His Excellency the Chairman of the OAS Permanent Council:
His Excellency the Secretary General of the OAS:
Distinguished Permanent Representatives to the OAS:

The Government of the Eastern Republic of Uruguay has deemed it essential to provide the attached materials in order to explain and document the Government’s international conduct.

The first document sets out our country’s position in this difference and describes the material damages it has sustained. It also explains why, in its view, the traffic stoppage or blockade on the bridges is more than a violation of the fundamental instruments of MERCOSUR; it is also a violation of the basic rules of international law that protect and guarantee the free circulation of persons, merchandise, vehicles and goods in general. These issues affect not just our country, but the region and indeed the entire international community as well; if allowed to persist, they would set a dangerous precedent in violation of the rules of law that govern relations between States.

The second document goes specifically to the issue of the pulp mills and the legal procedures that Uruguay has rigorously observed.

We are asking that the member states of the Organization of American States be particularly attentive to this disagreement, for the sake of comity, international solidarity, friendly relations among the countries of the region and to strengthen the ties among us.




Reinaldo Gargano
Minister of Foreign Affairs of the
Eastern Republic of Uruguay


MINISTER OF FOREIGN AFFAIRS


Presentation by His Excellency Don Reinaldo Gargano,
Minister of Foreign Affairs of the Eastern Republic of Uruguay,
to the Permanent Council of the Organization of American States


BLOCKADE OF TRAFFIC ON BRIDGES BETWEEN ARGENTINA AND URUGUAY

The Uruguayan Government brings to this forum a deeply disturbing matter, so disturbing that it threatens Uruguay’s relations with a country that it has always regarded as a close brother in the family of nations. The issue here is a blockade of two of the three bridges spanning the Uruguay River between our country and Argentine territory. This is a blockade imposed by force, from the Argentine side, by private citizens of that country, which the Argentine government has done nothing to stop.

The Government of Uruguay is firmly convinced that sincere dialogue between Argentina and Uruguay is the avenue to pursue to settle this matter. Nevertheless, these blockades might recur or persist into the future, either intermittently or continuously. Then, too, the harm caused by this anomaly has become regional in scale. Given these considerations, the Government of Uruguay believes that it has an ineluctable obligation to bring this matter to the attention of the other countries.

Uruguay and Argentina are geographically separated by the Uruguay River and the Río de la Plata. The two countries are linked by three bridges across the Uruguay River that create a highway connection between the two countries: the Fray Bentos-Puerto Unzué bridge, the Paysandú-Colon bridge, and the Salto-Concordia bridge. These bridges are vital to the flow of traffic in goods and persons traveling in both directions, coming not just from Argentina and Uruguay but from other countries of the region as well, such as Chile and Paraguay, for example. Some 70% of the Uruguayan truck fleet uses these border crossings.

The economic importance of these bridges increases exponentially during the summer vacation period (December-March) and at other shorter vacation times (Holy Week, school and student vacation times in July and in September, etc.). At these times, a massive exodus of Argentine tourists heads for the Uruguayan coastline, especially via the bridge between the cities of Puerto Unzué (Argentina) and Fray Bentos (Uruguay). Clearly, therefore, these access routes are of vital importance to our country.

The flow of private vehicles, cargo vehicles, and passenger vehicles leaving Argentina bound for Uruguay has been forcibly disrupted on the two bridges closest to the capitals of the two countries (the Fray Bentos-Puerto Unzué bridge and the Paysandú-Colón bridge). The blockade on the Fray Bentos –Puerto Unzué bridge started on December 23, 2005; the blockade on the other bridge began on January 3, 2006. A group of people blocked access to these bridges from the Argentine side. The blockade on the Fray Bentos-Puerto Unzué bridge became permanent on February 3, 2006; the blockade on the Paysandú-Colón bridge became permanent on February 16.

When the summer season ended in late March of this year, the flow of traffic was freed up for a brief period. However, just before Holy Week traffic was stopped again and remains so still.
Needless to say, these roadblocks have inflicted grievous harm upon Uruguay, a country of three and a half million people, just as they have on import-export businesses, the tourism industry, trade in the zone, and third countries as well. The forced layovers have cost trucks an estimated 200 dollars a day. Consider the cost when as many as 300 trucks carrying perishables were paralyzed at the border. Compounding all this was the expense of diverting cargo trucks and passenger vehicles to overland or maritime routes. The volume of Argentine tourism in our country this year was substantially less in the summer season and Holy Week than it was at the same times last year. The lag in tourism took its toll on all tourism-related activities (transportation, the hotel business, the restaurant business, etc.).

