Enel’s 2019-2021 Strategic Plan focuses increasingly on the growth of renewables and the development of low-carbon technologies, including the digitalization of networks, the installation of charging stations, software platforms and public lighting, thus abandoning investments in coal plants and the construction of large infrastructure projects with a high environmental impact.
This strategy allows the Group to be more flexible and to minimize the impact on the ecosystem, local area and community. Operating across such a vast geographical area necessarily implies engagement with different entities and an in-depth knowledge of the local area and the needs of the various stakeholders, in order to identify targeted solutions. Each infrastructure project is therefore considered in view of observations from the communities and the stakeholders involved, which in some cases (mainly involving relocations) can result in criticism or partial uptake. In the latter cases, the Group could be exposed to reputational risks, also in relation to interaction with local suppliers, as well as operational risks linked to delays in the execution of projects or their closure, with possible repercussions also on the supply chain.
The involvement of stakeholders in planning processes and in the development of infrastructure is extremely important, especially for those cases in which the construction of a new plant involves the relocation of a part of the population residing in the surrounding areas. Relocation management cannot be separated from the involvement of the populations and the people concerned – or from a careful assessment of the psychological and social problems that can occur at individual and collective level.
The approach in selecting potential sites is therefore to minimize the need for relocation of the population as much as possible through an analysis of the economic, political, cultural and socio-demographic aspects, including analysis of the daily life of the communities living in the area of influence, the distribution of the population, organizational forms, the levels of employment and pay. In cases where the relocation option goes ahead, the plan is developed in compliance with international standards on the subject, taking into consideration any impacts on the different forms of physical, human, economic, environmental and cultural resources of the populations concerned.
Any resettlement project is implemented in compliance with the legislation in force in the country involved and with local regulations that specify the relocation conditions and the methods for calculating the related economic compensation. Enel’s sensitivity on this topic is also reflected in the Human Rights Policy which was approved by the Board of Directors in 2013 (see the chapter “Corporate governance”).
Below are the most significant cases under way, the positive and/or negative impacts on the territory (actual or ‘feared’) and the manner in which the Group companies involved are promoting a proactive dialogue to achieve solutions that are as widely shared as possible, in relation to plants built in the past but which have remaining issues.
Bocamina plant (Chile)
The Bocamina II plant is a 350 MW coalfired thermal power plant, which started to be built in 2007 in the Municipality of Coronel, Bío Bío Region, Chile. The plant is part of the Bocamina coal-fired power plant complex, whose first unit of 128 MW was built in the 1960s and put into operation in 1970.
Construction of the second unit took place in an area adjacent to the first, where about 1,300 families were living. Starting from the construction of the second unit, in the Municipality of Coronel, the first agreements with families of communities living next to the plant were signed. At the end of 2018, 1,237 out of a total of 1,337 families had been relocated. This resettlement took into account applicable international standards, including the standard IFC no. 5 “Land Acquisition and Involuntary Resettlement”.
The main actions undertaken concerned:
- the identification of structural improvements necessary to adopt for housing of the Coronel community. In particular, a joint technical working group (community, Company and CITEC - University of Bío Bío) was set up, aimed at carrying out a census of houses that require improvements and to draw up the relevant plans. At the end of 2018, necessary actions were defined, which will be tested on a pilot project;
- the creation of a dashboard summarizing the impacts on the quality of life of families because of the constructive defects of the houses in which they lived since 2010 and the quantification of the related compensation;
- the reconstruction of the school and churches in the new neighborhoods;
- the launch of the project “Mi barrio, nuestro barrio” (“My neighborhood, our neighborhood”) which includes redevelopment projects for new and pre-existing neighborhoods, also through the redevelopment of sports facilities and green areas.
A project was started in the Cerro Obligado community to combine economic- social development and the circular economy with the aim of training four women in eco-sustainable construction techniques, who recycled over 800 pallets from local industries and sold over 600 items of furniture and accessories.
Furthermore, casa abierta Coronel is present, a reference point for the whole community, in line with the Open Power vision of the Group, where it is possible to openly dialogue with the Company, receive information, communicate any complaints and evaluate solutions with a group of experts. The basic criteria are transparency, fairness and non-discrimination.
