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Main current projects and managing relocation

Enel’s Strategic Plan 2017-2019 is increasingly focused on growth in renewables, thus abandoning investments in coal plants and the construction of large infrastructure projects with a high environmental impact. This strategy enables the Group to enjoy greater flexibility and a reduction in risks besides the minimization of impacts on the ecosystem and local area.

Every infrastructure project faces evaluation by the communities affected; in some cases, there are criticisms or the project does not have full support. Sometimes, despite the broad consensus of the local communities and institutions, there is opposition from some civil society movements or environmental associations. The involvement of the parties concerned in the planning processes and in the development of infrastructure is an essential element. In some cases the construction of new plant may entail the relocation of part of the resident population to nearby areas. Managing relocation inevitably involves the populations or individuals affected and a careful assessment of the psychological and social problems that can be expected at both individual and group level. The approach to choosing potential sites is that of minimizing, as far as possible, the need to relocate the population. When establishing the potential sites for the development of energy projects, studies are conducted which include economic, political, cultural, social and demographic aspects, including analysis of the daily life of the communities who live in the area affected, the population distribution, the forms of organization, and the levels of employment and pay. In the cases in which the relocation option is confirmed, the project is developed in compliance with the legislation in force in the country concerned, as well as with any local laws which specify the conditions for the relocation and the means for calculating the related compensation. Enel’s sensitivity to this issue is also clear in the human rights policy approved in 2013 by the Board of Directors. Below are details on the most important current projects, the positive and/or negative (real or ‘feared’) impacts on the local area and how the Group companies involved are promoting proactive dialogue to arrive at shared solutions, relating to plants built in the past which have residual problems.

ChileHydroelectric plants of the Alto Bío Bío (Ralco, Pangue y Palmucho)

Endesa Chile (now Enel Generación Chile) manages 3 hydroelectric power plants in the area of the Alto Bío Bío, an area which is characterized by the historic presence of the indigenous Pehuenche populations. The Pehuenche population in the area affected by the plants, with 12 communities, consisting of over 1,500 families, numbers around 7 thousand people.
During 2016 the relationship with these communities was mainly focused on two negotiating groups with representatives of the families who have complained about the impact of “Sitio 53” and other working groups dedicated to the planning of initiatives for local development. The communities involved in these activities were Pitril, Callaqui, El Avellano, Aukiñ Wallmapu, Quepuca Ralco, Ralco Lepoy, El Barco, and Ayin Mapu. The negotiations were conducted in accordance with the principles of transparency and access to information. At the end of December 2016, the negotiations were still ongoing, with the parties
showing themselves willing to find a solution. These opportunities for dialogue saw the active involvement of executives nominated by the communities and of the Enel Generación Chile group which operates in the local area and which includes people from the sustainability and operations areas.
Among the development programs which emerged from the dialogue with these communities, we may highlight the launch of new business initiatives. In particular the production, transformation and sale of local produce such as cherries, jams, hazelnuts and their derivatives. The activity, which was based on the transfer of analytical and technological tools, involved 27 people in its first test stage. The project was conducted in collaboration with the Center for Agro-industrial Technological
Development of the University of Concepción.

As well as with the indigenous communities, the company maintains constant contact also with the Municipality of the Alto Bío Bío. One of the main results achieved in 2016 was the signing of the long-term agreement with the Municipality of the Alto Bío Bío with the aim of promoting the educational, cultural, social and economic development of the area. The agreement will be in force until 2022 and will benefit all the families in the area, including the 4 communities in the area of the
Queco which are not part of the reference scope. Under this agreement, Enel Generación Chile financed the construction of the APR Ralco pipeline in order to guarantee the continuous supply of water for the community of Callaqui Bajo and contributed funds for the realization of the drinking water project, which 116 families will benefit from directly.

Other projects concerned:

  • the regularization of the drinking water system and of the sewer system for the children’s garden in Chenqueco, which benefitted 10 children from the Ralco Lepoy community with an investment of 25 million Chilean pesos (around 35 thousand euro);
  • the maintenance of the photovoltaic panels which supply energy to the homes of the Alto Bío Bío, with an investment of 15 million Chilean pesos (around 21 thousand euro);
  • support for the municipal Emergency Plan of the Alto Bío Bío, including the purchase of raw materials and training with an investment of around 15 million Chilean pesos (around 21 thousand euro);
  • the purchase of agricultural machinery for the communities of Ayin Mapu and Aukiñ Wallmapu, with an investment of 15 million Chilean pesos (around 21 thousand euro).

