COMPLAINT BEFORE THE INDEPENDENT CONSULTATION AND INVESTIGATION MECHANISM (MICI) OF THE INTER-AMERICAN DEVELOPMENT BANK (IDB) Ituango Hydropower Plant (IHP), Antioquia, Colombia To: Victoria Márquez Mees Director, Independent Consultation and Investigation Mechanism Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 Email: [email protected] Tel.: 202-623-3952; Fax: 202-312-40 Re: Project 11794-04: EPM - IIC Ituango Hydropower Plant in Colombia http://www.iic.org/en/projects/colombia/11794-04/epm-ituango-hydropower-plant Filed by: Individuals, communities, and civil society organizations located in the municipalities of Ituango, Toledo, San Andrés de Cuerquia, Briceño, Valdivia, Sabanalarga, Peque, Caucasia, and Medellín, Antioquia, under the umbrella group Movimiento Ríos Vivos Antioquia. The following international organizations are providing support in this case: the Interamerican Association for Environmental Defense (AIDA), the Center for International Environmental Law (CIEL), and the International Accountability Project (IAP). Points of contact: ▪ Isabel Cristina Zuleta López ▪ Pedro Vicente With support from: Center for International Environmental Law (CIEL)1 Interamerican Association for Environmental Defense (AIDA)2 International Accountability Project (IAP)3 1 Point of contact: Carla García Zendejas 2 Point of contact 3 Point of contact: Alexandre Sampaio. 1 Antioquia, Colombia, June 5, 2018 Victoria Márquez Mees Director, Independent Consultation and Investigation Mechanism Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 Dear Ms. Márquez, We are writing to you as Colombian citizens and members of Movimiento Ríos Vivos Antioquía (MRV) on behalf of the communities that reside in the municipalities of Briceño, Ituango, Toledo, San Andrés de Cuerquia, Valdivia, Sabanalarga, Peque and Caucasia, Antioquia. We have been affected by the Ituango Hydroelectric Plant (IHP), Project Number 11794-04 financed by the Inter-American Investment Corporation (hereinafter IIC) (now IDB Invest) of the Inter-American Development Bank (IDB), which is being implemented by Empresas Públicas de Medellín S.A. E.S.P. (EPM) in Colombia. At the end of this letter is a list of the 472 signatories to this complaint. Based on the following considerations, we are filing this complaint with MICI in reference to the above-cited project. Background This complaint refers to the investment of the Inter-American Development Bank Group (IDB Group) through the Inter-American Investment Corporation (now IDB Invest) in Project Number 11794-04. The Board of Directors of the Inter-American Investment Corporation (IIC) decided in November 2016 to provide up to US$ 550 million in financing to Empresas Públicas de Medellín S.A. E.S.P. (EPM),4 the company that is building the Ituango Hydroelectric Plant (IHP) in Colombia. In October 2012, the IDB also approved financing for technical cooperation on the same project, specifically number CO-T1250: Support for Structuring the Ituango Hydroelectric Project.5 In January 2018, the IDB Group announced a new investment to provide EPM with financing for the construction of the Ituango Hydroelectric Power Plant through the management of a loan package involving several banks in the amount of US$1 billion.6 4 Inter-American Investment Corporation (IIC). 11794-04 EPM: Ituango Hydropower Plant. Available at: http://www.iic.org/en/projects/colombia/11794-04/epm-ituango-hydropower-plant 5 Inter-American Development Bank CO-T1250: Support for Structuring the Ituango Hydroelectric Project. Available at: https://www.iadb.org/en/project/CO-T1250 2 This complaint therefore concerns the impacts and harm caused by a project that has received several IDB grants in recent years. This demonstrates the years-long presence of the IDB Group in the Ituango Hydroelectric Project in connection with its client EPM. The main works of the hydroelectric plant, which was already under construction when the Corporation's board approved the loan, are located on the Cauca River, between the mouths of the San Andrés and Ituango rivers, 8 km below the Pescadero Bridge in the department of Antioquia, and approximately 170 km from the capital of this department, Medellín. The main works are located in the municipalities of Briceño, Ituango, and Toledo. The project’s reservoir also encompasses land from the municipalities of Peque, Sabanalarga, Buriticá, Liborina, Olaya, and Santa Fe de Antioquia. The project entails the complete relocation of the towns of Orobajo (municipality of Sabanalarga) and Barbacoas (municipality of Peque), as well as a large number of families scattered throughout the Cauca Canyon. In addition, related construction work is being done on land in the municipalities