To guarantee even greater transparency, Enel Generación Chile started a system for the real time transmission of data on CO2 emissions, including data from the Bocamina II plant, to the Superintendencia del Medio Ambiente (SMA). Bocamina is the first plant in Chile to carry out this activity.
Further information is available in the Sustainability Report of Enel Generación Chile (www.enelgeneracion.cl).
Alto Bío Bío plants (Ralco, Pangue and Palmucho - Chile)
Enel Generación Chile manages three hydroelectric plants in the Alto Bío Bío area (Ralco, Pangue and Palmucho), an area that is characterized by the historical presence of Pehuenche indigenous peoples. Numerically, the Pehuenche population in the area of influence of the plants totals about 3,000 people, made up of 800 families in 10 communities (Pitril, Callaqui, El Avellano, Aukiñ Wallmapu, Quepuca Ralco, Ralco Lepoy, El Barco, Guayalí, Pewen Mapu and Ayin Mapu).
In February 2017, an important collaboration agreement was signed with 25 families from the Aukiñ Wallmapu community to start local development projects. The agreement settles the conflict related to the impacts generated during the construction of the Ralco plant. In March 2017, Enel Generación Chile officially handed over its ancestral cemetery to the community of El Barco.
The handover took place thanks to the support of the Director General of the Corporación Nacional de Desarollo Indigena (CONADI) of the Bío Bío Region, thus solidifying the response to a commitment that the Company had taken with the community following the construction of the Pangue power plant. In June 2017, Enel Generación Chile also signed two agreements with the El Avellano and Quepuca Ralco communities.
Following requests made mainly by the El Avellano community, the project to develop Chilean hazelnut-based products continued in 2018. Enel Generación Chile has promoted this project together with the University of Concepción, the El Avellano community, the Alto Bío Bío Municipality and the Pehuen Foundation, thus allowing a historical activity to become a micro-entrepreneurial activity.
Considering the tourist and recreational potential of areas near the plants and in order to promote the socio-economic development of local communities, specific projects are being developed to encourage entrepreneurship in sustainable tourism. In particular, a project concerns the area next to the El Barco lagoon, where local entrepreneurs currently offer camping facilities, excursions and gastronomic services.
Enel Generación is providing technical support to improve the infrastructure and training courses to offer better services to tourists and boost the local economy. At the end of 2018, 132 people had benefited from the project, and the funding of nine new individual tourist projects has been planned for before the end of 2019, expanding tourist and gastronomic services in the area.
Shared and sustainable water management
The Chilean Ministry of Public Works and Enel Generación Chile signed an agreement, subsequently also ratified with the local associations that manage the irrigation channels of the Saltos del Laja area, in the Bío Bío Region.
The aim of the agreement is to improve the flexibility in the use of water, ensuring the supply to families and the production of energy. The initiative is the result of the joint work of the Canalistas de Laja and Canalistas del Canal Zañartu associations, Dirección de Obras Hidráulicas, Dirección General de Aguas, Enel Generación Chile, Ministerio de Agricultura, Ministerio de Energía and Comisión Nacional de Riego.
An agreement was also signed with the Municipality of Antuco to start a pilot project to promote tourism in the area of Salto del Trubunleo during the summer. To manage contingent or emergency situations in a rapid and coordinated manner, a specific communication system has been set up between the Enel Generación Chile Pangue and Ralco power plants, the Angostura power plant in Colbún, the Municipalities of Alto Bío Bío, Quilaco and Santa Bárbara and the Ministerio del Interior y Seguridad Pública (ONEMI) and the Ministerio de Energía.
Further information is available in the Sustainability Report of Enel Generación Chile (www.enelgeneracion.cl).
El Quimbo plant (Colombia)
El Quimbo is the most impressive engineering work carried out by the Enel Group in recent years and one of the largest hydroelectric investments in South America. With an installed capacity of 400 MW, the plant is set in the Huila region, south-west of Bogotá.
