While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category A according to IFC’s Environmental and Social Review Procedure (ESRP) due to a number of potential significant impacts of the Project and its implications on natural resources which include, among others, potential significant hydrological changes in over 100 km of streams and rivers, as well as relevant implications affecting the natural landscape of a touristic area of the Andes Mountains.

Performance Standard 7: Indigenous Peoples does not apply as there are no indigenous territories and no indigenous peoples communities have been identified in the Project area of influence. Performance Standard 8: Cultural Heritage, does not apply as the Project will not affect any known archeological, cultural heritage or paleontological sites.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Policy
AES Gener maintains an Integrated Environmental, Health, Safety and Quality (EHSQ) Policy, which is aligned with its parent company’s (AES Corp.) corporate guidelines, and which is certified to ISO 14001:2004 and OHSAS 18001:2007.  The EHSQ Policy which has been developed and approved by the Sponsor’s presidency is widely disseminated throughout AES Gener’s operations in Chile.  It includes statements that give priority to safety of employees, contractors, and communities over all other business priorities and expressions of a commitment with environmental protection and the concept of continuous improvement.  The Sponsor has also developed an Ethics and Compliance Policy mandated by the parent company AES Corp., a Policy on Community Liaison and Networks and a Management of Contractors and Subcontractors Policy, some of which are described in more detail in subsequent sections of this summary. These policies will be applied to the Project together with the applicable aspects of the IFC Performance Standards as described below.

Identification of Risks and Impacts
Through the implementation of the risk identification process in its EHSQ Policy, the PHAM commissioned the preparation of an Environmental and Social Impact Assessment (ESIA) based on Chilean regulations. The ESIA was initially completed in May 2008 and subsequently amended with Addenda in November 2008, January 2009, and March 2009. The revised ESIA for the Project was approved by the various authorities consulted with as part of the Chilean environmental licensing process, publicly documented since 2008 in the government website (http://www.e-seia.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=2933044#-1). The Chilean Government subsequently issued an Environmental Authorization (Resolución de Calificación Ambiental - RCA), Resolución Exenta N°256/09, dated March 30, 2009 (seia.sea.gob.cl/archivos/bc4_RCA.pdf).  The ESIA comprehensively identified key environmental and social impacts, and the corresponding mitigation measures, associated with the Project’s construction and operation.

As regards the construction, the impact identification included, among others,  alteration of air quality resulting from transportation and construction activities; noise and vibrations; temporary alteration of water quality and flow; impacts on aquatic fauna; waste rock disposal; risk of soil contamination from waste and hazardous substances; soil erosion and compaction; loss of vegetation and forest cover; impacts on terrestrial fauna; project proximity to protected areas and glaciers; greenhouse gas emissions; alteration of the natural landscape; changes in the local labor market; temporary disruption of tourism activities; traffic and road use. Mitigation and management measures corresponding to each of the identified impacts were incorporated into the Project’s design and construction phase environmental and social management plans, as well as in the Contractor’s contracts.   The ESIA comprehensively  identified key environmental and social impacts likely to be generated during the Project’s operation including, for example: permanent changes in the water flow regime; alteration of sediment transport characteristics of the Maipo River; impacts to surface hydrology; proximity to protected areas; potential impacts to water rights holders in the intervened reach and immediately downstream of the Project discharge; impacts to community water intake structures in the intervened reach; visual impacts and instream recreational river use (e.g. kayaking) impacts. Mitigation and management measures corresponding to each impact have been proposed as part of the RCA and the Company is obligated to incorporate them into the Project’s operation phase environmental and social management plans prior to the initiation or during construction activities, as applicable.

The PHAM completed an Alternatives Analysis report which summarizes five Project alternatives that have been analyzed for the past 22 years.  The report describes several important design, location and technology iterations for various Project components that were studied and modified to address environmental, social and cultural heritage aspects.  The technical, financial and legal feasibility of those alternatives were also analyzed.  Between 2006 and 2008, the PHAM made significant changes to the Project design based on input received during the stakeholder consultation process.   Key changes incorporated to the Project design to address stakeholder concerns include:

• The removal of the flow intake at Las Cortaderas Stream to protect the ecological flow in the Yeso River and the vegas wetlands;
• Elimination of the Laguna Lo Encañado as a forebay and inclusion of smaller forebay as part of the surge shaft at Alto Aucayes to avoid concerns raised by stakeholders; 
• Re-routing of the crossing of Yeso River to avoid a cultural heritage finding associated to an Inca Trail (“Camino del Inka”); 
• Removal of all surface infrastructure in protected areas; 
• Incorporation of a recharge chamber adjacent to Colorado River with liner to serve as regulating pond for Alfalfal II and for overflow discharge; 
• Relocation of the Las Lajas powerhouse and surge shaft to minimize impacts on El Manzano community and Project opposition, changing the tunnel routing, access roads, waste rock disposal, etc.; 
• Cancellation of the flow intake at Quempo Stream to protect the ecological flow in the Colorado River; and,
• Incorporation of the 13.3 km-long discharge tunnel from Las Lajas designed to discharge directly to the Maipo River downstream of El Manzano.

Furthermore, after the ESIA approval, additional design and technology changes and operational procedures and mitigation measures will be incorporated to address further stakeholder concerns  according to the applicable regulations. These measures primarily included:

• The incorporation of turbine deflectors, communication system, and overflow structure design to minimize the impact of water flow interruptions on water users downstream of the discharge point during energy grid blackouts; 
• The installation of gauging stations upstream and downstream of the discharge structure on the Maipo River; 
• The reduction in the volume of the forebay at Alfalfal II; and, 
• The relocation of La Engorda intake to protect “veranada” vegetation.

The PHAM completed a comprehensive Cumulative Impacts Assessment (CIA) report following an internationally accepted methodology, incorporating qualitative and quantitative effects and taking into consideration issues raised by stakeholders as well as the recommendations from the IFC.  An initial draft of the CIA report was disclosed on the Lender’s websites in October 2012 and later updated to address comments from the IFC and from stakeholders.  The revised version included the participation and review of an international consultant with recognized experience in the development of cumulative impact assessments and their alignment with international standards. The CIA includes a detailed description of the geographic and temporal boundaries of the Project’s direct footprint, ancillary facilities and associated component, and existing or future planned projects within a basin-wide approach.  The geographic boundaries are described for each selected Valued Environmental Component (VEC) in six maps.  Temporal boundaries consider four periods which coincide with important infrastructure development events in the Maipo River watershed.  VECs were identified based on the environmental, social and economic components assessed during the ESIA including topics raised during the ESIA consultation process and issues raised by opposing stakeholders.  VECs identified included: river continuity; water flow; security in water availability for irrigation; recreational uses of water; sediments dynamics; socio economic component; local infrastructure, especially routes G-25, G-345 and G-455; biodiversity in water courses; surface water quality; air quality; cultural heritage patrimony; climate change; and protected areas and/or areas or touristic, cultural or patrimony use.  The criteria for selection included (1) VEC of regional importance; (2) VEC affected by PHAM and (3) VEC affected by other projects/ activities.  Seven cumulative effects are identified: reduced water flow in the system; reduced sediment transport capacity in the system and consequent effects on infrastructure and livelihoods; riverbed erosion; reduced tourist visits; increased risk of traffic accidents and deterioration of existing public roads; increased demand on basic services in the local communities; and disturbance of local communities from in-migrant workers. The CIA confirms the appropriateness of many of the existing and proposed mitigation, management, monitoring and compensation measures already included in the PHAM as part of the ESIA approval process, including specific measures and monitoring commitments including a description of how PHAM will minimize cumulative impacts and contribute, at a regional level, to improve certain conditions (e.g., capacity building for local employment).  It further explains the adaptive management approach by which the PHAM will monitor on an ongoing basis potential cumulative impacts and implement additional prevention and mitigation measures as applicable.

The PHAM has evaluated the potential changes to the hydrology of the project area due to regional climate change projections. The evaluation consists of the application of the Stockholm Environment Institute’s Water Evaluation and Planning System (WEAP) hydrological model, together with three Global Circulation Models (GCM’s) downscaled to thirteen points of interest within project area rivers. The hydrologic model was calibrated and validated with observed streamflow data from six different hydrologic stations (San Alfonso, Queltehues, Olivares-Colorado, Colorado-Olivares, Colorado-Maipo and Las Melosas). Meteorological projections for the A2 scenario (most severe scenario with the highest air temperature projections from GCM’s) and for RCP2.6 scenario (most favorable in terms of radiation) were used to evaluate climate change impacts in the Maipo (including Yeso) and Colorado systems and their sub-watersheds for the time period between 2010 and 2070. Based on the model results, the Report states that anual streamflow in period 2041-2070 may decrease between 3.4% to 7.3% for the Maipo system and  between 8% to 9% for  the Colorado system without the shrinking of glaciers, in the period 2011-2040 annual streamflow may decrease 5.9% to 7.5% in the Maipo system and between 7.5% to 8.5% in the Colorado system without the shrinking of glaciers. The report also states that the Colorado system is more vulnerable to global warming than the Maipo system. However, when shrinking glaciers (approximately 1% per year) are considered, these negative percentages of streamflow are lower than without shrinking glaciers because runoff will be increased, particularly during the winter months. In order to address the potential cumulative aspects of impacts related to climate change, AES Gener is currently participating and sponsoring the study “Vulnerabilidad y Adaptación a la Variabilidad y al Cambio Climático en la cuenca del rio Maipo en Chile Central” (Pontificia Universidad Católica de Chile (PUC) and, International Development Research Center (IDRC)), together with other private companies, irrigation associations of the Maipo River, governmental services (DGA, municipalities) and ONGs. (cambioglobal.uc.cl/index.php/en/proyectos/idrc.html).

