Paper mill in Uruguay-Argentina spat escapes closure

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The UN's highest court Tuesday declined to order the dismantling of a paper mill that sparked a row between Argentina and Uruguay for allegedly polluting a shared river.

While Uruguay had "breached its procedural obligations to inform" Argentina, there was no evidence the mill was causing harmful pollution to the River Uruguay, International Court of Justice acting vice-president Peter Tomka said.

Ordering the dismantling of the mill "would not constitute an appropriate remedy for the breach", he said.

The court handed down judgment in a dispute between the neighbours over the mill, owned by Finnish firm Botnia, which started operating near the town of Fray Bentos on the Uruguayan bank of the river in November 2007.

It agreed with Argentina that "Uruguay ought not prior to notification to have issued the initial environmental authorisations and the authorisation for construction" of the mill, a second mill which was never built, as well as a port terminal.

"By doing so, Uruguay gave priority to its own legislation over its procedural obligations under" a 1975 treaty with its neighbour that governs joint use of the River Uruguay, the judge said.

But the court ordered no penalties, saying it was unable "to uphold Argentina's claim in respect of compensation for alleged injuries suffered in various economic sectors, specifically tourism and agriculture."

In hearings before the court in September, Argentina accused its neighbour of having reneged on the 1975 treaty when it authorised the one-billion dollar (740-million-euro) Botnia mill.

It said the mill was causing "irreversible" environmental damage in a densely populated area whose inhabitants use the river for fishing, leisure and tourism.

But the court said there was no evidence that Uruguay had breached any obligations to protect the environment.

"There is no conclusive evidence in the record to show that Uruguay has not acted with the requisite degree of due diligence or that the discharges of effluent from the Orion (Botnia) mill have had deleterious effects or caused harm to living resources or to the quality of the water or the ecological balance of the river," said the judgment.

"We are satisfied," Susana Ruiz Cerutti, a representative of the Argentinian foreign ministry, told reporters after the judgment.

Uruguayan representatives declined to comment.

The ICJ, which considers disputes between nations, dismissed a bid by Argentina in July 2006 for an order suspending construction of the Botnia mill and another by Spanish company Ence, which has since been scrapped.

In January 2007, it rejected an application by Uruguay for an order ending a blockade of a bridge across the river by Argentinian environmentalists that has been in place since 2006 and is still maintained.

© 2010 AFP

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