A plan with socio-environmental initiatives for local populations and in particular for families who live or own property in the area of influence of the project, as well as for those who work or have commercial activities and services in this area, has been agreed in an open, collaborative manner. The families surveyed and in possession of the requisites envisaged were given the opportunity to decide between relocation (collective/individual) and the sale of their land. Of the 152 families who opted for relocation, 40 chose individual relocation, receiving land for a business project or a home.
The remaining 112 families opted for relocation to the collective settlements (Montea, Santiago y Palacio, Llano de la Virgen, San José de Belén), with new homes equipped with essential services and located in an urban context with schools, churches, multifunctional sports facilities, football field, green areas, waste collection centers and waste water treatment plants. Each family also received 5 hectares of land with an irrigation plant to develop their own production activity (farming or micro-breeding).
In 2018, as part of the policy to create shared value, specific activities were defined together with the resettled families, to recoup and restore the social and relational fabric. 21 shallow wells were built to meet demand for water in the summer months, and the elderly, children and young adults continued to meet to tell of their stories and traditions and ease the generational transition. Communication and the involvement of vulnerable segments of the population was stepped up, guaranteeing their inclusion in social and community processes and managing their requests as priority. 226 activities to promote relations (vinculación grupal) were also held in the four collective resettlements, allowing traditions to be recovered and extending this practice to community members, with 458 actions providing psychological, family and community support for the resettled families and four training activities regarding marketing and accounting, to consolidate ownership of the Agricultural Production Plans (PPA).
Specific training courses have been developed and agreements with institutions and other local entities involving one or more areas have been established, including:
- National training service-SENA (Servicio Nacional de Aprendizaje): training in basic accounting, for dairy and meat-based products and a course on gravity irrigation in San José de Belén;
- Public Administration High School-ESAP: Diploma in Leadership and Public Management for social development for 53 people, with the aim of training public officials and community leaders;
- Neiva chamber of commerce: training courses for shopkeepers from the resettled population;
- Rural development agency-ADR: proceduresto legalize user associations in irrigation districts were completed. Through the initiative “Sembrando valores, cosechando lideres” (“Sowing values, creating leaders”), Emgesa, the Enel group company operating in Colombia and project owner, has developed actions to promote positive values and attitudes in the management of children and young people of resettled populations, and to strengthen the sense of local belonging by giving value to each family member. In this context, 37 cultural and recreational events took place, as well as 33 training activities coordinating with the local administration and private entities.
Emgesa, la società del gruppo Enel operante in Colombia e titolare del progetto, attraverso l’iniziativa “Sembrando valores, cosechando lideres” (“Seminando valori, creando leader”), ha sviluppato azioni per promuovere valori e atteggiamenti positivi nella gestione di bambini e giovani delle popolazioni reinsediate, e rafforzare il senso di appartenenza territoriale, dando valore a ciascuno dei membri delle famiglie. In tale contesto sono stati realizzati 37 eventi culturali e ricreativi e 33 attività di formazione in coordinamento con amministrazioni comunali ed enti privati.
Local economic development
In association with the Sirolli Institute, Emgesa adopted a customized professional orientation methodology, in order to generate employment and promote development and economic growth in the Municipalities of Garzón, Gigante and El Agrado. People with a business idea or an established activity received free, personal and confidential advice to analyze the status of their activity. Community social networks are then created to discuss how to improve products, marketing and relative financial strategies for the business; these activities are all supported by a Business Plan defined for each company. Between 2017 and 2018, two launches of 32 financially sustainable businesses took place.
In 2018, 34 training sessions were also held, to provide tools to develop a self-sufficient productive economy, and provide support and advice on marketing for the Agricultural Production Plans. During plant construction, 201 people were identified as being involved in subsistence fishing, which is one of the production activities along the Magdalena river still practiced using traditional techniques and with little technological development. Funds were allocated to provide initial capital to run the subsistence fishing program.
The environmental education program also continued in 2018, with 51 actions focused on strengthening environmental education in schools, 95 activities to promote environmental topics with social players from the six Municipalities (involving 1,528 people), 10 community training courses, 359 visits to promote good environmental practices with resettled families and 42 actions for sustainable tourism with the involvement of the local administration and community organizations.
