Identifier
Created
Classification
Origin
06MONTEVIDEO353
2006-04-12 19:19:00
UNCLASSIFIED
Embassy Montevideo
Cable title:  

PAPER MILLS DISPUTE: NO END IN SIGHT

Tags:  PREL SOCI EINV SENV AORC AR UY 
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VZCZCXYZ0001
OO RUEHWEB

DE RUEHMN #0353 1021919
ZNR UUUUU ZZH
O 121919Z APR 06
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5676
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHHE/AMEMBASSY HELSINKI 0056
RUEHMD/AMEMBASSY MADRID 0849
RUEHTC/AMEMBASSY THE HAGUE 0164
RUMIAAA/CDR USSOUTHCOM MIAMI FL//J-5//
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
UNCLAS MONTEVIDEO 000353 

SIPDIS

SIPDIS

DEPT FOR WHA/BSC BARNES, CROFT AND MURRAY
DEPT ALSO FOR EB A/S WAYNE AND WHA/OAS DCENTO
DEPT PLEASE PASS USTR
TREASURY FOR OASIA FOR DOUGLAS
COMMERCE FOR ITA/MAC BASTIAN
NSC FOR FISK AND CRONIN

E.O. 12958: N/A
TAGS: PREL SOCI EINV SENV AORC AR UY
SUBJECT: PAPER MILLS DISPUTE: NO END IN SIGHT

REF: A. MONTEVIDEO 00327


B. MONTEVIDEO 00305

C. MONTEVIDEO 00291

D. MONTEVIDEO 00268

E. MONTEVIDEO 00250

UNCLAS MONTEVIDEO 000353

SIPDIS

SIPDIS

DEPT FOR WHA/BSC BARNES, CROFT AND MURRAY
DEPT ALSO FOR EB A/S WAYNE AND WHA/OAS DCENTO
DEPT PLEASE PASS USTR
TREASURY FOR OASIA FOR DOUGLAS
COMMERCE FOR ITA/MAC BASTIAN
NSC FOR FISK AND CRONIN

E.O. 12958: N/A
TAGS: PREL SOCI EINV SENV AORC AR UY
SUBJECT: PAPER MILLS DISPUTE: NO END IN SIGHT

REF: A. MONTEVIDEO 00327


B. MONTEVIDEO 00305

C. MONTEVIDEO 00291

D. MONTEVIDEO 00268

E. MONTEVIDEO 00250


1. (SBU) The long-running dispute between Argentina and
Uruguay over construction of giant pulp mills on a shared
river seems to have worsened and entered into a more
litigious phase after Presidents Vazquez and Kirchner
canceled their plans to meet on the issue last week.
Uruguayan public criticism over its Government's handling of
the affair and comments made by the GOA's Minister of the
Interior that Vazquez "was not in control," because he failed
to order a closing of the plants, apparently has stung
Vazquez and spurred the GOU to search for a new strategy. As
of April 11, a second bridge, out of three bridges linking
Argentina with Uruguay was also blocked by Argentine
protesters. Construction on the Finnish-owned Botnia plant
has been suspended until April 18, but only because of the
Easter holidays.

Media Reaction
--------------

2. (U) Following the partial breakdown in negotiations, the
GOU has relegated the matter to Foreign Minister Reinaldo
Gargano. Embassy understands that the MFA is attempting to
bring the issue before Mercosur and the International Court
of Justice (ICJ) in the Hague. Uruguayan sources contend
that Argentina (which holds the Pro-tempore Mercosur
presidency until July) has rejected the complaint in Mercosur
on grounds that the dispute is purely bilateral. News reports
also indicate that Uruguay has not yet lodged a formal
complaint in The Hague, but has only delivered a letter to
the ICJ informing it of the problem. The letter's contents,
highlighting that the bridge blockades were a violation of
international law were published in the press.


3. (U) The Uruguayan media reported that an independent
Canadian environmental consulting firm who analyzed the
International Finance Corporation's (IFC) Cumulative Impact
Study (CIS),downplayed the ecological dangers of the
cellulose plants. The press also carried unsubstantiated
reports that Argentine protesters were planning to block
ferry traffic on the Rio de la Plata and that energy supplies
from Argentina to Uruguay could be affected. Also covered
were threats by Uruguayan truckers to mount their own bridge
blockades. One editorial in the daily "Ultimas Noticias"
contrasted President Vazquez' "respect for the rule of law"
in honoring private contracts with Argentina's Interior
Minister's call to force the plants to halt construction for
up to 90 days.

Comment:
--------------

4. (SBU) It is difficult to predict what might happen next in
this ongoing bilateral dispute, but the Uruguayans
displeasure at Argentina over the pulp mill issue is already
fairly intense. Judging from recent press reports and
reactions by our contacts, Uruguay is likely to more
aggressively seek international support for its position that
the bridge blockades violate international law and treaties.
End Comment.
Nealon