Design of the future homes of the community of Ayin Mapu
In 2016 Enel Generación Chile established a program to improve the homes of families from the Ayin Mapu community in Santa Bárbara. These families were relocated in 2000 following the construction of the Ralco plant. This program is run under the environmental license (Resolución de Calificación Ambiental – RCA) of the plant and is based on the principle of co-creation.
The families which will benefit from the program are taking part in the design of the new homes so that they have available space which respects their lifestyle and their traditions. Proposals have been prepared which will be presented to the community to include the latest recommendations and start the requests to obtain the related permits.

Drinking water for the Ayin Mapu and El Barco communities
16 years ago Enel Generación Chile relocated the families of the Pehuenche Ayin Mapu community, in the Municipality of Santa Bárbara, and of the El Barco community in the Municipality of the Alto Bío Bío, under the agreements for the construction of the Ralco hydroelectric power plant. The passage of time and the significant increase in the population have made it necessary to enhance the drinking water system to ensure its supply tofamilies.
In 2016 following intensive work with communities, the projects were presented to the authority (Seremi de Salud) of the Bío Bío for the related assessment. During the proceedings the communities directly received all the information regarding the revision of the solutions, the scope of the works, the timeframes and the various steps to be taken.

Finally, through the Energía para Educación Project, Enel Generación supports the training of students in the Municipalities of Santa Bárbara and Alto Bío Bío, where the power plants of Ralco and Pangue operate, in order to facilitate the sustainable development of the communities. These are students of the Ayin Mapu, Callaqui, Pitril, El Avellano, Quepuca Ralco, Aukiñ Wallmapu, Ralco Lepoy and El Barco communities who cannot access the educational system due to economic reasons and owing to the distance from the urban centers.
In 2016 they were provided with school kits with everything necessary for each educational level. Over 400 young people received teaching at middle school, technical and professional school level, receiving grants, clothing and trips provided by Enel Generación. In addition, support was envisaged for the educational centers through training for teachers on renewable energy, development of the cinema at school program, and the supply of books for the library.

ColombiaEl Quimbo

El Quimbo is the most important engineering project undertaken by the Enel Group in recent years and one of the biggest hydroelectric investments realized in South America. With installed power of 400 MW the plant is located in the region of Huila, around 350 km south-west of Bogotá. The plant, which is fed by the Río Magdalena, the country’s biggest river, crosses 6 towns (Gigante, Garzón, Altamira, El Agrado, Paicol and Tesalia). It represents an overall investment of around 1.2 billion US dollars, which was accompanied by a major action plan in favor of the local populations, including the construction of new homes, the building of new bridges, including the largest viaduct in the country, as well as initiatives to protect biodiversity in the area, such as the restoration of over 11 thousand hectares of tropical vegetation on the left bank of the basin and the realization of veterinary help centers. Right from the start of the project, Emgesa, the Group’s power generation company in Colombia, has shown its openness to dialogue with the regional and national stakeholders and has developed a social and environmental management plan. On an agreed and participatory basis, specific initiatives have been established for resident or landowning families in the area affected by the project, as well as those who work or have commercial activities or services in the area. The program is also targeted at people who undertook informal business locally. The families, which have been surveyed and have the envisaged prerequisites, can decide between (collective/individual) relocation or sale of their land.

Social and cultural management
152 families have opted for relocation: 112 of these have chosen 4 collective facilities, with new 100 m2 homes equipped with essential services and set in an urban context with 3 schools, 3 churches, multifunctional sports centers, 1 football pitch, 4 parks, 4 waste recycling collection centers and 5 waste water treatment plants. 40 families have chosen individual relocation, either receiving five hectares of land to undertake a business project together with a related technical plan or a 180 m2 home. In addition, since the start of construction 244 cases of compensation have been completed for families who did not opt for relocation. In 2016, 594 requests were presented for the survey, of which 549 have been analyzed also through interviews and 45 will be handled during 2017. During the year 34 plans were launched for agricultural/livestock production which involved the families resident in the Municipalities of Santiago Palacio, Montea and Llano de la Virgen, after checking the conditions of the land and the availability of water. In 2016 various initiatives were organized aimed at promoting the social development of the local area.

