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Botnia Plagued by Worker Protests and Growing Unemployment in Fray Bentos related to the Mill

March 4, 2008 – Fray Bentos Uruguay . The promises of the Finnish work ethic, responsible business practices, environmental soundness and economic bonanza are fading fast for workers and residents of Fray Bentos who trusted the Finnish Pulp giant Botnia's promises that what would be Latin America's largest pulp mill, would bring benefits to everyone. The mill is supposed to produce 1 million tons of ECF pulp per year.

But a string of protests is putting the investment at risk, slowing production, and resulting in a series of unanticipated worker stoppages, strikes and protests, summed to the tens of thousands of protestors the mill faces across the river in Argentina. Another massive protest to top 100,000 is scheduled for late April.

Construction workers, laid off factory workers, local residents, transport contractors and a slew of other related business are complaining that Botnia, the “Botnian” work ethic, and the Botnians (as the company likes to refer to its staff) are falling short of expectations and promises.

Transport workers argue that Botnia is only meeting about a third of the promised truck flow resulting from the project. The Uruguayan National Truckers Union is pressuring Botnia to keep to its promises or face a massive trucking strike, which could start as early as this Friday following a union meeting scheduled to take place in the late evening to discuss action options. It is expected more than 100 union member truckers representing 20 companies subcontracted by Botnia will convene to debate what to do about Botnia's refusal to meet contractual obligations. Jorge Godoy of the union indicated that Botnia is already operating at 80% of capacity, and yet they've only met with 1/3 of the demand they promised to local truckers. This, argues Godoy, is undermining the investments the truckers made to provide Botnia with the service they had demanded early on, risking loan defaults on their investments made solely to supply Botnia.

In construction, similar attitudes abound against the Finnish pulp mill, including the strong reaction to worker unsafety as another worker died recently in an accident, supposedly because of Botnia's lack of oversight. Others have been seriously injured, had limbs amputated or have been exposed to toxic gases and gotten very ill. A local schoolhouse has complained that schoolchildren often get sick when Botnia is functioning. SUNCA, the construction worker's union that supplies workers to Botnia is protesting the death of Juan Pedro Molina, who plunged to his death recently from a scaffold unit at the mill, constructed with no safety precautions. SUNCA has filed a criminal complaint against Botnia for the death.

In yet another dimension of local displeasure with Botnia, since Botnia arrived, unemployment has actually dropped in the locality, despite the rhetorical promises made by the pulp mill giant that employment would flourish. Since the end of construction of the mill, unemployment has dropped 5.7% in the locality of Rio Negro, where Botnia is situated, making Rio Negro top on the Uruguayan national unemployment charts. Analysts are calling it, “the Pulp Mill Effect” or “the Botnia Effect”. In 2005, just before Botnia entered Uruguay, Rio Negro had the lowest umemployment rate in the nation.

What is Botnia doing about growing resentment? PR Staff in Helsinki and Uruguay are busy at work with corporate schemes and marketing tactics to win over local residents. Last weekend they held an open-door festival in a local arena for charitable benefit to the hungry, and to officially launch the company in Uruguay. Botnia's CEO Erkki Varis, who is accused by local environmental and human rights groups as the person most at fault for many of the poorly executed decisions made by the company, came from Helsinki. Everyone was invited to the festivities, except of course, anyone with an opinion against the project. Posters, signs, t-shirts, megaphones, or any other materials expressing anything against the mill, were banned.

The Uruguayan government, police and military were present in large numbers (perhaps to the relief of Mr. Varis and other of Botnia's corporate executives), to ward of any potential protestors against the mill.

More Information

Jorge Daniel Taillant
Center for Human Rights and Environment (CEDHA)
Cel. 54 9 11 6729 5466
jdtaillant@cedha.org.ar