The Argentine/Uruguay Pulp Mill Imbroglio:

UNCLAS SECTION 01 OF 03 BUENOS AIRES 001434 SIPDIS SENSITIVE, SIPDIS STATE FOR OES/ETC, OES/ENV, OES/PCI, WHA/BSC EPA for INTERNATIONAL ACTIVITIES: CAM HILL-MACON E.O. 12958: N/A TAGS: SENV PGOV ECON PREL AR SUBJECT: The Argentine/Uruguay Pulp Mill Imbroglio: Environmentalists Tell Kirchner to Put His Money Where His Mouth Is ¶1. Sensitive but Unclassified, Not for Internet Distribution ¶2. (SBU) Summary: Argentina's strong stand against the construction of two pulp mills on the Uruguayan side of a river that borders an Argentine eco-tourism area, has given environmental activists an opening to press for increased environmental protection. NGO's rightly point out that some of the 30 pulp mills already operating in Argentina are serious polluters. Responding to citizen demand, the Supreme Court has ordered the 44 companies that dump chemical waste in the large sewer-like Riachuelo River, which runs through Buenos Aires, to report on the chemical content of their waste. The Paraguayans have protested a pulp mill on their border. President Nestor Kirchner is working to upgrade the woefully underfunded Secretariat of Environment and is reportedly on the brink of SIPDIS selecting a new more dynamic Secretary. While critics say that Argentina is protesting the construction of the pulp mills because of sour grapes -- reportedly, they wanted the plants on their side of the river -- an unintended and welcome result of the flap is increased interest in environmental protection in Argentina. End Summary The Uruguay - Argentine Pulp Mill Flap -------------- ¶3. (U) The imbroglio over the construction of two wood pulp mill plants in Uruguay's Rio Negro department on the Uruguay River across from an eco-tourist site on the Argentine side of the border, has given the environmental NGO community an opening to highlight the lack of environmental protection across the country. The construction of two plants, by the Spanish firm Ence and Finnish company Botnia, a USD 1.9 billion investment, has caused a diplomatic flap for Argentina and Uruguay. Uruguay has sought USD 150 million loan from the World Bank's International Finance Corporation (IFC) to support the projects. The Argentines have filed a case against the construction with the International Court of Justice in The Hague, arguing that the mills will pollute the Argentine side of the Uruguay River. This bilateral issue gained international attention at the recent EU-Latin American Summit in Vienna, when an Argentine beauty queen in a provocative costume, appeared before the presidents with a message to stop the proposed pulp mills plants. Kirchner Raises the Environmental Flag -------------- ¶4. (U) In mid-May, Kirchner, with his environmental team, various politicians and the press, traveled to Gualeguaychu, the town across the river from the pulp mills, to hold a highly publicized rally where he vehemently opposed the construction, announcing that the environmental protection is "now a matter of state policy." Kirchner promised economic growth "that will incorporate an environmental perspective in all government actions, and raise the current environmental standards." Local NGO's took the opportunity to ride on President Kirchner's newly-discovered enthusiasm for the environment to point out that Argentina has some 30 pulp mills, some of which are serious polluters. A U.S. expert on the environment, who is well versed in the water pollution in Argentina, recently told ESTH Counselor that Argentina has serious water pollution problems, likening it to the U.S. 50 years ago. The Argentine Association of Pulp and Paper Producers noted in a recent press report that Argentine mill owners invested USD 35 million between 2001 and 2005 in improving the environment, although he admitted there is more to be done in processing the estimated 900,000 tons of pulp produced annually. Recently, Paraguay filed a suit against Argentina for pollution by two pulp mills in the northeastern Misiones Province, on their shared border. According to the Paraguayan Foreign Ministry, Argentina has failed to respond to the complaint. World Environment Day: NGOs Demand Reform -------------- ¶5. (U) The pulp mill flap has raised consciousness about the serious pollution problems in Buenos Aires' Riachuelo River among politicians, the press and the general public. Some claim that the Riachuelo is Latin America's most polluted river, and no one disputes the fact that it is the most polluted waterway in Argentina. Kirchner's recent push for increased environment protection provided an opening for key environment NGOs to demand for reform on June 6, World Environment Day. A broad coalition of 13 environmental organizations proposed a series of measures for the Kirchner Administration to implement. In a document entitled "The Environment: A State Question," the NGOs urged that the Riachuelo river be cleaned up; they called for a law for clean technology in the pulp mills and for upgrading the Secretariat of Environment to minister status. They cited the need for urgent measures to stop rampant deforestation and to require a national law making environmental impact studies mandatory. (Comment: Politicians have BUENOS AIR 00001434 002 OF 003 outlined plans for cleaning the river for decades. Under the Menem Administration, the then-Minister of