Protesters block border over Uruguay mill

The planned mill, which has caused a diplomatic rift between Buenos Aires and Montevideo, is due to be built near the town of Fray Bentos on the Uruguayan side of the Uruguay river that marks the border between the two countries.

Argentineans are protesting against the project on the grounds of the water and air pollution it will cause, while many Uruguayans hope it will bring jobs and economic growth to their country, one of South America’s poorest.

The World Bank’s decision is the latest development in a saga that has seen months of protests and roadblocks and an intervention from Argentinean president Nestor Kirchner who complained to his Uruguayan counterpart that his country had not been consulted on the project.

The troubles have already led to one of the two European companies involved the project and some of the financial backers to pull out (see related story.

That leaves only Finland’s Botnia, Europe’s biggest eucalyptus pulp producer, which plans to go ahead and construct the mill.

It now appears to have been backed by the World Bank which has finally decided to provide a $170m loan following months of uncertainty while the Bank waited for the results of further environmental impact assessments to emerge.

Following a report on the mills’ environmental and social impacts published on Tuesday, the International Finance Corporation (IFC), the private sector arm of the World Bank, has now said it “will ask their Board of Director to approve IFC financing … to Botnia.”

The experts who conducted the study of the mills’ environmental and social impacts said: “We consider that the revised cumulative impact study of September 2006 effectively addresses the issues raised by ourselves and by stakeholders.”

“We further consider that the study shows that the mills are designed in accordance with modern, environmentally sustainable practices, in accordance with Best Available Techniques.”

For more information from the Centre for Environment and Human Rights, an Argentinean NGO coordinating protests against the mills, see here.

For more information on the paper mills from the World Bank including the social and environmental impact report see here.

Goska Romanowicz