of San Andrés de Cuerquia, Yarumal, and Valdivia for infrastructure projects such as the straightening of the San Andrés de Cuerquia-El Valle road, the Yarumal-Work Site transmission line construction, and the opening of the Puerto Valdivia-Dam Site road, respectively. The IHP is slated to become the largest hydroelectric power plant in Colombia, with a finished dam measuring 225 meters in height, and a 79 km long reservoir that will flood more than 4,500 hectares. It will have an installed capacity of 2,400 MW, which will allow it to generate approximately 17,460 gigawatts per hour (GWh) every year. In the first phase of the project, four of its eight turbines are scheduled to be fully operational by 2019. During the second and final phase, the four remaining turbines will come into operation in approximately 2022. Based on the project’s potential risks, the IIC rated the IHP as category “A”. Projects in this category are likely to cause significant negative environmental and associated social impacts or have profound implications affecting natural resources. According to the Corporation: “IIC’s participation in the financing will play an important catalytic role in mobilizing new sources of long-term commercial financing for EPM. The IIC will lead a financing package to EPM, which will also mobilize additional financing from international financial institutions and investors under the IIC-B Loan as well as IIC managed funds. The transaction will be structured as an unsecured corporate loan to EPM. IIC/IDB 6 “IDB Invest signs largest renewable energy project in Colombia” Available at: https://www.iadb.org/en/news/Largest_renewable_energy_project_in_Colombia 3 facility will support EPM’s strategy through a 12-year unsecured loan (including a 4 year grace period) to EPM […].”7 B. Noncompliance with IIC and IDB Operational Policies We are of the opinion that the investment in the IHP reflects a failure to comply with the following IDB and IIC Operational Policies, and defer to MICI’s assessment of them based on the facts and data of the project in question: OP-703: Environment and Safeguards Compliance Policy OP-710: Operational Policy on Involuntary Resettlement OP-102: Access to Information Policy OP- 761: Operational Policy on Gender Equality in Development Environmental and Social Sustainability Policy (IIC) Disclosure of Information Policy (IIC) We also believe that the following IFC performance standards have not been met: Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts Performance Standard 2: Labor and Working Conditions Performance Standard 3: Resource Efficiency and Pollution Prevention Performance Standard 4: Community Health, Safety, and Security Performance Standard 5: Land Acquisition and Involuntary Resettlement C. Description of substantial and direct harm caused by non-compliance with Relevant Operational Policies As this section will more fully explain, there have been instances of non-compliance with IDB operational policies that have caused harm to the environment and the community affected by the IHP. The most significant breaches are as follows: • The affected community is a vulnerable population with high rates of poverty and is largely a victim of the armed conflict. It is made up of people who are 7 Inter-American Investment Corporation IIC. Ituango Hydropower Plant. Available at: http://www.iic.org/en/projects/project-disclosure/11794-04/planta-hidroel%C3%A9ctrica-ituango, last visited on May 28, 2018. 4 generally fishermen, gold panners, and farmers. In addition, there were many people who disappeared during the war and whose bodies were dumped into the Cauca River in the area where the project will be carried out, and there is a danger that they will not be found when the reservoir area is flooded. • No adequate and complete environmental impact assessment was carried out, nor was there a cumulative impact assessment. This circumstance is reflected in the project’s current state of crisis, which has led the Colombian government to declare a disaster alert (red, orange, and yellow). • The environmental authority waived EPM's obligation to present an environmental diagnostic of alternatives without even stating the reasons for the exemption.8 • No adequate social impact assessment was carried out: not all of the affected people were identified, and there was no appropriate characterization of the population that would be affected. • No effective procedures for citizen participation and access to information have been implemented that have involved the presence of all affected populations. • National environmental regulations and obligations established in the environmental license have not been complied with, resulting in the initiation