MercoPress. South Atlantic News Agency

Ence relocates pulp mill and pickets “take” Buenos Aires

Tuesday was Argentina's turn to score in the escalating controversy over the building of pulp mills on the Uruguayan side of a river that acts as a natural divide between the neighboring countries and which has triggered ongoing protests from Argentine residents and environmentalists.

It was precisely when those pickets who had traveled hundreds of miles to take their protest to the streets of Buenos Aires that the Spanish company ENCE announced the building of its planned pulp mill on the River Plate estuary instead of a location across from Argentina which has been at the heart of the controversy.

Ence represented by the company's CEO Juan Luis Arregui met with Argentina's cabinet chief Alberto Fernandez to inform him of the company's plans and the fact that the new pulp mill will also be purchasing wood from Argentina.

Ence originally had planned to build the pulp mill in Fray Bentos, across from Gualeguaychu next to a second mill currently under construction by Finland's Botnia which has refused to re-locate the Orion plant and is keeping to its production schedule beginning next September/October.

Ence months ago succumbed to strong Argentine lobbying although the company also argued strong logistics reasons to desist from building in Fray Bentos.

Gualeguaychu residents and environmentalists who have been blocking bridges leading to Uruguay decided to take their protests to Buenos Aires furious with the Kirchner administration that has been unable to convince the Uruguayan government and Finland's Botnia not only to re-locate the plant, but at least to momentarily suspend construction.

With signs reading "enough pollution and environmental looting, YES for life", Gualeguaychu residents marched at mid afternoon, from Congress to Government House, causing chaos in the heart of a sweltering Buenos Aires.

"We're pleased to have finished the problem of re-locating the plant", said Mr. Arregui on announcing the pulp mill will be built on the River Plate 200 kilometers south from the original Fray Bentos.

Cabinet Chief Fernandez praised Ence and thanked the company for their decision.

"Ence's plant will be built in Punta Pereyra, 60 kilometers from where the river Uruguay feeds into the River Plate", said Fernandez. "The Argentine government values the willingness of Ence and in particular Mr. Arregui who all along showed great understanding of the problem, which means that this decision will help preserve the waters and habitat of the river Uruguay", he added.

Fernandez pointed out that the company's environmental impact assessments on the area "comfortably exceed those requested by Uruguayan environmental authorities".

Since the construction of the two pulp mills in Fray Bentos was announced a couple of years ago Gualeguaychu environmentalists have been complaining about pollution risks and later organized pickets blocking access to Uruguay, who claims they have caused hundreds of millions of dollars in losses to trade and tourism.

The controversy became international when it was taken by Argentina to the International Court of The Hague and by Uruguay to a Mercosur disputes tribunal, plus the "facilitating" efforts of a King of Spain envoy who is trying to re-establish dialogue conditions between the two countries.

Uruguay denies any contamination risks and refuses to sit down to talk until the "damaging" pickets come to an end, but the Kirchner administration argues it will not use repression tactics against Argentines freely expressing themselves. The World Bank which recently approved 520 million US dollars in credits and insurances for Botnia also supports Uruguay's position. "The problem made Ence stop work in the plant's foundations when it had already invested 80 million US dollars", revealed Mr. Arregui in Buenos Aires, who was critical of Uruguay.

However Arregui said Ence has been in permanent contact with Uruguayan authorities regarding the company's corporate and relocation decisions but also recalled that the Spanish company first arrived in Fray Bentos.

"We had all the environmental impact data well before Botnia, but we failed when we didn't challenge their plant not because of the contamination impact but rather because of its closeness (ten kilometers away)".

Arregui underlined that the main problem of having two pulp mills so next to each other is logistics, "there are insufficient roads and other facilities to have thousands of loaded trucks circulating in the area".

However Arregui downplayed any possible environmental impact from Ence's pulp mill or "for that matter from Botnia".

"I don't think Botnia will contaminate. It would be very negative for Ence that Botnia had problems of that nature. People can be assured that the latest pulp mills technology and state of the art equipment, following European standards, will not be contaminating for the river Uruguay or the River Plate", said Arregui.

The Botnia and Ence pulp mill projects are estimated will cost almost 2 billion US dollars, Uruguay's largest private investment in recent history. Uruguay's GDP stands at 18/20 billion US dollars.