Coronel: The Roadmap Towards The Sustainability of The Resettlement Process
The Bocamina I and II Thermal Power Plant has two thermal units located in the Lo Rojas sector, Coronel 's commune, Biobío Region. The first unit had been in operation since 1970 and was owned by the State of Chile. The second unit was approved through an Environmental Impact Statement (DIA) in 2006. During Endesa Chile 's management, in 2007, the construction of a second unit, Bocamina II began. The construction was carried out in a context of high urbanization in the northeast sector of Coronel inhabited by about 1,300 families.
The largest resettlement derived from industrial impact in the history of Chile.
The construction phase of the second unit generated impacts on homes around the construction site, causing a major conflict with the community. Said conflict was handled in 2008, through a plan to relocate approximately 400 families to different parts of the commune. This stage of the relocation process was developed based on bilateral agreements with each family without the application of national criteria and principles regarding resettlement and human rights.
After the planning stage for the resettlement of the families, the Bocamina operation caused conflict with the fishing community of Coronel due to issues associated with environmental impacts on the marine ecosystem as a result of the industrial processes of the plant. In December 2013, after an appeal for protection filed by fishermen and seaweed recollecter organizations in the area, the Court of Appeals ordered the shutdown of the plant. The following year, the Company was sanctioned by the environmental authority.
In 2014, the joint work of the company, Endesa Chile at that time, with other actors such as the SEREMIS (regional ministerial secretariat) of housing and urbanism, energy and environment, the union of neighborhood councils, the Municipality of Coronel and 20 fishermen unions, resulted in a framework agreement with three main work streams. Among them, the extension of the resettlement to another 900 families in the area of the Bocamina II plant, through a public- private resettlement agreement between families, SERVIU and Endesa.
The Benefits and Gaps of Resettlement
This resettlement implied a series of benefits such as acquiring a regularized house with great urban conditions such as access to drinking water, sewage and a stable energy supply system, which, from the point of view of material/physical benefit, improved the housing situation of an important part of resettled families. However, it also disturbed the previous social structure, made up of families that lived and collaborated as a community, which were now distributed in different points of the city, distancing them from their source of work. Most of them were fishermen who lived close to the sea. The lack of awareness of the importance of community during the resettlement process generated numerous difficulties and gaps in adaptation due to the impacts on the human and socio-economic environment. Additionally, the absence of a plan for the restitution of livelihoods made it difficult for families to adapt in the new neighborhoods, bringing this process closer to the definition of "eradication".
From 2017 onwards, when Enel took over the sustainability management of Endesa Chile, a revision of the "eradication" process was carried out with the purpose of transforming it into a process of resettlement in accordance and auditable to international standards.
Part of Enel's management at Coronel was to reflect on the fact that the "eradication" plan had a number of gaps to be filled, and therefore, there was an unfinished process. One of the deepest gaps was that this plan contained dissimilar and partial agreements between users, both from the private and public-private agreement. It was evident that the criteria of equity, transparency, human rights and internationally recognized standards for resettlement were insufficient.
This process involved more than 1,370 families, most of which were considered by the Ministry of Social Development to be socially vulnerable. The number of people involved makes it one of the largest resettlements carried out by an industry in Chile.
Review of the process and alignment to international standards and human rights approach
The process of reviewing the “eradication” process and its transformation into a resettlement process with a retroactive character represents an unprecedented operation at the national level. The review considered the entire process executed, with a direct focus on human rights and with a focus on activating a remediation plan with international standards, using the International Finance Corporation's (IFC) Performance Standard No. 5 as an instrument for resettlement and the United Nations' Sustainable Development Goals.
In order to diagnose the gaps generated by resettlement, Enel began an international tender in 2017 aimed at companies composed of experts with the highest academic level and with extensive experience in family relocation processes. The consultant selected was Environmental Resources Management (ERM), based in Canada, a company with expertise in resettlements worldwide.
