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UNCLAS SECTION 01 OF 03 BUENOS AIRES 001434 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
STATE FOR OES/ETC, OES/ENV, OES/PCI, WHA/BSC 
EPA for INTERNATIONAL ACTIVITIES: CAM HILL-MACON 
 
E.O. 12958: N/A 
TAGS: SENV PGOV ECON PREL AR
SUBJECT: The Argentine/Uruguay Pulp Mill Imbroglio: 
Environmentalists Tell Kirchner to Put His Money Where His Mouth Is 
 
¶1.  Sensitive but Unclassified, Not for Internet Distribution 
 
¶2.  (SBU) Summary: Argentina's strong stand against the construction 
of two pulp mills on the Uruguayan side of a river that borders an 
Argentine eco-tourism area, has given environmental activists an 
opening to press for increased environmental protection.  NGO's 
rightly point out that some of the 30 pulp mills already operating 
in Argentina are serious polluters.  Responding to citizen demand, 
the Supreme Court has ordered the 44 companies that dump chemical 
waste in the large sewer-like Riachuelo River, which runs through 
Buenos Aires, to report on the chemical content of their waste.  The 
Paraguayans have protested a pulp mill on their border.  President 
Nestor Kirchner is working to upgrade the woefully underfunded 
Secretariat of Environment and is reportedly on the brink of 
 
SIPDIS 
selecting a new more dynamic Secretary.  While critics say that 
Argentina is protesting the construction of the pulp mills because 
of sour grapes -- reportedly, they wanted the plants on their side 
of the river -- an unintended and welcome result of the flap is 
increased interest in environmental protection in Argentina.  End 
Summary 
 
The Uruguay - Argentine Pulp Mill Flap 
-------------------------------------- 
 
¶3.  (U) The imbroglio over the construction of two wood pulp mill 
plants in Uruguay's Rio Negro department on the Uruguay River across 
from an eco-tourist site on the Argentine side of the border, has 
given the environmental NGO community an opening to highlight the 
lack of environmental protection across the country.  The 
construction of two plants, by the Spanish firm Ence and Finnish 
company Botnia, a USD 1.9 billion investment, has caused a 
diplomatic flap for Argentina and Uruguay.  Uruguay has sought USD 
150 million loan from the World Bank's International Finance 
Corporation (IFC) to support the projects.  The Argentines have 
filed a case against the construction with the International Court 
of Justice in The Hague, arguing that the mills will pollute the 
Argentine side of the Uruguay River.  This bilateral issue gained 
international attention at the recent EU-Latin American Summit in 
Vienna, when an Argentine beauty queen in a provocative costume, 
appeared before the presidents with a message to stop the proposed 
pulp mills plants. 
 
Kirchner Raises the Environmental Flag 
-------------------------------------- 
 
¶4.  (U) In mid-May, Kirchner, with his environmental team, various 
politicians and the press, traveled to Gualeguaychu, the town across 
the river from the pulp mills, to hold a highly publicized rally 
where he vehemently opposed the construction, announcing that the 
environmental protection is "now a matter of state policy." 
Kirchner promised economic growth "that will incorporate an 
environmental perspective in all government actions, and raise the 
current environmental standards."  Local NGO's took the opportunity 
to ride on President Kirchner's newly-discovered enthusiasm for the 
environment to point out that Argentina has some 30 pulp mills, some 
of which are serious polluters.  A U.S. expert on the environment, 
who is well versed in the water pollution in Argentina, recently 
told ESTH Counselor that Argentina has serious water pollution 
problems, likening it to the U.S. 50 years ago.  The Argentine 
Association of Pulp and Paper Producers noted in a recent press 
report that Argentine mill owners invested USD 35 million between 
2001 and 2005 in improving the environment, although he admitted 
there is more to be done in processing the estimated 900,000 tons of 
pulp produced annually.  Recently, Paraguay filed a suit against 
Argentina for pollution by two pulp mills in the northeastern 
Misiones Province, on their shared border.  According to the 
Paraguayan Foreign Ministry, Argentina has failed to respond to the 
complaint. 
 
World Environment Day:  NGOs Demand Reform 
------------------------------------------ 
 
¶5.  (U) The pulp mill flap has raised consciousness about the 
serious pollution problems in Buenos Aires' Riachuelo River among 
politicians, the press and the general public.  Some claim that the 
Riachuelo is Latin America's most polluted river, and no one 
disputes the fact that it is the most polluted waterway in 
Argentina.  Kirchner's recent push for increased environment 
protection provided an opening for key environment NGOs to demand 
for reform on June 6, World Environment Day.  A broad coalition of 
13 environmental organizations proposed a series of measures for the 
Kirchner Administration to implement.  In a document entitled "The 
Environment: A State Question," the NGOs urged that the Riachuelo 
river be cleaned up; they called for a law for clean technology in 
the pulp mills and for upgrading the Secretariat of Environment to 
minister status.  They cited the need for urgent measures to stop 
rampant deforestation and to require a national law making 
environmental impact studies mandatory.  (Comment:  Politicians have 
 
BUENOS AIR 00001434  002 OF 003 
 
 
outlined plans for cleaning the river for decades.  Under the Menem 
Administration, the then-Minister of Environment purloined the funds 
allocated for the cleanup and has served jail term for doing so. 
End Comment.) 
 