In 2018, programs continued with a view to preventing, managing and monitoring the environmental impact associated with the project:
- a plan to manage wild fauna, with the recovery of over 33,000 animals in the 2015-2018 period;
- a program to manage fishing, in which 21 species were logged, with a total uptake of around 158,000 kg and over 260,000 specimens;
- a habitat recovery plan for wild fauna, with the planting of almost 7,000 plants and the installation of various structures for the protection of fauna. Moreover, activities of the research center set up by Emgesa were consolidated;
an ecological restoration program: the first phase of the four-year ecological restoration program (April 2014-April 2018) was completed. This program identifies the most effective strategies to adopt throughout the area concerned by the plant, in the region and other dry forests of the country.
Communication channels and legal proceedings
Emgesa has established specific communication channels to inform and answer all questions of the community about the project (dedicated web page, Twitter channel, official channel on You-Tube, periodic magazine). Regular meetings are held with national and international interest groups, and monitoring meetings with the Huila government, municipalities, environmental authorities, control bodies and representatives of the company, and guided tours of the project were offered. To forge continual, informed relations, two offices for community relations have been set up: one in the Municipality of Garzón and one in the Municipality of Gigante. As regards the project, some legal proceedings are pending (“acciones de grupo” and “acciones populares”) taken by inhabitants/fishermen in the area. Details are given in the 2018 Annual Report of the Enel Group (“Contingent assets and liabilities”).
Further initiatives and information on the project are available in the 2018 Sustainability Report of Emgesa (https://www.enel.com.co/es/medio-ambiente-desarrollo-sostenible.html) and on the dedicated project website (https://www.enel.com.co/es/conoce-enel/enel-emgesa/el-quimbo.html).
EGP-Nareva consortium 850 MW wind power program
In March 2016, a consortium of three companies – Enel Green Power, Siemens Wind Power and the Moroccan energy company Nareva – won the project for the development, construction and operation of five wind plants in the Municipalities of Midelt, Tanger, Jbel Lahdid, Boujdour and Tiskrad with a total installed capacity of 850 MW.
Their construction will require a total investment of around 1 billion euros.
In preparing for the tender described above, Enel Green Power conducted a preliminary analysis of the social, economic and environmental context (“SEECA”) with the help of external specialists in the areas where it planned to build the plants. The SEECA identified the relevant socio-economic issues and specific needs of local communities which are, among others: infrastructure development, education development, health care, service development, poverty, social services, land ownership and protection of cultural heritage.
Moreover, an assessment of the environmental and social impact (Environmental Social Impact Assessment ESIA) was carried out, in line with the standards of the International Finance Corporation (IFC) and the guidelines of the European Bank for investments in the Midelt project and is underway for the Boujdour project, while it will be developed and subsequently implemented for the remaining projects.
A consultation process with various stakeholders was held by ONEE (Office National de l’Electricité et de l’Eau potable) with the involvement of the Enel Green Power-Nareva consortium at Midelt, Boujdour and Jbel Lahdid. A question and answer session was held at the end of every consultation. The process to analyze project impacts and benefits will steer the definition and adoption of the Sustainability Plan for each project.
Enel Green Power operates in full compliance with laws applicable to the investment in question. Furthermore, the investment does not involve extractive activities, and the use of local renewable resources will support the social, economic and environmental development of the various areas involved. Moreover, the investment respects the principles adopted by the international community in relation to the protection of the environment and the reduction of emissions deriving from coal.
In all areas involved in the projects, the consortium will conduct a second SEECA, also to identify any updates to the preliminary analyses previously conducted. The actions and projects identified by the analyses will be developed during the plant operation phase.
However, from as early on as the project development phase, the consortium will also run a sustainability project to mitigate environmental impacts, in particular regarding water, emissions and waste, through a sustainable work site; any impact on social and local employment aspects will be monitored, and these aspects will be given support through targeted technical specifications requested in the tender phase for plant construction.
For the Midelt plant, the financial close was on November 5, 2018, and the construction phase started in December 2018. As regards the Boujdour project, the consortium started preliminary activities in view of construction that will take place between the end of 2019 and early 2020.