From: Reuters
Published April 20, 2006 12:00 AM

Argentina Urges Foreign Role in Paper Mill Dispute

BUENOS AIRES, Argentina — Argentine President Nestor Kirchner urged all sides Wednesday to try to resolve a dispute over two paper mills being built in neighboring Uruguay that have raised environmental concerns.

Kirchner called on Spain and Finland to intervene since the mills are being built by companies from the two European countries.

Kirchner also urged the two companies, Finland's Botnia and Spain's Ence, to be open about the possible environmental impact of the plants and called for further studies to assess that.

Argentina opposes construction of the plants, charging that the $1.7 billion project would damage the environment along the Uruguay River, which separates the two South American countries.

Relations between Uruguay and Argentina have been strained by the project, which represents the biggest private investment ever in Uruguay.

"The Finnish government ... has stayed quiet, and it should be helping to resolve the matter," the Argentine president said at the government palace in Buenos Aires.

Kirchner said Spain's government should also get involved.

Last week, the World Bank's private sector arm said it would withhold approval of about $400 million in funding for the two mills, saying it wanted to further examine the social and environmental impact before deciding whether to proceed.

Argentina argues that the plants violate bilateral accords while Uruguay says months of protests on the Argentine side of the border by demonstrators blocking roads have caused about $400 million in economic losses.

Kirchner's government has not stopped the protests, but on Wednesday he said he did not support them and urged the environmentalists to call them off.

For its part, Paraguay called for a meeting with Argentina over concerns that three Argentine paper mills could be contaminating a border river.

"If the paper mills are polluting (the river), we urge Argentina to take the necessary measures to make sure these plants do what is necessary to eliminate these residues," Paraguay's Deputy Foreign Minister Emilio Gimenez said.

(Additional reporting by Daniela Desantis in Asuncion)

Source: Reuters

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