This diagnosis for the process that took place in Coronel ended in 2018, and was developed integrating an approach of the United Nations Guiding Principles for Business and Human Rights. It was the first project to recognize impacts that occurred 10 years ago and resolve them widely, following international performance standards which, in some cases, exceeds national regulations.
The analysis involved focus groups and interviews with over 900 families, resulting in a report of gaps affecting resettled families in human, cultural and social settings.
The "Livelihoods" Plan: The Unprecedented Journey to the Past, with Today's Social Tools
To solve these previously mentioned gaps in the resettlement of families, Enel focused on the procedures required by the IFC Performance Standard No. 5, dependent of the World Bank, with the purpose of building a new paradigm of expected behavior with the affected families in this process.
a) Clear rules and sufficiency of information
The diagnosis detected a series of partial and dissimilar resettlement agreements applied to the families resettled during 2008, in some cases agreements with excessive (non-market) and irregular amounts, in which political intervention was found, and in other cases with insufficient amounts for the purchase of a home.
Enel voluntarily corrected this asymmetry during 2019, through the agreement levelling methodology, which consisted of a detailed review of all existing resettlement agreements.
The study identified two agreements: the public-private agreement of 2014 and the private agreement, from 2008, both with reliable social cadasters, endorsed by competent authorities, the highest number of criteria and standards and, of course, they meet the standards of the Performance Standard No. 5 of the IFC (International Finance Corporation). These instruments would be the normative standard to level the economic terms of the agreements with resettled families to fair conditions.
The implementation of settlement equalization remedied the situation of more than 250 families who in the past had been arbitrarily excluded from plan benefits or compensated without clear rules of the process. Enel applied this management measure in a unique way following the Company's internal regulations and with a sense of equity for the families. Enel Generación Chile invested close to 2.5 billion chilean pesos in this measure during 2019.
b) Security of tenure: The diagnosis detected cases in which families were relocated to places along the coast, which impacted beneficiaries given the impossibility of proving wealth of these residences over time. Despite the fact that the users themselves chose these places, there was evidence of a violation of the security of tenure (ownership of the land) that the beneficiaries of a resettlement process must have.
Enel resolved this gap with a professional support team that collaborated with these users to obtain the regularization of these properties and homes.
c) Replacement of infrastructure of church organizations: The resettlement process of 2008 and 2014, respectively, only contemplated the relocation of families and their homes, excluding the church infrastructure of the evangelical creed in the area.
When Enel arrived in Coronel, they were recognized in a memorandum of understanding during 2017, prior to the diagnosis, in an unprecedented event in the industry, configured as a milestone of good faith and reconciliation with the evangelical churches of Coronel.
Currently these churches are being rebuilt in areas close to the resettlement neighborhoods and correspond to the communities of origin of Adonai Church, Jesus Christ is the Kirios, Christian Philadelphia of Jesus Christ, Jesus Christ Restoration Ministry The Colony, Connected to Christ, Divine Hope, Mission of the Church of the Lord, The Beautiful and Evangelical Wesleyan.
d) Re-building of educational infrastructure, the Rosa Medel School:
The Rosa Medel Aguilera School had a severe deterioration in enrollment, due to the displacement of families to other destination neighborhoods, because the building was outside the area destined for resettlement.
During 2017, prior to any diagnosis and following its Human Rights Policy, Enel closed an agreement with the Municipality of Coronel and the center for parents and guardians of that establishment, with the aim of collaborating with the rebuilding of this infrastructure.
This commitment was made in 2019, when the Municipality of Coronel provided the land where the work will be executed. Enel delivered a contribution of 2 million dollars, in addition to financing the soil mechanics and pre- feasibility studies, being the only company in the area interested in co-financing this project, which is in the midst of more than 15 industries in Coronel. The new school will be located in the La Peña sector.
e) Housing with construction deficiencies: A group of 240 families moved to the neighborhoods of Doña Isidora and Huertos Familiares, where they received housing with construction deficiencies and without a current construction company to which to make their claims. The houses were of a useful age, that is, they had not yet reached 10 years of deterioration (the period in which the post-sale guarantee for structural damage ends in Chile).
