Argentina, Uruguay Gear up for Political Battle over 2 million TPY UPM Mill

Old tensions are set to reignite between Argentina and Uruguay as the Tabaré Vázquez administration is eager to move forward with the construction of the third pulp mill in the country, raising concerns of environmental groups on both sides of the Uruguay River over its impact. The project comes after a four-year conflict between the two countries, which started with the construction of the first pulp mill plant in Uruguay in 2006 and finished with a ruling at the International Court of Justice.

Uruguayan President Tabaré Vázquez has started talks with Finnish company UPM over the construction of a new pulp mill in the country, which would be located in the center of Uruguay and over the Río Negro River. It would require a $5 billion investment, create 8,000 jobs, and imply the repair of roads and railways.

But the Río Negro then meets the Uruguay River, which is shared with Argentina and protected by a treaty, which requires both parties to inform the other of any project that might affect the river. Uruguay government officials said the treaty wouldn’t be applicable, something rejected by their Argentine counterparts.

Citizens of Gualeguaychú, Entre Ríos have already voiced concern over the environmental impact the pulp mill could have, as the city is located on the Uruguay River banks. The city’s municipality has issued a press release rejecting the construction of the factory because it would affect the "environment and health" of its citizens.

"Pulp mills don’t benefit Uruguay; they only lead to pollution and pillage. When he was a candidate, Tabaré said he was in favor of the environment. But he is now favoring a new pulp mill," Juan Veronesi, member of the citizen assembly of Gualeguaychú, told the Buenos Aires Herald. "UPM only cares about collecting large profits."

Similar concerns have been shared by Uruguayan environmental groups, all gathered under an organization called Mesa Ecológica. They held a meeting last week to discuss the government’s project and agreed to carry out protests against it and even file complaints in court.

"The area where the pulp mill would be located is highly important due to its biodiversity; it could even be a national park. If the factory is built, the government would be committing an ecocide," Rubén Mancini, head of Mesa Ecológica, told the Herald. "Uruguay used to be an agricultural country and is now becoming dependent on foreign companies."

Veronesi and Mancini were part of the about 20,000 activists who started to complain in 2006 after Uruguay gave the green light for the construction of the first pulp mill in Fray Bentos, located on the banks of the Uruguay and facing Gualeguaychú. They blocked many times the international San Martín Bridge between the two cities, a protest he didn’t rule out staging again this time.

The protests back then escalated and led to diplomatic tensions between the two countries, which ended with a ruling by the International Court of Justice, claiming that Uruguay failed to inform the operations of the pulp mill and broke the Uruguay River treaty but that the factory did not pollute the river and shouldn’t be closed.

Nevertheless, Gualeguaychú citizens have dismissed the ruling and continue to hold a protest once a year.

"Building a new factory will affect us directly. We are already exposed on a daily basis to toxic fumes. Deaths linked to cancer are going up and that could be directly linked to the pulp mill. But we aren’t a priority for the Macri administration," Veronesi said.

The new UPM pulp mill would produce more than 2 million metric tpy of pulp, exceeding the amount manufactured by the two factories currently operating. Construction would start on the second semester of 2018 and production in 2020. Three departments are in the race to house the factory: Durazno, Cerro Largo, and Tacuarembó.

The Herald contacted UPM but they declined to comment on the project. Nevertheless, the company’s SVP of Development in Uruguay Jaakko Sarantola recently confirmed the initiative at a press conference with Vázquez.

"Uruguay could accommodate a third state-of-art pulp mill with proven environmental performance, if the logistics infrastructure is rebuilt to support large scale export-oriented businesses. If these challenges can be solved in the coming few years, Uruguay could be a competitive alternative for addressing UPM’s pulp market opportunities in the 2020s," he said.

The full story is available online.

 

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