The Uruguayan government must draw the other member states’ attention to the ripple effects that these roadblocks have had. First, for Uruguay the serious hardship that these blockades have inflicted and continue to inflict upon Uruguay has made this a nationwide crisis. Second, the Argentine Republic’s image has suffered a severe blow, since it is hardly credible that its authorities lack the capacity necessary to ensure freedom of movement within its territory. It is a bi-national problem because of the suffering sustained by Uruguay and the strain it is placing on Argentine-Uruguayan bilateral relations. It is a regional problem, because these roadblocks impair operations within the MERCOSUR road system by striking at one of its synapses. Finally, the ill-effects of this problem extend far beyond the region and the Hemisphere, affecting the investments and dealings of businesses from other regions and other hemispheres, on a national, bi-national, regional and hemispheric scale.

The Uruguayan Government is deeply concerned. At no time since the events in question first presented themselves has the Government of Argentina taken any effective steps to guarantee the free flow of traffic over these bridges to Uruguay, causing the problems cited earlier. Compounding all this is the fact that the Governor of the Argentine province of Entre Rios initially encouraged and supported these actions. President Kirchner himself expressed solidarity with the organizations responsible for the blockades.

In the Uruguayan Government’s view, the problem is a clear violation of the international rules that uphold freedom of movement, a principle that is the cornerstone of the integration movement among our countries.

Uruguayan authorities made repeated overtures to the Argentine authorities as such, and in their capacity as Chair Pro Tempore of MERCOSUR, to have the roadblocks lifted. But those overtures were to no avail. Given that fact, Uruguay sought to begin direct negotiations within the framework of the Olivos Protocol for the Settlement of Disputes in MERCOSUR. On the occasion of the meeting of the Common Market Group, whose Final Report is a matter of public record, Uruguay -backed by Brazil and Paraguay- asked the Argentine Chair Pro Tempore to convene the Common Market Council of MERCOSUR to discuss the matter. In a move unprecedented in the annals of MERCOSUR, the Argentine Republic ignored the request from the other partners.

The Uruguayan Government also sought the good offices of the Secretary General of the Organization of American States (OAS), Dr. José Miguel Insulza, to help get the two countries together to discuss the matter.

The Government of Uruguay contends that the Argentine Government’s tolerance of these aggressive and deleterious acts is utterly unfounded and unjustified. It further contends that the blockade “a piacere” of routes between our countries by groups of individuals is unjustifiable and indefensible. Given the circumstances, any possibility of bi-national negotiations on urgent issues requiring immediate agreements is simply untenable, since no agreement can be reached as long as these attempts to coerce Uruguay persist.

The blockade of the bridges is so serious that any supposed “cause” that a government might attempt to invoke to justify it, would simply disgrace that government since the alleged “cause” would be so disproportionate to the actual effect.

The Government of Uruguay is delivering this presentation of the facts in this matter in the spirit of Article 84 of the Charter of the OAS, which provides that “[t]he Permanent Council shall keep vigilance over the maintenance of friendly relations among the member States, and for that purpose shall effectively assist them in the peaceful settlement of their disputes.” It would respectfully request that the representatives consider these facts.

INFORMATIVE APPENDIX
THE PULP MILLS ON THE URUGUAYAN SIDE OF THE RIO URUGUAY

Construction of these two pulp mills was authorized only when the construction project passed the rigorous technical and procedural requirements in effect in Uruguay. The corresponding agencies constantly monitor for compliance with those requirements; in the event of noncompliance, the authorization to build would be suspended and any further construction work would be prohibited. Both companies were required to submit a plan of execution, an environmental impact study and an environmental management plan, which was approved by the National Bureau of the Environment [Dirección Nacional de Medio Ambiente] (DINAMA) of Uruguay’s Ministry of Housing, Land Planning and Environment (MVOTMA).

