INTERNATIONAL COURT OF JUSTICE
CASE CONCERNING PULP MILLS
ON THE RIVER URUGUAY
ARGENTINA
V.
URUGUAY
COUNTER-MEMORIAL OF URUGUAY
VOLUME I
20 JULY 2007VOLUME I TABLE OF CONTENTS
Page
CHAPTER 1. INTRODUCTION........................................................................
.....1
Section I. Observations on Jurisdiction ..........................................................14
Section II. Summary of Argument..................................................................16
Section III. Structure of the Counter-Memorial..............................................32
PART I
CHAPTER 2. THE LAW APPLICABLE TO THE ALLEGED
PROCEDURAL VIOLATIONS OF THE 1975 STATUTE ..................................37
Section I. Origins and Scheme of the 1975 Statute.........................................43
A. History and Development................................................................43
1. The 1961 Boundary Treaty.......................................................43
2. The 1971 Joint Declaration.......................................................44
3. The 1973 Treaty on the River Plate ..........................................46
B. The Object and Purpose of the Statute.............................................47
C. The Scheme of the 1975 Statute.......................................................50
D. Overview of the Environmental Protection Provisions....................54
E. The Procedural Requirements of the Statute ....................................57
Section II. The Procedural Provisions of the Statute ......................................60
A. Article 7........................................................................
...................60
1. The First Paragraph of Article 7................................................60
(a) What Is “Significant Harm”?...........................................61
(b) Timing........................................................................
.....62
(i) The Statute ...............................................................64
(ii) The Digest...............................................................65
(iii) State Practice..........................................................66
a) Traspapel...........................................................66
b) M’Bopicua Port.................................................69
c) Nueva Palmira Freight Terminal.......................70
(c) To “Carry Out”................................................................72
-i- (d) The Application of Article 7 to Industrial Facilities........74
2. The Second Paragraph of Article 7...........................................81
3. The Third Paragraph of Article 7..............................................82
B. Articles 8-11........................................................................
.............84
1. Article 8........................................................................
............84
2. Articles 9 and 10.......................................................................85
3. Article 11........................................................................
..........86
C. Prior Consent Is Not Required.........................................................90
1. There Is No Veto Right Under General International Law.......92
2. The Statute Does Not Require Prior Consent..........................100
3. The Argentine Government’s Memorandum Accompanying
the Statute ........................................................................
.....103
4. The 1976 Joint Presidential Declaration .................................104
5. Argentina’s Practice................................................................106
6. The Case of the Garabí Dam...................................................114
7. Argentina’s Conduct Prior to the Submission of Its
Application ........................................................................
...116
8. State Practice in Latin America...............................................118
D. The Obligation to Consult in Good Faith.......................................121
1. The Purpose of Consultations.................................................121
2. Relevant Timeframes..............................................................123
3. Duties During Consultation ....................................................125
(a) An Obligation of Conduct, Not Result ..........................127
(b) Status of the Project During Consultations....................128
(c) Status of the Work During Dispute Resolution..............130
Section III. The Role of CARU....................................................................133
Section IV. The Role of the Court................................................................144
Conclusion........................................................................
............................146
CHAPTER 3. THE APPLICATION OF THE LAW TO THE FACTS
CONCERNING THE ALLEGED PROCEDURAL VIOLATIONS....................149
Section I. Uruguay Was Not Required to Notify CARU Before It Issued
AAPs to ENCE and Botnia........................................................................
...153
-ii- A. Argentina and CARU Were Well Informed About the ENCE
Plant Before the 9 October 2003 AAP Was Issued.......................159
B. Argentina and CARU Were Equally Well Informed About the
Botnia Plant Before the 14 February 2005 AAP Was Issued........163
Section II. Uruguay Was Not Obligated to Await CARU’s Authorization
for the Plants........................................................................
.........................169
A. The Parties Agreed to Address the ENCE Plant Outside CARU...172
B. The Parties’ Agreement to Address ENCE at the Government-
to-Government Level Outside CARU Was Extended to Botnia...187
C. The Parties Created GTAN as a Means to Address Both Plants
at the Government-to-Government Level.....................................191
D. Argentina Seeks to Impose on Uruguay Obligations that Not
Only Do Not Exist, But that Argentina Never Accepted for
Itself........................................................................
......................197
E. Uruguay Complied With Its Obligations Concerning the Botnia
Port and the Botnia Water Extraction Permit................................197
Section III. Uruguay Gave Argentina Sufficient Information to Assess the
Probable Impact of the Plants on Navigation, the Regime of the River and
the Quality of Its Water........................................................................
........203
A. Uruguay Gave Argentina Sufficient Information About ENCE.....206
B. Uruguay Gave Argentina Sufficient Information About Botnia.....211
Section IV. Uruguay Complied with Its Duties During Consultations and
Dispute Resolution ........................................................................
...............227
A. Uruguay Took Only Preparatory Steps During the GTAN
Consultative Process.....................................................................228
B. Uruguay Was Free to Carry Out the Pulp Mill Projects after the
Consultations Were Over..............................................................233
Conclusions........................................................................
..........................238
PART II
CHAPTER 4. THE LAW AND THE FACTS PERTAINING TO THE
ALLEGED SUBSTANTIVE VIOLATIONS OF THE 1975 STATUTE.............243
Section I. Uruguay’s Compliance with Its Obligations to Prevent
Pollution under Article 41 of the 1975 Statute..............................................249
A. Article 41 Does Not Ban All Discharges to the River....................249
B. CARU Regulations Define the Substantive Performance
Standards of the 1975 Statute........................................................253
-iii- C. Argentina and Uruguay Have, Through CARU, Agreed Upon
the Environmental Standards for the Uruguay River....................256
D. Uruguay Has Ensured that the Botnia Plant Complies with the
Applicable Pollution Prevention Laws and Regulations...............262
1. Uruguay Has Required Botnia to Comply with the CARU
Water Quality Standards.......................................................263
2. The Botnia Plant’s State-of-the-Art Anti-Pollution Systems
Ensure Compliance with the CARU Water Quality
Standards........................................................................
.......263
3. The IFC’s Independent Experts Have Confirmed that the
Botnia Plant Will Comply with the CARU Water Quality
Standards........................................................................
.......264
4. Argentina Does Not Allege that Any CARU Standard Will
Be Breached........................................................................
..265
5. The Botnia Plant Will Not Cause an Exceedance of
Uruguay’s Phosphorus Standard...........................................266
6. Comprehensive Monitoring Will Ensure Compliance with
the CARU Standards.............................................................270
Section II. Uruguay has Ensured that the Botnia Plant Will Not Alter the
Ecological Balance of the River Uruguay in Violation of Article 36 of the
1975 Statute........................................................................
..........................271
A. CARU Regulations Implement the Parties’ Obligations Under
Article 36........................................................................
..............271
B. Uruguay Has Ensured Compliance with Subject E3 of the
CARU Digest........................................................................
........272
C. Uruguay Has Ensured Compliance with Subject E4 of the
CARU Digest........................................................................
........273
D. The IFC’s Independent Experts Concluded that the Botnia Plant
Will Not Adversely Impact the Ecological Balance of the
Uruguay River ........................................................................
......275
Section III. Uruguay’s Choice of Site for the Botnia Plant Complies with
All Applicable Obligations........................................................................
...277
Section IV. The Approach to Environmental Regulation Adopted in the
1975 Statute is Consistent with General International Law..........................279
A. Equitable and Reasonable Use of the River...................................280
B. The Alleged Principle of Non-Harmful Use of Territory...............282
C. Applicable International Standards Pursuant to the 1975 Statute...284
-iv- D. The Precautionary Principle Neither Calls into Question the
Decision to Authorise the Botnia Plant Nor Transfers the
Burden of Proof........................................................................
....288
Section V. The International Law of Environmental Impact Assessment.....292
A. Environmental Impact Assessment Is a National Procedure, Not
an International One......................................................................293
B. Environmental Impact Assessment Is a Process Not an Event.......295
C. Required Content of a Transboundary Environmental Impact
Assessment ........................................................................
...........298
D. An Environmental Impact Assessment Is Not Required to
Assess Remote or Speculative Risks.............................................301
Section VI. The Environmental Review of the Botnia Plant Satisfies the
Requirements of the 1975 Statute and International Law.............................304
A. Uruguay’s Law on EIA..................................................................304
B. Botnia’s Initial Environmental Impact Assessment Submissions
to DINAMA........................................................................
..........308
C. Uruguay’s Response to the Botnia Environmental Impact
Assessment Report........................................................................
314
D. Uruguay’s Continuing Environmental Assessment and Control....319
E. Uruguay’s Compliance with the 1975 Statute................................324
CHAPTER 5. THE CONCLUSIONS OF THE INTERNATIONAL FINANCE
CORPORATION AND ITS INDEPENDENT EXPERTS...................................327
Section I. Deference Due to the International Finance Corporation and Its
Independent Technical Experts.....................................................................329
A. The Weight to Be Accorded the IFC’s Findings............................332
B. IFC Policy and Performance Standards are Detailed, Extensive,
and Cover All Potential Environmental Impacts...........................334
C. The IFC’s Performance Standards .................................................337
1. Performance Standard 1..........................................................339
2. Performance Standard 3..........................................................343
3. Performance Standard 4..........................................................348
4. Performance Standard 6..........................................................349
Section II. The Botnia Plant Was Evaluated According to the IFC’s
Performance Standards Prior to the Decision to Finance the Project............351
Section III. The Evaluation in the Final Cumulative Impact Study..............357
-v- A. The Exhaustive Environmental Review in the CIS Demonstrates
that the Botnia Plant Will Not Harm the Environment .................357
B. The Impacts Analysis in the Final CIS Assumed the
Construction of Both the ENCE and Botnia Plants, and Thus
Significantly Overstated the Impacts from Operation of the
Botnia Plant Alone........................................................................
359
C. The Botnia Plant Will Comply with the Requirements of IPPC
BAT and Will Operate as One of the Best Plants in the World ....360
D. The Botnia Plant Will Not Adversely Impact Water Quality or
the Ecological Balance of the River, and Any Potential Impacts
Are Likely to Be Immeasurable....................................................362
E. The Tree Plantations Will Not Cause Adverse Impacts to the
Uruguay River. ........................................................................
.....378
Section IV. Conclusions with Respect to the International Finance
Corporation........................................................................
...........................382
CHAPTER 6. THE OPINIONS OF THE EXPERTS RETAINED BY THE
PARTIES........................................................................
......................................385
Section I. Argentina Has Failed to Show that the Botnia Plant Will Harm
the Environment ........................................................................
...................387
Section II. Argentina Has Failed to Show that Potential Impacts of the
Botnia Plant Have Been Inadequately Assessed...........................................391
A. Argentina Seeks to Impose a Standard on Environmental Impact
Assessment that No Project Could Ever Meet..............................391
B. The Impacts of the Botnia Plant Have Been Thoroughly and
Adequately Assessed ....................................................................397
Section III. Argentina Has Done Nothing to Disturb the Conclusion that
the Botnia Plant Will Perform on a World-Class Level................................401
Section IV. Argentina Has Not Met Its Burden of Showing that the
Botnia Plant Will Adversely Impact Water Quality or the Ecological
Balance of the River........................................................................
.............422
Section V. The Conclusions of the IFC’s Final Cumulative Impact
Statement Are Valid in All Respects............................................................449
CHAPTER 7. ENSURING PROTECTION OF THE URUGUAY RIVER
AND THE AQUATIC ENVIRONMENT............................................................451
Section I. Extensive Pre- and Post-Operational Monitoring of the Botnia
Plant Will Ensure Rapid Detection and Correction of Any Prohibited
Impacts........................................................................
.................................453
A. Monitoring of the Water Quality and Aquatic Life of the
Uruguay River to Date..................................................................454
-vi- B. Post-Operational Monitoring by DINAMA ...................................461
C. The Follow-Up Committee ............................................................467
D. Post-Operational Monitoring by Botnia.........................................468
Section II. Uruguay Has Broad Authority to Require Remedial Measures
if Prohibited Impacts Occur........................................................................
..474
Section III. The Question of Remedies for Alleged Violation of the 1975
Statute........................................................................
...................................478
Submissions........................................................................
..................................487
List of Annexes
-vii--viii- CHAPTER 1.
INTRODUCTION1.1 Pursuant to Order of the Court da ted 13 July 2006 fixing the time limits
for the filing of the written pleadings, Ur uguay respectfully submits this Counter-
Memorial in response to Argentina’s Memorial of 15 January 2007. As provided in
Article 49(2) of the Rules of Court, Ur uguay’s Counter-Memorial will answer the
factual and legal arguments in the Memori al and, in so doing, identify points of
agreement and disagreement between the Parties.
1.2 Uruguay welcomes this opportunity to refute Argentina’s case on the
merits. In its submissions, Argentina has asked that the Court find that:
qu’en autorisant unilatéralement la construction des usines de
pâte à papier CMB et Orion et les installations annexes de celle-
ci sur la rive gauche du fl euve Uruguay en violation des
obligations découlant du Statut du 26 février 1975, la
République orientale de l’Uruguay a commis les faits
internationalement illicites énumérés aux chapitres IV et V du
présent mémoire, qui engagent sa responsabilité internationale 1.
Argentina also submits that the Court must order Uruguay, inter alia, to:
rétablir sur le terrain et au plan juridique la situation qui existait
avant la perpétration des faits internationalement illicites
mentionnés ci-dessus 2.
1.3 As the Court will read in detail in the Chapters to follow, these and the rest
of Argentina’s submissions are without foundation either in law or in fact. Uruguay
has at all times complied with its obligations under the 1975 Statute on the River
Uruguay (the “1975 Statute” or “Statute”), and continues to do so. There is thus no
cause for the Court to issue an order of any kind against Uruguay.
1Memorial of Argentina (“AM”), para. 9.1(1) (“by unilaterally authorizing the construction of
the CMB and Orion pulp and pape r mills and the related facilities on the left bank of the
Uruguay River in violation of the obligations arising from the Statute of February 26, 1975, the
Eastern Republic of Uruguay has committed the internationally wrongful acts enumerated in
Chapters IV and V of this Memorial, for which it bears international responsibility”).
2
AM, para. 9.1(2)(iii) (“on the ground and legally, re store the situation that existed prior to the
commission of the internationally wrongful acts described above”).
- 3 -1.4 Argentina’s Memorial accuses Ur uguay of committing two categories of
wrongful acts: procedural and substantive. Neither accusation withstands serious
scrutiny. Argentina’s procedural case is undone by the simple fact that Argentina
received the full m easure of performance to which it was entitled under the 1975
Statute. Uruguay’s so-calle d “unilateral” authorizations of the CMB and Orion
cellulose plants did not violate the procedural re quirements of the Statute. As
Uruguay will explain, its compliance with its procedural obligations is amply
demonstrated by the text of the Stat ute, by Argentina’s own longstanding
interpretation of that text, and by the cons istent historical practice of both States
throughout the 31-year history of the Statute.
1.5 The Statute imposes the procedural duties of notification, information
sharing, and, if necessary, consultatio n and dispute resolution by this Court
whenever one of the Parties authorises a project that may potentially cause harm to
the other. But nothing in the 1975 Statute imposes on either Party the obligation to
obtain the approval of the other before carrying out a planned project, or empowers
either State to veto the economic development projects of the other. The procedural
provisions of the Statute -- which mirror the principles of general international law --
require prior consultation between the Parties, not prior consent. Where there is a
persisting disagreement on whether a particular project may harm the river or the
other Party, the Statute provides not for a right of rejection by that Party, but for
resolution of the dispute by the Court at the instance of either Party. In this case,
Uruguay gave timely notice to, shared suffi cient information and consulted in good
faith with Argentina about both the ENCE and Botnia cellulose plants. It also
3
For ease of reference, Uruguay will refer to the CMB and Orion plants as the “ENCE” and
“Botnia” plants, respectively, after the names of the private corporations building them.
- 4 -honoured its obligation to submit to the Cour t’s jurisdiction for resolution of this
dispute. Procedurally, the 1975 Statute entitles Argentina to no more.
1.6 Uruguay has likewise fully complied with its substantive obligations under
the 1975 Statute, which are set forth in ge neral terms in Articles 41 and 36 of the
Statute, and with particularity in th e environmental regul ations promulgated
thereunder by the Comisión Administrativa del Río Uruguay (“CARU”). It is an
unchallenged fact that the cellulose plan ts about which Argentina now complains
will fully comply with CARU’s water qualit y and other environmental regulations.
Argentina’s Memorial fails to allege even a single CARU standard that either of the
two plants will violate, much less to provide any evidence (scientific or otherwise)
that the plants will violate these regulations.
1.7 Uruguay’s full compliance with its substantive obligations under the
Statute is clearly demonstrated by the fact that the International Finance Corporation
of the World Bank (“IFC”) and its independent panel of experts have concluded that,
in terms of their environmental performance, the two plants will be “among the best
4
in the world” . Argentina cannot dispute this fact. The IFC’s experts specifically
found that “ENCE and Botnia have combined their operating experience and process
knowledge with vendor offers to develop mill configurations that would be accepted
in Canada, the USA or Europe. The mills will employ state-of-the-art technologies
in every respect …” . They also found that the mills will “be IPPC-BAT (2001) or
4
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills (hereinafter
“Final CIS”), p. ES.v (September 2006). Uruguay Counter-Memorial (hereinafter “UCM”),
Vol. VIII, Annex 173.
5
Ibid.
- 5 -better” . And thus specifically found that the ENCE and Botnia plants would satisfy
all of CARU’s water quality standards a nd regulations for the protection of the
Uruguay River and its ecosystem.
1.8 Against this overwhelm ing case, Argentina can argue only that there are
speculative possibilities of eventual harm arising from exceedingly remote
contingencies that are impossible to predic t. Yet, such a slender reed does not
support a claim for breach of the substantiv e provisions of the 1975 Statute. Like
general international law, the Statute re cognises the need to balance the equally
important priorities of economic developm ent and environmental protection. The
very first Article expresses the Statute’s ultimate objective of “optimum and rational
utilisation” of the Uruguay River. This obj ective is achieved by guaranteeing to
each Party the right to use the river and its waters for economic and commercial
activities, subject to the obligation to take appropriate precautions to prevent or
minimise harm to the river a nd its aquatic environment. In this regard, the Statute
expressly authorises the use of the river and its waters for industrial purposes. The
emphasis is on sustainable development, that is, on achieving the proper balance
between use of the river for economic de velopment activities and environmental
protection.
1.9 Since the hearing on Argentina’s demand for provisional measures on 8-9
June 2006, ENCE has decided to relocate its planned cellulose plant away from the
Uruguay River. Contrary to Argentina’s assertions 7, this fact has a material bearing
on this case. The environmental review process carried out by Uruguay and later by
6Ibid., p. ES.vi.
7AM, para. 0.5.
- 6 -the IFC considered both the Botnia and the ENCE facilities, and Chapters 4 through
7 will show that both plants operating toge ther would not cause adverse effects on
the river. Nonetheless, Argentina has made much of the fact that two mills had been
permitted in Fray Bentos. Now, only the Botnia plant remains. The ENCE plant
was a substantial industrial facility, desi gned to produce 500,000 tons of cellulose
8
annually, which represented approximately half of Botnia’s projected production .
Its relocation will substantially reduce tota l effluent flow into the river -- by
9
approximately 40% . Phosphorus will decline by an estimated 41%, AOX by 38%,
COD by 35%, BOD by 50%, and total suspended solids by 39% 10. Because the
existing studies document that the two plan ts operating together would have had no
adverse impacts on the river, its water quality, or its ecological balance, there is even
more reason to conclude that the Botnia plant, operating alone, will not cause any
adverse impacts.
1.10 Unlike many other internationa l disputes over resources or the
environment, this is not a case where th e alleged improper acts of the Respondent
State would have negative effects exclusiv ely or primarily on the Applicant State.
The Uruguay River is Uruguay’s most precious natural resource, and many
Uruguayans depend on its preservation as a functioning ecosystem for their health,
welfare, and livelihoods. This is not a na tural resource that Uruguay can afford to
harm: the 22,000 citizens of Fray Bentos, capital of the Uruguayan Province of Río
Negro, drink the water from the river from an inlet 5 km downstream from the
8Final CIS, op. cit., p. 1.3. UCM, Vol. VIII, Annex 173.
9See International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills, Annex
D (hereinafter “Final CIS, Annex D”), pp. D4 .7-4.9 (Tables D4.2-1, D4.3-1 & Table D4.3-2)
(September 2006). UCM, Vol. VIII, Annex 176.
10See ibid.
- 7 -Botnia plant. Uruguay’s fishermen fish in the river. Uruguay’s Playa Ubici, a beach
area 1.5 km from the Botnia discharge, is a recreational resource used for camping,
swimming, and other outdoor recreational activities. Las Cañas beach resort area, 12
km downstream from the Botnia plant, a ttracts visitors from Uruguay, Argentina,
and other countries. And, the protected resources Esteros de Farrapos e Islas del Río
Uruguay, a Ramsar Convention site located upstream of the Botnia plant, are in
Uruguay.
1.11 Uruguay recognises and respects the uses to which the citizens of
Argentina may put the river, but Uruguay’s reliance on its waters and aquatic life is
at least as great. Because the Botnia plant’s discharge is in Uruguay, the
hypothetical adverse effects of that discharge -- effects that Uruguay denies -- would
fall dramatically more in Uruguay than Ar gentina. Simply put, Uruguay stands to
lose far more than Argentina if the Botnia plant damages the river. As a
consequence, Uruguay has every incentive to protect the river and has taken every
necessary step to ensure that it is, in fact, protected.
1.12 Uruguay’s commitment to protect the river is fully engrained in its legal
11
system, beginning with its Constitution . Article 47 of Uruguay’s Constitution
specifically provides that “[e]nvironmental protection is a matter of general
12
interest” . Water -- including the Uruguay River -- is a “natural resource essential
for life” and access to drinking wa ter is a “fundamental human right” 13. The
Constitution requires Uruguay’s national polic y of water and sanitation to be based
on “sustainable management in solidarity with future generations, of water
11See Constitution of Uruguay, Art. 47 (1967). UCM, Vol. II, Annex 5.
12
Ibid., Art. 47, para. 1.
13
Ibid., Art. 47, paras. 2 & 3.
- 8 -resources” . Persons must “avoid any action which may cause serious depredation,
15
destruction or contamination of the environment ”, and the Constitution deems to
be “void” all authorisations, concessions , and permits that are contrary to the
16
environmental principles enshrined therein .
1.13 In Uruguay, these Constitutional protections and objectives are
implemented through a sophis ticated and comprehensive environmental regulatory
regime that ensures that industrial operati ons such as the Botnia plant do not cause
unacceptable impacts to water or other environmental media. The Department of the
Environment (Dirección Nacional de Media Ambiente, or “DINAMA”), as part of
the Ministry of Housing, Territorial Planning and Environment (Ministerio de
Vivienda, Ordenamiento Territorial y Me dial Ambiente, or “MVOTMA”), is the
agency most responsible for the implementation of this regime. It is undisputed that
DINAMA exercises this responsibility with professionalism and vigour, as well as a
firm commitment to the principles set forth in the Constitution. The IFC’s
independent experts analysed Uruguay’s environmental protection regime and
concluded that “the permit setting pro cess used by DINAMA is practical and
rigorous” .7
1.14 Uruguay achieves its environmental protection objectives in a variety of
ways. First, Uruguay mandate s water quality standards th rough Decree 253/79 that
sets maximum allowable concentration le vels for contaminan ts in water bodies,
14Ibid., Art. 47 1(b).
15Ibid., Art. 47, para. 1.
16Ibid., Art. 47, para. 4.
17
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills, Annex A,
p. A6.7 (September 2006). UCM, Vol. VIII, Annex 174.
- 9 -including the Uruguay River. The IFC’s independent experts found Uruguay’s
water quality standards to be comparable to -- or even stricter than -- the standards of
other internationally respected authorities, such as the European Union, the World
Health Organization, and the United States Environmental Protection Agency 18.
Decree 253/79 also establishes mandatory effluent discharge parameters for phenolic
substances, phosphorus, flow, pH, arseni c, and chemical dissolved oxygen 19. Any
discharge in excess of these limits by an industrial facility such as the Botnia plant is
strictly prohibited. MVOTMA is authorised to establish new standards if necessary
to protect the quality of the water 20. In the Uruguay River, Uruguayan law also
mandates compliance with the water quality standards adopted by CARU, and the
Botnia plant (or any other facility) is re quired to ensure that its operations do not
violate either the Uruguayan or the CARU standards.
1.15 Second, no authorisation to cons truct or operate significant industrial
facilities may be granted unless DINAMA has approved an environmental impact
assessment (including a monitoring plan) a nd determined that there will be no
unacceptable impacts on water quality, water resources, or the environment . To 21
implement these provisions, Uruguayan law re quires the proponent of a project to
undertake an environmental impact assessm ent, which must be acceptable to
DINAMA before an Initial Environmental Authorisation (“AAP” per the Spanish
initials) can be issued. Uruguayan law specifically prohibits approval of projects
18
Final CIS, Annex D, op. cit., p. D2.5 (September 2006). UCM, Vol. VIII Annex, 176.
19
Decree No. 253/79, Regulation of Water Qua lity (9 May 1979, as amended) (hereinafter
“Decree No. 253/79”), Art. 11(2). UCM, Vol. II, Annex 6.
20
Ibid., Art. 14.
21
See Decree No. 435/994, Environmental Impact Assessment Regulation, Art. 17 para. 3
(21 September 1994). UCM, Vol. II, Annex 9.
- 10 -that will cause unacceptable environmental impacts 2. The AAP sets forth the
emissions limitations with which a project must comply and other requirements for
the protection of the environment. AAPs may also be issued upon the condition that
additional information be submitted, certain modifications to the project be made, or
upon the adoption of certain mitigation m easures and monitoring and contingency
23
plans . DINAMA scrutinised the Botnia plant’s application for well over a year
before issuing the AAP, which require d numerous additional submissions and
commitments from Botnia before operations could begin, all of which ensured that
the plant will operate as designed and as predicted, and in compliance with all
applicable environmental laws and regulations.
1.16 Third, before a project can operate, it must receive an Authorisation to
24
Operate (“AAO” per the Spanish initials) . Issuance of the initial AAO is approved
upon confirmation by the project applicant th at the project will comply with all
applicable requirements, including those in its AAP . And, to ensure that operating
procedures continue to be state-of-the-art and provide the highest standard of
environmental protection, industrial plants must request and obtain a renewal of their
AAO every three years . The renewal process includes revision and updating of the
project’s environmental management plans and approvals with respect to emissions,
27
including effluent discharges . At each renewal, DINAMA may impose further
22Ibid.
23Ibid., Art. 17, para. 4.
24Decree No. 349/005, Environmental Impact Assessment Regulation revision, Art. 23
(21 September 2005). UCM, Vol. II, Annex 24.
25Ibid.
26Ibid.
27Ibid., Art. 24, para. 2.
- 11 -safeguards, if necessary, and may suspend allegedly dangerous activities while the
28
appropriate investigations are undertaken .
1.17 Fourth, independent from a project’s environmental review process,
DINAMA and MVOTMA are endowed with broad powers to halt unacceptable
environmental impacts in the event that a project causes them. These include the
power to suspend operations temporarily or permanently if adverse impacts occur,
and to require the adoption of more stri ngent pollution control technology or any
other measures deemed necessary to achiev e water quality standards or to otherwise
29
prevent a risk to the environment . DINAMA may exercise these powers even if a
project is operating in compliance with the requirements of all of its approvals, if
unacceptable impacts are nevertheless occurring.
1.18 In short, Uruguay has both every incentive and every needed tool to ensure
that the Botnia plant will not harm the environment. Any assertion that the Botnia
plant has been authorised in a location where its impacts do not matter to Uruguay,
or where Uruguay is powerless to contro l those impacts, is simply wrong.
Uruguay’s extraordinary efforts have ensured that the Botnia plant will be among the
best in the world.
1.19 Argentina suggests that because it di sagrees with some of the conclusions
reached by Uruguay, the only course of action is to demolish the plant. There are
three simple answers to this. First, Uruguay has scrupulously complied with its
obligations under the 1975 Statute and th ere is thus no legal basis for this
unprecedented demand. Second, there is no reasonable scientific or technical
28Ibid., Art. 24, para. 2.
29Decree No. 253/79, op. cit., Art. 17. UCM, Vol. II, Annex 6. Law No. 17,283, General Law
for the Protection of the Environment, Art. 14 (28 November 2000). UCM, Vol. II, Annex 11.
- 12 -support for Argentina’s assertions that the Botnia plant will cause unacceptable harm
to the river. Third, and in light of the two prior points, to accept Argentina’s
interpretation of the Statute would divest Uruguay of its sovereign right to economic
development consistent with its obligations to protect and preserve the environment.
The Botnia plant is central to Uruguay’s carefully considered plans to achieve
economic development in an environmentally sustainable matter. Uruguay is among
the best locations in the world for growing plantation forests to supply cellulose for
the world’s paper supply. Historically, th ese trees were exported for processing,
which ensured that the bulk of the economic value of Uruguay’s natural ability to
grow trees sustainably was exported as well . The Botnia plant -- the largest foreign
30
investment in Uruguay’s history -- thus represents a crucial step up the ladder of
Uruguay’s economic development since it will enable the country to advance into
value-added processing of its forest pr oducts. The IFC’s independent experts
calculated that operation of the plant will have an annual impact of US $274
million . These experts also predict that the plant will stimulate a major increase in
32
employment, creating 8,155 direct and indi rect jobs during the operations phase .
The plant will also spawn related proj ects, including laboratories and university
33
sponsored research , all of which will help secure the economic future of Uruguay.
1.20 Yet, notwithstanding these impre ssive benefits, Uruguay would not have
issued any authorisations for the Botnia plant had it not been convinced -- by the
30Sworn Declaration of Martin Ponce de Leon, Undersecretary of the Ministry of Industry,
Energy, and Mining of Uruguay (hereinafter “Ponce Aff.”), para. 7 (June 2006). UCM, Vol. X,
Annex 227.
31Final CIS, op. cit., p. 4.75. UCM, Vol. VIII, Annex 173.
32Ibid., p. 4.76.
33Ponce Aff., op. cit., para. 10. UCM, Vol. X, Annex 227.
- 13 -overwhelming technical and scientific evidence -- that the plant would cause no
harm to the Uruguay River or its ecosystem. After extensive research and analysis
extending over more than three years, Urugua y is convinced that the Botnia project
is consistent with its commitment to sustainable development, with its Constitutional
obligation to preserve the quality of its water resources, and with its international
obligations arising under the 1975 Statute not to harm the Uruguay River or its
aquatic environment. As the Court will read in the chapters that follow, the evidence
fully supports these conclusions.
Section I.
Observations on Jurisdiction
1.21 Before turning to its Summary of Argument, Uruguay will state its views
on the Court’s jurisdiction. As Argentina’s Memorial correctly notes, the Court’s
jurisdiction in this case is founded solely upon Article 36(1) of the Statute of the
Court and the compromissory clause cont ained in Article 60 of the 1975 Statute,
which provides:
Any dispute concerning the interpretation or application of the
Treaty and the Statute which cannot be settled by direct
negotiation may b34submitted by either Party to the International
Court of Justice .
1.22 The Parties are thus in agreemen t that “les seuls différends couverts
ratione materiae par la clause compromissoire en question sont ceux relatifs à
35
l’interprétation ou l’application … du statut” . It follows that any dispute that is not
34Statute of the River Uruguay (hereinafter “1975 Statute”), Art. 60 (26 February 1975). UCM,
Vol. II, Annex 4.
35
AM, para. 1.4 (“the sole disputes covered ratione materiae by the arbitration clause in
question are those relating to the interpretation application … of the Statute.”). The only
provisions of the 1975 Statute that Argentina a lleges have been violated by Uruguay are:
procedural obligations arising under Articles 1, 7-12, 27, and 34; obligations concerning use of
the river for navigation, under Articles 3-6; oblig ations concerning use of water from the river
- 14 -based on interpretation or application of the 1975 Statute is outside the Court’s
36
jurisdiction . Although the compromissory clause in Article 60 also gives the Court
jurisdiction over disputes concerning the in terpretation or application of the 1961
Uruguay-Argentina Treaty Concerning the Boundary Constituted by the River
Uruguay (the “1961 Boundary Treaty”), Argentina has not asserted any claims based
on that instrument.
1.23 Thus, claims based on other bilateral treaties or multinational conventions,
even if ratified by both Argentina and Uruguay, lie beyond the Court’s jurisdiction,
because they do not concern interpretation or application of the 1975 Statute or the
1961 Boundary Treaty. For the same re ason, claims aris ing under general
international law are beyond the Court’s ju risdiction in these proceedings. Uruguay
accepts that the Court has jurisdiction under Article 60 to address Argentina’s claims
regarding alleged procedural violations of the 1975 Statute, as well as Argentina’s
substantive claims insofar as they relate to alleged harm to the Uruguay River or the
aquatic environment in violation of the St atute. But the Statute does not cover or
provide remedies for all forms of envir onmental harm. It does not, for example,
address the subjects of air pollution, or noise pollution, or what Argentina refers to
as “visual” pollution. Since these matters do not concern interpretation or
application of the 1975 Statute (or the 1961 Boundary Treaty), they cannot properly
be placed before the Court in these proceedings. To the extent Argentina has
attempted to do so, therefore, the Court should deny jurisdiction under Article 60.
for industrial purposes, under Article 27; oblig ations concerning soil and forest management,
the ecological balance of the river and its zones of influence, and conservation and preservation
of biological resources, under Articles 35-37; and obligations concerning prevention of
pollution, under Articles 40-43. Ibid., para. 1.6.
36Fisheries Jurisdiction (Spain v. Canada), Judgment, ICJ Reports 1998, p. 456, para. 55.
- 15 -1.24 While Uruguay is confident that it has fully complied with all of its
obligations under international law, whatev er their source, it nonetheless wishes to
declare that it has not consented to the ju risdiction of the Court over any obligations
that are not expressly included within the scope of Article 60 of the 1975 Statute.
Section II.
Summary of Argument
1.25 This Counter-Memorial consists of two Parts and seven Chapters,
followed by Uruguay’s Submissions. Part One, which consists of Chapters 2 and 3,
responds to Argentina’s claims that Uruguay has violated the procedural
requirements of the 1975 Statute, and demonstrates that Uruguay has fully complied
with all such requirements. Part Two , which consists of Chapters 4 through 7,
refutes Argentina’s claims that Uruguay ha s violated the substantive obligations
imposed by the Statute, and demonstrates that Uruguay has fulfilled those
obligations.
1.26 Chapter 2 of Part One follows immediately after this Introduction, and
provides Uruguay’s views on the law applicable to this case. It pr esents a detailed
examination of the text of the 1975 Statute for purposes of identifying the procedural
rights and duties it does -- and does not -- create. Where appropriate, Uruguay refers
to principles of general international law and the Parties’ historical practice under
the 1975 Statute to aid in the interpretation of the Statute’s text. As the Court will
read, Argentina’s Memorial radically mischaracterises the 1975 Statute. The Statute
is not, as Argentina would have it, a treaty concerne d only or primarily with
environmental protection. On the contrary , it was crafted to ensure the Parties’
respective rights to make use of the Uruguay River in a fair and reasonable manner.
As set forth in Article 1, the Statute’s ultimate objective is to assure “the rational and
- 16 - 37
optimal utilisation of the River Uruguay” . The Statute thus covers a broad range of
topics, most of which relate to the differ ent uses to which the river might be put:
navigation, exploitation of the resources of the riverbed and subsoil, pilotage, port
facilities, etc. The right to use the river or its waters for industrial purposes is one of
38
the uses that is expressly authorised . To be sure, the protection of the Uruguay
River and its aquatic environment is a ke y part of the Statute, and important
obligations are imposed on the Parties in this regard. But the scheme of the Statute is
one of balance: an equilibrium between the Parties’ rights and needs to use the river
for economic and commercial development activities, and the need to protect it from
the environmental harm that may be caused by such activities. In other words, the
goal of the Statute is best understood as a ssuring the sustainable development of the
river and its environment.
1.27 In order to ensure that each Party’s right to make optimum use of the river
is not unfairly impaired by the other, the Statute creates a system of notification,
information sharing, consultation and, if necessary, dispute resolution when one
Party is planning a project of sufficient scope to affect the river and thus potentially
harm it or the other State. Chapter 2 demonstrates that the Statute does not,
however, require the consent of the not ified State before a project may be
undertaken. The text of the Statute, rule s of general international law, and the
practice of the Parties uniformly point to this same conclusion. Argentina’s
Memorial identifies nothing -- because there is nothing -- that can change this result.
Indeed, as Uruguay will show, throughout the 31-year history of the Statute,
371975 Statute, op. cit., Art. 1. (UCM, Vol II, Annex 4).
38See ibid., Art. 27.
- 17 -Argentina has consistently interpreted it as imposing an obligation only of
notification and consultation, and not one of consent or agreement. Argentina’s
leading authorities on the Statute and the la w of shared natural resources, including
(among others) Dr. Julio Barberis, who negotiated the Statute on behalf of
Argentina, and Dr. Julio Carasales, who l ong served as the President of Argentina’s
delegation to CARU, have always view ed it as requiring notification and
consultation, but not consent or agreement. And Argentina’s practice for more than
three decades has uniformly followed this interpretation. Never, not even once, did
Argentina ever seek Uruguay’s consent befo re authorising more than three dozen
industrial facilities in Entre Ríos Province, all of which discharge effluents directly
or indirectly into the Uruguay River.
1.28 Since there is plainly no requir ement of prior consent, Argentina’s
procedural case depends on its contenti ons that Uruguay failed to fulfil its
obligations with respect to notification and consultation. Yet, Argentina’s argument
on the alleged failure to give proper notif ication is based on a misreading of the
Statute, to wit, that the St ate planning a project liable to affect the river must give
notification to the other State even before it issues a preliminary authorisation for the
project. Uruguay will show in Chapter 2 that Argentina’s interpretation is refuted by
the text of the Statute itself, by the CARU regulations adopted pursuant thereto, and
by the Parties’ historical practice. A ll three sources unambiguously confirm that
notification can occur (and, as the Court will read, has consistently occurred) after
projects are first authorised by the initiating State.
1.29 Chapter 2 also deconstructs Argen tina’s equally fallacious argument that
Uruguay’s notifications regarding the ENCE and Botnia plants were untimely or
- 18 -otherwise inappropriate because Uruguay issued them with out first awaiting
“authorisation” from CARU. In fact, CARU does not “authorise” projects; the
Statute does not give it that power. CARU’s own regulations, published in the
CARU Digest, simply could not be any clearer that the Parties, and only the Parties,
have the power to authorise projects. Ar gentina itself has always understood this to
be the case. It has never submitted an industrial project, or any other project located
exclusively within its own territory, to CARU for approval, and has never awaited
(or obtained) authorisation from CARU before carrying out these projects.
Nevertheless, it now seeks to hold Uruguay to a standard it itself has never observed.
1.30 Chapter 2 also refutes Argent ina’s legal argumentation on Uruguay’s
alleged failure to comply with its cons ultation obligations under the Statute.
Argentina does not deny that Uruguay consul ted extensively with it regarding both
the ENCE and Botnia plants, and that Uruguay did so in good faith. Rather,
Argentina’s argument is that while consultations are taking place the Statute creates
a “no construction oblig ation,” and that Uruguay violat ed this ostensible obligation
by allowing construction work to continue on the plants. The first problem with
Argentina’s argument is that there is no language in the Statute that supports it.
There is nothing that says work must be suspended while consultations are taking
place or, for that matter, at any other tim e. Uruguay submits that, absent any treaty-
based prohibition, the Statute is best cons trued in a manner consistent with general
international law, which permits the initiating State to continue with preparatory
works in furtherance of the eventual implementation of a project even when
consultations between the Parties are taking place. In fact, the only work that
- 19 -Uruguay allowed during its consultations with Argentina was strictly preparatory in
nature.
1.31 Chapter 2 also refutes Argentina’s argument that the Statute prohibits
work from continuing after the consultati ons have ended and dispute resolution
proceedings have commenced. Again, there is no such obligation in the Statute
itself. Moreover, general international law is clear that once consultations have
ended, an initiating State is free to resume implementation of a planned project while
dispute resolution proceedings are in progre ss. The alternative, it has been widely
recognised, would be to give the objecti ng State an effective veto right over the
project -- a right it possesses neither under the Statute or in general international law
-- since blocking a private investment project for the several years that it customarily
takes to resolve a dispute is all but certain to kill it.
1.32 In Chapter 3 of Part One , Uruguay applies the law, as explicated in
Chapter 2, to the particular facts of this case. Uruguay shows that Argentina has in
fact received the full measure of procedural performance to which it is due under the
1975 Statute. As noted above, Argentina complains that notification was due by
Uruguay prior to the dates when Uruguay issued AAPs to ENCE and Botnia. After
demonstrating in Chapter 2 that Argentina’s argument is wrong as a matter of law --
because the Statute does not require notification before the issuance of such initial
authorisations -- Uruguay demonstrates in Chapter 3 that Argentina’s argument fails
on the facts as well. Indeed, Argentina badly misunderstands the nature of AAPs
under Uruguayan law. The AAPs issued to ENCE and Botnia were only “initial”
authorisations, and many additional authorisations, as listed in the AAPs themselves,
had to be obtained before either plant could begin construction, much less operation.
- 20 -Moreover, both CARU and Argentina were well aware of, and engaged seriously
with both plants, long before the issuan ce of their AAPs. Since the Statute
prescribes no precise time for the notification of a planned project, the proper
interpretation, in light of the text, the purpose of the Statute, the practice of the
Parties, and the applicable principles of general international law is that notification
is lawful if it is timely. As shown in Chapter 3, Uruguay’s notifications were timely
in all respects. Both CARU and Argentina were notified before construction began
on the plants, and far in advance of the time when any irreversible steps were taken.
When notice was provided there was more than ample time to engage in the
information sharing and good faith cons ultations required by the Statute.
Argentina’s procedural rights were thus fully respected.
1.33 Chapter 3 will also show that Argentina’s argument that Uruguay “by-
passed” CARU fails on the facts as well as the law. Having shown in Chapter 2 that
the Statute does not empower CARU to approve or disapprove particular projects,
and that there is consequently no obligation to await CARU’s “authorisation” before
proceeding with a project, Chapter 3 further exposes the hollowness of Argentina’s
argument. Contemporaneous documents show that the Parties expressly agreed to
address Argentina’s stated concerns about the two plants directly, on a Party-to-
Party basis at the level of their Forei gn Ministers, rather than through CARU.
Pursuant to this bilateral understanding, Uruguay furnished Argentina with all the
information about the ENCE plant in October and Novemb er 2003. Argentina
analysed the information and determined (in its own words): “that there would be no
- 21 -significant impact on the Argentine side…” 39. And (again in Argentina’s words):
“It must be pointed out, with complete and absolute emphasis that none of the
different technical reports evidence that the activity in question causes an
irreversible and unavoidable damage to the environment, at least of a sufficient level
that would warrant the suspension of the plant or opposition to its construction, at
least with any scientific basis…” . 40
1.34 Based on these findings, the Foreign Ministers of the two States expressly
agreed that the plant would be built, subject only to water quality monitoring by
CARU during construction and after operations began. Again, in Argentina’s own
words: “On 2 March 2004, the Foreign Ministers of Argentina reached an
understanding with respect to the course of action that would be applied to the issue,
that is, to have the Uruguayan government provide the information relating to the
construction of the plant, and with respec t to the operational phase, to have CARU
undertake the monitoring of water quality in conformity with the Statute.” 41
1.35 Chapter 3 demonstrates that the Parties extended this agreement to the
Botnia plant as well. This is shown, ag ain, by Argentina’s own words, including
reports from the highest level of the Arge ntine government, issued in March 2005
(after the AAP for the Botnia plant was issued): “a Bilateral Agreement was signed
through which Argentina’s Government put an end to the controversy… Thus,
39Statement by Argentine Ministry of Forei gn Affairs, International Trade and Culture,
included in Report of the Head of the Argentine Cabinet of Ministers, Alberto Angel
Fernandez, to the Argentine Chamber of Depu ties (hereinafter “Statement by Argentine
Ministry of Foreign Affairs to the Chamber of Deputies”), Report No. 64, p. 136 (March 2005).
UCM, Vol. III, Annex 46.
40
CARU Minutes No. 01/04, pp. 18-19 (15 May 2004). UCM, Vol. IV, Annex 99.
41Statement by Argentine Ministry of Forei gn Affairs, International Trade and Culture,
included in Report of the Head of the Cabinet of Mi nisters, Alberto Angel Fernandez, to the
Argentine Senate, Report No. 65, p. 617 (March 2005). UCM, Vol. III, Annex 47.
- 22 -inclusive control procedures were carri ed out on the Uruguay River, which means
they will continue after the plants begin to operate. Controls on both plants will be
more extensive than the ones our country has on its own plants on the Paraná
River…” . 42
1.36 After public protests caused the Government of Argentina to reconsider its
agreement with Uruguay on the two plants, the Parties decided again to deal directly
with one another on issues concerning the plants, rather than through CARU. In
May 2005, the Presidents of Argentina and Uruguay established the High-Level
Technical Group (“GTAN,” per the Spanish initials), expressly (again in Argentina’s
words): “to exchange information and for follow up on the effects that the operation
of the cellulose plants that are being constructed in the Eastern Republic of Uruguay
will have on the ecosystem of the shared Uruguay River” 43. Plainly, in light of
Argentina’s express agreements to addre ss both the ENCE and the Botnia plants
directly with Uruguay, at the Foreign Mini ster level and via the GTAN, rather than
through CARU, there can be no merit to Argentina’s claim that Uruguay “by-
passed” CARU in violation of the 1975 Statute.
1.37 Argentina’s argument that Urugua y failed to provide it with adequate
information to evaluate the probable impact of the two projects is belied not only by
Uruguay’s timely production to Argentina of voluminous information -- consisting
of everything Uruguay had on the ENCE and Botnia plants -- but also by
Argentina’s own conduct upon receipt of th at information. As indicated, after
42Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136 (emphasis added). UCM, Vol. III, Annex 46.
43Joint Argentine-Uruguayan Press Release Constituting GTAN No. 176/05 (31 May 2005).
UCM, Vol. V, Annex 126.
- 23 -reviewing the information provided by Uruguay concerning the ENCE plant,
Argentina specifically came to the conclusion that the plant was “environmentally
44
viable” and that “none of the different technical reports evidence that the activity in
question causes an irreversible and unavoidable damage to the environment …” . 45
1.38 Uruguay provided Argentina with still more information concerning the
Botnia plant during the GTAN process. Chapter 3 describes in detail the
information Uruguay provided. Uruguay not only gave Argentina everything it had
on the Botnia plant, it also supplied Argen tina with information that it specifically
obtained from third parties at Argentina’s request. If the ENCE information was
sufficient for Argentina to evaluate that project, the much more extensive
information Uruguay provided regarding the Botnia project was sufficient as well.
1.39 In Chapter 3, Uruguay also shows that the facts contradict Argentina’s
claim that Uruguay violated the Statute by allowing work on the two plants to
continue during the consultations that th e two Parties conducted under the auspices
of the GTAN process between May and December 2005. As indicated, Uruguay
first demonstrates in Chapter 2 that the Statute contains no express requirement that
work on a planned project cease while consultations are in progress, and that general
international law allows preparatory work to continue even in the face of objections
from the notified State. Chapter 3 shows that, in fact, only preparatory work was
carried out on the ENCE and Botnia plants wh ile consultations were in progress. In
the case of the ENCE plant, only ground cl earing was performed. And with respect
to the Botnia plant, only foundational and ancillary structures were erected; no actual
44CARU Minutes No. 01/04, op. cit., p. 18. UCM, Vol. IV, Annex 99.
45Ibid., pp. 18-19.
- 24 -construction was performed on the manufactu ring facility itself, or on its pollution
control or effluent treatment systems. Put simply, no work was performed on any of
the elements of the plant that could potentially harm the river or Argentina.
1.40 Chapter 3 further establishes Uruguay’s compliance with its obligations
after Argentina initiated proceedings in th is Court under Article 60. As indicated,
there is no obligation in the 1975 Statute or general international law for work to
cease during dispute resolution proceedings. Uruguay’s only obligation during this
period is to accept the jurisdiction of the Court to resolve the dispute, which it has
never hesitated to do, and to comply with any orders the Court may issue. By its
Order of 13 July 2006, the Court declined Argentina’s invitation to impose
provisional measures requiring Uruguay to halt construction of the plants.
Accordingly, Uruguay remains within its rights under the 1975 Statute in allowing
these projects to go forward pending a final resolution by the Court.
1.41 Part Two of the Counter-Memorial begins with Chapter 4 and continues
through Chapter 7 which, taken together, demons trate that Uruguay has complied
with its substantive obligations under the 1975 Statute. Each Chapter on its own
provides sufficient justification for why Ar gentina’s claims must be dismissed.
Chapter 4 shows that the substantive lega l obligations in this case derive from
Articles 41 and 36 of the Statute, and in particular from the regulations on water
quality and protection of aquatic life adop ted by CARU thereunder. Chapter 4
demonstrates that Uruguay has complied fully with these regulations. Significantly,
Argentina has failed to allege -- let alone prove -- that the operation of the Botnia
plant will violate any of these regulati ons. Chapter 5 describes the extensive
environmental review process conducted by the IFC and the conclusions of its
- 25 -independent experts that: the Botnia plant employs state-of-the-art anti-pollution
technology; conforms to the requirements of the European Commission “Integrated
Pollution Prevention and Control Reference Document on Best Available
Technologies” (“IPPC BAT”); will be among the top five cellulose plants in the
world; will comply with the CARU regulations protecting water quality and aquatic
life; and will not cause any harm to the Uruguay River or to Argentina. Chapter 6
presents the responses of the IFC, Urugua y’s consultants, independent Argentine
authorities, and even the Argentine government to the experts Argentina has retained
in this litigation for the purpose of criticising the work performed and the
conclusions reached by the IFC and its i ndependent experts; and it shows that the
technical objections proffered by Argen tina’s experts/advocat es simply have no
merit. Finally, Chapter 7 documents how Uruguay will ensure the continued safe
operation of the Botnia plant through comprehensive and vigorous monitoring of the
plant’s effects on water quality and aquati c life, and through the exercise of its
power to order any necessary remedial measures, including modifications to or
temporary closure of the plant, in th e event violations of any applicable
environmental standards are detected. Ch apter 7 thus demonstrates why Argentina
requires no additional protection from the Court, and why the draconian measure of
demolition of the plant that Argentina has requested is completely unjustified,
unprecedented, and unnecessary. These Chapters are discussed in more detail
below.
1.42 Chapter 4 begins Part Two by setting forth Uruguay’s views on the law
applicable to the substantive issues in this case, namely the provisions of the 1975
Statute that set forth the Parties’ obligations to prevent pollution and to protect the
- 26 -aquatic environment. As the Court will read, these obligations flow in particular
from Articles 41 and 36 of the Statute, purs uant to which the Parties, through their
respective delegations to CARU, have a dopted binding environmental regulations
for the protection of the water quality and the ecologi cal balance of the Uruguay
River. As such, the CARU regulations represent the standards against which to
measure compliance with the substantive e nvironmental obligations of the Statute.
Chapter 4 demonstrates that Uruguay has ensured the plants’ compliance with all
applicable CARU regulations. Significantly, Argentina has not suggested otherwise.
It has not identified a single CARU standard or regulation that would be violated by
operation of either the ENCE or the Botnia plant, or by both of them cumulatively.
This alone defeats Argentina’s substantive case. If the CARU regulations represent
the substantive environmental standards w ith which Uruguay (and the plants) must
comply, Argentina’s failure even to alle ge, let alone prove, a violation of those
standards is fatal to its entire argument.
1.43 Chapter 4 further demonstrates that phosphorus -- the only substance
whose discharge Argentina alleges will result in an exceedance of any standard -- is
not a subject of the CARU regulations. Rath er, the Parties have chosen not to have
CARU set limitations on discha rges or concentrations of phosphorus in the river.
Thus, discharges of phosphorus do not violate the CARU regulations or,
consequently, the 1975 Statute. While Uruguay has enacted its own national water
quality standard and discharge limit for phosphorus, Argentina has not. Argentina
places no limits on phosphorus discharges or concentrations in the river. As a result
of this regulatory vacuum in Argentina, Argentine industries and municipalities have
freely discharged large quantities of phosphorus into the river, causing the water in
- 27 -some places to exceed Uruguay’s phosphorus standard even before the Botnia plant
(or any other Uruguayan facility) begins to operate. The Statute does not allow
Argentina, by its irresponsible behaviour, to thus create a servitude or priority for
itself with respect to uses of the river that result in unlimited phosphorus discharges,
and at the same time deprive Uruguay fro m undertaking projects that harmlessly
release even minute amounts of that substance into the water. In this regard, it is
significant that Uruguay has determined, and the IFC’s independent technical
experts have confirmed, that operation of the Botnia plant will not cause more than
de minimis additions of phosphorus to the river, which, even under rare and brief
periods of low flow, will have no adverse impacts on water quality or any other
aspect of the aquatic environment.