The above described assessments and evaluations can also be found on the website of Alto Maipo http://www.altomaipo.com/Temas%20de%20interes/Paginas/default.aspx

Going forward, the PHAM will ensure that potential environmental and social impacts for future expansions are evaluated in accordance with local legal and IFC requirements, including potential use of water resources from Laguna Negra, Laguna Lo Encañado, in accordance with the agreement between Aguas Andinas and AES Gener, and the Volcan River, in accordance with the agreement between AES Gener and RP Global Chile Energías Renovables, and any other future new expansions, if applicable. 

Additionally, climate change related risks will be monitored and managed as defined in the Participatory Monitoring and Ecosystem Services Management Programs described in more detail below. 

Management Programs
Based on the results of the ESIA and as a condition of the Environmental License (RCA) the project is required to develop and implement a series of environmental and social management plans to address the impacts and risks identified. The plans, which are to be developed in detail by construction contractors according to the PHAM’s legal requirements and defined terms of reference, include: 

• Emission Compensation Program
• Environmental Management Plan for Waste Rock Disposal Sites
• Reforestation Management Plan 
• Waste Management Plan for Work Fronts and Camps
• Access Roads Improvement Program
• Dust Suppressant Application Program
• Vegetation Restoration Plan
• Contingency and Emergency Response Plans  
• General Operation and Closure Standards for Work Fronts and Camps
• Fauna Rescue and Relocation Plan
• Integrated Management Plan for Populations of Small Catfish in Alto Maipo
• Petroleum and Hazardous Substances Management Plan
• Explosives Management Plan

Additionally, AES Gener has an Integrated Environmental, Health and Safety and Quality (ESHQ) Management System, which covers all its operations (i.e., the Cordillera Complex). The EHSQ Management System specifically for the PHAM Project, to be developed by Alto Maipo SpA (the Company) will be based on the AES Gener system, adapted to the specifics of PHAM.  During preliminary construction works in 2012 and 2013, EHS plans and procedures were implemented by CONPAX, the contractor performing the preliminary works that in turn have an ISO 14001 and OHSAS 18000 certified EHS management system that is consistent with the AES Gener’s and IFC requirements.  

Going forward, AES Gener will complement the general operational management programs described in the environmental and social impact study (ESIA) and AES Gener’s existing management plans with detailed operational phase environmental, health, safety, and social (EHSS) management plans specific for the Alto Maipo Hydropower Project. Examples of those plans are described in more detail below.

Organizational Capacity and Competency
The PHAM Project is managed as an independent business unit supported by the larger AES Gener organization based in Chile, including personnel from the Cordillera Complex and other Chile operations, as well as from Antofagasta Minerals and the AES Corporation. The Project has a dedicated Construction Management Team supported by external consultants for Environmental Supervision,  Owner’s Engineering and Technical Inspection.  During 2012 and early 2013 the Company complemented its ESHS organizational structure with the incorporation of a dedicated Environmental Manager and dedicated Community Relations Manager, both reporting directly to the Project Director. The Project also has a dedicated Safety Manager who reports to the Project Director.

The Environmental Manager is supported by three Environmental Engineers, dedicated to implementation of the EHSQ Management System and to oversight of regulatory compliance with RCA conditions. During the preliminary works stage, this team was further supported by an external consultant (Cruz y Davila, C&D) with approximately 20 professionals at construction fronts responsible for day-to-day supervision of the implementation of environmental plans and procedures by contractors and subcontractors during the construction of the preparatory works (access roads and electric infrastructure) conducted since early 2012 in preparation for the main construction activities planned for early 2014.  The Community Relations Manager who reports directly to the Project Director, is supported by the a Community Relations Chief, Communications Chief and Community Projects Administrator, in addition to a Community Relations Assistant based in the local office at San Jose de Maipo.  The Community Relations team also includes three Contractor Monitors responsible for coordinating and monitoring all contractor activities related to each of the principal construction areas, the Volcan, Colorado and Yeso areas.In addition to the Company’s organizational structure for ESHS supervision and support from contractors, per the RCA permit, the Project has an independent auditor that reports directly to the authorities.  This auditor is also part of the authorities’ regular on-site inspections and reviews compliance with RCA commitments and applicable Chilean regulations.

Going forward, AES Gener will define the organizational structure for the management of ESHS issues during the project’s operational phase, complementing the existing structure of the Cordillera Complex.  Given the extent and complexity of ESHS monitoring and management requirements of the Project, the organizational structure will include at least one dedicated ESHS Manager supported by the required environmental, OHS, and social staff. 

Emergency Preparedness and Response
The Project has developed a series of emergency preparedness and response plans (EPRPs) applicable to the construction and operational phases, addressing natural as well as anthropogenic hazards.  EPRPs based on an initial identification of potential risks and impacts in the Project’s ESIA and on existing emergency plans currently developed for AES Gener’s hydropower operations in the Maipo River Valley region (referred to as the Cordillera Complex Operations).   The EPRPs, mainly applicable to the construction phase of the project, cover aspects such as: avalanches and lahars; landslides and rockfalls; flooding; earthquakes; explosion hazards; drainage from waste rock disposal sites or tunnels; traffic accidents; hazardous substance spills; damages to places of cultural interest; damage to groundwater; work site fire; and falls from heights.  Some of the aforementioned aspects are detailed in the Contingencies and Risk Prevention Manual (an Annex to the ESIA) which includes the following documents: Risk Prevention Plan for Contractor Companies; Contingency Plan for Contractor Companies; Cordillera Complex Emergency Plan and Annexes; Spillage Management Plan for the Cordillera Complex.

Although operational phase contingency plans are still to be developed, the Company has already developed a plan to respond to electricity grid blackouts in order to address one the key stakeholder concerns related to the potential temporary interruption or diminution of water flow downstream of the point of discharge of the project into the Maipo River, which could occur in the event of generalized electricity grid blackouts requiring the PHAM project to suddenly shut down.   The Company describes the potential scenarios that may occur due to the event of internal or external shut downs (‘Blackouts’) in PHAM facilities in the following studies: Proyecto Hidroelectrico Alto Maipo: Minuta Operacion en eventos de detencion brusca y ‘Blackout’ and PHAM operation during ‘Blackout’ and/or abrupt stoppage events Operacion del PHAM durante un ‘Blackout’ y/o detencion brusca de las centrales.  Among the stakeholder concerns is the potential generation of a surge wave due to the assumed abrupt return of water into the streams and rivers in the event of a facility shut down.  However, this situation would require a generalized facility shutdown lasting nearly seven (7) hours.  It should be noted that only seven (7) blackout events have occurred during the last 10 years of operation Alfalfal I, all of them lasting approximately two (2) hours. 

Going forward, the PHAM will harmonize the existing EPRP plans into a discrete, comprehensive, EPRP document (a PHAM Prevention and Contingency Plan) specifically focusing on emergency situations and categorizing applicable risks by probability, severity, and magnitude, using up to date risk information, particularly on what refers to the mapping of natural hazards.  As part of the harmonization of the EPRP documents, the PHAM shall adapt the existing Cordillera Complex Emergency Plans (including the Spillage Prevention Plan) to the specifics of the PHAM project’s construction and operational phases. The Prevention and Contingency Plan should include details necessary for implementation and specify which actions are required to occur sequentially or simultaneously, ensuring consistent treatment of cross-cutting risks.  It should also define internal and external communication protocols to define the role of the Company, potentially affected communities, and local authorities (e.g. police, fire-fighting unit), clearly considering the capacity of each party to respond to emergencies related to the Project (either brought on by Project activities or natural risks affecting Project activities).  

Given the stakeholder concerns surrounding plant shutdowns, which could temporarily affect the flow regime of stream or rivers, the EPRP should specifically outline communication protocols during this specific type of events or any other type of situations which could be perceived to affect downstream populations.  The Company will ensure that the Plant Emergency Response Plan includes contingencies for all aspects related to plant operations, including filling of tunnels prior to start up and the event of a shutdown resulting from a electricity grid blackout including, but not limited to: infringement of water rights during filling of the tunnels; sudden changes in stream flow affecting intake structures for irrigation and potable water systems; and risks to communities health and safety caused by surge waves.  The definition of the EPRP and contingencies should be done in close consultation with potentially affected stakeholders and should be proactively communicated to all interested parties.