During 2017, Enel Generación closed an important agreement with the Junta de Vecinos de Huertos Familiares and later with Doña Isidora that involved:
- Establish a technical table with engineers representing the interests of the community, Enel engineers and a third technical part that was identified in the CITEC- Centro de Investigación en Tecnologías de la Construcción, of the University of Bío-Bío.
- Carry out a comprehensive technical study of each home of Huertos Familiares and Doña Isidora for an excellent repair. This research was carried out by CITEC from the University of Bío-Bío and agreed upon by the technical committee.
- Housing change option for those families who voluntarily opt for a permanent change of home. For this measure, Enel considered a team of experts who prepared an appraisal study for resettlement purposes. This process involves recognizing the residences as if they were in perfect condition.
- Study of social impacts and recognition of management measures.These measures recognized the expenses incurred by the families, considering that the deterioration of the houses was mainly structural. These management measures were paid to all families during 2017. An additional management measure was contemplated exclusively for those families that opted for repairs, given that they will have impacts resulting from the repair process in their homes. This began in 2019 with the detail engineering phase, the repair project and the obtaining of permits associated with the new process and a bidding process by Enel.
- The repair process is voluntary and will begin on the ground in 2020 and end in 2023. To reassure families and restore trust, this process will be executed initially in pilot homes so that families know the repair process in each neighborhood.
- Temporary relocation: To avoid the inconvenience of the families during the repair process and the associated costs, Enel has fully equipped fifteen houses within the neighborhoods, which will be used as residences, to accommodate the families.
- Battery of improvements, with the purpose that the families that will give their houses to repair, opt to a better quality of life. Enel committed a series of additional ones not identified by CITEC but that seek to improve the quality of life of the families. For example, the change of roof covering, installation of a humidity barrier, among other actions.
f) Loss of materiality, the "TOP" houses: The "eradication" process implemented in 2010 did not consider those families who own houses with a verifiable constructive superiority. The diagnosis found that the public-private resettlement plan was only aimed at those families of high vulnerability, with houses built with light materiality. Therefore, during 2017, Enel applied a specific methodology for these users, established a mechanism that included an appraisal study with criteria of social relevance, which recognized in an auditable manner this loss of materiality of the houses called "Casas Top".
After the analysis of each case, an agreement was generated with each family, allowing them to be resettled in conditions appropriate to their home, with criteria of equity and transparency, in accordance with the IFC resettlement standard.
g) Consolidation of information, an updated baseline: During 2018, Enel systematized the entire process executed. With this instrument, it learned about the reality and management measures of each of the resettled families. This implied that those beneficiaries who had a transactional logic and who attempted aggressive actions to obtain benefits again were dismissed in their claims, being considered as "opportunists of the process". This has allowed Enel to have a very close link with those families who, in an auditable and measurable way, were indeed impacted. This procedure has allowed Enel to put principles of equity and impartiality to work in the face of these events.
During March 2020, there was an irregular tapping of one of the high voltage towers that evacuates the energy from Central Bocamina. This irregular takeover was carried out by people who had received onerous agreements in the past. For this reason, the company refused to meet with these families, since accessing these pressures would mean reopening gaps in a process that was in the process of being remedied.
h) Impacts on the economic environment, impacted rural enterprises: The revised resettlement process found that a group of "carretoneros" (a trade in which a horse and cart is used as transport for the sale and distribution of charcoal and firewood) was recognized in the process with accredited documents. However, the associated management measures were inconsistent with the losses of the families who were forced to sell their main source of income (the horse) since, in the destination areas, it is prohibited to use the homes for the care of productive animals. This controversy was resolved by Enel and the cartwrights, with a process of formulating projects aimed at reactivating their enterprises. Today, most of them carry out cargo transfers, materials, removals or distribute certified firewood.
i) Restitution of social infrastructures, the "My neighborhood, our neighborhood" plan: The resettlement process excluded the social infrastructures of the areas of origin as community and other headquarters. These were intended for the cohesion of families. For this reason, Enel, during 2017, initiated a plan focused on the replacement of community infrastructures and equipment. These projects are designed together with the community and are currently an opportunity for families to acquire skills and have a source of employment, in the construction phase of these initiatives.
