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Stakeholder Communities Increase Pressure and Plan New Marches to Oppose Uruguayan Pulp Mills

Monday, 11th September – Paraná – Four months and ten days after lifting a 45-day long international road block to protest the installation of two mega pulp mills on the Uruguay River, local stakeholders returned to the highway and international bridge yesterday to remind Botnia and ENCE (the two pulpmill owners), the Uruguayan and Argentine Government, the IFC and the World Bank, that Gualeguaychú (the affected Argentine community) remains steadfastly and relentlessly opposed to the installation of the two mills, and that they will never give Botnia and ENCE the social license they need to operate in the area.

Hundreds of local stakeholders opposed to the mills traveled in caravan to block access to Ruta Nacional 14 between Argentina and Uruguay, disrupting international traffic and confirming the strengthened resolve of the people of Gualeguaychú to prevent the installation of the two mega projects that are still in violation of the World Bank's environmental and social safeguards, its International Waterways Policy and that have caused an unprecedented international dispute between Argentina and Uruguay currently under review by the International Court of Justice. The motorized march delivered a clear and succinct message to both companies and financiers, highlighting that Botnia and ENCE lack the social license necessary to carry out the projects, and that banks are in no position to provide financial support. Local stakeholders opposed to the project have already produced the largest environmental march ever, of over 120,000 common citizens which marched to the international bridge in April to oppose this investment.

The IFC is currently finalizing studies to provide "missing" and erroneous information about the investments, much of which was denounced in September of 2005 by stakeholders before the Compliance Advisory Ombudsman, and which now the IFC and the companies are trying rapidly to complete in order prepare the projects for elevation to the Board of Directors vote in October or November of this year. Paul Wolfovitz, the World Bank's President, has already shown concern over the two projects, and has told project sponsors, the Uruguayan government, and even the European Union (which tried to leverage support for the projects), that the Bank would not move on the projects until it was sure that they fully complied with social and environmental safeguards. Rumors leaked recently, that the Bank's Legal Counsel, now headed by incoming Ana Palacios of Spain, also had doubts about the investments, largely due to the pending dispute between Argentina and Uruguay at the International Court of Justice, a dispute which is unlikely to be resolved anytime soon.

Private commercial banks (Calyon of France, BBVA of Spain, NORDEA), among others), European multilaterals (the Nordic Investment Bank) and export credit agencies (Finnvera of Finland and CESCE of Spain), and other international financial actors are awaiting the IFC decision, and hoping for a settlement between the neighboring countries, so that project risk is reduced and a green light appears in the otherwise complicated investment climate surrounding the mega-mills. Local residents, however, are increasing pressure to remind the banks of their irreversible opposition and promising to sustain their protests until Botnia and ENCE pack their bags and leave the area. Botnia meanwhile, has ignored the International Court of Justice order that parties refrain from aggravating the dispute until a settlement can be reached, and has continued construction and increasing shipments of construction materials, spurring yet more conflict in the region, new protests, and new roadblocks. Botnia already has an open case before the OECD for violations to the OECD Guidelines for Multinational Enterprises, due to alleged violations of international law, responsible business ethics, and its selfish position of putting its investment interests above the delicate conflict it has caused between Argentina and Uruguay.

The next protest march is planned for Sunday the 24th of September to commemorate the one year anniversary when ten thousand students protested against the construction of the pulp factories. Major protests are once again brewing and are in preparation for the General San Martin Bridge, the key arterial route between Uruguay and Argentina, and adjacent to the Botnia factory under full construction.

Discussions by the Citizen’s Assembly of Gualeguaychú are underway planning further disruptions to Uruguayan tourism, similar to protests that took place the previous summer, which allegedly caused over US$400 million in damages to the tourist industry, but which have been recently declared by the ad-hoc MERCOSUR tribunal as the legitimate expression of residents’ fears. The MERCOSUR verdict states that the protests are an understandable consequence as a result of inadequate action on behalf of both Argentinean and Uruguayan governments and due to the potential environmental damage to be caused by the mills. Protests are now set to be repeated in force over the upcoming months.

These protests, roadblocks and increased pressure on the project sponsors and the Bank all occur as a backdrop and lead-up to the IFC's imminent final decision to move the project to the Bank's Board of Directors for the final vote. Private banks are watching closely and awaiting for a green or red light to the investment.

More Information

For more information contact:

Jorge Daniel Taillant
Center for Human Rights and Environment (CEDHA)
Tel. 54 3541 494 162
Cel. 54 9 351 625 3290
jdtaillant@cedha.org.ar