The procedures involve public hearings and make it possible to identify, in advance, any adverse environmental consequences that a project might have, so as to prevent, mitigate or compensate for any negative environmental impact.

The studies and controls rigorously applied have revealed that the technology that the mills will use satisfies Uruguay’s emissions standards, and all the European Union standards for the production of wood pulp (European Union’s Integrated Pollution Prevention and Control Directive), which is among the best available technologies (B.A.T.) today.

The Argentine Government informed the Uruguay River Administrative Commission (CARU, a bilateral agency created under the Uruguay River Statute in 1975) of its concern over the eventual transboundary environmental impacts of these mills. As a result of that concern, in March 2004 then Foreign Ministers Bielsa (Argentina) and Opertti (Uruguay) agreed that the Uruguayan Government would provide “information relevant to the plant’s construction and, once in the operational phase,” CARU “would begin to monitor water quality in accordance with its Statute.”

This agreement regarding the pulp mills is mentioned in the Annual Report on the State of the Argentine Nation, 2004, presented by President Néstor Kirchner to the Congress of the Nation. The Annual Report reads, verbatim, as follows: “In June 2004, a bilateral agreement was signed whereby the Argentine Government put an end to the controversy. This agreement is respectful of the fact that these are Uruguayan mills and of the standards in force regulating the waters of the Uruguay River through CARU.” Based on that understanding, a “Plan for monitoring water quality in the Uruguay River in areas where pulp mills are located” was designed. That plan, in combination with the “Uruguay River Environmental Protection Plan” (which local governments of the two countries signed on October 29, 2002) helps to maintain the quality of the water.

As early as February 2004, even before the agreement was struck, the report of CARU’s binational advisors had already established that there would be no substantial environmental impact on the Argentine side, and estimated that the only impact would basically be the eventual bad odors. Based on that report, the National Bureau of the Environment of Uruguay imposed an acceptable odor limit that was even more rigorous than the one established by the World Health Organization as the initial threshold for irritancy (which, in the case of the WHO, is mild eye irritation).

Argentina and Uruguay agreed that the controls to be used would be greater than those that Argentina uses with its own pulp mills on the Paraná River and that technicians from the Argentina’s National Water Office, from the Government of the Argentine Province of Entre Ríos, and from the Argentine city of Gualeguaychú would participate.

On May 5, 2005, Presidents Néstor Kirchner and Tabaré Vázquez agreed to form a high-level technical group (GTAN). In a joint communiqué dated May 31, 2005, the foreign ministers took steps to form, under their supervision, a “Group of Technicians for studies and analysis, information sharing and follow-up on the effects that the operation of the pulp mills being built on the Uruguayan side of the Uruguay River will have on the ecosystem of the shared Uruguay River. The Group will be composed of officials from the Foreign Ministries and national and/or provincial government officials, who will be assisted by the Universidad de la República and the Universidad Nacional del Litoral. The Group’s first report must be produced within 180 days."

However, on June 26, 2005, by which time the GTAN was fully engaged in carrying out its work, the Argentine Government sent a note to the World Bank asking that a loan to the Botnia company for construction of its plant in Uruguay not be awarded.

The High-level Technical Group (GTAN) met 12 times between August 3, 2005 and January 30, 2006. The issues discussed were: production process, liquid emissions, gaseous emissions, solid waste, environmental impact evaluation and monitoring, evaluation of the socio-economic impact and analysis of the draft report ordered by the International Finance Corporation (of the World Bank) on a “Cumulative Impact Study – Uruguay Pulp Mills” (December 2005).

The findings of the draft report commissioned by the World Bank’s IFC are consistent with the environmental impact studies done by the companies and by Uruguay’s DINAMA-MVOTMA. It points out that the significant cumulative effects will be limited to the influx of construction workers, the increase in road traffic (but not river traffic), and direct and indirect economic benefits at the local, regional, and national levels. The report also cites other factors that, although of most common concern to the public, it found did not pose potentially significant adverse impacts and are handled in accordance with internationally accepted standards. These include air quality, emissions into the Uruguay River, the expansion of forest plantation and impacts on tourism in the region.

