Development & Aid, Environment, Headlines, Latin America & the Caribbean

ENVIRONMENT-URUGUAY: Pulp Mills Under Fire from Argentine Gov’t, Activists

Marcela Valente*

BUENOS AIRES, Jul 20 2005 (IPS) - "If we fail to keep these two big pulp mills from being built on the Uruguay River, it won’t be only the local residents who will lose out," said Ricardo Gahan, a local activist.

"We would essentially be giving a green light to foreign companies to come and pollute our region," he told IPS.

The construction of two cellulose plants near the Uruguayan town of Fray Bentos, on the eastern bank of the Uruguay river that forms part of the border between Uruguay and Argentina, has created tension between the two countries, while local residents and environmentalists on both sides of the border are up in arms.

The dispute has intensified over the past few weeks, since the Argentine government took a firmer stance against the installation of the eucalyptus wood pulp mills by the Empresa Nacional de Celulosa de España (ENCE) cellulose company from Spain and Botnia, a company from Finland.

Argentine Foreign Minister Rafael Bielsa said he was not optimistic about how the altercation with Uruguay would turn out, and underlined that Argentina is determined to demand that the Uruguayan government provide independent environmental impact studies for the two plants.

"It is Uruguay’s systematic refusal that is complicating matters," the minister said late last week.

Uruguayan President Tabaré Vázquez, meanwhile, said construction of the plants would not be brought to a halt, and Foreign Minister Reinaldo Gargano remarked that although he is willing to discuss the question of environmental impact, "the decision on the installation of the plants has been taken, and there is no turning back."

Although both the Vázquez administration in Uruguay and the government of Néstor Kirchner in Argentina appear to be open to dialogue, there seems to be little chance that they will see eye to eye on this matter.

Uruguay refuses to budge from its plans, and Argentina has threatened to take the case to international tribunals.

"Argentina must not accept the failure to comply with the 1971 and 1975 agreements on the use and administration of the Uruguay River, which stipulate that consultations must be held on the environmental impact of projects that affect the watercourse," Raúl Estrada, the Argentine Foreign Ministry’s director of environmental affairs, told IPS.

The diplomat pointed out that the environmental impact studies provided by Uruguay were conducted by the companies themselves, which he said are seeking to set up shop outside of Europe because of the restrictions on producing wood pulp there. He noted that a similar ENCE plant was fined in Spain for the environmental damages caused near the northwestern Spanish city of Pontevedra.

Under European regulations, no cellulose plant will be allowed to operate within European territory after Oct. 30, 2007 without upgrading the current technology, which is highly polluting.

Residents of Gualeguaychú, an Argentine town across the river from Fray Bentos, have been fighting since 2003 to block the pulp mills that were approved by the previous Uruguayan administration of Jorge Batlle, who was succeeded by Vázquez in March.

ENCE plans to invest 600 million dollars in its plant, and Botnia will invest over one billion dollars – significant sums for the small economy of Uruguay, which has a total population of 3.3 million and is sandwiched between South America’s two giants, Argentina and Brazil.

The two pulp mills would be installed just 10 kms apart, which further fuels the concern over the potential pollution.

Environmentalists and residents on both sides of the river were confident that once Socialist President Vázquez took office at the head of the leftist Broad Front government, the pulp mill projects would be called off.

But that did not occur. "It’s a mistake to believe socialists have a better attitude towards the environment," said Estrada. "The economies of (the socialist bloc in) eastern Europe destroyed the environment as much as, or worse than, the market economies."

One of Vázquez’s arguments in defence of the pulp mills is that Uruguay has the right to develop and to create new sources of employment. But those who are opposed to the plants raise doubts as to their real capacity to generate jobs.

Gahan pointed out that in Valdivia, in southern Chile, a similar plant failed to become an engine for development or employment, while it caused severe pollution.

Estrada noted that it is the production of paper, not wood pulp, that generates a significant number of jobs.

Pulp mills are major polluters, producing dioxins and furans, which are among the most carcinogenic substances known.

Dioxins and furans are among the 12 Persistent Organic Pollutants (POPs) that must be reduced or eliminated under the Stockholm Convention, adopted by the international community in 2001.

POPs are chemical compounds that tend to persist in the environment and travel long distances, posing significant health risks, including birth defects, and accumulating in the bodies of both humans and animals.

Local residents and activists say the factories will contaminate the river, air and soil in the surrounding area.

On Apr. 30, some 35,000 people from both sides of the river gathered on the international bridge that links the Uruguayan province of Río Negro, where Fray Bentos is located, and the Argentine province of Entre Ríos, which is home to Gualeguaychú, to hold a joint protest against the pulp mills.

In the demonstration, the members of the Entre Ríos Environmental Assembly, to which Gahan belongs, called on the centre-left Argentine government to press the Vázquez administration to bring construction of the factories to a halt.

Shortly afterwards, Kirchner and Vázquez agreed to set up a bilateral technical commission to assess the environmental impact of the plants.

But the Uruguayan government skipped the two meetings that were scheduled, to protest Argentina’s unilateral decision to ask the International Finance Corporation (IFC) – an arm of the World Bank – to condition funding for the pulp mills on the completion of an independent environmental impact study.

Estrada, who came up with that strategy, met this month in Buenos Aires with IFC delegate Dimitris Tsitsiragos to ask him to deny the projects financial support unless a reliable impact study was conducted.

Gahan said the only such study presented so far by Uruguay is one that was carried out by ENCE, which was described as "very incomplete" by experts at the Universidad Nacional del Litoral, a university in Argentina.

But Uruguayan Deputy Minister of Housing and the Environment Jaime Igorra commented to IPS that there is "a great lack of information on this case in Argentina."

"No cellulose plant can be built without having first followed the usual procedure of presenting the National Environment Directorate (DINAMA) with an environmental impact report on the project, which must be approved by the authorities," said the deputy minister.

Igorra said both ENCE and Botnia had carried out impact studies that were approved by DINAMA.

Gahan also said the Uruguayan government admitted that it lacks the technical and financial resources to adequately monitor the factories, and that the technical experts who will be in charge of oversight will be proposed by Botnia.

"We can’t allow the fox to guard the hen house," said Gahan. "That is a suicidal attitude on the part of Uruguay, which we must curb because there are other companies that are studying the possibility of building factories in our region, and if we fail in this case, we will be sending out a signal that they can come and do whatever they like."

Igorra, however, said the plants would be monitored by Uruguayans. "A laboratory run by Uruguayan experts will be set up in Fray Bentos to monitor, on a daily basis, emissions of gas into the air and the liquid effluent dumped into the Uruguay river."

He also said that ENCE has created a reserve in Fray Bentos for endangered species of animals, while Botnia will begin to monitor the sewage that Fray Bentos dumps into the river. * With additional reporting by Raúl Pierri in Uruguay.