Monitoring and Review
The Project’s monitoring programs which have been defined as part of the EIA (2008) and the RCA for implementation during the construction and operational phases of the project include the following:

• Air Quality Monitoring Plan
• Noise and Vibration Monitoring Plan (construction only)
• Traffic Monitoring and Control Plan (construction only)
• Vegetation Monitoring Plan at La Engorda
• Water Quality Monitoring Plan
• Effluent Monitoring and Control Plan
• Ecological Flow Monitoring Plan
• Limnological Monitoring Program
• Flora and Fauna Monitoring
• Social Indicators Monitoring Plan

Reports of the results of monitoring activities are being compiled into regulatory and management reports for respective presentation to the regulatory authorities, as required in the RCA, and to the Project’s EHS management team, as required in the construction contracts.  Going forward, the full monitoring reports and summaries of key findings will be made available to interested parties at the Project offices in San Jose de Maipo. The results of the quarterly monitoring of social indicators can also be found on the website of Alto Maipo:

http://www.altomaipo.com/Descargas/Paginas/Monitoreo-de-indicadores-.aspx

The PHAM will develop a Participatory Monitoring Program as part of its expanded stakeholder engagement plan.  The objective of the participatory monitoring program is to include local residents in ongoing monitoring of the Project’s environmental and social performance, with particular focus on issues of most relevance to local stakeholders. The participatory monitoring program will be initiated by the formation of a monitoring committee consisting of the PHAM Community Relations Director, the PHAM Environmental Manager, and three community representatives: one representative from the Union Communal de Juntas de Vecinos, the local school system, and the municipality of San Jose de Maipo, respectively. The monitoring committee will establish the monitoring indicators and procedures and assign specific roles and responsibility to each member. Once the monitoring committee has established the scope of the monitoring program, the monitoring program will be publicized in local communities and through the internet. The monitoring committee plans to conduct a monitoring inspection at least every four months throughout the project construction phase and one time per year during the operational phase,  in order to monitor compliance with key environmental and social indicators in alignment with the RCA. A yearly survey will be conducted to verify that the monitoring panel and other participants are satisfied with the monitoring program in order to identify possibilities for ongoing improvement of the monitoring procedures.

Going forward, as an extension of the currently planned multi-stakeholder process to implement the social monitoring program, the PHAM will prepare and implement detailed participative monitoring programs to monitor, in cooperation with representatives of potentially affected stakeholders and other interested parties, potential impacts related to: 

• Changes in water flow regimes along the intervened reach and up to 5km downstream of the point of restitution during start up, normal operation, and potential emergency shutdown during “blackouts”, including access to real time water flow information in locations agreed upon with potentially affected stakeholders; 
• Changes in streambed sediment transport and any potential effects on the structural integrity of irrigation water intake and potable water intakes, along the intervened reach and up to 5km downstream of the point of restitution; 
• Potential impacts to groundwater or surface water bodies as a result of tunneling activities.

Working Conditions and Management of Worker Relationship

An average of 2,000 workers will be required during the construction phase of the PHAM, with a peak of 2,500 workers midway through the construction phase. As part of the Social Collaboration Agreement executed with the community, Alto Maipo has also committed to hire a minimum of 15% of labor from the San Jose del Maipo community. Should the local labor hours fall below this threshold, the Project will make additional payments for community activities. This obligation is included as a requirement in all construction contracts, and the Project will retain funds if the 15% target rate is not met. In addition, the Project will pay an incremental bonus to contractors for increasing local labor up to 25% of the total project hours. Workers hired from local communities are not expected to require housing, but will be transported to/from work. The remaining workers will be housed in temporary residential camps discussed in more detail below.



Chile has ratified the main ILO Conventions on trade union rights (Conventions No. 87 and No. 98), forced labor (Conventions No. 29 and 105), child labor (Conventions 138 and 182) and discrimination (Convention No. 100 and No. 111). National law offers protection in each of these areas. Chile’s Labor Code stipulates that the employer is obligated to take all measures necessary to effectively protect the lives and health of workers, maintain adequate safety and health conditions, and provide the necessary tools to prevent occupational accidents and diseases. Chilean legislation also provides protection for the rights of migratory workers and their families (Law Nº 20.123) regulating subcontractor and temporary workers contracts.



AES Gener has a series of policies which govern company practices on labor relations of own employees and contractors. These include: Policy on Selection, Hiring and Relocation of Personnel, including requirement of non-discrimination; Business Ethics and Compliance Policy which includes an internal grievance mechanism specific to unethical business conduct, requirements for health and safety practices in the workplace, and compliance with national law; Policy on Management of Contractors and Subcontractors and its accompanying Regulations describing the environmental, social, health and safety requirements; Code of Conduct for worker’s behavior while on the job, including respect and care for the environment.



Going forward, the PHAM will develop and implement a human resources policy and grievance mechanism consistent with IFC’s requirements and national labor laws. The HR policy will make explicit reference to the Company’s commitments to non-discrimination and equal opportunity; minimum work age requirements; workers’ rights to freedom of association; respect for collective agreements, if these are present; maximum working hours; and working conditions and terms of employment. The HR Policy will be disseminated
among all employees. The Grievance Mechanism will be applicable and disseminated to both contractors and employees.



Protecting the Workforce

Chilean labor laws prohibit discriminatory practices and define minimum of age of work. AES Gener complies with local requirements, supporting equal opportunity and non-discrimination in employment and requiring all prospective employees to demonstrate proof of age of 18 years or older. It also contractually requires construction contractors to do the same.



Occupational Health and Safety

AES Gener follows its parent company’s corporate policy regarding health and safety which applies to its own employees and its contractors. AES Corporation’ s “Environmental, Security, and Occupational Health and Safety Policy” requires its operations and subsidiaries to comply with applicable regulations as well as voluntary agreements/ commitments made by the Company regarding health and safety; periodically review the integrated management system promoting continuous improvement; identify and assess hazards and risks; prevent the contamination, efficient use of resources, reduction of waste generation; and promote operational excellence and compliance of clients expectations. In addition, the parent company adopts the principle that all accidents and illnesses are preventable and pledges to encourage a culture of safety amongst employees and contractors. Specific requirements include aspects such as: disclosing to workers the risks they are exposed to at the workplace; appropriate and periodic training and awareness of the risks, preventive measures, emergency response plans and communication of contingencies; reporting of injuries and illnesses; periodic medical exams; health and insurance services provided through the Mutual de Seguridad, the Chilean social security for work-related risks and occupational health and safety that is required to all construction activities; obligatory use of applicable personal protective equipment; as well as incentives for good health and safety performance. The Company and contractors are required to meet Chilean regulations related to occupational health and safety, which follow best industry practice. During the construction phase, all contractors will be required to apply their respective occupational health and safety programs. Both of the primary construction contractors, Strabag and Hochtief, have global health and safety policies. Strabag is certified under the OHSAS 18001 standard (http://www.strabag-international.com/) and Hochtief has a corporate Health and Safety Directive (http://www.hochtief.com/hochtief_en/data/pdf/directive_oshep.pdf).



Non-local workers will be housed in five worker camps with a capacity of approximately 200-400 workers in each camp, which will be set up throughout the Project area. Worker camp locations were selected considering logistics and engineering requirements, as well as the environmental, social, and health and sa
fety considerations. The Technical Environmental Specifications (i.e., Especificaciones Tecnicas Ambientales) included in the construction contracts detail the requirements for workers accommodations, including the provision of services such as potable water, energy, food, transportation, wastewater treatment, among others, which are expected to be of high standards as required by Chilean regulations. Camp locations have been selected taking into consideration potential risks due to natural hazards such as landslides and avalanches.



Workers Engaged by Third Parties

The PHAM will contractually require all construction companies and construction related service providers to demonstrate compliance with Chilean labors laws. The PHAM’s contracts with construction companies already incorporate clauses that address labor and worker rights including: freedom of association; minimum age for employment ; acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety; prohibition in use of forced or compulsory labor; clear communication of working conditions and terms of employment; no discrimination; maximum working hours and minimum rest periods; payment of wages; and ensuring worker rights to remove themselves from hazardous situations without jeopardizing their continued employment.



The PHAM has publicly committed to maximize the creation of job opportunities for local residents during the construction phase. As mentioned above, the Social Collaboration Agreement between AES Gener and the community includes a Local Employment Creation Program which requires that at least 15% of the construction phase workforce be residents of the municipality of San Jose de Maipo, and establishes procedures and mechanisms to promote local content (labor and services) in the Alto Maipo Project. The PHAM will contractually ensure that hiring of local labor is maximized by construction companies particularly for semi-skilled and unskilled work. Influx of laborers will be actively managed to avoid burdening of local services and infrastructure, through the construction of the aforementioned temporary construction camps.



The Project will require that contractors train employees in understanding workplace risks and their prevention and control, including the use of personal protective equipment (PPE), hazardous materials handling, and emergency response. Incidents and accidents will be investigated by individual contractors and followed up by the PHAM according to a documented procedure so that steps can be taken to prevent reoccurrence.



Additionally, the PHAM is already ensuring that legal contracts with all construction companies cover the following aspects: specific references to Lender’s ESHS requirements; requirements for compliance with labor and working conditions rights according to local laws and Lender’s requirements; requirements for Community Relations Management Plans; requirements for
Community Health and Safety Management Plans; requirements for adequate organizational structure and capacity to meet ESHS obligations under the contracts; requirements for Worker Camp Management Plans; and obligations to respond to findings of Project Owner’s periodic audits, including any stop work orders to address imminent risks.



Going forward, the PHAM will ensure adequate monitoring of implementation of contractor management plans to verify that contractors and sub-contractors engaged the construction phase comply with IFC requirements with regard to occupational health and safety, labor conditions, environmental performance and community engagement. The monitoring program will include regular monitoring by independent parties and tracking implementation of corrective actions by contractors.

