URUGUAYAN CELLULOSE PLANT OPENS DESPITE ARGENTINE OBJECTIONS AFTER TALKS FAIL.

The bilateral conflict between Argentina and Uruguay regarding a US$1.2 billion Uruguayan cellulose pulp mill worsened in the final months of 2007. Argentine environmentalists, generally backed by the Argentine government, say two plants being built along on a river the two countries share will create harmful contamination (see NotiSur, 2005-09-16, 2006-02-10, 2006-07-28 and 2007-02-16), while Uruguayans say the pollution will be minimal and the income from paper mills will be necessary for the tiny country's economy. Uruguay's President Tabare Vazquez inaugurated a port serving one of the plants in September and, after talks broke down between the two nations, the plant opened in November.

The two countries have both taken claims to the International Court of Justice (ICJ) at The Hague, but the court has so far refused to block either the plants in Uruguay or the Argentine protests that repeatedly impede access to roads into Uruguay.

Uruguay closes border crossing after Botnia plant opens

In late August, President Vazquez inaugurated a port serving the controversial new pulp mill, to the backdrop of several dozen Argentine protesters in a flotilla of boats and dinghies. Residents of the Argentine town of Gualeguaychu then staged their boldest demonstration in months on Sept. 2 against the pulp mill across the river in Fray Bentos, Uruguay.

Years of protests have failed to persuade the mill's Finnish owners, Botnia, to move to another location. Financial support from the World Bank and International Finance Corporation (IFC) have made the two plants--Uruguay's largest investment projects ever--possible.

Vazquez authorized the start-up of the plant on Nov. 8 during a summit of regional leaders, inflaming tension with Argentina, which is implacably opposed to the plant.

Then President Nestor Kirchner of Argentina slammed the decision as a "stab in the back," while Vazquez, fearing violent protests, temporarily closed the border and banned flights over the plant on the banks of the Rio Uruguay dividing the once-friendly neighbors.