1.44 While the Court has jurisdiction under Article 60 of the 1975 Statute to
address only questions of interpretati on and application of the 1975 Statute
(including, of course, the regulations adopted thereunder by CARU), Chapter 4
shows that Uruguay has not only fulfilled t hose obligations, but it has also fulfilled
whatever obligations it may have under ot her international conventions, including
the Convention on Biological Diversity, the Ramsar Convention, and the POPS
Convention.
1.45 Chap 4ter further demonstrates that Uruguay has satisfied any international
obligations it might have in regard to environmental impact assessment and the
precautionary principle (although the latter is, in any event, not relevant in the
present circumstances) by adopting a rigorous regulatory regime that requires a
series of authorisations and approvals th at may only be given after comprehensive
assessment and evaluation, including of im pacts to Argentina. Contrary to
- 28 -Argentina’s unsupported assertions, the precau tionary principle is not relevant here
because, as Uruguay’s comprehensive environmental impact review has shown, and
the IFC’s independent experts have substant iated, there is no risk of serious or
irreversible harm. Nor does the precautionary principle, even if it were relevant,
shift the burden of proof from Argentina to Uruguay, as Argentina alleges. Uruguay
notes in this respect that Argentina’s attempt to shift the burden to Uruguay must be
taken for what it is -- a patent recognition that it cannot satisfy this burden, which it
plainly bears as the Applicant State.
1.46 Chapter 5 shows that, although the Botnia plant’s compliance with all
applicable CARU regulations conclusively es tablishes that it will not violate any of
the substantive provisions of the 1975 Statut e, technical and scientific confirmation
of the plant’s environmental viability is provided in the form of the Final Cumulative
Impact Study (“CIS”) prepared by the independent experts retained by the
International Finance Corporation. Th e IFC’s experts conducted a thorough review
of the project and gave it an unqualified e ndorsement. Based on their findings, the
IFC announced that it was “convinced” the plant will both “generate significant
economic benefits for Uruguay” and will “cause no environmental harm” . 46
1.47 Chapter 5 describes the nineteen -month process that resulted in this
declaration of support. The Chapter disc usses the conscientiousness with which the
IFC addresses environmental concerns, including its refusal, as a matter of policy, to
participate in projects that are environmentally harmful. The IFC’s policy is
manifested in a series of performance sta ndards with which a proposed project must
46International Finance Corporation, Press Re lease, "IFC and MIGA Board Approves Orion
Pulp Mill in Uruguay, 2,500 Jobs to be Created, No Environmental Harm" (hereinafter “IFC
Press Release”), p. 1 (21 November 2006). UCM, Vol. IX, Annex 206.
- 29 -comply, including the requirements: to conduct a comprehensive assessment of
impacts; to implement sufficient pollution control and abatement; to ensure
protection of health, safety, and securi ty; and to maintain conservation of
biodiversity and sustainable natural resource management. To determine whether
the Botnia (and ENCE) plants would comply with its strict internal guidelines, the
IFC conducted a Cumulative Impact Study of the expected impacts of the two plants
taken together. The IFC then hired technical consultants to review the CIS. When
those experts identified limited deficienci es in the CIS and made recommendations
for improvement, the IFC retained still other technical experts to address these
concerns in the form of a Final CIS.
1.48 Chapter 5 examines the Final CI S, and describes how it found that no
adverse impacts would be caused by the two plants cumulatively, let alone by the
Botnia plant alone. The Chapter further demonstrates that the same experts who
found fault with the initial CIS were called back to review the Final CIS, and that
they gave it their full and unqualified e ndorsement, finding that the project would
have “no impacts on the health of the peopl e in the area, on either side of the Rio
Uruguay,” and that the Botnia plant would be in the “top five in the world” 47. The
IFC considered this to be “conclusive evidence that the local area, including the
Argentine city of Gualeguaychú, will not experience adverse environmental
48
impacts” . Uruguay submits that the conclusions reached by an international
organisation experienced and knowledgeable in the field, and by its independent
47Hatfield Consultants, Report of Expert Pane l on the Final Cumulative Impact Study for the
Uruguay Pulp Mills. p. 2 (14 October 2006). UCM, Vol. VIII, Annex 178.
48IFC Press Release, op. cit., p. 1. UCM, Vol. IX, Annex 206.
- 30 -experts -- the only truly impartial parties to have expressed their views -- are entitled
to particular weight in these proceedings.
1.49 Chapter 6 demonstrates that Argentina’s attempts to criticise the work and
conclusions of the IFC’s independent technical experts are misguided and mistaken.
In responding to Argentina’s attacks on the Final CIS, Uruguay draws on the
findings of the Final CIS itself (many of which were ignored or inaccurately
described by Argentina), as well as analyses obtained by Uruguay from leading
experts in the fields of environmental im pact assessment; hydrodynamic modelling,
water quality, and sediment transports; cellulose plant technology and ecological
impacts; and wastewater treatment. Chapter 6 demonstrates that these experts fully
support the conclusions of the IFC’s technical consultants in every respect.
1.50 Chapter 6 further shows that independent assess ments conducted in
Argentina, including by the Argentine National Academy of Engineering, the
National Institute of Technology and Industry of the Argentine Republic, and by
leading Argentine academics, also confirm that the independent assessment by the
IFC’s technical experts was correct in all respects, and that the Botnia plant will not
cause any adverse impacts to the Uruguay River or its aquatic environment.
1.51 Chapter 7 details the measures that Urugua y has undertaken thus far, as
well as the ones it has committed to putting into place, in order to monitor the
impacts of the Botnia project once opera tions begin. It shows that Uruguay’s
extensive monitoring program will ensure that the project operates as anticipated,
and that should, contrary to expectations, adverse impacts begin to develop, they will
be immediately detected and corrective measures implemented. The Chapter
describes Uruguay’s legal authority to require remedial actions, and repeats
- 31 -Uruguay’s commitment to exercise that authority should circ umstances require,
including ordering the cessation of plant operations.
1.52 Lastly, Chapter 7 shows that even if the Court were to credit Argentina’s
unfounded concerns, Argentina’s proposed remedy of demolishing the plant is
unjustified, unprecedented, and completely unnecessary in light of the extensive
reviews to which the plant has been subjected, and Uruguay’s commitment to
extensive monitoring and willingness to require the adoption of any and all remedial
measures. Argentina’s re cently inaugurated national effort to upgrade its own
cellulose plants -- to standards that Argentina deems sufficient but which come
nowhere close to the technological or performance levels that Argentina asserts the
Botnia plant must meet -- demonstrates that the appropriate remedy if one of these
plants is deemed insufficien t is to improve it, not de stroy it. But this, Uruguay
submits, is conjecture. The fact is, and the evidence conclusively shows, the Botnia
plant will meet all applicable envir onmental requirements, and Uruguay has
fulfilled, and continues to fulfil, all of its obligations under the 1975 Statute.
1.53 For all of the reasons so summarised, each of which will be more fully
articulated in the Chapters to follow, Arge ntina is not entitled to the order from the
Court that it has requested, or to any other relief. To the contrary, as set forth in
Uruguay’s Submissions, all of Argentina’s claims should be rejected by the Court.
Section III.
Structure of the Counter-Memorial
1.54 Uruguay’s Counter-Memorial consists of 10 volumes. Volume I contains
the main text of the Counter-Memorial. Volumes II through X contain supporting
materials arranged in the following order: Treaties and Joint Declarations;
Government Documents (Uruguay); Government Documents (Argentina);
- 32 -Diplomatic Notes (Uruguay); Diplomatic Notes (Argen tina); CARU Digest; CARU
Minutes and Subcommittee Reports; GTAN Documents; Technical Documents;
Press Articles; Miscellaneous; and Expert Reports.
1.55 The main text of the Counter-Memorial consists of seven Chapters divided
into two parts. Part One begins immediately following this Introduction and
addresses Argentina’s allegations that Uruguay has not complied with its procedural
obligations under the 1975 Statute. Chapters 2 and 3 together form the body of Part
One. Part Two addresses Argentina’s al legations that Uruguay has not complied
with its substantive obligations under the Statute, a nd is comprised of Chapters 4
through 7. Uruguay’s Submissions are included following Chapter 7.
1.56 The Chapter-by-Chapter outline of this Counter-Memorial is as follows:
Chapter 1 Introduction and Summary of Uruguay’s Arguments
Chapter 2 The Law Applicable to the Alleged Procedural Violations of
the 1975 Statute
Chapter 3 The Application of the Law to the Facts Concerning the
Alleged Procedural Violations
Chapter 4 The Law and the Facts Pertaining to the Alleged Substantive
Violations of the 1975 Statute
Chapter 5 The Conclusion of the International Finance Corporation and
Its Independent Experts
Chapter 6 The Opinions of the Experts Retained by the Parties
Chapter 7 Ensuring Protection of the Uruguay River and the Aquatic
Environment
Submissions
- 33 -- 34 -PART I CHAPTER 2.
THE LAW APPLICABLE TO THE ALLEGED PROCEDURAL
VIOLATIONS OF THE 1975 STATUTE2.1 The purpose of this Chapter is to an alyze the 1975 Statute, with particular
emphasis on the procedural obligations it cr eates. Uruguay will examine in detail
the provisions pertinent to the procedural issues in this case, especially Articles 7
through 12, and draw on principles of general international law where appropriate to
aid in the interpretation of that text. It will also describe the Parties’ historical
practice under the 1975 Statute in order to demonstrate that Uruguay’s interpretation
of the Statute is confirmed by the Parties’ mutual conduct over the past 31 years.
2.2 As Uruguay will show, the 1975 Stat ute was created for purposes of
ensuring the Parties’ mutual rights to use the Uruguay River in a fair and reasonable
manner for commerce and transportation, fo r fishing and the extraction of other
natural resources, for industrial and agricu ltural purposes, for recreation, and for
49
municipal purposes, including water supply and sanitation . Although
environmental protection was always an im portant objective of the Statute, it was
never its sole purpose, as Argentina’s Memorial suggests. Rather, from the time the
Parties began negotiating the 1975 Statute, and continuing through its adoption and
more than three decades of practice under it, their emphasis has always been on the
various uses to which the river might be put , consistent, of course, with their mutual
interest in protecting and preserving the aquatic environment. Simply put, the
Statute is designed to ensure the sustainable use of the Uruguay River.
2.3 In order to protect the Parties’ rights to make use of the Uruguay River in a
fair and reasonable manner while si multaneously protecting the aquatic
environment, the 1975 Statute creates a regi me of prior notification, information
sharing and, if necessary, consultation whenever one of the Parties plans to
49
See Statute of the River Uruguay (hereinafter “1975 Statute”) (26 February 1975). UCM,
Vol. II, Annex 4.
- 39 -undertake a work of sufficient magnitude that it could affect navigation, the regime
of the river and/or the quality of its waters. It conspicuously does not, however, give
either Party a right to prevent works planned by the other, as Argentina argues.
Although the Statute’s procedural mechanisms are designed to f acilitate agreement
between the Parties, they do not state that such agreement is a prerequisite to the
implementation of a planned work. Instead, in cases where the Parties are unable to
reach agreement despite their good faith efforts, the Statute provides recourse to this
Court as the ultimate arbiter of whether or not a planned use is consistent with the
central goal of the Statute: the rational and optimal utilization of the river. Uruguay
will demonstrate each of these points in the sections that follow.
2.4 In so doing, Uruguay will also expose the fallacy of each of the arguments
on which Argentina’s procedural case is pred icated. That is, th at Uruguay violated
the 1975 Statute (i) by not notifying CARU before it issued initial environmental
authorizations to ENCE and Botnia; (ii) by failing to await CARU’s “authorization”
of the plants; (iii) by not suspending work on the plants during the Parties’
consultations; and (iv) by not suspending work while this case is heard by the Court.
2.5 With respect to Argentina’s first argument, the truth is that nothing in the
1975 Statute requires notification to CARU prior to the initial environmental
authorization of a particular project. Indeed, the text of the Statute actually suggests
that notice to CARU comes after authorization by the initiating State. This reading
is confirmed by the CARU Digest and the consistent practice of the Parties, both of
which make it clear that notice of a project to CARU is not required until after the
project has been authorized by the notifying State.
- 40 -2.6 With respect to Argentina’s sec ond argument, that Uruguay was required
to await authorization from CARU, the fa ct is that CARU does not have the
authority to approve or reject part icular projects. Indeed, CARU has never
authorized or rejected a particular project in the three decades of its existence. That
is not its role. Under the Statute and the Digest, CARU’s functions with regard to
projects or works undertaken by the Partie s are largely techni cal, regulatory, and
facilitative. It expresses opinions and offe rs technical information and analyses; it
establishes water quality standards with which the Parties must comply; it facilitates
communication between the Parties; but it do es not engage in decision-making with
respect to whether particular projects may be implemented or not. The CARU
Digest in particular makes it absolutely clear that the Parties (that is, Uruguay and
Argentina) -- and only the Parties -- have the power to authorize projects. While
CARU is given responsibility for conducting a preliminary technical review of a
planned project, it does not approve or disapprove the project.
2.7 With respect to Argentina’s third argument, that Uruguay was required to
refrain from carrying out the projects while consultations were on-going, the fact is
that the Statute does not expressly state any such obligation. Even accepting that the
provisions of pertinent multilateral conventions explicitly stating the duty Argentina
seeks to invoke could be read into the Statute, that duty does not prohibit the
initiating State from taking steps in furthera nce of a project during consultations.
Rather, it is precluded only from “implementing” the project. Preparatory steps are,
however, permitted.
2.8 Finally, Argentina’s argument that Uruguay was obligated to suspend
implementation pending a final judgment on the merits in this case is defeated by the
- 41 -clear rules of general international law. Th e Statute itself is silent on this score, but
the provisions of the relevant multilateral conventions which (unlike the Statute)
expressly state that projects should not be “implemented” during consultations,
nonetheless make clear that that duty does not extend into the dispute resolution
phase. Even under those conventions, the duty ends when consultations end.
Afterwards, the initiating State is free to implement a project even as dispute
resolution proceedings are underway. The result can be no different under the
Statute.
2.9 For all these reasons, each of which will be more fully articulated below,
the pillars of Argentina’s procedural ar gument that Uruguay violated the provisions
of Articles 7 through 12 of the 1975 Statute cannot support the weight the Memorial
attempts to place on them. As they collapse, so too does the entire edifice of
Argentina’s procedural case. As demonstrated in the remainder of this Chapter, and
in Chapter 3 which immediately follows, in both law and fact Uruguay has at all
times complied with its procedural duties under the 1975 Statute.
2.10 Uruguay has not only complied w ith its procedural obligations under
Articles 7-12. As will be more fully detailed in Part II of this Counter-Memorial,
Uruguay has also complied with its substant ive obligations under the Statute. As
demonstrated in Chapters 4 through 7, Uruguay has taken all required steps -- and
more -- to ensure that the ENCE and Botnia plants do not harm the Uruguay River or
its aquatic environment.
- 42 - Section I.
Origins and Scheme of the 1975 Statute
A. H ISTORY AND D EVELOPMENT
1. The 1961 Boundary Treaty
2.11 The Parties agree that the orig ins of the 1975 Statute lie in the 1961
Uruguay-Argentina Treaty Concerning the Boundary Constituted by the River
50
Uruguay (the “1961 Boundary Treaty”) . Article 7 of the 1961 Boundary Treaty
requires the Parties to “agree on the statute on the use of the river,” and defines the
scope of what would later become the 1975 Statute. It provides that the future
statute will contain, among other things, the following:
a) common and uniform regulation concerning the safety of
navigation.
b) a regime of pilotage that respects currently existing practices.
c) regulation of the maintenance of dredging and buoying, in
conformity with Article 6.
d) reciprocal facilitation of hydrographic surveys and other
studies relating to the River.
e) rules for the conservation of living resources.
51
f) rules for averting the contamination of the water .
2.12 Thus, from the beginning, the statute-to-come was intended to have a
broad substantive scope with an emphasis on “the use of the river.” Environmental
protection was certainly an important con cern, but it was also consequent to the
Parties’ mutual focus on making use of the river.
50
See AM, paras. 3.5-3.9. See Treaty Concerning the Boundary Constituted by the River
Uruguay (hereinafter “1961 Boundary Treaty”) (7 April 1961). UCM, Vol. II, Annex 1.
51
1961 Boundary Treaty, Art. 7.
- 43 - 2. The 1971 Joint Declaration
2.13 In 1971, four years before final agreement on the text of the 1975 Statute,
the Parties issued the Joint Declaration on Water Resources described at paragraph
3.24 of Argentina’s Memorial. The 1971 Joint Declaration is of particular interest in
understanding the 1975 Statute. It sets out the basic procedural framework
governing notification of projects on the rive r, the central elements of which were
later reflected in the procedural provisions of the 1975 Statute. As Argentina itself
puts it: “… la Déclaration argentino- uruguayenne de 1971 énonce les principes
52
fondamentaux en matière d’utilisation et de protection d’un cours d’eau” .
2.14 The 1971 Joint Declaration states:
Both Ministries declare their agreement on the following basic
principles, applicable to the system for the use of international
rivers and their tributaries:
1. The river waters shall be used in a fair and reasonable
manner.
2. All forms of pollution of international rivers and their
tributaries shall be avoided, and all ecological resources shall
likewise be preserved in the zones of their respective
jurisdictions.
3. When one State plans to make use of the resource, it shall
provide beforehand to the States concerned the work plan and
schedule of operations as well as any other data enabling them to
determine the effects such work will have on the territory of
such States.
4. The requested party shall indicate within a reasonable period
of time any aspects of the plan or schedule that could cause
significant damage. In that case, the party shall indicate the
technical reasons and calculations on which its concerns are
based or shall make suggestions for modifying the proposed plan
52
AM, para. 3.30. (“the 1971 Argentina-Urugua y Declaration sets out the fundamental
principles in terms of the use and protection of a waterway.”)
- 44 - or schedule when informed thereof in order to avoid such
damage.
5. Any dispute arising for this reason shall be referred to a Joint
Technical Committee for a decision. In the event of a
disagreement among the technical experts, they shall be required
to present a report to their Governments expressing their
opinions. The Governments shall attempt to find a solution by
diplomatic means or by any other means agreeable to both, with
a view to finding a fair and amicable solution 53.
2.15 There are five points about the 1971 Declaration that deserve to be
underscored because each reappears in the text of the 1975 Statute. First, paragraph
4 provides that if the notified State determin es that a planned project could cause it
significant harm, it must “indicate the technical reasons and calculations on which its
concerns are based”. In other words, it must identify the basis of its conclusions
with particularity. It cannot rely on specu lation or vague allegations of generalized
harms, but rather bears a burden of showing that its concerns have a basis in reality.
2.16 Second, also under paragraph 4, the notified State is entitled to make
“suggestions” for “modifying” the planned project. Both terms are significant. The
use of the term “suggestions ” implies, of course, that the notified State is not
empowered to dictate requirements that must be complied with before work can be
undertaken. Similarly, the use of the verb “modify” suggests that while the notified
State may seek to influence the manner in which a project is carried out, it is not
entitled to negate the initiating State’s underlying right to undertake the project.
2.17 Third, and related to the previous point, the 1971 Declaration does not
state that the consent of the notified State is required before a project can be carried
out. Neither does it say anything about th e notified State having the right to impede
53
Uruguayan-Argentine Joint Declaration on Water Resources (9 July 1971). UCM, Vol. II,
Annex 2.
- 45 -the execution of the project. In a similar vein, paragraph 5 provides that the Parties
“shall attempt to find a solution … agreeable to both”. This wording (“…shall
attempt…”) excludes a requirement that such an agreement be reached before a
project can be carried out.
2.18 Fourth, paragraph 5 of the 1971 Declaration provides that in the event of a
disagreement, the Parties shall first try to settle the issue at a technical level, and will
subsequently proceed to direct consultations if they deem it necessary.
2.19 Fifth, and finally, the ultimate goal in the case of any disagreement is a
“fair solution”. Viewed in light of paragraph 1, which states that “the River shall be
used in a fair and equitable manner”, the necessary conclusion is that a notified State
can have no good faith basis for resisting a project if it can be deemed “fair and
equitable” under all the circumstances.
3. The 1973 Treaty on the River Plate
2.20 As Argentina’s Memorial correctly recounts 54, the Parties deferred
completing their negotiation of the St atute for the River Uruguay pending
completion of what became the 1973 Trea ty on the Río de la Plata and the
55
Corresponding Maritime Boundary (the “1973 Treaty”) . The 1973 Treaty is of
interest because it presages many of the pr ocedural obligations later included in the
1975 Statute. In particular, Articles 17 through 22 of the 1973 Treaty are virtually
identical to what would become Articles 7 through 12 of the 1975 Statute 56. They
are also broadly reflective of the princi ples of the 1971 Joint Declaration adopted
54
See AM, para. 3.12.
55
See Treaty Concerning the Río de la Plat a and the Corresponding Maritime Boundary
(hereinafter “1973 Treaty”) (19 November 1973). UCM, Vol. II, Annex 3.
56
Compare 1975 Statute, arts. 7-12, with 1973 Treaty, arts. 17-22.
- 46 -just two years earlier. There was, howev er, one key innovation in the 1973 Treaty:
the provision in Article 87 for referring dis putes between the Parties that cannot be
57
resolved through direct negotiation to the International Court of Justice . This
provision, of course, was later mirrored in the 1975 Statute (at Article 60) and forms
the basis of the Court’s jurisdiction in this case .
B. T HE O BJECT AND P URPOSE OF THE STATUTE
59
2.21 As Argentina again correctly notes , the negotiations culminating in the
1975 Statute lasted two years, from 1973 to 1975. On 26 February 1975, the heads
of both States signed the agreement in Salto, Uruguay. It subsequently came into
force on 18 September 1976 with the exchange of instruments of ratification.
2.22 The central object of the 1975 Statute is set forth in Article 1, which states:
“The Parties agree on this Statute … in order to establish the joint machinery
necessary for the optimum and rational utilization of the River Uruguay ….” . The60
Statute itself does not define the phr ase “optimum and ra tional utilization”.
Nonetheless, given the origins of the Statute, logic compels the conclusion that it
refers back to the concept of “fair and reasonable” use invoked in paragraph 1 of the
1971 Joint Declaration.
57
1973 Treaty, op. cit., Art. 87.
58
There is, however, a difference in the scope of the procedural provisions of the 1973 Treaty
and the 1975 Statute. Whereas the 1975 Statut e requires notification to the other Party
whenever one State is planning a work capable of affecting navigation, the regime of the river
and/or the quality of its waters, the analogous prov isions of the 1973 Treaty are more limited.
They apply only in case where a planned project might affect navigation and/or the regime of
the river (in that case, the River Plate).
59
AM, para. 3.13.
60
1975 Statute, op. cit., Art. 1. UCM, Vol. II, Annex 4.
- 47 -2.23 Argentina agrees that the concepts “optimal and rational utilization” and
“fair and reasonable use” are equivalent. In its Memorial, for example, Argentina
states: “Le principe de l’utilisation optimale et rationnelle du fleuve Uruguay [in
Article 1] est notamment lié au principe de l’utilisation équi table et raisonnable”
described in Article 5 of the 1997 Watercourse Convention . The provisions of and
the commentary to the 1997 Watercourse Convention can thus shed light on the
concept at the heart of the 1975 Statute; th at is, the optimum and rational use of the
62
Uruguay River .
2.24 The International Law Commission’s commentary to its 1994 Draft
Articles on the Non-Navigational Uses of International Watercourses (which was
later adopted as the 1997 Watercourse Conve ntion) makes clear that, at root, the
principle of fair and reasonable use involve s an equitable balancing of interests of
the States involved. According to the ILC commentary to Article 5 (at para. 2): “[A]
watercourse State has both the right to ut ilize an international watercourse in an
equitable and reasonable manner and the obligation not to exceed its right to
equitable utilization or, in somewhat different terms, not to deprive other
61
AM, para. 3.163. (“The principle of optimal and rational use of the Uruguay River [in Article
1] is especially tied to the principle of equitable and reasonable use”.)
62
The 1975 Statute, of course, constitutes the specific source of law governing this case and
defining the Court’s exercise of jurisdiction.Neither Uruguay nor Argentina have signed the
1997 Watercourse Convention, nor has it entered into force. Consequently, it cannot of its own
force create binding obligations relevant to this case. Nevertheless, it is Uruguay’s position
that reference to principles of general international law can aid in the interpretation of the
specific provisions of the 1975 Statute as pr ovided in Article 31(c)(3) of the Vienna
Convention on the Law of Treaties. This is especially true of the 1997 Watercourse
Convention because it bears manifold similarities to the Statute; because it was adopted by the
General Assembly by a vote of 104 in favor to only three against; and because the Court itself
has recognised its importance in the Gabčíkovo case. See Case Concerning the Gab čikovo-
Nagymaros Project (Judgment,)I.C.J. Reports 1997, p. 56, para. 85.
- 48 - 63
watercourse States of their right to equitable utilization” . Accordingly, a State has
the right to make use of an international waterway so long as its use does not prevent
the other State from exercising its equivalent right to make a fair and reasonable use
of the same waterway.
2.25 Again according to the ILC commentary to Article 5:
There is no doubt that a watercourse State is entitled to make use
of the waters of an international watercourse within its territory.
This right is an attribute of s overeignty and is enjoyed by every
State whose territory is traversed or bordered by an international
watercourse. Indeed, the principl e of the sovereign equality of
States results in every watercourse State having rights to the use
of the watercourse that are qualitatively equal to, and correlative
with, those of other watercourse States. … [E]ach watercourse
State is entitled to64se and benefit from the watercourse in an
equitable manner .
Inevitably, “[t]he scope of a State’s rights of equitable utilization depends on the
65
facts and circumstances of each individual case …” .
2.26 This rule, which requires an equita ble balancing of the interests involved,
is an old and distinguished one. In the 1927 Donauversinkung case, for example, it
was stated: “The interests of the States in question must be weighed in an equitable
manner against one another. One must cons ider not only the absolute injury caused
to the neighbouring State, but also the relation of the advantage gained by the one to
the injury caused to the other” . 66
63Draft Articles on the Law of Non-Navigationa l Uses of International Watercourses and
Commentaries Thereto (hereinafter “1994 Draft Articles”), p. 97, comment 2 (1994), appears
in Yearbook of the International Law Commission, 1994, vol. II, Part Two.
64
Ibid., p. 98.
65
Ibid.
66
Streitsache des Landes Württemberg und de s Landes Preussen gegen das Land Baden
(Württemberg and Prussia v. Baden) , betreffend die Donauversinkung , German
Staatsgerischtshof, 18 June 1927, Entscheidungen des Reichsgerichts in Zivilsachen (Berlin),
vol. 116, appendix, pp. 18 et seq. Although the Donauversinkung Case involved two federal
- 49 - C. T HE SCHEME OF THE 1975S TATUTE
2.27 Consistent with the terms of Artic le 7 of the 1961 Treaty, which required
Uruguay and Argentina to agree on a statute on the “use of the River”, the scope of
the 1975 Statute scope is broad. It is divi ded into 17 Chapters dealing with a wide
range of substantive themes, including: navigation and works (Chapter II), pilotage
(Chapter III), port facilities (Chapter IV), safeguarding of human life (Chapter V),
salvaging (Chapter VI), use of the waters (Chapter VII), resources of the bed and
subsoil (Chapter VIII), conservation of na tural resources (Chapter IX), pollution
(Chapter X), and research (Chapter XI). It also contains a number of Chapters
governing procedural and administrative issu es, including: the establishment of an
administrative commission (Chapter XIII), procedures for conciliation (Chapter
XIV) and the settlement of disputes (Chapter XV).
2.28 As noted above, the focus of the Stat ute is on the uses to be made of the
river. This point is emphasized in the clearest possible way in the provisions of the
CARU Digest dealing with the subject of pollution. In setting forth the relevant
regulations, the Digest states that the “b asic purposes of the provisions of this
Subject [that is, dealing with pollution]” include “ to ensure any legitimate use of the
67
water considering long term needs and particularly human consumption needs” . It
should be noted, moreover, both (i) that “l egitimate use of the water” is a defined
states (Länder) of Germany, the German C onstitutional Court applied international law in
rendering its decision. The courts of other fderal jurisdictions have similarly applied the
international principle of “equ itable apportionment” or “equitable utilization” between their
constituent states.See, e.g. , Kansas v. Colorado , 206 U.S. 46 (1906) (United States of
America); Soleure v. Argovia (RO 261, pp. 50-51) (1900) (Switzerland).
67Digest of the Commission for the Administration of the River Uruguay (CARU) (hereinafter
“CARU Digest”), Subject E3, Title 1, Chap. 2, S ec. I, Art. 1(b) (1984, as amended) (emphasis
added). UCM, Vol. IV, Annex 60.
- 50 - 68
term that means “any use or exploitation of the water that deserves protection” , and
(ii) that “industrial supply” is specifically included as a “legi timate use” of the
69
water . Argentina’s assertion that the Stat ute reflects “un souci constant: celui
d’exclure toute utilisation et explo itation unilatérale du fleuve Uruguay” 70 is thus
entirely inconsistent with the actual purposes and text of the 1975 Statute, as well as
the provisions of the Digest adopted jointly by the Parties through their respective
delegations to CARU.
2.29 Contrary to the extreme position advocated in Argentina’s Memorial, what
the Statute requires is an equitable balancing of interests. While the Statute
guarantees the right of each Party to use th e river, including for industrial purposes,
this does not mean that Uruguay or Argentina is free to pursue economic
development at the expense of the aquati c environment. Rather, the 1975 Statute
must be interpreted in accordance with the principle of sustainable development,
which requires that the goals of ec onomic development and environmental
protection be treated in an integrated fashion . Thus, the 1975 Statute permits each
Party to develop its economy in the exercise of its sovereign rights, provided it does
not do so at the expense of environmental pr otection. As shown in Part II of this
Counter-Memorial, Uruguay’s environmental laws and regulations are as strong as
any in Latin America. Indeed, the obligation to protect the environment is enshrined
68Ibid., Chap. 1, Sec. 2, Art. 1(d).
69Ibid., Title 2, Chap. 4, Sec. 1, Art. 1(f).
70AM, para. 3.32. (“reflect a consistent concern: the concern for ruling out any unilateral use or
operation of the Uruguay River”)
71This is required by Principle 4 of the Rio Declaration on Environment and Development (3-
14 June 1992) and adverted to in se veral judgments of this Court. See, e.g., Gabčikovo-
Nagymaros Project (Judgment), p. 78, para. 140; Case Concerning Pulp Mills on the River
Uruguay (Order on Provisional Measures), I.C.J. Reports 2006, p. 19, para. 80 (13 July 2006).
- 51 - 72
in Article 47 of its Constitution . Not only are its laws strong, Uruguay also has an
outstanding record of rigorous enforcement. It has been ranked third in the world
(and first in Latin America) in its commitment to environmental protection and
sustainable development, a fact senior Argentine officials have themselves
73
recognized .
2.30 The right of all States to pursue sustainable economic development is
enshrined in Principle 2 of the 1992 Rio D eclaration (which Argentina does not cite
74
in its Memorial), and in several subsequent treaties . Principle 2 affirms both the
sovereign right of States to exploit th eir own resources “pursuant to their own
environmental and developmen tal policies” and their res ponsibility “to ensure that
activities within their jurisdiction or control do not cause damage to the environment
of other states or to areas beyond the limits of national jurisdiction.” When first
adopted in 1992, the totality of this provision was regarded by many States present at
the Stockholm Conference, and subsequent ly by the UN General Assembly, as
72Constitution of Uruguay, Art. 47 (1967). UC M, Vol. II, Annex 5. Article 47 states,
“Environmental protection is a matter of gene ral interest. Persons should avoid any action
which may cause serious depredation, destructi on or contamination of the environment. The
law will regulate this provision and can establish sanctions for infringers thereof.”
73
2005 Environmental Sustainability Index, World Economic Forum. UCM, Vol. IX,
Annex 201. Former Argentine Foreign Minist er Rafael Bielsa himself remarked on
Uruguay’s prominence in the realm of environmen tal protection, stating that Uruguay is “the
sixth leading nation in the world in terms of environmental protection…” Presidency of
the Republic of Uruguay Web Site, “Agreements on Mercosur, Environment and
Human Rights (9 October 2003), available at
http://www.presidencia.gub.uy/noticias/archivo/2003/octubre/2003100902… (last visited on
29 June 2007). UCM, Vol. II, Annex 14.
74United Nations Framework Convention on Climate Change, Preamble (1992) ( entered into
force for Argentina on 9 June 1994); 1992 Conventio n on Biological Diversity, Art. 3 (1992)
(entered into force for Argentina on 22 November 1994); Convention to Combat
Desertification, Preamble (1994) ( entered into force for Argentina on 6 April 1997); 2001
Convention on Persistent Organic Pollutants, Preamble (2001) ( ratified by Argentina on 25
January 2005).
- 52 - 75
reflecting customary international law . In this form, the Court has held that it is
“now part of the corpus of international law relating to the environment” . 76
2.31 The right to pursue economic deve lopment – indeed the duty to do so –
has also been recognized in international human rights law. Article 1 of the 1966
UN Covenants on Civil and Political Right s and on Economic, Social and Cultural
Rights specifically recognizes the right of all peoples to “freely pursue their
economic, social and cultural development”, and “to freely dispose of their natural
wealth and resources” in accordance with international law.
2.32 What is clear is that Principle 2 of the Rio Declaration is neither an
absolute prohibition on environmental damage nor a license to exercise absolute
freedom in exploiting natural resources. Like Principle 4, it too requires integration
or accommodation of development and environmental protection. The Court made
the point in the Gabcikovo case: “This need to reconcile economic development with
protection of the environment is aptly expressed in the concept of sustainable
development.” 77
2.33 Argentina’s arguments about the 1975 Statute entirely fail to address this
need to accommodate economic developm ent and environmental protection when
utilizing the waters of the Uruguay River. Indeed, Argentina’s Memorial studiously
cultivates the impression that the 1975 St atute subjugates considerations of
economic development to unyielding envi ronmental concerns. However, as
75L. Sohn, “The Stockholm Declaration on the Human Environment,” 14 H ARV . NT ’LL. J. 423,
pp. 491-493 (1973). UNGA Resolution 2996 (XXVII) (1972) asserts that Principles 21 and 22 of
the Stockholm Declaration “lay down the basic rules governing this matter”. One hundred and
twelve states voted foris resolution; none opposed.
76Advisory Opinion on the Legality or Threat of Use of Nuclear Weapons, I.C.J. Reports 199,6p.
242, para. 29.
77
Gabčikovo-Nagymaros Project (Judgment,)op. cit., p. 78, para. 140.
- 53 -demonstrated, this view of the interrela tionship between economic development and
environmental protection is inconsistent with the terms of the Statute itself, and with
general international law.
D. O VERVIEW OF THE E NVIRONMENTAL PROTECTION P ROVISIONS
2.34 The provisions of the Statute rela ting to environmental protection are set
out in Chapter IX (Arts. 35 through 39) relating to the “Conservation, Utilization and
Development of Other Natural Resources ” and Chapter X (Arts. 40 through 43)
relating to “Pollution”. Article 41 is of particular relevance in this case. Pursuant to
Article 41(a), the Parties undertake to “protect and preserve the aquatic environment
and, in particular, to prevent its pollution, by prescribing appropriate rules and
measures in accordance with applicable international agreements and in keeping,
where relevant, with the guidelines and recommendations of international technical
78
bodies” .
2.35 Although Article 41(a) states that th e Parties shall “prevent pollution” this
does not, of course, require them to refrain from all activities that result in
discharges of any kind into the river. To the contrary, as will be discussed in greater
detail in Part II, the Parties have specifically agreed on standards setting the
threshold for what they jointly consider acc eptable impacts. In particular, through
CARU, Argentina and Uruguay have togeth er defined and adopted water quality
standards which they have determined ad equately protect the aquatic environment
and ensure their mutual ability to make rational uses of the river.
2.36 These specific standards are set forth in the section of the CARU Digest
dealing with the subject of pollution. First established in 1984, the standards are the
781975 Statute, op. cit., Art. 41(a). UCM, Vol. II, Annex 4.
- 54 -subject of frequent revision and are modifi ed to take account of new scientific
developments both in the protection of the environment and the understanding of
how various substances exert toxic effects. Thus, under Article 41(a), so long as the
Parties are prescribing appropriate rules and measures to ensure compliance with the
agreed standards set by CARU, they are discharging their duty to “prevent
pollution”.
2.37 Viewing the obligation to prevent pollution in this way exposes the error
of Argentina’s statement that: “Chaque Etat riverain a … l’obligation de prévenir les
dommages au cours d’eau. Si cette exigence n’est pas respectée, l’autre Etat riverain
pourrait être privé de son droit de parvenir à un résultat optimal et rationnel dans
l’utilisation des eaux du fleuve” . In the case of Uruguay and Argentina, the most
that could be said is that each State has the obligation to prevent discharges into the
river that exceed the agreed water quality standards established under the auspices of
CARU in conformity with Article 41(a) of the Statute.
2.38 But even this is an overstatement. The obligation set out in Article 41(a) is
a duty of due diligence. The Parties do not undertake to prevent all pollution but
rather to “to prevent its [the aquatic environment’s] pollution, by prescribing
appropriate rules and measures …” 80 In other words, it is an obligation of conduct,
not an obligation of result. In this re spect, the 1975 Statute is entirely consistent
with the principles of general international law. As the ILC stated in its commentary
to Article 7 of what became the 1997 Watercourse Convention: “The obligation of
79
AM, para. 3.53. (“Each Waterway State has … the obligation to pr event damage to the
waterway. If this requirement is not respected , the other Waterway State may be deprived of
its right to benefit from optimum and wise use of the river waters.”)
80
1975 Statute, op. cit., Art. 41(a) (emphasis added). UCM, Vol. II, Annex 4.
- 55 -due diligence contained in article 7 sets the threshold for lawful state activity. It is
not intended to guarantee that in utilizing an international watercourse significant
harm would not occur. It is an obligation of conduct, not an obligation of result.” 81
2.39 The same point is reflected in the commentary to the ILC’s 2001 Draft
Articles on the Prevention of Transboundary Harm. According to the commentary
to Article 3:
The obligation of the State of origin to take preventive or
minimization measures is one of due diligence. It is the conduct
of the State of origin that will determine whether the State has
complied with its obligations under the present articles. The
duty of due diligence involved however is not intended to
guarantee that significant harm be to tally prevented, if it is not
possible to do so. In that eventuality, the State of origin is
required, as noted above, to exer t its best possible efforts to
minimize the risk. In this sense it does not guarantee that the
harm would not occur 82.
2.40 Also according to the ILC:
[D]ue diligence is manifested in reasonable efforts by a State to
inform itself of factual and legal components that relate
foreseeably to a contemplated procedure and to take appropriate
measures in a timely fashion, to address them. … Such
measures include, first, formulating policies designed to prevent
significant transboundary harm or to minimize the risk thereof
and second, implementing those policies. Such policies are
expressed in legislation and administrative regulations and
implemented through various enforcement mechanisms 83.
2.41 The ILC commentary to Article 5 makes clear how these principles apply
when private entities are conducting the potentially polluting activities:
811994 Draft Articles, op. cit., p. 103, comment 4.
82
Draft Articles on Prevention of Transbounda ry Harm from Hazardous Activities with
commentaries (hereinafter “2001 Draft Articles”), p. 391-392, comment 7, appears in Yearbook
of the International Law Commission, 2001, vol. II, Part Two.
83
Ibid., p. 393, comment 10.
- 56 - To say that States must take the necessary measures does not
mean that they must themselves get involved in operational
issues relating to the activities to which article 1 applies. Where
these activities are conducted by pr ivate persons or enterprises,
the obligation of the State is limited to establishing the
appropriate regulatory framework and applying it in accordance
with these articles4.
2.42 Of particular note in light of the agreed water quality standards set forth in
the CARU Digest are the ILC’s comments to Article 3 of the 2001 Draft Articles
which state: “Article 3 … imposes an obligation on the State of origin to adopt and
implement national legislation incorporating accepted international standards. These
standards would constitute a necessary reference point to determine whether
measures adopted [to minimize harm] are suitable.” 85
2.43 The logic of this last point is as pow erful as it is self-evident. It would be
nonsensical for either Argentina or Uruguay to argue that when the other State
adopts and enforces national rules requiring compliance with CARU’s
environmental standards -- standards that both Parties have cooperatively fashioned
pursuant to the 1975 Statute -- it might still be said to violate the anti-pollution
provisions of the Statute. As Uruguay shows in Part II of this Counter-Memorial, it
has faithfully enacted into its own nationa l law the anti-pollution standards adopted
by CARU, and has vigorously enforced them and pledged to continue doing so, in
particular with respect to the two cellulose plants at issue in this case.
E. T HE P ROCEDURAL R EQUIREMENTS OF THE S TATUTE
2.44 In addition to its various subs tantive articles, the 1975 Statute also
contains a series of provisions relating to the procedure for notification, information-
84Ibid., p. 399, comment 10.
85Ibid., p. 391, comment 4.
- 57 -sharing and, if necessary, consultation in circumstances where one State is planning
to undertake a project which might prejudic e navigation on the river, the regime of
the river, and/or the quality of its waters . These provisions are set out at Articles 7
through 12 of the Statute and will be examined in detail below.
2.45 At the outset, however, it is impor tant to appreciate the role of these
procedural provisions in the scheme of th e 1975 Statute as a whole. At the oral
hearings on Argentina’s request for the i ndication of provisional measures in June
2006, Counsel for Uruguay observed:
While the Parties disagree about the nature and extent of the
procedural rights and obligations set forth in Articles 7 to 13 of
the Statute, they are in agreement, it would appear, on the
purpose and objective of these procedures. They are intended to
provide some measure of protection for each State against
violation of the substantive provisions of the Statute by the
other, in this case the subs tantive provisions against
contamination of the river set forth in Articles 40 to 43. ... That
is the harm that the procedures set forth in Articles 7 to 13 are
designed to protect against 86.
2.46 This agreement is no longer merely apparent; it is explicit. At paragraph
3.31 of its Memorial, Argentina admits th at “[d]es obligations de contenu plus
procédural comme la notification et la c onsultation permettent la mise en oeuvre
d’obligations à contenu substantiel comme le principe de l’utilisation équitable et
87
raisonnable et le principe de ne pas causer un préjudice sensible” . In a like vein,
Argentina elsewhere acknowledges: “I l en va ainsi des deux catégories
d’obligations imposées aux Parties par le St atut: les obligations substantielles de
prévenir la pollution et les autres dommages au fleuve Uruguay (que l’on peut
86CR 2006/49, p. 31 (Reichler) (9 June 2006).
87AM, para. 3.31 (emphasis added). (“obligations of a more procedural nature like notification
and consultation are used to implement obligations of a substantive nature like the principle of
fair and reasonable use and the principle of not causing any significant damage.”)
- 58 -considérer comme des obligations de résultat) d’une part; les obligations
procédurales de coopération, informa tion et consultation préalables (que
s’apparentent à des obligations de comportement[ 8]) d’autre part, les secondes
89
constituant le moyen pour atteindre les résultats visés par les premières.”
2.47 To say that the procedural mech anisms of the Statute are designed to
facilitate the realization of its substan tive provisions in no way diminishes the
importance of those procedures. It does, however, make clear that their importance
is as a tool for achieving the ultimate goal of the Statute: the rational and equitable
use of the river. As the ILC stated in connection with the procedural provisions of
the 1997 Watercourse Convention (which are very similar to those in the 1975
Statute): “These articles establish a procedural framework designed to assist
watercourse States in maintaining an equitable balance between their respective uses
90
of an international watercourse.”
2.48 The particular provisions of Articles 7 through 12 of the 1975 Statute track
91
the core elements of the 1971 Joint Declaration . They provide a system of
notification, information sharing and, if necessary, consultation between the Parties
and dispute resolution by this Court. As Uruguay will demonstrate presently, they
distinctly do not require the prior consent of the notified State before a planned
88Uruguay notes that Argentina’s reference to the obligation to prevent pollution as an
“obligation of result” contradicts the text of Article 41(a) which, as demonstrated above,
plainly creates an obligation of conduct.
89
AM, para. 5.2 (emphasis added). (“Two categories of obligations imposed upon the Parties
by the Statute are thus established: on the one hand, substantive obligations to prevent pollution
and other damage to the Uruguay River (that can be considered obligations of result); and on
the other, procedural obligations of cooperation, information and prior consultation (that can be
classified as obligations of conduct), the latter constituting means of obtaining the results
targeted by the former.”)
901994 Draft Articles, op. cit., p. 111, comment 1.
91See supra paras. 2.12-2.19.
- 59 -project can be implemented. Neither do th ey give the notified State a right to
impede the execution of the works, even in circumstances where it has objected to
the project in question. What they do is afford the notified State a mechanism for
evaluating a planned project, airing its concerns, and having those concerns
considered in good faith by the initiating St ate, including in the context of direct,
Party-to-Party consultations if necessary. They also afford the Parties the option of
having any unsettled dispute over the potential impact of a planned project on the
river resolved by this Court.
Section II.
The Procedural Provisions of the Statute
A. A RTICLE 7
1. The First Paragraph of Article 7
2.49 The obligation to provide notificatio n of a planned work is set forth in
Article 7, the first paragraph of which provides:
If one Party plans to construc t new channels, substantially
modify or alter existing ones or carry out any other works which
are liable to affect navigation, the régime of the river or the
quality of its waters, it shall notify the Commission [ i.e.,
CARU], which shall determine on a preliminary basis and within
a maximum period of 30 days whether 92e plan might cause
significant harm to the other Party .
The triggering event for the obligation to notify CARU is thus when one party
“plans” the “implementation” of a “work” that is of sufficient magnitude that it
could affect navigation, the regime of the river, and/or the quality of its waters.
2.50 At least two threshold observations about this first paragraph of Article 7
are in order. First, by its terms, the duty to notify is triggered only by a limited set
92
1975 Statute, op. cit., Art. 7.
- 60 -of projects. Only those that are liable to af fect (i) navigation, (ii) the regime of the
river , and/or (iii) water quality are included. Works that are not liable to affect any
of these three subjects are not included within the scope of the notification
obligation, regardless of their nature or scope. Second, the initial notice is to be
provided to CARU, which then is tasked with determining preliminarily whether the
planned project might cause significant harm to the other party. It has a maximum
of 30 days following notification by the initiating State to do so.
(a) What Is “Significant Harm”?
2.51 The 1975 Statute itself does not its elf define “significant harm.” The
ILC’s commentary to the 2001 Draft Articles -- which uses the identical formulation
-- sheds light on the matter, however. According to the ILC: “‘[S]ignificant’ is
something more than ‘detecta ble’ but need not be at the level of ‘serious’ or
‘substantial’. The harm must lead to a real detrimental effect on matters such as, for
example, human health, industry, property, environment or agriculture in other
94
States.” In the same paragraph, the ILC also makes clear that this “would exclude
activities where there is a very low probability of causing significant transboundary
harm” . In addition, the “significant harm ” must stem from transboundary activity
that has a measurable physical (as opposed to purely psychological) effect.
93“Regime” in this context means, “the condition of a river with respect to the rate of its flow
as measured by the volume of water passing di fferent cross sections in a given time”.
Webster’s Third New International Dictionary, Unabridged, Massachusetts, Merriam Webster,
2002, p. 1911.
942001 Draft Articles, op. cit., p. 388, comment 4.
95Ibid., p. 386, comment 16.
- 61 -According to the ILC commentary to Artic le 1, “these activities should have
96
transboundary physical consequences which, in turn, result in significant harm” .
(b) Timing
2.52 The wording of Article 7 is imprecise with respect to the question of when
exactly CARU must be notified about a give n project. The Statute says merely that
when one of the Parties “plans” to “carry out” a project, it shall inform CARU,
without saying precisely when in the pla nning process this must occur. General
97
international law is helpful in interpreting this provision, however . Article 12 of
98
the 1997 Watercourse Convention requires “timely” notification . According to the
ILC commentary: “The term ‘timely’ is in tended to require notification sufficiently
early in the planning stages to permit m eaningful consultations and negotiations
99
under subsequent articles” . Similarly, the ILC commentary to Article 12 of the
2001 Draft Articles provides that “in a timely manner” “means that when the State
becomes aware of such information, it should inform the other States quickly so that
there will be enough time for the States concerned to consult on appropriate
preventive measures or the States likely to be affected will have sufficient time to
take proper actions” 100. As applied to Article 7 of the 1975 Statute, the ILC’s logic
would require the notifying State to give notice of a planned project in sufficient
time to allow CARU and the notified State to assess the likely impacts of the project
96
Ibid.; see also ibid ., comment 17 (“the activities covered in these articles must themselves
have a physical quality, and the consequences must flow from that quality”).
97See Vienna Convention on the Law of Treaties, op. cit., Art. 31(c)(3).
98Convention on the Law of the Non-naviga tional Uses of International Watercourses
(hereinafter “1997 Watercourse Convention”), Art. 12 (1997).
991994 Draft Articles, op. cit., p. 111, comment 4.
1002001 Draft Articles, op. cit., p. 421, comment 5.
- 62 -on navigation, the regime of the river, a nd/or water quality, a nd, if necessary, “to
consult on appropriate preven tive measures” before a poten tially harmful project is
implemented. As will be shown in Chapter 3, Uruguay’s notification in this case, in
respect of each of the two cellulose plants at issue, was indisputably timely.
2.53 It must also be pointed out that , as a matter of logic, the Article 7
notification cannot occur at the earliest moments of planning because there will not
be sufficient information at that stage to enable CARU to render an opinion about
whether or not the project will cause significant harm to the other State. Put another
way, how could CARU opine on the risk of harm unless the project is at a
sufficiently advanced stage of planning that technical data about the likely impacts
have been generated? Accordingly, the first paragraph of Article 7 makes sense only
if it is understood to require notificati on at a time when s ubstantial technical
information about the project already exists, but before the project has advanced
beyond the point at which inputs from CARU or the notified State on the potential
harm would necessarily come too late to be acted upon. As will be seen below, this
reading is supported by the terms of the third paragraph of Article 7.
2.54 Argentina argues that Article 7 required notification to CARU about the
ENCE and Botnia plants prior to Uruguay’s issuance of the initial environmental
authorizations for both. For example, at paragraph 3.66 of its Memorial, Argentina
states: “Cette disposition [Article 7] prévoit l’obligation de saisir et d’informer la
CARU préalablement à toute action qui vise à l’autorisation et à la construction d’un
- 63 - 101
projet sur le fleuve Uruguay.” Indeed, this argument is one of the main pillars in
Argentina’s overall procedural case. As Argentina claims to see it:
En conclusion, en autorisant la construction 102 de l’usine CMB
sans saisir la CARU, l’Uruguay a violé l’obligation lui
incombant en vertu de l’article 7 du Statut de 1975. Cette
violation n’a aucune justification et n’est excusée par aucune
circonstance excluant l’illicéité. E lle constitue non seulement,
par elle-même, un fait internationalement illicite à l’égard de
l’Argentine mais aussi elle prive les articles subséquents de toute
possibilité de mise en oeuvre 10.
Argentina’s thesis is, however, refuted by the text of the Statute, by the CARU
Digest, and by its own past practice. All three sources are clear: under the 1975
Statute, the initial authorizations of pr ojects can be (and in practice have been)
issued before notification to CARU.
(i) The Statute
2.55 Article 28 of the Statute (in Chapter VII on “Use of Water”) states:
Every six months the Parties shall submit to the Commission a
detailed report of the developmen ts they undertake or authorize
in the parts of the river under their respective jurisdictions, so
that the Commission may verify whether the developments taken
104
together are likely to cause significant damage .
101
AM, para. 3.66. (“This provision [Article 7] s tipulates the obligation to contact and inform
CARU prior to taking any action to authorize and build a project on the Uruguay River.”)
102
As will be detailed in the next Chapter, Argentina repeatedly misc haracterizes the initial
environmental authorizations as authorizations to begin “construction.” They were not. The
initial environmental authorizations about wh ich Argentina complains were very much initial
authorizations. They did not authorize construc tion. Additional authorizations were required
before either ENCE or Botnia could begin any sort of construction activity. See infra, Chap. 3,
paras. [3.09 - 3.12].
103
AM, para. 4.47. (“In conclusion, by authoriz ing the construction of the CMB plant without
referring the matter to CARU, Uruguay violated the obligation incumbent on it under Article 7
of the 1975 Statute. There is no justification for this violation and it is not excused by any
circumstance other than illegality. Not only doe s it, in itself, constitute an internationally
wrongful act against Argentina, it also prevents the subsequent Articles of any possibility of
implementation.”)
