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DE RUEHBU #1776/01 2491928
ZNY CCCCC ZZH
R 061928Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9160
INFO RUEHAC/AMEMBASSY ASUNCION 6533
RUEHBO/AMEMBASSY BOGOTA 1627
RUEHCV/AMEMBASSY CARACAS 1469
RUEHPE/AMEMBASSY LIMA 2147
RUEHME/AMEMBASSY MEXICO 1435
RUEHOT/AMEMBASSY OTTAWA 0545
RUEHFR/AMEMBASSY PARIS 1318
RUEHQT/AMEMBASSY QUITO 0993
RUEHSG/AMEMBASSY SANTIAGO 0753
RUEHHE/AMEMBASSY HELSINKI 0050
RUEHBR/AMEMBASSY BRASILIA 6392
RUEHMN/AMEMBASSY MONTEVIDEO 6725
RUEHEG/AMEMBASSY CAIRO 0027
RUEHMD/AMEMBASSY MADRID 1894
RUEHLP/AMEMBASSY LA PAZ SEP WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL

C O N F I D E N T I A L BUENOS AIRES 001776 
 
SIPDIS 
 
SIPDIS 
 
PASS NSC FOR MICHAEL SMART 

PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 

PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN 

TREASURY FOR ROSELLEN ALBANO 

USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 

US SOUTHCOM FOR POLAD 

OES FOR LAWRENCE SPERLING 

EX-IM BANK FOR MICHEE WILKINS 

OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI 

USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN 

USCINCSO FOR POLAD 

 

E.O. 12958: DECL: 09/05/2017 

TAGS: ECON EINV SENV PREL SOCI FI UY AR

SUBJECT: ARGENTINE-URUGUAYAN PULP MILL DISPUTE: FINNISH 

EMBASSY OFFICIAL DISCOUNTS POSSIBILITY OF SERIOUS VIOLENCE 

 

REF: BUENOS AIRES 01707 

 

Classified By: DCM Tom Kelly, Reasons 1.5 (b,d) 

 

¶1. (C) SUMMARY: The Finnish Embassy believes that despite the 

bilateral frictions that the Argentina-Uruguay pulp mill 

dispute has created, the mill project will open as scheduled 

in October with a minimal possibility of violence.  The 

Embassy discounts as spurious Argentine environmental 

activists' complaints, saying that both federal and 

provincial governments have politicized the protest movement 

and resisted any attempts at dialogue with Botnia.  President 

Kirchner has failed to see how ""damaging"" his actions have 

been to Argentina's own international investment image.  The 

Embassy praised the King of Spain's mediation effort, but 

said this effort, as well as the GOA-GOU International Court 

of Justice case, are ""going nowhere.""  The Embassy said that 

the Government of Uruguay (GOU) has been ""terribly 

disappointed"" with Brazil and Mercosur for its lack of 

support in the dispute, which has in turn forced the GOU to 

consider building ties outside the trade bloc.  The Embassy 

said this dispute is ""vastly more important"" for Uruguay than 

it is for Argentina.  The Embassy said Botnia chose Uruguay 

over Argentina for this pulp mill due to the former's more 

salutary environment with respect to anti-corruption laws, 

rule of law, and forestry management.  END SUMMARY. 

 

-------------------------- 

Pulp mill ""perfectly safe"" 

-------------------------- 

 

¶2. (C) EconOff met Ms. Petra Theman, Charge of the Finnish 

Embassy, on August 23 to discuss the Finnish-based Botnia's 

pulp mill project in Uruguay (reftel).  The Finnish Embassy 

in Buenos Aires is 

also accredited to Uruguay.  Ms. Theman has been in Argentina 

for over a year, and appears to be very 

knowledgeable about the pulp mill issue.  She described the 

long and conflict-ridden history of this project.  While 

neither her Government nor Embassy has any direct role in 

this Finnish private sector project, it has at times been 

drawn into the debate, and provided general advocacy for the 

project. 