At Argentina’s request, the GTAN held no further meetings and did not prepare a joint report. Two separate reports were prepared instead and delivered to the Ministers of Foreign Affairs on January 31, 2006. The Ministers will decide the Group’s future. Argentina claims it has not received all the necessary information, while Uruguay has acted with complete transparency, openness, and technical rigor and has demonstrated its willingness to cooperate by answering all of the concerns raised by Argentina. It even invited Argentina to include its own technicians on the “Construction Projects Follow-up Committee” created by resolution of the MVOTMA. The Argentine delegation has not accepted the invitation.

The fear created in the general populace about significant negative effects that these mills could have on the environment and health, and the popular demonstrations against them, are attributable to the public measures taken by the Governor of the Argentine Province of Entre Ríos, Jorge Bustí. That fear and the demonstrations intensified in the course of his campaign for re-election, which happened in October 2005.

In a note dated December 14, 2005, the Argentine Foreign Ministry requested that construction of the pulp mills in Uruguayan territory be suspended. It was around this time that blockades began to occur on the Argentine side of two of the three bridges between Uruguay and Argentina, as we said at the outset. The participants’ avowed purpose was to force the Uruguayan Government to halt construction of the mills.

The talks and exchanges of notes described above ensued.

A more recent development was the request that the Argentine Foreign Minister made of the President of the World Bank, asking that financing of the construction of these plants by the International Finance Corporation be suspended until the dispute was resolved. That request was sent on March 15 of this year, three days after the Presidents of Argentina and Uruguay met in Santiago, Chile and reached a mutual understanding on this matter.

Uruguay can only reaffirm its willingness to engage in peaceful, respectful dialogue, in good faith and without pressure of any kind, with a view to finding a mutually acceptable and technically sound solution to the matter, one that will ensure that construction of the mills can proceed without incident, in strict adherence to all environmental standards so as to ensure that no negative effective will occur.

Full respect for environmental law–both domestic and international–is a fundamental and immediate concern of the Uruguayan Government, which goes hand in hand with its desire to promote the country’s productive development to benefit all human beings. The Uruguayan Government has embarked upon these construction projects in accordance with the principle of sustainable development that encompasses economic, social, and environmental considerations.

In response to the Argentine Government’s demands that the construction of the mills be halted, it is important to recall that the construction work itself will not cause environmental damage and will not be completed until late 2007. Hence, it would be illogical to accede to that demand. The Uruguayan Government has stated, therefore, that it will not suspend construction of the mills unless it can be shown that they will cause some negative environmental impact that is beyond internationally accepted guidelines. In other words, the Uruguayan Government is completely certain that the mills are in strict compliance with the law and will therefore brook no attempt to limit its sovereignty.

The Uruguayan Government feels duty bound to suggest to the Government of Argentina that it take the necessary measures to lift the blockades on the access routes to our country, thereby ensuring the free flow of people and goods between Argentina and Uruguay.

Finally, in response to the objections that Argentina raised to the first report commissioned by the World Bank’s International Finance Corporation on the pulp mills, the Corporation ordered a second report on the environmental effects of pulp production –and we emphasize pulp production, not construction of the respective mills. That second report begins by stating that comments expressing concern that the mills will cause catastrophic environmental damage are unsupported and unreasonable.

But this confirmation of the legitimacy of the Uruguayan Government’s position and the rebuttal of Argentina’s objections is not what matters most. What makes this second report so important for Uruguay is that it enumerates a series of specific points about the mills where more detailed information is either advisable or necessary. We appreciate these observations, which are vital as they represent a formidable cause for bilateral, joint effort and the opportunity to completely dispel any doubts that may still persist on the Argentine side.

This joint Argentine-Uruguayan effort so essential to negotiating a settlement of this difference will doubtless be more difficult if attended by coercive measures such as blockades of bridges, or by demands like halting construction of the pulp mills. As noted earlier, the construction of the pulp mills clearly causes no harmful effects of any kind. At the current pace of construction, the pulp mills could be up and operating by late 2007. Again, the Government of Uruguay would like to give its assurances that in the course of this difference, it will only make its appeals through institutional channels, as it has thus far.

So Uruguay reasserts its complete willingness to continue the dialogue to reach an understanding, now based on this very concrete and rigorous list of tasks to be performed that appears in the World Bank’s most recent report.