MercoPress. South Atlantic News Agency

Uruguay/Argentina pulp mills conflict reaches Washington

The pulp mills conflict between Uruguay and Argentina has reached Washington where the World Bank will be deciding in the coming weeks on a credit for one of the companies involved in the massive undertaking, Finland's Botnia.

Uruguayan ambassador Carlos Gianelli and Industry and Mining Deputy Secretary Martin Ponce de León, already in Washington, are lobbying before the bank for a 170 million US dollars loan to Botnia that is building a plant on the Uruguay River which divides the two countries.

Argentina opposes the pulp mills on environmental and administrative grounds based on a River Uruguay joint management treaty dating back to 1975 and has requested the relocation of the Botnia plant. Ence from Spain agreed to build the pulp mill somewhere else in Uruguay.

From Montevideo it was announced that Finance minister Danilo Astori and Alicia Torres head of the Environmental Office will also be traveling to Washington this week.

Argentina already has a delegation in Washington headed by Romina Picolotti, the country's top environment official who has accused the World Bank of fuelling a bitter bilateral squabble with neighboring Uruguay through its "consistent negligence".

"The World Bank's negligence has profoundly aggravated Argentina's conflict with Uruguay" argues Ms Picolotti claiming the bank has acted as "if it was a partner of the corporations" building the pulp mills.

Ms Picolotti also blamed the bank for provoking the return of Argentine activists' roadblocks across bridges linking the two countries divided by the Uruguay River.

The blockades, which are estimated to have cost Uruguay's economy 400 million US dollars so far this year, coincided with the recent Ibero-American presidential summit meeting in Montevideo, causing Uruguayan president Tabaré Vázquez, to refuse to discuss the issue with Argentina's Néstor Kirchner.

Mr Kirchner has now asked King Juan Carlos of Spain to act as a "facilitator" for talks on the issue. Both countries must now send delegations to Madrid.

President Kirchner also wrote a letter to World Bank president Paul Wolfowitz requesting "a gesture coherent with the neutrality that must be displayed in an international controversy, which will facilitate both countries to finally reach a lasting solution".

"The financing of the plant under construction by Botnia could have the undesired effect of interfering with the procedure before the International Court of The Hague favorable to Uruguay", wrote Kirchner.

Argentina demanded Uruguay before The Hague Court for the alleged violation of the 1975 River Uruguay treaty. A first ruling of the court was contrary to Argentina's request of no innovation or suspension of the works until the final ruling.

However, Uruguay is insisting with the financing for Botnia based on two environment impact assessments contracted by the International Finance Corporation which discard any future serious water or air pollution from the pulp mills.

Uruguay has reiterated its willingness to dialogue but will "defend national sovereignty" and emphasizes that the location and construction of the Botnia plant is "absolutely nonnegotiable", said Finance Minister Astori.

Astori also denied reports in the Argentine press that Uruguay had authorized, and was preparing to announce the building of a fourth pulp mill.

According to the Argentine version besides Botnia, Ence (relocated) and Sweden's Stora Enso (yet undecided), Uruguay in the coming months would be announcing a fourth pulp mill project.

"I never talked about it, I never met anybody from the alleged newspaper and it simply it's not true", said Astori.

The World Bank is expected to decide on the Botnia credit November 16, and if positive would pave the way for loans from other banks.