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ARGENTINA-URUGUAY: Quiet Diplomatic Talks on Pulp Mills Hit New Hurdle

Diana Cariboni

MONTEVIDEO, Mar 30 2006 (IPS) - The dialogue between Uruguay and Argentina aimed at finding a solution to the ongoing crisis over two paper pulp factories on the Uruguayan side of a border river has run up against a new hurdle, despite what looked like promising advances.

The members of the Citizens Environmental Assembly of Gualeguaychú – the town in Argentina that has led the protests against the pulp mills because of the potential threat to the environment – declared themselves in a state of alert when a meeting between Presidents Néstor Kirchner of Argentina and Tabaré Vázquez of Uruguay was cancelled on Wednesday.

The Assembly, which blocked traffic along one of the three bridges between the two countries for 45 days, is demanding to be informed of the content of quiet diplomatic talks that have been going on between the two governments for months.

It is also considering the possibility of renewing the roadblock during Holy Week, in April, although there are some indications that an agreement may have been reached by then.

Talks continue between Argentina’s cabinet chief, Alberto Fernández, and Vázquez’s chief of staff, Gonzalo Fernández. Although the basics of an agreement that the two officials have been negotiating for several months have been defined, differences flared up once again when the document began to be drafted.

A draft statement that was to be signed by the two presidents, and which provided for the creation of a binational commission to carry out an independent environmental impact study of the two factories, was almost ready on Monday, a source who preferred to remain anonymous told IPS.

But in a telephone conversation on Tuesday, the officials began to express differences on the finer details of the accord, such as specific terms to be used and the makeup of the binational commission.

For instance, Montevideo wants a smaller commission than what Buenos Aires is pressing for. The Uruguayan government fears that Argentina’s aim of expanding the commission is designed to include member of the Gualeguaychú Citizens Environmental Assembly.

Participation by the Argentine Foreign Ministry, which had not been involved in the negotiations until now, in drafting the text reportedly aggravated the disagreements.

The governments agree on two key premises: that the factories will not be moved from the sites where they are being built, and that the controversial ECF technology to be used will not be modified.

Historically, most paper pulp has been bleached with elemental chlorine gas. However, this generates highly toxic compounds, like dioxins and furans. A new bleaching technique developed over the past decade, known as Elemental Chlorine-Free bleaching (ECF), uses chlorine dioxide instead.

Although an even cleaner technique, Totally Chlorine-Free (TCF), has been developed, the pulp plants that are being built in Uruguay by Botnia, a Finnish company, and ENCE from Spain, plan to use ECF.

Another aspect on which agreement has been reached is the creation of a binational commission that will have between 10 and 90 days to produce an environmental impact report.

The commission will also set forth recommendations and establish limits involving the monitoring and controls of the factories by a larger, permanent joint body, said the source.

The two plants under construction near the town of Fray Bentos in western Uruguay will produce a combined total of 1.5 million tons a year of pulp (or cellulose) – the raw material used in the production of paper -, double the total output of the nearly one dozen pulp mills already operating in Argentina.

The backstage diplomatic negotiations, which have contrasted with the aggressive nationalist rhetoric that has flooded the media in both countries over the last few months, have been responsible for what progress has been made so far towards a solution to the conflict.

The main achievement was mutual recognition by the two presidents of the essential conditions set for formal negotiations to begin.

Kirchner was demanding that work on the pulp mills be brought to a halt for 90 days in order for a joint commission of independent experts to produce an environmental impact study, while Vázquez said he would not negotiate until the roadblocks had been completely lifted.

On Mar. 11, the leaders made an announcement in Chile that they were willing to fulfill these two conditions, and urged the two European companies and the protesters in Argentina to comply.

The Gualeguaychú Assembly lifted its traffic blockade from a bridge on the Uruguay River – which forms part of the border between the two countries – last week. Shortly afterwards, activists in the Argentine town of Colón, farther upstream, followed suit, calling off their own roadblock along another bridge.

After considerable pressure was brought to bear on the two companies, Botnia announced on Sunday that it was willing to freeze work on its 1.1 billion dollar plant as of Apr. 6, although on Thursday it stated that no decision would be made until the Kirchner-Vázquez meeting had taken place.

ENCE, for its part, said on Tuesday that it would bring construction of its 500 million dollar factory to a halt.

A month ago, the positions of the two governments in the ongoing conflict looked irreconcilable.

But while ministers, deputy ministers, provincial governors, mayors and even the presidents themselves engaged in an escalating war of words, with threats of turning to the International Court of Justice in The Hague and the Organisation of American States, the two Fernández’s continued their conversations over the past five months, meeting frequently in Buenos Aires.

The conflict over the environmental damages that could be caused by the pulp mills broke out in 2003, but began to escalate in late 2005, when local residents of Gualeguaychú began to block traffic between the two countries.

The town of Gualeguaychú is located in northeastern Argentina on the river of the same name – a tributary of the Uruguay River – 25 km from the pulp factories.

The roadblocks, timed to coincide with the southern hemisphere summer, caused heavy damages to Uruguay’s tourism industry and to commerce, and the Vázquez administration demanded respect for freedom of circulation of goods and persons, a right that is recognised by international law and regional treaties.

The Argentine government had previously complained that the Uruguayan government failed to inform the binational commission that jointly administers the Uruguay River when it authorised the construction of the two plants as well as a privately-run river port, and threatened to take the case to The Hague.

The position taken by Argentina further galvanized the resolve of the Uruguayan government and people to move ahead with the factories, and left no room for a debate on whether monoculture forestry, in which fast-growth pulpwood trees rapidly deplete the soil of nutrients and water, and potentially polluting pulp production are the best route towards development for this small South American country of 3.3 million people.

Uruguayan officials and the public alike were outraged by the roadblocks, which were tolerated and even encouraged by local and national authorities in Argentina.

Amidst so much noise, many people in Uruguay were taken entirely by surprise when Vázquez and Kirchner announced on Mar. 11 that they had reached an “understanding” – the terms of which are now up in the air once again.