237psychological, family and community support actions for the relocated families
17days dedicated to children and young people to promote the sense of belonging to the new areas
8training courses and meetings with women
12support and consultancy actions for specific groups (children, young people and women)
43development courses for social and community organizations
88people in vulnerable situations have taken part in group activities

As part of the “project to repay the commitment”, a specific strategy was defined, Empreendedores con Energía, which involves providing initial capital and training courses to people who carried out their business in the area affected by the project (non-residents or residents who do not have property). Training courses were provided by SENA (Servicio Nacional de Aprendizaje), which, since the start of the project, over 2 thousand people have benefitted from and around 21 million euro have been destined for development of the province.

Environmental management
During 2016 specific environmental programs continued in order to prevent, manage and monitor environmental impacts connected to the project. In conformity with the provisions in the environmental license, in particular the following were established: 1. Management plan for wildlife, which enabled the assistance and saving of 30,635 animals; 2. Management program for fish and fishing; 3. Program to save fish; 4. Ecological restructuring plan; 5. Management plan to cover the flora and land habitats. Besides the recovery of over 11 thousand hectares of tropical vegetation on the left bank of the basin and the realization of veterinary support centers, 20 new species were identified and classified, where possible, in accordance with the Red List of the International Union for the Conservation of Nature (IUCN).

Emgesa established specific communication channels to inform and respond to all the questions from the community regarding the project (dedicated webpage, Twitter, official channel on YouTube, a magazine). Monthly meetings were held with national and international groups, as well as periodic monitoring meetings with the Government of Huila, municipalities, environmental authorities, control bodies and representatives of the company, and guided visits were organized to the project. Further information is available in the Emgesa Sustainability Report 2016 and on the website dedicated to the project (www.proyectoelquimboemgesa.com.co).

Legal proceedings
Despite this intensive relationship-building and involvement of the communities, there are also some legal proceedings (acciones de grupo and acciones populares – class action) launched by local inhabitants/fishermen. In particular, a first acción de grupo, which is now at the preliminary investigation stage, was taken by around 1,140 residents of the Municipality of Garzón who complained that the construction of the power plant would reduce revenue from their business by around 30%. A second case was brought between August 2011 and December 2012 by inhabitants and companies/associations from the five towns of Huila for alleged damage in relation to the closure of a bridge (Paso El Colegio). In relation to the so-called acciones populares, in 2008 some local inhabitants started proceedings to ask, among other things, for suspension of the environmental license. A further acción popular was launched by some fishing companies in relation to the alleged impact of the refilling of the El Quimbo basin on fishing in the Betania basin, downstream from El Quimbo. In February 2015 the Court ordered the suspension of the refilling until some specific requirements were met.
The suspension was subsequently modified, thus allowing the filling of the basin, which started on June 30, 2015. However, on July 17, 2015 Emgesa received a notice modifying the precautionary measure to prohibit generation activities until ANLA (the national environmental authority) certifies that the company has removed biomass and forest waste from the Quimbo reservoir basin.
Pending the ruling, as an energy emergency had been declared, the Ministry of Energy issued a decree authorizing Emgesa to begin electricity generation. Subsequently, on December 16, 2015 the Constitutional Court ruled that the presidential decree was unconstitutional and as from that date Emgesa suspended electricity generation.
On December 24, 2015, the Ministerio de Minas y Energía and the AUNAP (Agriculture and fishing authority) filed a joint motion (acción de tutela) asking the criminal court to authorize generation as a precautionary measure. On January 8, 2016, the court granted the precautionary measure requested by the Ministry and the AUNAP, authorizing the temporary and immediate production of energy at the El Quimbo plant. The precautionary measure granted by the court would remain in force until the Huila court issued a ruling on the substance of the case, i.e. on the revocation or upholding of the precautionary measure previously issued by the local administrative court. With a decision of February 22, 2016 the Huila court issued a ruling allowing generation to continue for six months. The court ordered Emgesa to prepare a technical design that would ensure compliance with the oxygen level requirements and to provide collateral of about 20,000,000,000 Colombian pesos (around 5.5 million euro). With the decision of the Administrative Court of Huila of April 11, 2016 the temporary withdrawal of the precautionary measure was once again confirmed for six months up to October 16, 2016, a deadline which was then extended again for a further six months as from February 2017. In this time period, Emgesa will have to show that the system of oxygenation used allows attainment of the oxygen levels imposed.