1041975 Statute, op. cit., Art. 28.
- 64 -This provision is also mirrored in the CARU Digest which provides:
In compliance with articles 7 to 12 of the Statute , biannually the
Parties shall submit to CARU a detailed report on works or
exploitations of the River’s wate rs undertaken or authorized in
order to be considered for the River zoning, as well as for
determining whether said work s or uses, individually or
105
collectively, affect or may affect the water quality .
2.56 It is readily apparent that notifica tions to CARU of particular uses of the
river may occur after they have been “authorized” by the initiating State. Indeed,
the CARU Digest could scarcely be any cl earer that post-authorization notice to
CARU is entirely consistent with Article 7. The introductory clause specifically
states “[i]n compliance with articles 7 to 12”, and then goes on to refer to works or
exploitations that have already been authorized by the initiating State. By itself, this
disproves Argentina’s argument about the need to notify CARU before any
authorizations are issued.
(ii) The Digest
2.57 This same point is made equally e xplicit elsewhere in the CARU Digest.
Subject E3 of the Digest, to which Uruguay has already referred, covers the topic of
pollution. Chapter 1 specifies the competencies of the Parties, on the one hand, and
CARU, on the other. Article 1(a) states that each of the Parties has the competence
to “promulgate authorizations, restrictions or prohibitions related to the different
legitimate uses of the water, informing CARU about said authorizations, restrictions
or prohibitions whenever they are originated by or related to risks for human
106
health” . (As previously stated, “industrial supply” is specifically included among
105CARU Digest, op. cit., Subject E3, Title 2, Chap. 3, Sec. 1, Art. 2 (emphasis added). UCM,
Vol. IV, Annex 60.
106Ibid., Chap. 1, Sec. 1, Art. 1(a) (emphasis added).
- 65 - 107
the “legitimate uses of the water” .) Thus, each State retains the unilateral right to
promulgate authorizations, s ubject to the obligation subsequently to inform CARU
when appropriate.
(iii) State Practice
2.58 The conclusion that notice to CARU is not, as Argentina tries to argue,
required prior to the authorization of a project is demonstrated in the most
unmistakable way by the Parties’ past pr actice under the Statute. The evidence
shows that the Parties have typically author ized and then notified, not the other way
around.
a) Traspapel
2.59 Argentina’s Memorial cites the Tr aspapel cellulose plant that was under
consideration in Uruguay in the mid-1990s as an example of State practice that
108
ostensibly supports its interpretation of the 1975 Statute . If anything, however, it
shows that Uruguay’s interpretation is the correct one, particularly on the issue of
the timing of notice to CARU. The probative value of the Traspapel example in this
respect is particularly high given that it involved exactly the sort of facility -- a
cellulose plant -- at issue in this case.
2.60 At the outset, it is important to note that the Traspapel plant did not come
to the attention of CARU as a result of an y actions taken by either of the Parties
themselves. CARU learned about the plant in July 1995, when the Concejo
Deliberante de Concepción del Uruguay, a local legislative body from Concepción
del Uruguay, Argentina, wrote a letter to CARU’s Subcommittee on Water Quality
107
See supra para. 2.28.
108See AM, paras. 3.101, 3.115-3.118.
- 66 -to express concern about reports that a ce llulose plant might be constructed in the
vicinity of Fray Bentos, Uruguay 109. Upon receiving this letter, CARU sent a note to
DINAMA asking for information about th e project, including studies done and
background materials 110.
2.61 DINAMA responded on 15 August 1995 by sending the Subcommittee a
memorandum providing technical details about the plant and detailing its
administrative status within Uruguay. This was the first time Uruguay
communicated with CARU about the plant, and it was sent four days after
Traspapel’s initial environmental authorization (AAP) had been issued on 11 August
1995 111. Neither Uruguay nor Argentina considered DINAMA’s memorandum a
formal notification of the pr oject to CARU sufficient to set in motion the 30-day
period in which CARU is to render an opi nion on whether the project might cause
harm to the other Party.
2.62 CARU explicitly took note of the issuance of the AAP at a subsequent
plenary meeting on 15 March 1996. During that meeting, the Chairman of the
Argentine delegation, Ambassador Carasales, noted:
the documentation held by the C.A. R.U. appears to be complete
with respect to the process of location, given that it includes the
decree authorizing the installation of the mill in Fray Bentos and
109
Subcommittee on Water Quality and Prevention of Pollution Report No. 148, pp. 893-894
(20 July 1995), approved in CARU Minutes No. 6/95 (21 July 1995). UCM, Vol. IV, Annex
79.
110
CARU Minutes No. 6/95, p. 845 (21 July 1995). UCM, Vol. IV, Annex 78.
111
Ministry of Housing, Land Use Planning and the Environment Initial Environmental
Authorisation for Transpapel (11 August 1995). UCM, Vol. II, Annex 10.
- 67 - includes the authorization for the works and the technical and
environmental conditions that the company must satisfy 112.
2.63 The statement by the Chairman of Argentina’s delegation to CARU is
most interesting for what it does not say. As of March 1996, CARU had in its
possession the AAP preliminarily authorizing the installation of the Traspapel plant
which had been issued seven months earlier . As of that date, CARU had not been
formally notified about the plant by Uruguay pursuant to Article 7. Yet, there is not
the slightest hint of protes t from Argentina about these facts. Evidently, Argentina
did not then consider it objectionable that Uruguay had issued an initial
environmental authorization for the installation of a cellulose plant near the river
without prior notification to CARU.
2.64 Argentina’s failure to protest Uruguay’s issuance of an AAP to Traspapel
without prior notification to CARU reflects its understanding that Article 7 of the
Statute does not require notification before the issuance of the AAP, and undermines
its diametrically opposite argum ent here that prior notification to CARU of the
ENCE and Botnia AAPs was required. Ar gentina clearly understood then what it
chooses to ignore now: that the issuance of an initial environmental authorization is
merely the beginning of an extended review process that requires multiple
subsequent authorizations before a plant can be constructed, let alone brought into
operation. Thus, there is ample time following the issuance of the AAP for notice to
be provided, for inputs from CARU and Argentina to be offered and considered, and
for meaningful consultations to occur before any potentially harmful activities are
commenced.
112CARU Minutes No. 2/96, p. 202 (15 Marc h 1996). UCM, Vol. III, Annex 80. CARU
received the information referenced not as a result of any official notification from Uruguay,
but rather in response to informal information requests CARU itself sent to DINAMA.
- 68 -b) M’Bopicua Port
2.65 Traspapel is not an isolated case. In its Memorial, Argentina also invokes
the example of the M’Bopicua Port built near Fray Bentos. Argentina claims that
“[l]es étapes suivies par la CARU dans le cadre du projet de port M’Bopicuá
113
correspondent à ce qui doit être fait avant la Commission ne prenne une décision.”
In light of this assessment, the facts of the M’Bopicua Port case merit close
attention, particularly those that bear on the question of whether the initiating State
may authorize a project before notifying CARU about it.
2.66 Argentina’s chronology of CARU’s treatment of the M’Bopicua Port is
conspicuously bare. It states only: “la CARU a été saisie de ce projet par
114
l’Uruguay” . This intentional vagueness obscu res a key point. As CARU itself
subsequently noted, the Uruguayan Mini stry of Transport and Public Works
authorized the development, operation and maintenance of installations, and
provision of port services on 7 March 2001 11, and this authorization was
communicated to CARU after the fact 116.
2.67 The record shows that CARU processed the M’Bopicua authorization as a
matter of routine. As Argentina acknowledges, on 12 April 2001, the Subcommittee
on Navigation, Works and Erosion decided that it had no reason to find fault with
the project as described 117. The port was later built and went into operation in late
113AM, para. 3.120. (“[t]he steps followed by CA RU in connection with the M’Bopicua Port
project correspond to the procedure required before the Commission makes a decision.”)
114AM, para. 3.119. (“CARU was informed of this project by Uruguay.”)
115CARU Minutes No. 03/01, p. 249 (16 March 2001). UCM, Vol. IV, Annex 91.
116
See ibid.
117
AM, para. 3.119.
- 69 -2003 . Again, exactly as in the case of the Traspapel plant, the record contains not
even the slightest hint that Argentina considered the notice to CARU, coming as it
did only after the authorization of the project, un timely or in any way inconsistent
with the provisions of the Statute. Thus, in 2001, as in 1996, Argentina did not
subscribe to the position it advances before this Court; that is, that authorizations are
only permitted after the notific ation and consultation proce ss set forth in Articles 7
through 12.
c) Nueva Palmira Freight Terminal
2.68 Argentina’s true understanding about whether notice to CARU is required
before any authorizations are issued is s till further demonstrated by the example of
the Nueva Palmira freight terminal, about which Uruguay notified CARU in
February 2006. As with Traspapel and th e M’Bopicua Port, Argentina’s Memorial
119
attempts to enlist the Nueva Palmira Terminal to support its procedural case . Yet,
once again, Argentina’s depiction of relevant events is materially incomplete.
2.69 It is true, as Argentina states, that Uruguay brought the freight terminal to
120
CARU’s attention at the 17 February 2006 plenary meeting . It is also true that the
Argentine delegation then said that, under Article 7, CARU had 30 days to evaluate
121
whether the project might cause significant harm to Argentina . More telling,
however, is what Argentina omits. That is, Uruguay’s Ministry of Transport and
118International Finance Corporation Cumulativ e Impact Study -- Uruguay Pulp Mills, Annex
E, p. E2.7 (September 2006), available at http://www.ifc.org/ifcext/lac.nsf/
AttachmentsByTitle/Uruguay_CIS_AnnexE_Oct2006/$FILE/Uruguay_CIS_AnnexE_Oct2006
.pdf (last visited on 5 July 2007).
119See AM, paras. 3.121-3.122.
120
See AM, para. 3.121.
121
AM, para. 3.122.
- 70 -Public Works issued Resolution No. TO/ 136 authorizing the freight terminal at
Nueva Palmira on 30 January 2006 122-- nearly three weeks prior to Uruguay’s
notification to CARU. More telling still was Argentina’s reaction. It did not object
to the timeliness of Uruguay’s notification. It did not claim that Uruguay had failed
to follow the procedural requirements of th e 1975 Statute. In fact, it did quite the
opposite. It accepted Uruguay’s notice without comment and stated simply that
123
CARU had 30 days to give its preliminary views . It thus implicitly endorsed the
propriety of Uruguay’s notice.
2.70 The absence of objection is exquisitely awkward for Argentina. The
Nueva Palmira freight terminal was firs t presented to CARU in February 2006 even
as Argentina was positioning this dispute for submission to this Court. In December
2005 and January 2006, Argentina and Uruguay were in the process of exchanging
diplomatic notes about the ENCE and Bo tnia plants in which Argentina was
threatening to institute proceedings in this Court. In those notes, Argentina took the
position that it now advances in its Memori al; that is, that Uruguay’s “unilateral”
authorizations of the cellulose plants prio r to notifying CARU were in violation of
124
the 1975 Statute . Yet, even subsequent to sendi ng those notes, in February 2006,
Argentina accepted Uruguay’s post-authorizat ion notification of the Nueva Palmira
freight terminal without objection -- exactly as it had done in the cases of Traspapel
and the M’Bopicua Port. Uruguay submits that Argentina’s actions reveal more
plainly than any legal argument in the Memorial its true understanding of the
requirements of the 1975 Statute.
122CARU Minutes No. 02/06, p. 302 (17 February 2006). UCM, Vol. IV, Annex 116.
123
Ibid., p. 303.
124
See AM, Vol. II, Annexes 27-30.
- 71 - * * *
2.71 Argentina’s argument about when Article 7 requires notice to CARU
about a planned project is demonstrably wr ong. There is nothing in the text of the
Statute, the provisions of the CARU Dige st, or the Parties’ practice that requires
notice before a project is authorized by th e initiating State. In fact, as Uruguay has
just shown, all three sources show that notice can be provided after the authorization
of a project has already occurred. What Article 7 requires is timely notice. That is,
notice must be given in sufficient time to allow CARU and the notified State to
evaluate the likely effects on the river and, if necessary, to consult on appropriate
preventive measures. As Chapter 3 will demonstrate, that happened in this case:
Uruguay provided timely notice with respect to both the ENCE and Botnia plants.
(c) To “Carry Out”
2.72 The first paragraph of Article 7 requires notification whenever one party
plans to “carry out” a work that might affe ct navigation, the regime of the River,
and/or water quality. Thus, in evaluati ng the text of Article 7, including how it
relates to the issue of timing, it is impor tant to understand what it means to “carry
out” a project for purposes of Article 7. The carrying out, or implementation, of a
project can only be the initiation of the actions that themselves threaten harm to
navigation, the regime of the river and/or the quality of its waters. In the context of
this case, that is only the operation of the ENCE and Botnia plants, not their mere
construction. Argentina has made no allegation that the construction of the plant has
or will cause damage, merely that the future operation of the plant might do so.
Thus, only at the operational phase can the project be said to have been “carried out”
within the purview of the Statute.
- 72 -2.73 The point here is reminiscent of the Court’s observations in the Gabcikovo
case where it stated that:
[B]etween November 1991 and October 1992, Czechoslovakia
confined itself to the execution, on its own territory, of the works
which were necessary for the implementation of Variant C, but
which could have been abandoned if an agreement had been
reached between the parties and did not therefore predetermine
the final decision to be taken. For as long as the Danube had not
been unilaterally dammed, Variant C had not in fact been
applied.
Such a situation is not unusual in international law or, for that
matter, in domestic law. A wrongful act or offence is frequently
preceded by preparatory actions which are not to be confused
with the act or offence itself. It is as well to distinguish between
the actual commission of a wrongful act (whether instantaneous
or continuous) and the conduct prior to that act which is of a
preparatory character and which “does not qualify as a wrongful
act”12.
2.74 To be clear, in making this obser vation, Uruguay is not suggesting that
notice to CARU would be timely at any time up to the moment when the plant
becomes operational. To the contrary , Uruguay has already acknowledged that
notice is due at a point in time during the planning process that is sufficiently in
advance of operation to allow for the procedures of the 1975 Statute to be followed;
this is, for a meaningful assessment of the project by CARU and/or the notified
State, for the provision of their views, and for good faith consultations between the
Parties, if required. The point is simply that so long as notice occurs at a moment
during the planning process that it is suffici ently far in advance of operation -- as
opposed to mere construction -- so as to pe rmit such consultative procedures, it is
timely. As indicated, and as demonstrated in Chapter 3, that is precisely what
happened in this case.
125
Gabčikovo-Nagymaros Project (Judgment,)op. cit., p. 54, para. 79.
- 73 - (d) The Application of Article 7 to Industrial Facilities
2.75 There is a final point concerning the scope of the first paragraph of Article
7 that requires attention. That is, it does not apply of its own force to industrial
facilities located exclusively within the territo ry of one of the Parties. By its terms,
Article 7 is triggered when one of the Pa rties plans to implement “works” (“obras”)
that otherwise meet the criteria stated. Th e Article is situated in Chapter II of the
1975 Statute, captioned “Navigation and Works,” and the only works specifically
listed in the text include the construction of new channels or the modification of
existing ones; that is, large-scale works that are carried out in the river itself. The
term “works” is thus best understood to refer only to a limited set of major public
works. Significantly, whenever the 1975 Statute intends to embrace other types of
projects within the notice and information sharing obligations it creates, it does so
explicitly 12.
2.76 Before proceeding further on this point, Uruguay hastens to make clear
that it is not arguing that it was not obligated to give notice about either the ENCE or
Botnia plants. To the contrary, Uruguay’s position is as it advised the Court on 8
June 2006 during the oral hearings on Argentina’s request for provisional measures:
Uruguay considers that Articles 7-12 of the Statute do apply (albeit indirectly, as
discussed below) to the plants, and to all other industrial facilities that might affect
127
the quality of the water of the Uruguay River . Uruguay’s purpose here is to note
126
See, e.g. , 1975 Statute,op. cit. , Arts. 27 (relating to domestic, sanitary, industrial and
agricultural uses) & 34 (relating to the explor ation and exploitation of the river bed and
subsoil). UCM, Vol. II, Annex 4.
127
See CR 2006/49, p. 10, para. 2 (Boyle) (8 June 2006).
- 74 -the manner in which the Statute works, a nd to discuss the Parties’ historical
behaviour under it.
2.77 The fact that Article 7 does not apply of its own force to industrial
facilities located exclusivel y within the territory of one of the Parties is amply
supported by the Parties’ historical practi ce under the Statute. In its Memorial,
Argentina cites a total of six examples of State practice which it claims shed light on
the Parties’ de facto interpretation of the procedural provisions of Articles 7 et seq.
They are: (1) the Garabí Dam, (2) the M’Bopicua Port, (3) the Nueva Palmira
Freight Terminal, (4) the Santo Tome-Sao Borja Bridge, (5) the Casa Blanca Canal,
and (6) the Traspapel cellulose plant. As the Court will note, five of these six
examples are major public works to be built on or in the river itself, and thus plainly
fall within the explicit language and scope of Article 7. The only prior case
identified in the Memorial that did not involve public works on the river itself was
the Traspapel cellulose plant. And even then, the consideration of the Traspapel
plant touched off an extensive debate in CARU as to whether or not Articles 7-12 of
the Statute apply to industrial plants located within the territory of one of the Parties.
Most significantly, it was Argentina’s positi on that they do not. Ambassador Julio
Carasales, then Chairman of Argentin a’s delegation to CARU, argued that he
“understands that those artic les are regulating the execution of works, emphasizing
the word works, in the river such as channels, dams, etc., that is, works which have a
direct relation to and are done fundamentally in the river” 12.
2.78 The CARU minutes of an earlier meeting at which the Traspapel plant was
discussed reflect that Argentina’s
128
CARU Minutes No. 7/96, p. 1069 (23 August 1996). UCM, Vol. IV, Annex 82.
- 75 - Ambassador Carasales confirms for the record that, the pertinent
studies by the appropriate national authorities of Uruguay having
been completed, and the authorization for placement [of the
Traspapel plant] having been granted, the Administrative
Commission of the Uruguay River does not have competence to
express an opinion on a facility in the territory of one of the
Parties. Once that plant is operating and in production, if it
causes contamination problems, the 129U will have statutory
power to intervene in the matter .
2.79 The issue of whether or not the procedural mechanisms of the 1975 Statute
applied to the Traspapel plan t was subsequently addressed at some length, although
without conclusion (then or since). It was in response to the suggestion by the
Chairman of the Uruguayan delegation, Ambassador Gonzalez Lapeyre, that the
procedural mechanisms of the Statute might apply 13, that Ambassador Carasales
expressed the Argentine view that Article 7 addresses only “works that have a direct
relation to and are done fundamentally in the river.” He also went on to state that he
believes that to extend and to apply - he is not saying that this
cannot be done but rather that it should be carefully examined -
the prior consultation regime to the implementation of industrial
facilities within one country or the other would mean as a
practical matter that a country w ould have to ask for permission
from the other country to do an i ndustrial facility. It should be
considered carefully why and to what extent works in the River
Uruguay can be assimilated to i ndustrial projects or any other
131
kind in the territory of either country .
2.80 Ambassador Carasales’ use of the verb “to extend” in this context is
noteworthy. The implication is plain: until that time, CARU had not applied the
regime of prior consultation under the 1975 Stat ute to industrial facilities located in
the territory of either Uruguay or Argentina. The historical record confirms this. As
129CARU Minutes No. 2/96, op. cit., p. 203 (emphasis added). UCM, Vol. IV, Annex 80.
130CARU Minutes No. 7/96, op. cit., p. 1065. UCM, Vol. IV, Annex 82.
131Ibid., p. 1069 (emphasis added).
- 76 -discussed in detail at paragraphs [2.140] to [2.150] below, since the adoption of the
Statute in 1976, Argentina has authorized th e construction and operation of literally
dozens of industrial plants that deposit significant quantities of chemical or
132
biological effluents into the Uruguay River or its major tributaries . Not once has
it notified CARU or Uruguay of any of these projects, even though they are certainly
of a sufficient magnitude to affect the quality of the river. Likewise, Uruguay
authorized several industrial plants of its own without notifying either CARU or
Argentina during the same time period. Plainly, neither Party considered itself
obligated to provide a notification under Artic le 7 for industrial facilities located in
its own territory, as distinguished from major works on the river itself.
2.81 It is worth recalling here that in the Traspapel case -- the only industrial
plant mentioned in the Memorial -- Ur uguay never formally notified CARU (or
Argentina), and Argentina made no objecti on. As a result, Ambassador Carasales
considered that any extension of the Stat ute to bring industrial plants within the
purview of Article 7 should be undertaken only after careful analysis by both Parties.
He personally did not want to take a position for or agai nst such an extension, but
instead stated that
in relation to the subject of the extension of the principle of prior
consultation to industrial or other types of facilities constructed
within the territory of each State and not in the river, he wants to
reiterate his previous statemen ts so there are no doubts about
them. He did not take any position in favour of whether or not
this principle should be applied, but only expressed the point of
view that the subject should be studied with care because if the
criterion were applied strictly, perhaps - and this is something to
132
See Ministry of Industry, Energy and Mines, “Works on the River Uruguay,” pp. 29-48
(June 2007). UCM, Vol. X, Annex 224.
- 77 - be debated - the princip133of prior consultation would be
excessively extended .
2.82 It does not appear that Argentina and Uruguay ever pursued the issue or
came to a conclusion one way or another 134. The issue of the application (or non-
application) of the procedural rules set forth in Articles 7 through 12 of the 1975
Statute to industrial facilities was thus left open and unresolved; a state of affairs that
has continued to this day.
2.83 It is only now, for purposes of this case, that Argentina argues for the first
time that the procedural duties set out in Articles 7-12 apply to industrial facilities,
specifically to the ENCE and Botnia plants. Uruguay cannot help but note the irony
in Argentina’s sudden change of position, re flected in its consistent conduct since
1976 and the justification offered by Amba ssador Carasales, one of its leading
experts on the 1975 Statute. After authorizing the construction and operation of
135
dozens of industrial plants of its own near the Uruguay River -- all capable of
affecting the quality of the water -- without notifying CARU or Uruguay, Argentina
now insists that Uruguay’s plants are subj ect to the procedural requirements of
Articles 7-12.
2.84 In fact, it is actually Article 27, which appears in Chapter VII of the
Statute governing “Use of Wa ter,” that makes Articles 7 et seq. applicable to
industrial facilities. It states:
The right of each Party to use the waters of the river, within its
jurisdiction, for domestic, sanita ry, industrial and agricultural
133Ibid., pp. 1072-1073.
134Despite Uruguay’s best efforts, including a re view of all of the minutes of subsequent
CARU meetings, it has been unable to locate any references to CARU having come to a
conclusion on the issue. Uruguay thus concludes that it never did so.
135See “Works on the River Uruguay,” op. cit., pp. 30-41. UCM, Vol. X, Annex 224.
- 78 - purposes shall be exercised without prejudice to the application
of the procedure laid down in articles 7 to 12 when the use is
liable to affect the regime of the river or the quality of its
waters 136.
2.85 As just discussed, however, the practice of the Parties until this case
appears to have been to read Article 27 out of the Statute. Not only have they
authorized numerous industrial uses of the river without notifying CARU, they have
also authorized a great num ber of domestic and sanitation projects -- also without
notifying CARU or each other. Annex 224 is a study conducted by Uruguay’s
Ministry of Industry, Engineering and Mi ning. It identifies nearly 170 industrial
facilities on or near the Uruguay River, and more than 30 domestic and sanitation
projects capable of affecting the river, authorized by Argentina 137. None of those
projects was ever notified to CARU or Urugua y, or were the subject of consultation
with Uruguay. Annex 224 also identifies i ndustrial facilities and sanitation projects
authorized by Uruguay. Although the number of these projects on the Uruguayan
side of the river is vastly smaller, it is nevertheless true that they were never notified
to Argentina or CARU 138.
2.86 The fact that the Parties have historically disregarded their nominal
obligations under Article 27 is still further confirmed by their practice under Article
28, which follows and complements Article 27. As previously mentioned, Article 28
1361975 Statute, op. cit., Art. 27. The fact that Article 7 does not apply directly to industrial
facilities but only through the operation of Article 27 is confirmed by the familiar principle of
interpretation that no provision of a treaty s hould be interpreted to be mere surplusage. If
Article 7 applied of it own force to industrial us es of the river, Article 27 would be rendered
entirely redundant and thus unnecessary, a result inconsistent with basic interpretive tenets.
137
“Works on the River Uruguay,” op. cit., pp. 30-48, 57, 12-21. UCM, Vol. X, Annex 224.
138Ibid., p. 57. Eighty-five per cent of the iden tified industries are lo cated on the Argentine
bank of the river. Eighty-four per cent of the medium and high contamination potential
industries are located on the Argentine bank.
- 79 -and the analogous provisions of the CARU Digest require the Parties to submit semi-
annual reports to CARU detailing the uses (including industrial uses) they have
authorized within their jurisdiction so that CARU can determine whether those
developments are likely to cause significant harm to the regime of the river or the
quality of its waters 139. However, the Parties’ compliance with the reporting
requirements of Article 28 has been virtually non-existent, whether in respect of
industrial, agricultural, sanitary, or domestic uses of the river. In 1994, for instance,
Argentina’s Ambassador Carasales prepared a report to CARU in which he observed
that neither of the Parties had been submitting the information called for in Article
140
28, nor had CARU insisted on the matter . As a result, he concluded that CARU
“obviously does not exercise its duty of judging the possible damage that the uses of
141
water cause or may cause . In this regard, he also observed that as of that date, the
duty to notify and consult had been deem ed to relate only to works of great
importance, such as dams 142.
2.87 Other than noting that Argentina’s current argument is contradicted by the
prior practice of the Parties, however, Uruguay takes no issue with it. Uruguay has
now made it absolutely clear that it considers that Articles 7-12 of the Statute do
139
1975 Statute, op. cit., Art. 28. UCM, Vol. II, Annex 4.
140
Subcommittee on Legal and Institutional Affairs Report No. 115, pp. 804 -805, Annex A, p.
807 (20 June 1997), approved in CARU Minutes No. 6/97 (20 June 1997). UCM, Vol. IV,
Annex 85.
141Ibid.
142Ibid. Minutes of CARU meetings show that when Uruguayan delegate Captain Juan Miguel
Herrera was appointed to the Commission in May 1996, he made a point of asking why CARU
had historically not insisted on compliance with the procedures set out in Articles 27 to 29
concerning uses of the River, including industr ial uses. CARU Minutes No. 4/98, p. 386 (17
April 1998). UCM, Vol. IV, Annex 87. Argentin a’s Ambassador Carasales informed him that
in the early 1990s CARU had asked the Parties to supply it with the pertinent information but
they had both largely failed to respond. As a result, CARU decided to stop insisting on the
matter. Ibid.
- 80 -apply (albeit indirectly, by operation of Article 27) to the ENCE and Botnia plants,
and to all other industrial, agricultural, sanitary, and domestic f acilities that might
affect the quality of the river’s water. A nd, as shown in this Counter-Memorial, in
particular in Chapter 3, Uruguay complied fully with these procedural obligations
insofar as the ENCE and Botnia plants are concerned. Uruguay’s point here is
simply to make clear that this case represents a complete departure from the
consistent course of the Parties’ historical dealings.
2. The Second Paragraph of Article 7
2.88 The second paragraph of Article 7 st ates the applicable procedures in the
event CARU either (1) finds preliminarily that a project might cause significant
damage to the other Party, or (2) is unable to achieve consensus on the matter. It
states:
If [CARU] finds this to be the case [ i.e., that the project might
cause significant harm to the other Party] or if a decision cannot
be reached in that regard, the Party concerned shall notify the
other Party of the plan through the said Commission 14.
2.89 The implication, of course, is that if both delegations to CARU come to
the agreed conclusion that a project will not cause significant harm to the other
Party, the initiating State has discharged its procedural obligations and owes no
further performance to the other State. As discussed above, this is exactly what
happened in the case of the M’Bopicua Port in 2001.
2.90 In the event that CARU finds there is a threat of significant harm or is
unable to achieve consensus on the issue, Article 7 provides that the matter will
thereafter be dealt with between the two Governments. From that point on, CARU’s
143
1975 Statute, op. cit., Art. 7, para. 2.
- 81 -substantive role in connection with the Article 7 to 12 process is essentially over. As
articulated by Argentina’s Ambassador Carasales:
[T]he fundamental issue is no longer within CARU’s
competence. It is an exclusively bilateral issue which must be
resolved Government-to-Government, with the only procedural
matter being that communications should be sent through the
[CARU], but [CARU’s] role is th at of a postal agent that may
not take any substantive actio n. … The dialogue must be
formalized bilaterally144om Government to Government and not
through the [CARU] .
3. The Third Paragraph of Article 7
2.91 Under the third paragraph of Article 7, the notification from the initiating
State to the other Party contemplated in the preceding paragraph
shall describe the main aspects of the work and, where
appropriate, how it is to be ca rried out and shall include any
other technical date [ sic] that will enable the notified party to
assess the probable impact of such works on navig145on, the
régime of the river or the quality of its waters .
2.92 The information-sharing requirement described in this paragraph should be
understood in light of its purpose -- “to asse ss the probable impact of such works on
navigation, the régime of the river or the qua lity of its waters.” Thus, so long as the
notifying Party has provided information ad equate to meet this purpose, it has
discharged its obligations under the 1975 Statut e. As the Court will read in Chapter
3, Uruguay discharged this obligation. It provided Argentina with more than enough
information to assess the probable impacts of the ENCE and Botnia plants.
2.93 Geneirnatlernationa l law suggests that the notifying State is under no
obligation to conduct additional investigations or gather additional information at the
behest of the notified State. Accord ing to Article 12 of the 1997 Watercourse
144
CARU Minutes No. 5/95, pp. 712-713 (23 June 1995). UCM, Vol. IV, Annex 77.
1451975 Statute, op. cit., Art. 7, para. 3.
- 82 -Convention, any “notification shall be acco mpanied by available technical data and
information, including the results of any environmental impact assessment, in order
to enable the notified States to evaluate the possible effects of the planned
146
measures” . The commentary makes clear:
The reference to ‘available’ tec hnical data and information is
intended to indicate that the no tifying State is generally not
obligated to conduct additional re search at the request of a
potentially affected State, but must only provide such relevant
data and information as has been developed in relation to the
planned measures and is readily accessible 147.
Nevertheless, as set forth in Chapter 3, at Argentina’s request, Uruguay repeatedly
obtained additional data from other source s in order to furnish Argentina with
information it requested that Uruguay itself did not possess.
2.94 At least two further observations about the third paragraph of Article 7 are
in order. First, the use of the term “probable” to describe the impact of the planned
work should not be ignored. The explicit purpose of the information sharing is to
enable the notified Party to evaluate the likely effects of the planned project. In
other words, by its very terms, the 1975 St atute is not concerned with remote or
speculative impacts that, while capable of being imagined, are unlikely to eventuate
in reality.
2.95 Second, this paragraph underscores once more the limited scope of the
notification and information sharing mechan isms of the 1975 Statute. Just as the
first paragraph of Article 7 requires notice only when a pr oject may affect
navigation, the regime of the river, and/or water quality, the third paragraph requires
only the provision of information relating to these same three subject areas. The
146
1997 Watercourse Convention, op. cit., Art. 12.
1471994 Draft Articles, op. cit., p. 112, comment 5.
- 83 -notifying State is thus under no obligation to provide information that has no bearing
on these issues.
B. A RTICLES 8-11
1. Article 8
2.96 Article 8 says that the State receiving the notification described in the third
paragraph of Article 7 has up to 180 days in which to review the information
provided by the notifying State and give its response, if any. Specifically, it states:
The notified Party shall have a period of 180 days in which to
respond in connection with the plan, starting from the date on
which its de148ation to the Commission receives the
notification .
The Article also deals with the possibilit y that the notified party considers the
material provided to it incomplete, and states:
Should the documentation referred to in article 7 be incomplete,
the notified Party shall have 30 days in which to so inform,
through the Commission, the Party which plans to carry out the
work 149.
2.97 It bears reiteration here that it is the notified Party itself which is carrying
out the review of the project, not that Party’s delegation to CARU. Similarly, any
requests for additional information are dire cted from one Party to the other, albeit
through the instrumentality of CARU. Du ring this phase of the process, CARU
remains a vehicle for communication betw een the Parties. To use Ambassador
Carasales’ words, CARU’s role in this part of the process is to serve as a “postal
150
agent” .
1481975 Statute, op. cit., Art. 8. UCM, Vol. II, Annex 4.
149Ibid., Art. 8.
150
CARU Minutes No. 5/95, op. cit., pp. 712-713. UCM, Vol. IV, Annex 77.
- 84 - 2. Articles 9 and 10
2.98 Articles 9 and 10 together describe the procedural consequences that
attach when the notified Party either (a) fails to respond within the 180-day period
stipulated in Article 8, or (b) specifically states that it has no objection to the planned
project. Article 9 provides:
If the notified Party raises no objections or does not respond
within the period established in article 8, the other Party may
151
carry out or authorize the work planned .
Article 10, in turn, states:
The notified Party shall have the right to inspect the works being
carried out in order to determine whether they conform to the
plan submitted 152.
2.99 These two Articles, and the role they play within the procedural scheme of
the 1975 Statute, are discussed at greater length below. For present purposes, it is
sufficient to note that together they make clear that when the notified State has no
objections to a project, the notifying State bears no further procedural duties with
which it must comply (Art. 9), save for permitting the notified State to inspect the
work in question in order to verify that the project as implemented is the same as the
project previously presented to it (Art. 10).
3. Article 11
2.100 Article 11 deals with the procedural consequences that attach when the
notified State comes to the conclusion th at the planned project might cause it
significant harm. As such, it deals with the alternative possibility to the one
addressed in Articles 9 and 10. In particular, it provides:
1511975 Statute, op. cit., Art. 9. UCM, Vol. II, Annex 4.
152Ibid., Art. 10.
- 85 - Should the notified Party come to the conclusion that the
execution of the work or the programme of operations might
cause significant harm to navigati on, the regime of the river or
the quality of its waters, it shall so notify the other Party,
through the Commission, within the period of 180 days
established in article 8.
Such notification shall specify which aspects of the work or the
programme of operations might significantly impair navigation,
the regime of the river or the quality of its waters, the technical
reasons on which this conclusion is based and the modifications
suggested to the plan or programme of operations 153.
2.101 At least five important observations can be made about the text of Article
11. First, the right of the notified Party to engage with the initiating Party is
dependent on a finding that there might be significant harm. This is evident from the
first paragraph of Article 11 which applie s in the event that “the notified Party
comes to the conclusion” that the project might cause it significant harm. It follows,
then, that unless it comes to that conclusion, the notified State is entitled to no
further procedural performance from the notifying State.
2.102 Second, and flowing as a necessary consequence of the first point, the
notified State has a duty to accept detrimental effects that do not rise to the level of
“significant harm.” Indeed, this conclusi on flows not just from the text of Article
11, but from the entire scheme of Articles 7 through 11. As Uruguay has shown, the
triggering event requiring notification under Article 7 is the planned implementation
of a project that has the potential to cause significant harm to the non-initiating State.
CARU’s preliminary review under the first pa ragraph of Article 7 is directed at
determining whether or not significant harm might occur. Likewise, under Article
11 the notified State’s right to engage with the notifying State is dependent on its
153
Ibid., Art. 11.
- 86 -own finding that the planned project might cause it significant harm. Individually
and collectively, these provisions only make sense if they are understood to impose
an obligation on the notified State to accept effects, even harms, that do not rise to
the level of “significant”.
2.103 This reading of the 1975 Statute also finds support in general international
law. In his 1986 Second Report on the Law of the Non-Navigational Uses of
International Watercourses, Special Rapporteur Stephen McCaffrey stated:
[A] State’s right to use a waterc ourse is limited by a duty not to
cause harm to other States, but this duty is not absolute; some
harm may have to be tolerated ( i.e. is not wrongful), provided it
is caused by conduct falling with in the ambit of a use by one 154
State that is ‘equitable’ vis-à-vis the other State(s) concerned .
2.104 The same point is reflected even more succinctly in the ILC’s 2001 Draft
Articles on Transboundary Harm. According to the commentary to Article 2:
These mutual impacts [of one State on another], so long as they
have not reached the level of ‘significant’, are considered
155
tolerable .
2.105 This was a point of some discussion during the UN Ge neral Assembly’s
debate over the ILC’s 1994 Draft Articles prior to their adoption as the 1997
Convention. During the Sixth Committee Working Group of the Whole for the
Elaboration of a Convention on the Law of the Non-Navigational Uses of
International Watercourses in October 1996, a
bone of contention in the discussi on of art. 7 was the adjective
“significant”. Downstream dele gations requested its deletion,
which was strongly resisted by upstream delegations. During
the debate, it gradually emerge d that there was unanimous
acceptance of the de minimis rule. As a general principle this
154Special Rapporteur Stephen McCaffrey, Second Report on the Law of the Non-Navigational
Uses of International Watercourses, p. 134, para. 184 (1986).
1552001 Draft Articles, op. cit., p. 388, comment 5.
- 87 - derives from national legal syst ems, and from the principle
concept of good neighbourliness. Its implication in the context
of art. 7 is that co-riparians have a duty to overlook insignificant
damage 15.
2.106 Third, by requiring the notified State to “specify which aspects of the work
or the programme of operations might signifi cantly impair navigation, the regime of
the river or the quality of its waters, the technical reasons on which this conclusion is
based”, the second paragraph of Article 11 squarely places a burden on the notified
party to identify the specific technical r easons for believing that a project has the
potential to cause significant harm. In this respect, Article 11 mirrors paragraph 4 of
the 1971 Joint Declaration 15. Speculation about remote possibilities or vague
allegations of generalized harms is not enough.
2.107 Once again, this approach is entirely consistent with general international
law. According to the ILC commentar y to Article 15 of the 1997 Watercourse
Convention, for example:
The explanation [of the notified State’s objections] must be
‘documented’ -- that is to say it must be supported by an
indication of the factual or other bases for the finding -- and
must set forth the reasons for the notified State’s conclusion that
implementation of the planned measures would violate articles 5
156
Tanzi, A. “Codifying the minimum standards of the law of international watercourses:
remarks on part one and a half”. (Natural Resources Forum, Vol. 21, No. 2, May 1997, p. 115.)
Under general international law, not even signifi cant harm to a co-riparian State is necessarily
impermissible. The governing question in all cases is whether a use exceeds a State’s right to
the equitable and rational utilization of the river. According to the ILC commentary to Article
7 of the 1997 Watercourse Convention (at para. 2):
[T]he fact that an activity involves significant harm would not of itself
necessarily constitute a basis for barring it. In certain circumstances ‘equitable
and reasonable utilization’ of an inte rnational watercourse may still involve
significant harm to another watercourse state. Generally, in such instances, the
principle of equitable and reasonable utilization remains the guiding criterion
in balancing the interests at stake.
1994 Draft Articles, op. cit., p. 103, comment 2.
157See supra paras. 2.14.
- 88 - or 7. The word ‘would’ was used rather than a term such as
‘might’ in order to indicate that the notified State must conclude
that a violation of articles 5 or 7 is more than a mere
158
possibility .
2.108 Fourth, the limitations as to the substantive scope of the procedural
provisions must again be emphasized. Article 11 once more underscores that the
only legitimate areas of inquiry for the notif ied State are navigation, the regime of
the river, and the quality of its water. Other subject matters unrelated to navigation,
the river regime and water quality -- even those of an environmental character --
afford no basis for objection under Article 11, even if the Statute elsewhere covers
those topics for other purposes.
2.109 A fifth and final point concerns the use of the terms “modifications” and
“suggested” in the final phrase of Article 11. The terms are significant, and hearken
back to the use of similar terms in the 1971 Joint Declaration. The use of the verb
“suggest” underscores the fact that the notified State has no right to impose any
particular changes to the planned project, merely that it may make recommendations
which by definition need not be incorporated into the final project. In a similar way,
the use of the term “modificat ions” indicates that the notified State has no power to
negate the initiating State’s right to undertak e the project in question. It has only a
right to suggest modifications to the projec t that the initiating St ate is obligated to
consider in good faith.
C. P RIOR CONSENT IS N OT REQUIRED
2.110 Before turning to the Parties’ mu tual duties to consult in good faith, it is
appropriate to address the issue of whether or not anything in the foregoing
1581994 Draft Articles, op. cit., p. 115, comment 2.
- 89 -provisions of the 1975 Statute requires the notifying State to obtain the prior consent
of the notified State before implementing a planned project. Oddly, especially in
light of the evident centrality of the i ssue, Argentina’s Memo rial conspicuously
refuses to take a clear position. While Argentina seems intent on cultivating the
impression that the Statute requires prior consent, it is reluctant to come out and say
that directly. Thus, for example, the word s “prior consent” and “veto” are not used
in connection with the 1975 Statute anywhe re in the 370 pages of the Memorial.
The phrase “accord préalable” or “prior agreement”, on the other hand, appears with
some frequency. When it does, however, it is not altogether clear that Argentina is
arguing that the Statute actually requires prior agreement. Most often, the phrase
appears in the context of a statement that the Statute creates a system of notification
and consultation “ en vue de parvenir à un accord préalable” 15. This hortatory
formulation, of course, stops well short of claiming an express requirement for prior
agreement.
2.111 Only very rarely do the two words “accord préalable” stand alone and
160
unqualified. Indeed, Uruguay can identify only five such usages in the Memorial .
Yet even these, when examined closely, evince a tenderly nurtured ambiguity that
makes it unclear whether Argentina really means what it appears to be implying. At
paragraph 3.38, for example, the Memorial states: “Le droit de chaque Etat d’utiliser
les eaux du fleuve à l’intérieur de sa juridiction nationale est donc soumis aux
obligations relatives à l’information, la notification, la consultation et l’accord
préalable, c’est-à-dire au mé canisme strict de coopération établi par le Statut de
159See, e.g., AM, paras. 3.25, 3.28, 3.39, 3.63, 3.81, 3.85, 3.97 (emphasis added). (“ with a view
to achieving prior agreement”)
160AM, paras. 3.38, 3.51, 3.99, 3.101 & 3.198.
- 90 - 161
1975.” The “mécanisme strict de coopération établi par le Statut de 1975”
indisputably requires “disclosure” (Art. 8) and “notification” of a project that might
prejudice navigation, the regime of the river and/or the quality of its waters (Art. 7).
But there is no reference of any kind, dire ct or indirect, to a “prior agreement”
anywhere in the Statute. What then does Argentina mean when it refers to the
“obligation[] relative[] à … l’accord préalable”? Given its general reluctance to take
a definitive position on the matter, it is not clear what Argentina is actually arguing.
Maybe it really does mean to say that a prior agreement is obligatory. On the other
hand, maybe the reference to the “obligation[] relative[] à … l’accord préalable” is
merely descriptive. That is, maybe Argentina is saying that the right of each Party to
use the river is conditioned on such obligati ons of prior agreement as might exist in
the Statute, which in turns means only that the Statute creates a system of
notification and consultation “en vue de parvenir à un accord préalable”.
2.112 If Argentina appears to be reticen t to make an outright claim that the
Statute requires “prior agreement”, there is good reason. At the oral hearings on
Argentina’s request for provisional meas ures in June 2006, Counsel for Uruguay
pointed out that in the 30-year history of the Statute prior to this case, Argentina had
never -- not once -- taken the position that a Party could not carry out a project
without the other’s prior agreement. Now, after reviewing Argentina’s 370-page
Memorial and 2439 pages of a nnexes, after readings thousands of pages of minutes
of CARU meetings and other official CARU documents, and after examining the
publications authored by Argentina’s expe rts on the negotiation and history of the
161AM, para. 3.38. (“The right of each State to use the waters of the river inside its national
jurisdiction is therefore subject to the obligatio ns relating to disclosure , notification and prior
agreement; i.e., the strict cooperation mechanism established by the 1975 Statute.”)
- 91 -Statute, Uruguay reaffirms its Counsel’s st atement in June 2006. In the 30-year
history of the Statute prior to the history of this case, Argentina never -- not once --
took the position that the Statute requires the prior agreement or consent of the
notified State before the notifying State can carry out a covered project.
2.113 Uruguay and especially the Court should not be put in the position of
having to sort out Argentina’s current ambi valence. A consequence of Argentina’s
reluctance to take a clear stand is that Uruguay does not know to which argument it
is supposed to be responding. Certainly, if Argentina is contending simply that the
1975 Statute creates a regime of notice, information sharing and consultation, all “en
vue de parvenir à” or “with a view to” prior agreement, Uruguay does not and could
not disagree. It should perhaps go without saying that prior agreement is always a
worthy goal, and Uruguay does indeed view the procedural mechanisms of the
Statute as designed to facilitate (without requiring) such an agreement. On the other
hand, if Argentina is arguing that the Statute requires the prior agreement of the
notified State before the notifying Stat e may implement any projects, Uruguay
strongly disagrees for all of the reasons that follow.
1. There Is No Veto Right Under General International Law
2.114 A logical starting place to begin the analysis of whether or not the 1975
Statute requires prior consent is general international law, which the context for
interpreting the text of the Statute. It is clear -- and Argentina makes no argument to
the contrary -- that general international law does not give notified States a veto
right.
2.115 As early as 1957, the arbitral tribunal in the Lake Lanoux case (Spain v.
France) held:
- 92 - [I]nternational practice does not so far permit more than the
following conclusion: the rule that States may utilize the
hydraulic power of international watercourses only on condition
of a prior agreement between th e interested States cannot be
established as a custom, even less as a general principle of
law 162.
Later in the same portion of its opinion, the tribunal reiterated the point:
Customary international law, like the traditional Law of the
Pyrenees, does not supply eviden ce of a kind to orient the
interpretation of the Treaty and of the Additional Act of 1866 in
the direction of favouring the necessity for prior agreement; even
less does it permit us to conclude that there exists a general
principle of law or a custom to this effect 16.
2.116 Significantlty h,e Lake Lanoux tribunal found that the obligations to give
notice and to consult do not themselves imply an obligation to reach a prior
agreement. Its logic was straightforward:
If the contracting Parties had wished to establish the necessity
for a prior agreement, they woul d not have confined themselves
to mentioning in Article 11 only th e obligation to give notice.
The necessity for prior notice from State A to State B is implicit
if A is unable to undertake the work envisaged without the
agreement of B; it would, then, not have been necessary to
mention the obligation of notice to B, if the necessity for a prior
agreement with B had been established 164.
2.117 In light of the foregoing, the tribunal determined that if prior agreement is
required, that requirement must be stated expressly. Specifically, it held:
To admit that jurisdiction in a certain field can no longer be
exercised except on the condition of, or by way of, an agreement
between two States, is to place an essential restriction on the
162Lake Lanoux Arbitration (France v. Spain) (hereinafter “Lake Lanoux”), International Law
Reports, vol. 24, p. 129, para. 13 (16 November 1957).
163Ibid.
164Ibid., para. 16.
- 93 - sovereignty of a State, and such restriction could only be165
admitted if there were clear and convincing evidence .
2.118 Dr. Julio A. Barberis, who nego tiated the 1975 Statute on behalf of
Argentina and is widely considered among the leading Latin American authorities on
shared natural resources, emphasized the same point in his 1979 work Shared
Natural Resources Among States and International Law. He wrote:
Some treaties establish the principle that one State, to be able to
carry out a work or hydraulic project, must have the consent of
the other contracting State. In these cases, each State has a veto
right with respect to the works and projects that may be
undertaken by its co-contracting party since, for its realization, it
must have the latter’s agreement. The consent of the co-
contracting State is necessary, regardless of whether the
hydraulic work project will or will not affect its territory. The
existence of a legal regime of this type must be expressly
stipulated in a treaty 16.
2.119 Argentina’s Memorial attempts to minimize the Lake Lanoux case and
avoids reference to Dr. Barberis altogether. Indeed, Argentina seems so
uncomfortable with the Lake Lanoux case and the obvious implications it has for this
dispute that it mentions the case in only three paragraphs of an otherwise ample
Memorial. Paragraph 3.83 contains Ar gentina’s only effort to distinguish Lake
167
Lanoux from this case . It argues: “l’Espagne et la France n’étaient pas liées par
165
Ibid., para. 11.
166
Julio Barberis, Shared Natural Resources Among States and International Law (hereinafter
“Shared Natural Resources”), p. 46 (1979) (emphasis added). UCM, Vol. IX, Annex 198.
167
The only other references to the Lake Lanoux case are in paragraph 3.82, where Argentina
merely identifies the case as a source of oneof the arguments Uruguay made during the June
2006 oral hearings, and paragraph 3.174, where Argentina cites the portion of the decision
where the tribunal states: “[l]a souveraineté terr itoriale joue à la manière d’une présomption.
Elle doit fléchir devant doutes les obligations in ternationales, quelle qu’en soit sa source […]”.
(“territorial sovereignty acts as a presumption. It must yield before all international obligations,
regardless of their source [...].”)
- 94 - 168
un traité au contenu semblable au Statut de 1975.” Presumably, Argentina means
to suggest that the 1975 St atute contains language e xpressly requiring prior
agreement. As Uruguay will demonstrate below, that is not true.
2.120 Moreover, the fact is that Spain and France were bound by a treaty broadly
similar to the 1975 Statute. Specificall y, they were bound by the 1866 Treaty of
Bayonne and the Additional Act of the same date. Article 11 of the Additional Act
required notice whenever “in one of the two States it is proposed to construct works
or to grant new concessions which might change the course or the volume of a
watercourse” so that “the interests that may be involved on both sides will be
169
safeguarded” . On that basis, the tribunal found that the parties owed each other
duties similar to those set forth in the 1975 St atute. It declined, however, to find a
requirement for prior agreement, precis ely because the Additional Act did not
contain an express requirement to that effe ct. Given the broad similarities between
the 1866 Additional Act and the 1975 Statute, the same conclusion is warranted in
this case.
2.121 Geneirn atlernatilal w has not changed since the Lake Lanoux case was
decided. The ILC commentary to Article 1 of the 2001 Draft Articles, for example,
states the general principle:
States likely to be affected ar e given the right of engagement
with the State of origin in designing and, where appropriate, in
the implementation of a system of management of risk
commonly shared betw een or among them. The right thus
envisaged in favour of the States likely to be affected however
168AM, para. 3.83. (“Spain and France were not bound by a treaty with contents similar to the
1975 Statute.”)
169Treaty of Bayonne and Add itional Act, Art. 11 (1866), quoted in, Lake Lanoux, op. cit., p.
103.
- 95 - does n170give them the right to veto the activity or project
itself .
2.122 Similarly, the text of Article 9 of the 2001 Draft Articles also makes clear
that prior agreement is not required:
If the consultations referred to in paragraph 1 fail to produce an
agreed solution, the State of origin shall nevertheless take into
account the interests of the State likely to be affected in case it
decides to authorize the activity to be pursued, wit171t prejudice
to the rights of any State likely to be affected .
The ILC commentary to Article 9 is particularly instructive:
[This] article maintains a balance between the two
considerations, one of which is to deny the States likely to be
affected a right of veto . … To take account of this possibility,
the article provides that the State of origin is permitted to go
ahead with the activity, for the absence of such an alternative
would, in effect, create a right of veto for the States likely to be
172
affected .
2.123 A leading commentator succinctly summed up the state of the law in her
discussion on “water as a natural resource.” She wrote: “With one early exception
[the Madrid Declaration of 1911], none of the [International Law Association] or
Institut [de Droit International] resolutions require prior permission for change to the
173
flow of water, whether as to line of its flow or as to its quantum or content.”
2.124 HistoricallA y,rgen tina has not disagreed. In 1974, for example, the
United Nations was working on the draft Ch arter of Economic Rights and Duties of
States, of which Argentina was a sponsor. At a 6 December 1974 session of the
170
2001 Draft Articles, op. cit., p. 383, comment 6 (emphasis added).
171
2001 Draft Articles, op. cit., Art. 9, para. 3.
172Ibid., pp. 411-412, comment 10 (emphasis added).
173Higgins, R.: Problems and Process, International Law and How We Use It. Oxford, Oxford
University Press, 1994, p. 135.
- 96 -General Assembly, just two and half months before the signing of the 1975 Statute,
the representative of Argentina, Mr. Oliveri Lopez declared:
Article 3 [of the draft Charter] stated a universally recognized
principle, namely, that economic co-operation between States
should be based on a system of information and prior
consultation in order to prevent disputes. It should not be
174
interpreted as implying that any State had a right of veto .
2.125 During the oral proceedings on Argentina’s request for the indication of
provisional measures in June 2006, Urugua y cited for the Court the provisions of
United Nations General Assembly Resolution 2995, dated 15 December 1972 175.
Paragraph 2 affirms the obligations of Stat es to cooperate and exchange data when
planning to implement projects that may ca use harm to their neighbours. Paragraph
3, however, makes it clear that
the technical data referred to in paragraph 2 above will be given
and received in the best spirit of co-operation and good-
neighborliness, without this bei ng construed as enabling each
State to delay or impede the programmes and projects of
exploration, exploitation and development of the natural
resources of the States i176hose territories such programmes or
projects are carried out .