This plan contemplates the construction of infrastructure in the neighborhoods where these buildings were not developed and considers seven infrastructures, of which a sports center of excellence is completed and three social centers, built with models of circular economy and with local labor opportunities marked by a strong gender focus. During 2021, the delivery of three more infrastructures will be completed.
These jobs involved a workforce of more than 200 people, 50% of whom were women working in construction, and jobs associated with the work such as cooking and monitoring.
j) Management measures for people with disabilities:
The livelihood plan contemplates universal access measures for all infrastructures that are delivered in the process of relocation of families. This measure is compensatory in case the family has already invested and accredited these adaptations in the houses that did not contemplate this measure in the past.
k) Management measures for pregnant people: Those women who were pregnant were excluded from the relocation process, mainly because the baby was not born at the time of the social cadaster. Enel facilitated and recognized all these families.
l) Local grievance mechanism with an international approach to resettlement: During 2018, Enel installed a local grievance mechanism in Coronel to resolve issues that required a technical-social approach that would provide formal responses to those users who could be affected in their quality of life or who required the provision of clear and concrete information. The system has handled more than 400 situations, positively remedying more than 70%. The rest have been rejected mainly because they are users who have already received the most advantageous agreements or because their complaints were not supported or creditable.
m) Installed capacities: All the gaps in resettlement have been addressed as a vision of opportunity to apply Enel's shared value creation (CSV) model, which is why the buildings, housing and programs promoted by the company encourage the use of local SMEs, the hiring of local labor and the training of people in building and social monitoring.
Immaterial Losses of Families, The Livelihood Restoration Plan:
This plan aims to be a bridge for the long-term economic development of families and is intended to improve their quality of life or livelihood, understood as the full range of means used by individuals, families and communities to earn a living.
In 2020-2021 period, the following social development programs will be carried out:
a) Program aimed at Older Adults, Children participating in the Resettlement Plan. Objective: To generate instances of social participation and recreation of the elderly, enhancing their social and cultural rights. Audiovisually documented conversations will be carried out to share and value the stories of their current populations, reinforcing their sense of belonging and revealing their life experience. It addresses human and social capital.
b) "Coronel Emprende" Competitive Fund, special line for entrepreneurs of resettled families. Objective: to promote local entrepreneurship, opening new opportunities for productive development that favor the social and economic development of the resettled families. Aimed at formal and informal undertakings by members of resettled families. Addresses economic capital.
The Fund has benefited more than 140 enterprises, 72 of which are led by women.
c) Scholarships for Higher Level Students "Beca Rosita Medel".
Objective: To contribute to the continuity and permanence of higher education for members of resettled families, who are studying at a higher level of university and technical education. Addresses human capital. 40 scholarships will be awarded annually to students who demonstrate academic excellence.
d) The Mural: Given the process of restoring livelihoods and the recovery of the social fabric with the resettled families, the first project in Chile of Enel's Open Power to Art plan begins, which consists of a mural of more than 3000 meters in length where the community captured historical passages of the commune. It is one of the largest murals in the country.
e) SMEs in Coronel: The company's change in strategy, inspired by international criteria to restore livelihoods in Coronel, involved strengthening the entire supply chain for the sustainability department. Catering services, parking lots, lodging, events, cleaning services, monitoring services, food services, began to be activated in the same commune of Coronel, avoiding going to other communes in the region with greater resources such as Concepción or San Pedro de la Paz.
