ARGENTINA/URUGUAY: Tom Henniganin São Paulo reports on a dispute that is souring relations between two South American nations
An escalating dispute over a pulp mill located on their shared border has plunged relations between Uruguay and Argentina to their lowest level in years.
Over the weekend the Uruguayan government ordered its army to block land links between the two countries in order to keep environmental protesters from Argentina out of Fray Bentos, the town located on its side of the River Plate estuary where a huge new pulp mill has just started production.
The protesters, mainly from the Argentinian province of Entre Ríos, which lies across the Plate from the mill, claim the plant will pollute the river and surrounding countryside. With the tacit approval of the government in Buenos Aires, they have intermittently blockaded the three bridges that link the two countries over the last two years in a bid to force Uruguay to relocate or scrap the project.
While the countries' two presidents have traded accusations of bad faith, Argentinian protesters on boats have scuffled with Uruguayan police in the middle of the estuary. Uruguay has denounced the roadblocks, which have caused hundreds of millions of euro in damages to its economy, as illegal under international treaties and has refused direct talks with Argentina until they are removed.
But the government in Buenos Aires says that is was Uruguay which broke a 1975 statute governing control of the shared estuary by giving the project the go-ahead without consulting them, a charge Uruguay denies.
The blockade has rallied Uruguayan support for the mill in a country historically suspicious of Argentinian interference in its internal affairs.
A small band of Uruguayan environmentalists says the mill is part of a wider World Bank-led project by the developed world to relocate dirty industries to the developing world.
But their argument has been drowned out by the overwhelming backing for the government's stance of staring down Argentinian pressure.
Uruguayan backers of the mill believe the government of Argentina's president Néstor Kirchner has sided with the protesters, not out of environmental concern but as a cheap populist means of winning votes, pointing out that the plant meets far stricter environmental standards than the 60 pulp plants operating in Argentina.
Attempts by King Juan Carlos of Spain at mediation collapsed earlier this month when Uruguay's president Tabaré Vázquez gave Botnia, the mill's Finnish owner, the go-ahead to start production over Argentinian objections.
The centre of the protests is the town of Gualeguaychú in Entre Ríos, which fears its tourist and horticultural industries will be ruined by the plant, whose giant chimney can be seen from the town's riverside beaches.
"Everything we have done to build up our tourism industry is at risk because of the plant. We used to be famous around Argentina for our carnival," says Adolfo Weimberg, one of the Gualeguaychú protesters. "Now we are famous for having this huge industrial plant on our doorstep. Since they started building the mill there has been a total halt to all new investment in tourism in the area and house prices are falling."
The government in Montevideo insists that the mill will operate under the strictest environmental standards and Botnia points out that Uruguay is the first non-EU country to adopt EU standards for pulp plants.
The pulp will be exported to Europe, where it will be turned into paper products.
Botnia's funding from the World Bank is also dependent on meeting environmental and social standards set by it.
A recent survey commissioned by the bank concluded that the project would generate major economic benefits for Uruguay and would not harm the environment.
Uruguay's environmental monitoring agency says that initial tests since the plant started up show emissions and effluents are within legal limits.
For Uruguay, the mill is seen as vital to the future of its small economy. The total investment by Botnia of $1.7 billion is equivalent to around 10 per cent of Uruguay's GDP.
But problems during the mill's start-up have seen intense bad odours released from the plant envelop the town of Fray Bentos.
One such release last week led to six schoolgirls being taken ill. Botnia said this was the result of fine tuning as the plant starts production.
Uruguay hopes that having faced down the Argentinian protesters and seen the plant become operational demands for its relocation will now end.
But that seems unlikely. The protesters in Entre Ríos show no signs of backing down and the government in Buenos Aires remains unwilling to try and rein them in.
Recently Argentina's president-elect, Cristina Fernández Kirchner, said that "a certain degree of conflict" between the two sides was inevitable until a ruling by the International Court of Justice in The Hague on the case, something not expected any time soon.