2.126 In its Memorial, Argentina atte mpts to downplay the relevance of
Resolution 2995, principally by claiming that because it was adopted some two years
before the 1975 Statute, it can have no re levance to the interpretation of the latter
174
United Nations, Official Records of the General Assembly , Twenty-ninth Session , Second
Committee, agenda item 48, para. 3, document A/C. 2/SR.1647 (emphasis added). UCM, Vol.
IX, Annex 197.
175
CR 2006/49, p. 24 (9 June 2006) (Condorelli).
176
United Nations General Assembly Resoluti on 2995 (15 December 1972). UCM, Vol. IX,
Annex 196.
- 97 - 177
instrument . In so doing, Argentina ignores the history of the Resolution, a history
which only underscores its relevance to the procedural elements of this case.
2.127 In the early 1970s, a dispute developed between Argentina and Brazil over
the proposed construction of a dam across the River Paraná between Brazil and
Paraguay. Argentina was concerned that the dam would adversely affect it as a
downstream State, and took the position that Brazil had a duty under international
law to inform it of the technical details of the project and to consult with it in order
to take Argentina’s interests into account. Brazil initially resisted, but the two States
ultimately came to an agreement on 29 September 1972. It was precisely the text of
that bilateral agreement between Argentina and Brazil that was later adopted by the
178
General Assembly as Resolution 2995 . The core mechanisms laid out in
Resolution 2995 (that is, information sharing and consultation without a right to
impede another State’s proj ects) thus reflected Argentina’s position in the early
1970s.
2.128 The fact that two years passed between the time of the Resolution and the
conclusion of the 1975 Statute is immaterial. First, as Argentina itself has admitted,
179
negotiations on the Statute had begun as early as 1969 . The negotiation of the
Statute thus overlapped with Argentina’s agreement with Brazil and the adoption of
Resolution 2995. Second, as already discussed above, the procedural provisions of
the 1975 Statute largely echo those containe d in the 1973 Treaty on the Rio de la
Plata at Articles 17-22. That treaty was completed in November 1973, just 11
177AM, para. 5.12.
178
Stephen McCaffrey, The Law of International Watercourses, pp. 265-266 & n. 260 (2001).
179
AM, para. 3.12.
- 98 -months after the adoption of Resolution 2995, and must unquestionably be viewed as
bearing its imprint.
2.129 Argentina’s views concerning Braz il’s duties with respect to the River
Paraná dam, as reflected in Resolution 2995, did not arise in a vacuum. In 1946,
Uruguay and Argentina signed the Agreem ent Relating to the Utilization of the
Rapids of the Uruguay River in the Area of Salto Grande (ratified in 1958). At
Article 11, the 1946 Agreement affords Braz il an opportunity to be consulted in
connection with the construction of the Salto Grande dam 180. Brazil had previously
sought to assist a right to prior consent, a position expressly rejected by both
Argentina and Uruguay in favor of a prio r consultation regime. Particularly
interesting in this respect are the words of a 23 September 1960 Joint Declaration in
which the Governments of Argentina, Brazil and Uruguay agreed on the following:
The Governments of Argentina and Uruguay recognize the
Brazilian Government’s right, in accordance with existing
international instruments and the rules of international law ,
freely to carry out hydraulic works of any nature in the Brazilian
reaches of the Uruguay River and its tributaries; the Brazilian
Government will in its turn, in accordance with international
law and practice , consult with the other riparian States before
carrying out any hydraulic works which may alter the present
regime of the Uruguay River 181.
Thus, it is clear that Argentina’s position on “the rules of international law” was
consistent for at least the 30-year period leading up to the adoption of the 1975
Statute. The initiating State could “freely carry out” projects subject only to the duty
180Agreement between Argentina and Uruguay relati ng to the utilization of the rapids of the
Uruguay River in the area of Salto Grande (30 December 1946), Yearbook of the International
Law Commission, 1974, vol. II, Part Two, p. 87 (emphasis added).
181Joint Declaration of Argentina Brazil and Uruguay (23 September 1960), Yearbook of the
International Law Commission, 1974, vol. II, Part Two, p. 87-88, n.228 (emphasis added).
- 99 -to “consult with the other riparian States”. Prior consent was not required by
“international law and practice”.
2. The Statute Does Not Require Prior Consent
2.130 A thse Lake Lanoux Tribunal held, “clear and convincing evidence” is
required to find that a State’s right to unde rtake projects within its own territory is
conditioned upon reaching a prior agreement with another State 182. Argentina has
not and cannot identify any such evidence. The Statute itself contains no provision
expressly requiring the prior consent of the notified State. The closest Argentina has
ever come to identifying a textual basis for its position that the 1975 Statute requires
prior agreement was during the oral proc eedings on its request for provisional
measures in June 2006. At that time, Argentina argued that an a contrario reading
of Article 9 (which provides that when the notified State has no object
ions, the
notifying State may implement the project) implies that when the notified State does
183
object to a planned project, the initia ting State may not implement the project .
Article 9 will not bear the weight Argentina attempts to put on it, however.
2.131 First, the Court should be cautious about yielding to the temptation of
simplistic a contrario reasoning. As Uruguay will dem onstrate below, when States
mean to create a regime of prior consent, they express that requirement directly,
exactly as the Lake Lanoux case and Dr. Barberis suggest they should. They do not
depend, as Argentina would have it, on inferential leaps of logic from ambiguous
text. The fact that neith er Article 9 nor any other provision of the 1975 Statute
182Lake Lanoux, op. cit., para. 11.
183CR 2006/46, p. 31 (8 June 2006) (Sands).
- 100 -expressly requires prior agreement compel s the straightforward conclusion that no
such requirement exists.
2.132 Second, there is another perfectly logical way to read Article 9 that is
consistent with both the text of the Stat ute and the rejection of a veto right under
general international law. It is this: Article 9 (as read together with Article 10)
states the procedural consequences when the notified State does not object to the
notifying State’s project. Article 9 makes clear that the initiating State may proceed
with the project without incurring any further procedural obligations (of information
sharing, consultation, etc.), subject only to the notified State’s right to inspect the
project (under Article 10) to verify that the project as implemented conforms to the
project as described.
2.133 Articles 11 and 12, in turn, state the procedural consequences when the
notified State does have objections. In that case, the notified State must state the
basis for its objections with particularity, the parties must consult with one another
and, if they are unable to come to an agreement, one of them may submit the dispute
to the jurisdiction of this Court.
2.134 The procedural consequences under Article 9, which flow from the
absence of objections by the notified St ate, say nothing about the procedural
consequences flowing from the contrary situation when the notified State does have
objections. Seen in this light, Article 9 means exactly, but only, what it says: in the
absence of objections from the notified State, the notifying State may proceed with
the project with no additional procedural obligations incumbent upon it.
2.135 Dr. Barberis’s 1979 book confirms that the 1975 Statute does not require
prior consent. As cited above, Dr. Barberis wrote that “[s]ome treaties establish the
- 101 -principle that one State, to be able to carry out a work or hydraulic project, must
184
have the consent of the other contracting State” . He cites three examples: an
1816 Treaty between Prussia and Holland , an 1862 treaty betw een Austria and
185
Bavaria, and a 1956 treaty between Czechoslovakia and Hungary . He
conspicuously does not cite the 1975 Statute that he had negotiated on Argentina’s
behalf four years earlier. This is no oversi ght. Just three pages later, Dr. Barberis
references both the 1973 Treaty and the 1975 Statute in connection with his
discussion of treaty regimes that create a duty of prior consultation, but not prior
consent .86
2.136 In 1987, Dr. Barberis was one of the principal speakers at a two-day
“Technical Legal Symposium” (“Encuentro Técnico-Jurídico”) on the meaning and
application of the 1975 Statute. The sy mposium was sponsored by CARU, and
chaired by the President of CARU, the aforementioned Dr. Julio Carasales of
Argentina. In his presentation, Dr. Barberis again emphasized that the regime
established by the Statute was one of consultation, not consent:
Now, when one State proposes carrying out any work of
sufficient size to affect the river, it must first consult with its
riparian neighbor to permit the latter to determine whether said
work will cause it significant harm. Articles 7 to 13 of the
Statute establish the procedure to follow for this purpose and
provide for the participation of the Commission. Here, I would
like to highlight the provision in Article 13 that refers
specifically to the topic under consideration. This establishes the
regime of consultation not only for works that will be carried out
in the river, but also with regard to those that will be executed
within the jurisdiction of the States “outside the section defined
as a river and in the respective areas of influence in both
sections.” In conformity with these norms, if anyone, for
184Shared Natural Resources, op. cit., p. 46. UCM, Vol. VII, Annex 198.
185Ibid., p. 46, n. 125.
186
Ibid., p. 49 & n. 133.
- 102 - example, has a rice field of a certain size on the bank of the river
and proposes to fertilize it with a given chemical product or treat
it with certain pesticides, this could affect the quality of the river
waters and therefore, it must be the subject of consultation with
the riparian neighbor. The same procedure must be followed if
the execution of a work involves impeding the discharge of an
aquifer in the river or if someone proposes establishing a
contaminating industry on a tributary of the Uruguay River, such
as a tannery or a plant intended to process certain chemical
products.
As can be seen, the regime of consultation provided for in the
187
Statute has a broad range of application .
Thus, there can be no question that Argen tina’s lead negotiator of the 1975 Statute
did not read it to require prior consent, but only prior consultation.
3. The Argentine Government’s Memorandum Accompanying the Statute
2.137 Annex 4 to Argentina’s Memorial confirms Argentina’s contemporaneous
188
understanding of what the Statute does -- and does not -- require . That document
is a 7 September 1976 memorandum from the Ar gentine legislature to the President
accompanying bill no. 21.413 concerning ratification of the Statute. In
recommending ratification, the memorandum describes the provisions of the Statute
in substantial detail. With respect to th e procedural provisions of the Statute it
states:
The principle of prior consultation applies to cases in which one
of the riparian States plans to build new canals, to modify or
alter significantly those already in existence or to carry out other
works of sufficient magnitude to affect navigation, the regime of
189
the river or the quality of its waters .
187
CARU Technical-Legal Symposium, pp. 67- 68 (17-18 September 1987) (emphasis added).
UCM, Vol. IV, Annex 72.
188
AM, Vol. II, Annex 4.
189
Note to the Executive Br anch Accompanying Bill 21.413, p. 79 (7 September 1976)
(emphasis added). UCM, Vol. II, Annex 40.
- 103 -It also states:
Although the parties have the right to use the river’s waters
within their respective jurisdictions, for domestic, sanitary,
industrial and agricultural purposes, the prior consultation
procedure is established for those us es that are of sufficient
magnitude to affect the regime of the river or the quality of its
waters. 190
2.138 Numerous other references to “the principle of prior consultation” or “the
procedure of prior consultation” are included throughout the text of the
memorandum. The terms “prior agreemen t,” “prior consent” and/or “veto”,
however, appear nowhere either in form or in substance. The conclusion is
unmistakable. At the time the Argentine government submitted the 1975 Statute for
ratification, it did not view it as creating a requirement of prior consent.
4. The 1976 Joint Presidential Declaration
2.139 The only document that Argentina has be en able to identify that refers to
prior agreement is the joint Argentin e-Uruguayan Declaration of 18 September
1976 191. The Declaration was issued only 11 days after Argentina’s 7 September
1976 memorandum on ratification of the Statute discussed in the preceding section,
which described the procedural regime of the 1975 Statute as one of “prior
consultation”, not prior agreement. In contrast to the memorandum, the 18
September 1976 declaration, which was issued to commemorate the inauguration of
a bridge over the Uruguay River -- a jointly undertaken public works project -- refers
to the Statute as adding “dans son ordre ju ridique bilatéral, le principe d’accord
préalable pour tout ouvrage ou activité qu e l’une quelconque des Parties envisage
190Ibid.
191AM, Vol. II, Annex 34.
- 104 -réaliser” 19. Such a solitary and isolated reference to “le principe d’accord
préalable” cannot be, and is not, sufficient by itself to establish that such agreement
is required by the 1975 Statute, or that absent an agreement the Statute permits one
Party to veto projects of the other that are entirely within the latter’s territory. The
Declaration not only stands in stark contrast to the formal memorandum immediately
preceding it from the Argentine legislature to the President, but also contradicts
Argentina’s historical position that international law requires prior consultation but
not prior agreement, and the interpretati on given to the Statute by Argentina’s
leading authorities on it, including the prin cipal Argentina negotiators. Given that
there is no other instance in which either Argentina or Uruguay has taken the
position that the Statute requires prior agreement, the Declaration can only be
understood as (i) a hortatory expression of preference, rather than obligation, that the
Parties respective projects be carried out by mutual agreement 193; or (ii) a reference
to bridges and other joint public works pr ojects, which can only be carried out by
agreement of the Parties. The Joint Decl aration thus will not do the work Argentina
asks of it. Cf. Lake Lanoux Award, para. 18 (“one must not seize upon isolated
expressions or ambiguous attitudes which do not alter the legal positions taken by
194
States” ) As the Court will read in the sections to follow, Argentina’s own conduct
since the adoption of the Statute disproves the idea that it requires prior consent.
Never once in the past 31 years -- prior to this case -- has Argentina even claimed
192
Ibid. (“adding in its bilateral legal system the principle of prior agreement for any work or
activity the Parties plan to carry out”.)
193
Understood in this manner, the Declaration would be consistent with Argentina’s
formulation, repeated throughout its Memorial, that the Statute creates a scheme of prior
consultation “en vue de parvenir à un accord préalable”, without requiring such agreement. See
supra, paras. [2.110 - 2.112].
194Lake Lanoux, op. cit., para. 18.
- 105 -that prior agreement was required under th e 1975 Statute; nor has it ever sought
Uruguay’s agreement before (or for that matter, even after) carrying out its own
industrial projects affecting the Uruguay River.
5. Argentina’s Practice
2.140 Since the entry into force of the 1975 Statute, Argentine federal, provincial
and municipal authorities have authorized the construction and operation of dozens
of industrial plants that discharge liquid and solid waste into the Uruguay River or
its tributaries. In no case -- not a single one -- has Argentina ever sought Uruguay’s
prior agreement or consent to the cons truction or operation of these industrial
facilities. In fact, Argentina has neve r so much as notified Uruguay, let alone
consulted with it or sought its prior agr eement, before authorizing any of the
industrial plants that have been establis hed in its territory since 1975, even though
every one of these plants discharges waste directly or indirectly into the Uruguay
River. Nor did Argentina ever notify CARU about the plants, before or after they
began operating. Although numerous examples could be presented, the following
should suffice.
2.141 In 1976, shortly after the Statute took effect and, ironically, the same year
as the presidential joint declaration highlighted in Argentina’s Memorial, the
chemical plant of Fana Química, S.A. began operating in Colón, Argentina,
195
alongside the Uruguay River in Entre Ríos Province . The plant manufactures
chemical adhesives, plastics, paint, glue, aerosols, insecticides and silicon sealers,
and it discharges liquid effluents into the river. Argentina did not consult with
195“Fanaquimica is a Guarantee of quality,” available at
http://www.fanaquimica.com/NuestraEmpresa/Default.aspx (last vis ited on 6 June 2007).
UCM, Vol. IX, Annex 207.
- 106 -Uruguay prior to the commencement of opera tion of the plant, much less seek its
prior consent or agreement. Nor did Argentina notify CARU of the plant’s
authorization or commencement of operations. There is no reference to this plant in
the CARU Minutes or any other CARU documents until November 1991, nearly
fifteen years after it began to operate, when CARU initiated a “Coastal Sampling
Program” (“Programa de Muestreo de Costas”), the first stage of which included
196
Fana Química . Then, in 2000, after learning that municipal authorities in
Argentina had sanctioned Fana Quími ca for violating local environmental
regulations, CARU on its own initiative wrote to the company and complained about
the discharge of liquid effluents into the river197.
2.142 In 1983 and 1984, Argentine authorities approved the establishment of two
poultry plants alongside the Uruguay River in Entre Ríos Province at San José (built
and operated by Las Came lias, S.A.) and Concepci ón del Uruguay (built and
operated by Granja Tres Arroyos, S.A.) 19. According to the Environmental Health
and Safety Guidelines promulgated by the International Finance Corporation, such
poultry operations
may generate effluents from va rious sources including runoff
from poultry housing, feeding and watering; and from waste
management and storage facilities. Both types of effluents have
the potential to contaminate surface water and ground water with
nutrients, ammonia, sediment, pe sticides, pathogens and feed
additives, such as heavy metals, hormones and antibiotics.
Effluents from poultry operations typically have a high content
of organic material and consequently a high biochemical oxygen
196
Subcommittee on Pollution Report No. 108, Annex A, p. 1344 (22 November 1991),
approved in CARU Minutes No. 10/91 (22 November 1991). UCM, Vol. IV, Annex 76.
197
Letter SET-8952-AR sent from CARU Presiden t, Dr. Rodolfo Zanoniani, to Fana Química
S.A. (10 February 2000). UCM, Vol. IV, Annex 90.
198
“Las Camelias: Historical Evolution,” available at http://www.lascamelias.com.ar/ (last
visited on 29 June 2007). UCM, Vol. IX, Annex 208.
- 107 - demand (BOD) and chemical oxygen demand (COD), as well as
nutrients and suspended solids 199.
Nevertheless, Argentina neither consulted with Uruguay prior to the operation of the
plants, nor sought its consent or agreement. Nor did Argentina notify CARU about
the existence of the plants. The first refe rence to the plants in CARU’s minutes was
not until 1996 (in the case of Las Camelias) , when CARU received a note from the
Prefectura Naval de Colón (Argentina) advising it of water tests performed near the
200
Las Camelias facility , and 1999 (in the case of Granja Tres Arroyos), when the
Subcommittee on Water Quality proposed to evaluate the plant’s discharges into the
201
Uruguay River .
2.143 In 1994, Argentine authorities approved the establishment of a
manufacturing facility for wood projects at Co ncordia, also in Entre Ríos Province.
The company, Masisa Argentina, S.A., acknowledges that effluents from this type of
facility include suspended solids, organi c load (DBO5) and high chemical oxygen
demand (COD) 202. Nevertheless, Argentina did not notify Uruguay or CARU about
the authorization of the plant, or its co mmencement of operations; nor did it engage
in any consultations with Uruguay, or se ek Uruguay’s consent or agreement with
respect to the plant. CARU’s Minutes incl ude no references to the plant until 1999,
199International Finance Corporation, “Environm ental, Health and Safety Guidelines for
Poultry Production,” available at http://www.ifc.org/ifcext/enviro.nsf/
AttachmentsByTitle/gui_EHSGuidelines2007_PoultryProd/$FILE/Final+-
+Poultry+Production.pdf (last visited on 4 July 2007).
200CARU Minutes No. 8/96, pp. 1233-1234 (27 September 1996). UCM, Vol. IV, Annex 83.
201Report on Meeting with Concordia Development Association, Annex E to Subcommittee on
Water Quality and Prevention of Pollution Report No. 192 (21 July 1999), approved in CARU
Minutes 11/99 (23 July 1999). UCM, Vol. IV, Annex 88.
202"Water: Consumption and Effluents," available at http://stage.masisa.com/
Content.aspx?idioma=2&lang+2&site=&content=96&menu=175 (last visited on 5 July 2007).
UCM, Vol. X, Annex 226.
- 108 -five years after operations began, when the Commission on its own initiative,
undertook to address contamination issues directly with Masisa Argentina, S.A 203..
2.144 After 1975, when an “industrial park” was established in Entre Ríos
204
Province near the Gualeguaychú River , which flows directly into the Uruguay
River and is its principal tributary from the Argentine side, Argentine authorities
licensed the construction and operation of some 25 industrial facilities at that park 205.
Many of these plants discharge liquid and solid wastes that enter the Uruguay River
just upstream from Argentina’s Ñandubaysal beach resort, and across from Fray
Bentos on the Uruguayan side. Among these is the food and beverage processing
206
plant belonging to RPB, S.A., wh ich commenced operations in 1983 . According
to the IFC’s Environmental Health and Safety Guidelines,
effluent streams from food and be verage processing may have a
high biochemical and chemic al oxygen demand (BOD and
COD) resulting from organic wastes entering into the
wastewater stream, and from the use of chemicals and detergents
in various processes, including cl eaning. In addition, effluent
may contain pathogenic bacteria, pesticide residues, suspended
and dissolved solids such as fibe rs and soil particles, nutrients
and microbes, and variable pH 207.
203Report on Meeting with Concordia Development Association, op. cit. , pp. 1095-1097.
UCM, Vol. III, Annex 88.
204“Gualeguaychú Industrial Park,” available at http://www.pigchu.com.ar/
ubicacion_parque.htm (last visited on 27 June 2007). UCM, Vol. IX, Annex 209.
205
“Works on the River Uruguay,” op. cit., p. 40. UCM, Vol. X, Annex 224.
206
“Baggio-RPB: The Company,” available at http://www.baggio.com.ar/english/
thecompany.html (last visited on 29 June 2007). UCM, Vol. IX, Annex 211.
207International Finance Corporation, Environmenta l, Health and Safety Guidelines for Food
and Beverage Processing,” available at http://www.ifc.org/ifcext/enviro.nsf/
AttachmentsByTitle/gui_EHSGuidelines2007_FoodandBeverage/$FILE/Final+-
+Food+and+Beverage+Processing.pdf. (last visited on 4 July 2007).
- 109 -It is not surprising, therefore, that a report published in the newspaper Diario El
Argentino on 25 October 2006, quoted local residents as complaining that:
Since the RPB company began to dig ditches on the land the
company owns that is adjacent to the district, it discharges raw
effluents, and that gives rise to bad odors in the air and pollutes
the groundwater 208.
It also states:
Since we’ve had this problem, we can no longer take water from
our wells and we have to resort to using mineral water, with all
the costs that involves 209.
2.145 Argentina never notified Uruguay or CARU about the RPB, S.A. plant.
Nor did it consult with Uruguay or attempt to obtain its consent. There are no
references to the plant in the CARU Minutes or in any other CARU documents. The
same can be said for the industrial dyeing fa cility built by Rontaltex, S.A., which is
also located in the Gualeguaychú Industrial Park and began operating in 1989 210.
According to the IFC’s Environmental Health and Safety Guidelines,
wastewater from dyeing may cont ain color pigments, halogens
(especially in vat, disperse and reactive dyes), metals (e.g.,
copper, chromium, zinc, cobalt and nickel), amines (produced by
azo dyes under reducing conditions) in spent dyes, and other
chemicals used as auxiliaries in dye formulation (e.g., dispersing
and antifoaming agents) and in the dyeing process (e.g., alkalis,
salts and reducing/oxidizing agents ). Dyeing process effluents
are characterized by relatively high BOD and COD values, the
latter commonly above 5,000 mg/S alt concentration (e.g., from 211
reactive dye use) may range between 2,000 and 3,000 ppm .
208Diario El Argentino, “Residents of the Don Pedro District Complain” (25 October 2006).
UCM, Vol. IX, Annex 188.
209Ibid.
210“Nuestra PYMES/Textile/Rontaltex,” available at http://pymesriouruguay.com.ar/
pymes/index2.php?option=com_content&do_pdf=1&id=77 (last visited on 6 June 2007).
UCM, Vol. IX, Annex 210.
211
International Finance Corporation, “Environm ental, Health and Safety Guidelines for
Textiles Manufacturing,” available at http://www.ifc.org/ifcext/enviro.nsf/
- 110 -2.146 Likewise, Argentina never notifie d Uruguay or CARU (or consulted with
the former) about the battery manufacturing plant established by Unión BAT, S.A. at
the Gualeguaychú Industrial Park in 1978. The IFC’s Environmental Health and
Safety Guidelines state that effluents from such a facility include:
fluids resulting from metal cutting, grinding and forming [that]
typically become contaminated due to extended use and
reuse…Spent fluids may contain high amounts of metals (e.g.,
iron, aluminum and copper) acids and alkalis, (e.g.,
hydrochloric, sulphuric and nitric acids), and organics (e.g.,
ethylene glycol, acetic aldehyde and formaldehyde, straight oils,
soluble oils, semi-synthetic fluids, and solvent wastes).
Effluents usually contain significant pollutants, and can be
differentiated into separate streams, including wastewaters
potentially impacted by oils and solvents; surface treatment
finishing wastewaters; and metal containing wastewaters… 21.
2.147 These are but a few examples of the many industrial facilities that have
been authorized by Argentine authorities, and that have entered into operation,
following the adoption of the 1975 Statute. Many others could be cited. Rather than
burden the Court with a case-by-case examination of all the times Argentina has
authorized industrial facilities along the Uruguay River, Uruguay respectfully refers
the Court instead to Annex 224 of this Count er-Memorial. This is the study, cited
previously, by the Uruguayan Ministry of Industry, Energy and Mining that details,
inter alia, the dozens of industrial facilities inst alled along the Argentine side of the
Uruguay River. As the Court can read, Argentina has authorized an impressive array
of industrial facilities along the river or its major tributaries in the period since 1975.
The Gualeguaychú Industrial Park alone hosts more than 25 industrial facilities, all
AttachmentsByTitle/gui_EHSGuidelines2007_TextilesMfg/$FILE/Final+-
+Textiles+Manufacturing.pdf (last visited on 4 July 2007).
212International Finance Corporation, “Environmental, Health and Safety Guidelines for Metal,
Plastic and Rubber Products Manufacturing,” available at http://www.ifc.org/ifcext/enviro.nsf/
AttachmentsByTitle/gui_EHSGuidelines2007_MetalPlasticRubber/$FILE/Final+-
+Metal%2C+Plastic%2C+and+Rubber+Products+Mnfg.pdf (last visited on 4 July 1007).
- 111 -established since 1976 when the Park opene d. Liquid effluents from these plants
flow directly into the Arroyo del Cura, a stream that leads to the Gualeguaychú
213
River, which in turn flows into the Uruguay River .
2.148 Even these are but a fraction of the total number of industrial plants
authorized by Argentina near the river. The Industrial Park at Concepción del
Uruguay, near the Argentine bank of the river, hosts at least eight industrial
facilities, all established since the Park opened in the 1980’s. All of them discharge
liquid and solid wastes into the Uruguay River, either directly or indirectly, and all
of them appear to be capable of affecting water quality. Yet in no case -- not a
single one -- has Argentina ever notified Uruguay or CARU about the authorizations
issued for these plants, or about their co mmencement of operations. In no case has
Argentina ever consulted with Uruguay about the establishment of an industrial plant
or facility in Argentine territory; and in no case has Argentina ever sought to obtain
Uruguay’s consent . 214
2.149 It is thus surprising that Argent ina criticizes a November 2003 statement
of Uruguay’s then Foreign Minister, Didier Opertti, “que des projets industriels ont
été menés à bien du côté argentin sans qu’ il y ait eu de réaction ou de protestation
213“Works on the River Uruguay,” op. cit., p. 40. UCM, Vol. X, Annex 224. Concordia alone
has some 100 industrial facilities. Ibid., pp. 34-38.
214Argentina cannot argue that these projects di d not require notification because they were
incapable of affecting water quality. The thres hold for notification unde r Article 7 is low,
requiring only that the project be “capable of affecting” (“puede afectar”) water quality. 1975
Statute, op. cit., Art. 7. UCM, Vol. II, Annex 4. As is demonstrated in text, Argentina’s plants
plainly met this threshold. Moreover, the determination of whether or not a project is capable
of affecting water quality is not one that Argentina can make unilaterally. As its Counsel stated
during the June 2006 oral proceedings on its request for provisional measures: “The
outstanding issue is whether or not these effects, amongst others, are acceptable or not.
Uruguay says they are acceptable, but we say the 1975 Statute does not allow it to impose that
view on Argentina.” CR 2006/48, p. 16, para. 10 (9 June 2006) (Sands).
- 112 - 215
uruguayennes.” According to Argentina: “M. Opertti ne s’est pas montré plus
explicite bien qu’il eût laissé entendre que dans des cas semblables l’Argentine
216
n’avit pas saisi la CARU. Rien n’est plus éloigné de la réalité .” Asthe
proceeding demonstration reveals, however, the truth is that it is Argentina’s claim
that is a long way from the truth. Arge ntina repeatedly -- indeed frequently --
authorized industrial projects without referring the matter to CARU and without
protest from Uruguay, exactly as Minister Opertti had said.
2.150 Based on Argentina’s consistent practice since the 1975 Statute was
adopted, a period that has now extended for more than 32 years, the following
conclusions can be drawn:
• Argentinhaas never considered itself obligated to obtain Uruguay’s
prior consent or agreement in order to carry out a planned project,
even one that could affect the Uruguay River or the quality of its
water. This is not surprising. It has always been the unanimous view
of Argentina’s (and Uruguay’s) leading experts on the 1975 Statute
that it does not require the State initiating a project affecting the river
or the quality of its water to obtain the other State’s consent or
agreement before carrying out the project.
• Argentinh aas never considered itself obligated even to notify
Uruguay or CARU, or to consult with Uruguay, regarding a planned
industrial facility located exclusively within Argentine territory, even
if the facility could affect the river or the quality of its water. In this
regard, Argentina’s behaviour has followed the interpretation of the
1975 Statute advanced by Dr. Julio Carasales, former Argentine
President of CARU. As described above, Dr. Carasales held the view
that the Statute applied only to works on the river itself -- like dams
and canals -- and doubted that it could apply to an industrial facility
located in the territory of only one of the Parties. This was contrary to
the view of Dr. Julio Barberis, Argentina’s lead negotiator of the
Statute, who took the position that the “regime of consultation”
(“régimen de consulta”) established by the Statute applied to
215AM, para. 4.20. (“that industrial projects had been carried out by the Argentines with no
reaction or protest from Uruguay.”)
216Ibid. (emphasis added). (“Mr. Opertti did not gi ve explicit details, although he implied that
in similar cases, Argentina had not referred the matters to CARU. Nothing could be further
from the truth.”)
- 113 - industrial facilities. By its conduct, Argentina has demonstrated its
adherence to Dr. Cara217es’ interpretation of the Statute rather than to
that of Dr. Barberis .
6. The Case of the Garabí Dam
2.151 The fact that Argentina does not vi ew the 1975 Statute as incorporating a
prior consent regime is further confirme d by its behaviour in one of the State
practice examples cited in its Memorial -- the Garabí Dam. In the early 1980s, the
Governments of Argentina and Brazil began researching the possibility of
218
constructing a dam in the upper reaches of the Uruguay River . The project came
before CARU in October 1981. In December of that year, the two delegations to the
Commission came to the joint conclusion that “carrying out the work in question, as
planned for the Upper Uruguay River may produce significant damage to navigation,
the regime of the river and water quality.” 219
2.152 Notwithstanding CARU’s opinion, however, Argentina continued to move
forward with its plans for the dam. For example (as reflected in the CARU minutes),
in 1983, it came to the attention of the Uruguayan delegation that Argentina was
220
pressing ahead with the project . Upon learning this, Uruguay’s Ambassador
Gonzalez Lapeyre stated his view that in light of CARU’s prior finding -- jointly
agreed by both delegations -- the dam should not be built, at least as then planned 221.
At the time, the Argentine delegation took no position on Ambassador Lapeyre’s
217Uruguay, as described above, agrees with Dr. Barberis: that industrial plants are covered by
Articles 7-12 (by virtue of Article 27).
218CARU Minutes No. 8/81, pp. 447-448 (13 November 1981). UCM, Vol. IV, Annex 67.
219CARU Minutes No. 9/81, p. 514 (18 December 1981). UCM, Vol. IV, Annex 68.
220
CARU Minutes No. 6/83, p. 399 (29 July 1983). UCM, Vol. IV, Annex 69.
221
Ibid., p. 397.
- 114 -statement. Argentina’s subsequent conduct shows that it did not agree, however.
The CARU minutes show that in August 1985, the Presidents of Argentina and
222
Brazil announced their intent to go forward with the project . Argentina’s
delegation to CARU told its Uruguayan counterpart that Uruguay would be informed
223
and consulted later, when there was something “concrete and decided” .
2.153 In 1988, the Parties’ respective Foreign Ministries engaged in a round of
224
discussions about the planned project . As a result of these State-to-State
discussions, it was agreed that documents concerning Garabí would be sent to
Uruguay, through CARU, so that it could determine whether the project would cause
significant harm. It is clear from the CARU minutes, however, that Argentina never
viewed its plan to build the Garabí Dam as in any way conditional on Uruguay’s
consent. The head of the Argentin e delegation, Amba ssador Carasales,
acknowledged the existence of the agreement just mentioned, an agreement which
he said contained “a comm itment on the part of the Argentine Republic, as it could
not be otherwise, to consult with the Eastern Republic of Uruguay about the [Garabí
Dam] that will be built jointly with Brazil ….” 225
2.154 On 13 July 1990 the Government of Uruguay informed CARU that it had
concluded that the project might cause significant harm to navigation, the regime of
the river, and the quality of its waters 226. According to the CARU minutes from that
day:
222CARU Minutes No. 7/85, p. 670 (13 December 1985). UCM, Vol. IV, Annex 70.
223Ibid., p. 678.
224CARU Minutes No. 2/89, p. 218 (17 March 1989). UCM, Vol. IV, Annex 74.
225
Ibid.
226
CARU Minutes No. 8/90, pp. 801-802 (13 July 1990). UCM, Vol. IV, Annex 75.
- 115 - The note from the Uruguayan Delegation dated 13 July 1990,
whereby the Government of the Eastern Republic of Uruguay
expresses its position on the Garabí hydroelectric project in the
Upper Uruguay River area, was received. The note contains
technical reports attached, whic h state that the planned works
may cause significant harm to 227igation, the regime of the
river, and the quality of its waters .
2.155 Notwithstanding Uruguay’s conclu sion that the project might cause
significant harm (and CARU’s prior opini on to the same effect), Argentina
continued to move forward with its plans for the dam -- albeit slowly. In 1996, the
Presidents of Argentina and Brazil met and discussed their desire to reinitiate the
project 22. In April 1997, the two Presidents met again and specifically declared
229
their intent to carry out the project . The CARU minutes do not make clear what
transpired thereafter, although very recent reports suggest that Argentina and Brazil
have recently revitalized their plan. At any rate, the important point is that even in
the face of express determinations by both CARU and Uruguay that the Garabí Dam
would cause significant harm, Argentina fo rged (and is continuing to forge) ahead
with its plans to implement the project with Brazil. Its behaviour is plainly
incompatible with the view that the 1975 Statute required Uruguay’s prior consent to
the project.
7. Argentina’s Conduct Prior to the Submission of Its Application
2.156 The fact that the 1975 Statute creates only a regime of prior consultation,
not prior consent, is still further confirme d by Argentina’s conduct leading up to the
filing of its Application to this Court. In all of its communications with Uruguay,
227Ibid.
228
Subcommittee on Navigation, Works and Erosion Report No. 185, pp. 408-409 (18 April
1996), approved in CARU Minutes No. 3/96 (19 April 1996). UCM, Vol. IV, Annex 81.
229
CARU Minutes No. 9/97, p. 1387 (12 September 1997). UCM, Vol. IV, Annex 86.
- 116 -Argentina never once claimed that the Statute creates anything other than a regime
of prior consultation. It never once claimed that it requires prior consent. This fact
further reveals Argentina’s true understanding of the 1975 Statute’s requirements.
2.157 Argentina’s own Memorial cites a telling example. According to
Argentina, at a 2005 CARU meeting, the head of the Argentine delegation
complained that “le mécanisme de consultation prévu par le Statut (article 7 et
suivants) n’avait été respecté…” 230 It then quotes at great length the comments of
the Chairman of the Argentine delegation. Conspicuously, the head of the Argentine
delegation referred to the mechanism of “consultation préalable” or “prior
consultation” three different times in hi s comments. At no point, however, did he
contend that there was or is a requirement for prior consent. Similarly, on 12
January 2006, Argentina sent Uruguay a diplomatic note laying the foundation for its
Application. In that note, it referred repeatedly to the “prior information and
consultation mechanism set forth in Arti cles 7 to 12 of the Statute”, without
anywhere suggesting that the Statute contained a requirement for prior agreement 23.
2.158 These official communications, coming even as Argentina was positioning
this dispute for submission to the Court, must be seen for what they are -- clear
admissions that Argentina does not consider the Statute to require prior consent. As
the Lake Lanoux tribunal noted fifty years ago, “t he obligation to give notice does
not include the obligation, which is much more extensive, to obtain the agreement of
230
See AM, para. 2.60 (emphasis added). (“the consultative mechanism provided by the Statute
(Articles 7 et seq.) had not been respected….”)
231
Diplomatic Note sent from Argentine Minister of Foreign Affairs, International Trade and
Culture to Uruguayan Ambassador in Argentina, D. Francisco Bustillo (12 January 2006).
UCM, Vol. III, Annex 59.
- 117 - 232
the State that has been notified” . If Argentina truly considered that the 1975
Statute required prior agreement, it surely would have said so in its communications
with Uruguay leading up to this lawsuit. Th e fact that it confined itself instead to
invoking the mechanisms of “prior cons ultation” is compelling evidence of
Argentina’s true understanding of what the Statute does -- and does not -- require.
8. State Practice in Latin America
2.159 In its Memorial, Argentina includes a curious review of State practice in
Latin America that it clai ms supports the view that prior consent is a general
requirement in regional practice. In truth, however, the only thing that Argentina’s
review proves is that when prior consent is required by an international agreement,
that requirement is expressly stated in the agreement. Argentina cites four
instruments.
2.160 The first is the 1933 Uruguay-Brazil Boundary Treaty, Article XX of
which specifically requires prior agreement. It states:
When there is possibility that the installation of plant for the
utilization of the water may cause an appreciable and permanent
alteration in the rate of flow of a watercourse running along or
intersecting the frontier, the cont racting State desirous of such
utilization shall not carry out the work necessary therefore until
it has come to an agreement with the other State 233.
2.161 The second instrument Argentina cites is the Montevideo Declaration, also
dating to 1933. Section 2 of the Declaration also specifically requires consent:
[N]o State may, without the consent of the other riparian State ,
introduce into watercourses of an international character, for the
industrial or agricultural expl oitation of their waters, any
232Lake Lanoux, op. cit., para. 16.
233Convention Regarding the Determination of th e Legal Status of the Frontier Between Brazil
and Uruguay (20 December 1933) (emphasis added).
- 118 - alteration which may prove injurious to the margin of the other
234
interested State .
In its discussion of the Montevideo Declaration, the Memorial cites Gonzalez
Lapeyre’s and Flangini’s book El Estatuto del Rio Uruguay 235. The phrasing of
Argentina’s reference seems designed to cr eate the erroneous impression that when
the authors wrote “[c]ette règle, appli cable au fleuve Uruguay en raison de son
caractère de frontalier… [requis] le cons entement de l’autre Etat” they were
referring to the 1975 Statute 236. They distinctly were not. The reference to “[c]ette
règle” relates solely to the 1933 Mont evideo Declaration between Uruguay and
Brazil. Their book nowhere suggests that the 1975 Statute requires prior consent.
2.162 Argentina’s third example is the 1971 Asunción Resolution. Like the
previous two examples, it too explicitly requires prior agreement. Section 1
provides:
In contiguous international rivers, which are under dual
sovereignty, there must be a prior bilateral agreement between
237
the riparian States before any use is made of the waters .
2.163 The fourth and last document Ar gentina cites is the 1957 Inter-American
Bar Association Resolution, paragraph 3 of which also specifically requires
agreement:
234Declaration of Montevideo co ncerning the industrial and agricultural use of international
rivers (24 December 1933), Yearbook of the International Law Commission , 1974, vol. II, Part
Two, p. 212 (emphasis added).
235AM, para. 3.87.
236See ibid. (“[t]his rule, which is applicable to the River Uruguay, owing to its nature as a
boundary between the two States … [requires] the consent of the other State”)
237Declaration of Asunción on the use of in ternational rivers, Resolution No. 25 (1971),
Yearbook of the International Law Commission, 1974, vol. II, Part Two, p. 324 (emphasis
added).
- 119 - States having under their jurisdiction part of a system of
international waters are under a duty to refrain from making
changes in the existing régime that might affect adversely the
advantageous use by one or more other States have a part of the
system under their jurisdiction, except in accordance with (i) an
agreement with the State or States affected or (238 a decision of
an international court or arbitral commission .
2.164 From this partial review of Latin American practice, Argentina’s
Memorial attempts to draw the conclusion that: “La règle de l’approbation préalable
des projets sur un cours d’eau internati onal a donc été plébis citée en Amérique
239
Latine. Le Statut du fleuve Uruguay s’inscrit dans cette mouvance.” Logic would
seem to compel exactly the opposite conclu sion. In each of these instruments, the
requirement for prior consent or agreement was expressly stated, exactly as the Lake
Lanoux tribunal and Dr. Barberis said it should be. The 1975 Statute, on the other
hand, contains no such statement. The absence of an express prior consent
requirement can only compel the conclusion that it was specifically and intentionally
left out in order to make clear that prior consent/agreement is not required.
2.165 Thus, there is nothing in the text of the 1975 Statute, the practice of the
Parties or general international law that can be read to graft onto the Statute a
requirement that the initiating State obtain the prior agreement of the notified State
before implementing a covered project in its own territory. The duty the Statute
creates is the obligation to consult with the notified State in good faith in an effort to
238
Inter-American Bar Association Resolution, Proceedings of the Tenth Conference, (14 to 21
November 1957), Yearbook of the International Law Commission , 1974, vol. II, Part Two, p.
208 (emphasis added).
239
AM, para. 3.91. (“The rule of prior approval of projects on an international waterway was
therefore put to a vote in Latin America. Th e Uruguay River Statute is subject to this
movement.”)
- 120 -reconcile the interests of the two States. Uruguay will now turn to the scope and
content of that obligation.
D. T HE O BLIGATION TO CONSULT IN GOOD FAITH
2.166 Although the 1975 Statute does not expressly state a requirement to
engage in consultations as such, it is Articles 11 and 12 that, taken together, impose
a duty on both Parties to engage in direct consultations. As already discussed,
Article 11 provides that in the event the notified State concludes that a planned
project will cause significant harm to navi gation, the regime of the river, or the
quality of its waters, it must inform the initiating State of the reasons for its
conclusions, as well as any suggested modifi cations to the project. Article 12 then
provides:
Should the Parties fail to reach agreement within 180 days
following the notification referred to in article 11, the procedure
indicated in chapter 240[relating to dispute settlement by the
ICJ] shall be followed .
It is thus clear that following the notification from the notified State to the initiating
State referred to in Article 11, the Parties must attempt to reach agreement within
180 days by means of direct consultations.
1. The Purpose of Consultations
2.167 In analyzing the pertinent articles of the 1975 Statute, it is worth
considering the object and purpose of the consultation mechanism within the scheme
of the Statute as a whole. In this resp ect, Uruguay is content to adopt the words of
the Memorial, where Argentina states:
L’obligation d’information et consultation préalables est
caractérisée par sa finalité: il s’agit de permettre à l’autre partie
2401975 Statute, op. cit., Art. 12. UCM, Vol. II, Annex 4.
- 121 - intéresée ‘d’évaluer l’effet probable que l’ouvrage aura sur la
navigation, sur le régime du fl euve ou sur la qualité de ses
241
eaux’ .
2.168 Inasmuch as these are Argentina’s own words, Uruguay will pause on
them to make two points. First , Argentina recognizes, as it must, that the focus of
the inquiry during the consultation phase is on “l’effet probable” of the planned
work. Argentina thus acknowledges that remo te or speculative harms are irrelevant
to the consultative process envisioned by Articles 11 and 12. Second, Argentina also
recognizes the limited scope of the consultations. They are concerned only with
impacts on navigation, the regime of the river, and/or water quality. Other issues,
even other environmental considerations, are outside the ambit of the consultation
mechanism under the 1975 Statute.
2.169 The understanding of the limited scope of the consultation process
Argentina evinces in paragraph 4.76 (and elsewhere 242) of its Memorial refutes less
considered statements in other parts of the Memorial. At paragraph 5.09, for
example, Argentina (mis)states: “aucune décision relative [aux projets] ne pouvait,
ni n’aurait dû être prise par l’Uruguay avant que toutes les conséquences
243
environmentales n’en aient été étudiées et prises en considération.” Tosimilar
effect is paragraph 3.52 whic h argues: “une utilisation optimale est celle qui prend
241AM, para. 4.76. (“The prior information and c onsultation obligation is characterized by its
ultimate objective: it enables the other interested Party to ‘assess the probable impact of such
works on navigation, the regime of the river or the water quality’.”)
242See, e.g., AM, para. 3.84 (“le Statut de 1975 encadre le mécanisme de décision relatif à tout
ouvrageou toute utilisation que peut causer un préjudice sensible à la navigation, au régime du
fleuve ou à la qualité de ses eaux”) (“The 1975 Statute does ind eed lay out the framework for
the decision-making mechanism relating to any project or use that can cause substantial
damage to navigation, the regime of the river or the water quality.”)
243
AM, para. 5.9 (emphasis added). (“No decision about the [plants] could or should have been
made by Uruguay until all environmental consequences ha d been studied and taken into
consideration.”)
- 122 -en compte toutes les oppositions éventuelles d’un Etat riverain lorsque des mesures
244
sont projetées.”
2.170 Such expansive claims are plainl y inconsistent with Argentina’s own
admissions and, more importantly, with the text of the Statute itself. In four separate
places between Articles 7 and 11 (twice each in Articles 7 and 11), the Statute
reiterates that the topical scope of the notification, information sharing and
consultation provisions is limited to (1) navi gation, (2) the regime of the river, and
(3) water quality. Consequently, Argentina’s entitlement to be consulted and to have
input must likewise be limited to the same three subjects. And even then, it is
entitled to be heard only with respect to objections arising from its assessment of
“l’effet probable”, not “toutes” impacts, as Argentina would have it.
2. Relevant Timeframes
2.171 Article 12 requires direct consu ltations for up to 180 days, after which
time either Party may submit a dispute to the Court for resolution. This 180-day
period, of course, states the maximum period a Party must wait before submitting an
Application to the Court. It is also possible that the Parties will reach an impasse in
their consultations prior to the expirati on of the 180-day period, in which case it
would be unreasonable and inconsistent with the sound administration of justice to
require the Parties to wait the full six months before initiating the case. As was
stated in Barcelona Traction, Light and Power Company, Limited, a Party need not
244
Ibid., para. 3.52 (emphasis added). (“Optimal use is a use that takes into account any and all
possible objections by a Waterway State when measures are planned.”)
- 123 -undertake “a clearly futile and pointless activity, or a repetition of what has been
245
done in vain” .
2.172 The 180-day consultation period in Article 12 also comes at the end of a
series of other time periods provided for in Articles 7 and 8; viz, CARU’s 30-day
summary review period (Article 7) and the 180-day review period given to the
notified State to examine the information presented to it a bout the project. (Article
8.) Insofar as the purpose of these earlier steps is to obviate the need for direct
consultations by giving first CARU and th en the notified Party the opportunity to
decide that a given project poses no threat to navigation, the regime of the river, or
the quality of its waters, there is no reason in principle that the Parties might not
jointly decide to bypass these prior steps and proceed directly to bilateral
consultations. If it is clear that the two Parties have a difference of opinion about a
given project, there should be no impediment to their seeking to resolve the matter
through direct consultations at any mutually agreed moment. As will be detailed in
Chapter 3, this is exactly what Uruguay and Argentina did with respect to both the
ENCE and Botnia plants. As soon as it became clear that they viewed matters
differently (as did their respective delegations to CARU, causing a stalemate in that
body), they agreed to seek out mutually acceptable solutions through Party-to-Party
consultations. The consultation process in which they engaged, and the voluminous
information provided to Argentina by Urugua y during this process, are described in
Chapter 3.
2.173 Not surprisingly, this common-sens e approach is reflected in general
international law. Article 9 of the 2001 Draft Articles provides: “The States
245
Barcelona Traction, Light and Power Co mpany, Limited, Second Phase (Judgment) , I.C.J.
Reports 1970, p. 145 (Tanaka, separate opinion).
- 124 -concerned shall enter into consultations, at the request of any of them, with a view to
achieving acceptable solutions regarding measures to be adopted in order to prevent
significant transboundary harm” 246. With respect to the issue of timing, paragraph 7
of the ILC commentary states:
Article 9 may be invoked whenever there is a question about the
need to take preventive measur es. Such questions obviously
may arise as a result of Article 8, because a notification to other
States has been made by the State of origin that an activity it
intends to undertake may pose a risk of causing significant
transboundary harm, or in the course of the exchange of
information under Article 12 247in the context of Article 11 in
the absence of notification .
The point is thus that whenever it becomes clear that a difference may be most
efficiently resolved by direct consultations between the Parties (as happened in this
case), such consultations are appropriate and entirely consistent with the procedural
scheme of the Statute if the Parties jointly agree to follow such a route.
3. Duties During Consultation
2.174 The obligations of each Party during the course of consultations conducted
pursuant to Articles 11 and 12 are not subject to doubt. Each side must participate in
the process in good faith with an open mind and a willingness to take account of the
other side’s views. The obligation to consult genuinely and in good faith was
recognized in the Lake Lanoux award, in which it was held:
Consultations and negotiations between two States must be
genuine, must comply with the rules of good faith and must not
be mere formalities. The ru les of reason and good faith are
applicable to procedural rights and duties relative to the sharing
248
of the use of internal rivers .
246
2001 Draft Articles, op. cit., Art. 9, para. 1.
247
Ibid., p. 411, comment 7 (emphasis added).
248Lake Lanoux, op. cit., p. 119.
- 125 -Although it is unnecessary to identify all the attributes of good faith consultation, the
Lake Lanoux tribunal did refer to some forms of behaviour that were impermissible,
including “an unjustified breaking off of the discussions, abnormal delay, disregard
of the agreed procedures, [and] systematic refusals to take into consideration adverse
proposals or interests …” 249. These rules, of course, a pply equally to both sides at
the negotiating table. The notified State ha s an equal duty to take into account the
initiating State’s interests and, as observe d above, even to accept harms that do not
rise to the level of “significant.” Were it otherwise, the notified State could turn the
consultation process into a mechanism that “paralyses the exercise of the territorial
250
jurisdiction of another.”
2.175 The Court has recognized the same general principles on more than one
occasion. In the North Sea Continental Shelf Cases, for example, the Court held:
[T]he parties are under an obliga tion to enter into negotiations
with a view to arriving at an agreement, and not merely to go
through a formal process of negotiation as a sort of precondition
for the automatic application of a certain method of delimitation
in the absence of agreement; they are under an obligation so to
conduct themselves that the nego tiations are meaningful, which
will not be the case when either of them insists upon its own
251
position without contemplating any modification of it .
Similarly in the Fisheries Jurisdiction Case, the Court stated: “the task [of the
parties] will be to conduct their negotiations on the basis that each must in good faith
pay reasonable regard to the legal rights of the other.” 252 The principle is, of course,
simply a particular application of the duty of good faith that inheres in all
249
Ibid., p. 128, para. 11.
250Ibid.
251North Sea Continental Shelf Cases (Judgment), I.C.J. Reports 1969, p. 47, para. 85.
252Fisheries Jurisdiction (U.K./Iceland) (Judgment), I.C.J. Reports 1974, p. 33, para. 78.
- 126 -international obligations, whether treaty-based or otherwise. As the Court stated in
the Nuclear Tests Cases: “One of the basic principles governing the creation and
performance of legal obligations, whatever their source, is the principle of good
253
faith.”
2.176 As will be shown in Chapter 3, Ur uguay fully discharged this obligation.
Indeed, Argentina nowhere argues that it did not. Uruguay’s good faith is thus
admitted.
(a) An Obligation of Conduct, Not Result
2.177 As discussed above, the Statute doe s not require prior agreement in order
for one State to undertake projects on its side of the river. The obligation to consult
does not imply an obligation to achieve a particular outcome. In other words, it is an
obligation of conduct, not an obligation of result. Were it otherwise, the
consultation mechanism the Statute creates would effectively be converted into a
means for an objecting State to prevent or indefinitely forestall the implementation
of a project.
2.178 As with so many of the other elements of the 1975 Statute, this
understanding of the text is entirely consistent with general international law. In the
Railway Traffic Case, the PCIJ clearly stated that “an obligation to negotiate does
not imply an obligation to reach an agreement.” 254 The decision of the tribunal in
the Lake Lanoux case is to the same effect:
[I]nternational practice prefers to resort to less extreme solutions
[than requiring prior agreement] by confining itself to obliging
253
Nuclear Tests Cases (New Zealand/France) (Judgment) , I.C.J. 1974 , p. 268, para. 46
(emphasis added).
254
Railway Traffic Between Lithuania and Poland (Railway Sector Landwarów Kaisiadorys)
(Advisory Opinion), P.C.I.J., Series A/B, No. 42, p. 116 (1931).