As a run-of-river hydropower project, the main pollution related risks, and the applicable prevention and mitigation measures, are relevant to the construction phase of the project as described in more detail in this section.



Air Quality

The most significant impacts to air quality will consist of the generation of dust during the construction phase due to excavation and transportation of earth materials as well as traffic of heavy equipment and vehicles through unpaved roads. The Project will implement preventive measures and management practices for the minimization of dust generation, including: transportation of waste rock via shuttle car wagons and conveyor belts; covering of trucks with canvas; reduction of length of service roads between the stockpile and work fronts; and humidification of dirt road surfaces, among others. In addition, given that the Project is located in the Metropolitan Region and is subject to the Metropolitan Region Air Pollution Prevention Plan (PPDA), a compensation of 150% of emissions of particulate matter (PM10) is required per the RCA. Compensation measures include the improvement of 23 km of Route G-455, between Route G -25 and the Yeso Reservoir, and 23 km of Route G-25, between the Yeso Bridge and the Project work sites. The road improvements consist of rebuilding the roadbed (using a leveled granular pavement fill) and damping of the road with water and dust suppressant (Magnesium chloride - Bischofite). The proposed compensation was estimated following the calculation procedures and criteria recommended by the environmental authorities.



Noise and vibrations

Increased noise and vibrations will be generated during the construction phase mainly by the use of blasting in the tunnel portals, heavy construction machinery, operation of concrete plants, energy generators, loading and unloading of construction materials and construction wastes, and by mobile sources such as transit of trucks and vehicles. Based on detailed noise modelling conducted as part of the ESIA, the Company will implement control measures to attenuate noise impacts through a series of measures including the installation of acoustic screens and semi-enclosures for the noisiest equipment; limiting surface work and other noise generating activities, including truck traffic, during night times and weekends; equipment maintenance; notification of work activities and duration to communities, including blasting events; and monitoring noise pressure vibration levels at eight (8) points selected as part of the environmental licensing process. The Company is further mitigating the potential impacts of vibrations due to tunnelling below the El Morado Natural Monument and the San Francisco de Lagunillas y Quillayal Natural Sanctuary, which also include two glaciers (the El Morado Glacier and San Francisco Glacier), through the use of Tunnel Boring Machines (TBM) which will reduce the use of explosives. It should be noted that most areas wher
e drill and blasting will be used are located at depths of between 400 and 1500 meters below the ground surface. Specific vibration estimations were made for the areas where the tunnels will traverse the protected areas and results indicated that vibration would not be perceived at the ground surface.



Going forward, the PHAM will complement the existing Noise and Vibration Monitoring Program to include a clear notification protocol to alert communities when blasting will occur and, if necessary, assist in preparing communities at risk to respond to any emergencies related to project or natural events. The monitoring of noise and vibration will also include households and sensitive receptors located in close proximity to roads where heavy traffic will occur due to the Project.



Effluents and alteration of water quality

Three main sources of impacts to water quality identified in the EIA include: construction works in the river channel; domestic effluents from wastewater treatment plants and industrial effluent from tunnelling activities. Prevention and control measures to minimize the impacts due to civil works in streambeds include: minimizing the intervention of riverbed and river channel for bridge construction; scheduling works in river channels at the end of the summer and beginning of the fall, when the flow is lowest, to ensure maximum riverbed exposure; minimizing the duration of riverbed intervention; ensuring that construction material and machinery do not creep into the riverbanks and supervision of adequate use; and preventing spills of oil by prohibiting stockpiling drums of lubricants or parking machinery on the riverbed. Sewage wastewater from camps and work fronts will be treated in temporary modular plants according to local regulations and discharged into surface water courses at five selected discharge points. Treated effluents will also be used for road dust control based on prior regulatory authorization. Industrial wastewater from tunnelling activities will be treated in a sequential sedimentation system that will be set up in each temporary facility, close to each tunnel portal. The system will include a decantation pond that separates industrial wastewater into clear waters and sludge. Treated wastewater will be used in road dust control with the corresponding authorization, as well as to prepare concrete and wash vehicles. The remaining treated effluent will be discharged into surface waters with prior authorization. The sludge from the treatment plants will be removed periodically and disposed of in an authorized landfill. The production water from tunnels will be monitored and if necessary, treated prior to its discharge onto surface water. The treatment system will be capable of retaining production water that may contain high pH, to undergo treatment.



Waste rock disposal

It is estimated that the construction of over 70 km of tunnels will generate approximately 1.7M m3 of waste rock materials. Thi
s volume and the filling material extracted from the construction of roads and escarpments will total approximately 2.75 M m3 of material to be transferred to 14 waste rock disposal sites or excavation waste heaps located throughout the Project area, in close proximity to the tunnel portals. Depending on the chemical make-up of this waste rock (i.e. sulphide content which could lead the creation of acid rock drainage (ARD), stormwater and snowmelt leachate from the heaps could negatively impact the surrounding soils, groundwater and potentially surface water. Based on the geological assessments conducted as part of the Project feasibility and design phases, mineral or acidic contents in the geological alignment have not been detected, and thus the potential for acid rock drainage (ARD) is considered low. Nevertheless, contractors will be required to conduct geological sampling 25 m – 30 m in advance of tunnel extraction operations to identify hydrogeological characteristics which could generate impacts to water quality. In case of encountering levels of acidity or alkalinity over regulated limits, by means of Acid Base Accounting (ABA) and Toxicity Characteristic Leaching Procedure (TCLP) testing, the Company is required, per the RCA, to implement contingency measures such as installation of a soil impermeabilization system (i.e., liner), runoff and drainage management, and water treatment/neutralization prior to discharge of surface or subsurface runoff. Contractors will also be required to monitor water quality at discharge points associated with run-off from tunnel construction sites and establish control measures in cases of exceeding allowable limits. The Company has also prepared an Environmental Management Plan for Waste Rock Heaps which describes the site selection criteria for their location including, for example: proximity to tunnel portals and other surface working fronts to minimize material transport; avoidance of areas of natural risk (i.e., avalanche, landslide); avoidance of inundation plains or aquifers; avoidance of vegetation areas and areas of cultural heritage; distance from households, wells and surface water bodies; visual and landscape considerations; and prioritization of areas with low edaphic value. The management plan also includes procedures to ensure slope stability as well as for site restoration following the completion of construction activities.

Although waste rock materials are by far the most significant waste material in this project, the project also includes a comprehensive Waste Management Plan which describes the procedures, actions and equipment to manage and dispose of waste during the construction and operation of the Project including non-hazardous solid waste; domestic and organic waste; non-hazardous liquid waste; and hazardous solid waste, including solvents, used oil, lubricant grease, batteries, and oil filters.



Going forward, the PHAM will develop and implement a comprehensive plan fo
r stormwater management, to include estimation of stormwater to be generated, mitigation and control measures, and regular monitoring to ensure compliance with receiving water quality standards. Additionally, the PHAM will develop and implement a plan for managing tunnel production wastewater, including a complete list of chemical substances that will be used, handled and stored in tunnels; expected flow of production water in each tunnel section; capacity of wastewater treatment plants, the operating system and expected pollutants to be treated (i.e., high pH, high sediment load, oil and grease, other pollutants). The assessment should account for potential excess water production from fractured rock (i.e., “bolsones de agua”) and include regular monitoring to ensure compliance with receiving water quality standards.

The PHAM will complement the existing Contingency Plan for Acid Rocks with specific mitigation measures to be implemented in the event of encountering acid rock, including measures to prevent acid drainage from entering the water courses.

Infrastructure and Equipment Design and Safety

The Project has been designed to minimize or prevent adverse impacts to community health and safety. Over 90% of its components are located underground and the Project does not entail the construction of dams for regulating or storage reservoirs or the construction of other civil infrastructure that could pose a physical risk to the communities living in the area of influence of the Project. As previously noted, waste rock heaps from tunnel tunneling materials will be placed in locations that do not pose a risk to safety in the event of slope failure, although slope stability measures are also being applied according to international best practices to prevent such failures. Construction activities will include the use of construction camps with residential facilities in order to reduce the need for daily transport of personnel. Construction materials will be stockpiled, processed, and/or prepared on-site (i.e. use of cement plants), also reducing the frequency of heavy transport vehicles in public roadways. According to the provisions of the Environmental License, the PHAM is responsible for the implementation of a road Safety Signaling Program applicable to routes G-25 to Volcan and G-455 to El Yeso and to other areas where project activities and access roads may intersect public roadways. The Safety Signaling Program will be implemented following the definitions and requirements of the Roads Manual from the Chilean Ministry of Public Works under the supervision of a Risk Prevention Expert.



Hazardous Materials

Per the provisions of the Environmental License an Explosives Management Plan is to be developed and implemented by the Contractor in order to manage the risks of transport, storage, and use of explosives to be used as part of the tunneling activities. Chilean legislation strictly regulates the sale, transport, storage, and use of explosives for all activities including construction and mining. Safety standards include certification requirements for transporters and users and strict safety specifications for temporary storage facilities such as those which will be used in the Project’s constructions camps.

Protection and Conservation of Biodiversity

Project-related biodiversity impacts can largely be summarized in terms of natural and modified natural habitat, and are as follows: (1) direct impacts to terrestrial flora due to the project’s footprint, primarily during construction; and (2) direct impacts on the mainly highly modified aquatic natural habitat due to reduction in water flow along the intervened reach of the project, potentially leading to residual impacts on the ecological integrity of the Maipo, Yeso, Volcan, and Colorado Rivers.



