Court rules pup mills construction can continue

"The circumstances did not require a provisional measure ordering the suspension of the mills' construction" said the president of the court, Rosalyn Higgins.

The court ruled that the construction of the pulp mills posed no serious threat to the environment and could continue while the judges evaluate the potential risks of the pulp plants once they begin operation.

"Argentina has not convinced this Court that the mills will cause irreparable damage", said the ruling which was decided by a 14 to one vote of the Court's fifteen judges. However the resolution refers to the "pulp mills construction stage" and does not limit Argentina's rights to present future demands if new controversies emerge. Thursday's ruling by the International Court of Justice in The Hague is the latest chapter in a long row that has provoked months of protests in both countries and strained bilateral relations.

Argentina argues that the mills could contaminate their border river but Uruguay says they will generate jobs and be under strict environmental control.

The Argentine government wanted construction stopped to allow further environmental studies to be conducted. The mills are being built on the Uruguayan side of the River Uruguay that separates the two neighbours.

Uruguay argued that the mills would adhere to the strictest rules and would bring badly needed jobs to the border area.

Argentina said that they would pollute a region dependent on agriculture and tourism and invokes a 1975 treaty by which all issues concerning the River Uruguay must be agreed by both countries.

Uruguay approved one mill in 2003 and has "aggravated the dispute" by authorising a second one, insists the Argentine application to the court.

Uruguay argues that the Spanish and Finnish (Ence and Botnia) companies building the mills will use the latest technology to avoid pollution, and the 1.8 billion US dollars project, the country's largest single private investment in decades, will stimulate the local economy.

There have been mass protests in Argentina against the mills, including in April when thousands blocked traffic crossing the bridge between the two countries.

Now the ICJ has issued its provisional ruling, it will move on to study the substance of Argentina's complain, under the 1975 agreement, an issue which could take several years.

Argentina's delegate in The Hague Court Susana Ruiz Cerruti said "it's simply no, for the time being. If Argentina believes that construction of the mills is damaging we could even demand the dismantling of the works".

Uruguay has now the "exclusive responsibility" of ensuring the mills will not pollute the environment, she added. However Argentina's Environment Secretary Romina Picolotti described the ruling "encouraging" and warned investors in the pulp mills that the Court's decision was in line with Argentina's "judicial and financial strategy".

"The Court can rule in the future that the mills are contaminating, and I believe this can be the case, which makes the industry a risk investment, so I would caution investors and bankers", said Ms Picolotti in Gualeguaychú, the Argentine city on the river Uruguay, across from where the mills are under construction and which forced the Argentine government to appeal to International Court.

Uruguay's first reaction was from Foreign Affairs minister Reinaldo Gargano who said it was "a no victory, no defeat" resolution and emphasized that what really mattered was that the Argentine/Uruguay dialogue "has always been open". "Uruguay has always been willing to bilateral talks, and this our official policy", underlined Gargano.