CEDHA Press release May 10th

Blow to Botnia and ENCE in Uruguayan Papermill Scandal: World Bank Recognizes Flaws in Environmental Impact Studies Wednesday May 10th, 2006 – Washington, DC – The International Finance Corporation of the World Bank recognized many of the reiterated concerns and claims made by CEDHA, the Environmental Assembly of Gualeguaychú, and by the Argentine government, relative to the expected social, economic, and environmental impacts of the two papermills that are to be constructed on the Uruguay River, and that such concerns are grounded and merit more study before the World Bank can consider supporting these investments.  The IFC posted yesterday a new Action Plan on its website,[1] detailing how the now infamous and complicated papermill investment by Botnia of Finland and ENCE of Spain will proceed in terms of impact studies. The Action Plan was agreed to by Botnia and ENCE, and establishes the need to conduct yet further studies regarding impacts to air, water and soil. It also recognizes the potential impacts to groundwater from massive plantations of eucalyptus trees (an issue that was entirely ignored in the past). The Action Plan draws attention to the site choice for the plants, indicating that more information is needed, suggesting a possible need to relocate the plants to a less impacting site. The ECF technology proposed by Botnia and ENCE, which claimed to use best available technology is also under question, indicating that less contaminating technologies are available and can be used to minimize risk. Another issue of great importance to local residents is that Botnia and ENCE are dumping liquid waste upstream (3 and 9 kilometers, respectively) of the drinking water intake of the community of Fray Bentos. This will also be a focus of the new studies. Finally, the IFC recognizes that further study is necessary on issues such as impacts on fisheries, tourism, and contingency plans should emergencies occur, something also left out of the companies’ original EIAs.  The IFC basically is saying that yet another study is necessary to determine the environmental, social and economic impacts of the cellulose plants, and this will take another 90 days or so to conduct. It is evident from this new Plan of Action, that previous studies, upon which the World Bank and the companies previously were convinced that they could move forward, were entirely insufficient, just as CEDHA, the Environmental Assembly, NGOs in Uruguay and Argentina, and the Argentine have been saying all along.  Tabaré Vasquez, Uruguay’s President, met with Paul Wolfovitz only a few days ago, requesting fast track approval of the loans to Botnia and ENCE, but to his surprise he received a less-than-warm reception in the top floors of the 18^th and Pennsylvania World Bank Headquarters. Wolfovitz indicated that the World Bank would not support these projects if they did not strictly comply with World Bank environmental and social safeguards, signs that the Bank is growing cold the mills investment. Vasquez was so offended by Wolfovits, that he nearly got up and left the room, a clearly a blow to Botnia and to ENCE.  For more information: Jorge Daniel Taillant Center for Human Rights and Environment (CEDHA) Tel. cel. 54 9 351 625 3290; jdtaillant@cedha.org.ar

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[1]See:  http://www.ifc.org/ifcext/lac.nsf/AttachmentsByTitle/Uruguay_ActionPlan_English/$FILE/Uruguay_ActionPlan_May2006.pdf