The Project area is predominantly located in modified natural habitat within a relatively wide range of elevations. The least modified habitat of the project area consists of the La Engorda Canyon where four water intakes at the highest elevation of the project will be constructed. This area is dominated by high mountain steppe vegetation which includes shrubs and grasses as well as wetlands or “vegas” – traditionally used for pasturing livestock during the spring and early summer – which develop along the water streams. This area has evidence of unpaved roads and wooden bridges used by off-road enthusiasts, seasonal cattle herders, and mountain hikers and campers. The predominant vegetation at lower altitudes is dominated by Schlerophyll forests, including a mix of native and non-native species (up to 40% non-native along the Colorado River area). The project’s footprint will impact approximately 31 ha of natural Schlerophyll forests along the Colorado and Volcan Rivers and 70 ha of shrubs and grasses, which includes 56 ha of Andean steppe vegetation in the upper reach of the La Engorda area and 6.8 ha of the wetlands (“vegas”). The vegetation affected includes five species of Schlerophyll forest trees classified as “Vulnerable” under Chilean Law. In terms of terrestrial fauna, the project area has a high variability of species, including amphibians, reptiles, birds (including raptors), waterfowl, and mammals. In the areas of the Colorado River, La Engorda and El Morado Streams, Laguna Lo Encañado, Manzanito Stream, the Yeso River and Reservoir, and the Aucayes Stream, the ESIA reported the presence of 16 species in a Chilean conservation category, the majority of them reptiles, followed by amphibians, mammals and birds (most of them classified as “Threatened” per Chilean law but also classified under lower conservation categories by the IUCN Red List). The project’s Environmental Management Plan defines a series of management actions to prevent or minimize impacts on terrestrial flora and fauna. These measures include the definition of “restricted areas” requiring avoidance and/or special management measures due to their ecological sensitivity, including the following: (i) vegas and wetlands in the Lo Encañado – Yeso River area and upstream of the intake area along the Volcan River, (ii) areas where flora species under conservations status are present, and (iii) officially protected areas. I
n addition, per Chilean regulations, all protected vegetation species require a sectorial permit prior to clear cutting. Permits are issued for individual trees and need to be reforested based on the authority’s requirement (i.e., 1:1, 1:5 or 1:10 depending on the conservation status). Similarly, a fauna capture and relocation plan is in place prior to entering new areas and specific specialist supervision is required in areas of ecological sensitivity.



Three fish species have been identified in baseline surveys conducted between 2005 and the present. They consist of the Rainbow trout (Oncorhynchus mykiss) and Brown trout (Salmo trutta), which are not native and introduced for sport fishing, neither of which are threatened, and the Small catfish (Trichomycterus areolatus), which is a native endemic species to Chile and is also is in the IUCN Red List category of “Data Deficient”. The Small catfish is characterized as being widely distributed across Regions III to X in Chile, with its population considered “Vulnerable” in Regions III to IX (which includes the project area) and “out of danger” in Region X. The introduction of trout (mainly for sport and recreational activities) has had historical and current adverse effects on native fish assemblages in the country and particularly in the Upper Maipo River basin. Findings from the sampling campaigns support available literature regarding aquatic ecosystems in the area, which suggest that the ecosystems have been disturbed by anthropogenic activities mainly associated with irrigation, power generation and recreation. Two species in conservation status, the Torrent Duck (Merganatta armata), which is categorized as ‘Endemic to Chile’ in Chile’s CONAF Red Book and as ‘Least Concern’ by the IUCN Red List and the Amphibian “Sapo Arriero” (Alsodes nodosus), classified by Chile’s CONAF Red Book as ‘Threatened’ and by the IUCN Red List as ‘Near Threatened’, are also present in the Project area of influence and associated to the river.



A first ecological flow study of PHAM was developed during the year 2008, and its results were confirmed by the environmental permit for the project (RCA) issued in 2009. The calculation of ecological flow in 2008 considered hydrological methods and valid procedures from the General Water Authority (DGA), including criteria requirements for fish fauna and anthropogenic activities in rivers. After obtaining the environmental permit, the ecological flow was established in accordance with Chilean regulations from the DGA using a hydrologic method of 10% of the mean annual flow. For the purpose of the due diligence revision in the financing process, as required by lenders, the PHAM additionally conducted a detailed Ecological Flow Study to evaluate the potential impacts of the proposed flows on aquatic habitats following the IFIM/ PHABSIM models combined with the hydrologic model HEC-RAS with input data from 45 years of hydrology from nearby gauging and fluviometric
stations. The Ecological Flow Study was revised based on comments made by the IFC and an independent international expert on eco-hydraulics. The revised Ecological Flow Study included new field data gathered during the months of September 2012 and March 2013, including hydrologic and hydraulic data; topobathimetrical data; hydrobiology and aquatic habitat data. The updated information was assessed in the context of three areas: (i) accuracy and validity of hydraulic and hydrologic models using HEC-RAS; (ii) impacts on hydrobiology and biodiversity based on the application of the PHABSIM models and habitat suitability curves and (iii) impacts on recreational users of the waterways affected by the project. The accuracy of the hydrologic and hydraulic models were deemed acceptable to meet best practice and the hydrobiology data confirmed the hypothesis based on available literature in terms of habitat requirements for the fish species (with particular focus on the endemic T. areolatus and macro-invertebrates), basically concluding that the depth and velocity requirements of the fish would not be threatened by the project’s operations and the proposed ecological flows. The conclusions reached with regards to recreational users, however, were mainly limited to a determination of navigability based on literature and will be validated by the PHAM through participatory monitoring and stakeholder interviews to confirm the areas of use and flow requirements for recreational users.



As a result of the Ecological Flow Study, specific flows were recommended at each intake location, which were determined to be sufficient to sustain the aquatic habitats directly impacted by the project. These ecological flows were approved by the Environmental Authorities in the RCA. Nevertheless, through the application of the DGA method (i.e., 10% of the mean annual flow), higher ecological flow requirements were imposed on the Project, thus requiring even more conservative measures for aquatic habitats. Based on the DGA ecological flow requirements, all the values were higher than those recommended in the Study, except for one which was the same value at Colina Stream.



In addition to the required ecological flows, the PHAM developed and is beginning to implement an Integrated Management Plan of the Small catfish (T. areolatus) consisting of an in-depth study of the distribution, abundance and habitat characteristics of the species (including details of habitat preference). The PHAMr is further incorporating protected species Torrent duck (M. armata), and the amphibian ‘Sapo Arriero’ (A. nodosus) into the on-going habitat surveys. This management plan incorporates monitoring and mitigation measures following a mitigation hierarchy to protect biodiversity and includes an adaptive management of Project operations in the event that it is determined that the Project causes significant impacts to the aquatic habitats. The RCA also includes specific requirements fo
r adaptive management and revisions to the proposed ecological flows if deemed necessary.



Going forward, as a complement to the Ecological Flow Management Plan, the PHAM will continue to gather baseline information on fish species, macro invertebrates, and other non-fish species as well as hydrological information with monitoring and sampling campaigns which provide detailed information on the pattern of habitat use of small catfish in the specific Maipo basin area. The PHAM will further complement the Ecological Flow Management Plan with specific mitigation measures for habitat conservation, compensation, and adaptive management measures, if applicable. In addition to the adaptive management requirements set forth in the Environmental License, mitigation measures for the protection of the Small Catfish shall specifically include adjustment of flows and biodiversity offsets, in case these are deemed necessary, in order to maintain or improve their population in rivers affected by the project.



With regards to recreational users, in consultation with commercial and private recreational boaters and other stakeholders, the PHAM will quantify the level of recreational use in affected rivers, the flow requirements for a quality recreation experience (including preferred river segments, time of year, and minimum and maximum flows for recreational uses in any of the bypass reach segments), and propose complementary mitigation and management measures, if required.



Legally Protected and Internationally Recognized Areas

Three legally protected areas lie within the PHAM area of influence, all of which are internationally recognized under an IUCN category. The Project components overlapping with the Monumento Natural El Morado (IUCN Category II) and the Santuario de la Naturaleza San Francisco de Lagunillas y Quillayal (IUCN Category IV), are entirely underground with no expected impacts aboveground. With regards to the Santuario de la Naturaleza Cascada de las Animas (IUCN Category IV), there are no physical Project components within the area, with the closest component 16 km to the northeast.



Since 2005 the majority of the municipality of San José de Maipo is designated as a priority area for conservation according to the Strategy for the Conservation of Biodiversity in the Metropolitan Region of Santiago, developed by the Chilean Ministry of Environment. These areas include the Upper Maipo River area covering 126,622 ha, comprising the southern part of the municipality of San José de Maipo; the El Morado area covering 141,827 ha, comprising the center of the town of San José de Maipo and extending north-west; the Olivares River, Colorado River, and Tupungato area covering 110,438 ha, comprising the northern part of the municipality of San José de Maipo; and the High Andean Zone covering 83,366 ha, comprising the eastern part of the municipality of San José de Maipo, bordering with Argentina. Although these areas primarily include mod
ified habitats, even urban areas, the Chilean Ministry of Environment indicates that their designation is due to the presence of high altitude streams and wetland areas and due to their use as a corridor by animal species moving between Chile and Argentina, including the puma (Puma concolor), guanaco (Lama guanicoe), and Andean Parakeet (Bolborhynchus aurifrons). Their designation as conservation areas does not preclude development of hydropower projects or other activities as long as potentially negative impacts are prevented or mitigated according to applicable local laws, as demonstrated by the project in the ESIA and accompanying environmental management programs.



