This week, several Finnish newspapers have run articles with headlines like: "Caught in the middle of international political debate - Botnia agrees and is ready to cease the installation of a massive pulp mill in Uruguay."

The highly controversial pulp mill to be built in Fray Bentos is the largest industrial investment in the history of Uruguay. It is also the largest industrial foreign direct investment made by any Finnish private corporation - the estimated project value is close to 1 billion Euros.

In addition to these impressive figures, the pulp mill built by the Europe's second largest pulp producer Botnia has been caught in the middle of a heated debate between two countries - Uruguay and Argentina. The pulp mill is being built on the banks of Rio Uruguay, in the immediate vicinity of the Uruguay - Argentina –border.

Recently the debate has reached the presidential level in both countries. Few weeks ago the Argentinian Parliament agreed to support the administration in its efforts to seek resolution to the disagreement in the International Court of Justice in Hague. From the Argentinian perspective the state of Uruguay might be violating the border waters agreement by allowing the mill to be built so close to Rio Uruguay. Also the civic organizations in Argentina have strongly expressed their concern on the environmental impact of the mill.

According to the leading Finnish business periodical Talouselama, the dispute is about regional, environmental, industrial, and party politics. "This has become a disagreement between two sovereign states. A private corporation cannot have any kind of role in its mitigation." - sighs Mr. Timo Piilonen, the Finnish Director of the pulp mill project, in a recent interview.

A few days ago international news agencies rushed to announce that the installation of the mill would have already come to a halt. "Botnia is ready to cease the installation of the mill. The date, duration, and extent are dependent on the negotiations between the Presidents of Uruguay and Argentina." adds Mr. Erkki Varis, the CEO of Botnia.

"When building a pulp mill, one should obviously be a political engineer in addition to technical engineer." finishes Mr. Piilonen, the project director.

The President of Uruguay Mr. Tabare Vazquez expresses his hopes for a prompt resolution with Argentina in the disagreement.

Sources:

MTV3-STT-AFP-Reuters (in Finnish - http://www.mtv3.com/uutiset), Talouselama 8/2006 (in Finnish - http://www.talouselama.fi)

More on the subject: www.metsabotnia.com (in English)

Posted by sampo at March 28, 2006 8:36 AM