f) A new alliance with artisanal fishing: Many of the families in the resettlement had as their head of household and support for the artisanal fishing families, so a large number of these people were relocated away from their trades. With the aim of generating a common alliance between artisanal fishermen and Enel, a new approach and lines of work were developed that were framed in the just transition, that is, collaborating in building an economic heritage for these groups, avoiding the welfare approach previously installed in the community. For this reason, a joint program was designed with 2,039 fishermen that integrates twenty social infrastructures for artisan fishing and a competitive fund of 600 million pesos a year for the reconversion of trades, or the strengthening of existing ones, this during the useful life of the plant.
g) CorCoronel Fund: In order to collaborate in the development of the commune of Coronel, Enel injects 180 million pesos annually into the CorCoronel (Municipal Corporation). To date, projects have been implemented in the areas of the environment, roads, and economic development. Currently, this amount has been a support to attend the health or social contingency measures for the COVID-19 pandemic.
h) Circular Economy: Coronel was one of the first communes to develop, together with Enel, circular economy SMEs. This is the case of the ENTREPALLETS SME, which is dedicated to extending the useful life of industrial pallet wood. This SME, made up of three women from Coronel, has facilitated the implementation of social centers, the sustainability office and other projects with eco- furniture design. These women traveled from Coronel to Italy to present this pioneering undertaking that brings together circularity and gender perspective.
Installed capacities in our people: Enel professionals develop expertise in the international standard of resettlement.
At the local level and applying the guidelines of the Sustainability Management, Enel deploys a work team in Coronel composed of professionals and technicians who, on a daily basis, attend to individuals and families in the community.
This territorial team absorbed capacities in the knowledge and application of the International Finance Corporation regulations. The ERM experts trained this working group in the theoretical framework, application of the standard and management measures in both the cases of resettled families and those pending resettlement.
Environmental improvements, the new Bocamina:
Enel also carried out a process of environmental excellence for Bocamina. A series of major environmental improvements were implemented through investments of more than $200 million dollars, which are fundamental to guarantee the sustainability of the project and the permanent respect for the human rights of individuals, communities and the environment.
The main environmental improvements of the plant are specified below:
- Implementation of "Johnson" type filters for seawater suction and cooling in both units of the plant that almost completely reduce the entry of hydrobiological organisms into the plant's cooling system.
- Two domes for the collection of coal, in both units of the plant. These geodesic metallic structures prevent pollution by coal dust and have made Bocamina the first power plant of its kind in the country and in Latin America to have this modern system.
- Acoustic measurements in the whole plant.
- Particulate matter (PM 2.5) monitoring in the online air quality network which is publicly accessible information.
- Environmental excellence improvement plan for the "Millabú" ash dump that is being reforested, with a 75% progress.
All these improvements have made Bocamina one of the thermal plants in Latin America with the best performance and environmental standards.
Just Transition, Decarbonization Plan: The Final Closure of Both Units is Brought Forward.
On May 27, 2020, the board of Enel Generación Chile announced its decision to bring forward the closure of the two units of the Central Bocamina thermoelectric complex. In order to implement this measure, the company requested the Executive Secretary of the National Energy Commission (CNE) to authorize the final withdrawal, disconnection and cessation of operations of Bocamina I, no later than December 31, 2020 and of Bocamina II, on May 31, 2022.
The application was subsequently approved by the National Energy Commission.
This definition implied substantially advancing the closure dates committed by the company in the National Decarbonization Plan signed with the Ministry of Energy on June 4, 2019, which foresaw the closure of Unit I by the end of 2023 and, at the latest, in 2040 for Bocamina II. This decision confirmed the leadership of the Enel Group in Chile by accelerating its decarbonization process, reinforcing its commitment to face the effects of climate change, in addition to the investment plan that considers adding 2 GW of renewable energies to the energy matrix by 2022.
Even though the plant will cease operations in December 2022, all commitments and plans that Enel has established in Coronel will be maintained and executed as it has committed to families and communities.