Management of Ecosystem Services

Regarding ecosystem services, the Project is not expected to have negative effects on irrigation activities nor human consumption. In addition, there are no significant fishing activities other than sporadic sport recreational fishing in the rivers affected by the project. The evaluation and determination of ecological flow included a determination of potential impacts to whitewater rafting activities along the stretch of the Maipo Rivers where these activities are practiced. The evaluation, which was mainly limited to a determination of navigability (depth and width of the Maipo River along the sections used for whitewater rafting), concluded that the project will not have a significant impact in this activity. The PHAM is presently engaging in discussions with the whitewater rafting operators in order to ensure that other factors, such as changes in rafting experience due to proposed changes in flows, are also considered in the evaluation of potential impacts.



The assessment of environmental impacts of the project also identified potential changes in the sediment transport dynamics, initially concluding that there would be a reduction in potential capacity of sediment transport along the intervened portions of the Yeso, Volcan, Colorado and Maipo rivers. Among the potential impacts associated with changes in sediment dynamics is the potential structural undermining of irrigation association intake structures located within the intervened reach and up to 5 kilometers downstream of the point of restitution which could occur due to the combined reduction of sediment and the scour effect of sediment-less water discharged at the point of restitution. Of the approximately 17 irrigation intake structures within the intervened reach and up to 5 km downstream of the project discharge point, identified impacts are likely only to affect the El Manzano Community Irrigation Association intake. The Company reached an agreement with the Community Irrigation Association from the community of El Manzano (Comunidad de Aguas Canal el Manzano) regarding satisfactory measures to ensure that their existing water intake structures in the Colorado River are sufficient to provide water flow in accordance with the community’s water rights. The provisions o
f the agreement (dated Dec 9th, 2008) require the Company to: (i) complete an assessment of baseline water flow at the point of the communities intake structure; (ii) establish the plans for a re-designed intake structure according to water flow changes during Project operation; and (iii) upon written approval from both the DGA and the community regarding the proposed intake structure, install and maintain an intake structure which ensures the water flow in accordance with the community’s water rights. No potential impacts to other irrigation intake structures have been identified. A similar agreement is being negotiated with the Canal El Maurino irrigation association.



The PHAM is presently halfway through a 6-Phase Advanced Sediment Transport Study designed to better understand the potential impacts of changes in sediment transport dynamics and propose proper mitigation, management and compensation measures, if applicable.



Stakeholders located downstream of the point of restitution, particularly the operators of the irrigation associations located within a 5-km stretch downstream of the point of restitution, have also expressed significant concerns about potential violations of their water rights, which could occur prior to plant start-up, during the filling of project water conveyance structures, and during electric grid black-outs which would require the company to conduct a temporarily, emergency, shut down one or both plants. This type of events would potentially discontinue the flow of water out of the point of restitution, redirecting the water that would be entering the intake points into their natural river courses. The main concern expressed by some stakeholders is that the shut-down could result in a delay in discharge on the Maipo River downstream of Las Lajas by a total of about 7 hours (assuming an extended blackout), during which time stream flows may be insufficient to meet required water flow for all existing water right holders downstream from the project. Unexpected drops in water levels could also cause physical damage to intake structures for irrigation and potable water systems downstream. The probability of a ‘Blackout’ is considered low, with a potential recurring frequency of less than once per year and with an average duration of 2 hours per event, not enough to create the conditions required for water levels to experience significant drops downstream of the point of restitution. Since the Project has been licensed as a pure run-of-river scheme without any consumptive water rights, as specified in the ESIA, the PHAM will purchase water from owners of consumptive water rights in order to fill the Las Lajas forebay, unless of course the filling is done during the high water flow season in which case the Maipo River’s water volume would exceed the allocated water rights. Regarding potential impacts from “blackout” events, the PHAM modified the design of the project to include water deflectors in the turbine w
ater injectors. When activated, these devises will deflect the water from the injectors according to the magnitude of the flow-through so that water flow does not reach the turbines, allowing water to continue to flow through the PHAM water conveyance systems even while the power plants are shut down.


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During the community engagement process leading to the environmental licensing of the project, stakeholders expressed concerns about the alteration of viewsheds and natural landscapes that will result from the construction and operation of the Project. According to the PHAM ESIA (2008), no direct impacts to tourism sites or tourism service providers will be generated during the construction phase of the PHAM. Indirect impacts include temporary disruption/delay of traffic and temporary visual impacts (i.e. construction access roads, temporary construction camps, etc.) which detract from the serenity and natural landscape of the two primary tourism zones in proximity to Project work sites: the Yeso Reservoir and the Alto Volcán sector. The Volcán Tunnel will pass underneath the Monumento Natural El Morado and the Alfalfal Tunnel will pass underneath the Santuario de la Naturaleza San Francisco at a depth of 450 m and 1,000 m, respectively. Tunneling activities at such depths are not anticipated to generate impacts to tourism or protected areas. In addition to the avoidance of construction activities in priority tourism areas, contractors will be required to comply with all transit and traffic laws which include suspension of Project traffic during days holidays and weekends (traffic is also suspended from Monday to Friday prior to 8:30 am and after 5:30 pm, Saturday before 9:30 am and after 2:00 pm, and no traffic at all on Sunday). The PHAM is also committed to implement a Tourism Development Program in partnership with the Municipality of San Jose de Maipo to compensate for any interference of tourism activities caused by the PHAM and to support local tourism service providers through a grant fund administered by the Fundación AES Gener, AES Gener’s corporate foundation.



Stakeholder concerns have also been raised in regards to the potential localized impacts on the groundwater hydrology due to the tunnelling activities during the construction of the PHAM. These concerns are mostly related to: (i) use or interruption of groundwater/ aquifers; (ii) impacts of tunnelling activities under protected areas, particularly El Morado Natural Monument and Nature Sanctuary San Francisco de Lagunillas y Quillayal, and the glacial dynamics in the area; and (iii) project-related interruptions to surface water bodies. Although the possibilities of encountering an aquifer have been assessed as low by the hydrology studies, the tunnelling procedure has further taken provision and control measures to avoid an impact on these: (i) systematic exploratory drilling 20-25 m ahead of the face, before each next blast round takes place, (ii) tunnel excavation
includes grouting (injection of cement, cement-bentonite slurry, polyurethane or others).



Going forward, as an extension of the currently planned multi-stakeholder process to implement the social monitoring program, the PHAM will prepare and implement detailed participative monitoring programs to monitor, in cooperation with representatives of potentially affected stakeholders and other interested parties, potential impacts related to:

• Changes in water flow regimes along the intervened reach and up to 5km downstream of the point of restitution during start up, normal operation, and potential emergency shutdown during “blackouts”, including access to real time water flow information in locations agreed upon with potentially affected stakeholders;

• Changes in streambed sediment transport and any potential effects on the structural integrity of irrigation water intake and potable water intakes, along the intervened reach and up to 5km downstream of the point of restitution;

• Potential impacts to groundwater or surface water bodies as a result of tunneling activities.



Going forward, the PHAM will also develop and implement an Ecosystem Services Management Program to address identified cumulative impacts on ecosystem services in the project direct and indirect area of influence (intervened reach and up to 5km downstream of the point of restitution). The program shall include the following main elements:

• Plans for outreach and engagement with relevant stakeholders including but not limited to: relevant public agencies, community associations and business groups, irrigation associations, and other business operations (i.e hydropower and mining) to discuss joint regional approaches for the management of identified impacts on hydrology and sediment transport from the Participatory Monitoring Program, including impacts potentially associated with climate change;

• Operational change management procedures to address those aspects that the company is able to influence independently on in collaboration with other stakeholders.

• Compensation plans with clear commitments to address impacts to key stakeholders including but not limited to: commercial whitewater rafting operators along a section of the intervened reach in the Maipo River; and irrigation canal water intakes (from changes in riverbed sediments or water fluctuations);

• Specific commitments to complete the Advanced Sediment Transport Study and to develop and implement specific management, mitigation, and compensation measures to address impacts from the Project in collaboration with affected stakeholders.h ?


Prior to the development and submission of the ESIA, the Company consulted and informed key stakeholders about the PHAM. Preliminary consultation and disclosure activities began as early as 2006 and included a series of 40 meetings with government authorities, 70 meetings with communities and community representatives within the area of influence, and meetings with key civil society stakeholders. The Company developed a Consultation and Disclosure Report to document the date, location, participants and content of each public consultation and disclosure meeting. According to the Consultation and Disclosure Report, community meetings consisted of PowerPoint presentations, disclosure of project information, and question and answer sessions. Meetings with governmental authorities ensured the proposed project and the proposed environmental impact assessment took into consideration any preliminary feedback from the sectorial agencies. The number of participants in community meetings ranged from between one or two community representatives to large public disclosure meetings of up to 600 people during the first submission of the ESIA to environmental authorities in 2007.

As a result of public consultation and disclosure activities, including those associated with the submission of the original ESIA in 2007, the Project design was modified, in part, to incorporate stakeholder feedback as previously described in this summary.

