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- Paper Pulp Mills - Uruguay
- Corporate Accountability and Human Rights
- Climate Change and Human Rights
The CAO Ombdusman (CAO) Triggers Audit of Uruguayan Paper Mill Projects and Expands Investigation to Proceedings of MIGA
Tuesday November 9, 2005 - Washington DC. – Following the completion of its preliminary review of a complaint filed by CEDHA against two proposed IFC-financed paper mills on the Argentine-Uruguayan border, an investment of nearly 2 billion dollars which has resulted in diplomatic confrontation between two otherwise amicable states, the CAO Ombudsman officially communicated today to CEDHA and to the nearly 40,000 complainants of Argentina and Uruguay against the mills, that it will formally trigger a compliance audit of both the International Financial Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) handling of the paper mill projects. The compliance audit is the CAO’s strongest administrative review function which can be triggered only by the World Bank President or by the CAO itself, if its findings during preliminary review of complaints suggest the need to review institutional policy compliance.
CEDHA met last week with the CAO in Washington DC and requested that the CAO extend its review of the complaint filed in September against the IFC financed-projects, to actions carried out by MIGA, the World Bank’s agency which provides loans to guarantee investments against political risk in developing countries. As part of the CAO mandate, it may review project activities of both the IFC and MIGA.
The CAO formally admitted the complaint last month and chose to conduct a site visit shortly thereafter. The CAO mission to meet with affected stakeholders of Argentina and Uruguay included meetings with local community groups, IFC staff, representatives of the ENCE and Botnia (the company sponsors of the mills), and with Argentine and Uruguayan government representatives.
The publication of the CAO’s report on its first mission to the region is expected later this week, however the CAO has already notified project complainants and the IFC that it will trigger a compliance audit.
ENCE of Spain, and BOTNIA of Finland, the two paper mill companies set to invest in Uruguay, are two of the largest paper producers in the world, with a long history of local community opposition to their plants, and with severe legal problems in their countries of operations, yet they have convinced the government of Uruguay to open their doors for what is slated to be the largest direct foreign investment in the countries history, 1.8 billion dollars. The plants will use second rate technology, currently phasing out in Europe, employing chlorine which combined with other toxins used in the milling process, results in discharges of carbon monoxide, sulfur dioxide, and chlorine dioxide which in turn emit dioxins and absorbable halogen dioxins, into water and atmosphere. Production of pulp will also result in the accumulation of lead, cadmium, chrome, and arsenic in the soil, around the plant, all elements which have been shown to produce numerous human illness, including genetic defects, cancer, respiratory problems, and skin disease.
CAO Letter Informing Trigger of Audit and Extention of Review to MIGA.
More Information
For more information, please contact:
Jorge Daniel Taillant
Center for Human Rights and Environment (CEDHA)
00 54 351 425-6278; cel. 00 54 9 351 625-3290
Romina Picolotti
Center for Human Rights and Environment (CEDHA)
00 54 3541 494 162; cel. 00 54 9 351 625-3297
