Chile: Empresa Electrica Pangue S.A.-02/Upper Bio-Bio Watershed

Date Filed
01 Jul 2002
Status
Closed
Phase
Dispute Resolution (DR)
Country
Chile

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Monitoring
Closed
Compliance
CURRENT Status
Closed(DISPUTE RESOLUTION)

Project Information

Region
Latin America & the Caribbean
Institution
IFC
Name & Number
Empresa Electrica Pangue S.A. 2067
Company
Empresa Electrica Pangue S.A.
Sector
Infrastructure
Department
Infrastructure
Category
A
Commitment

2.5% (Equity Interest) & $170 million (Loan)

Synopsis

Complaint

The Pangue Hydroelectric Project involved a series of proposed hydroelectric dams on the upper BioBio River, Chile. In July 2002, a group of Pehuenche women lodged a complaint with CAO in relation to the following concerns:

1. Inappropriate and weak social and environmental mitigation measures; and

2. Lack of adequate compensation for those individuals affected by the project.

IFC held 2.5 percent of the equity interest in the Pangue Project from October 1993 until divestment in July 2002. As a result of various complaints lodged by local groups and NGOs at the time of dam construction, the President of the World Bank Group seconded Jay Hair, President of the International Union for the Conservation of Nature, to undertake an independent inquiry into the complaints, which became known as the Hair Report.

CAO Action

Despite divestment in July 2002, CAO accepted the complaint based on the fact that the complaint related directly to IFC’s role in the project over a number of years; to promises and commitments made; and to previous opinion by independent investigations and consultant reports requiring certain actions be undertaken by IFC. CAO commenced assessment in October 2002. The Assessment Report, completed in May 2003, recommended that IFC disclose the Hair Report and disseminate documents it had commissioned including emergency response plans and downstream impact studies.

In March 2006, a settlement agreement was finalized that focused on supporting and providing funds for local development capacity building. At the request of the complainants, CAO Ombudsman continued to monitor the settlement by working with local and indigenous organizations to address broader cultural impacts of the project. The CAO worked with the Mapuche University, local Pehuenche institutions, and We Monguen, an indigenous organization based in the Alto Bio Bio.

Status

CAO Ombudsman successfully negotiated an agreement between the complainant and the company, which was duly signed in June 2001. The complaint was closed in January 2005.

Case Documents

  • Dispute Resolution

    Assessment Report(s)
    Assessment Report, Regarding
    May 01, 2003
    English
    Assessment Report, Regarding
    Informe de Evaluacion en Relacion
    May 01, 2003
    Spanish
    Informe de Evaluacion en Relacion
    Agreement(s)
    Pangue Complaint Settlement Agreement
    Feb 09, 2006
    English
    Pangue Complaint Settlement Agreement
    Convenio del Acuerdo entre la CAO
    Feb 09, 2006
    Spanish
    Convenio del Acuerdo entre la CAO
    Close-out Report(s)
    Historical Summary
    May 25, 2010
    English
    Historical Summary
    Resena Historica
    May 25, 2010
    Spanish
    Resena Historica
    CAO Conclusion Report
    Jun 01, 2010
    English
    CAO Conclusion Report
    IFC Lessons Learned: Pangue Hydroelectric
    Nov 01, 2004
    English
    IFC Lessons Learned: Pangue Hydroelectric
    Leciones Aprendidas de la IFC
    Nov 01, 2004
    Spanish
    Leciones Aprendidas de la IFC