 

¶3. (C) Theman said that the GOA, media and analysts have long 

known ""perfectly well"" that the GOA and Gualeguaychu 

activists have ""no case"" on the environmental merits.  She 

said that it is well known that the Botnia technology is 

safe, and uses the most advanced technology.  Theman said her 

Embassy had been in contact with Greenpeace and other 

environmental NGOs throughout this conflict, and they had all 

long ago dissociated themselves from the Gualeguaychu 

protests, recognizing early on the mostly political nature of 

their cause.  She said that this particular pulp mill 

technology has not been an issue for Greenpeace for a long 

time.  She said that Finland itself has a dozen or so mills 

exactly the same as this one in Uruguay. 

 

 

------------------------------- 

Mediation ""still going nowhere"" 

------------------------------- 

 

¶4. (C) Theman said that the International Court of Justice 

case between the GOA and GOU might last several more months 

or longer, as it decides on the central issue of whether the 

GOU violated the 1975 Treaty of the Rio Uruguay (joint 

oversight of the river).  She said the GOU and GOA were 

submitting reports and counter-reports to the ICJ, and this 

could take time.  She said that, unfortunately, neither side 

ever did exchange any actual physical note agreeing to allow 

the pulp mill.  The leaders did verbally agree to allow it to 

move forward, but other than ""some speeches"" to this effect, 

there were nothing more concrete, which was ""a slight problem 

for the (GOU).""  She said that the King of 

Spain's mediation effort has also seen ""little progress,"" 

although she praised the Spaniards for their ""great job."" 

She understood that the King of Spain has high hopes to be 

able to announce something concrete during the November 

Ibero-American summit in Chile. 

 

--------------------------------------------- -------- 

""Fifteen minutes of fame"" for ""uneducated"" protesters 

--------------------------------------------- -------- 

 

¶5. (C) Ms. Theman said she had visited Gualeguaychu, 

Argentina, and Fray Bentos, Uruguay many times, and appeared 

to know these communities well.  Theman said that many 

Gualaguaychu activists liked to portray their town as kind of 

""environmental haven, but in fact it is a big polluter.""  She 

said that like many small Argentine towns in the interior, it 

in fact has big pollution problems: factory air and water 

pollution, solid waste, and the community's wastewater goes 

untreated directly into the Rio Uruguay itself.  She said 

that Botnia has for years attempted to inform and include the 

Gualaguaychu community in the project: invitations to visit 

Finland and its (identical) pulp mills there, invitations to 

attend community information sessions, and many press and 

information notices to local newspapers to counter the 

""totally false propaganda.""  However, all such advances have 

been rejected.  She said that Entre Rios Governor Jorge Busti 

threatened to cut off all official advertising to newspapers 

carrying any ""pro-Botnia"" advertisements.  She said that, in 

fact, the very few Argentines who do attempt to learn more 

about the Botnia issue, or even express neutrality, are ""cut 

off"" from the community, and have even been threatened.  She 

said that one journalist who did take up the Botnia offer to 

visit Finland returned with a more ""open mind,"" but was also 

shunned.  She said that another frustration for Botnia is 

that, and contrary to what most Argentines think, 

Gualaguaychu is actually around 18 miles away from the River 

Uruguay, and even the small tourist beach area with which it 

is associated is six miles away from a site across the river 

from the Botnia plant.  Theman said that the ""educational 

level"" of many of the most vocal protesters did not seem too 

high, and that for some, the protest was an ""interesting 

wagon to ride on,"" and an opportunity for their ""15 minutes 

 

 

of fame."" 

 

--------------------------------------------- -- 

Entre Rios Province and GOA's ""unhelpful"" roles 

--------------------------------------------- -- 

 

¶6. (C) Theman explained that, as Gualaguaychu has 

traditionally been Radical Party territory, the decision by 

Peronist Governor Busti to joining the cause was an 

""opportunity to co-opt this group"".  Now, he ""is more or less 

stuck with the role.""  Theman also said that Busti has had 

good relations with the Kirchners, was an early supporter of 

then-Governor Nestor Kirchner's 2003 presidential bid, and 

has also helped Mrs. Kirchner financially in her own 

presidential campaign.  This close relationship has 

contributed to the GOA's own support of this cause. 

