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Last Update: July 16, 2008
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- Paper Pulp Mills - Uruguay
- Corporate Accountability and Human Rights
- Climate Change and Human Rights
International Roadblock Against Pulp Mill Investment Breaks ONE YEAR Threshold
November 20, 2007. Argentine – Uruguayan Border. Today, local community representatives, opposed to a multimillion dollar pulp mill investment by the Finnish Botnia, have reached an unimaginable one year marker with an international road block they installed to halt international overland traffic between Argentina and Uruguay to draw attention to their predicament. The roadblock went up on November 20 th , 2006, as the community waited out a decision by the World Bank’s International Finance Corporation (IFC) to grant a US$470 million loan to what has become the most controversial pulp mill investment ever. It is the longest standing public protest in World Bank history, and some say, in global history generally. The community sat in a vigil awaiting the World Bank Board of Directors vote, and following the green light given by the financial institution to the Finnish pulp mill, resolved to stay on the bridge indefinitely. That was one year ago, and they are still there.
Uruguay claims to have lost over US$500 million to earlier stakeholder roadblocks even before it became permanent one year ago. Some estimate that losses to economic activity and other cross-border economic flows could already exceed the U$1 billion value of the investment.
The conflict involves a controversial pulp mill (to produce 1 million tons of pulp per year) constructed by Oy Metsa Botnia , a Finnish pulp mill giant set on transferring the growth of pulp production from Europe to the developing world, where trees grow faster, production is cheaper, and wages are far lower than in Finland, as is the tolerance for the industry’s environmental impacts. Botnia’s Uruguayan mill will be three times larger than any it presently operates in Finland. Uruguay granted Botnia tax free production, its own port facility, and flexed environmental standards so that the investment and the industry more generally would thrive.
Stakeholders on both sides of the border including Uruguayan environmental organizations, vehemently oppose the investment, which they say will only bring destruction to ecosystem and employment for only a few hundred people, many of which are not even from the community. Uruguay has already embarked on a conversion of agricultural lands to eucalyptus farming targeted for pulp production which is devastating Uruguayan ecosystems, say environmentalists.
The social conflict that has arisen around the investment has spilled over into diplomatic relations, and caused a rift between two otherwise friendly neighbors, Argentina and Uruguay and has even brought tense diplomatic relations to regional trade agreements like MERCOSUR of which Uruguay has threatened to pull out because of the dispute. Community groups have come out in droves to express their rejection of the social license the mill has failed to obtain. On three separate occasions, 50,000, 100,000, and 120,000 people marched peacefully rejecting the project installation on the border. Considering there are only about 100,000 people living in the immediate area impacted by the mill, the number is mind boggling. But Botnia and the Uruguayan government have shown no flexibility to negotiate a relocation, which is what the community is asking for. Recently, a mediation effort by the Spanish King was abandoned when Uruguay gave the final permits needed by Botnia to start production.
Recent criminal legal actions taken in Argentina point to company CEO Erkki Varis, who they blame for deceiving local stakeholders about pulp mill impacts which include foul odor and cumulative contamination to the ecosystem, and for failing to consider the sensitive cultural backlash that could have been expected from the Botnia’s arrival to a environmentally and pristine community. Communities fear irreversible impacts to sensitive environmental resources and collapse of eco-tourism, which is critical to the local economy and livelihoods. They also signal out World Bank Board of Directors responsibility in fueling the dispute and facilitating Botnia’s advancement and hurried construction of the mill, which has led to lax safety controls, serious injury, human intoxication and death.
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