- 127 - the States to seek, by preliminary negotiations, terms for an
agreement, without subordina ting the exercise of their
competences to the conclusion of such an agreement. Thus, one
speaks, although often inaccurately, of the “obligation of
negotiating an agreement” 255.
(b) Status of the Project During Consultations
2.179 As previously discussed, Arge ntina’s argument that the 1975 Statute
requires prior agreement is notably half-hearted, and entirely without merit.
Argentina is more direct, however, in arguing that in the face of objections from the
notified State, the initiating State may not authorize a project at least until such time
as consultations have been exhausted or, if the notified State institutes dispute
resolution proceedings under Article 12 and Chapter XV, even until after a decision
on the merits has been reached by the Court. At paragraph 4.89(a)(iv), for example,
Argentina argues that the Statute creates “l’obligation de parvenir à un accord avec
l’autre partie ou d’attendre le règlement du différend selon la procédure prévue au
chapitre II du Statut [ i.e., Articles 7-12] de 1975, avant d’autoriser la construction”
256
of any projects . This narrower argument fares no better, however, and should
similarly be rejected.
2.180 The starting point of the analysis is, of course, the text of the 1975 Statute.
Conspicuously, the Statute itself does not expressly state what the duties of the
initiating State are during the consultation period. It neither says that the State in
question may proceed with the project nor says that it may not. In contrast, both the
1997 Watercourse Convention and the 2001 Draft Articles on the Prevention of
255Lake Lanoux, op. cit., p. 128, para. 11.
256
AM, para. 4.89(a)(iv). (“obligation to reach an agreement with the other party or to await
the settlement of the dispute according to the pro cedure established in Chapter II of the Statute
[i.e., Articles 7-12], before authorizing” any projects.)
- 128 -Transboundary Harm expressly state that in the event of consultations over a
planned project, the initiating State shall refrain from “implementing” the project
during the pendency of consultations , provided the other party so asks 25. Even
accepting that the 1975 Statute implicitly incorporates the same duty, that obligation
only prohibits the initiating State from “implementing” the project while
consultations are ongoing. As a lead ing commentator on consultation in
international law has stated:
[A] prior consultation obligatio n does not inherently imply a
duty to desist until a solution is finally reached. It simply
implies that nothing more than preparatory work will be
undertaken until the consulte d state has had an ample
opportunity to present its views and until those views have been
considered in good faith 258.
2.181 As discussed above, the “implementation” of the project at the heart of this
case is the operation of the plants, not simply their construction. Construction per se
poses no threat to navigation, the regime of the river or the quality of its waters 259.
Accordingly, steps that are preparatory to the actual construction of the plants, but
not their ultimate operation, are plainly permissible even as consultations continue.
2.182 This result is consistent with th e purposes of the consultation mechanism.
According to the ILC commentary to Article 12 of the 1997 Watercourse
Convention, for example, the object of tim ely notification is “t o permit meaningful
consultations and negotiations under subsequent articles” 260. Thus, so long as the
2571997 Watercourse Convention, op. cit., Art. 17, para. 3; 2001 Draft Articles, op. cit., Art.
11, para. 3.
258Kirgis, F.: Prior Consultation in Intern ational Law: A Study in State Practice,
Charlottesville, University Press of Virginia, 1983, p. 75.
259See Gabčikovo-Nagymaros Project (Judgment,)op. cit., p. 54, para. 79.
2601994 Draft Articles, op. cit., p. 111, comment 4.
- 129 -initiating State takes no irre parable steps during consultations that might foreclose
the good faith consideration of the notified State’s interests, it has fulfilled its
obligations, exactly as Kirgis suggests. As the next Chapter will demonstrate,
Uruguay in fact authorized no more than preparatory work (such as ground clearing)
for construction of the ENCE and Botnia plants while consultations were taking
place. It thus indisputably complied with its obligations under the Statute.
(c) Status of the Work During Dispute Resolution
2.183 Regardless of whether or not the initiating State may implement the
project while consultations are on-going, once the consultation period is over or the
consultations have reached an impasse, th e project most certainly can go forward,
even if all avenues of dispute resolution have not been exhausted. Argentina’s
argument to the contrary is mistaken. Once again, the Statute is entirely silent on the
matter. General international law is clear, however, that any obligation to refrain
from implementing a project endures onl y for a reasonable period during the
consultations as such. It does not continue after the consultation phase or extend
into any subsequent dispute resolution procedure.
2.184 Both the 1997 Watercourse Convention and the 2001 Draft Articles
contain provisions for post-consultation dispute resolution. Although neither
provides for the reference of disputes to th is Court, the difference is immaterial for
present purposes. Article 33 of the 1997 Wa tercourse Convention and Article 19 of
the 2001 Draft Articles both provide for the creation of impartial fact-finding
commissions or, if agreed by the States concerned, mediation or conciliation 261.
Both instruments make clear that the duty to refrain from implementing a project
261
1997 Watercourse Convention, op. cit., Art. 33; 2001 Draft Articles, op. cit., Art. 19.
- 130 -ends when consultations end, regardless of the status of any subsequent dispute
resolution proceedings. The ILC commentary to Article 9 of the 2001 Draft
Articles, for instance, specifically states that when consultation fails “the State of
origin is permitted to go ahead with th e activity, for the absence of such an
alternative would, in effect, create a right of veto for the States likely to be
affected.” 262 Similarly, the ILC commentary to the 1997 Watercourse Convention
states: “After this period [of consulta tion] has expired, the notifying State may
263
proceed with the implementation of its plans...” . Accordingly, whatever
obligations are imposed on the initiating St ate during consultations, there can be no
question that implementation of the proj ect is permissible during a subsequent
dispute resolution phase.
2.185 Uruguay notes that this understandi ng of the 1975 Statute does not mean
that the notified State is without remedy during the dispute resolution process. As
Argentina demonstrated by its actions in May 2006, the notified State can, if it
believes the situation warrants, always seek interim measures of protection from this
Court at any time after the filing of its Application. Provided that it can meet the
requirements for provisional measures -- an urgent need to protect its rights in
dispute from irreparable harm -- the notified State has an effective mechanism for
protecting its interests pending the outcome of the dispute.
2.186 The practical consequences flowi ng from a finding that the initiation of
judicial proceedings by itsel f requires the suspension of a project also demonstrate
why it is wrong. If Argentina were right, a notified State could impede the initiating
2622001 Draft Articles, op. cit., p. 412, comment 10.
2631994 Draft Articles, op. cit., p. 116, comment, para. 4.
- 131 -State’s projects not just for the six mont h consultation period, but potentially for
years as the dispute wends its way to fi nal judgment. Given that the 1975 Statute
specifically recognizes the “right of each Party to use the waters of the river” 264that
result would be plainly inconsistent with the central objective of the Statute. Such a
prolonged suspension would quite probably kill any and all private projects, as
investors would be unlikely to wait out a multi-year judicial proceeding when they
might find a more readily available location for their investment. Reading the
Statute as Argentina suggests would thus e ffectively subjugate each State’s right to
economic development to the whims of the other, and would be plainly incompatible
with “the rational and optimal utilization of the Uruguay River.” 265 Even so, as
indicated above, the notified State can al ready bring about the suspension of the
project during dispute resolution proceedings if it can demonstrate to the Court an
urgent need to protect its rights in dispute from irreparable harm. Thus, the practical
consequence of adopting Argentina’s interp retation of the Statute as requiring a
suspension of the work whenever dispute resolution proceedings are initiated would
be automatically to suspend and potentially kill a project though the need to do so is
not urgent, and there is no imminent danger of irreparable harm to the notified State.
* * *
2.187 Argentina and Uruguay are in agreement about the purposes of
consultations under the Statute: to enable the notified State to assess the probable
impact of planned projects on navigation, th e regime of the river, and the quality of
2641975 Statute, op. cit., Art. 27. UCM, Vol. II, Annex 4.
265Ibid., Art. 1 (emphasis added).
- 132 - 266
its waters . And although the Memorial nowhere expressly says as much, Uruguay
presumes that the Parties are also in agreement that all consultations must be
conducted in good faith. Where they disagree, however, is in whether the obligation
to consult entails an obligation to achieve a certain result, and in whether the
initiating State may move forward with a project during consultations and any
subsequent dispute resolution proceedings . For the reasons articulated above, a
careful analysis of the Statute proves that the duty to consult is an obligation of
conduct, not result, and that the initia ting State may at ve ry least undertake
preparatory work even as consultations are on-going, and may implement the project
during dispute resolution proceedings in this Court (unless the Court determines that
the indication of provisional measures is ju stified). In the next Chapter, Uruguay
will demonstrate that it fulfilled all of its obligations during the consultation and
dispute resolution processes.
Section III.
The Role of CARU
2.188 A central theme of Argentina’s Me morial is Uruguay’s ostensible failure
to abide by its procedural obligations in and to CARU by issuing preliminary
environmental authorizations (AAPs) to ENCE and Botnia prior to referring the
matter to the Commission. In making its argument, Argentina systematically
cultivates the impression that “[l]e mandat de la CARU est large et ses compétences
sont étendues.” 267
Similarly, it suggests that CARU had the power to “détermine s’il
266See supra para. 2.167.
267AM, para. 3.58. (“[t]he mandate of CARU is broad and its authority extensive.”)
- 133 -pouvait construire ou délivrer l’auto risation des ouvrages concernés.” 268 Like
references are sprinkled liberally th roughout the Memorial. Uruguay submits,
however, that such assertions should be trea ted with the greatest of caution. Under
the 1975 Statute, CARU, though it exercises cr itical functions in fulfilment of the
statutory scheme, simply does not have the particular powers Argentina seeks to give
it.
2.189 Article 56 of the 1975 Statute states the functions of CARU. Uruguay will
not burden the Court by setting those functions out in exhaustive detail here but will
269
merely refer the Court to the Statute itself . For present purposes, it is enough to
observe that nowhere in Article 56 is CARU given the authority to approve or reject
works planned by either of the Parties in the exercise of their sovereign powers. The
functions the Statute confers on CARU are esse ntially of five kinds: (i) regulatory;
(ii) fixing limits on fish catches; (iii) facilitating coordination between the Parties;
(iv) exchange of information; and (v) pa rticipation in consultations between the
Parties.
2.190 With respect to its regulatory functions, it is instructive to note that
although CARU is given the power to draw up rules governing the “prevention of
pollution”, the way in which it has done so only underscores that (a) CARU’s role is
secondary to that of the Parties themselves, and (b) largely consists of providing
technical advice and conducting monitoring activities. As previously mentioned, the
portions of the CARU Digest dealing with the subject of pollution expressly state the
competencies of each of the Parties, on the one hand, and CARU, on the other. The
268AM, para. 4.13. (to “determine whether Urugua y could build or grant the authorization to
build the works in question.”)
2691975 Statute, op. cit., Art. 56. UCM, Vol. II, Annex 4.
- 134 -competencies of each Party include, among others: to promulgate authorizations for
the various legitimate uses of the waters; to create and operate the appropriate
systems for collection, treatment and dispos al of effluents and solid waste derived
from industrial activity; to control the compliance with effluent standards; to control
compliance with the conditions establishe d for discharges and dumpings; and to
approve, as proposed by CARU, the zoni ng of the River and its corresponding
legitimate uses .70
2.191 In contrast, the competencies of CARU include: to establish water quality
standards; to promote and coordinate the Parties’ monitoring of compliance with the
water quality standards; to promote the Parties’ implementation of strict control
measures as regards contaminants ; to promote the construction by the Parties of
water treatment systems; to encourage the dissemination of information to the
public; and to issue periodic reports on water quality levels 271. It is thus clear that
CARU’s role, although very important, is not what Argentina now pretends it to be.
It does not approve or reject projects as Ar gentina repeatedly suggests. It issues
water quality standards, and then promotes their observance. Each Party retains the
right to approve its own projects, subject only to the obligation to notify CARU and
the other Party in a timely fashion.
2.192 Indeed, the Digest could scarcely be any clearer in this respect. The very
first competency of the Parties listed is the power to issue authorizations for the
various legitimate uses of the River (which include industrial uses). This portion of
the Digest was first adopted in 1988. According to a CARU report dated 9 April
270CARU Digest, op. cit., Subject E3, Title 2, Chap. 1, Sec. 1, Art. 1. UCM, Vol. IV, Annex
60.
271Ibid., Art. 2.
- 135 -1987 explaining each of the provisions later adopted in the Digest, the subparagraph
concerning the Parties’ power to issue authorizations: “[r]efers to the competence of
the Parties to grant authorizations in a broad sense, including e very type of permit,
license, or administrative act of similar content, related to the various legitimate
uses of the waters.” 272 There is simply no basis to dispute that the power to
authorize or deny authorization to particul ar projects resides solely in the hands of
the Parties, not CARU.
2.193 In the context of the procedural m echanisms created by Articles 7 through
12 of the 1975 Statute, CARU plays a role co nsistent with its technical function.
That is, it performs what is essentially a technical screening function to determine
whether or not a given project needs to be brought to the attention of the non-
initiating State. In particular, under the first paragraph of Article 7, it receives the
initial notification of a project from the initiating State. It then conducts a summary
review to determine whether or not the project might cause significant harm to the
other Party. If it comes to the conclusion that it will not, it does not authorize the
project, it simply reports its findings to the Parties.
2.194 When CARU comes to the opposite conclusion ( i.e., that there might be
significant harm), it does not disapprove the project. The 1975 Statute does not give
CARU the authority to stop a project. What CARU does is report its findings to the
Parties. The only thing that happens th en is that, under the second paragraph of
Article 7, the State planning the project must inform the other State about the
project, thereby starting the direct, Party-to-Party mechanisms of information-
272Annex A to Subcommittee on Pollution and Investigation Report No. 57, p. 383 (9 April
1987), approved in CARU Minutes No. 3/87 (10 April 1987) (emphasis added). UCM, Vol. IV,
Annex 71.
- 136 - 273
sharing and, potentially, consultation . During this process, CARU serves as a
vehicle for facilitating communication between the Parties. But in no case does
CARU have any decision-making authority over the project, much less any kind of
executive power to prevent it from bei ng undertaken. As Uruguay’s Ambassador
Gonzalez Lapeyre stated during the Parties’ discussions about the Traspapel plant in
1996, he
Believes that this is extremely important. It is not a matter of the
organization [CARU] issuing an opinion that it cannot be done
or that it may cause significant damage to navigation, the regime
of the river or the quality of its waters. It is about that, starting
from this moment [when the CARU decides there might be
significant harm], it is essential to initiate a round of negotiations
to seek a solution, to elucidate the doubts that may exist and to
274
resolve the observations from the technical perspective.
2.195 CARU’s lack of decision-making authority on proposed projects is further
demonstrated by a document entitled “Standard Procedure to be Followed by CARU
With Respect To Communication From One Party Regarding the Installation of a
Project that May Affect The Quality of the Water” 275. This document was first
prepared by CARU’s Subcommittee on Water Quality and then approved in plenary
session in April 1997. This document makes clear that in CARU’s own estimation,
2731975 Statute, op. cit., Art. 7, para. 2. UCM, Vol. II, Annex 4.
274Ambassador Gonzalez Lapeyre’s opinion in 1996 differs from the one cited by Argentina (at
para. 3.104) and expressed 13 years earlier in c onnection with the Garabí Dam. Then, he
claimed that when both delegations to CARU agree that a project might cause significant harm,
that finding should have a suspensive effect on the project. CARU Minutes No. 7/96, op. cit.,
p. 1079. UCM, Vol. IV, Annex 82. His 1996 st atement may reflect his revised understanding
of the matter. In any event, in the present case there was no fi nding by CARU that either the
ENCE plant or the Botnia plant might cause significant harm. In both cases, the two
delegations to CARU, each of which exercises one vote, were divided, and no findings -- which
can only be issued by consensus -- were possible.
275Annex B to Subcommittee on Water Quality and Prevention of Pollution Report No. 167, p.
463 (18 April 1997), approved in CARU Minutes No. 4/97 (18 April 1997). UCM, Vol. IV,
Annex 84.
- 137 -its role under Articles 7-12 is strictly limite d to a preliminary technical review. No
power to approve or disapprove projects is claimed, exactly as the Statute suggests.
2.196 CARU’s screening function is stated in steps (a) and (b) of the 1997
document. They provide that CARU shall first:
a. - Verify whether the submissi on for the works or river water
use presented by the Party falls within the guidelines of Articles
7 to 12 of the Statute of the River Uruguay.
b. - Review the documentation presented by the Party on the
characteristics of the undertakin g. Special attention should be
paid to the data on the qualitative-quantitative composition
of future discharge, production processes employed, [and]
proposed effluent treatment system (if necessary). 276
2.197 Steps (f) and (g) of the standard procedure describe the consequences
when either (i) the two delegations agree that the project will not affect water
quality, or (ii) they are unable to come to agreement. They state:
f. - In case both CARU delegations agree that the water quality
will not be affected or on the use presented by the Party…a strict
Water Quality Monitoring Plan should be designed to verify
compliance with the quality standards outside the Mixing Zone.
g. - When there is no agreement between both delegations at
CARU with regard to the viability of the work or use presented
by the Party, the plan will be submitted to the other Party in 277
compliance with the provisions of Articles 7/12 of the Statute .
2.198 The import of these provisions is unmistakable: CARU does not exist to
approve projects. When the two delegations agree that a project will not harm the
river, CARU does not issue an authoriza tion or anything of the kind. Consistent
with its more technical function genera lly, it designs a water monitoring plan to
ensure compliance with its water quality stan dards after the project is implemented.
276
Ibid.
277Ibid., pp. 463-464.
- 138 -And when the two delegations disagree about the impact of a proj ect, the effect is
not to put a stop to it. Rather, it is merely to set in motion a round of direct, Party-
to-Party communications, exactly as the 1975 Statute says.
2.199 To be sure, CARU plays an important role in achieving the objectives of
the 1975 Statute. First and foremost, it se rves as a regulatory body, promulgating
regulations as agreed to by both Partie s for the conservation and preservation of
natural resources, and the prevention of contamination. Second, CARU sets limits
on fish catches. Third, it monitors comp liance with its regulations and coordinates
the measures taken by the Parties to carry out their obligations to protect the aquatic
environment. Fourth, it shares information with the Parties relative to their
obligations under the Statute and the Digest. And fifth, CARU participates in the
“consultation regime” (to use Dr. Barberis’ wo rds) of Articles 7-12 of the Statute in
the ways described above, that is, by su mmarily determining if a planned project
might cause significant harm to the other State, and thereafter serving as a vehicle of
communication and source of technical information for the two States.
2.200 The powers of CARU under the 1975 Statute -- and the limits of those
powers -- were described in detail by Dr. Barberis, perhaps Argentina’s leading
expert on the Statute, at the CARU-spons ored “Technical Legal Symposium” in
1987. Dr. Barberis, it will be recalled, was Argentina’s lead negotiator in the talks
with Uruguay that culminated in the 1975 Statute. Uruguay apologizes for the
following lengthy quotation from his presentation at the symposium, but it prefers to
present Dr. Barberis’ remarks on CARU’s role under the Statute in their entirety,
rather than to appear to be extracting only certain excerpts.
- 139 -With respect to the conservati on of living resources and the
environment in the Statute of the River Uruguay, the breadth of
competence granted to the Commission has drawn my attention.
Article 7 of the Uruguay River Boundary Treaty (7 April 1961)
provides that the River Statute will contain provisions regarding
the conservation of living resour ces (Par. e) and prevention of
contamination of the waters (Par. f).
The Statute of the River Urugua y (26 February 1975) addresses
the matter in some detail.
In the first place, the Statute grants the Commission the authority
to regulate matters related to the conservation and preservation
of living resources (Art. 56, Paragraph a, 2) and the prevention
of contamination (Article 56, Para graph a, 4). This is, therefore,
a regulatory power.
Then, according to Art. 56, Paragraph (c), of the Statute, the
Commission can set maximum fi shing limits by species and
adjust them periodically.
Another authority that the Commission possesses, in accordance
with Art. 36 of the Statute, is th at of coordinating measures that
the two countries take “to avoi d any change in the ecological
balance and to control pests and other harmful factors in the
river and its areas of influence” . It should be emphasized here
that these preventive measures to be coordinated by the
Commission refer not only to the ri ver but also to its “areas of
influence”.
At the same time, Article 39 of the Statute provides that the
parties, through the Commission, will exchange information on
fishing and the catch per species.
Finally, one power of the Commission that is interesting to
analyze is its participation in the regime of consultation. To
examine this matter, it is conveni ent first to mention Article 35
of the Statute, which provides as follows: “The Parties undertake
to adopt the necessary measures such that the management of the
soil and woodlands and the use of groundwater and the waters of
the tributaries of the river do not cause changes which may
significantly harm the régime of the river or the quality of its
waters.” This article reflects the obligation that every State has,
under general international law, not to cause significant harm
beyond its territory. The merit of this provision lies in specifying
that it is possible to cause a significant deterioration to the river
- 140 - waters through bad management of other natural resources, such
as the soil, the forests, and the aquifers. Now, when one State
proposes carrying out any work of sufficient size to affect the
river, it must first consult with its riparian neighbor to permit the
latter to determine whether said work will cause it significant
harm. Articles 7 to 13 of the St atute establish the procedure to
follow for this purpose and provide for the participation of the
Commission. Here, I would like to highlight the provision in
Article 13 that refers specifically to the topic under
consideration. This establishes the regime of consultation not
only for works that will be carried out in the river, but also with
regard to those that will be executed within the jurisdiction of
the States “outside the section defined as a river and in the
respective areas of influence in both sections.” In conformity
with these norms, if anyone, for example, has a rice field of a
certain size on the bank of the river and proposes to fertilize it
with a given chemical product or tr eat it with certain pesticides,
this could affect the quality of th e river waters and therefore, it
must be the subject of consultation with the riparian neighbor.
The same procedure must be followed if the execution of a work
involves impeding the discharge of an aquifer in the river or if
someone proposes establishing a contaminating industry on a
tributary of the Uruguay River, such as a tannery or a plant
intended to process certain chemical products.
As can be seen, the regime of consultation provided for in the
Statute has a broad range of application.
Therefore, according to what I have said, we can state that the
powers of the Commission with regard to the conservation of
natural resources and the envir onment fall into five distinct
categories: 1) regulation, 2) establishing fishing limits, 3)
coordination of measures, 4) exchange of information, and 5)
participation in the consultation regime. If we compare these
authorities with those granted by river statutes to other
Commissions, we can see that the competency of the
Administrative Commission of the Uruguay River is broad and,
278
in general, greater than that of other analogous entities.
2.201 Uruguay agrees with th is statement by Dr. Barber is. Uruguay agrees that
CARU is empowered by Article 56 of th e Statute “to promulgate regulations”
pertaining to the prevention of contamination and the preservation of living
278CARU Technical-Legal Symposium, op. cit., pp. 67-68. UCM, Vol. IV, Annex 72.
- 141 -resources, and “to fix” fishing limits; and th at it is authorized by Article 36 “to
coordinate” the activities of the Parties intended to preserve the ecological balance
of the river and its zones of influence. With particular regard to CARU’s powers
under Articles 7-13 of the 1975 Statute, Uruguay also agrees with Dr. Barberis that
these are limited to exchange of informa tion and participation in consultation.
Nowhere does the Statute -- or Dr. Barberis -- attribute to CARU the power to
approve or disapprove projects covered by Articles 7-13. Although CARU plays a
vital role in the protection of the Uruguay River and the aquatic environment, and in
the conservation of resources and the protection of aquatic life, it simply does not
have the particular power Argentina attemp ts to ascribe to it in the Memorial: to
approve or disapprove the projects covered by Article 7-13. Nor has Argentina ever
-- on any occasion prior to the initiation of th is lawsuit -- attributed such power to
CARU.
2.202 Interestingly, this appears to be the first time that Argentina has taken such
an expansive view of CARU’s role and pow er. As previously discussed, Argentina
never even notified, let along obtained a pproval from, CARU prior to authorizing
the construction and operation of dozens of industrial plants located on its side of the
river. Even with regard to public works projects on the river itself. Argentina’s own
actions belie the position it now adopts in the Memorial. In the Garabí Dam case,
CARU formed the opinion that the project mi ght significantly harm the River. Yet,
as shown by its subsequent behaviour, Argentina did not view that finding as in any
way dispositive. Indeed, as cited above, Argentina’s Am bassador Carasales, then
the President of Argentina’s delegation to CARU, informed Uruguay’s delegation
that the Commission would be consulted late r, when there was something “concrete
- 142 -and decided.” This statement is, of course , incompatible with the notion that it was
CARU’s role to do the deciding.
2.203 CARU’s organizational nature and structure belie Argentina’s attempt to
depict it as an independent, decision- making authority. CARU is an inter-
governmental organ, not an autonomous intern ational or supranational entity. It has
no executive staff; its full-time personnel ex ercise only technical and administrative
functions. Its “executive” consists of the two delegations appointed by the Parties.
Its President is actually the head of one of the delegations; the presidency alternates
between the heads of the two delegations. All decisions regarding the adoption of
regulations, the setting of limits on fish catches, etc., are made by consensus with
each delegation casting one vote. Significantly, the delegations are appointed by
their respective Foreign Ministries, normally from the Foreign Ministry’s ranks, and
they report directly to their Foreign Ministers. Thus, it is very much the Parties
themselves, and especially their Foreign Mi nisters, that control CARU, rather than
the other way around.
2.204 AmbassadC orrasales succinctly summed up the matter in 1988. At that
time, some members of the Subcommittee on Water Quality were proposing that
CARU explore the possibility of undertaki ng pilot irrigation projects on both sides
of the River. After listening to them, Ambassador Carasales:
stated that in general the arguments set forth on the matter have
not convinced him, because it seems that they stem from the
belief that CARU has powers to establish what the States can or
cannot extract [from the river] and to do this, they must turn to
the Commission. This is not what is stipulated in the Statute of
the River Uruguay. 279
279
CARU Minutes No. 6/88, p. 2295 (22 July 1988). UCM, Vol. IV, Annex 73.
- 143 -For support, Ambassador Carasales cited Articles 27 and 28 of the Statute 28.
2.205 Although Ambassador Carasales’ comm ents related specifically to the
subject of irrigation, the general principle a pplies with full force to other uses of the
river, including industrial uses. Article 27 does not draw a distinction among the
various uses; they are treated the same. Thus, CARU has no more “authority” to
“determine” what the Parties may do with the river for industrial purposes than for
agricultural purposes. Likewise, the Parties need not “address themselves” to the
Commission for permission when they use the river for industry any more than when
they use it for agriculture. CARU simply does not have the authority Argentina now
tries to say it does. Accordingly, Urugua y cannot have violated the Statute by
authorizing the ENCE and Botnia plants without waiting for CARU’s approval.
Section IV.
The Role of the Court
2.206 As stated, Article 12 provides that “[s]hould the Parties fail to reach
agreement within 180 days” 281 they may have recourse to this Court under Article
60, which provides in turn that “[a]ny dispute concerning the interpretation or
application of the Treaty and the Stat ute which cannot be settled by direct
negotiations may be submitted by either Party to the International Court of
282
Justice.”
2.207 In evaluating the role of the Court, it is important to bear in mind the
nature of the dispute that brought the Partie s before it in the first place. Articles 7
through 12 establish a regime of notificati on, information-sharing and consultation
280Ibid.
2811975 Statute, op. cit., Art. 12. UCM, Vol. II, Annex 4.
282
Ibid., Art. 60.
- 144 -all relating to the effects of a planned projec t on three subjects: (i) navigation; (ii)
the regime of the river; and (iii) the quality of its waters. The articles create a
mechanism for the Parties to share their views about the potential effects of the
planned project on these three subjects and to attempt to come to an agreement either
(a) that there will be no significant harm, or (b) on appropriate mechanisms for
averting or minimizing such harm. As Uruguay has shown, the premise of these
articles is that the notified State must accept harms that do not rise to the level of
“significant”. The dispute before the Cour t thus centres on the following question:
is the notified State threatened with significant harm to its interests in navigation, the
regime of the river or the quality of its waters? Argentina appears to agree that this
question defines the scope of the Court’s jurisdiction. At paragraph 4.80 of the
Memorial, for example, it states: “Si un différend s’élève entre les parties à cet égard
[i.e., about whether or not there will be significant harm] et qu’il ne peut être réglé, il
appartient à la Cour de le régler (article 12).” 283
2.208 If the answer to this question is “no”, -- i.e., that there is no likelihood that
the project will cause significant harm to the notified State’s interests in navigation,
the regime of the river, and/or water quality -- then there is no need to, and the Court
is without power to, impose requirements of any kind on the planned project.
Logically, the situation w ould revert back to the ci rcumstance contemplated by
Article 9; that is, it is just the same as if the notified State had come to the
conclusion that the project will not cause si gnificant harm. In that case, as the
Statute makes clear, the initiating State is free to implement the project with no
further obligations incumbent upon it, excep t those imposed by Article 10. In
283
AM, para. 4.80. (“If a dispute arises in this regard [ i.e., about whether or not there will be
significant harm] and it cannot be settled, it is up to the Court to settle it (Article 12).”)
- 145 -Argentina’s own words: “Le recours à la CIJ participe à la réalisation de l’objectif de
284
prévention des atteintes à l’environnement du fleuve Uruguay.” It follows, then,
that if there is no threat to the river, there is nothing for the Court to prevent.
2.209 It is only if the Court concludes that the project will cause significant harm
to the notified State -- that is, to its interests in navigation, to the regime of the river,
and/or to water quality -- that it would be empowered to impos e obligations on the
initiating State to prevent or minimize such harm. Unless and until the Court
reaches such a conclusion, and in the absence of indication of provisional measures,
the initiating State is free to continue to carry out the project, as described above.
2.210 In Part II of this Counter-Memorial, Uruguay demonstrates that, based on
all of the scientific evidence, there is no likelihood that operation of the Botnia plant
will significantly harm the river or Argentina, and specifically that operation of the
plant will cause no harm to navigation, the re gime of the river, or the quality of its
water. Accordingly, there is no harm to prevent, and no basis for any remedial
action to be ordered by the Court.
Conclusion
2.211 Chapter 3, which immediately follows, examines the facts bearing on
Uruguay’s compliance with the legal obligations described in this Chapter. Chapter
3 makes it plain that Uruguay has fully complied with all of its procedural
obligations under the Statute, particular ly its obligations under Articles 7-12.
Together, Chapter 2 on the applicable law and Chapter 3 on the application of the
284
AM, para. 3.96. (“The right of recourse to the ICJ partly fulfils the objective of preventing
threats to the Uruguay River environment.”)
- 146 -law to the facts, demonstrate why Argent ina’s arguments that Uruguay has violated
its procedural obligations under Articles 7-12 should be rejected in their entirety.
- 147 -- 148 - CHAPTER 3.
THE APPLICATION OF THE LAW TO THE FACTS
CONCERNING THE ALLEGED PROCEDURAL VIOLATIONS3.1 This Chapter will pres ent the facts showing that Uruguay complied at all
times with its procedural ob ligations under the 1975 Statute. The discussion of the
facts in this Chapter will draw on the legal analysis of the Statute set forth in Chapter
2, in order to put the facts in their proper legal context. In the process of stating the
facts, Uruguay will also respond to Chapters 2 and 4 of Argentina’s Memorial,
which lay out Argentina’s view of the fact s and Uruguay’s ostensible violations of
the 1975 Statute, respectively. In so doi ng, Uruguay will show that (i) Argentina’s
depiction of the facts is materially inaccurate in virtually every respect, and (ii) the
conclusions of law it attempts to draw from the facts are similarly off the mark.
3.2 Although Argentina’s Memorial is not always a model of clarity, it
appears to argue that Uruguay violated its procedural obligations in four basic
respects: (i) by failing to notify CARU about the ENCE and Botnia plants before
issuing initial environmental authorizations; (ii) by failing to await authorization
from CARU before itself authorizing the plants; (iii) by not providing either CARU
or Argentina sufficient information to eval uate the probable imp act of the projects
on navigation, the regime of the River, or the quality of its water; and (iv) by moving
ahead with the plants both during consulta tions between the Parties and during the
pendency of this case.
3.3 Chapter 2 of this Counter-Memorial has already demonstrated the fallacy
of at least three of Argentina’s four arguments as a matter of law. As shown therein,
the 1975 Statute does not require notice to CARU before the initiating State may
authorize a project in its sovereign territory. In fact, the text of the Statute and the
consistent practice of the Parties show that notification can occur (and has occurred)
after authorizations have already been i ssued. Similarly, Uruguay showed that
- 151 -CARU does not have the power to approve or reject particular projects. The Parties
-- and only the Parties -- have that power. The Statute therefore does not require the
initiating State to await approval from CARU before authorizing a project; and, in
practice, neither Argentina nor Uruguay ha ve ever awaited -- or sought -- CARU’s
authorization before undertaking a project. Finally, it is not true that the Statute
prevents an initiating State from taking st eps in furtherance of a project during the
pendency of consultations or during proceedings before this Court. The Statute
allows a Party to undertake preparatory work during the consultation period; and
once consultations are over, the Statute permits the initiating State to implement a
project, even if dispute resolution proceedings are underway.
3.4 Three of Argentina’s four procedur al arguments are thus disproved even
without reference to the facts of this case. As Uruguay will demonstrate further in
this Chapter, once the true facts are re vealed, the conclusion that Uruguay fully
complied with its procedural duties under the Statute is inescapable. With respect to
the only one of Argentina’s arguments that doe s not fail as a matter of law -- that is,
that Uruguay did not provide adequate info rmation to either CARU or Argentina --
the truth is to the contrary. In point of fact, Argentina received more than enough
information to enable it to evaluate the probable impact of the plants on navigation,
the regime of the river, and the quality of its water, as Article 7 of the 1975 Statute
requires. As shown within, Argentina’s own conduct proves the point.
Consequently, not a single one of Argentina’s procedural claims withstands analysis.
Each and every one of its submissions in this respect is unfounded, either as a matter
of law, as a matter of fact, or both.
- 152 -3.5 For ease of reading, this Chapter will respond to each of Argentina’s four
arguments in sequence.
Section I.
Uruguay Was Not Required to Notify CARU Before
It Issued AAPs to ENCE and Botnia
3.6 Argentina contends that Uruguay violated Article 7 of the 1975 Statute by
granting initial environmental authorizations to ENCE (9 October 2003) and Botnia
(14 February 2005) without prior notice to CARU. The Memorial argues, for
example: “Cette disposition [Article 7] prévoit l’obligation de saisir et d’informer la
CARU préalablement à toute action qui vise à l’autorisation et à la construction d’un
projet sur le fleuve Uruguay.” 285 Elsewhere, it states: “En conclusion, en autorisant
la construction de l’usine CMB sans sais ir la CARU, l’Uruguay a violé l’obligation
lui incombant en vertu de l’article 7 du Statut de 1975.” 286
3.7 Argentina’s argument cannot stand in the face of the law analyzed at
length in Chapter 2 287. Uruguay showed there that the 1975 Statute does not require
notice to CARU before a State may author ize a project within its own territory.
Both the text of the Statute and the provisions of the CARU Digest make clear that
notice to CARU may occur after a project has been authorized. The CARU Digest,
for example, states that each of the Parties has the competence to “promulgate
authorizations, restrictions or prohibitions related to the different legitimate uses of
the water, informing CARU about said aut horizations, restrictions or prohibitions
285
AM, para. 3.66 (emphasis in text). “This provis ion [Article 7] stipulates the obligation to
contact and inform CARU prior to taking any action to authorize or build a project on the
Uruguay River.”
286AM, para. 4.47; see also, inter alia , AM, para. 4.89. (“In conc lusion, by authorizing the
construction of the CMB [ENCE] plant wit hout referring the matter to CARU Uruguay
violated the obligation incumbent on its under Article 7 of the 1975 Statute.”)
287See Chap. 2, paras. 2.52-2.71
- 153 - 288
whenever they are originated by or related to risks for human health.” On its face,
this provision plainly anticipates that the Parties will first promulgate authorizations
and then notify CARU in relevant cases.
3.8 The fact that notice to CARU is not required prior to the authorization of a
project is confirmed in the most unmistakable way by the Parties’ consistent and
mutual conduct prior to this case. Contrary to Argentina’s argument (which appears
to have been invented for purposes of this case), the Parties have in the past typically
notified CARU only after authorizing particular projec ts. Thus, for example, in
2001 Uruguay authorized the M’Bopicua Port and informed CARU only after the
fact289. Argentina did not protest and CARU pr oceeded to review the project in the
290
ordinary course . Similarly, in 2006, Uruguay fi rst authorized the Nueva Palmira
Freight Terminal and then notified CARU about the project. Again, Argentina did
not protest, and again CARU proceeded to take cognizance of the issue as a matter
291
of routine . Particularly in light of the fact that both projects were cited in
Argentina’s Memorial as probative instances of State practice, the two cases stand as
dispositive evidence of Uruguay’s reading of the Statute. Accordingly, notice was
not due to CARU before Uruguay issued initial environmental authorizations to
ENCE and Botnia.
288Digest of the Commission for the Administration of the River Uruguay (CARU) (hereinafter
“CARU Digest”), Subject E3, Title 2, Chap. 1, S ec. 1, Art. 1(a) (1984, as amended) (emphasis
added). UCM, Vol. IV, Annex 60.
289
See Chap. 2, para. 2.65-2.67; see also, CARU Minutes No. 03/01, p. 249 (16 March 2001).
UCM, Vol. IV, Annex 91.
290
See AM, para. 3.199.
291
CARU Minutes No. 02/06, p. 302 (17 February 2006). UCM, Vol. IV, Annex 116.
- 154 -3.9 It is important to note also that in making its arguments about the putative
requirement to notify CARU before any authorizations are issued, Argentina
repeatedly mischaracterizes the authorizations Uruguay issued to ENCE and Botnia
in October 2003 and February 2005, respectively. Argentina states again and again
that the authorizations permitted the construction of the plants 292. They did no such
thing. They were very much preliminary authorizations, the purpose of which will
be described in the paragraphs that follow. Argentina’s mischaracterizations
demonstrate either a fundamental ignorance of Uruguayan law or a wilful disregard
for the facts.
3.10 The ENCE and Botnia authori zations about which Argentina now
complains were “initial environmental authorizations” (“autorizaciones ambientales
previas” or “AAPs”). As their name implies, they were preliminary only. Under
Uruguayan law, an AAP reflects the initial determination of Uruguay’s Ministry of
Housing, Territorial Development and Environment (“MVOTMA”) that, based on
293
the review conducted to date, a pr oject is environmentally viable .
Administratively, an AAP serves two principal functions. First, it establishes certain
substantive requirements with which a proj ect must comply. In the case of Botnia,
for example, the AAP mandated that the plant had to comply with IPPC BAT
requirements, and with the water quality standards established by CARU and
DINAMA . 294
292See, e.g., AM, paras. 0.14, 2.2, 2.3, 4.89 (b)(c).
293Decree No. 435/994, Environmental Impact A ssessment Regulation (hereinafter “Decree
No. 435/994”), Art. 17, para. 3 (21 September 1994). UCM, Vol. II, Annex 9.
294MVOTMA Initial Environmental Authorization for the Botnia Plant (hereinafter “Botnia
AAP”), Subsec. (aa) (14 February 2005). UCM, Vol. II, Annex 21.
- 155 -3.11 Second, an AAP also identifies the further environmental reviews to which
a project is subject, and the further authoriz ations that will be required. In the case
of the ENCE and Botnia AAPs, they es tablished a multi-pha sed review process
under which the companies were required to submit for DINAMA’s approval
separate environmental management plans (“EMPs”) for all significant pre- and
295
post- operational phases in the life cycle of the plants, such as earth movements ,
the construction of the foundations and ot her associated elements of the plants 296,
297
and the construction of the wastewater treatment plants . Indeed, even the final
construction permit would not authorize the actual operation of the plants. Before
operation could begin, still another EMP, including an implementation plan for
mitigation measures and a solid waste management plan, must be submitted and
must receive DINAMA’s approval 298.
3.12 The Director of DINAMA neatly summarized the point in her 1 June 2006
affidavit, which Uruguay submitted to the C ourt at the time of Argentina’s request
for provisional measures:
The AAPs authorize Botnia a nd ENCE merely to request
approval to begin construction only; an AAP does not authorize
either plant to begin operations, nor do they even authorize
construction itself. The AAP requires the submission of an
Environmental Management Plan (“Plan de Gestion Ambiental”
295
DINAMA Environmental Management Plan Approv al for the Botnia Plant (for the removal
of vegetation and earth movement) (hereinafter “Botnia PGA (for the removal of vegetation
and earth movement)”) (12 April 2005). UCM, Vol. II, Annex 22.
296
DINAMA Environmental Management Plan Approval for the Botnia Plant (for the
construction of the concrete foundation and the em issions stack) (hereinafter “Botnia PGA (for
the construction of the concrete foundation and the emissions stack)”) (22 August 2005). UCM,
Vol. II, Annex 23.
297DINAMA Environmental Management Plan Approval for the Botnia Plant (for the
construction of the wastewater treatment plant) (hereinafter “Botnia PGA (for the construction
of the wastewater treatment plant)”) (10 May 2006). UCM, Vol. II, Annex 28.
298
Botnia AAP, op. cit., Art. 2(h). UCM, Vol. II, Annex 21.
- 156 - or “PGA”) for construction, an Environmental Management Plan
for operation, a Mitigation Plan, and a Monitoring and Follow-
up Plan (including monitoring of effluent quality and affect on
299
living creatures).
3.13 As discussed in detail in Chapter 2, Article 7 is imprecise as to when
300
exactly in the planning process of a project notice to CARU is required .
Certainly, it is not due prior to an initial authorization. General international law
suggests that so long as notice is “timely,” Article 7 is sa tisfied. “Timely” in this
sense means simply that notice occurs in sufficient time to allow CARU and the
notified State to assess the likely impacts of the project on navigation, the regime of
the river, and/or water quality, and, if necessary, to consult on appropriate preventive
301
measures before a potentially harmful project is carried out . Here, there is no
serious argument that the ability of CARU or Argentina to review the projects and
have their concerns considered and addr essed was impaired in any way when the
AAPs to ENCE and Botnia were issued in October 2003 and February 2005,
respectively. No final decision of any kind had been made with respect to either
plant. Both still required se veral additional authorizations before even construction
could begin, much less operation. There was still more than enough time for CARU
to review the project and for Argentina’s concerns to be addressed before the
projects were carried out. Indeed, as th e Court will read, this is exactly what
happened. Thus, in no sense was Argentina presented with a fait accompli merely
by issuance of the AAPs as the Memorial repeatedly and erroneously suggests.
299Sworn Declaration of Alicia Torres, Director of Department of the Environment (hereinafter
“Torres Aff.”), p. 6, para. 3. (June 2006). UCM, Vol. II, Annex 30.
300See Chap. 2, para. 2.52.
301See Chap. 2, para. 2.52; see also, Draft Articles on Prevention of Transboundary Harm from
Hazardous Activities with commentaries (hereina fter “2001 Draft Article s”), p. 421, comment
5 (2001), appears in Yearbook of the International Law Commission, 2001, vol. II, Part Two.
- 157 -3.14 Argentina’s argument that Uruguay’s issuances of the ENCE and Botnia
AAPs were somehow untimely also rings hollo w in light of the fact that Argentina
and CARU were well aware of Uruguay’s plans far in advance of the dates when the
AAPs were issued. As it must, Argentina’s Memorial admits this. At paragraph 2.5,
for example, Argentina acknowledges that CARU was aware of the potential ENCE
plant at least as early as 17 October 2002, a full year before issuance of the AAP 302.
Similarly, at paragraph 2.47, Argentina ad mits that CARU was aware of the Botnia
plant at least as of 29 April 2004, some ten months before the AAP was issued 303.
As will be detailed immediately below, CARU and Argentina were actually aware of
both plants long before the dates acknowledged in the Memorial.
3.15 The fact that CARU and Argentina knew about both plants prior to the
issuance of the AAPs is important for at least three inter-related reasons. First,
Argentina cannot credibly claim either surprise or prejudice. Second, the CARU
Digest specifically permits the Commission itself to request notification from a Party
pursuant to Article 7 whenever it believes a project might affect the water quality of
the River. In particular, the Digest provides that
whenever CARU may have determined by preliminary
procedures that the works or exploitation of the River waters
imply an impact on the water quality, it shall address the
corresponding Party in order to undertake the appropriate
304
measures [i.e., notify CARU].
CARU never requested that Uruguay forma lly notify it about either plant, and
certainly made no such request before ei ther AAP was issued. Nor did Argentina’s
302
AM, para. 2.5.
303
AM, para. 2.47.
304
CARU Digest, op. cit., Subject E3, Title 2, Chap. 3, Sec. 1, Art. 3. UCM, Vol. IV, Annex
60.
- 158 -representatives to CARU ever propose that the Commission request notification by
Uruguay prior to the issuance of the initial authorizations. These facts confirm that
all Parties understood that the time was not ripe for an Ar ticle 7 notification before
the AAPs were issued. Third, notwithstanding the fact that Argentina and its
delegation in CARU were well aware of the imminent issuance of the AAPs, they
never once indicated that they expected to be formally notified under Article 7
before Uruguay issued the AAPs.
A. A RGENTINA AND CARUW ERE W ELL INFORMED A BOUT THE ENCE P LANT
B EFORE THE 9 OCTOBER 2003 AAP W AS ISSUED
3.16 Argentina’s Memorial suggests that CARU first became aware of the
305
ENCE plant in October 2002 . The truth is, however, that the Commission became
aware of the issue much earlier than th at. On 14 December 2001, for example,
CARU received a letter from a local non-governmental organization in Argentina
expressing concern about reports that a cellu lose plant would be built in the vicinity
of Fray Bentos306. In response to that letter, CARU’s Legal Subcommittee requested
an opinion from its legal advisor analyzing the Commission’s powers in the area of
307
pollution control . The opinion is very telling in light of Argentina’s arguments
before the Court. In essence, it merely quotes the provi sions of the CARU Digest
308
Uruguay previously analyzed in Chapter 2 . That is, the opinion states that the
Parties have the power to “ issue authorizations, limitations or prohibitions relating
305AM, para. 2.5.
306CARU Minutes No. 14/01, p. 2185 (14 December 2001). UCM, Volume IV, Annex 92.
307Annex F to Subcommittee on Legal and Ins titutional Affairs Report No. 165 (11 December
2001), pp. 2225-2228, approved in CARU Minutes No. 14/01 (14 December 2001). UCM, Vol.
IV, Annex 93.
308
See Chap. 2, para. 2.191.
- 159 -to the various legitimate uses of the waters, informing CARU about such
authorizations, limitations or prohibitions, when they cause or are linked to risks to
human health.” 309 Thus, at this early stage, it was plainly CARU’s understanding
that it would be notified of the ENCE plant after an appropriate authorization had
been issued by Uruguay.
3.17 The planned project took more c oncrete form before CARU on 8 July
2002, when representatives of ENCE visite d CARU’s offices in Paysandú, Uruguay
to provide information about the company’s plans to build a cellulose plant near
Fray Bentos 310. Although the CARU records do not elaborate on the content of the
meeting, it is at a minimum clear that no later than July 2002, more than 15 months
before Uruguay issued ENCE’s AAP, CARU knew with specificity not only the
nature and location of the project being pl anned, but also the company that would
build it.
3.18 By October 2002, just three months later (and a full year before the AAP
was issued), CARU already had a summary of the environmental impact assessment
which ENCE had submitted to the Uruguayan g overnment as part of its application
for an AAP, as well another study en titled “Estudio Hidrodinámico del Río
Uruguay.”
309By contrast, CARU’s powers are described in the Memorandum as: to establish water
quality standards; to pr omote and coordinate the Parties’ monitoring of compliance with the
water quality standards; to promote the Parties’ implementation of strict control measures as
regards contaminants; to promote the construction by the Parties of water treatment systems; to
encourage the dissemination of information to the public; and to issue periodic reports on water
quality levels. Annex F to Subcommittee on Legal and Institutional Affairs Report No. 165, op.
cit., pp. 2225-2228. UCM, Vol. IV, Annex 93.
310Letter sent from Vice President of Celulosas M’Bopicuá, Rosario Pou Ferrari, to CARU
Uruguayan Delegation President, Architect Walter Belvisi (24 August 2004). UCM, Vol. IV,
Annex 106.
- 160 -3.19 Uruguay will not burden the Court with a point-by-point exegesis of all the
facts bearing on CARU’s awareness of a nd involvement with the ENCE plant prior
to the issuance of the AAP in October 2003. It is content to quote the words of
Argentina’s Ambassador García Moritán. During the 17 October 2003 meeting at
which he was otherwise decrying Uruguay’s “failure” to notify CARU about the
ENCE plant before issuing the AAP, he nonetheless conceded that:
The environmental studies relati ng to the establishment of the
plant have been part of our discussions at all our plenary
meetings for more than a year. We have also had meetings with
experts to understand the environm ental scope of the issue and
they have helped us on several occasions to include the technical
details that must be considered in writing the letters we have sent
to the Department of the Environment. These meetings with the
experts have brought up various issues that must be kept in mind
when dealing with a cellulose plant. Among other things, it was
agreed that new monitoring stati ons would have to be installed
to check the water quality in thos e areas. We have discovered
that all the historic records de scribe a water quality of 100%.
The CARU monitoring stations will continue to provide
information. I also believe that CARU has had extensive
correspondence with that agency we esteem so highly, the
Department of the Environment. 311
3.20 From all the prior communications to which Ambassador García Moritán
referred, it was well known to CARU, and in particular to Argentina’s delegation to
CARU, that the issuance of the AAP was imminent. As part of its effort to keep the
Commission informed, for example, DINAMA sent CARU a copy of its 14 July
2003 resolution “convening a Public Hear ing on the request for an Initial
Environmental Authorization presente d by Celulosas de M'BOPICUYÁ [ sic]
S.A.” 312 A member of CARU’s Technical Secr etariat and its legal advisor attended
the hearing on 21 July 2003, and prepared a report describing the event in positive
311
CARU Minutes No. 11/03, pp. 2181-2182 (17 October 2003). UCM, Vol. IV, Annex 97.
312CARU Minutes No. 08/03, p. 1400 (15 August 2003). UCM, Vol. IV, Annex 94.
- 161 - 313
terms . Also, in August 2003, the advisors to the Subcommittee on Water Quality,
which was continuing to work on a plan for monitoring the water around the ENCE
plant, noted that in order to make furthe r progress on the plan “it is necessary to
await the Department of the Environment’s decision about the impact study that was
314
presented.” And in September 2003, anticipating the issuance of the AAP,
Argentine delegate to CARU, Dr. Armando Darío Garín, asked whether DINAMA
already “had issued an opinion on the project” or not 315. DINAMA’s representative
316
on the Commission stated that it had not but would do so in the next several days .
3.21 Not once during the course of any of these exchanges did any member of
CARU, whether Argentine or Uruguayan, s uggest that the forthcoming AAP had to
be deferred pending formal Article 7 notification to CARU. When this is considered
in light of the consistent prior practice of the Parties described in Chapter 2, pursuant
to which the Parties routinely authorized then notified -- not the other way around --
there is simply no basis to conclude th at Uruguay’s putative “failure” to notify
CARU at this stage violated the 1975 Statute.
3.22 Argentina’s Memorial contains a curious allegation that on the same day
that ENCE’s AAP was issued, 9 October 2003, “le Président de l’Uruguay Jorge
313
Annex B to Subcommittee on Water Quality and Prevention of Pollution Report No. 239
[sic] (12 August 2003), pp. 1455-1456, approved in CARU Minutes No. 08/03 (15 August
2003). UCM, Vol. IV, Annex 95.
314Subcommittee on Water Quality and Prevention of Pollution Report No. 239 [sic ], p. 1441
(12 August 2003), approved in CARU Minutes No. 08/03, 15 August 2003. UCM, Vol. IV,
Annex 95.
315Subcommittee on Water Quality and Prevention of Pollution Report No. 239, pp. 1701-1702
(9 September 2003), approved in CARU Minutes No. 09/03 (12 September 2003). UCM, Vol.
IV, Annex 96.
316
Ibid. Technically, under Uruguayan law, an AAP is issued by MVOTMA, not DINAMA.
However, MVOTMA bases its decision on the recommendation of DINAMA. Decree No.
435/994, op. cit. Chap. IV. UCM, Vol. II, Annex 9.
- 162 -Batlle avait promis à son homologue argen tin Néstor Kirchner, dans une réunion
tenue à Colonia (Uruguay), qu’aucune autorisation ne serait déliverée avant de
répondre aux soucis environn ementaux de l’Argentine.”317 The Court need not
concern itself with this allegation, however, because Argentina offers no evidence to
support it. The Court will see that the prtinent statement in the Memorial lacks
citation. In fact, contemporaneous accoun ts of the Presidents’ meeting make no
mention of the putative promise Argentina identifies. The reason, of course, is
simple: no such promise was ever made.
B. A RGENTINA AND CARUW ERE E QUALLY W ELLINFORMED A BOUT THE
BOTNIA P LANT BEFORE THE 14F EBRUARY 2005AAPW ASISSUED .