 

¶7. (C) Theman said that her Embassy and its contacts are 

certain that the GOA, among other groups, has financed the 

protesters, and she indicated that these otherwise ""marginal"" 

protesters had no other means of support.  She said that the 

GOA has not been at all helpful during this near two-year 

ordeal.  The Finnish Embassy and Botnia's main interlocutor 

at the MFA was initially the ""very difficult"" MFA 

Environmental Affairs official, Raul Estrada Oyuela.  (Post 

has also found Estrada Oyuela to be recalcitrant and 

officious.)  Theman said that Estrada Oyuela was ""totally on 

the side"" of the protesters, and always resisted Finnish 

attempts to talk or exchange views.  Theman said that there 

is wide agreement in the Argentine scientific community, and 

even in the GOA scientific community, that there is no 

environmental danger from the pulp mill, but the GOA forced 

its own experts to keep quiet.  Theman actually marveled at 

the level of expertise among the Argentine environmental 

community, in and outside government, but said it was ""a 

pity"" that they could not speak out.  She also noted how, for 

the GOA, this dispute was a great natural fit in the GOA 

populist ""blame game"" campaign against outside interests: to 

blame ""multinationals"" for treating Argentina as a ""waste 

dump."" 

 

¶8. (C) Speaking more generally about Argentina citizens' 

propensity for conflict, Theman cited the ""remarkably low 

trust"" that residents of Gualaguaychu, and Argentines in 

general, have towards their own government, businesses, and 

institutions.  She said that a big contributor to this 

conflict has been citizens' own lack of confidence and trust 

in their own institutions, politics, politicians, 

international organizations, and multinational corporations. 

Thus, ""it was only natural to have little faith in Botnia."" 

She said that perhaps the only institutions that enjoy a 

modicum of trust or respect in Argentina are the Catholic 

Church and universities. 

 

--------------------------------------------- --------- 

Uruguay ""terribly disappointed"" with GOA, Brazil, Mercosur 

--------------------------------------------- --------- 

 

 

¶9. (C) As non-resident diplomats, Theman and her ambassador 

visit Uruguay fairly often, and her ambassador has met with 

President Vazquez and senior GOU officials.  She said that 

the GOU has been ""terribly disappointed"" by the GOA, 

Lula/Brazil and Mercosur, for its lack of action or support. 

She said, partly as a result of this ""betrayal,"" the GOU, 

including Vazquez, has mentioned its interest in reducing its 

Mercosur ties, opening up more to the world in the ""Chile 

fashion"" (i.e., opening much more to the rest of the world, 

albeit with a foot still in Mercosur).  She said that 

Brazilian President Lula will have a state visit in Finland 

in the coming weeks, and Botnia will surely be on the agenda. 

 Theman said that, although it is widely assumed that 

Kirchner has his hands tied in opposition to the mill, it was 

actually GOU President Vazquez who really had his hands tied, 

given the ""extremely fragile"" leftist Frente government, and 

that Vazquez ""cannot go too far left or right to maneuver."" 

She also said that there is ""universal"" support all over 

Uruguay for this project, and that the issue is ""vastly"" more 

important in Uruguay than it is here.  She agreed with our 

assessment that, media coverage notwithstanding, this is 

virtually a non-issue for 98% of Argentines. 

 

--------------------------------------------- -------- 

Beefed up security for Finnish Embassy and staff residences 

--------------------------------------------- -------- 

 

¶10. (C) In response to a question if the Embassy or staff 

felt threatened, Theman expressed a general sense of 

satisfaction with security and that her Embassy staff thought 

there was ""nothing to worry about.""  But as a ""precaution,"" 

the Finnish Embassy had increased security at the Embassy (a 

fifth floor office in a downtown high-rise) and at the 

residences of the Ambassador and the Mission's three-member 

staff. 