¶6.  (U) Responding to a court case brought by activists, the Supreme 
Court recently ruled that the GOA must present a plan within 30 days 
for reducing the Riachuelo's pollution.  The court's decision 
requires that the 44 companies that discharge waste into the river 
detail the amount and chemical content of the waste.  The firms 
include oil companies such as Shell and YPF and other large 
companies.  Press reports credit the pulp mill flap with garnering 
attention to this long standing environmental problem in Buenos 
Aires City and Province where 3 million people are affected by the 
pungent river, which looks like a large sewer. 
 
Top NGO Reports on the Environmental Situation 
--------------------------------------------- - 
 
¶7.  (U) ESTH Staff heard a litany of environmental problems at the 
recent event marking the publication of a 600-page report, "The 
Environmental Situation in Argentina 2005," prepared by the 
Foundation Vida Silvestre Argentina, associated with the World 
Wildlife Fund International (WWF).  The report highlighted 
large-scale deforestation, pollution, overfishing and 
desertification.  It warned that the burning of forests in the Grand 
Chaco region, shared with Paraguay and Bolivia, produces more carbon 
dioxide emission than generated by all the motor vehicles in the 
country.  Pollution generated by mines in remote region like the 
Patagonian steppes in southern Argentina was also highlighted.  Old 
mines, including uranium mines, have impacted water supplies in the 
Puna Altiplano plateau in northwestern Argentina, the Andes 
Mountains along the western border, and the Yungas rainforest in the 
northwest, where mining has had a severe impact on local water 
supplies.  (Note:  The World Bank is developing a project to clean 
up Argentina's defunct uranium mines, two of which are in the center 
of urban areas.) 
 
Call for Increase Federal Support for the Environment 
--------------------------------------------- -------- 
 
¶8.  (SBU) During this event, the keynote speaker, a leading 
environmentalist and constitutional lawyer, observed that while the 
necessary environmental laws are in place, they are not enforced. 
He called upon the GOA to increase its meager support for the small 
Secretariat of Environment, currently under the Ministry of Health. 
 
SIPDIS 
The speaker, Daniel Sabsay, observed that jurisdictional problems 
inherent in a federal system, complicated by the weak Secretariat of 
Environment, make enforcing environment law an impossible task.  The 
speaker emphasized that the Federal Environmental Council (COFEMA), 
responsible for coordinating environmental policies with provinces 
through consensus, has not protected the environment because it is 
stacked with political representatives political parties, oil and 
mining companies, rather than environmentalists.  In sum, COFEM is a 
sham.  (Comment:  The speaker is right on the mark.  Not only has 
COFEMA not worked effectively to protect the environment, but the 
Argentine Secretariat of Environment, itself, is understaffed and 
under funded.  Job security is an issue there because about one half 
of the 300 employees do not enjoy civil service protection. 
Employees routinely hold two or three jobs to support themselves and 
are often absent from the office. End Comment.) 
 
Top NGO Calls for Increased Environmental Protection 
--------------------------------------------- ------- 
 
¶9.  (U) In discussions with ESTH Counselor, staff from the Vida 
Silvestre Argentina Foundation, the country's largest and most 
important NGO, said that, while they are strong proponents of the 
environment, at the same time they realize that Argentina needs to 
continue its economic growth to support its recovery from the 2001 
financial disaster.  Foundation representatives pointed out that all 
industry has some degree of contamination.  While sympathizing with 
the inhabitants of Gualeguaychu, the Foundation pointed out they do 
not have the right to protest by blocking traffic, causing 
considerable loss to commerce.  The Foundation recommended an 
independent study to determine the environmental impact of the pulp 
mills.  It also pointed out that there is a chlorine free technology 
currently in use, and recommended that countries in the region work 
with industry to install this state-of-the-art technology.  The 
Foundation emphasized that Argentina must apply the same high 
environmental standard that it wants the Uruguayan pulp mills to 
have to its own pulp mills. 
 
The Pulp Mill Debate:  Good for Argentina's Environment 
--------------------------------------------- ---------- 
 
¶10.  (SBU) Comment: Since the beginning of the Kirchner 
Administration, the environment has been placed on the back burner. 
 
BUENOS AIR 00001434  003 OF 003 
 
 
The general public appears to be willing to give the Administration 
some space, accepting damage to the environment as the cost of the 
economic recovery.  However, Kirchner's sudden morphing into a 
defender of the environment has put the spotlight on Argentina's 
environmental problems.  It could result in more resources and 
interest in cleaning up contaminated sites and rivers, and requiring 
environmental impact studies.  From the Argentine side of the 
Uruguay River, the "greening of the Kirchner Administration" is a 
good thing.  End Comment. 
 
¶11.  (U) To see more Buenos Aires reporting, visit our classified 
website at: http://www.state.sgov.gov/p/wha/buenosaires.< /a> 
GUTIERREZ