3.23 Both CARU and Argentina were at least equally well informed about the
Botnia plant before February 2005 when MVOTMA issued its AAP. CARU itself
first became aware of the Botnia plant no later than 15 April 2004, nearly ten full
months before Uruguay granted the company its AAP 31. In fact, internal Uruguayan
documents show that Argentine officials were aware of the Botnia project long
before that. According to a 4 N ovember 2003 memorandum from Minister
Counsellor Daniel Castillo of the Ur uguayan Embassy in Buenos Aires to
Ambassador Alberto Volonté Berro, repres entatives of Botnia, together with
Finland’s Ambassador in Ar gentina, had already met with Argentine government
317
AM, para. 2.17 (“Jorge Battle, President of Ur uguay, promised his Argentinean counterpart,
Nestor Kirchner, at a meeting held in Colonia (Uruguay), that no permit would be issued before
the environmental concerns of Argentina were addressed.”)
318See La Nación (Argentina), “Kirchner, Satisfied with His Meeting with Jorge Batlle” (9
October 2003). UCM, Vol. IX, Annex 182.
319See CARU Inter-Plenary Session, Report No. 09/2004, pp. 146-148 (15-16 April 2004),
approved in CARU Minutes No. 02/04 (21 May 2004). UCM, Vol. IV, Annex 100.
- 163 -officials to discuss Botnia’s potential in vestment in Uruguay. According to that
memorandum,
the visit by the representatives of said group to Argentina, was
solely for informational purposes, of a preventative nature,
(concerned about the problem between Argentina and Uruguay
when the news appeared regarding a project similar to that of the
Spanish group M-Bopicuá), with the aim of dispelling any
doubts which the Argentine authorities could raise about the
purpose, scope and especially environmental protection
guarantees in relation to the impact on the Uruguay River and its
area of influence. The Ambassador of Finland stated that the
results of the meetings with the Argentine authorities were
positive on their part, and without encountering any
obstructionist attitudes, but rather, on the contrary, they were
flexible and helpful, appearing to be simply interested in
becoming acquainted with the evaluation of the environmental
impact of the project.320
3.24 The timing of Botnia’s meeting with Argentine government officials
coincided with the public announcement of the company’s plans. On 24 October
2003, Botnia issued a press release announcing the creation of a local corporate
entity, Botnia, S.A., to begin studying the possibility of constructing a cellulose
plant with a production capacity of around one million tons/year in the vicinity of
321
Fray Bentos .
3.25 On 15 April 2004, the Parties’ de legations to CARU met unofficially in
Buenos Aires and decided to seek a meeti ng with Botnia representatives to learn
directly about the company’s plans 32. As Argentina’s Memorial acknowledges, the
320Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro (4 November 2003). UCM, Vol. II, Annex 16.
321Botnia Press Release, “Botnia Investigates Prospects for Starting Pulp Production in
Uruguay” (24 October 2003). UCM, Vol. IX, Annex 199.
322See CARU Inter-Plenary Session, Report No. 09/2004, op. cit., pp. 146-148. UCM, Vol. IV,
Annex 100. The delegations met “unofficia lly” because the formal work of CARU was
suspended at the time for reasons that will be addressed in the next section of this Chapter.
- 164 - 323
meeting between Botnia and CARU took place on 29 and 30 April 2004 . CARU
minutes do not detail the contents of th e meetings, but simply characterize it as
“informative” 324.
3.26 CARU quickly incorporated the Bo tnia plant into its activities. As
Uruguay will detail in the next section of this Chapter, in October 2003, the Foreign
Ministers of Uruguay and Argentina came to an understanding about the approach to
be taken with the ENCE plant. An agreement was formalized in March 2004 325. As
part of their agreement, the Foreign Mini sters agreed that CARU would be given
responsibility for implementing a water quality monitoring program in the vicinity of
the ENCE plant to guarantee compliance with the CARU water quality standards 326.
CARU began working on the plan, which became known as “the Plan for
Monitoring the Environmental Quality of the Uruguay River Proposed for the Areas
of the Pulp Mills” (“PROCEL”) in July 2004, less than three months after its
327
meeting with Botnia representatives . From the very first draft, the plan
anticipated not only the future ENCE plant, but also the Botnia plant. This can be
seen most obviously in its title, which refers to “pulp mills”. Equally, the first line of
the first draft dated July 2004 states: “Taking into account the future installation of
323AM, para. 2.47. Argentina incorrectly states that the meeting took place in Montevideo. In
actuality it occurred in Fray Bentos. CARU In ter-Plenary Session, Report No. 10/2004, p. 151
(29-30 April 2004), approved in CARU Minutes No. 02/04 (21 May 2004). UCM, Vol. IV,
Annex 101.
324Ibid.
325See infra. 2, paras. 3.45-3.60
326See ibid.
327“Procedimiento de Vigilancia de la Calidad Ambiental del Río Uruguay en áreas de Plantas
Celulósicas,” in English: “Draft Plan for Monitoring the Environmental Quality of the Uruguay
River for the Areas of the Pulp Mills,” Subc ommittee on Water Quality and Prevention of
Pollution Report No. 243, p. 851 (13 July 2004), approved in CARU Minutes No. 04/04 (16
July 2004). UCM, Vol. IV, Annex 102.
- 165 -cellulose and paper plants … the plan described below was developed, focusing on
328
areas which the facilities may possibly impact.”
3.27 The same month, on 7 July 2004, Botnia’s Vice President invited CARU
to send a delegation to Finland to learn more about the company and its cellulose
329
plant technology . CARU accepted the invitation and sent a delegation in early
330
August 2004 . The delegation was comprised not only of representatives of the
Commission, but also members of the loca l governments on both sides of the river,
including Argentina’s Entre Rios province 33. The delegation delivered an audio-
332
visual presentation about the trip to the full CARU on 25 October 2004 . They
also prepared a detailed, technical report of their visit, which they presented to the
333
full Commission on 7-11 February 2005 .
3.28 CARU’s Subcommittee on Wate r Quality continued to work on
developing the PROCEL plan throughout the remainder of 2004. Like the first draft
quoted above, all subsequent drafts continued to contemplate “the future installation
334
of cellulose and paper plants” that is, both the ENCE and Botnia plants. On 12
328Draft Plan for Monitoring the Environmental Quality of the Uruguay River in the Areas of
the Pulp Mills (hereinafter “Draft PROCEL”), Annex C to Subcommittee on Water Quality and
Prevention of Pollution Report No. 243, p. 863 (13 July 2004), approved in CARU Minutes
No. 04/04 (16 July 2004) (emphasis added). UCM, Vol. IV, Annex 102.
329
CARU Minutes No. 05/04, pp. 997-998 (13 August 2004). UCM, Vol. IV, Annex 103.
330
CARU Inter-Plenary Session, Report No. 16/2004, p. 1304 (30 July 2004), approved in
CARU Minutes No. 05/04 (13 August 2004). UCM, Vol. IV, Annex 105.
331Ibid.
332CARU Inter-Plenary Session, Report No. 26/2004, p. 1901 (25-26 October 2004), approved
in CARU Minutes No. 08/04 (12 November 2004). UCM, Vol. IV, Annex 110.
333Subcommittee on the Environment and Sustainable Water Use Report No. 03, pp. 306-309,
Annex B, pp. 313-327 (7-11 February 2005), approved in CARU Minutes No. 02/05 (11
February 2005). UCM, Vol. IV, Annex 112.
334
Draft Plan for Monitoring the Environmental Quality of the Ri ver Uruguay in the Areas of
the Pulp Mills (hereinafter “Draft PROCEL”), Annex A to Subcommittee on Water Quality and
- 166 -November, CARU’s plenary session approved the final version of the PROCEL and
sent DINAMA a copy “for the final approval of the Environmental Quality
Monitoring Plan Proposed for the Uruguay River in the Areas of the Pulp Mills.” 335
DINAMA subsequently advised CARU that it had no obj ections to the monitoring
336
plan and approved it .
3.29 Also in November 2004, CARU se nt DINAMA a letter seeking an update
on the administrative status of the Botnia plant in Uruguay 337. DINAMA replied by
fax in December “forwarding the text of th e public file for the Kraft cellulose plant
project, application for ini tial environmental authorization [AAP] filed by Botnia
S.A.” 338 In the same CARU minutes in wh ich receipt of DINAMA’s fax is noted,
Argentina’s Ambassador García Moritán went on record to make clear his pleasure
at how well CARU had fulfilled its mandate with respect to the two cellulose plants;
that is both the ENCE and Botnia plants. He
indicated that [the past year] was a success if one examines the
work done relative to the issue of the environment
Prevention of Pollution Report No. 244, p. 1136(11 August 2004), approved in CARU Minutes
No. 05/04 (13 August 2004). UCM, Vol. IV. Annex 104. Draft Plan for Monitoring the
Environmental Quality of the Uruguay River in the Areas of the Pu lp Mills (hereinafter “Draft
PROCEL”), Annex A to Subcommittee on Water Quality and Prevention of Pollution Report
No. 246, p. 1717 (12 October 2004), approved in CARU Minutes No. 07/04 (15 October
2004). UCM, Vol. III, Annex IV. Draft Plan for Monitoring the Environmental Quality of the
Uruguay River in the Areas of the Pulp Mills (hereinafter “Draft PROCEL”), Annex A to the
Subcommittee on Water Quality and Prevention of Pollution Report No. 247, p. 1959 (8
November 2004), approved in CARU Minutes No. 08/04 (12 November 2004). UCM, Vol. IV,
Annex 109.
335
Subcommittee on Water Quality and Prevention of Pollution Report No. 247, p. 1951 (8-12
November 2004), approved in CARU Minutes No. 08/04 (12 November 2004). UCM, Vol. IV,
Annex 109.; CARU Minutes No. 08/04 (12 November 2004), pp. 1859-1860. UCM, Vol. IV
Annex 108.
336Subcommittee on Water Quality and Prevention of Pollution Report No. 247, op. cit., p.
1951.
337
Ibid., p. 1955.
338
CARU Minutes No. 09/04, p. 2148 (10 December 2004). UCM, Vol. IV, Annex 111.
- 167 - fundamentally, and perhaps everyone’s wish is that the Uruguay
River Environmental Protection Plan had had greater
momentum; but it is also fair to recognize that the work was
very focused on adopting control and monitoring procedures
with respect to the cellulose plants, as reflected in the respective
reports. In that respect, the re sponsibilities of the CARU have
been particularly significant, within the scope of work requested
by the Foreign Ministers of our countries; and now, perhaps all
of the work studied and analyzed can be concluded by
requesting funding for the start-up of a specific monitoring
station. And as this issue has evolved, among others also placed
before the CARU, congratulations are in order for the manner
in which this matter was treated, and in all of these activities, the
presence and dedication of the Pr esident, in seeking to find the
most propitious environment a nd a harmonious and adequate
manner in which to carry out this year’s important tasks, have
not been minor. 339
3.30 It is thus clear that CARU was fully engaged with the Botnia plant long
before Uruguay issued its AAP in February 2005. Especially given the provisional
nature of an AAP under Uruguayan environmental law, Argentina’s attempt to
attach dispositive significance to the issuance of the AAP, and to treat it as the
watershed event in the procedural scheme of the 1975 Statute, simply makes no
sense. CARU and Argentina were well in formed about the plant before the AAP
was issued. At the time it was issued in February 2005, Argentin a’s rights were just
as secure as they were before. There was still plenty of time for CARU and
Argentina to be consulted prior to the c onstruction, much less the operation, of the
plant, and for Uruguay to take into account any concerns they might raise about the
project’s effects on navigation, the regime of the river, and/or the quality of its
water. In fact, as will be demonstrated below, that is exactly what happened here.
* * *
339
Ibid., pp. 2153-2153 bis (emphasis added).
- 168 -3.31 In light of the foregoing, it is clea r both as a matter of fact and as a matter
of law that Uruguay did not violate the 1975 Statute by not formally notifying
CARU in advance of granting AAPs to ENCE and Botnia. As a matter of law, the
1975 Statute does not require notice to CARU before a Party may authorize a given
project. And as a matter of fact, both CA RU and Argentina were well informed
about and engaged with the ENCE and Botnia plants long before the AAPs were
issued. The day after Uruguay granted the AAPs, Argentina’s rights were no more
threatened than they had been beforeha nd. Particularly given that so many
additional permits were required before e ither company could begin construction,
much less operation, more than adequate time remained for CARU to be notified and
Argentina consulted, and for their views to be taken into account by Uruguay. This
element of Argentina’s case thus has no merit.
Section II.
Uruguay Was Not Obligated to Await CARU’s Authorization for the Plants
3.32 In addition to arguing that Uruguay violated the 1975 Statute because it
did not notify CARU before issuing AA Ps to ENCE and Botnia, Argentina’s
Memorial also contends that Uruguay was obligated to await CARU’s authorization
before proceeding with the projects. At paragraph 4.13, for example, the Memorial
contends that it was up to CARU to “d étermine s’il pouvait construire ou délivrer
340
l’autorisation de construire des ouvrages concernés.” In a like way, Argentina
elsewhere argues that “à aucun moment… [la CARU] n’a approuvé la construction
341
de l’ouvrage…” .
340
AM, para. 4.13. (“determine whether Uruguay could build or grant the authorization to build
the works in question.”)
341
AM, para. 2.39. (“at no time … was the c onstruction of the facility approved” by CARU);
see also AM, para. 2.40 (stating that “la procédure n’es t en aucun cas arrivée au stade de la
- 169 -3.33 Once again, this argument collapses even before the facts are examined.
As Uruguay showed in Chapter 2, CARU does not have the institutional competence
to authorize or reject particular projects 342. Under the Statute, and as reflected in the
343
CARU Digest, the Parties are the only ones empowered to authorize projects .
Indeed, the CARU report describing the purpose of the relevant portions of the
Digest makes it absolutely clear that it is the Parties that have the competence “to
grant authorizations in the broad sense , including any type of permit, license or
administrative act with similar content, related to the various legitimate uses of the
344
water.” (Uruguay has also already shown that industrial uses are specifically
345
included among the “legitimate uses” of the river. ) The competencies of CARU,
in contrast, are narrower, and are limited to more technical and administrative
functions. They include, for example, establishing water quality standards;
promoting and coordinating the Parties’ monitoring of compliance with the water
quality standards; promoting the Parties’ implementation of co ntrol measures as
regards contaminants; promoting the constr uction by the Parties of water treatment
systems; facilitating the exchange of info rmation between the Parties; encouraging
décision par la CARU”) (“the procedure had in no way reached the phase of decision-making
by CARU.”).
342See Chap. 2, paras. 2.188-2.205.
343CARU Digest, op. cit., Subject E3, Title 2, Chap. 1, Sec. 1, Art. 1(a). UCM, Vol. IV, Annex
60.
344Annex A to Subcommittee on Pollution and Investigation Report No. 57, p. 383 (9 April
1987), approved in CARU Minutes No. 3/87 (10 April 1987) (emphasis added). UCM, Vol. IV,
Annex 71.
345
CARU Digest, op. cit., Subject E3, Title 2, Chap. 4, Sec. 1, Art. 1. UCM, Vol. IV, Annex
60.
- 170 -the dissemination of information to the publ ic; and issuing periodic reports on water
346
quality levels .
3.34 The scope of CARU’s competen ces is confirmed by a 1997 CARU
document entitled “Standard Pr ocedure to be followed by CARU with respect to a
Communication from one Party regarding th e Installation of a Project that May
Affect the Quality of the Waters.” 347 The document makes clear that in CARU’s
own view, its role in the consultation process set out in Articles 7-12 of the Statute is
strictly limited to a preliminary technical review. No power to approve or
disapprove projects is claimed, exactly as the Statute suggests. Thus, for example,
steps (f) and (g) of the standard procedure describe the consequences when either (i)
the two delegations agree that the project will not affect water quality, or (ii) they are
unable to come to agreement. When the two delegations agree that a project will not
harm the river, CARU does not issue an authorization or anything of the sort.
Consistent with its more technical functi ons generally, it si mply designs a water
348
monitoring plan to ensure compliance with the applicable water quality standards .
And when the two delegations disagree about the impact of a proj ect, the effect is
not to put a stop to it. Rather, it is solely to set in motion a round of direct, Party-to-
349
Party communications, exactly as the 1975 Statute says . The conclusion is thus
unmistakable that as a matter of law, CARU does not have the power Argentina now
seeks to confer on it.
346Ibid., Subject E3, Title 2, Chap. 1, Sec. 1, Art. 2. UCM, Vol. IV, Annex 60.
347
Annex B to Subcommittee on Water Quality and Prevention of Pollution Report No. 162, p.
463 (18 April 1997), approved in CARU Minutes No. 4/97 (18 April 1997). UCM, Vol. IV,
Annex 84.
348Ibid., pp. 463-464.
349Ibid.
- 171 -3.35 Quite apart from this fundamental legal impediment, the position
Argentina adopts in its Memorial is also refu ted by the facts. In the paragraphs that
follow, Uruguay will demonstrate that in the cases of both ENCE and Botnia, the
Parties expressly agreed to address the issue of both plants outside the context of
CARU. Indeed, in direct, Party-to-Party talks, Argentina specifically agreed that
both plants would be built (although it now a ttempts to retract that agreement).
Thus, even if CARU had the powers Argen tina seeks to confer on it in the abstract
(which it does not), the fact of the matter is that the Parties agreed to handle both
plants at a higher, Government-to-Government level.
A. T HEP ARTIESA GREED TO A DDRESS THE ENCE P LANT O UTSIDE CARU
3.36 Uruguay demonstrated in Section I of this Chapter that Argentina was well
aware of the ENCE plant long before the AAP was issued on 9 October 2003. In
fact, the issue had even been engaged at the Foreign Ministry level before that date.
Thus, for example, in advance of a protest planned by Argentine citizens on the main
bridge linking the two countries, Uruguay’s Fo reign Ministry sent a diplomatic note
to the Argentine Embassy in Montevideo on 3 October 2003 expressing its concern
and noting that “the issue [of the ENCE Plant] is already known by and under
consideration of both Foreign Ministries.”
3.37 The topic was addressed at some le ngth by the Foreign Ministers of the
two States on 9 October 2003, on the occasi on of a meeting between the Presidents
of Uruguay and Argentina in Anchorena, Uruguay, the same day that Uruguay
issued ENCE’s AAP. The two Foreign Mi nisters discussed the most appropriate
35Diplomatic Note DGAP3 603/2003, sent from the Minister of Foreign Affairs of Uruguay to
the Embassy of Argentina in Montevideo (3 October 2003). UCM, Vol. III, Annex 54.
- 172 -manner to address the issue. At a press conference after the meeting, Argentina’s
Foreign Minister Rafael Bielsa made clear that his country
does not oppose the construction of the plant, on the contrary it
appears to us to be very good for generating jobs, but we hope
that all of the guarantees and laws in force in both countries
governing protection of the environment are complied with. 351
3.38 He also stated:
We talked about the M'Bopicuá plant. The idea is that when the
company issues its environmental assessment plan, that report
can be made known. From the point of view of Argentina, if the
report is satisfactory regarding the environmental issues,
something that Uruguay is also pursuing in its capacity as the
sixth leading nation in the world in terms of environmental
protection, then we shall be in agreement.
* * *
There is no such thing; the position of the two nations is
absolutely in harmony [sic ]. We, on the contrary, Argentina,
wants to see that this plant is ac tually installed, that these jobs
can actually be created, that the investment can actually go
forward and that this does not i nvolve any deterioration for the
environment. 352
Tellingly, Argentina’s Memorial neither acknowledges the 9 October meeting of the
Foreign Ministers nor mentions Minister Bielsa’s public remarks made immediately
afterwards.
3.39 As their subsequent conduct dem onstrated, the effect of the Foreign
Ministers’ understanding in early October wa s to take the issue of the ENCE plant
outside the formal process designated in Articles 7 through 12 of the 1975 Statute
351
Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro (28 October 2003). UCM, Vol. II, Annex 15.
352
Presidency of the Republic of Uruguay, “Agreements on Mercosur, Environment and
Human Rights” (9 October 2003), available at
http://www.presidencia.gub.uy/noticias/archivo/2003/octubre/2003100902…. (last visited on
29 June 2007). UCM, Vol. II, Annex 14.
- 173 -and deal with it in a more direct, bi-l ateral fashion by the Foreign Ministers
themselves. Argentina would be given an opportunity to assure itself that the plant
was environmentally viable , but Uruguay’s fundamental right to undertake the
project was never in question. As circumstances would have it, it was impossible to
submit the project to CARU at that stage in any event. As Argentina itself has
admitted, following the 17 October 2003 CARU meeting in which Argentina’s
Ambassador García Moritán (erroneously) accused Uruguay of failing to abide by its
duties under the Statute, CARU was effec tively prevented from working for half a
year. In Argentina’s own words: “En conséquence de cette situation qui empêche la
CARU d’exercer les compétences que sont les siennes, la CARU suspend son
353
fonctionnement durant plus de six mois.” Uruguay is confident that the irony of
Argentina’s position will not be lost on the Court. By its own admission, Argentina
caused CARU to suspend its activities for six months, yet it now accuses Uruguay of
failing to respect the CARU process during this period.
3.40 Pursuant to the understanding reached by the Foreign Ministers in early
October 2003, the Uruguayan Foreign Minist ry dispatched a diplomatic note to
Argentina on 27 October in which it included the 22 July 2002 environmental impact
assessment (“EIA”) ENCE had submitted in connection with its application for an
AAP (which CARU had had since at least October 2002), DINAMA’s 2 October
2003 technical report on the EIA and the 9 October 2003 AAP itself 35. Argentina’s
353
AM, para. 2.25. (“As a consequence of th is situation, which prevented CARU from
exercising its functions, CARU suspended its operations for more than six months.”)
354
Diplomatic Note 05/2003, sent from Ministry of Foreign Affairs of Uruguay to the Embassy
of Argentina in Uruguay (27 October 2003). UCM, Vol. III, Annex 55.
- 174 -Memorial admits that it received all three documents at this time 355. As Argentina
further admits, Uruguay also sent Argentina a copy of MVOTMA’s entire file on the
356
ENCE project -- a total of 1,683 pages -- on 7 November 2003 .
3.41 Argentina’s Memorial cites a stat ement of Uruguay’s Foreign Minister,
Didier Opertti, made during this time to the Foreign Relations Committee of the
Uruguayan Senate . In his 26 November 2003 remarks, Minister Opertti articulated
his view that the ENCE plant did not fall w ithin the competencies of CARU. In the
circumstances, Argentina would appear to have no grounds to object. Uruguay’s
position on the application of Articles 7-12 of the 1975 Statute is clear. As Uruguay
stated on the record at the oral hearings on Argentina’s provisional measures request,
the ENCE plant (and the Botnia plant) do fall within the notification and
358
information-sharing obligations of the 1975 Statute . This is not in dispute in these
proceedings. Nonetheless, two important observations about Minister Opertti’s
comments are in order. First, they are entirely consistent with Argentina’s historical
approach to the issue of industrial facilities built within the territory of either of the
Parties. As demonstrated in Chapter 2, Argentina has never informed or consulted
with Uruguay about any of the dozens of indus trial facilities it has built on or near
the Uruguay River since 1976. Indeed, it was the express view of Dr. Julio
Carasales, the former Chairman of Argentina’s delegation to CARU and leading
Argentine Authority on the 1975 Statute, th at “the Administrative Commission of
355
AM, para. 2.23.
356
AM, para. 2.25; see also Diplomatic Note DGAP/711/2003, sent from Ministry of Foreign
Affairs of Uruguay to the Embassy of Argen tina in Uruguay (7 November 2003). UCM, Vol.
III, Annex 56.
357
AM, para. 2.26.
358
See CR 2006/49, p. 10, para. 2 (Boyle) (8 June 2006).
- 175 -the Uruguay River does not have competence to express an opinion on an
[industrial] undertaking in the terr itory of one of the Parties.” 359 Second, Minister
Opertti’s comments came at a time when the Parties had already come to a direct
understanding about the manner in which the project would be handled. As stated,
Argentina would be given a chance to satisfy itself that the plant was
environmentally viable, but Uruguay’s sove reign right to carry out the project was
not in doubt.
3.42 In any event, Argentina proceeded to analyze the documents Uruguay gave
it in October and November 2003. In February 2004, Argentina’s technical advisors
to CARU prepared a report addressing th e potential environmental impact of the
plant. Conspicuously, Argentina not only fails to include a copy of the report among
the hundreds of pages of annexes is does subm it to the Court, but also fails even to
mention the report’s existence. Fortunately, however, Argentina acknowledged both
the existence of the report and its contents beyond the confines of its Memorial. In a
statement contained in the 2004 year-end report to Argentina’s Chamber of Deputies
prepared by the Chief of Staff to Argentina’s Cabinet of Ministers, the Argentine
Foreign Ministry succinctly described the report and its findings as follows:
In February 2004, the report from CARU’s advisors established
that there would be no significa nt environmental impact on the
Argentine side; it was estimated that said impact would be,
mainly, the bad odors that usually come from pulp mills an360hat
might reach the Argentine shore of the Uruguay River.
359CARU Minutes No. 2/96, p. 203 (15 March 1996). UCM, Vol. IV, Annex 80.
360
Statement by Argentine Ministry of Forei gn Affairs, International Trade and Culture,
included in Report of the Head of the Argentine Cabinet of Ministers, Alberto Angel
Fernandez, to the Argentine Chamber of Depu ties (hereinafter “Statement by Argentine
Ministry of Foreign Affairs to the Chamber of Deputies”), Report No. 64, p. 136 (March 2005).
UCM, Vol. III, Annex 46.
- 176 -3.43 The same report also observes that “Controls on both plants will be more
extensive than the ones our country has on its own plants on the Paraná River, which
361
were nevertheless accepted by Uruguay …” .
3.44 On the basis of the February 2004 report of Argentina’s technical advisors,
Argentine delegate to CARU, Dr. Darío Garín, stated categorically:
It must be pointed out, with complete and absolute emphasis,
that none of the different technical reports evidence that the
activity in question causes an irreversible and unavoidable
damage to the environment, at least of a sufficient level that
would warrant the suspension of the plant or opposition to its
362
construction, at least with any scientific basis…
Dr. Garín’s comments were seconded by a nother Argentine delegate to CARU, Dr.
Hectór Rodriguez, who stated that he would “not spend any more time on” the
technical issues and “adopts as his own” Dr. Garín’s comments . 363
3.45 In light of the February 2004 report of Argentina’s technical advisors, and
364
with CARU still “paralysée” (to use Argentina’s word ), the Foreign Ministers of
both countries met again on 2 March 2004 to continue their Party-to-Party talks
about the ENCE plant. During that mee ting, they specifically agreed on the way
forward, an agreement that included the fact that the plant could and would be built.
According to the text of a 3 March 2004 press conference about the agreement given
by Uruguayan Foreign Minister Didier Opertti:
Well, a working methodology was put in place to address the
concerns that have arisen on this issue … The first phase of the
project was recently completed, which represents the first
favorable test of the project. The second phase consists of the
361
Ibid.
362
CARU Minutes No. 01/04, pp. 18-19 (15 May 2004). UCM, Vol. IV, Annex 99.
363
Ibid., p. 23.
364AM, para. 2.29. (“paralyzed”)
- 177 - construction of the plant, which will take no less than four years.
During that period, what will we have to provide to Argentina?
Information, knowledge of whether the construction of the plant
is complying with environmental guidelines and the
environmental rules that apply in those cases. The third phase is
the operational phase, namely, when the plant starts to operate,
which will take place in a period of four to five years. At that
time, it will be necessary to report on the monitoring of the
water, that is, the control of the waters to determine whether the
river is taking in effluents, whet her in liquid, gaseous or solid
form, that are capable of causing some type of harm to the
quality of the water. That is the methodology we have identified
for the different stages, and we are going to document it
appropriately in CARU itself in the next weeks. 365
3.46 ContemporaneA oursenticnceounts evidence the same facts. According
to a 3 March 2004 story in Argentina’s leading daily, La Nación, Argentine Deputy
Secretary for Latin American Affairs, Ambassador Eduardo Sguiglia, stated that the
366
Foreign Ministers “agreed to make the pl ant’s installation process ‘transparent’.”
He is quoted further as stating: “It was agreed that in the next four years of
construction, there will be exhaustive m onitoring to ensure compliance with the
environmental guidelines established for the installation of the plant, which will
include permanent monitoring.” 367 Later in the same story, Foreign Minister Bielsa
himself is quoted as saying: “This system that we have agreed upon with Foreign
365Presidency of the Republic of Uruguay Web Site, “M’Bopicuá: Working Methodology
Established” (3 March 2004), available at
http://www.presidencia.gub.uy/noticias/archivo/2004/marzo/2004030301.htm. (last visited on
4 July 2007). UCM, Vol. II, Annex 17. Uruguay has searched for, but has been unable to find
any contemporaneous record of the statements of Argentine Foreign Minister Bielsa. However,
as detailed in text, the subsequent history confirms Minister Opertti’s understanding of events.
366
La Nación (Argentina), “Uruguay Promises to Inform the Government about the Paper Mill”
(3 March 2004). UCM, Vol. IX, Annex 183.
367
Ibid.
- 178 -Minister Opertti, I believe, protects the legitimate expectation of the residents that
368
these projects do not threaten their daily life.”
3.47 Argentina’s official statements after the fact also reflect an identical
understanding of events. According to a statement of the Argentine Ministry of
Foreign Affairs contained in the 2004 ye ar-end report to the Argentine Senate,
prepared by the Chief of Staff to the Cabinet of Ministers:
On 2 March 2004, the Foreign Ministers of Argentina and
Uruguay reached an understanding on the course of action to
give to this subject. This is, for the Government of Uruguay to
facilitate information relative to the construction of the plant,
and in regard to the operational phase, instruct the CARU to
proceed to carry out a monitoring of the water quality of the
River Uruguay in conformity with the provisions of the Statute
for the River Uruguay, especially its Chapter X, Articles 40 to
43. This decision coincides with the request of the Governor of
Entre Rios Province who asked that “the Commission for the
Administration of the River Uruguay adopt procedures to
establish mechanisms of contro l and monitoring, both for the
construction stage and particularly for the period of operation, to
the effect of relying on this binational organization and the
Statute for the River Uruguay for a program capable of
maintaining a strict control over the entire process.” The
understanding of the Foreign Ministers, the note from the
Governor of Entre Rios and the report of the technical experts
coincide in that the CARU shoul d concentrate its activity on the
subject of mechanisms of control. 369
3.48 The Argentine Foreign Ministry’s statement in the 2004 year-end report to
the Chamber of Deputies is to the same effect:
In June [sic] of that same year, a Bilateral Agreement was signed
through which Argentina’s Government put an end to the
controversy.
368Ibid.
369
Statement by Argentine Ministry of Forei gn Affairs, International Trade and Culture,
included in Report of the Head of the Cabinet of Mi nisters, Alberto Angel Fernandez, to the
Argentine Senate (hereinafter “Statement by Argentine Ministry of Foreign Affairs to the
Argentine Senate”), Report No. 65, p. 617 (March 2005). UCM, Vol. III, Annex 47.
- 179 - Said agreement respects, on the one hand, the Uruguayan
national character of the project, and on the other hand, the
regulations in force, that regu late the waters of the Uruguay
River through the CARU.
Likewise, it implies a work methodology for the three phases of
the construction of the project: th e project, the construction and
the operation.
Thus, inclusive control procedures were carried out on the
Uruguay River, which means they will continue after the plants
are in operation.370
3.49 Lest there be any remaining doubt on the matter, the 2004 Annual State of
the Nation Report prepared by the Office of the President, the Honourable Nestor
Kirchner, reflects the same position. It states:
That same month, both countries signed a bilateral agreement
which put an end to the controversy over the pulp mill
installation in Fray Bentos.
This agreement respects, on th e one hand, the Uruguayan and
national character of the work, which was never under
discussion, and on the other hand, the regulation in force that
regulates the Uruguay River waters through the CARU
(Administrative Commission of the Uruguay River).
It also provides for a working procedure for the three phases of371
construction of the work: project, construction and operation.
3.50 Argentina’s Memorial now tries to recast this “bilateral agreement which
put an end to the controversy over the pulp mill installation in Fray Bentos” by
claiming that the only thing the Foreign Ministers agreed to do in March was submit
the project to CARU so that the Commission could exercise its “decision-making”
370Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
371Annual Report on the State of the Nation for 2004, Ministry of Foreign Affairs,
International Trade and Culture, p. 105 (March 2005). UCM, Vol. III, Annex 48.
- 180 -authority and determine whether or not the plant could be built 372. Argentina’s effort
to explain away the Foreign Ministers’ agreement fails for at least three reasons.
First, Argentina’s argument is predicated on the erroneous proposition that CARU
has a “decision-making” role in connec tion with projects covered by Articles 7
through 13 of the Statute. Yet, as shown in Chapter 2 and reiterated in Section I of
this Chapter, CARU does not have any such role. Nor, prior to this case, has
Argentina ever suggested that it did. Argentina’s re-interpretation of the March
2004 agreement of the Foreign Ministers is thus facially untenable.
3.51 To be sure, the Foreign Minister s did agree that CARU would have an
important role with respect to the plant. They gave the Commission the task of
monitoring water quality both during the c onstruction of the plant and during its
operation to assure that the applicable wa ter quality standards would be met. Thus,
in its statement included in the 2004 year -end report to the Argentina Senate, the
Argentine Foreign Ministry emphasized that the “understanding of the Foreign
Ministers, the note from the Governor of En tre Rios and the report of the technical
experts coincide in that the CARU should concentrate its activity on the subject of
mechanisms of control.” 373 Neither in the Argentina Foreign Ministry ’s report nor
anywhere else is there any suggestion th at CARU will play anything other than a
technical role, which is precisely the role it has always played during the 32 years
since the Statute was adopted.
3.52 Second, Argentina’s contention that the agreement did not settle anything,
and did not involve an acknowledgement that the plant would be built, is directly
372See AM, para. 2.40.
373Statement by Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p. 617
(emphasis added). UCM, Vol. III, Annex 47.
- 181 -contradicted by the same official statem ents cited above. Bo th the Office of the
President and the Ministry of Foreign Affa irs are on public record as stating that
Argentina and Uruguay had signed an agreement that “put an end” to the
controversy 37. In those same statements, the President of Argentina and the
Minister of Foreign Affairs made repeat ed reference to the construction and the
operation of the plant in a way that left no room for doubt that Argentina had agreed
the plant would be built. Thus, in its statement in the 2004 year-end report to the
Argentina Senate, the Ministry of Foreign Affairs noted th at the Foreign Minister’s
agreement
coincides with the request of the Governor of Entre Rios
Province who asked that “the Commission for the
Administration of the River Uruguay adopt procedures to
establish mechanisms of control and monitoring, both for the
construction stage and particularly for the period of operation ,
to the effect of relying on this binational organization and the
Statute for the River Uruguay for a program capable of
maintaining a strict control over the entire process.” 375
3.53 To the same effect is the Foreign Ministry’s statement included in the
year-end report to the Argentine Chamber of Deputies which states that “inclusive
control procedures were carried out on the Uruguay River, which means they will
376
continue after the plants are in operation.”
3.54 Third, Argentina’s revised argument about the nature of the Foreign
Ministers’ agreement in March 2003 is still further belied by the Parties’ consistent,
mutual conduct after the fact. At the e nd of March 2003, Forei gn Minister Bielsa
374Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
375Statement by Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p. 617
(emphasis added). UCM, Vol. III, Annex 47.
376Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
- 182 -visited Montevideo to meet with his Uruguayan counterpart, Foreign Minister
Opertti. During a dinner of about ten offi cials of both countries, the topic of the
ENCE plant was raised. According to a contemporaneous memorandum recording
the content of the conversation:
both parties agreed on the identi fication of the essential points
that are beyond debate: on the on e hand, the legitimate claim of
the Uruguayan government that what is involved is a decision, to
authorize the investment, that is an exercise of the internal
sovereignty of the country, and therefore, should not be the
object of any consultations; and, on the other hand, the
understandable Argentine desire to know the environmental
impact of the proposed plant on the water quality of the Uruguay
River. In this regard, an agreement on the role of the CARU was
confirmed, as being the most su itable vehicle for channeling the
pertinent information for organizing the system of monitoring
and following the environmental ma nagement plans, both in the
pre-feasibility phase (now completed) and in the construction
phase (which will last approximate ly 4 years), as well as after
377
the start-up of plant’s operation.
3.55 Pursuant to the 2 March agreement of the Foreign Ministers, the Parties
designated two Ambassadorial level offi cials from their respective Foreign
Ministries to memorialize their agreement for subsequent inclusion in the minutes of
the next meeting of CARU. Ambassadors E duardo Sguiglia of Argentina and Pablo
Sader of Uruguay proceeded to exchange a number of drafts. The final version is
dated 28 April 2004 and is of great interest . At paragraph VIII, for example, it
states:
On 2 March 2004, the Foreign Ministers of Argentina and
Uruguay reached an understanding w ith respect to the course of
action that this matter will take, that is, to have the Uruguayan
government provide the informati on relating to the construction
of the plant, and with respect to the operational phase, to have
377
Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro, para. 5 (1 April 2004). UCM, Vol. II, Annex 18.
- 183 - the CARU undertake the monitor378 of water quality in
conformity with its Statute.
3.56 The Court will note that the text of the agreement makes absolutely clear
that the construction and future operation of the plant were expected and accepted
facts. There is nothing even the least bit conditional about them. Moreover,
Uruguay observes that there is nothing to indicate that the Parties had in mind any
decision-making role for CARU, as Argentina’s Memorial tries to argue 37. The first
stage of the agreed process, that is, Argen tina’s preliminary review of the project to
content itself that the project was environmentally viable, had already been
completed, exactly as Foreign Minister Op ertti of Uruguay reported in his 3 March
380
2004 press conference , and as confirmed during the Parties subsequent dinner
meeting at the end of that month 381. Indeed, the 28 April draft contains additional
confirmation of that fact. In it, Argentin a “underscored that the elemental chlorine-
free (ECF) technology that will be appl ied by Celulosa de M'Bopicuá S.A., is
environmentally viable.” 382 Thus, as the 28 April draft shows, both Parties
understood that only two steps remained: construction and operation.
3.57 The agreement of the Foreign Mi nisters was subsequently restated
formally in the minutes of a plenar y CARU meeting on 15 May 2004, the first
official CARU meeting since October 2003. The minutes of the meeting echo
378Proposed Special Minutes, Final Version, para. VIII (28 April 2004). UCM, Vol. IX, Annex
200.
379See AM, paras. 2.30, 2.40.
380Presidency of the Republic of Uruguay Web Site, “M’Bopicuá: Working Methodology
Established,” op. cit. UCM, Vol. II, Annex 17.
381Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro, para. 5 (1 April 2004). UCM, Vol. II, Annex 18.
382Proposed Special Minutes, Final Version, op. cit., paras. VIII, IX. UCM, Vol. IX, Annex
200.
- 184 -verbatim the final draft prepared by Am bassadors Sader and Sguiglia two weeks
earlier. They state:
On 2 March 2004, the Foreign Ministers of Argentina and
Uruguay reached an understanding w ith respect to the course of
action that this matter will take, that is, to have the Uruguayan
government provide the informati on relating to the construction
of the plant, and with respect to the operational phase, to have
the CARU undertake the monitoring of water quality in
383
conformity with its Statute.
3.58 Uruguay hesitates to repeat itself. However, in light of Argentina’s
argument that the Foreign Ministers’ agreement was merely to refer the matter to
CARU so that the Commission could exerci se its “decision-making” authority over
the project, it is important to emphasize the Parties’ contemporaneous understanding
of CARU’s role. At this stage, as th e agreed minutes of the 15 May 2004 meeting
plainly reflect, only two stages remained: construction and operation. The Court
will see, and Uruguay warrants, that there is no reference to any sort of decision to
be made by CARU. Indeed, the Argent ine delegation explic itly recognized the
limited nature of the Commission’s role at that stage of the process. Argentine
delegate Darío Garín, for example, stated that “an important limiting factor in our
position is the agreement executed by the Foreign Ministers on 2 March 2004.” 384
As already quoted above, he then went on to state:
It must be pointed out, with complete and absolute emphasis,
that none of the different technical reports evidence that the
activity in question causes an irreversible and unavoidable
damage to the environment, at least of a sufficient level that
would warrant the suspension of the plant or opposition to its
construction, at least with any scientific basis… 385.
383
CARU Minutes No. 01/04, op. cit., p. 33. UCM, Vol. IV, Annex 99.
384Ibid., p. 18.
385Ibid., pp. 18-19.
- 185 -3.59 Uruguay invites the Court to exam ine closely the quot ations from the
CARU minutes of 15 May 2004 included in Argentina’s Memorial at paragraphs
2.32 through 2.34. The Court will see that they very plainly contradict Argentina’s
argument that the Foreign Ministers agreed that CARU would decide whether or not
the project would go forward. In each case, the quotations prove that the only two
remaining steps were constr uction and operation. In pa ragraph 2.32, for example,
Argentina cites the summary of the Forei gn Ministers’ agreement that Uruguay has
quoted above at paragraph 3.57. The othe r quotations show merely that CARU was
given a technical role, consistent with its institutional compet ence, in reviewing
information relating to the environmental impacts of the plant and in monitoring
water quality. There is nothing, however, to suggest that the fact that the plants
would be built was anything other than a given.
3.60 CARU’s subsequent behaviour fu rther underscores both the Parties’ and
the Commission’s understanding of its role and the status of the plant. As discussed
above, beginning in June 2004, and conti nuing through the remainder of the year,
CARU devoted significant time and energy to developing a water quality monitoring
program in the vicinity of the future plants . The first line in each and every draft of
the PROCEL contains identical wording: “Taking into account the future
386
installation of cellulose plants …” . As the words plainly show, there was never
any doubt, or anything conditional, about “the future installation of cellulose plants.”
386Draft PROCEL, Annex C to Subcommittee on Water Quality and Prev ention of Pollution
Report No. 243, op. cit., p. 863. UCM, Vol. IV, Annex 102. Draft PROCEL, Annex A to
Subcommittee on Water Quality and Prev ention of Pollution Report No. 244, op. cit., p. 1136.
UCM, Vol. IV, Annex 104. Draft PROCEL, Annex A to Subcommittee on Water Quality and
Prevention of Pollution Report No. 246, op. cit., p. 1717. UCM, Vol. IV, Annex 107. Draft
PROCEL, Annex A to Subcommittee on Water Quality and Prevention of Pollution Report No.
247, op. cit., p. 1959. UCM, Vol. IV, Annex 109.
- 186 -It was a matter that had been agreed at the Foreign Ministry level on 2 March 2004.
Under the bed-rock principle of pacta sunt servanda, Argentina cannot be allowed to
walk away from that legally binding agreement now. Still less can it be allowed to
complain that Uruguay failed in its duties toward CARU, when Argentina expressly
agreed with Uruguay that the ENCE plant would be addressed di rectly by the two
States at the level of their Foreign Ministers, rather than through the Commission.
B. T HEPARTIES’A GREEMENT TO ADDRESS ENCE AT THEG OVERNMENT -TO-
GOVERNMENT LEVEL OUTSIDE CARU W AS EXTENDED TO BOTNIA
3.61 Argentina also argues that Uruguay violated its duties under the 1975
Statute by circumventing CARU and not awaiting the Commission’s authorization
387
before issuing Botnia’s AAP in February 2005 . As in the case of ENCE, this
argument collapses for the simple reason Uruguay has now made clear more than
once: CARU does not have the authority Argentina’s Memorial seeks to give it.
CARU does not have, and never has had, the authority to approve or disapprove
projects. The argument also fa ils for two additional reasoFirst, the Parties’
agreement that the ENCE plant could be built was later extended to include the
Botnia plant as well.Second, by Argentina’s own admission, soon after Uruguay
issued the Botnia AAP, the Parties agreed in writing to bypass CARU altogether and
proceed to direct consultations under Articles 11 and 12 of the 1975 Statute. Thus,
by agreement the issue was removed from CARU’s ambit altogether. Each of these
points is addressed below.
3.62 As discussed above, Argentina was aware of the Botnia project beginning
in or around November 2003, and by Apr il 2004 (10 months before the AAP was
38See AM, paras. 2.54, 4.48.
- 187 -issued) CARU had taken cognizance of the project 388. In other words, even as the
Parties were finalizing the text of their agreement on the ENCE plant to be recorded
in the CARU minutes, both Argentina and CARU were well informed about the
Botnia project. Thus, the CARU S ubcommittee on Water Quality, which was
charged with carrying out the Foreign Ministers’ 2 March 2004 agreement by
designing the PROCEL water quality monitoring program, included the Botnia plant
as well as the ENCE plant in the PROCEL program from the very beginning. There
was never any conditionality expressed about ei ther plant. In all cases, “the future
installation of cellulose plants” was a given on which Uruguay was entitled to, and
did, rely. When the PROCEL was comple ted by CARU’s technical advisors in
November 2004 38, it was then approved by both delegations to the Commission in
th 390
plenary session on the 12 of that month . After that, CARU asked for and
391
received DINAMA’s approval of the plan . Consequently, Uruguay’s delegation
to CARU, DINAMA, and Uruguay itself unders tood that Argentina had agreed that
both plants could and would be built.
3.63 The scope of Argentina’s agreement is reconfirmed in one of the 2004
year-end reports cited by Uruguay above. The report to the Argentine Chamber of
Deputies from the Chief of Staff of the Argentine Cabinet of Ministers contains a
telling question (from a legislator) and answer (by the Foreign Ministry). It reads:
388
See supra. paras. 3.23-3.25.
389
Subcommittee on Water Quality and Pr evention of Pollution Report No. 247, op. cit., p.
1951. UCM, Vol. IV, Annex 109.
390
Ibid. CARU Minutes 08/04, op. cit., pp. 1859-1860. UCM, Vol. IV, Annex 108.
391
Subcommittee on Water Quality and Pr evention of Pollution Report No. 247, op. cit., p.
1951. UCM, Vol. IV, Annex 109.
- 188 -INSTALLATION OF CELLULOSE PLANTS ON THE
URUGUAY RIVER
Argentina’s Position
220. Taking into account the decision of the Uruguayan
Government to authorize the installation ofcellulose plants on
the Uruguay River and considering that it goes against the
Statute of the Uruguay River and also against the MERCOSUR
constituent agreements, what is the reason why our Government
does not value these supranational legal provisions?
RESPONSE: MINISTRY OF FOREIGN AFFAIRS,
INTERNATIONAL TRADE AND CULTURE
Pursuant to the Statute of the Administrative Commission of the
River Uruguay - CARU- both parties assume the obligation of
informing the other party of any project or facility that they plan
to carry out and that could have an impact on both banks of the
river.
Based on this, the official Argentine claim, in relation to the
installation of cellulose plants by Uruguay, in the area near Fray
Bentos, was aimed at obtaining Uruguay’s compliance with this
obligation.
…
In June [sic] of that same year, a Bilateral Agreement was signed
through which Argentina’s Government put an end to the
controversy.
Said agreement respects, on the one hand, the Uruguayan
national character of the project, and on the other hand, the
regulations in force, that regu late the waters of the Uruguay
River through the CARU.
Likewise, it implies a work methodology for the three phases of
the construction of the project: th e project, the construction and
the operation.
Thus, inclusive control procedures were carried out on the
Uruguay River, which means they will continue after the plants
begin to operate.
- 189 - Controls on both plants will be more extensive than the ones our
country has on its own plants on the Paraná River, despite which
they were accepted by Uruguay (the technologies the Province
of Entre Ríos raises questions about to Uruguay are the same
ones used by our country). 392
3.64 What makes this report particularly interesting is the extent to which it
defines Argentina’s understand ing of the scope of the controversy, Argentina’s
position on that controversy, and the agreement putting an end to it. The heading
above the question and answer make clear that the issue encompasses the
“installation of the cellulose plants;” that is , it is a plural reference to both plants.
The question likewise addresses itself to the installation of the “plants,” again plural.
The scope of the “the official Argentine cl aim”, and thus the c ontroversy, similarly
encompasses “the installation of the cellulose plants”. Therefore, when the report
states that the Government of Argentina “put an end to the controversy,” it can only
mean with respect to both plants. This reading is confirmed in subsequent
paragraphs of the statement which make reference to the time “after the plants begin
to operate” and the fact that “controls on both plants will be (i.e., future tense,
unconditional (“serán”)) more extensive than the ones our country has.” There can
thus be no doubt that Argentina understood that the controvers y covered “the two
plants,” and that the controversy as to bot h the ENCE and Botnia plants, not just the
ENCE plant, was “put to an end.”
3.65 Before leaving this report, one other point bears mention. The report
relates to events during the year 2004. It was, however, delivered in March 2005;
that is, the month after Uruguay issued Botnia’s AAP in February 2005. Thus,
392
Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136 (emphases added). UCM, Vol. III, Annex 46.
- 190 -Uruguay’s allegedly “unilateral” authori zation of the Botnia plant elicited no
contemporaneous objection by Argentina, or complaint that Uruguay had violated
the agreement previously reached by the two States. To the contrary, in March 2005
Argentina submitted reports to its Senate and Chamber of Deputies confirming that
there was an agreement on the installation of “the two plants.”
C. THE PARTIES CREATED GTAN AS AM EANS TO A DDRESS BOTH PLANTS AT THE
G OVERNMENT TO -GOVERNMENT L EVEL
3.66 Independent of their agreement, made outside CARU, that the ENCE and
Botnia plants would be built, the Partie s reached a subsequent agreement in May
2005 to commit the issue of both plants a bi-lateral, high level technical group
outside the ambit of CARU. As Argentin a put it at the time: “The lack of
agreement within the River Uruguay Administration Commission (CARU) … led
the Government of both countries to deal with the question directly and to establish a
393
High Level Technical Group (GTAN) in May 2005.”
3.67 Although Argentina describes the catalyst for the creation of the GTAN as
Uruguay’s granting of an AAP to Botnia in February 2005, that claim is dubious in
light of the twin facts that (i) Argentina and CARU had long known about the
imminent issuance of Botnia’s AAP, as desc ribed in Section 1 of this Chapter; and
(ii) Argentina had already agreed that bo th the ENCE and Botnia plants would be
built, as described above. The true catalyst appears instead to have been a marked
change in the domestic political situati on in Argentina. By April 2005, popular
opposition to the cellulose plants, centred in the city of Gualeguaychú, reached a
critical level. On 30 April 2005, approxi mately 40,000 Argentine citizens marched
393
Diplomatic Note sent from Argentine Minister of Foreign Affairs, International Trade and
Culture to Uruguayan Ambassador in Argentina, Francisco Bustillo (12 January 2006). UCM,
Vol. III, Annex 59.
- 191 -on the General San Martín Bridge c onnecting Gualeguaychú and Fray Bentos 394.
Energized by the vocal support of local municipal and provincial authorities, the
citizens organized themselves into the “Environmental Assembly of Gualeguaychú”,
which launched a series of unremitting prot ests against the construction of the two
plants, and against the Argentine government for not opposing them 395. Thus, while
as late as March 2005 Argentina had e xpressly and officia lly recognized its
agreement on the construction and operati on of the ENCE and Botnia plants --
subject to the monitoring of water qualit y by CARU -- mounting domestic political
pressure caused it to reverse its position on the plants by the end of April.
3.68 To fend off this pressure, the Argentine government backtracked on its
prior acceptance of the plants. It called for new technical studies to assess the
probable impacts of the plants, even though its own experts had previously
concluded -- based on the environmental impact assessments that had been furnished
by Uruguay the previous year -- that the plants were envir onmentally viable.
Argentina’s reversal of course on the viability of the plants had a predictable impact
in CARU. With the two delegations -- which had previously united in support of the
plants -- now divided, CARU became deadlocked.
3.69 While CARU remained deadlocked , the two States came to an explicit
understanding on how to move the process forward on 5 May 2005, on the occasion
of Uruguayan President Tabaré Vázquez’s first visit to Argentina since taking office
on 1 March 2005. As Argentina’s Memorial states:
394
El Clarín (Argentina), “Mass Protest in Entr e Rios Against Installation of Pulp Mills” (1
May 2005). UCM, Vol. IX, Annex 184.
395
See
http://es.wikipedia.org/wiki/Asamblea_Ciudadana_Ambiental_de_Gualeguayc… .
(last visited on 8 July 2007).
- 192 - Lors de sa première visite en Argentine, le nouveau président
uruguayen Tabaré Vázquez et s on homologue argentin Néstor
Kirchner décident le 5 mai 2005 de créer un groupe de travail de
haut niveau (GTAN), en vue du règlement du différend, sur la
base d’une étude d’impact sur l’environnement des deux projets
d’usines de pâte à papier, CMB et Orion. 396
3.70 The Presidents’ early May agreement was concretized by their Foreign
Ministers at the end of the month. As Argentina again writes: “Le 31 mai 2005, les
397
Ministres des affaires étrangères procèdent à la création effective du GTAN.”