 

---------------------------------------- 

Damage to Argentina's investment climate 

---------------------------------------- 

 

¶11. (C) Theman said that Kirchner, perhaps due to his 

""provincial background,"" did not seem to grasp, in this 

""globalized world of instant communications,"" just how 

damaging the GOA's stance has been for Argentina's own global 

investment perception.  She said that GOU officials from 

President Vazquez on down know all too well that they could 

never have undone this project (which they inherited from 

the previous GOU administration).  If they had canceled the 

project, she said, it would have been a ""monumental disaster"" 

for their future investment prospects.  Theman said that many 

potential Argentine sub-contractors and suppliers had lost 

out on opportunities, many out of fear of reprisal from 

Argentines.  Many other Argentine sub-contractors had already 

lined up work, but had to cancel in the face of this 

pressure. 

 

------------ 

Why Uruguay? 

 

 

 

------------ 

 

¶12. (C) Theman discussed some of the reasons that Botnia 

chose Uruguay for its site in the first place.  She noted 

that Argentina, and in particular, Governor Busti's own Entre 

Rios Province, had itself courted pulp mills for its 

territory.  Theman mentioned the widely-cited high levels of 

corruption in Entre Rios province and Argentina as a whole, 

compared to the much lower levels in Uruguay.  Theman also 

cited several other important reasons that Uruguay was chosen 

for the pulp mill project: a better 

tree-growing climate and soil, rule of law, and relatively 

skilled workers.  She particularly highlighted what she said 

were the GOU's ""model, advanced"" forestry legislation, 

management and long term planning. 

 

------------------------------------ 

Recent industrial accident at Botnia 

------------------------------------ 

 

¶13. (C) As mentioned in reftel, on August 14, there was a 

highly publicized leak of a mixture of sodium sulphide at the 

Botnia plant.  A small amount of this chemical, a material 

with which Botnia employees routinely work, was accidentally 

released in the air during a period of high wind.  According 

to a Botnia press release, two workers downwind showed skin, 

eye and upper respiratory symptoms, but according to medical 

professionals, there were no major clinical symptoms. 

Nonetheless, this incident prompted more GOA and activists' 

complaints.  Theman said that a group of Brazilian 

subcontractors, in violation of procedures, transported a bag 

of sodium sulphide during high winds, and it spread about 12 

meters around. 

 

------------------------------------------ 

Next steps: face-saving deal in the works? 

------------------------------------------ 

 

¶14. (C) Speaking of the likely October mill opening - ""right 

at the same time as the presidential elections!"" - Theman 

largely downplayed any possibility of major violence.  She 

said that everyone to whom she speaks on this matter also 

dismisses the chance of violence.  However, she would not 

rule out the possibility of ""a lone person or small group 

doing something,"" like disrupting a shipment to or from the 

plant, along the River Uruguay.  She hoped that during the 

late October-through-early December 10 GOA presidential 

transition, there might be a face-saving solution, but did 

not hold out a lot of hope for this.  Theman said that one 

possible deal that she had heard about was that, in exchange 

for the GOU and Botnia delaying the mill's opening, the GOA 

would withdraw its ICJ complaint.  But Theman herself did not 

give this theory too much weight.  She said that that what 

might likely occur is just more blockades and protests, which 

would gradually taper off as the project goes on line and 

""people slowly start to see that there really is no major 

environmental problem to the mill.""  Theman was not sure if 

there were even any GOA-GOU talks going on at all.  She noted 

 

 

that GOA Chief of Staff Alberto Fernandez and GOU Secretary 

of the Presidency (Chief of Staff) Gonzalo Fernandez were 

three-decade-old friends from the University of Buenos Aires, 

and assumed that they're in touch on this pulp mill issue as 

well.  (These two reportedly met in person last week in 

Uruguay, but no reports have surfaced on the content of their 

discussion.) 

 

-------- 

Comment 

-------- 

 

¶15. (C) Most, if not all, of Theman's comments track closely 

with Embassy's own reading of events.  The conflict has 

always been mostly about politics rather than the 

environment.  The coming weeks will be a sensitive time, with 

the opening of the mill roughly coinciding with the GOA's 

October 25 presidential election.  Post will continue to 

monitor this case, especially for any indication of violence. 

WAYNE 


=======================CABLE ENDS============================