ARGENTINA asked the world court yesterday to stop Uruguay building two giant paper mills on the banks of a river shared by the South American neighbours, claiming that the project would damage the environment.

After months of mass protests and talks failed to stop construction of the paper mills on Uruguayan shores, Argentina appealed to the International Court of Justice in The Hague amid fears that effluent from the plants could devastate the environment of the Uruguay River that forms part of the border between the countries.

The two-day hearing, which concludes today, was told by the Argentine delegation that construction of the mills, by Ence, a Spanish firm, and Botnia, of Finland, violated bilateral accords governing the river that were signed by the two countries in 1975.

Argentine representatives, arguing that the construction of the pulp mills, which is already under way, goes against the Uruguay River Statute, also emphasised their environmental concerns and asked the 15 judges at the hearing to put a halt to the project.

Argentina said that the mills would cause “irreversible” damage to the region and accused Uruguay of failing to inform the Argentine authorities in advance over the undertaking.

But to Uruguay, still reeling from the effects of Argentina’s economic crash that plunged the smaller country into serious difficulties, the two paper mills represent the biggest private investment in its history. The $1.7 billion (£1 billion) investment will also bring massive employment to an area where many are still struggling to make a living after the 2001-02 crash left 20 per cent of people unemployed and 39 per cent living below the poverty line.

Months of protests by angry Argentinians, concerned that the mills will contaminate the farming area on their side of the river and affect its thriving tourism industry, have also taken their toll on relations between these formerly friendly nations.

Locals from the Argentine province of Entre Ríos, just across the river from the mills, cut off the international bridge joining the two countries during Uruguay’s tourist season this year, seriously damaging the neighbouring economy and escalating the dispute.

President Kirchner of Argentina has repeatedly called for studies on the environmental impact that the two mills will have, and asked that construction be halted until such studies were carried out. But the companies behind the pulp mills argue that any pollution they produce will fall within internationally accepted levels.

An offer by Botnia to suspend construction on its mill for a ten-day period was rejected by Argentina as too short a period to be of any use and work has continued on the mills, which are set to begin operations next year (Botnia) and in 2008 (Ence).

A planned investment into the project by the World Bank International Finance Corporation was postponed until environmental studies could be completed.

There have been some lighter moments as this dispute has unfolded; in particular at the summit of the leaders of Europe, Latin America and the Caribbean in Vienna last month, when an Argentine carnival queen appeared unexpectedly before the gathered heads of state in a sequined bikini to register her own protest at the mills’ construction.

The court is expected to publish its final ruling on the issue by July 28.

URUGUAY V ARGENTINA

Population

Uruguay 3.4m
Argentina 40m

GDP per capita

Uruguay $9,600
Argentina $13,100

GDP per capita in 1990

Uruguay $5,830
Argentina $7,310

Life expectancy

Uruguay 76
Argentina 76

Population below poverty line

Uruguay 40%
Argentina 39%

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