According to a press release issued by the Argentine Foreign Ministry that same day:
In conformity with what was agreed to by the Presidents of
Argentina and Uruguay, the Foreign Ministries of both of our
countries constitute, under th eir supervision, a Group of
Technical Experts for complementary studies and analyses,
exchange of information and follow up on the effects that the
operation of the cellulose plants that are being constructed in the
Eastern Republic of Uruguay will have on the ecosystem of the
398
shared Uruguay River.
3.71 Since Argentina had previously agreed that the plant would be built,
Uruguay was under no obligation to participate in additional consultations under the
Statute. Likewise, it had no obligation to halt construction of the plants.
Nonetheless, Uruguay recognised that political opposition within Argentina was
causing a problem for President Kirchner because of his government’s prior
agreement concerning the plants. It thus saw the GTAN as a way to provide
additional information and reassurance that the plants were environmentally viable.
396AM, para. 2.58. (“During his first visit to Ar gentina, the new Uruguayan president, Tabaré
Vázquez and his Argentinean counterpart, Néstor Kirchner, decided on May 5, 2005, to create
a high-level working group (GTAN) with a view to settling the dispute based on an
environmental impact study of the two paper pulp mills, i.e., CMB and Orion.”)
397AM, para. 2.61. (“On May 31, 2005, the Ministers of Foreign Affairs moved ahead with the
creation of GTAN.”)
398Joint Argentine-Uruguayan Press Release Constituting GTAN No. 176/05 (31 May 2005).
UCM, Vol. V, Annex 126.
- 193 -In no sense, however, did the creation of the GTAN detract from the prior agreement
that the plants would be built. The enduri ng quality of that agr eement is reflected,
for example, in the language of the Argentine press release issued following the
Foreign Ministers’ 31 May 20 05 meeting. In particular, it states that, “[i]n
conformity with what was agreed to by the Presidents,” the GTAN will examine and
analyse the environmental effects that “the operation of the cellulose plants that are
being constructed in the Eastern Republic of Uruguay will have.” 399 The use of the
unconditional future tense, “will have” (“tendrán”), and the present progressive, “are
being constructed” (“se están construyendo”), make clear that, even as of the end of
May 2005, Argentina recognized Uruguay’s underlying right to build the projects
and that their construction would conti nue. Subsequently, as the increasingly
vehement protests of the citizens of Gu aleguaychú turned into a national political
issue, and with the approach of nati onal elections in October 2005, Argentina
hardened its position.
3.72 Uruguay will discuss the conduct of the GTAN meetings, which consisted
of 12 plenary sessions between August and December 2005, in the next section of
this Chapter. For present purposes, the impor tant point is that Argentina admits that
the “lack of agreement” in CARU “led th e Governments of both countries to deal
with the question directly and to establish a High Level Technical Group
(GTAN).” 400 It also admits that the GTAN process fulfilled the Parties’ duty to
399
Ibid. (emphasis added).
400
Diplomatic Note sent from Argentine Minister of Foreign Affairs, International Trade and
Culture to Uruguayan Ambassador in Argentina, Francisco Bustillo (12 January 2006). UCM,
Vol. III, Annex 59.
- 194 -engage in good faith consultations under Article 12 of the 1975 Statute. The
Memorial states, for example:
Le 14 décembre 2005, l’Argentin e transmet à l’Uruguay une
note dans laquelle elle rappelle formellement l’existence d’un
différend relatif au Statut de 1975, que l’article 12 de celui-ci est
applicable, que par conséquent la procédure du chapitre XV du
Statut est ouverte aux Parties et que le délai de 180 jours prévu
par ce traité pour que celles-ci parviennent à un règlement par
des négociations directes court depui s le 3 août 2005, date de la
première réunion du GTAN. 401
3.73 Thus, by Argentina’s own admissions, the Parties agreed to proceed
directly to the Party-to-Party consultati ons envisioned by Article 12 of the Statute
and not to await a prelim inary determination from CARU. Uruguay showed in
402
Chapter 2 that there is no legal impediment to the Parties doing this . Once a
difference of opinion crystallised, the Parties were free to try to resolve the matter
through direct consultation at any mutual ly agreed moment. To argue to the
contrary, Argentina would have to contend that a mutual agreement to bypass certain
treaty-based procedures in favour of other tr eaty-based procedures itself violates the
treaty. Such a result would plainly be nons ensical, especially where, as here, the
purpose of the procedures by-passe d (preliminary review by CARU, etc.) is to
obviate the need for the procedures to which the Parties specifically agreed (direct
consultations).
401AM, para. 2.72 (citing 14 December 2005 Dipl omatic Note). (“On December 14, 2005,
Argentina sent Uruguay a memo in which it officia lly reiterated the existence of a dispute with
respect to the 1975 Statute, and indicated that Article 12 was applicable and that consequently,
the procedure set out in chapter XV of the Statut e was open to the parties, and that the 180-day
period provided in this treaty to help the parties reach a settleme nt by direct negotiations had
started on August 3, 2005, the date of the first GTAN meeting.”)
402
See Chap. 2, para. 2.172.
- 195 -3.74 This same point can be made from a slightly different perspective. The
entire thrust of Argentina’s procedural ar gument is its claim that Uruguay disrupted
the proper functioning of the procedures set forth in Articles 7 through 12 of the
1975 Statute by failing to notify CARU, etc. Yet, Argentina admits (as it must) that
the Parties were able to bring themselves back within the Statute’s procedural
framework by agreeing to the GTAN process and thus fulfilling their duty to consult
under Article 12. Accordingly, even assuming arguendo that Uruguay failed to
abide by the procedures laid out in Articles 7 through 11 -- which it did not -- that
nominal failure was later remedied by the Parties’ mutual agreement to consult
403
under Article 12. Itisnoanswertosayth at the GTAN consultations were
somehow untimely. As Uruguay will show in Section IV of this Chapter, the
consultations occurred at a sufficiently early stage in project development that there
was more than “enough time for the States concerned to consult on appropriate
preventive measures.” 404
403
At paragraph 4.73 of its Memorial, Argen tina cites Professor Felipe Paolillo as having
expressed this view, that is, that Uruguay’s direct and timely consultations with Argentina
through the GTAN process fulfilled the mandate of Article 12 of the 1975 Statute, and
therefore “cured” any earlier defects in Ur uguay’s compliance with the Statute’s notice
obligations. Argentina mischievously goes on to in sinuate -- falsely -- that Professor Paolillo’s
view was adopted by Uruguay when, at the conc lusion of the conference at which he spoke
(along with several other distinguished counsel who, unlike Professor Paolillo, spoke on behalf
of the Government of Uruguay and disagreed with him), Foreign Minister Reinaldo Gargano
said that the participants “had, in 40 minut es, precisely summarised Uruguay’s position.”
(AM, para. 4.74.). It is obvious from the context that Foreign Minister Gargano was referring to
the expression of views by counsel for the government, not by Professor Paolillo or others who
participated in the open and wide-ranging disc ussion. Uruguay’s position then, as at all times
before or since, has been the same: it fully complied with all of its procedural obligations under
the 1975 Statute, including its notice obligations. While Uruguay agrees that, theoretically, its
consultations with Argentina via the GTAN process were sufficient to "cure" any prior defect
in its performance under Articles 7-12, in fact there were no defects and nothing to "cure."
4042001 Draft Articles, op. cit., p. 421, comment 5.
- 196 - D. A RGENTINASEEKS TOIMPOSE ONU RUGUAY O BLIGATIONS THAN OT ONLY
D ON OT EXIS,B UT THATARGENTINA N EVERA CCEPTED FORTSELF
3.75 As shown, the 1975 Statute impoes no obligation on a Party to await
“authorization” from CARU before it mitself authorize or implement a project
that may affect navigation, the regime of th e river, and/or the quality of its water;
CARU simply does not “authorize” such projects, or reject them.
3.76 It is perplexing that Argentwould suggest otherwise, given its own
consistent practice during the entire time the 1975 Statute has been in effect. As
405
discussed in Chapter 2 , Argentina has authorized and implemented literally
dozens industrial projects on its side river, as well as a host of water and
sewage treatment projects and flood control installations (that affect the regime of
the river as well as water quality),ever awaiting CARU’s “authorization”
before carrying out its plans. Indeed, Argentina not only failed to await CARU’s
“authorization” before proceeding with th ese projects but in almost every case it
failed even to notify CARU about the projects. Nor did it notify Uruguay, or attempt
to consult with Uruguay in advance of these activities.
E. URUGUAY COMPLIED W ITHTS OBLIGATIONSC ONCERNING THEBOTNIA PORT
AND THE BOTNIA W ATEREXTRACTION PERMIT
3.77 In addition to its primary complaints about the ENCE and Botnia cellulose
plants, Argentina also argues in passing that Uruguay failed to give CARU an
opportunity to approve both the Botnia port and the Botnia water extraction permits
issued on 5 July 2005 and on 12 September 2006, respectively. With respect to the
Botnia port, Argentina claims that Uruguay improperly authorized “le 5 juillet 2005,
la société Botnia à utiliser le lit du fleuve et à construire un port a l’usage exclusif de
405
See Chap. 2, paras. 2.140-2.150
- 197 -l’usine Orion sans saisir la CARU.” 406 And with respect to the Botnia water
extraction permit, Argentina contends that pursuant to “sa politique systématique
d’autorisation unilatérale, L’Uruguay a, le 12 septembre 2006, autorisé Botnia à
prélever et utiliser les eaux du fleuve Uruguay à des fins industrielles, à savoir la
production de pâte à papier.” 407 Uruguay will briefly respond to and quickly
disprove each of these allegations, in turn.
3.78 In the case of the Botnia port, th e facts show that it was Argentina, not
Uruguay, that prevented CARU from exercisi ng its statutory role. At the first
meeting of the GTAN on 3 August 2005, the Parties’ delegations agreed to refer the
408
port project back to CARU for preliminary review . Acting pursuant to this
understanding, Uruguay promptly notified CARU about the project on 15 August
2005 . The notice included a copy of Uruguay’s 5 July 2005 resolution authorizing
Botnia to make use of the riverbed for purposes of constructing a port 410.
Argentina’s delegation to CARU subseque ntly requested additional information
411
which Uruguay promptly provided on 13 October 2005 . However,
notwithstanding Uruguay’s timely submission of this information, Argentina made
406AM, para. 4.55. (“Botnia, on 5 July 2005, to use the bed of the river and build a port for the
exclusive use of the Orion plant without referring the matter to CARU.”)
407AM, para. 4.61. (“its systematic policy of unilateral authorization, Uruguay, on 12
September 2006, authorized Botnia to extract and use the waters of the Uruguay River for
industrial purposes; i.e., the production of paper pulp.”)
408
First Meeting of the Uruguayan-Argentine Technical Group (GTAN) (3 August 2005).
UCM, Vol. V, Annex 127.
409Diplomatic Note 168/05 sent from Presid ent of the CARU Uruguayan Delegation to the
President of the CARU Argentine Delegation (15 August 2005). UCM, Vol. IV, Annex 105A.
410Ibid.
411Diplomatic Note OCARU No. 032/2005 sent from the President of the CARU Uruguayan
Delegation to the President of the CARU Ar gentine Delegation (13 October 2005). UCM, Vol.
IV, Annex 113.
- 198 -clear that it had no intention of allowing CARU to examine the information Uruguay
had given it 41. Argentina’s position was communicated at the CARU meeting of 14
October 2005, and again in a 10 November 2005 Note to the Chairman of the
Uruguayan Delegation to CARU. Argentin a’s ostensible basis for blocking the
Commission’s review of the project was the fact that Uruguay had refused to
suspend work on the port until the evalua tion and consultation process had been
exhausted 41. As Uruguay discussed in Chapter 2, and as is reiterated further in
Section IV below, Uruguay had no legal oblig ation to suspend any and all work on
the port. Nonetheless, Argentina seized on this excuse to impede CARU’s
consideration of the project. The real re ason for Argentina’s actions is clear. In
light of mounting domestic opposition to the plants, and the decision of the
government in Buenos Aires to curry favour with the protestors, by October 2005
Argentina had no intention of doing anythi ng that might be perceived as facilitating
either cellulose plant project.
3.79 Argentina’s true motive for preventing CARU from doing its work is made
plain by the fact that there is no real dispute about the environmental viability of the
port. Nowhere either in its Application or in the 370 pages of its Memorial does
Argentina argue that the port will cause any harm, let alone significant harm to
navigation, the regime of the river or the quality of its water. Given that Argentina
has had all the pertinent technical data in its possession since at least October 2005,
it can be presumed that if Argentina had a substantive basis to oppose the project, it
would have said so. Its silence is itself a powerful admission. In this connection, it
412See CARU Minutes No. 09/05, op. cit., pp. 1859-1863. UCM, Vol. IV, Annex 114.
413Ibid.
- 199 -is worth mentioning that the Botnia port is significantly smaller in size than the
M’Bopicua Port about which Uruguay notified CARU in 2001 414. In that case, as
Argentina admits, both delegations to CARU quickly agreed that the port posed no
threat to navigation, the regime of the river or the quality of its water 415. Indeed, the
issue occupied very little of the Commission’ s time or attention. There is no record
in the CARU minutes of an y debate, much less disagreem ent, on this matter. The
fact that even now Argentina has been unable to identify any technical basis on
which to oppose the much smaller Botnia port shows that its objections, and its
refusal to let CARU do its work, were based solely on its more general desire to
frustrate Uruguay’s overall plans for the cellulose plant projects.
3.80 Argentina’s protest about the Botnia port authorization appears even more
inauthentic when its own historic practices with respect to port authorizations are
taken into account: Argentina has repeatedly authorized port construction and
rehabilitation on its side of the Urugua y River without even bothering to notify
Uruguay or CARU, let alone to consult with Uruguay over these projects. Examples
include: creation of a new port at Federación (1979) with a 180-meter esplanade and
seven piers; structural repair of the port at Concordia (2004); authorization of a new
port at Puerto Yuquerí (2004); and construction of a new pier 152 meters in length
and 10.9 meters in width and the reconstruc tion of two existing piers at Concepción
416
del Uruguay (2000-2004) . The port construction and rehabilitation project at
Concepción del Uruguay was part of a major Port Modernization Project financed by
414
CARU Minutes No. 03/01, op. cit., p. 249. UCM, Vol. III, Annex 91.
415See AM, para. 3.119.
416Ministry of Industry, Energy and Mining, "Works on the River Uruguay," pp. 59-66 (June
2007). UCM, Vol. X, Annex 224.
- 200 -the Inter American Development Bank 417. Argentina neither notified nor consulted
with Uruguay or CARU in any of these cases.
3.81 The putative issue Argentina raises with respect to the 12 September 2006
Botnia water extraction permit can be disposed of even more readily. Argentina had
timely notice of the water extraction issues and was consulted in good faith about
them as part of the GTAN process. Arge ntina thus received all the procedural
performance to which it was due under the Statute.
3.82 The water extraction permit related to an integral element of the overall
Botnia project that was expressly included within the scope of work from the outset.
It was understood at the very earliest stages that the Botnia plant would “prélever et
utiliser les eaux du fleuve Uruguay.” 418 Thus, for example, the Botnia EIA indicated
how much water the company expected to extract from the river when it began
operating, and the 14 February 2005 AAP likewise contains terms relating to the
issue of water extraction. The consequence, of course, is that both CARU and
Argentina had notice of the water extraction issues from the moment they became
aware of the plants themselves. Moreover (and as further evidence of the previous
point), water extraction issues were specifically encompassed by and addressed
during the GTAN consultation process. Argentina was therefore fully informed
about the water extraction issues, and had an opportunity to voice its concerns and
have them considered in good faith by Uruguay. The Statute requires no more.
417
Inter American Development Bank, Uruguay M’Bopicua Port Environmental and Social
Impact Report (ESIR) (September 2002), available at
http://www.iadb.org/pri/projDocs/UR0142_R_E.pdf (last visited on 7 July 2007).
418
See AM, para. 4.61. (“extract and use the waters of the River Uruguay.”)
- 201 -3.83 Beyond this, Uruguay not es that the predicate of Argentina’s argument --
that an entirely separate notice to CARU was due for the water extraction permit --
finds no support in the text of the 1975 Statute. To accept Argentina’s point would
mean that the Statute requires notice not just for “works” within the scope of Article
7, but also for each and every incremental step taken in furtherance of those works.
In a case like this, for example, Argentina’s logic would suggest that one notice was
due at the time of the AAP, another notice was due at the time of approval to begin
ground clearing is was given, still another notice was due when the permit to lay the
foundation was granted, etc. Argentina neither has identified nor could identify
anything in the Statute supporting that resu lt. Indeed, the absu rdity (not to say
administrative impossibility) of the approach speaks for itself.
3.84 In any event, even though it was not under an obligation to do so, Uruguay
did, in an abundance of caution, formally notify Argentina and CARU about the
issuance of the water extraction permit to Botnia in timely fashion. As indicated, the
permit was issued on 12 September 2006. Uruguay formally notified CARU on 17
419
October 2006 . This was at least twelve months before the plant was scheduled to
commence operations and begin extracting water, that is, in plenty of time to consult
with Argentina and CARU and take account of any well-founded objections.
* * *
3.85 For all of these reasons, there is no genuine argument either in fact or law
that Uruguay violated the 1975 Statute by fa iling to await CARU’s authorization of
the ENCE and Botnia plants (or the Botnia port or water extraction permit). As a
419Subcommittee on the Environment and Sustainable Water Use Report No. 16, p. 2468 (17
to 20 October 2006), approved in CARU Minutes No. 07/06 (20 October 2006). UCM, Vol.
IV, Annex 123.
- 202 -matter of law, it is clear that CARU does not have the authority to approve or reject
projects. The Parties, and only the Parties, are the ones that have that power.
CARU’s authority, in contrast, is centred on technical, administrative, and regulatory
matters. Uruguay thus never had a legal ob ligation to await CA RU’s authorization
of either the ENCE or Botnia projec ts. Moreover, Uruguay and Argentina
specifically agreed to address the issue of the plants in direct, Party-to-Party talks,
first in 2003/04 when the Parties’ Foreign Ministers agreed that the plants would be
built, and then again in May 2005 when the Presidents of both countries agreed to
establish the GTAN for the purpose of carr ying out direct consultations on the two
plants. If CARU was “by-passed” in this process, it was only with the specific
agreement of both Parties. As a result, no legitimate claim that Uruguay violated the
Statute in this respect can be made.
Section III.
Uruguay Gave Argentina Sufficient Information
to Assess the Probable Impact of the Plants on Navigation,
the Regime of the River and the Quality of Its Water
3.86 A third element in Argentina’s procedural case is its argument that
Uruguay failed to provide it with adequa te information concerning the ENCE and
Botnia plants. At paragraph 2.23 of its Memorial, for example, Argentina claims
that the information Uruguay gave it in 2003 concerning the ENCE plant “est… loin
420
de constituer l’information requis e conformément au Statut de 1975.” And at
paragraph 4.72, Argentina contends that the information Uruguay gave it about
421
Botnia in the GTAN process “s’est avérée manifestement incomplète.”
420AM, para. 2.23. (“failed to meet the sta ndard of information required under the 1975
Statute.”)
421AM, para. 4.72. (“proved to be grossly incomplete.”)
- 203 -3.87 In evaluating these claims, it is necessary to bear in mind what the Statute
does -- and does not -- require. The th ird paragraph of Article 7 requires the
initiating State to provide the notified Stat e with information describing “the main
aspects of the work and, where appropriate, how it is to be carried out” and to
“include any other technical data that will enable the notified party to assess the
probable impact of such works on navigation, the regime of the river or the quality
of its waters.” 422 As Uruguay showed in Chapter 2, this information-sharing
requirement is best unders tood in light of its purpose -- “to assess the probable
impact of such works on navigation, the regime of the river, or the quality of its
423
waters.” Argentina’s Memorial admits the point when it states the purpose of the
information-sharing and consultation provis ions of the 1975 Statute: “il s’agit de
permettre à l’autre partie intéressée ‘d’éva luer l’effet probable que l’ouvrage aura
424
sur la navigation, sur le régime du fleuve ou sur la qualité de ses eaux.” Asa
result, the Parties would appear to be in agreement that so long as the notifying Party
provides enough information to meet this purpose, it has discharged its duties under
the 1975 Statute. It bears repeating that ge neral international law suggests that “the
notifying State is generally not required to conduct additional research at the request
of a potentially affected State, but must only provide such relevant data and
422Statute of the River Uruguay (hereinafter “ 1975 Statute”), Art. 7 (26 February 1975). UCM,
Vol. II, Annex 4.
423See Chap. 2, para. 2.92.
424AM, para. 4.76.
- 204 -information as has been developed in relation to the planned measures and is readily
accessible.” 425 As demonstrated below, Uruguay met these duties and more.
3.88 It is important to observe in the first instance that Argentina does not
accuse Uruguay of withholding any information in its possession. To the contrary,
Argentina admits that it received a ma ss of documents concerning both the ENCE
and Botnia plants. It admits, for example, that:
• On 23 October 2003, Uruguay gave it the 9 October 2003 MVOTMA
resolution granting ENCE’s AAP, DINAMA’s 2 October 2003
technical report on ENCE’s envir onmental impact assessment, and
426
ENCE’s 22 July 2002 EIA ;
• On 7 November 2003, Uruguay gave it the entire 1,683-page
MVOTMA file on ENCE 427;
• On 3 August 2005, at the start of the GTAN process, Uruguay gave it
documents detailing Uruguayan environmental legislation, as well as
428
the AAPs for both Botnia and ENCE ;
• Throughout the GTAN process, “les parties ont échangé de la
documentation et soulevé diverses questions relatives à l’impact
transfrontalier des usines” 429; and
• In the course of the GTAN meetings, Uruguay gave it no less than 36
document430including DINAMA’s entir e 4,000-plus-page file on
Botnia.
425Draft Articles on the Law of Non-Navigati onal Uses of International Watercourses and
Commentaries Thereto (hereinafter “1994 Draft Articles”), p. 112, comment 5 (1994); see also
Chap. 2, para. 2.93.
426AM, para. 2.23.
427AM, para. 2.25.
428AM, para. 2.65.
429AM, para. 2.66.
430First Report of the Uruguayan Delegation to the GTAN, Annex B (31 January 2006). UCM,
Vol. V, Annex 154.
- 205 -3.89 As this list itself suggests, and as more fully described below, the
information Uruguay supplied was more than enough to enable Argentina to
evaluate the probable impacts of the plants on navigation, the re gime of the river,
and the quality of its waters. Uruguay will address the sufficiency of information
provided about ENCE first, and then descri be the information exchanged relating to
Botnia.
A. U RUGUAY G AVE A RGENTINA SUFFICIENT INFORMATION ABOUT ENCE
3.90 As noted above, Argentina admits that on 23 October 2003 Uruguay gave
it ENCE’s EIA, DINAMA’s technical report on the EIA, and MVOTMA’s
Resolution granting the AAP 43. It also admits Urugua y gave it DINAMA’s entire
432
1683-page file on ENCE just a week and a half later on 7 November 2003 .
Although Argentina is forced to concede these facts, it tries to suggest that the
information it received was nonetheless insufficient by complaining that Uruguay
did not forward any additional information after 7 November 2003 43. Argentina’s
self-serving complaint conveniently overlooks two key points, however. First, it
never actually asked Uruguay for more information after 7 November 2003. And
second, it does not identify any additional documents that Uruguay possessed but
failed to turn over.
3.91 An examination of the materials Uruguay provided shows that it was much
more than adequate to allow Argentina to assess the probable impact of the ENCE
plant. As discussed in mo re detail below, the documents Uruguay gave Argentina
431AM, para. 2.23.
432
AM, para. 2.25.
433
AM, para. 2.25.
- 206 -describe the receptor environment and the main aspects of the project, including the
technology to be employed, and they speci fy maximum emission limits for liquids,
solids, gases, and particulate matter.
3.92 The ENCE EIA is dated 22 July 2002 and is 260 pages long. It describes
the project and the surrounding environment, and it contains details about potential
434
environmental impacts, as required by Uruguayan law . With respect to the
receptor environment, it makes reference to location, flora, fauna, hydrology,
435
geomorphology, meteorology, and the human environment . It describes the kind
of technology to be employed, and the amounts of pulp to be produced yearly,
eucalyptus to be utilized and water to be extracted 436. With regard to the production
process, it discusses wood reception, washing and delignification, bleaching, drying,
and packing 437. Concerning the recovery process, it describes concentration, the
recovery boiler, and causticizing. Regarding the auxiliary process, it discusses water
treatment, sludge treatment, collecting and processing concentrated and dilute gases,
chlorine dioxide production, the deposit of solid waste, and energy generation 438.
3.93 The 2 October 2003 DINAMA technical report is a 29-page document that
analyzes the environmental impact of the ENCE pulp mill and recommends that
MVOTMA grant the AAP. In it, DINAMA presents its findings on the EIA and
proposed mitigation measures, including impacts on the physical environment,
sound pollution, particulate matter emissi ons, biota, archaeological heritage and
434
Decree 435/994, op. cit., Art. 4. UCM, Vol. II, Annex 9.
435
ENCE Environmental Impact Assessment, Table of Contents (July 2002). UCM, Vol. VI,
Annex 156.
436
Ibid.
437
Ibid.
438
Ibid.
- 207 -landscape, during implementation and the operational and withdrawal phases 439. It
recommends maximum emissions standards, including for sulphur dioxide, nitrogen
oxides, reduced sulphur compounds, chlorine dioxide, and many others. In addition,
it makes repeated reference to BAT and USEPA standards.
3.94 The 9 October 2003 MVOTMA resolution grants the AAP, and in addition
to listing a number of conditions ENCE must satisfy, it sets maximum liquid, gas,
and solid emissions limits. For example, it states that
[t]here must be compliance with effluent standards set forth in
decree 253/79 and amendments (including: oils and fats,
phenols, sulphurs, mercury, lead , cadmium and chromium), as
well as ensuring maintenance of the parameters for water quality
440
corresponding to Category 1 of the same decree.
Decree 253/79, to which the AAP refers, sets water quality standards and liquid
effluent limits 441. In addition, it specifies “maximum air emissions limits” 442, and
indicates what technologies should be used to reduce pa rticulate matter, such as
443
scrubbers . The AAP establishes that the co mpany “[m]ust comply with the
relevant DINAMA standards on Management of I ndustrial Solid Residuals.” 444 It
also specifies that “[t]he non compliance with any of the conditions set forth in the
439
DINAMA Environmental Impact Assessment Report for the ENCE Plant (hereinafter
“DINAMA EIA Report, ENCE”) (2 October 2003). UCM, Vol. II, Annex 12.
440
MVOTMA Initial Environmental Authorizati on of the ENCE Plant (hereinafter “ENCE
AAP”), para. q (9 October 2003). UCM, Vol. II, Annex 13.
441Decree 253/79, Regulation of Water Quality (9 May 1979, as amended). UCM, Vol. II,
Annex 6.
442ENCE AAP, op. cit., para. r. UCM, Vol. II, Annex 13.
443Ibid., para. t.
444Ibid., para. u.
- 208 -previous paragraph, will cause the automatic revocation of this resolution, making
445
possible, the imposition of … sanctions …” .
3.95 With these documents, as well as the remaining documents in the ENCE
file, Argentina was informed about the ma ximum emissions standards and the fact
that the AAP would be revoked automatically if ENCE failed to comply with these
requirements. Consequently, Argentina knew with certainty the amount of pollutants
that might enter the environment at bot h the construction and operation phases.
Combined with the information on the receptor environment and the technology to
be employed, Argentina had more than enough data to evaluate the probable impacts
on water quality, the regime of the river, and navigation.
3.96 In fact, Argentina’s actions after receiving the ENCE material prove that it
was sufficient to meet this purpose and thus satisfy the requirements of the Statute.
As discussed in Section II above, Argentina gave the ENCE materials to its technical
advisors to CARU and asked them to review the file and evaluate the project. They
did so without a hint anywhere in the record that their analysis was hampered by
inadequate information. Thus, in February 2004 they issued their report, which the
Argentine Foreign Ministry itself acknowledged “established that there would be no
446
significant environmental impact on the Argentine side.” Plainly, the advisors
could not have “established” anything about the plants, let alone that “there would
be no significant environmental impact on the Argentine side” if they had not been
furnished with adequate information.
445Ibid., para. 3.
446Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
- 209 -3.97 The fact that Argentina was give n sufficient information to assess the
impacts of the ENCE plant is confirmed by numerous other Argentine sources as
well. In the final version of the draft me morializing the Foreign Ministers’ 2 March
2004 agreement on the ENCE plant excha nged between Ambassadors Sguiglia and
Sader, for example, Argentina expressly acknowledged that, in light of the CARU
447
advisors’ report, the project was “environmentally viable.” This same conclusion
was also reaffirmed by Argentina’s delegates to CARU during the 15 May 2004
plenary session. According to Argentine Delegate Dr. Darío Garín:
It must be pointed out, with complete and absolute emphasis that
none of the different technical re ports evidence that the activity
in question causes an irreversible and unavoidable damage to the
environment, at least of a sufficient level that would warrant the
suspension of the plant or opposition to its construction, at least
with any scientific basis… 448
Still another example is the 2004 year-end report to the Argentine Senate prepared
by the Chief of Staff to the Cabinet of Mi nisters in which the Argentine Ministry of
Health and Environment stated that “[t]aking into account the technology of which
we have been informed, it is not believ ed that there will be any effects on our
territory, given the distances, the river’s diluting capacity and the technologies
involved.” 449 Of course, none of these assessm ents would have been possible if
Argentina had not received information sufficient to support them.
3.98 Based on a review of the document s themselves as well as Argentina’s
contemporaneous actions and admissions, it is clear that Argentina had more than
447See supra, para. 3.56.
448
CARU Minutes No. 01/04, op. cit., p. 18. UCM, Vol. IV, Annex 99.
449
Statement by Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p. 531.
UCM, Vol. III, Annex 47.
- 210 -adequate information on which to assess th e probable impact of the ENCE plant on
navigation, the regime of the river and wate r quality. Article 7 of the 1975 Statute
requires no more. Argentina’s claim in this respect is therefore unsupportable.
B. U RUGUAY GAVE ARGENTINA SUFFICIENT INFORMATION ABOUT B OTNIA
3.99 Notwithstanding the fact that Argentina had already pronounced the ENCE
plant “environmentally viable” in February 2004, it received still more information
from Uruguay about ENCE during the GTAN process in the second half of 2005.
Uruguay also provided Argentina with a vast amount of information about the
Botnia plant during that consultation process. Indeed, Uruguay gave Argentina far
more information about Botnia in 2005 than it had about ENCE in 2004. Given that
Argentina -- at least by its actions -- ha s admitted that the information concerning
ENCE was sufficient, the only possible conc lusion is that the information on Botnia
in 2005 was more than sufficient.
3.100 A close examination of the documents Uruguay gave Argentina during the
GTAN process proves the point. Uruguay produced to Argentina the following 36
450
new documents during the GTAN process:
• On 3 August 2005 (at the first meeting of GTAN): Uruguay’s
Regulation on Environmental Imp act Assessments, approved by
Decree 435/994 45. This describes the requirements for EIAs and
requests for AAPs under Uruguayan law.
• On 3 August 2005: DINAMA’s 11 February 2005 technical report on
Botnia452. This 35-page document descri bes the proposed project for
the “construction, start-up and operations of a pulp mill and a port
450Uruguay also reproduced the ENCE EIA, the DINAMA technical report and the MVOTMA
AAP that had previously been given Argentina in October and November 2003.
451Decree 435/994, op. cit. UCM, Vol. II, Annex 9.
452DINAMA Environmental Impact Assessment Report for the Botnia Plant (hereinafter
“DINAMA EIA Report, Botnia”) (11 February 2005). UCM, Vol. II, Annex 20.
- 211 - terminal, in a private free-trade zone situated on the outskirts of the
city of Fray Bentos, on the Uruguay River.” 453 It describes the
proposed pulp mill and port, the receptor environment, the
environmental impacts identified in the EIA, the proposed mitigation,
compensation and monitoring meas ures in the EIA, DINAMA’s
comments on the EIA, the public hearing held on the EIA, and
DINAMA’s conclusions and recomme ndations. In its comments on
the EIA, DINAMA considers liquid emissions, air emissions, noise,
soil emissions, physical presence of the project, impacts on biota,
archaeological heritage, social context and public perception,
landscape and recreation, risks and accidents, among other things.
• On 3 August 2005: MVOTMA’s 14 February 2005 Resolution
granting Botnia’s AAP 45. This document sets out a number of
conditions with which Botnia must comply: “The authorization . . . is
granted subject to strict compliance with the commitments that arise
from the company’s presentation.” 455 The AAP establishes maximum
air and liquid emissions standards: “The effluents to be discharged
into the Uruguay River shall comply with the standards for direct
discharges into a water body (Article 11.2 of Decree 253/79 and its
amendments).” 456 It provides maximum concentrations for AOX,
nitrogen, and nitrates, and it sets out the water quality standards that
apply: “The water quality standards applicable to the facility shall be
the lowest of those provided in Decree 253/79 and its amendments
(including the values determined by OSE –State Waterworks
Agency- under Section 8 therein) and in the Digest issued by the
Administrative Commission of the Uruguay River (Comisión
Administradora del Rio Uruguay).” 457 It also states that the project
must comply with “the best availa ble technologies as established in
the document: “European Commission Integrated Pollution
Prevention and Control (IPCC) Reference Document on Best
Available Technologies in the Pulp and Paper Industry, issued in
458
December 2001.” The AAP specifies that “non-compliance with
any of the conditions set forth in the previous numbered paragraph
will cause … the automatic revocation of this resolution …” 459.
453
Ibid., p. 3.
454
BOTNIA AAP, op. cit. UCM, Vol. II, Annex 21.
455Ibid., para. 2.
456Ibid., para. y.
457Ibid., para. aa.
458Ibid.
459Ibid., para. 3.
- 212 - • On 19 August 2005 (at the second meeting of GTAN): A CD
460
containing Botnia’s EIA. The EIA contains a detailed description
of the project, the receptor environment and possible impacts to it. It
also describes measures to impr ove environmental efficiency and
prevent risks, as well as prov iding information on monitoring,
management and company policy. The description of the project
contains information concerning the selection of the technology to be
utilized, the Kraft process, the production process, the wood to be
utilized, the preparation of the wood, the preparation of chemical
bleaches, the use of chemical substances, the drying and
transportation of the wood, evapor ation and boilers, energy usage,
causification and the lime kiln, and water use. The principal impact
factors described include liquid e ffluents, atmospheric emissions,
management of solid waste, nois e and physical presence. With
respect to the liquid effluents, the EIA describes the types of
effluents, their treatment, characteristics of the treatment,
management of rainwater, sanitary effluents, manipulation of sludge,
prevention of spills, the final effluents, and reduction in liquid
effluents in different parts of the pr oduction process. In its review of
the receptor environment, it examines possible impacts to the
Uruguay River, the physical characteristics of the river, water quality,
water uses, municipal and industrial effluents, industry and irrigation,
navigation and fishing, physical impacts, biol ogical impacts, and
impacts on minor waterways.
• On 31 August 2005 (at the third GTAN meeting): A response to a
request for information from Argen tina submitted at the first GTAN
meeting on 3 August 2005 461. In this document, Uruguay observes
that much of the information Argentina requested “is found in
462
abundant and validated form the documents delivered.” With
respect to three of Argentina’s requests seeking “broader contextual
information”, Uruguay notes that “the request for additional
information has already been forwar ded to both companies. It is
believed that this is an opportune time to improve upon this
information, to supplement the existing information, and the response
is pending” 463; thus showing its willingness to obtain information not
in its possession.
460GTAN/DU/6/19-08-05, CD containing the EIA of Botnia Company, cited in First Report of
the Uruguayan Delegation to the GTAN, op. cit. Annex B. UCM, Vol. V, Annex 154.
461GTAN/DU/7/31-08-05, Response to Request for Information on Both Pulp Mills from
Argentina, submitted to GTAN on 3 August 2005 (31 August 2005). UCM, Vol. V, Annex
128.
462Ibid.
463
Ibid.
- 213 - • On 31 August 2005: Reflections on an Argentine document entitled
“Technical Considerations regarding CMB,” responding to specific
Argentine comments regarding the ENCE plant 464. Concerning
Argentina’s questions about the effluent tube, for example, Uruguay
noted that “the company … has been requested to provide additional
information regarding construction details for the discharge tubes. It
should be emphasized that Plan 001GO100 (page 1166 of the … EIA)
shows the location of the discharge tubes and the coordinates are
given, and Plan No. 1 (point 5.34 of the EIA …) shows the
bathymetry.” 465
• On 14 September 2005 (at the fourth meeting of GTAN):
Supplementary information respondi ng to a request for information
about466CE Argentina made at the first GTAN meeting on 3 August
2005 . This document contains charts and statistics on yield, kappa
numbers, brightness, and inflow s and outflows for digestion,
washing, and bleaching, pulp drying, evaporators, and the effluent
treatment plant. In addition, it contains the list of chemicals to be
consumed in the ENCE plant.
• On 14 September 2005: Supplementa ry response to a request for
information concerning the ENCE plant made by Argentina on 19
467
August 2005 . This document contains a chart of contaminants at
the exit of the diffusers, as well as other technical diagrams.
• On 14 September 2005: Supplemen tary response to request for
information concerning Botnia made by Argentina at the first GTAN
meeting on 3 August 2005 46. This document c ontains information
that Uruguay solicited from Botnia at Argentina’s request, including
technical information on mass ba lance, consumption and mass
balance of chemical products of bleaching, and evolution of the pulp.
464
GTAN/DU/8/31-05-05, Reflections on Docu ment GTAN/DA4/19-05-05 (31 August 2005).
UCM, Vol. V, Annex 129.
465Ibid.
466
GTAN/DU/9/14-09-05, Supplementary Info rmation Responding to a Request for
Information on the Pulp Mils, submitted in th e Meeting of the High-Level Technical Group on
3 August 2005, corresponding to points 2.1, 2.2 and 2.3 regarding ENCE (14 September 2005).
UCM, Vol. V, Annex 130.
467GTAN/DU/10/14-09-05, Supplementary Re sponse to Document DA/4/19-08-05,
corresponding to points 9 and 26 (14 September 2005). UCM, Vol. V, Annex 131.
468GTAN/DU/11/14-09-05, Supplementary In formation Responding to a Request for
Information on the Pulp Mils, submitted en th e Meeting of the High-Level Technical Group on
3 August 2005, corresponding to points 2.1, 2. 2 and 2.3, regarding Botnia (14 September
2005). UCM, Vol. V, Annex 132.
- 214 - • On 14 September 200469A CD containing Botnia’s effluent
dispersion model .
• On 14 September 2005: A report entitled “Climate Change, Climate
Variability, Climate Trends, Variability between Decades” by
Professor José Luis Genta of the Institute of Mechanics and Fluids
and Environmental Engineering, School of Engineering, Universidad
de la República 470. This document discusses trends in precipitation
and climate change.
• On 14 September 2005: An extr act of the report “Analysis of
Climate Statistics and Development and Evaluation of Climactic and
Hydrological Scenarios in the Prin ciple Hydrographic Watersheds of
Uruguay and Its Coastal Zone (R ío Uruguay, Río Negro, Laguna
Merín, Río de la Plata and Atla471c Ocean)” prepared by the Climate
Change Unit at MVOTMA . This document analyzes climate
statistics and rainfall trends. It notes: “In the last two decades, an
472
increase in rains has been observed …” . It includes tables
predicting changes in precipitation through 2050.
• On 14 September 2005: Uruguay’s comments on a document
Argentina submitted to the GTAN on 31 August 2005 regarding
Uruguay’s environmental laws, Botnia’s EIA and the Botnia AAP 473.
Uruguay’s response includes an agreement to add monitoring stations
on the Argentine side of the river and to improve the landscape if
Argentina so requests: “We do not believe that there are any
disadvantages in having the Monitoring Plan include sampling points
from the Argentine side, especially if there is consent (and a request)
469GTAN/DU/12/14-09-05, CD contai ning effluent dispersion model of the Botnia company,
cited in First Report of the Uruguayan Delegation to the GTAN, op. cit., Annex B. UCM, Vol.
V, Annex 154.
470GTAN/DU/13/14-09-05, Climate Change, Clim ate Variability, Climate Trends, Variability
between Decades, prepared by Professor José Lu is Genta of the Institute of Mechanics and
Fluids and Environmental Engineering, School of Engineering, Universidad de la República,
(14 September 2005). UCM, Vol. V, Annex 133.
471
GTAN/DU/14/14-09-05, Extract of Analysis of Climate Statistics and Development and
Evaluation of Climate and Hydrological Scenar ios in the Main Hydrographic Basins of
Uruguay and the Coastline Thereof (Uruguay River, Negro River, Merin Lagoon, River Plate,
the Atlantic Ocean) prepared by the Clim ate Change Unit, DINAMA (14 September 2005).
UCM, Vol. V, Annex 134.
472Ibid., p. 3.
473GTAN/DU/15/14-09-05, Comments on Document GTAN/DA/5/31-08-05, prepared by
DINAMA (undated). UCM, Vol. V, Annex 135.
- 215 - from that State that this be done. Something similar can be said about
the environmental conditioning.” 474
• On 30 September 2005 (at the fifth meeting of GTAN): A CD
475
containing DINAMA’s entire file on Botnia . The CD contains
over 4,000 pages of documentation, including information about
DINAMA’s classification of the project, environmental impact
studies, information requested of Botnia by Uruguay, Botnia’s
responses to such requests, DINAMA’s reports, information about the
request for the AAP, and all other documentation exchanged between
Botnia and Uruguay. The CD contains all the information in
Uruguay’s possession concerning Botnia as of that date.
• On 30 September 2005: A powerpoint presentation on the production 476
process of the pulp mills by DINAMA Engineer Cyro Croce . This
powerpoint covers the Kraft process, preparation of the wood,
digestion, washing and delignification, purification and drying. In
addition, it provides information on the recovery cycle, services and
auxiliary processes, Best Available Technologies (“BAT”) and BREF
liquid, gas and solid emissions.
• On 30 September 2005: A powerpoint presentation on the
technology of cellulose production in by Chemical Engineer Alberto
Hernández of the Institute of 477 Chemical Engineering of the
Universidad de la República .
• On 4 November 2005: An additional report prepared by Botnia
concerning plume and sedimentation studies 478. This technical
document addresses questions raised by Argentina on the plume and
sedimentation studies during the 20 October 2005 meeting of GTAN.
• On 4 November 2005: Technica l considerations relative to
documents concerning Botnia provided by Argentina on 31 August
474
Ibid.
475GTAN/DU/16/30-09-05, CD containing DINAMA’s entire file on Botnia, cited in First
Report of the Uruguayan Delegation to the GTAN, op. cit., Annex B. UCM, Vol. V, Annex
154.
476
GTAN/DU/17/30-09-05, Pulp Mills Production Process, prepared by Chemical Engineer
Cyro Croce, DINAMA (30 September 2005). UCM, Vol. V, Annex 136.
477
GTAN/DU/18/30-09-05, Influence of Paper Pulp Technology on Case Study Generation,
prepared by Chemical Engineer Alberto Hernández, MSc. Institu te of Chemical Engineering,
Universidad de la República (30 September 2005). UCM, Vol. V, Annex 137.
478
GTAN/DU/19/04-11-05, Botnia EIA additiona l report in connection with Document
GTAN/DA/14/20-10-05 (4 November 2005). UCM, Vol. V, Annex 138.
- 216 - 479
2005 and 14 September 2005 . This document provides specific
responses to Argentina’s questions. It discusses chlorate emissions
and toxicity levels for algae, pointing out that “[i]n the worst case
scenario considered and at the most compromised point … the
discharge under the fully operational system implies an input of 6.8
µg/L.” 480 It also makes explicit refe rence to CARU standards: “In
reference to the preservation of the current conditions of the river at
the point of discharge, the consid erations established by CARU for
the mixing zone were taken in to account (see CARU – “Digest
regarding the uses of the Uruguay River” Topic E3, Title 1: General
Dispositions, Article 1, Subsection k. Also Topic E3, Title 2, Chapter
4, Article 4 and Topic E3, Title 2, Chapter 5, Section 1, Articles 4 and
5).”481 In addition: “The criterion for the selection of the discharge
point for the plant’s effluents is that the residual environmental
impacts are not significant. To this effect, the point finally adopted
does not coincide with the one originally proposed by the project
482
sponsor ...” .
• On 7 November 2005 (at the sixth meeting of GTAN): Technical
considerations relative to documents concerning ENCE provided by
Argentina on 31 August 2005 48. The document responds to specific
points raised by Argentina con cerning AOX emissions, dispersion
equations and modelling, the value of DBO5, and atmospheric
emissions.
• On 7 November 2005: An analysis of gaseous emissions from the
Botnia and ENCE plants by Chemical Engineer Cyro Croce, and
484
Hydr. & Environm. Ambassador Engineer Eugenio Lorenzo . This
document provides data concerning the load and concentration of
gaseous emissions, internal mitigation systems, characteristics of the
chimneys, descriptions of the receptor medium with respect to
479
GTAN/DU/20/04-11-05, Technical Consider ations with Regard to Documents
GTAN/DA/7/31-08-05 and GTAN/DA/9/14-09-05 on Botnia (4 November 2005). UCM, Vol.
V, Annex 139.
480Ibid., p. 1.
481Ibid., p. 1-2.
482Ibid., p. 2.
483GTAN/DU/21/07-11-05, Technical Consider ations with Regard to Documents
GTAN/DA/4/19-08-05 and GTAN/DA/8/31-08-05 on ENCE (7 November 2005). UCM, Vol.
V, Annex 140.
484GTAN/DU/22/07-11-05, Analysis of the Ga s Emissions Derived from the BOTNIA and
M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro Cro ce, Hydr. & Environm.
Engineer Eugenio Lorenzo, DINAMA (7 November 2005). UCM, Vol. V, Annex 141.
- 217 - climate and air quality, and dispersion studies and modelling. It also
details maximum emissions standards.
• On 7 November 2005: An analysis of solid wastes from the Botnia
and ENCE plants by Chemical Engineer Cyro Croce, and
Ambassador Engineer Eugenio Lorenzo 48. This document describes
solid wastes, their origin, destination, classification, amount, strategic
profile, treatment, characterization of ground water, and the pertinent
conditions set forth in the AAPs for both ENCE and Botnia.
• On 7 November 2005: An analysis of liquid emissions from the
Botnia and CMB plants prepared by Chemical Engineer Cyro Croce,
and Ambassador Engineer Eugenio Lorenzo 486. This document
provides charts and statistics about liquid emissions, including a
comparison of the loads for Botnia and ENCE with BAT - REF
standards, as well a comparison of concentrations for Botnia and
ENCE with Decree Law 253/79, the Uruguayan law on water quality.
In addition, the analysis discu sses mitigation measures, including
internal systems, effluent treatment, and the characteristics of the
discharge tubes. Further, it discusses the receptor medium, including
hydrological classifications, fl ow rates, physical-chemical
classifications, and hydrodynamic classifications and current
measurements, hydrodynamic behaviour, and mathematical
modelling. The presentation also addresses dispersion studies,
providing information concerning mathematical equations,
methodologies, control points, simula tions modelled, and results. It
provides specific results for studies examining Botnia alone, and
Botnia and ENCE collectively. In addition, it includes a “worst case
scenario,” explicitly examining the impact on the Argentine coast at
Isla Sauzal and at Gualegua ychú, based on increments in
concentration of 487umber of substances, with comparisons to CARU
Use 1 standards . It concludes with a recitation of the conditions of
the authorizations for both ENCE and Botnia 488.
• On 21 November 2005: An additional report on the Botnia EIA in
response to Argentina’s request for additional information on 20
485
GTAN/DU/23/07-11-05, Analysis of the Solid Waste Derived from the BOTNIA and
M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro Cro ce, Hydr. & Environm.
Engineer Eugenio Lorenzo, DINAMA (7 November 2005). UCM, Vol. V, Annex 142.
486
GTAN/DU/24/07-11-05, Analysis of the Fluid Emissions Derived from the BOTNIA and
M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro Cro ce, Hydr. & Environm.
Engineer Eugenio Lorenzo, DINAMA (7 November 2005). UCM, Vol. V, Annex 143.
487
Ibid., p. 15
488
Ibid., p. 16.
- 218 - 489
October 2005 . This document responds to Argentina’s request that
Uruguay do a study of the impact on plume and sediments of a south-
eastern windstorm in the Río de la Plata that stops the currents in the
Uruguay River. It states, “[i]f indeed no explicit simulation of a very
intensive Sudestada (rain-filled southeast rotating wind) was carried
out, in the simulations already done for dry periods (between January
1999 and January 2000), situations we re produc490that could be
interpreted as Sudestadas of moderate intensity. ” Uruguay then
provides graphs of the winds registered in Montevideo in January
1999 and January 2000.
• On 21 November 2005: A respons e to a request for information
included in the 9 491ember 2005 Note 2015/05 from the Argentine
Foreign Ministry . This ten-page, single-spaced document responds
to each question asked in Argentina’s letter, noting that: “It should be
pointed out that most of the information requested has already been
492
provided to...” . Uruguay points to the specific documents in which
it responded to each of Argentina’s questions. For example, “The
questions contained in Annex II of the summary minutes of the first
meeting of the High Level Group [GTAN], presented on 3 August
2005, were answered in the followi ng documents: Points 2.1, 2.2 and
2.3 were answered in docu ments GTAN/DU/9/14-09-05 … and
GTAN/DU/11/14-09-05 … with the exception of the comment
regarding the omission of an “integrated” flow chart for [ENCE],
which is found on page 1015 of th e corresponding file, validated at
the third meeting held on 31 August 2005. It is understood that the
remaining points were answered in document GTAN/DU/7/31-08-05
and expanded upon in the information subsequently submitted. If the
Argentine delegation requires more information about the issues
raised in these points, we request that it be more specific in its
493
request.” Similarly, “As regards questions 2 and 4 of Note No.
2015/05 of the Ministry of Foreign Affairs … referring to documents
GTAN/DA/4/19-08-05 and GTAN/DA/ 8/30-08-05 regarding the
[ENCE] project, we reiterate the responses in GTAN/DU/8/31-08-05,
GTAN/DU/10/14-09-05 and GT AN/DU/21/07-11-05. These
questions, the answers to which are still pending, were duly
489GTAN/DU/25/21-11-05, Botnia EIA 2 nd Additional Report in Connection with Document
GTAN/DA/14/20-10-05 (21 November 2005). UCM, Vol. V, Annex 144.
490Ibid.
491GTAN/DU/26/21-11-05, Reply to Request fo r Information Submitted by the Argentine
Delegation at the High-Level Technical Group sent in Note No. 2015/05 from the Ministry of
Foreign Affairs, International Trade and Cultu re (21 November 2005). UCM, Vol. V, Annex
145.
492Ibid., p. 1.
493Ibid., p. 2.
- 219 - forwarded to the project sponsor , and a corresponding response has
not yet been received. Likewise, we reiterate that th494information
will be submitted as soon as it is available.” Withrespectto
supplementary information Argentina requested regarding the Botnia
production process, Uruguay responded that “by virtue of the fact that
the information available to the Argentine delegation is the same that
is available to the Uruguayan delega tion, the request for the required
information necessarily had to be forwarded to the company. No
corresponding response has been receiv ed to date. This information
will be sent to the Argentine delegation as soon as it is available.” 495
• On 25 November 2005: A presentation prepared by DINAMA
concerning the monitoring of emissions and environmental quality for
496
ENCE and Botnia . The document begins by citing the provisions of
the AAPs of both Botnia and ENCE requiring the submission and
approval of environmental monitoring plans. It then reviews relevant
Uruguayan laws and CARU standards for effluent monitoring, as well
as the PROCEL program. The document also examines gas
emissions, biota, invertebrate benthic communities, and fish
monitoring requirements, by pointi ng to relevant provisions in the
AAPs and Uruguayan law. The presentation also refers to the
requirement in the AAPs that both Botnia and ENCE participate in
follow-up commissions. For example, Botnia must “participate in a
Follow-Up Committee for the project and make the relevant
information available for the purpose of following up on the project’s
environmental performance …” 497. The presentation concludes with
references to provisions in both AAPs allowing for their revocation if
the companies fail to comply with the conditions stated. For
example, for Botnia: “The non-com pliance with the provisions set
forth” will result in “the revocation of this authorization …” 498.
• On 25 November 2005: A presentation on the procedure for
499
environmental impact assessments . This document describes the
process for evaluating environmental impacts and for granting
environmental authorizations in Uruguay.
494
Ibid., p. 2.
495
Ibid., p. 10.
496
GTAN/DU/27/25-11-05, Emissi ons and Environmental Quality Monitoring in Connection
with the M’Bopicuá and Botnia Pulp Mills, prepared by DINAMA (25 November 2005).
UCM, Vol. V, Annex 146.
