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Created on: 2016-09-30 00:00:00
Last update: 2017-06-08 10:36:00 BankTrack & Accountability Counsel
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El Dorado International Airport in Bogotá, Colombia is the busiest airport in Colombia and one of the busiest in Latin America, serving as the main international and domestic air gateway in the country. It is located adjacent to the densely-populated neighbourhood of Fontibón in the northwest of Bogotá. For months at a time, flights have used the runway next to Fontibón 24 hours per day, leaving communities with no respite from the noise. While the decision to permit a 24 hour schedule for the runway on a permanent basis was recently cancelled by the Colombian environmental licensing authority, communities fear that airport operators will continue to try expand the schedule during nighttime hours.
The airport is currently undergoing a significant expansion in order to increase the number of flights into the country. In 2006, the Special Civil Aeronautics Administrative Unit (Aerocivil), a government agency, awarded a 20-year contract to OPAIN S.A. to expand, modernise and operate El Dorado Airport. Among other activities, the contract included the construction and operation of new, extended passenger and cargo terminals and additional aircraft docking and platform spaces, to expand the airport’s capacity. Under a separate concession, Codad S.A. (which constructed the second runway adjacent to Fontibón in 1997) is undertaking improvements to the runways, including improvements to and construction of rapid exit taxiways, to enable a higher rate of air operations. Air operations have already increased dramatically, increasing 22% between 2008 and 2014. By the end of 2017, OPAIN plans to increase the airport’s capacity to 40 million passengers per year, up from 31 million in 2016, while Codad’s runway improvements will increase the airport’s capacity by almost a third, from 76 to 100 operations per hour.
The airport expansion project has been carried out by two concession holders: OPAIN S.A. and Codad S.A. In 2006, OPAIN S.A. received a 20-year contract from Aerocivil to expand, modernise and operate El Dorado Airport. OPAIN obtained financing for the project from Bancolombia and BNP Paribas in 2007. Additional financing is provided by the Inter-American Development Bank (IDB), China Development Bank and the Development Bank of Latin America (CAF) in 2010. This development bank debt has been refinanced, under the Equator Principles, by several Equator Principles Financial Institutions in 2015. In order to fund additional works, OPAIN obtained financing from Financiera de Desarrollo Nacional, a Colombian development finance institution in which the World Bank Group’s International Finance Corporation (IFC) is an equity investor, in 2016. Since 1997, Codad S.A. has held a separate concession to construct, operate and maintain the airport runways. As of 2014, the primary shareholder of Codad S.A. is a private equity fund - Ashmore Colombia Fund I - in which the IFC also holds an equity stake. (See 'Finance' for more details).
In 2011, Comunidades Unidas, a community-based organization representing affected Fontibón communities, filed a complaint to the IDB's Independent Consultation and Investigation Mechanism (MICI) alleging violations of the Bank's environmental and social safeguards, with particular concern for noise-related harm. The complaint was found eligible for the consultation phase and MICI convened a dialogue between Comunidades Unidas, two other neighborhood organizations, Aerocivil, and OPAIN. After several years of making progress, the dialogue broke down, in large part over disputes regarding OPAIN's responsibility for the noise mitigation. MICI then made the decision to close the Consultation Phase and transferred the case to the Compliance Review Phase.On September 3, 2014, Comunidades Unidas, with the help of Accountability Counsel, filed a supplementary document, summarizing the severe noise-related harm caused by the airport, describing the link between the aiport expansion project and that harm, and analyzing the related violations of IDB policy. On November 21, 2014, MICI found the complaint eligible for the Compliance Review Phase, where it assessed whether the IDB breached its environmental and social obligations resulting in harm to communities. MICI recently concluded its compliance review investigation. See here and under 'updates' for more information.
Since filing the complaint, additional investors have made significant financial contributions to the project, leading OPAIN to repay the IDB's contribution. To our knowledge, none of the institutions properly investigated or managed the risks (including health risks) associated with noise pollution from the airport.
What must happen
OPAIN, Codad, Aerocivil and the financial institutions supporting this expansion project have failed to properly investigate and mitigate the health risks associated with noise pollution generated by El Dorado International Airport. No further financing should be committed, and no further disbursements should be made, until the following demands are met:
Comunidades Unidas urgently seeks an independent investigation of the actual and anticipated health impacts associated with El Dorado International Airport. The outcomes of this Health Impact Assessment, together with other relevant investigations and proper community consultation, should then inform:
- The strategic alteration of flight routes;
- An updated census of the buildings that have received soundproofing in the Fontibón locality and an evaluation of the soundproofing's effectiveness;
- A guarantee that the Fontibón community will have permanent adequate resources to implement, maintain and update soundproofing;
- The preparation and maintenance of a permanent Noise Mitigation Plan with proper community consultation and evaluations of the effectiveness of that plan; and
- Adoption of the best available international noise mitigation technology and timely evaluation of any changes made.
