URUGUAY-ARGENTINA: Montevideo Applauds Hague Ruling on Paper Mills, Urges Dialogue

By Dario Montero Reprint | | Print |

Darío Montero*

MONTEVIDEO, Jul 17 2006 (IPS) - The dispute has been bitter at times, but the atmosphere was almost cordial Thursday when the International Court of Justice at The Hague rejected Argentina’s lawsuit demanding a halt to construction of two paper pulp mills on the Uruguayan banks of a shared river.

The Argentine government had filed proceedings against Uruguay on May 4, alleging violations of bilateral agreements regarding joint administration of the border Uruguay River. It had also requested that the Court order a provisional suspension of work on both plants, one being built by the Finnish Botnia company and the other by Spain’s ENCE.

In Uruguay, the Tabaré Vázquez administration, while satisfied with the ICJ verdict, was low-key about the victory. Government spokespersons strongly discouraged likening the outcome to a sports event in which Uruguay “scored on Argentina,” as some quick-off-the-mark local analysts and media have done.

Montevideo has assured that the mills’ environmental impact will be minimal, using the latest available technologies. Domestic support for the mills lies mostly in the hope that they will create much-needed jobs in a country still recovering from the 2002 economic crisis.

Vice-President Rodolfo Nin Novoa said now was the time to “reopen dialogue with Argentina to draft an agreement establishing joint control over the environmental impacts the plants will have,” as Montevideo originally intended.

The ICJ decision “indicates that our country has greater environmental obligations,” he explained. He agreed with Foreign Minister Reinaldo Gargano’s observation that “the Court at The Hague has left the door open for Argentina; if necessary, it will be able to demand new studies” of the pulp mills’ environmental impacts, to prevent the damage it fears.

Amongst Uruguayan environmentalists critical of the paper mill projects, there was also a sense of relief at the ruling, but for different reasons than the government’s.

“We did not expect the Court’s ruling on the precautionary measures to result in any major resolutions,” María Selva Ortiz, of the environmental organisation REDES, the Uruguayan affiliate of the worldwide coalition Friends of the Earth, told IPS. But the result does clear the way for the real environmental issues to be properly addressed, she said.

Argentina’s request to halt plant construction work “only diverted debate, which actually focuses on the ramifications of developing of this kind of polluting industry and consolidating a harmful forestry model in the country,” explained Ortiz.

The International Court of Justice found, by 14 votes to one, “nothing in the record to demonstrate that the very decision by Uruguay to authorise the construction of the mills poses an imminent threat of irreparable damage to the aquatic environment of the River Uruguay or to the economic and social interests of the… inhabitants on the Argentine side…”

The court also stated that “Argentina has not persuaded it that the work presents irreparable damage to the environment or that the mere suspension of the work, pending final judgment, would be capable of reversing or repairing the economic and social consequences attributed by Argentina to it.”

But the Court’s ruling, read by its president, Rosalyn Higgins, went even further.

“In respect of the commissioning of the mills, Argentina has not provided evidence at present that suggests that any resulting pollution would be of a character to cause irreparable damage to the river,” read the decision. The Court added that, “in any event, the threat of any such pollution is not imminent as the mills are not expected to be operational before August 2007 in one case and June 2008 in the other.”

However, the judges reminded Uruguay that it “necessarily bears all risks relating to any finding on the merits that the Court might later make” and that “the construction of the mills at the current site cannot be deemed to create a fait accompli.”

The court made it clear that its ruling corresponded to this particular construction phase and leaves unaffected Argentina’s right to future claims “based on new facts.”

The Court also rejected the second part of Buenos Aires’s request: “an order requiring Uruguay to cooperate in good faith with Argentina and to ensure that the dispute is not aggravated.” The judges stated that Montevideo’s representatives had already demonstrated their good faith in May’s hearings.

The lawsuit brought by the Néstor Kirchner government is based on Montevideo’s alleged non-compliance with the Uruguay River Statute, which, according to Buenos Aires’ interpretation, requires a process of notification and consultation amongst the parties involved for authorisation of construction along the river the two countries administer together.

One of the articles in the statute signed in 1975 establishes that the International Court of Justice has jurisdiction to decide any related disputes.

The Court could take several years to rule on the key question, and could even declare that it lacks jurisdiction to consider the merits of the case, as it underlined in the Thursday ruling.

“Uruguay will surely lose” that case, because it can be proved that it did not seek authorisaton from Argentina to give the green light to the companies to begin construction or to conduct the environmental impact studies, said REDES-Friends of the Earth spokeswoman Ortiz.

The efforts by environmental groups has already halted bank loans for the Botnia mill and for ENCE, which in the end “will not be built,” Ortiz says.

Thursday, Uruguay’s Foreign Minister Gargano and Minister of Housing and Environment Mariano Arana urged the Kirchner government to return to the table for dialogue in order to create a binational team to monitor the two paper pulp mills as construction continues on the Uruguayan side of the Uruguay River, near the city of Fray Bentos.

“The path is one of tolerance and of extending a hand for dialogue, and not for resting on false triumphalism,” said Gargano, who did not rule out the possibility of progress on the matter at the Mercosur (Southern Common Market) Summit, next week, in the central Argentina city of Córdoba, which Vázquez and Kirchner both plan to attend.

The estimated investment for the two pulp mills is 1.8 billion dollars, the largest sum in Uruguay’s history, and their combined output would be 1.5 million tonnes of paper pulp annually.

Argentina’s Environment Secretary Romina Picolotti noted, as Ortiz did, that the campaign against the mills consists of keeping up the pressure in order to block their international financing.

“The ruling is of great importance both for our legal strategy and for targeting the financing. I hope the banks understand that the ruling does not mean the pulp mills are a safe investment,” she said.

“It only means that the Court has not found sufficient proof to halt construction, but it might in the future. This is not a definitive decision and is seems to me an important message for investors,” the minister added, addressing a rally of residents of Gualeguaychú, the Argentine city located across the river some 30 km upstream from Uruguay’s Fray Bentos.

Gualeguaychú has been the site of numerous protests against the Botnia and ENCE mill construction across the river in Uruguay, including a 43-day blockade of the bridges connecting the two countries.

As for the ICJ ruling, “We knew it was going to be difficult and we didn’t have much hope. We are disappointed, but even so, we don’t want to make any hasty decisions. This is a battle that is just getting started, Gustavo Ribollier, member of the Gualeguyachú Citizens’ Environmental Assembly, told IPS Thursday.

“It’s not the end of the world,” said Minister Picolotti, who was part of the delegation that presented Argentina’s petition to the ICJ in May.

The ICJ also left in the hands of the binational Uruguay River administrative committee the duty to monitor construction work and potential environmental impacts in the area.

In that regard, Vice-President Nin Novoa understands the ruling as containing a recommendation to Uruguay indicating something like “make sure this doesn’t pollute… We’re on it,” he said.

(*With reporting by Marcela Valente in Argentina.)