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Rumors of Terrorist Attacks on Botnia's Pulp Mill Installation stirs Uruguayan Government

Fray Bentos Uruguay - August 14, 2007 - The never-ending pulp mill controversy on the Argentine-Uruguayan border involving the US$1.2 billion (World Bank supported) investment by the Finnish Botnia, took a new turn for the worse yesterday, when the Uruguayan Foreign Minister reacted to rumors of terrorist attacks against the soon to be operational mega pulp mill facility in Fray Bentos Uruguay. He indicated Uruguay would file new international complaints against Argentina.

The area of conflict, once known for exporting SPAM (canned beef), is now a focal point, according to Reinaldo Gargano, Uruguay's Foreign Minister, for brewing eco-terrorism . The pulp mill company's recent trial production runs, which have spewed smoke into the sky, have enraged the local community and now, claims Uruguay on the heals of declarations by opponents, detailed terrorist attack plans on the mill are in design.

The new threats to security stem, according to Uruguay's leading daily, El Pais, from declarations by Jorge Frixler, one of the more hardline opponents to the mill, suggesting that "actions against Botnia are planned and will start to be executed". El Pais goes on to report that the target will be Botnia's port and cellulose storage facilities on the Uruguay River "utilizing plastic explosives which would be placed in timber destined to Botnia's facilities".

The controversy over the pulp mill stems from the community of Gualeguaychú, immediately across the river in Argentina, which over decades has invested in pristine vacation beachfront resorts now threatened by the chemical agents used in paper pulp production. Argentines fear that Botnia will spew millions of gallons of chlorine ridden contaminated industrial waters into their clean river, ruin natural habitat, and pump rotten-egg smelling gases and clouds of smoke into the air-something they see occurring with all other similar investments by European pulp mill companies in the developing countries. Locals conclude that this will scare off tourism, and transform their ecological paradise into an industrial wasteland.

Following approval of World Bank financing for the investment, Botnia's executives told private financial banks that opposition to the investment ( and investment risk ) would slowly dissipate, as one of the World Bank's hired consultant groups to study the project indicated, "the public's response to the new industrial features is subjective and will change over time as they become accustomed to the new landscape". This statement infuriated local residents who see the investment as a fait accomplit and an imposition by international corporate interests. They sustain that the pulp mills are incompatible with eco-tourism.

Efforts by the Spanish King to mediate the dispute have failed, a complaint at the International Court of Justice (ICJ) grows more and more bitter between Uruguay and Argentina, and the local community is once again, showing signs of strain and conflict. The World Bank's International Finance Corporation (IFC), private banks, and company executives are monitoring events closely, fearing that an explosion of violence from community opponents to the pulp mills, will throw their investment (and profit) into turmoil. The ICJ complaint looms over the investment scheme, as the ICJ could potentially order Uruguay to dismantle pulp mill production at the controversial site.

Gualeguaychú has spawned a considerable agglomeration of support to underpin its opposition to the mill, and has become an internationally acclaimed social movement, observed by non-governmental groups, academic institutions, and media the world over. People from all over the globe stream into Gualeguaychú to meet local environmentalist and assembly members. Gualeguaychú, and the "Uruguayan pulp mill case" as many now refer to it , is the subject of innumerable doctoral thesis, seminars, university classes, all focusing on the curiosities and defining characteristics of what many are calling, a dawning " environmental democracy" .

Residents of Gualeguaychú (population 80,000) drew 120,000 people (on two occasions) to the international bridge linking Uruguay and Argentina in peaceful protest against the mills. On November 20 th, 2006, the eve of the World Bank (ICF) vote to give Botnia the financing it needed (US$170 million) to draw other investors such as Calyon of France, Nordea of Sweden, and Finnvera (a Finnish state Export Credit Agency) into the investment, a road block effectively stopped terrestrial traffic across the border. Amazingly, it never left. Terrestrial traffic has been blocked between Argentina and Uruguay for nearly nine months and the community shows no sign of letting up, as locals brace themselves for the onset of Botnia's production, which is set to begin some time in October.

Yesterday rumors of terrorist attacks including bombs that would destroy Botnia's facilities, shook Uruguayan nerves.

For More Information

Jorge Daniel Taillant

Tel: (+54) 9 116 729 5466