Environment purloined the funds allocated for the cleanup and has served jail term for doing so. End Comment.) ¶6. (U) Responding to a court case brought by activists, the Supreme Court recently ruled that the GOA must present a plan within 30 days for reducing the Riachuelo's pollution. The court's decision requires that the 44 companies that discharge waste into the river detail the amount and chemical content of the waste. The firms include oil companies such as Shell and YPF and other large companies. Press reports credit the pulp mill flap with garnering attention to this long standing environmental problem in Buenos Aires City and Province where 3 million people are affected by the pungent river, which looks like a large sewer. Top NGO Reports on the Environmental Situation -------------- - ¶7. (U) ESTH Staff heard a litany of environmental problems at the recent event marking the publication of a 600-page report, "The Environmental Situation in Argentina 2005," prepared by the Foundation Vida Silvestre Argentina, associated with the World Wildlife Fund International (WWF). The report highlighted large-scale deforestation, pollution, overfishing and desertification. It warned that the burning of forests in the Grand Chaco region, shared with Paraguay and Bolivia, produces more carbon dioxide emission than generated by all the motor vehicles in the country. Pollution generated by mines in remote region like the Patagonian steppes in southern Argentina was also highlighted. Old mines, including uranium mines, have impacted water supplies in the Puna Altiplano plateau in northwestern Argentina, the Andes Mountains along the western border, and the Yungas rainforest in the northwest, where mining has had a severe impact on local water supplies. (Note: The World Bank is developing a project to clean up Argentina's defunct uranium mines, two of which are in the center of urban areas.) Call for Increase Federal Support for the Environment -------------- -------------- ¶8. (SBU) During this event, the keynote speaker, a leading environmentalist and constitutional lawyer, observed that while the necessary environmental laws are in place, they are not enforced. He called upon the GOA to increase its meager support for the small Secretariat of Environment, currently under the Ministry of Health. SIPDIS The speaker, Daniel Sabsay, observed that jurisdictional problems inherent in a federal system, complicated by the weak Secretariat of Environment, make enforcing environment law an impossible task. The speaker emphasized that the Federal Environmental Council (COFEMA), responsible for coordinating environmental policies with provinces through consensus, has not protected the environment because it is stacked with political representatives political parties, oil and mining companies, rather than environmentalists. In sum, COFEM is a sham. (Comment: The speaker is right on the mark. Not only has COFEMA not worked effectively to protect the environment, but the Argentine Secretariat of Environment, itself, is understaffed and under funded. Job security is an issue there because about one half of the 300 employees do not enjoy civil service protection. Employees routinely hold two or three jobs to support themselves and are often absent from the office. End Comment.) Top NGO Calls for Increased Environmental Protection -------------- -------------- ¶9. (U) In discussions with ESTH Counselor, staff from the Vida Silvestre Argentina Foundation, the country's largest and most important NGO, said that, while they are strong proponents of the environment, at the same time they realize that Argentina needs to continue its economic growth to support its recovery from the 2001 financial disaster. Foundation representatives pointed out that all industry has some degree of contamination. While sympathizing with the inhabitants of Gualeguaychu, the Foundation pointed out they do not have the right to protest by blocking traffic, causing considerable loss to commerce. The Foundation recommended an independent study to determine the environmental impact of the pulp mills. It also pointed out that there is a chlorine free technology currently in use, and recommended that countries in the region work with industry to install this state-of-the-art technology. The Foundation emphasized that Argentina must apply the same high environmental standard that it wants the Uruguayan pulp mills to have to its own pulp mills. The Pulp Mill Debate: Good for Argentina's Environment -------------- -------------- ¶10. (SBU) Comment: Since the beginning of the Kirchner Administration, the environment has been placed on the back burner. BUENOS AIR 00001434 003 OF 003 The general public appears to be willing to give the Administration some space, accepting damage to the environment as the cost of the economic recovery. However, Kirchner's sudden morphing into a defender of the environment has put the spotlight on Argentina's environmental problems. It could result in more resources and interest in cleaning up contaminated sites and rivers, and requiring environmental impact studies. From the Argentine side of the Uruguay River, the "greening of the Kirchner Administration" is a good thing. End Comment. ¶11. (U) To see more Buenos Aires reporting, visit our classified website at: http://www.state.sgov.gov/p/wha/buenosaires.< /a> GUTIERREZ