The Project’s ESIA was publicly disclosed locally and in the regulatory agency website in its original form in 2007 and then again in its revised form in 2008. Upon submission of the final ESIA (2008), in compliance with Chilean public consultation procedures, eight formal public participation meetings were organized by SEA and conducted with the participation of AES Gener. Public notice of the Project and PHAM ESIA process was provided via newspaper and radio advertisements. During the period of July and August of 2008, there were a total of eight (8) public disclosure meetings attended by between 20 and 800 community participants. More than 350 comments were received by the SEA during this period and were incorporated into the three addenda and the environmental license (RCA). In total, the SEA recorded more than 5,000 comments during the public disclosure process, all of which were considered by the regulatory agency as part of its decision making process prior to issuing the environmental license.

The ESIA of the 17-km transmission Line was completed in 2012. Consultation for this component of the project consisted of a single formal public meeting coordinated by SEA, with the participation of the PHAM. It is worth noting that no public comments were received by SEA during the public disclosure process. Information regarding the consultation activities prior to the submission of the PHAM ESIA and during the ESIA approval process is publicly available and included within the annexes and addenda to the ESIA in the SEA’s website (http://www.e-seia.cl/expediente/xhr_pac.php?id_expediente=2936494).
In 2012, as a result of the continued expression of concerns and opposition to the project by some stakeholders, the Company developed a Stakeholder Engagement Strategy to increase communication and understanding with key stakeholders.

A stakeholder mapping exercise and Stakeholder Engagement Plan were completed in August 2012. The Plan summarizes the socio-economic area of influence, describes key stakeholders and establishes a strategy for stakeholder engagement throughout the Project phases. The stakeholder engagement strategy is based on three objectives: (i) create and maintain positive relations with all key stakeholders; (ii) establish and implement opportunities for public involvement in ongoing monitoring of the Project’s environmental and social performance; and (iii) contribute to local development initiatives according to the needs and interests of both the Project and the local communities. The Stakeholder Engagement Plan also describes general activities proposed to achieve each objective described above. Key activities include, among others: (i) development and disclosure of a monthly newsletter regarding the PHAM project status, performance and schedule; (ii) establishment of a PHAM website to provide continuously updated information regarding project status, activities, environmental and social monitoring, grievance mechanism, etc;; (iii) development and disclosure of an annual sustainability report;; (iv) activities related to the Labor Development Plan; (v) actions necessary for the selection of social investment opportunities and the disbursement and monitoring of social investment funding; and (vi) the establishment and implementation of a Participatory Monitoring Program.

The scope of the Stakeholder Engagement Plan has been recently updated to include disclosure and consultation on the environmental and social impact assessment information which has been generated since 2012 as described above. The Company has established a schedule to conduct additional information disclosure meetings with key stakeholders, including those who have opposed the Project, concerns related to water rights, water use, ecological flow, climate change, and sedimentation, among others. Additional reports on these issues are being disclosed to key stakeholders in a series of meetings to be held in July and August 2013.

Additionally, AES Gener is engaging a neutral third party to assist in the process of disclosure, consultation and engagement with the community and stakeholders of the Alto Maipo Project. The role of this neutral third party will be played by the Consensus Building Institute (CBI, http://www.cbuilding.org), an internationally recognized non-profit group dedicated to facilitating complex relationships between project owners and related stakeholders. CBI’s activities will include an additional stakeholder mapping process, proposing dialogue mechanisms, and facilitating dialogue with a view to possible agreements between AES Gener and opposition stakeholders, particularly the Maipo River Supervisory Board (Junta Vigilancia del Rio Maipo), Pirque Channel Irrigators Association, and the Citizen Committee Against Alto Maipo (Coordinadora Ciudadana No Alto Maipo)

External Communications and Grievance Mechanisms
The PHAM established a Community Relations (CR) Office in San Jose de Maipo in 2008 to serve as the primary point of contact between the Project and Project stakeholders in the area of influence. The CR Office is staffed by a Community Assistant, whose primary responsibilities include: (i) receiving and registering employment requests and applications; (ii) provide Project information; (iii) coordinate communication with Project stakeholders, by receiving questions/complaints and channeling them to the appropriate person within the Company; and (iv) managing CR Office facilities, including computer and internet services available to local students/residents. A formal grievance mechanism was established as part of the Stakeholder Engagement Plan in August 2012. Prior to August 2012, the community relations field office in San Jose de Maipo provided a point of contact for local residents to obtain Project information but did not maintain a systematic procedure to ensure that complaints or questions from Project stakeholders were resolved in a timely and transparent manner. The grievance mechanism has been designed based on IFC guidelines and the principles of ISO 26000. The mechanism consists of five steps: (i) receipt and registration of the grievance; (ii) grievance verification; (iii) establishment of a proposed resolution strategy; (iv) implementation of the proposed resolution; and (v) monitoring and documentation. Grievances may be submitted through email, the PHAM website, postal service, phone, or in person via project staff or the PHAM office. The grievance mechanism will utilize standardized grievance forms to document and monitor all grievances.

In addition to PHAM’s grievance mechanism, each Contractor involved in Project construction will be required to implement a similar grievance mechanism where individuals from the community can report Project-related grievances. The Community Relations Regulations for Contractors (Reglamento de Relacionamiento Comunitario), dated 14 Dec 2010, establish binding requirements for Contractor actions related to community relations, worker conduct, community engagement and other aspects of community relations. The proposed grievance mechanism procedure will consist of the following steps:
• Each Contractor shall establish and maintain a “Book of Complaints” where individuals from the community can report Project-related grievances. The book must be available at the Contractor’s offices at the worksite; at the entrance checkpoint to the plant or project; or at the Community Relations Field Office;
• The CR Representative for each Contractor will record complaints and contact information of the complainant in the Book of Complaints;
• The CR Representative will communicate complaints to Gener Community Relations Manager on a daily basis, who will then be responsible for taking corrective action or establishing responsibility for resolving the complaint;
• The PHAM’s employee in charge of community relations will follow up on the complaint and supervise compliance with schedules in delivering the response and in executing the corrective action.
• The Contractor will have 10 days to take corrective action and respond to the requirement. Once the Contractor has responded or taken corrective action, it will inform the person who filed the complaint of the corrective measures taken.

The Company holds final responsibility for the grievance redress process and plans to periodically audit contractors’ Grievance Mechanisms to ensure complaints and grievances have been adequately resolved.

As part of on-going stakeholder engagement efforts, the PHAM has also established a Social Collaboration Agreement with the Municipality of San José de Maipo and 16 of the 28 communities represented by the Union Comunal of San José de Maipo and which are part of the PHAM area of influence (the other 12 communities not party to the Social Collaboration Agreement are outside the PHAM area of influence). The Union Comunal and the Municipal Administration of San Jose are both elected bodies which are representative of the communities in the Project Area of Influence. The Social Collaboration Agreement, which was signed in March 2009, included commitments to favor local labor in the construction and operation contracting process and a commitment by the Company to contribute to social programs for a term of 30 years. These contributions consist of US$200,000 per year to create or support existing programs on education, sports activities, small-scale local enterprises, and other organizations or fields to be determined by the local Council. The Local Council, which selects projects, allocates funds and oversees implementation, consists of the following members: Governor of the Cordillera Province; Mayor; Councilmen; Eduaction professional; President of the Neighborhood Community Council; President of the Football League; Chairman of the Committee for the Defense of the Cajon del Maipo; Manager of the AES Gener Cordillera Complex; and AES Gener executive.

On-going Reporting to Affected Communities
Chilean regulations require all projects to publicly disclose the results of environmental and social monitoring activities as a condition of the environmental license. In the case of the PHAM, this requirement is stipulated as a condition of the RCA, applicable to all of the aforementioned monitoring activities. The PHAM will make this information available through the Community Relations office in San Jose del Maipo and also through other mechanisms to be developed and implemented as part of the participatory monitoring program.

IFC has determined that there is overall Broad Community Support (BCS) for the Alto Maipo Hydroelectric Power plant. IFC’s determination of BCS took into account: i) the level of community engagement conducted to date commensurate with the impacts related to the development and operation of the project; and ii) the review of project documentation and outcome of interviews conducted with key stakeholders within the area of influence. As part of its regular supervision of the Project, IFC will verify that the Company conducts an ongoing process of Informed Consultation and Participation (ICP) as per PS1 through the construction and operational phase of the project. *ICP - Information Consultation and Participation **BCS - Broad Community Support

