HAGUE RULING DISAPPOINTS URUGUAY

UNCLAS MONTEVIDEO 000090 SIPDIS SENSITIVE SIPDIS DEPT ALSO FOR WHA/BSC AND EB DEPT ALSO FOR EUR/ERA, EUR/WE (MHILL),EUR/NB (MEVANS) DEPT PASS USTR FOR EEISSENSTAT AND SCRONIN TREASURY FOR OASIA FOR JASPER HOEK COMMERCE FOR ITA/MAC/WBASTIAN NSC FOR JCARDENAS SOUTHCOM FOR POLAD E.O. 12958: N/A TAGS: PREL PGOV SENV SOCI KLIG EINV AR UY SUBJECT: HAGUE RULING DISAPPOINTS URUGUAY REF: 06 MONTEVIDEO 00907 AND PREVIOUS ¶1. (U) On January 23, the International Court of Justice (ICJ) rejected Uruguay's petitions for provisional measures which would have obliged Argentina to remove roadblocks obstructing international bridges linking the two counties. The early morning newscasts here implied that the Court had decided it did not have jurisdiction in the matter. However, subsequent reading of the decision indicates the Court has competence but ruled that the blockades did not present an imminent risk of irreparable prejudice to the rights of Uruguay at this time. ¶2. (U) Initially, GOU officials publicly expressed dismay and disappointment at the outcome but did not spell out what next steps the Government might take. Uruguay's representative in The Hague, Hector Gross Espiel, was quoted as saying that he "was neither happy nor sad" over the ICJ's decision because the Court had failed to legitimize the roadblocks erected by Argentine protesters. Foreign Minister Reinaldo Gargano's reaction was vague and muted, though he stated that "we will have to wait for the Argentine Government's reaction." He also reiterated that Uruguay would not negotiate with Argentina while the bridges were blocked. ¶3. (U) Meanwhile, the Argentine environmental protesters who block the bridges reportedly were elated by the ICJ's decision not to exercise its power under Article 41 of the ICJ Statute to indicate provisional measures. Some protesters reportedly promised to "increase" their pressure against the construction of a $1.2 billion Finnish-owned pulp mill project on the shared Uruguay river. ¶4. (U) In somewhat related developments, a Spanish mediator in the dispute is scheduled to visit the region next week to try and help move things along. Also, the Spanish firm ENCE, which had moved the location of its own proposed pulp mill in Fray Bentos to a less controversial site in Colonia, for an investment of $1.2 billion. The ENCE plant will produce its own energy through biomass. ¶5. (U) Local press speculated several possible next steps to resolve the conflict. While all these options existed before the Court's ruling, the publication of possible options seems to indicate a public eagerness to move forward. Possible options listed are: the facilitator offered by the King of Spain could mediate, Argentina could begin the dialogue, or Uruguay could make the first move. The press also raise the question as to whether Uruguay would drop its demand to begin negotiations only upon lifting of the bridge blockades. The press also speculated that Uruguay could return to the ICJ or complain at the OAS as well. ¶6. (SBU) Comment: The ICJ decision is seen here as a defeat for Uruguay. Observers are clearly disappointed that the Court did not limit Argentina's "coercive action," while the parties await a final Court decision. The loss is bound to renew criticism of Formin Gargano's handling of the long-festering pulp mill dispute. On the other hand, some observers believe that a mild victory for Argentina "saves face" for the GOA and may allow Kirchner greater leeway on making concessions. The earlier GOA "defeats" at the Hague, the Mercosur tribunal and on the IFC loan vote inflamed Argentine nationalist passions according to this view. ¶7. (SBU) Comment (cont): Our contacts at the MFA were coy about what Uruguay might do next. Embassy notes that Uruguay has never seriously taken up its case with the OAS, other than a weak appeal last year by Vice-Formin Maria "Belela" Herrera to SYGN Insulza for OAS mediation. Possibly the GOU has not resorted to the OAS because of Mercosur's perceived rivalry with the OAS and Gargano's preference for Mercosur. Still, in previous discussions with mid-level Uruguayan diplomats, some of them expressed a desire for a stronger appeal to that forum. Article 20 of the OAS Charter states, "No State may use the coercive measures of an economic or political character in order to force the sovereign will of another State and obtain from it advantages of any kind." However, in its recent pleadings, Argentina argued that since the commercial aspects of the case had already been heard and decided by the Mercosur Tribunal, under the principle of "res judicata" the issue cannot be raised again in another forum. We do not know to what degree this principle applies in the jurisdiction of the OAS. End Comment. Baxter