Financers should make sure these demands are implemented by OPAIN S.A and Codad S.A.
The airport expansion project has contributed to a dramatic increase in the number of air operations at El Dorado International Airport (22% increase between 2008 and 2014). The noise experienced by neighboring communities exceeds normal limits for residential areas: 84% of noise measurements in the areas violated the 65 dB national daytime standard, while 100% of noise measurements violated the 50 dB national nighttime residential standard. This situation will only get worse as the airport is projected to increase air operations, increases that both OPAIN S.A. and Codad S.A. are contributing to:
- OPAIN has expanded, and continues to expand, the domestic and international terminals and aircraft docking and platform spaces, among other works. By the end of 2017, OPAIN plans to increase the airport’s capacity to 40 million passengers per year, up from 31 million in 2016.
- Codad has designed, constructed, increased and improved runway rapid exits to reduce the time that each aircraft occupies on the runway after it lands from more than a minute to 46 seconds. This will allow the airport to increase its capacity by almost a third, from 76 operations to 100 operations per hour.
Physical buffers around the airport's runways are almost non-existant with only a road and, for some, a mound of dirt separating Fontibón residents from the runway and aircraft. The insulation of homes and buildings is also incomplete and inadequate: a 2012 study of noise-affected areas by Bogotá's Secretary of Health (see documents) found that only 2.7% of study participants had partial sound insulation in their homes and only 1.1% felt protected from the noise.
A recent report by the Inter-American Development Bank's indpendent accountability office (known as MICI) describes their first-hand experience with the inadequate noise mitigation:
“During its visit to the Project area, the Compliance Review Panel … was able to experience firsthand not only the impact of the noise on the daily life of residents (such as the need to interrupt a conversation or classroom activities when airplanes take off and land because it was impossible for the other person or the teacher to be heard, or the vibrations caused by some aircraft), but also the discomfort produced in some homes by the soundproofing, which in the Panel’s experience is in poor condition, does not really reduce noise, and prevents, among other things, ventilation in the homes.” (MICI Report, paragraph 2.99)
The World Health Organization warns that chronic exposure to high levels of environmental noise can lead to hearing impairment, cardiovascular disease, mental health problems, impaired cognition, and severe sleep disturbance, among other harmful effects. Children are particularly vulnerable to developmental harm, with studies finding a relationship between long-term exposure to aircraft noise and impaired reading comprehension and memory.
Some of these harms are already visible in the Fontibón community. Bogotá's Secretary of Health estimates that 67% of Fontibón's population sleeps poorly, while up to 37% suffers chronic insomnia, leading to related problems with headaches, irritability, anxiety, and difficulty concentrating. Neighborhood children are experiencing early hearing loss.
Although OPAIN asserts that noise mitigation is the responsibility of Aerocivil under the specific terms of the concession agreement, such an argument cannot negate the environmental and social responsibilities of OPAIN, Codad S.A. - and their investors - under those investors' environmental and social safeguards. Those responsibilities apply to the project as a whole; the client cannot "contract out". MICI dismissed the same argument, when it was made by the Inter-American Development Bank, in strong terms:
"The MICI considers that Management’s argument that neither the Bank nor the Client is responsible for or has any influence on air activities and that the Bank is not involved in any activities on the Aerocivil side is an attempt to be relieved of responsibility and contradicts ... the essence underlying any Bank financing, as reflected in the standards set in Bank policies, particularly Operational Policy OP-703. This policy is a tool that should be used to achieve social and environmental success in any IDB project. There is an express requirement to identify, assess, and manage both direct and indirect impacts and risks, and it is the Bank’s obligation to determine how to manage them, whether they are produced by the Bank’s client or by a third party. It is also surprising that Management should attempt to disassociate itself from any aspect related to the Airport’s air operations, which are the source of the Project’s future financial success." (MICI report, paragraph 2.88)
Applicable norms and standards
Other applicable regulations
When it invested in this project, the Inter-American Development Bank was required to comply with its Environment and Safeguards Compliance Policy (OP-703), including obligations to:
- Conduct appropriate due diligence regarding project environmental and social risks, including, in this case, noise pollution and associated health risks;
- Ensure that the project effectively avoided, mitigated or compensated those risks;
- In this case, the IDB was required to recognize Aerocivil as a necessary third party for the effective mitigation of environmental and social impacts and analyze the risks associated with Aerocivil's role in the project;
- Develop a management plan in consultation with affected communities prior to project approval;
- And comply with Colombia's environmental laws, including national noise standards.
