MercoPress. South Atlantic News Agency

Paper mills conflict: 90 days truce agreed

Uruguay and Argentina presidents announced Saturday in Chile a 90 days truce in the paper mills controversy with a simultaneous plants construction suspension and lifting of international bridges blockades by Argentine residents and environmentalists protesting against the mills alleged future pollution.

Uruguayan President Tabare Vazquez and Argentina's Nestor Kirchner said they reached the agreement following two meetings, late Friday evening and early Saturday, in Santiago, where they participated in the inauguration of President Michelle Bachelet.

"The companies are being asked to stop construction of the paper mills and the Argentine people to stop blocking the bridges that link the two brotherly countries for a maximum period of 90 days" announced President Vazquez during a joint press conference.

"This joint request is essential for finding the path to a solution that the Uruguayan people and the Argentine people desire in order to consolidate ties. We're working for the permanent solidarity of our peoples", added President Kirchner.

During that period an environmental impact paper will be requested from a panel of international experts. A first meeting to further details on the deal is scheduled to take place in Anchorena, Uruguay, followed by a second in Mar del Plata, Argentina.

The two pulp mills, one belonging to Finland's Botnia and the other to Spain's Ence being built in the Uruguayan side of a shared river with Argentina, represent a 1.8 billion US dollars investment, the single largest ever for a country with a 16 billion US dollars GDP and recovering from the 2002 devastating financial crisis.

However, residents on the Argentine side of the river in the city of Gualeguaychu together with environmentalists argue that the pulp mills will only cause water and air pollution contaminating the region and damaging industries such as tourism.

Efforts to find a solution stalled last January after a technical commission from both countries completed a six-month study with contradictory results.

Argentina accuses Uruguay of taking unilateral action on a jointly shared and managed natural resource, the Uruguay River, and has threatened to take the case before the International Court of Justice in The Hague. Congress specifically supported the President Kirchner administration proposal.

Besides over the last three months pickets of environmentalists and residents from the Argentine coast of the river begun blocking two of the three border crossings, first at random and then systematically causing great damage to the regional and Uruguayan economy particularly the tourist summer season when Argentines flock to the Uruguayan Atlantic beaches.

Trucks transporting equipment from Chile for the Botnia plant were turned back and forced to return.

Argentine Cabinet Chief Alberto Fernandez speaking with the press in Buenos Aires described the Saturday agreement as "a very important step (made possible) by the close ties" between the two presidents.

Fernandez said he was confident that within the 90-day period that was requested "without these two elements of pressure, it will be possible to find the paths that allow a definitive solution to be reached" between the two neighborly countries.

The pulp mills conflict not only strained bilateral relations but also exposed the vulnerability of Mercosur which lacks effective dispute-resolution mechanisms. Mercosur junior members Uruguay and Paraguay have repeatedly expressed their disappointment with the workings and results of the South American block.

Picket leaders in Gualeguaychu said they were pleased with the agreement reached and promised to unblock the bridges as soon as work in the plants ceases.

"We must celebrate, but no more promises; we have been cheated for the last two years by Uruguay?but the second work stops in the plants, we'll end the pickets", said Juan Veronessi, from the Environmental Assembly of Gualeguaychu. "We'll be holding an assembly in the coming hours to vote on the presidential request", added Mr. Veronessi.