ChileBocamina plant

As from the construction of the second unit of the thermoelectric power plant of Bocamina in 2008, in the area of the Municipality of Coronel, agreements were signed with the local communities, to manage the processes to relocate the families, who lived in the area of the plant (Plan de relocalizaciones a Familias Vecinas al Complejo Térmico Bocamina). At the end of 2016, out of a total of 1,337 families, 946 had been relocated. The power plant started operating in 2012 and in August 2013, the SMA (Superintendencia del Medio Ambiente) informed Endesa Chile of the opening of sanction proceedings for alleged environmental infractions in relation to the second unit of the thermoelectric power plant of Bocamina (Bocamina II), in the Municipality of Coronel, which ended in August 2014 with the imposition on the company of penalties for a total of around 7.6 million US dollars. Endesa Chile (now Enel Generación Chile) and the local fishermen appealed this decision. The Tribunal Ambiental of Valdivia, with its decision of March 27, 2015, rejected Endesa Chile’s appeal and also ordered the SMA to increase the fine taking into consideration the fact that Endesa had committed the infraction intentionally. Subsequently, the SMA arranged to increase the amount of the fine by 500 Unidad Tributaria Anual (UTA). Endesa Chile appealed this decision to the Environmental Court and the appeal was partially accepted. The SMA appealed to the Cassation Court and that Court confirmed the amount of the fine applied with its decision of December 13, 2016. In regard to relationships with communities the main objective of Enel Generación Chile is to guarantee the progress and sustainability of the plan defined with the community of Coronel, which stresses a long-term approach, as well as promoting initiatives with the involvement of various social actors. During the last year Enel worked together with the Servicio de Vivienda y Urbanización – SERVIU of the Region of the Bío Bío and of the Municipality of Coronel, for the ongoing relocation processes. The process follows a series of agreements signed between 2012 and 2014 and dialogue with the Chilean Government to take part in the relocation plan for the families who used to live in the areas around the power plant, which were then declared uninhabitable following a study by Sernageomin – Servicio Nacional de Geología y Minería, following the earthquake in 2010. This led to the signing of the agreement mentioned previously in 2012 and to the consequent establishment of a public/private work group. During March, the families had the chance to receive housing subsidies and, in September, signed the purchase agreements for their new homes. In particular programs were defined for environmental and social recovery, including the project relating to the Parque Urbano Coronel to create parks and sports areas around the plant. During 2016 the Energía para tu emprendimiento (energy for your entrepreneurship) Program continued to promote a relationship based on the development of people and the creation of shared value, also thanks to the establishment of a fund to support entrepreneurship. This fund has allowed small business owners to enhance their knowhow, to create relations with local industry and develop a network. The fund for 2016 of 300 million Chilean pesos (around 420 thousand euro) enabled the financing of 73 individual production projects which were able to count on the support and consultancy of experts. Six months after the investment, monitoring will be undertaken of each initiative in order to understand the real impact on small business. Another important initiative is the Fondo de valor compartido (fund for the creation of shared value) which, with an allocation of 180 million Chilean pesos (around 250 thousand euro), aims to support projects for the community over the whole useful life of the Bocamina plant.
Social and community responsibility
As part of the social plan for Coronel, the 2016 version was held of the Copa Enel Coronel, a sports competition for the schools of Coronel which is part of the Energía para the educación (energy for education) Program.
The dome of Bocamina II
In August 2016, Enel Generación started the construction of the first dome for the storage of coal in Chile in the area north of the second unit of the Bocamina plant. This system covers 22,300 m2 of surface area, measures 51 meters in height and has a capacity of 150 thousand tons. It enables improvement in the logistics for the handling of coal and guarantees for the nearby communities compliance with environmental standards. The dome consists of a self-supporting metal structure, which is light and adaptable to the type of land; characteristics which enable it to be built quickly and with low impact. The same technological innovation will be applied in the storage area to the south of the plant. The activation of this project joins other environmental improvements made by the company thanks to an investment of around 102 million US dollars, which make the Bocamina plant one of those which operate in accordance with the highest standards in this field, aligned to all the rules and permissions required by the environmental authorities.