A recent report of the IDB's Independent Consultation and Investigation Mechanism ("MICI") concluded that the IDB violated multiple environmental and social obligations. Among its specific findings, MICI concluded that:
- The project should have been categorized as Category A rather than Category B;
- The assessments conducted did not even satisfy Category B standards. Among other flaws, the assessments failed to: evaluate the noise impacts that would be generated by the increase in air operations as the airport expanded; evaluate the risks associated with Aerocivil’s responsibility for noise management; and evaluate the circumstances in which noise levels were exceeding national limits and whether noise monitoring and management systems were adequate;
- Neither IDB’s nor OPAIN’s risk management plans identified in any substantial way the risks or impacts of increased noise nor established appropriate mitigation measures for those, including a plan to manage the compliance risks associated with Aerocivil;
- There was no meaningful consultation of affected communities and ongoing difficulties exist in the flow of information between OPAIN, Aerocivil and communities; and
- These failures are linked to health and stress impacts suffered by adjacent communities.
MICI report links project to health harm
On 5 june 2017, the independent accountability office of the Inter-American Development Bank confirmed that the Bank did not do enough to protect neighboring communities from serious harm when it funded the expansion of El Dorado International Airport in Bogotá, Colombia. The noise pollution suffered by those communities is grave and relentless, from the takeoff and landing of military as well as commercial aircraft at one of Latin America’s busiest airports. Noise is a long-standing problem that has been made worse by the airport’s expansion. The report found that the IDB violated its environmental and social safeguards in multiple ways:
- The Bank and its client, the company OPAIN, failed to recognize the scale and complexity of the noise risks. Fontibón has a population of more than 300,000 people and many of its residents live directly on the margins of the airport. The Bank and OPAIN failed to evaluate the impact that increased noise generated by the expanded airport would have on the residents there.
- The Bank and OPAIN failed to meaningfully consult communities before the project was approved and as it was implemented.
- The Bank and OPAIN failed to validate that appropriate systems and mitigation measures - including noise insulation - were in place to protect communities from the severe noise.
- Noise levels in the Fontibón neighborhood have frequently exceeded national legal noise limits. Yet the Bank had no system in place to monitor or respond to these violations, and therefore had no way to ensure that the project it was financing complied with national law.
- These failures are linked to the health and stress impacts that communities are suffering from. Studies have found that at least a third of Fontibón residents suffer from chronic insomnia and that reports of hearing damage are higher in areas with greater exposure to the noise. Children are particularly vulnerable, with studies finding a relationship between long-term exposure to aircraft noise and developmental delays. Yet the Bank made no assessment of the health risks and impacts associated with the increase in air operations.
However, despite acknowledging the strength of these independent findings, the IDB does not plan to take any meaningful steps towards fixing the problems in Bogotá. The IDB Board of Directors failed to adopt MICI’s recommendation that the IDB work with relevant Colombian authorities to analyze ways to improve the sustainability of the airport, claiming that such action is out of its control, following the repayment of the IDB's loan. See here for the full blog and report.
OPAIN has received financing from a range of Equator Principles Financial Institutions (EPFIs) and national and international development banks:
- The first round of financing took place in 2007, when OPAIN received financing from two EPFIs (Bancolombia and BNP Paribas) and three national and international development banks (Inter-American Development Bank (IDB), China Development Bank, and the Development Bank of Latin America (CAF)).
- In May 2015, OPAIN closed a further round of financing, to refinance its debt to the development banks and to fund additional works. Four EPFIs - Bancolombia, BNP Paribas, HSBC and Sumitomo Mitsui Banking Corporation each contributed USD 125 million as equal partners in a USD 450 million refinancing term loand and a further USD 50 million term loan.
- In December 2016, Financiera de Desarrollo Nacional (FDN), a Colombian infrastructure-focused development finance institution, began disbursing debt finance to OPAIN that is expected to total 190 billion pesos (approximately USD 65 million), to fund further terminal expansion works. Major shareholders in FDN include the World Bank Group’s International Finance Corporation (IFC), the Sumitomo Mitsui Banking Corporation and the CAF.
In 2014, Ashmore Colombia Fund I, a private equity fund, took an 85% shareholding in Codad. This fund is managed by Ashmore Colombia, part of the Ashmore Group (UK). The IFC has an equity investment in Ashmore Colombia Fund I.