	Task Title/Description	Anticipated Completion Date	Status as per May 2017
PS1: Assessment and Management of Environmental and Social Risks and Impacts
1	Assessment of Potential Future Project Developments Perform complementary assessment of potential environmental and social impacts for future expansions in accordance with local legal and IFC requirements, including potential use of water resources from Laguna Negra, Laguna Lo Encañado, in accordance with the agreement between Aguas Andinas-and AES Gener, and the Volcan River, in accordance with the agreement between AES Gener and RP Global Chile Energías Renovables S.A., and any other future new expansions, if applicable. 1-) Assessment of potential impacts and mitigation measures consistent with local legal and IFC requirements.	1-) Prior to project expansions, as required by local laws and IFC	1-) No expansions planned to date, ESAP item not applicable.
2	Operational Phase Management Complement the general operational management programs described in the environmental and social impact study (ESIA) and PHAM’s existing management plans with detailed operational phase environmental, health, safety, and social (EHSS) management plans specific to the Alto Maipo Hydropower Project. 1-) Documented framework 2-) Documented management procedure 3-) Implementation of management procedure	1-) December 31, 2015 2-) September 30, 2017 3-) December 31, 2018 or start of operations	1-) Rescheduled to one year prior to start of operations of the first power plant 2-) Rescheduled to one year prior to start of operations of the first power plant 3-) Rescheduled to 30 days after the start of operations of the first power plant
3	Organizational Capacity and Competency Define the organizational structure for the management of ESHS issues during the project’s operational phase, complementing the existing structure of the Cordillera Complex. The organizational structure will include at least one dedicated ESHS Manager supported by the required environmental, OHS, and social staff. 1-) Defined organization structure, including terms of reference for management roles 2-) Evidence of hiring of new positions	1-) September 30, 2017 2-) December 31, 2018 or start of operations	1-) Rescheduled to one year prior to start of operations of the first power plant 2-) 60 days prior to start of operations
4	Contractors Management Ensure adequate monitoring of implementation of contractor management plans to verify that contractors and sub-contractors engaged on the construction phase comply with IFC requirements with regard to occupational health and safety, labor conditions, environmental performance and community engagement. The monitoring program will include regular monitoring by independent parties and tracking implementation of corrective actions by contractors. 1-) Documented management system including details of monitoring scope and frequency	1-) December 31, 2013	1-) Completed January 2014
5	Emergency Preparedness and Response Harmonize the existing EPRP plans into a discrete, comprehensive, EPRP document (a PHAM Prevention and Contingency Plan) specifically focusing on emergency situations and categorizing applicable risks by probability, severity, and magnitude, using up to date risk information, including mapping of natural hazards. As part of the harmonization of the EPRP documents, the Sponsor shall adapt of the existing Cordillera Complex Emergency Plans (including the Spillage Prevention Plan) to the specifics of the PHAM project’s construction and operational phases. Ensure that the Plant Emergency Response Plan includes contingencies for all aspects related to plant operations, including filling of tunnels prior to start up and the event of a shutdown resulting from a electricity grid blackout including, but not limited to: sudden changes in stream flow affecting intake structures for irrigation and potable water systems; and risks to communities health and safety caused by the unlikely event of surge waves. 1-) Documented management procedure for construction phase 2-) Implementation of management procedure for construction phase 3-) Framework EPRP for operational phase 4-) Evidence of documented management procedure for operational phase 5-) Evidence of implementation of management procedure for operational phase	1-) November 30, 2013 2-) December 31, 2013 3-) December 31, 2015 4-) September 30, 2017 5-) December 31, 2018 or start of operations	1-) Completed February 2015 2-) Completed February 2015 3-) Rescheduled to June 30, 2018 4-) Rescheduled to June 30, 2018 5-) Rescheduled to 30 days after the start of operations of the first power plant
PS2: Labor and Labor Conditions
6	Human Resource (HR) Policy and Employee Grievance Mechanism Develop and implement a human resources policy and grievance mechanism consistent with IFC’s requirements and national labor laws. The HR policy will make explicit reference to the Company’s commitments to non-discrimination and equal opportunity; minimum work age requirements; workers’ rights to freedom of association; respect for collective agreements, if these are present; maximum working hours; and working conditions and terms of employment. The HR Policy will be disseminated among all employees. The Grievance Mechanism will be applicable and disseminated to both contractors and employees. 1-) Completed HR Policy grievance mechanism and evidence of disclosure to company employees	1-) December 31, 2013	1-) Completed January 2014
PS3: Resource Efficiency and Pollution Prevention
7	Stormwater, Tunnel Production Water, and Waste Rock Drainage Management Develop and implement a comprehensive plan for stormwater management, to include estimation of stormwater to be generated, mitigation and control measures, and regular monitoring to ensure compliance with receiving water quality standards. Develop and implement a plan for managing tunnel production wastewater, including a complete list of chemical substances that will be used, handled and stored in tunnels; expected flow of production water in each tunnel section; capacity of wastewater treatment plants, the operating system and expected pollutants to be treated (i.e., high pH, high sediment load, oil and grease, other pollutants). The assessment should account for potential excess water production from fractured rock (i.e., “bolsones de agua”) and include regular monitoring to ensure compliance with receiving water quality standards. Complement the existing Contingency Plan for Acid Rocks with specific mitigation measures to be implemented in the event of encountering acid rock, including measures to prevent acid drainage from entering the water courses. 1-) Documented procedures 2-) Implementation of documented procedures	1-) December 31, 2013 2-) March 31, 2014	1) Completed May 2015 2) Completed May 2015
8	Noise and Vibration Complement the existing Noise and Vibration Monitoring Program to include a clear notification protocol to alert communities when blasting will occur and, if necessary, assist in preparing communities at risk to respond to emergencies. The monitoring of noise and vibration will also include households and sensitive receptors located in close proximity to roads where heavy traffic will occur due to the Project. 1-) Documented procedures 2-) Implementation of documented procedures	1-) November 30, 2013 2-) December 31, 2013	1-) Completed May 2014 2-) Completed May 2014
PS6: Biodiversity Conservation and Sustainable Natural Resource Management
9	Ecological Flow Management Plan As a complement to the Ecological Flow Management Plan, continue to gather baseline information on fish species, macro invertebrates, and other non-fish species as well as hydrological information with monitoring and sampling campaigns which provide detailed information on the pattern of habitat use of small catfish in the specific Maipo basin area. Complement the Ecological Flow Management Plan with specific mitigation measures for habitat conservation, compensation, and adaptive management measures. In addition to the adaptive management requirements set forth in the Environmental License, mitigation measures for the protection of the Small Catfish shall specifically include adjustment of flows and biodiversity offsets, in case these are deemed necessary, in order to maintain or improve their population in rivers affected by the project. 1-) Documented management plan 2-) Implementation of management plan	1-) December 31, 2013 2-) December 31, 2018 or start of operations	1-) Completed May 2014 2-) Rescheduled to June 30, 2019
10	Recreational Water Use Management Program In consultation with commercial and private recreational boaters and other stakeholders, quantify the level of recreational use in affected rivers, the flow requirements for a quality recreation experience (including preferred river segments, time of year, and minimum and maximum flows for recreational uses in any of the bypass reach segments), and propose complementary mitigation and management measures, if required. 1-) Documented management plan 2-) Implementation of management plan	1-) December 31, 2015 2-) December 31, 2018 or start of operations	1-) Rescheduled to January 31, 2018 2-) Rescheduled to June 30, 2019 or start of operations
11	Participative Monitoring Program As an extension of the currently planned multi-stakeholder process to implement the social monitoring program, prepare and implement detailed participative monitoring programs to monitor, in cooperation with recognized representatives of potentially affected stakeholders potential impacts related to: • Changes in water flow regimes along the diverted reach and up to 5km downstream of the point of restitution during start up, normal operation, and potential emergency shutdown during “blackouts”, including access to real time water flow information in locations agreed upon with potentially affected stakeholders; • Changes in streambed sediment transport and any potential effects on the structural integrity of irrigation water intake and potable water intakes, along the diverted reach and up to 5km downstream of the point of restitution; • Potential impacts to groundwater or surface water bodies as a result of tunneling activities. 1-) Documented framework 2-) Evidence of documented plans and procedures as well as implementation for Construction Phase 3-) Documented framework for Operations Phase 4-) Evidence of documented plans and procedures as well as implementation of monitoring program for Operations Phase	1) December 31, 2013 2-) March 31, 2014 3-) December 31, 2015 4-) December 31, 2018 or start of operations	1) Completed May 2014 2-) Completed May 2014 3-) Completed May 2014 4-) Rescheduled to 60 days prior to start of operations
12	Ecosystem Services Management Program Develop and implement an ecosystem services management program to address identified cumulative impacts on ecosystem services in the project direct and indirect area of influence (diverted reach and up to 5km downstream of the point of restitution). The program shall include the following main elements: • Plans for outreach and engagement with relevant stakeholders to discuss joint regional approaches for the management of identified impacts on hydrology and sediment transport from the Participatory Monitoring Program, including impacts potentially associated with climate change (including continuation of AES’s participation and sponsorship of the study “Vulnerabilidad y Adaptación a la Variabilidad y al Cambio Climático en la cuenca del rio Maipo en Chile Central”. • Operational change management procedures to address those aspects that the company is able to influence independently on in collaboration with other stakeholders. • Compensation plans with clear commitments to address impacts to key stakeholders including but not limited to: commercial whitewater rafting operators along a section of the diverted reach in the Maipo River; and irrigation canal water intakes (from changes in riverbed sediments or water fluctuations); • Specific commitments to complete the Advanced Sediment Transport Study and to develop and implement specific management, mitigation, and compensation measures to address impacts from the Project in collaboration with affected stakeholders. 1-) Documented framework 2-) Evidence of documented management and compensation plans and their disclosure and consultation with potentially affected stakeholders 3-) Evidence of implementation of management and compensation plans	1-) December 31, 2013 2-) December 31, 2014 3-) December 31, 2018 or start of operations	1-) Completed January 2014 2-) Management and compensation plans completed. Disclosure and consultation pending 3-) Rescheduled to 30 days after the start of operations of the first power plant.