Other significant facts

NELTUME (CHILE)
Neltume is a project relating to a hydroelectric run-of-the river plant, with installed power of 490 MW, in the Municipality of Panguipulli, in the Region of Los Ríos. The environmental assessment process started in 2010 and is still ongoing. In 2006 Endesa Chile (now Enel Generación Chile) started a consultation process with the indigenous communities in order to incorporate their requests into the development of the project. In particular, since 2007 there have been information offices in the towns close to the project area and in 2011 some contact points were opened with the Casas Abiertas communities to facilitate their participation. Currently in Neltume there is a company information office which handles relations with civil society organizations and the local authorities to reach specific agreements. On April 29, 2013 the Environmental Assessment Service (SEA) of the Region of Los Ríos issued “Resolución Exenta n. 002” which envisages as part of the environmental assessment of the project the realization of an indigenous consultation process, in accordance with the provisions of “Convenio OIT n. 169”, with the communities, populations and groups in the area affected by the plant. The SEA met each of the eight communities identified to set out in detail the consultation process, inviting them to nominate their representatives.
In December 2015, after the conversations with the communities, the environmental impact assessment associated with the project was withdrawn since the impact generated according to the design of the project was not sustainable. In May 2016, Endesa Chile (now Enel Generación Chile) communicated that it would start assessment of design alternatives, which are currently underway. At the same time, Enel Generación Chile is working to provide sustainability and self-sufficiency to the local development initiatives undertaken in recent years. Among these is the creation of the Fiera Lelilen Lafken, which is a space for the sale and promotion of various crafts products and Mapuche food and drink built with the active support of the beneficiaries themselves on the shores of Lake Neltume and visited by over 400 thousand tourists annually.
The beneficiaries of this project are around 50 wood and wool artisans. The organization and the management of this space is collective and is delegated to an executive committee consisting of members of the community.

THERMOELECTRIC PLANT OF PORTO TOLLE (ITALY)
In August 2011 the Public Prosecutor’s Office of Rovigo indicted some directors, former directors, executives, former executives and employees of Enel and Enel Produzione for the crime of willful omission of measures to prevent disasters, relating to alleged emissions from the Porto Tolle plant; subsequently, the public prosecutor added the alleged crime of willful disaster. During 2012 the Preliminary Hearing Judge of Rovigo, following the requests from the Public Prosecutor’s Office of Rovigo, ordered the indictment of all those under investigation for both crimes. After various levels of judgment, on January 18, 2017 the Court of Appeal of Venice absolved all the accused on the grounds that there was no case to answer. For further details see the Enel Annual Report 2016 – Potential Assets and Liabilities.

HIDROAYSÉN (CHILE)
HidroAysén is a partnership between Endesa Chile (now Enel Generación Chile) and the Chilean company Colbún for the development of a hydroelectric project with a capacity of 2,750 MW. In 2014 the Chilean Government withdrew the license for the project after the protests of environmental groups. Enel wishes to develop only projects that create shared value for the company and for its stakeholders and therefore at the start of 2015 it stated that the project was not part of the portfolio of projects at the development stage. Currently negotiations are underway with the partner Colbún to find the best possible solution for the communities and the companies.

HYDROELECTRIC PROJECTS (CHILE AND PERU)
Enel has decided to waive hydroelectric use rights for some projects in Latin America following the analysis of their profitability and their socio-economic impact. The projects are the following: Puelo, Futaleufú, Bardón, Chillán 1 and 2, and Huechún in Chile (capital loss of 166 million euro) and Curibamba and Marañón in Peru (capital loss of 30 million euro). The waiver is in line with the strategy of the Enel Group which intends to develop only projects which are not only technically and economically feasible, but also shared with the local communities. The rights for water use, for which the waiver was expressed, were returned to the States to be used for any other type of development project.

Reference SDGs: 
Main actionsTarget
Access to energy3 million beneciaries, mainly in Africa, Asia and Latin America by 2020
Social and economic development1.5 million beneciaries* by 2020
Quality education0.4 million beneciaries by 2020
Implementation of new projects for the support of the communities in which Enel operates in order to create shared value and to foster the energy culture 
Diffusion of the Creating Shared Value (CSV) model in the operational activities (Business Development – BD, Engineering & Construction – E&C, Operation & Maintenance – O&M)
Strengthening of strategic partnership and promotion of operational partnership

* Target updated compared to 500 thousand initial beneficiaries.

Sustainability Plan 2017-2019