In 1958, the state-owned electric utility company Endesa began the construction of the Pullinque hydroelectric power plant on the northern bank of the Huanehue river, within the framework of the National Electrification Plan carried out by the State of Chile through its production development corporation CORFO. The 51 MW pass-through power plant utilizes the water of the Huanehue river, located in the Entre Ríos area of Panguipulli county, which flows into the Panguipulli lake. The hydraulic structures built in the 1960’s mainly consist of a water intake structure (bocatoma) at the Pullinque lake river mouth, which is channeled towards a turbine hall where energy is generated. The power plant was sold by Endesa to a third party and ultimately acquired by Enel Green Power in 2001.
The social environment of the Pullinque hydroelectric power plant is comprised of 350 Mapuche families distributed among 9 rural communities spanning across four territories: Tralcapulli, Llongahue, Curihue, and Tralahuapi.
From 2006 to 2016, the communities chose to work alongside the Company on local development initiatives, specifically in agricultural development, aimed at increasing crop yields for self-consumption. In some cases, these efforts surpassed family needs, allowing for distribution in fairs and markets, thus increasing their revenue potential. In addition, and for almost 15 years now, Enel funds a scholarship program to foster education continuity among the community’s students.
Starting in 2018, the communities founded the Kom Kiñepe Tain Newen corporation to broaden the areas of investment from agriculture and education to include infrastructure, housing and land improvement. The corporation represents the Llongahue, Tralcapulli, Curihue and Tralahuapi territories. Kom Kiñepe Tain Newen and the Company operate a task force to define local development programs.
Enel Green Power funds over 100 scholarships per year, distributed among students in high school, technical institutions, and universities, allowing these students to further develop their professional careers. In 2019, scholarships were extended to primary school, benefitting 60 students.
Local development plans also included investments in agricultural development, infrastructure, and land improvement. To this end, in 2019 the Company collaborated with 118 community members in improving the conditions of their productive and entrepreneurial initiatives.
These investments notwithstanding, some of the families living by the Huanehue river have expressed their disappointment regarding a section of the river that has not seen the flow of water in decades.
As stipulated in Company guidelines regarding relations within territories where it operates, Enel has actively participated in task forces dedicated to study and design of potential solutions to the aforementioned problem.
Specifically, regarding the section of the river without water since the 1960s, it was noted that any measure to restore the Huanehue river water levels must have completed evaluations for its technical, economic, and, most importantly, environmental feasibility, in order to mitigate or prevent possible environmental impacts to ecosystems existing in the area for more than 60 years. It was also noted that any infrastructure or activity carried out by community members further downstream, which could be affected by an increase in the river’s water flow, must be identified. The necessary studies, whose scope was brought forth at the task force meeting attended by the families and the Company, included participatory methodologies to define potential previous impacts, identify potential future impacts due to water flow, and update the environmental baseline.
Even though the studies were required to third party experts and underway, the works were not supported by families living along the river and were therefore suspended.
Enel has invested in the development of local communities within the operating zone of the Pullinque hydroelectric power plant through initiatives and projects that have been agreed upon by communities and that have been created by joint task forces dedicated to the construction of a common perspective, aimed towards finding consensual solutions with the communities. In the case of the Huanehue river, Enel has listened to the community and has made the necessary resources available to find plausible and satisfactory solutions to the territory’s needs, combining the power plant’s operational continuity, the community’s needs, and above all, their consent on all works that may be implemented.
In the case of the Huanehue river, all possible solutions, given the technical scale, dimension, and environmental requirements of replenishing the river’s flow, require evaluations and studies to minimize the impacts on anthropic and environmental ecosystems that have been developed in that section of the river without permanent water flow over the last 60 years.
Ongoing dialogue, transparency, and timely delivery of information among parties are instrumental in creating consensual, plausible, and sustainable solutions, which have been implemented in the more than 300 communities with which we work throughout the Chilean territory.