497
Ibid., p. 25, citing Botnia AAP, para. x.
498
Ibid., p. 27, citing Botnia AAP, para. 3.
499
GTAN/DU/28/25-11-05, Environmental Impact Assessment Procedure, prepared by
DINAMA (25 November 2005). UCM, Vol. V, Annex 147.
- 220 - • On 25 November 2005: A document entitled “Technical Proposal for
Regulation on Integrated Manage ment of solid industrial,
500
agroindustrial and service wastes.” This 27-page technical
document discusses norms concerning the handling and treatment of
solid wastes under Uruguayan law.
• On 9 December 2005: A supplementary report on Botnia’s
production process responding to a request from Argentina on 21
501
October 2005 . This 37-page document provides still more
technical data on the Botnia plant. It includes additional information
on the use of chemical products, the principal stages of the process,
emissions treatment, the principal equipment employed, the water
treatment plant, and numerous flow diagrams.
• On 9 December 2005: An outline presentation on the evaluation of
the anthropic medium prepared by MVOTMA 502. This presentation
looks at the impact of pulp mills on human communities, specifically
examining populations, health, soil use, sites of cultural and historical
interest, and security. It includes a citation to Botnia’s AAP: “The
implementation plan of mitigati on and compensation measures, in
addition to considering those m easures already submitted in the
Environmental Impact Assessment Summary, shall define those
concrete measures for the impa cts on the environment from noise,
disturbing odour, and effects on tourism, fishing, and leisure activities
in the area surrounding Fray Bentos.” 503
• On 16 December 2005: Results of atmospheric dispersion modelling
504
for the area of Ñandubayzal, Argentina . This document notes that
“[a] review was undertaken of the assessment of air quality in the
area of Ñandubayzal as a result of specific points being emphasized
505
by the Argentine delegation during the sixth meeting of the group.”
500
GTAN/DU/29/25-11-05, GESTA’s Technical Proposal, 25 November 2005, cited in First
Report of the Uruguayan Delegation to the GTAN, op. cit., Annex B. UCM, Vol. V, Annex
154.
501GTAN/DU/30/09-12-05, Additional Report Provi ding Information on Botnia’s Production
Process, in Connection with Document GT AN/DA/15/21-10-2005 (9 December 2005). UCM,
Vol. V, Annex 148.
502GTAN/DU/31/16-12-05, Social and Economic Impact, prepared by DINAMA (16
December 2005). UCM, Vol. V, Annex 149.
503
Ibid., p. 4.
504GTAN/DU/32/16-12-05, Clarification of Items Raised during the 6 thGTAN Meeting,
prepared by DINAMA (16 December 2005). UCM, Vol. V, Annex 150.
505
Ibid., p. 1.
- 221 - The document provides mean annual and maximum hourly values, as
well as extreme values and hourly concentration information.
• On 21 December 2005: Additional information on the ENCE project
in response to requests from Argentina on 19 August 2005 and 14
506
September 2005 . This seven-page docu ment contains technical
information responding directly to questions raised by Argentina
regarding flow, mixing zones, AOX concentrations, dilution
calculations, degradation coefficients, data concerning calibration of
an EIA model, and the longitude of th e effluent tube and diffuser. It
includes also a map of the ENCE port terminal and the effluent tube.
• On 18 January 2006: An analysis of the effect of discharges of the
future Botnia and ENCE plants at various points of interest 507. The
document states that “In accordance with the agreement made with
the technical experts from the Argentine Delegation during the
videoconference of 4 January of the present year, the Uruguayan
Delegation has carried out the recalculation of the increases in the
concentration of BOD [Biochemical Oxygen Demand] in water
(microg/L) due to the discharges of the future Botnia and [ENCE]
plants, at various points of interest, in a scenario that does not
consider the load factor”. 508The results are included.
• On 18 January 2006: Two technical proposals by GESTA (Technical
Group on Environmental Standardiz ation) regarding air quality
509
standards and mobile source emissions, provided to Argentina .
* *
3.101 As is illustrated by this list and description of documents, Uruguay
responded to each and every request for in formation Argentina made in GTAN, and
responded with all the information at its disposal. When it did not have the
506
GTAN/DU/33/21-12-05, Additional Report on the Celulosas de M’Bopicuá Project, in
Connection with Documents GTAN/DA/4/19-08-05 and GTAN/DA/8/14-09-05 (21 December
2005). UCM, Vol. V, Annex 151.
507
GTAN/DU/34/18-01-06, Effect of the Discharges of the Future Botnia and M’Bopicuá Pulp
Mills on Various Items of Interest, in a Scenaio where the Load Factor is not Considered,
prepared by DINAMA (18 January 2006). UCM, Vol. V, Annex 152.
508
Ibid., p. 1.
509
GTAN/DU/35/18-01-06, GESTA’s Technical Proposal on Air with reference to Air Quality
Standards, 18 January 2006, and GTAN/DU/35/18-01-06, GESTA’s Technical Proposal on Air
with reference to Mobile S ource Emissions, 18 January 2006, cited in First Report of the
Uruguayan Delegation to the GTAN, op. cit., Annex B. UCM, Vol. V, Annex 154.
- 222 -information (because it was not necessary fo r environmental evaluations previously
undertaken by Uruguay), Uruguay either generated the information necessary to
respond to the request, or sought the information from ENCE or Botnia,
notwithstanding the fact that it had no obligation to do so under the 1975 Statute.
3.102 All this was much more than enough for Argentina to assess the probable
effects of the Botnia plant (and the ENCE plant as well) on water quality,
navigation, and the regime of the river. This conclusion is confirmed by the expert
report of Dr. Pieter Booth of Bellevue, an expert in ecological risk assessment. Dr.
Booth states:
Based on a review of the EIA, and supplemental information
submitted to DINAMA, we conclude that the information
presented is sufficient for an independent assessment of potential
ecological impacts in the Uruguay River from effluent
discharges from the Botnia Orion plant… This determination is
based on assessment of standa rd practice in environmental
impact and ecological risk assessment. 510
3.103 Argentina attempts to prop up its argument on the putative insufficiency of
the information it received by citing to the 27 March 2006 Hatfield report to the
International Finance Corporation which, it claims, “a reconnu que l’information
relative aux usines CMB et Orion était insuffisante.” 511 Argentina’s reliance on the
Hatfield report is, however, entirely misplaced. The IFC did not hire the Hatfield
consultants to review the information Ur uguay had given Argentina, whether before
or during the GTAN process. Rather, the consultants were hired to review the
510Sufficiency of EIA and GTAN Information fo r Determination of Environmental Impacts-
Botnia, S.A., Fray Bentos Uruguay, Mr. Pieter Booth (Exponent, Inc.) (June 2007). UCM, Vol.
X, Annex 217. The report only addresses Botnia . ENCE is no longer building a pulp mill in
the vicinity of Fray Bentos. At any rate, Argentina’s conduct shows the information provided
by Uruguay, concerning ENCE was sufficient.
511
AM, para. 4.78. (“recognized that the informa tion related to the CMB and Orion plants was
insufficient.”)
- 223 -sufficiency of the IFC’s own comprehens ive impact study (“CIS”). Thus, the
opinions Hatfield may have expressed about the adequacy of the CIS for purposes of
satisfying the IFC’s internal processes a nd requirements say nothing about the very
different question of whether or not Uruguay had provided Argentina with sufficient
information to satisfy the particular re quirements of the 1975 Statute (that is, to
assess the probable impacts on navigation, th e river regime and water quality). The
Director of DINAMA addressed exactly th is point in her 1 June 2006 affidavit,
submitted at the time of Argentina’s provisional measures request. She stated:
DINAMA believes that many of th e questions and issues raised
by the Hatfield report about IFC’s draft Cumulative Impact
Study were previously answered through DINAMA’s EIA
process, the AAPs and accompanying documents, or the
information that was presente d to GTAN. Many of the doubts
and concerns raised in the Hatfield report arise from the lack of
information contained in the CIS, and not from a deficiency of
the total amount of information available. 512
As a result, the statement from the Hatfield Report that Argentina cites is very much
out of context, has no bearing on the issues presented in this case, and therefore does
nothing to bolster the Memorial’s argum ent that the inform ation Uruguay gave
Argentina was insufficient to satisfy Uruguay’s obligations, under the 1975 Statute.
3.104 The facts recited above make two conclusions perfectly obvious. First,
Uruguay gave Argentina an enormous volume of information on every aspect of the
ENCE and Botnia plants; it was more than sufficient to satisfy the information
sharing requirement contained in th e 1975 Statute. Second, no amount of
information would have appeased Argentina. In fact, by October 2005, if not earlier,
Argentina was incapable of being satisfied, as the above recitation amply
512
Torres Aff., op. cit., p. 12, para. E. UCM, Vol. II, Annex 30.
- 224 -demonstrates. Argentina appears instead to have been intent on overwhelming
Uruguay with requests for more and more in formation, much of which had nothing
to do with the topics actuall y within the scope of the 1975 Statute. Rather than
coming to the table with an open mind and with a view to accommodating the
legitimate interests of Urugua y, Argentina’s behaviour re flects a dete rmination to
frustrate the success of the GTAN process.
3.105 Argentina’s determination not to reach agreement with Uruguay in the
GTAN process is evidenced most dramatically by its abrupt termination of the work
of the water quality sub-group even as that group was finalizing the text of its report
on the effects of plant emissions on water quality 513. The sub-group was meeting
during a previously scheduled session in Buenos Aires. As the sub-group was
finalizing its report, however, Argentina’ s Ambassador García Moritán came into
the room and announced perfunctorily that the session was over and the sub-group’s
514
work terminated . The consequence, of course, was that the report was never
finalized. It is interesting to note, however , that the last draft, containing points of
agreement between the two delegations, is attached to the final report of the
Uruguayan delegation to GTAN and shows just how much productive work the
515
group was able to do based on the volumes of data exchanged . Plainly, such a
detailed and sophisticated analysis woul d have been impossible if, as Argentina
claims, the group lacked the information necessary to do its work.
513See AM, Vol. IV, Annex 2, Ex. C; see also First Report of the Uruguayan Delegation to the
GTAN, op. cit., Annex C. UCM, Vol. V, Annex 154.
514Report concerning Meeting of Water Subgroup of GTAN (27 January 2006). UCM, Vol. V,
Annex 153.
515See AM, Vol. IV, Annex 2, Ex. C; s ee also First Report of the Uruguayan Delegation to the
GTAN, op. cit., Annex C. UCM, Vol. V, Annex 154.
- 225 -3.106 Before concluding on this point, it bears mention that Argentina’s
assertion that it was not given sufficient information to assess the impact of the
plants is flatly contradicted by other elem ents of its own argumen t. In particular,
Argentina has from the beginning of this case argued with great passion that the
plants will cause significant harm to the wa ter quality of the Uruguay River. In its
Application, for example, Argentina assert ed that the information available to it
“établit manifestement que la mise en service des usines de pâte a papier CMB et
Orion causera un préjudice sensible à la qualité des eaux du fleuve Uruguay et un
516
préjudice sensible transfrontalier à l’Argentine.” But Argentina cannot
simultaneously argue both (i) that it lacked sufficient information to assess the
plants’ effects and (ii) that they will “manifestly” cause significant harm. As
Uruguay will show in subsequent chapters of this Counter-Memorial, Argentina’s
allegation that the plants will cause signifi cant harm is manifestly erroneous. The
important point here, however, is that th e allegation itself disproves the argument
that Argentina feels it did not receive adequate information to make that
determination.
* * *
3.107 As discussed above, the Parties agr ee that the purpose of the information-
sharing mechanism in the 1975 Statute is to enable a notified State to determine the
probable effects of a project on the three subjects covered by the Statute; namely,
navigation, the regime of the river, and the quality of its water. It could scarcely be
otherwise. The third paragraph of Article 7 unmistakably provides exactly that.
Where the Parties disagree is over the que stion of whether Uruguay gave Argentina
516Argentina’s Application Instituting Proceedings, para. 22 (4 May 2006); s ee also
Argentina’s Request for the Indication of Provisional Measures, paras. 6, 9 (4 May 2006).
- 226 -information sufficient to satisfy this purpose. Yet, Argentina’s own behaviour
shows that it did. In the case of EN CE, Argentina reviewed the information
Uruguay provided it in October and Nove mber 2003 and expressly determined the
project was “environmentally viable.” Su ch a determination would not have been
possible had Argentina not received adequa te information. And in the case of
Botnia, Argentina was given still more ample information in the course of the
GTAN process. Given that Argentina had previously found the ENCE information
adequate, it cannot now be heard to claim that the still more exhaustive information
it received on Botnia was somehow less ad equate. Indeed, as Uruguay’s detailed
examination of the materials exchanged in the GTAN process shows, there can be no
serious doubt about the sufficiency of the information Argentina received.
Accordingly, Argentina’s complaints on th is score fare no better than the other
elements of its procedural case; put simply, they have absolutely no validity.
Section IV.
Uruguay Complied with Its Duties
During Consultations and Dispute Resolution
3.108 The fourth and final element of Argentina’s procedural argument is that
Uruguay violated the 1975 Statute because it did not suspend all work on the
projects while the GTAN consultations were in progress, and because it has not
refrained from implementing the Botnia plant during the pendency of this case.
Thus, for example, Argentina contends that Uruguay breached its putative
“obligation de parvenir à un accord avec l’ autre partie ou d’attendre le règlement du
différend selon la procédure prévue au chapitre II du Statut de 1975, avant
- 227 - 517
d’autoriser la construction de l’usine CMB.” (The procedure “established in
Chapter 2” refers to Articles 7 through 12, which, of course, include the duty to
consult and provide for the referral of disputes to this Court.) An identical allegation
518
is also made with respect to the Botnia plant.
3.109 Like so many of its other allegations, these charges fail in the face of the
law described in Chapter 2 of this Counte r-Memorial. Uruguay showed there that
the Statute does not obligate an initiating St ate to put a complete stop to a project
while consultations are underway; to the c ontrary, preparatory work may continue
even as consultations are taking place. Uruguay also show ed that the Statute does
not require the Parties to refrain from implementing projects once consultations have
ended and dispute resolution proceedings have begun. These two points are
addressed in turn below.
A. U RUGUAY T OOK O NLY PREPARATORY S TEPSD URING THE GTAN
C ONSULTATIVE PROCESS
3.110 The 1975 Statute does not specifically address the question of the initiating
State’s duties in cases when Article 12 consultations are necessitated. It neither
states that a project is permit ted to continue nor states that it must be stopped. In
contrast, the pertinent multilateral conventi ons expressly state that in the event of
consultations, the notifying State is obligat ed to refrain from “implementing” the
work for a reasonable period during those consultations1. Even accepting that this
express obligation can be implied into a silent Statute, it does not mean that Uruguay
517AM, para. 4.89(a)(iv). (“obligation to reach an agreement with the other party or to await the
settlement of the dispute according to thcedure established in Chapter 2 of the 1975
Statute before authorizing the construction of the [ENCE] plant.”)
518AM, para. 4.89(b)(iv).
519See Chap. 2, para. 2.180.
- 228 -was obligated to put a hold on any and all activities in furtherance of the ENCE and
Botnia projects while consultations continue d. Instead, as discussed in Chapter 2,
the obligation
does not inherently imply a duty to desist until a solution is
finally reached. It simply implies that nothing more than
preparatory work will be undertaken until the consulted state has
had an ample opportunity to pr esent its views and until those
views have been considered in good faith. 520
3.111 Insofar as Argentina makes no argument that the construction of the plants
per se poses any threat to the water quality of the Uruguay River, preparatory steps
in furtherance of the final construction of th e plants are, under any view of the law,
entirely permissible while consultations are on-going. Such preparatory steps do not
foreclose the good faith consideration of the notified State’s interests within the
consultation process. In the paragraphs to follow, Uruguay wi ll demonstrate that
that is exactly what happened here; no mo re than preparatory steps were taken
during the GTAN consultation process.
3.112 For purposes of analyzing this issu e, it is important to bear in mind the
timing of the GTAN process. The Presiden ts of Argentina and Uruguay agreed to
521
establish the GTAN on 5 May 2005 . Their Foreign Ministers formally established
the GTAN at their meeting on 31 May 2005 , and announced that it was “to produce
522
an initial report within 180 days” , precisely the same period provided for
consultation under Articl e 12 of the 1975 Statute 523. Thus, under the schedule
520
Kirgis, F.: Prior Consultation in Intern ational Law: A Study in State Practice,
Charlottesville, University Press of Virginia, 1983, p. 75.
521
See AM para. 2.58.
522
Joint Argentine-Uruguayan Pr ess Release Constituting GTAN, op. cit. UCM, Vol. V,
Annex 126.
523
1975 Statute, op. cit., Art. 12. UCM, Vol. II, Annex 4.
- 229 -adopted by the Foreign Ministers, GTAN’s initial report was due by the end of
November 2005.
3.113 As it turned out, the first substa ntive meeting of the GTAN did not occur
until 3 August. The group then met a total of 12 times over the next several months,
with the last official meeting occurring on 30 January 2006. Although the meetings
continued into January, Argentina’s Memori al admits that by the end of 2005 the
GTAN process had reached an impasse. It states:
Fin 2005, compte tenu des positions contradictoires des parties
au sujet de l’étendue de l’inform ation requise, de la question de
l’emplacement des usin es et de la technologie à utiliser par
celles-ci, ainsi que du fait que les travaux se poursuivaient et que
l’Uruguay continuait à donner des au torisations de construction
d’ouvrages sans suivre la procédure du Statut de 1975, il est
devenu évident que les travaux du GTAN s’acheminaient vers
une impasse. 524
3.114 In light of this obvious impasse, Argentina began laying the procedural
groundwork for its application to the Court. Thus, on 14 December 2005, it sent
Uruguay a diplomatic note warning that it was preparing to initiate proceedings in
525
the Court . In that note, Argentina claimed that the 180-day consultation period
under Article 12 of the Statute began to run on 3 August, when GTAN first met, and
thus would expire on 3 February 2005. Argentina’s position in this respect was
reiterated twice more before even the last GTAN meeting by means of diplomatic
524
AM, para. 2.71. (“ At the end of 2005 , in light of the contradictory positions of the parties
with respect to the scope of the information requested, the issue of the site where the mills
would be located and the technology to be used by the mills, and given the fact that the work
had continued and that Uruguay was still issuing construction permits for the facilities without
following the procedure set out in the 1975 Statuteit became evident that the work of GTAN
was on the way to an impasse.”)
525Diplomatic Note 149/2005 sent from Argentin e Minister of Foreign Affairs, International
Trade and Culture to Uruguay Ambassador in Ar gentina D. Francisco Bustillo (14 December
2005). UCM, Vol. III, Annex 57.
- 230 -notes dated 26 December 2005 and 12 January 2006 526. Argentina’s behaviour
throughout this period, and its declaration of an impasse, appear to have been driven
by the dictates of internal politics; in pa rticular, the behaviour of protestors on the
ground in Gualeguaychú. Beginning on 8 December 2005, coinciding with the start
of the South American summer and to urist season, protestors from the
“Environmental Assembly of Gualeguayc hú” began blockading the bridges linking
Uruguay and Argentina to pressure the Argentine government to use all means at its
disposal, including a suit in this Court, to stop Uruguay from carrying out the ENCE
and Botnia Projects 527. Their protests continued without let-up until 20 March
528 529
2006 , long after the GTAN had formally come to an end .
3.115 It is against this backdrop of events that the steps Uruguay took in
furtherance of the ENCE and Botnia plants must be evaluated. ENCE is the simpler
case. Beyond the October 2003 AAP, the only other approval ENCE ever received
530
was the authorization to begin land movement, issued on 28 November 2005 .
Although the permit was issued during the GT AN process, there can be no dispute
526Diplomatic Note 154/05 sent from Argentine Minister of Foreign Affairs, International
Trade and Culture to Uruguay Ambassador in Ar gentina D. Francisco Bustillo (26 December
2005). UCM, Vol. III, Annex 58. Diplomatic Note sent from Argentine Minister of Foreign
Affairs, International Trade and Culture to Uruguayan Ambassador in Argentina, Francisco
Bustillo (12 January 2006). UCM, Vol. III, Annex 59.
527
Award of the “Ad Hoc” Arbitral Tribunal of Mercosur (6 September 2006). UCM, Vol. IX,
Annex 205.
528The blockades subsequently resumed and continued for still another month between 5 April
to 2 May 2006. Ibid.
529First Report of the Uruguayan Delegation to GTAN, op. cit., Annex A. UCM, Vol. V,
Annex 154.
530
DINAMA Environmental Management Plan Approval for the ENCE Plant (for the removal
of vegetation and earth movement) (28 November 2005). UCM, Vol. II, Annex 25.
- 231 -that land clearing represents only preparat ory work and thus was consistent with
Uruguay’s duties under any view of the law.
3.116 More facts are present in the case of Botnia, but the legal conclusion is the
same. On 12 April 2005, Botnia was authorized to begin ground clearing and land
531
movement , and on 22 August 2005 it was authorized to begin construction of a
chimney, a concrete plant (necessary for subsequent construction) and the
532
foundation of the plant itself . As in the case of ENCE , none of these steps is
anything more than preparatory to the later construction of the pulp processing
facility. None threatened to foreclose m eaningful consultations about the elements
of the plant that could cause environmental impacts, such as the bleaching
technology to be employed, the facilities for or methods of waste water treatment,
the nature and location of discharges into the river, etc. In short, nothing Uruguay
did during the consultation period prejudice d Argentina’s rights under the Statute to
be consulted, or to have its views considered by Uruguay in good faith.
3.117 It was only on 18 January 2006, when it authorized the actual construction
of the bleached cellulose plant, that Ur uguay could be said to have done anything
other than license purely preparatory steps. Yet, the 18 January 2006 authorization
could not have violated Uruguay’s oblig ations under the Statute because it came
after the consultation period had run its course and reached an impasse. It occurred
(i) after the initial 180-day period set by the Foreign Ministers had expired; (ii) more
than a month after Argentina had declared the consultations to be “on the way to an
impasse”; and (iii) only a few days befo re the final GTAN meeting on 30 January
531Botnia PGA (for the construction of the co ncrete foundation and the emissions stack), op.
cit., para. 1. UCM, Vol. II, Annex 23.
532Ibid.
- 232 -2006, when the Parties formally agreed to end the consultation process. Moreover,
there is no evidence that any construction work on the plant itself was actually
performed prior to 30 January.
3.118 Even were one to accept Argentina’s characterization of events and
calculate the running of the 180-day Artic le 12 consultation period from 3 August
when GTAN first met, the fact is that by the end of 2005, GTAN had reached an
impasse -- by Argentina’s own admission. Indeed, the impasse had been effectively
reached when Argentina dispatched its 14 December 2005 diplomatic note preparing
both itself and Uruguay for the institution of proceedings before the Court.
Consequently, by waiting until consultations had reached an impasse before
authorizing the actual construction of the Botnia plant, Uruguay plainly discharged
any duty it may have had to undertake no more than preparatory work while
consultations continued.
* * *
3.119 For the reasons discussed in the preceding paragraphs, Argentina’s
argument that Uruguay violated it obligati ons under the 1975 Statute by refusing to
freeze the Botnia and ENCE projects during the GTAN consultative process fails in
both law and fact. Uruguay’s behaviour was entirely consistent with its duties under
the Statute.
B. U RUGUAY W AS FREE TOC ARRYO UT THEPULP M ILLPROJECTS AFTER THE
CONSULTATIONS W EREO VER
3.120 In a related vein, Argentina argues that Uruguay has violated the
procedural provisions of the 1975 Statute because it has not waited until this Court
renders final judgment to implement the pl ants. At paragraph 4.80 of its Memorial,
for example, Argentina claims that
- 233 - [s]i un différend s’élève entre les parties à cet égard [ i.e., about
whether a project will cause signi ficant harm] et qu’il ne peut
être réglé, il appartient à la C our de le régler (article 12).
Comme il a été expliqué au chapitre III du Mémoire, tant qu’une
décision favorable à la construction ou à l’autorisation de
construire n’est pas intervenue, la partie intéresée ne peut pas
procéder de la sorte de manière unilaterale. 533
3.121 Uruguay’s answer to this aspect of Argentina’s argument is based on the
law. The facts themselves are not in dispute. Uruguay readily acknowledges that
after its consultations with Argentina in GTAN reached an impasse in December
2005, it authorized the construction of the Botnia plant. Since that time,
construction has proceeded, and Uruguay anticipates that the plant will enter into
operation in the fourth quarter of 2007. As detailed at length in Chapter 2 534,
Argentina’s argument that the 1975 Statute prohibits Uruguay from carrying out the
project until such time as the Court enters final judgment in this case is inconsistent
with the text of the Statute, general international law, and the sound administration
of justice. It has no merit whatsoever.
3.122 Under general international law, th e status of a work during the dispute
resolution phase is different than during the consultation phase. Whereas the
initiating State is prohibited from implem enting a project (other than preparatory
work) during consultations, it is permitted to do so during dispute resolution
proceedings. As Uruguay showed in Ch apter 2, the 1997 Watercourse Convention
and the 2001 Draft Articles both provide fo r post-consultation dispute resolution in
533AM, para. 4.80. (“[i]f a dispute arises between the parties in this regard [ i.e., about whether
a project will cause significant harm] and it cannotbe settled, it is up to the Court to settle it
(Article 12). As explained in Chapter 2 of the Memorial, as long as a decision favorable to the
construction or construction authorization has not been issued, the interested party cannot
proceed in a unilateral manner.”)
534
See Chap 2, para. 2.183-2.186.
- 234 -the form of impartial fact-finding commissions or, if the States concerned agree,
535
mediation or conciliation . Yet, both instruments also make clear that the duty not
to implement a project ends when consultations end, whatever the status of any
dispute resolution proceedings. The ILC commentary to the 1997 Watercourse
Convention, for example, states: “After this period [of consultation] has expired, the
notifying State may proceed with the implementation of its plans …” 536.
3.123 The reason both the 1997 Watercourse Convention and 2001 Draft
Articles permit the initiating State to implement a project after consultations have
run their course is clear. As the ILC explained in its commentary to Article 9 of the
2001 Draft Articles: “the State of origin is permitted to go ahead with the activity,
for the absence of such an alternative would, in effect, create a right of veto for the
537
States likely to be affected.” A right of veto is, of course, inconsistent with
general international law. It is also inconsistent with the 1975 Statute.
3.124 Uruguay described in great detail in Chapter 2 the numerous grounds that
support its conclusion that the 1975 Statute does not give the notified State a veto
right. In particular, Uruguay demonstrated that the text of the 1975 Statute, the
practice of the Parties, the practice of the States in the region, and the rules of
general international law all point to the same unavoidable conclusion: the Statute
does not require the prior consent of the notif ied State, or otherwise give that State
535Convention on the Law of the Non-Naviga tional Uses of International Watercourses
(hereinafter “1997 Watercourse Convention”), Art. 33 (1997); 2001 Draft Articles, op. cit., Art.
19.
536
1994 Draft Articles, op. cit., p. 116, comment 4; see also 2001 Draft Articles, op. cit., p.
412, Art. 9, para. 3. (“To take account of thispossibility, the article provides that the State of
origin is permitted to go ahead w ith the activity, for th e absence of such an alternative would,
in effect, create a right of veto for the States likely to be affected.”)
5372001 Draft Articles, op. cit., p. 412, Art. 9, para. 3.
- 235 -veto power over the initiating State’s project. Uruguay will not burden the Court by
recapitulating its argument in full here but merely refers the Court back to Section II
(E) of Chapter 2 where it sets forth its analysis in full.
3.125 Were the rule otherwise, the notified State could impede the initiating
State’s projects not just for the 180-day consultation period under Article 12, but
potentially for years while the case navigates its way through each of the stages
attendant to litigation in this Court: at least one round (and usually two rounds) of
written pleadings, oral proceedings on the merits and final judgment. Such an
extended hiatus would kill most investment projects. If Uruguay and Argentina truly
intended to restrict their respective sove reign rights to develop their economies in
accordance with their individual national priorities, they would have expressed that
intent clearly and convincingly. That they did not do so should be dispositive of the
issue. As the arbitral tribunal stated in the Lake Lanoux Case:
To admit that jurisdiction in a certain field can no longer be
exercised except on the condition of, or by way of, an agreement
between two States, is to place an essential restriction on the
sovereignty of a State, and such restriction could only be
admitted if there were clear and convincing evidence. 538
3.126 As it did in Chapter 2, Uruguay hastens to add that this reading of the 1975
Statute, and a finding that an initiating State may implement a project even as
proceedings are underway in this Court, in no way leaves the notified State without
remedy in those instances where it is authentically threatened with significant harm.
Under Article 73(1) of the Rules of Court the notified State has the right to request
an order of the Court indicting provisional measures at any stage of the proceedings.
538
Lake Lanoux Arbitration (France v. Spain), International Law Reports, vol. 24, p. 127, para.
11 (16 November 1957).
- 236 -Argentina’s conduct in this case proves Ur uguay’s point. Simultaneous with its
Application, Argentina filed a request for provisional measures seeking, inter alia,
an order from the court halting construction of the ENCE and Botnia plants. In
ruling on the provisional measures reque st, the Court specifically considered
Argentina’s argument that the Statute imposed a “no construction” obligation during
these proceedings. It nonetheless declined to order that construction be halted:
Whereas in this connection, the Court has taken note of the
interpretation of the 1975 Statute advanced by Argentina to the
effect that it provides for a “no construction” obligation, that is
to say that it stipulates that a project may only proceed if agreed
to by both parties or that, lacking such agreement, it shall not
proceed until the Court has ruled on the dispute; whereas,
however, the Court does not have to consider that issue for
current purposes, since it is not at present convinced that, if it
should later be shown that such is the correct interpretation of
the 1975 Statute, any consequent violations of the Statute that
Uruguay might be found to have committed would not be
capable of being remedied at the merits stage of the
539
proceedings [.]
3.127 For all of these reasons, Argentina’s contention that the Statute obligates
Uruguay to refrain from implementing th e plant during the course of these
proceedings must fail. The Statute creates no such express obligation, and there is
no basis on which it can be implied. Arge ntina’s rights, even if impaired by
Uruguay’s implementation of these projec ts during these proceedings (which
Uruguay vigorously denies) can be fully restored by means of the Court’s final
order. There is no legal basis for halting the projects at this time. Argentina’s
argument should therefore be rejected.
539Case Concerning Pulp Mills on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2006, p. 18, para. 71 (13 July 2006).
- 237 - Conclusions
3.128 Uruguay has now come to the end of Part I of this Counter-Memorial
relating to the procedural aspects of Arge ntina’s claim. In Chapter 2, Uruguay
analyzed the provisions of the 1975 Statute for purposes of setting out the law
applicable to this element of the dispute. In so doing, Uruguay refuted the core legal
arguments on which Argentina’s procedural case is predicated. In particular,
Uruguay showed that
(i) the 1975 Statute creates a regime of prior notice, information-
sharing and consultation, but not prior consent. Nothing in the
text of the Statute, the provisi ons of the CARU Digest or the
historical practice of the Par ties supports Argentina’s argument
to the contrary. The Statute does not give either State a veto
right over the projects of the other;
(ii) Article 7 of the Statute does not require notice to CARU
before the initiating State authorizes a project. Indeed, the text
of the Statute, the provisions of the Digest and the State practice
uniformly show that notice can (and has) come after
authorization;
(iii) CARU does not have th e institutional competence to
authorize or reject particular projects. Only the Parties -- that is,
Uruguay and Argentina -- have that power. CARU’s role in the
scheme of the Statute, although cr ucial, consists of technical,
regulatory, and administrative functions; and
(iv) the Statute does not require the initiating State to desist from
any and all work in connection with a project either during the
consultation phase under Artic les 11 and 12, or during
proceedings in this Court. With respect to the consultation
period, the initiating State is, at very least, permitted to continue
with preparatory works during the consultations so long as it
does not take any steps that mi ght prejudice the ability of the
Parties to engage in good faith consultations. And with respect
to the dispute resolution phase, there is nothing either in the
Statute or in international law that prohibits the implementation
of a project while court proceedings are on-going.
- 238 -3.129 In this Chapter 3, Uruguay applied the facts to the law analyzed in Chapter
2, and showed that it complied at all time s with its procedural obligations under the
Statute. With respect to each of Argentina’s arguments, Uruguay demonstrated that
(i) Argentina’s contention that Uruguay did not to give timely
notice of the ENCE and Botnia pl ants to CARU fails both as a
matter of law and also as a matter of fact. In the first instance,
Argentina badly mischaracterizes the nature of an AAP under
Uruguayan law. AAPs are initial authorizations in the truest
sense. Many additional authori zations were required before a
plant may begin construction, much less operation. Moreover,
CARU and Argentina were well aware of and engaged with both
plants long before the issuance of their AAPs. Argentina’s
attempt to attach dispositive significance to the date of the AAP
thus makes no sense. The ability of both CARU and Argentina
to review and be consulted about the projects was in no way
diminished by the mere issuance of initial environmental
authorizations, and their notif ication about the projects,
including the AAPs issued by Uruguay, was timely;
(ii) Argentina’s argument that Uruguay was obligated to await
CARU’s authorization of the projects likewise fails first in law,
but also in fact. In fact, the Parties expressly agreed to treat the
issue of the ENCE plant outside the context of CARU, which
had become paralyzed in any event. Indeed, in March 2004, the
Parties expressly agreed that the plant would be built, subject
only to water quality monitoring by CARU. This agreement was
later extended to the Botnia plant as well. Still further, the
Parties once again agreed to take the issue of both plants outside
the ambit of CARU in May 2005 when they constituted the
GTAN consultation process;
(iii) Argentina’s argument that Uruguay failed to provide it
with adequate information to evaluate the probable impact of the
projects on navigation, the regime of the river and water quality
is belied by its own conduct. Argentina reviewed the
information concerning the ENCE plant and specifically came to
the conclusion that the plant was “environmentally viable.”
Uruguay provided Argentina with still fuller information
concerning the Botnia plant during the GTAN process. If the
ENCE information was adequate to meet the purposes of Article
7, the Botnia information was more than adequate;
(iv) And finally, Argentina’s argument that Uruguay failed to
respect its obligations during the consultation and dispute
resolution phases similarly fails. During the GTAN consultation
- 239 - phase, Uruguay did no more than authorize preparatory work,
something it is plainly permitted to do. And during the dispute
resolution phase, although Uruguay has indeed moved to
implement the Botnia plant, the law is clear that it is permitted to
do so.
3.130 For all the reasons thus articulate d, Argentina’s procedural submissions
can and should be rejected.
3.131 With this, Part I of the Counter- Memorial is now complete. Uruguay thus
turns to Part II, which addresses the environmental claims that make up Argentina’s
substantive case.
- 240 -PART II CHAPTER 4.
THE LAW AND THE FACTS PERTAINING TO THE ALLEGED
SUBSTANTIVE VIOLATIONS OF THE 1975 STATUTE4.1 The purpose of this Chapter is to analyse the provisions of the 1975 Statute
that impose substantive environmenta l protection obligat ions, including the
obligations to prevent pollution, safeguard water quality, and protect the aquatic
ecosystem. The Chapter sets out Uruguay’ s view of the law applicable to the
protection of the Uruguay River and its a quatic environment, and demonstrates
Uruguay’s full compliance therewith. Toge ther with Chapters 5 through 7, this
Chapter exposes the flaws in Argentina’s legal argument and the complete lack of
factual underpinning for it.
4.2 Argentina bases its legal arguments on (a) Articles 35-37 and 40-41 of the
1975 Statute, (b) various treaties or r ecommendations which are alleged to be
applicable under the terms of Article 41 of the 1975 Statute, including the 2001
Stockholm Convention on Persis tent Organic Pollutants (“POPS Convention”), the
WHO water quality standards, the 1992 Convention on Biological Diversity, and the
1971 Convention on Wetlands of Intern ational Importance (the “Ramsar
Convention”), and (c) principles of international law, including the precautionary
principle, and the principles of harm prevention and equitable and reasonable use of
an international watercourse.
4.3 All of Argentina’s legal argume nts are founded on a single factual
premise, whether they are based on the 1975 Statute itself, international conventions,
or principles of general international law. That premise -- the sole basis on which all
of Argentina’s legal argumentation depends -- is that discharges from the Botnia
plant to the Uruguay River will constitute pollution so harmful to the river that they
are prohibited by the 1975 Statute 540. If -- as Uruguay will demonstrate --
540AM, paras. 5.20-5.53, 5.78-5.83.
- 245 -Argentina’s premise is wrong about pollution, that is, if discharges from the plant do
not cause significant harm to the river, Argentina’s entire legal case disintegrates.
Simply put, if the plant does not “pollut e” within the meaning of the 1975 Statute,
then there is no substance to Argentina’ s arguments on the use of best available
541 542
techniques (“BAT”) in the Botnia plant , the siting of the plant , the adequacy of
the environmental impact assessments 543, the protection of biodiversity or wetlands,
the POPS Convention, or the equitable and reasonable use of the river. If there is no
prohibited pollution, then there is nothing more to prevent and nothing left to assess.
If there is no prohibited pollution, Uruguay quite simply has no case to answer and
the Court must dismiss Argentina’s claims outright.
4.4 As shown in this Chapter, and in Chapters 5 through 7 which follow, there
is no prohibited pollution. Argentina has failed to meet its burden of proving that
discharge from the Botnia plant will cause significant harm to navigation, the regime
of the river, and/or its water quality. Argentina does not even allege that the plant
will affect navigation or the regime of the river. And it falls well short of
demonstrating the likelihood of any significan t harm to water quality. In fact, the
technical and scientific evidence shows that there is no likelihood of harm to water
quality, a fact confirmed by the Internat ional Finance Corporation -- an impartial
international organisation -- and the independ ent experts it retained to evaluate the
Botnia plant.
4.5 The source of Uruguay’s substantiv e environmental obligations is, of
course, the 1975 Statute. In particular , Argentina has alleged that Uruguay has
541AM, paras. 5.78-5.77.
542
AM, paras. 5.65-5.73.
543
AM, para. 5.63.
- 246 -violated Article 36 (ecological balance of the river) and Article 41 (prevention of
544
pollution) . Both Parties accept that the starting point for interpreting their
environmental obligations is found in these Articles and in their relationship to other
Articles of the 1975 Statute.
4.6 Two other sources of law elucidate the substantive content of Articles 36
and 41. First, the Parties, through CARU, and pursuant to an express delegation of
authority provided in the 1975 Statute, ha ve enacted a complex regulatory regime
that elaborates the substantive obligati ons with respect to protection of the
environment. The CARU Digest sets forth detailed and specific standards governing
a host of matters relating to the Urugua y River, including two categories of
regulation that are decisive in the presen t dispute: standards governing water quality
and regulations governing the ecological balanc e of the river. Sections I and II of
this Chapter discuss these CARU regula tions, and show that Uruguay has complied
with all of them.
4.7 Second, both Parties are in agreement that the Court’s interpretation of the
545
1975 Statute should be guided by general international law . As explained in
Section III, Uruguay’s interpretation of its obligations under the 1975 Statute
concerning the regulation of pollution and the ecological balance of the river is
entirely consistent with general internati onal law, including the right of a State to
make equitable and reasonable use of a shared river, and its obligation to exercise
due diligence in the regulation and control of environmental risks. The Convention
544
Argentina also makes passing reference to Articles 3-6, 27, 35, 37, and 42-43.
545
This is not to say that all international law is relevant tothe present dispute. Rather,
international law is relevant only insofar as it gives assistance in interpreting and applying the
various Articles of the 1975 Statute. The Court lacks jurisdiction over international obligations
that are independent from the 1975 Statute.
- 247 -on Biological Diversity, the Ramsar Conve ntion, and the POPS Convention do not
directly apply to this case, in which the jurisdiction of the Court is based solely on
Article 60 of the 1975 Statute, but if they did apply they would not assist Argentina
in the present dispute; Uruguay’s actions are in full compliance with the provisions
of these international instruments. More over, the precautionary principle, on which
Argentina also purports to rely, is applicable only where there is a risk of serious or
irreversible harm, which is manifestly no t the case here; Argentina has failed to
demonstrate the existence of such a risk, or the factual predicates thereto. Nor does
the precautionary principle transfer the burden of proof from Argentina to Uruguay
as Argentina erroneously suggests.
4.8 Third, Section IV shows that Argentina has misapprehended the
international law of environmental impact assessment. Argentina (i) erroneously
conceives of EIA as an international procedure that requires the approval of any
affected State, whereas it is, in fact, a national one; (ii) wrongly views EIA as a
single event instead of an ongoing process; and (iii) mistakenly claims that all risks
must be assessed, regardless of how remo te or speculative they are. Section V
demonstrates that Uruguay has fully sati sfied the existing EIA standards under
international law through its regulatory program that requires a series of
authorisations and approvals, which ca n only be granted after comprehensive
assessment and evaluation, including specific evaluation of the impacts to Argentina.
- 248 - Section I.
Uruguay’s Compliance with Its Obligations to Prevent Pollution under
Article 41 of the 1975 Statute
A. A RTICLE 41D OES N OT B AN A LL DISCHARGES TO THE R IVER
4.9 Argentina’s principal claim is that Uruguay has violated Article 41 of the
1975 Statute, which provides that the Partie s undertake, “[w]ithout prejudice to the
functions assigned to the Commission in this respect”, to “protect and preserve the
aquatic environment and, in particular, to prevent pollution, by prescribing
appropriate rules and measures in accordance with applicable international
agreements and in keeping, where relevant, with the guidelines and
546
recommendations of international technical bodies” . This Section discusses the
law applicable to Argentina’s claim and demonstrates Uruguay’s full compliance
547
with all its legal obligations . As shown below, the Botnia plant will cause no
“pollution” within the meaning of the 1975 Statute.
546
Statute of the River Uruguay (hereinafter “ 1975 Statute”), Art. 41(a) (26 February 1975).
UCM, Vol. II, Annex 4. Argentina does not ha ve a separately cognisable claim under Article
27 because that article serves only to clarify that the provisions of Articet seq. are
applicable to industrial facilities.
547Argentina’s allegations regarding violatioof Articles 3 through 6 with respect to
navigational issues can be disposed of summarily . Argentina alleges that the increase in river
traffic as a result of the shipment of wood, ch emicals, and pulp to and from the Botnia plant
violates those provisions. AM, paras. 7.202-7. 204. Nothing in Articles 3 through 6 expressly
prohibits an increase in river barge trafancillary to a project, much less addresses the
subject. In any event, the Final CIS found that the operations of both the ENCE and the Botnia
plants combined would add 1.8 barge trips per da y to the already existing average of 5.3, but
that this amount was not signifi cant and would be offset by the reduction of traffic for the
current export of wood chips. International Fi nance Corporation, Cumulative Impact Study,
Uruguay Pulp Mills (hereinafter “Final CIS”)p. 4.93 (September 2006). UCM, Vol. VIII,
Annex 173. Even that change, of course, is less with the relocation of the ENCE plant. It is
also unclear the extent to which Argentina ialleging that an increase in vehicles within
Uruguay constitutes a violation of the 1975 Statut e. AM, paras. 7.202-204. Clearly, however,
impacts to vehicular traffic within the soverei gn territory of Uruguay are outside the scope of
the 1975 Statute, and in any event, it is unhow car and truck traffic could interfere with
the function of the river.
- 249 -4.10 The 1975 Statute is not a pure preservationist agreement. Although
Uruguay has always protected and will al ways protect the important ecological
values of the river, the 1975 Statute does not prohibit all discharges to the river or
require that the river be kept in an untouched state. Article 27 of the 1975 Statute
specifically affirms the right of each Party “to use the waters of the river, within its
jurisdiction, for domestic, sanitary, industr ial and agricultural purposes”, each of
which (except the first) could result in the discharge of potentially harmful
substances into the river. Accordingly, references in Article 41 to the Parties’
undertaking to “protect and preserve the aquatic environment” must be understood in
that context, and cannot be interpreted in a fashion that eviscerates a Party’s rights
under Article 27 .548
4.11 This interpretation is consistent with the entire schema of the 1975 Statute,
which, as discussed in Chapter 2, is predicated on the principle, set forth in Article 1,
of “optimum and rational utilization of the River Uruguay”, a concept that is
analogous with the 1997 Watercourse Conven tion’s concept of “fair and reasonable
use”. As explained in the Internationa l Law Commission’s commentary to its 1994
Draft Articles on the Non-Navigational uses of International Watercourses (later
548In its Order of 13 July 2006, the Court recognised:
the need to ensure environmental pr otection of shared natural resources
while allowing for sustainable economic development; whereas it is in
particular necessary to bear in mind the reliance of the Parties on the
quality of the water of the Urugu ay River for their livelihood and
economic development; whereas from this point of view account must be
taken of the need to safeguard the continued conservation of the river
environment and the rights of economic development of the riparian
States.
Case Concerning Pulp Mills on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2006, p. 19, para. 80 (13 July 2006). The Court’s order shows the need to balance uses
of the river permitted under Article 27 and enviro nmental protection. That is why the Parties
have agreed upon water quality standards within the framework of CARU, as will be discussed
herein.
- 250 -adopted as the 1997 Watercourse Convention) , this gives a State both the right to
utilise an international watercourse in an equitable and reasonable manner and the
obligation not to exceed its right to equitable utilisation. Accordingly, the 1975
Statute requires an equitable balancing of interests, which necessitates consideration
of both the objectives of economic developm ent and environmental protection. One
is not privileged over the other. Rather, they are to be treated in an integrated
fashion.
4.12 The 1975 Statute’s definition of “pollution” as the introduction of
“substances” into the Uruguay River that have “harmful effects” conforms to
generally accepted norms found in many environmental agreements, including
549
Article 1(4) of the 1982 UN Convention on the Law of the Sea and Article 21(1)
of the 1997 UN Convention on the Non-na vigational Uses of International
Watercourses . Discharges constitute pollution only after they reach a certain level
of seriousness, either in volume or in the context of their location. For example,
Principle 6 of the 1972 Stockholm Declarati on on the Human Environment refers to
the discharge of toxic substances “in such quantities or concentrations as to exceed
551
the capacity of the environment to render them harmless” . By defining pollution
549United Nations Convention on the Law of the Sea (hereinafter “1982 Convention”), Art.
1(4) (1982) (pollution exists where there is “har m to living resources and marine life, hazards
to human health, hindrance to marine activities, including fishing and other legitimate uses of
the sea, impairment of quality for use of sea water and reduction of amenities”).
550
Convention on the Law of the Non-navigati onal Uses of International Watercourses
(hereinafter “1997 Watercourse Convention”), Arts. 21(1)-(2) (1997) (defining pollution as
“any detrimental alteration in the composition or quality of the waters of an international
watercourse which results directly or indir ectly from human conduct”, including “significant
harm” to “human health or safety, to the use of the waters for any beneficial purpose or to the
living resources of the watercourse”).
551Declaration of the United Nations Conf erence on the Human Environment, UN Doc
A/CONF/48/14/REV.1 (1972).
- 251 -as “substances” that have “harmful” e ffects, the 1975 Statute therefore does not
impose a categorical prohibition on discharges into the river.
4.13 The Parties’ intention not to ban all discharges is confirmed by their
subsequent practice. Argentina, in part icular, has taken full advantage of its
qualified right to allow discharges into the Uruguay River. The IFC’s independent
experts noted that while in general “the qua lity of the water in the Uruguay River is
considered good”, there is localised deterior ation on the Argentine side of the river,
due primarily to runoff from areas of inte nse agricultural use and discharges from
urban centres and industries with inadeq uate effluent treatment, notably at
Concordia, and Concepción del Uruguay (Argentina) 552. As discussed in Chapter 2,
Argentina has authorised more than 50 indus trial facilities on its side of the river
since the 1975 Statute came into effect, including more than 25 at the Gualeguaychú
Industrial Park, which release effluents in to the Gualeguaychú River, the principal
tributary of the Uruguay River 553. Indeed, much of the present pollution in the
vicinity of the Botnia plant comes from Argentina, and Argentina itself
acknowledges that pollution emanating from sources discharging into the
Gualeguaychú River causes high concentr ations of phosphorus and organic matter
on the Argentine side of the Uruguay River 55. Thus, the Botnia plant will hardly be
the first to make discharges to the Uruguay River.
552Final CIS, op. cit., p. ES.xi. UCM, Vol. VIII, Annex 173.
553
See infra, Chap. 2, paras. 2.140-2.150.
554
AM, para. 6.32.
- 252 - B. CARUR EGULATIONS D EFINE THE SUBSTANTIVE PERFORMANCE S TANDARDS
OF THE 1975 S TATUTE
555
4.14 The 1975 Statute created CARU . Among its other functions (described
in Chapter 2556), CARU serves as a forum in which Argentina and Uruguay establish
mutually agreeable, comprehensive, and enforceable environmental norms and
regulations that both Parties deem adequa te to protect the Uruguay River. The
Parties achieved this objective by mandati ng that CARU have an equal number of
representatives from Argentina and Uruguay and that each delegation have only one
vote. As a result, the rulemaking author ity of CARU can be exercised only by
achieving the consensus of both the Argentine and Uruguayan delegations 557. Any
rule or standard promulgated by CARU therefore has the express endorsement of
both State Parties.
4.15 The 1975 Statute expressly gives CA RU the competence to promulgate a
comprehensive regulatory regime for the Urugu ay River. In that regard, Article 56
requires that CARU “shall perform” certain enumerated “functions” 558. Included
among these functions is the requireme nt that CARU draft binding “rules
governing”, among other things, the “cons ervation and preservation of living
resources” and the “prevention of pollution” 559. CARU has no discretion in this
555
1975 Statute, op. cit., Art. 50 (“The Commission shall be made a legal entity in order to
perform its functions.”). UCM, Vol. II, Annex 4.
556
See infra, Chap. 2, paras. 2.140-2.150.
557
1975 Statute, op. cit., Arts. 49-50, 55.
558
Ibid., Art. 56 (“The Commission shall perform the following functions…”).
559
Ibid., Art. 56(a)(2) & (4).
- 253 -matter; Article 56’s use of the word “shall” obligates CARU to enact such
regulations 56.
4.16 Complementing CARU are the respective State Parties to the 1975 Statute,
which may enact binding environmental re gulations on those matters that CARU
decides not to regulate. Under Article 41, the Parties “ undertake”, among other
things, to “protect and preserve the aquatic environment and, in particular, to prevent
its pollution, by prescribing appropriate rules and measures” 561. However, the
assignment of this responsibility to the Stat es is subject to an important limitation
that Argentina conspicuously ignores -- Argentina and Uruguay’s authority to
prescribe such rules and measures is expressly made “without prejudice to the
562
functions assigned to the Commission in this respect” . This has important
implications for determin ing the substantive obligat ions imposed by the 1975
Statute 563.
4.17 First, by making the Parties’ undertaking to adopt environmental rules and
measures “without prejudice” to the functions assigned to CARU, the 1975 Statute
requires that, in circumstances where an environmental standard promulgated by
CARU conflicts with one adopted by a Stat e, the CARU standard controls. Thus,
560
Other areas that CARU is obligated to regulate include safety of navigation on the river and
use of the main channel; pilotage; and the insta llation of pipelines and cables under the river or
in the air. See ibid., Arts. 56(a)(1), (a)(3), & (a)(5).
561
Ibid., Art. 41 & 41(a).
562
Ibid., Art. 41.
563
Argentina has a confused view of the relati onship between CARU and the State Parties with
regard to their respective regulatory authority under Articles 41 and 56. Argentina appears
mistakenly to believe that CARU regulations set forth in the Digest are promulgated pursuant
to Article 41 of the 1975 Statute. AM, para. 3.133. In fact, as explained above, it is Article 56
that bestows upon CARU plenary competence to construct a comprehensive regulatory regime
for the Uruguay River.
- 254 -neither domestic legislation nor the permitting of a facility may supersede a CARU
standard.
4.18 Second, it means that a decision by CARU not to exercise its authority to
the fullest extent authorised by Article 56 necessarily means that Argentina and
Uruguay may regulate these areas as they see fit. This is what has occurred with
regard to certain water qu ality standards, which are regulated under Uruguayan law
564
by Article 5 of Decree 253 of 1979 .
4.19 Finally, CARU may adopt certain baseline standards, but leave it up to the
respective States to determine how to ensure compliance with those standards. This
is what CARU has done with respect to water quality. Although CARU has the
competence under Article 56 to impose discharge limits, it has chosen not to do so.
Instead, CARU has enacted water quality standards -- that is, maximum allowable
concentration levels of particular substances that may be present in the river at any
given time -- and left it to Argentina and Ur uguay to decide how to ensure that these
water quality standards are not exceed ed. Thus, Uruguayan law establishes
565
maximum effluent discha rge limits in Article 11 of Decree 253 of 1979 ; any
discharge in excess of those limits is prohibited, and the Minister of the Environment
is authorised to establish new standards if necessary to protect the quality of the
water under Article 14 of the same decree. Uruguay’s discharge limits are calculated
to ensure that the applicable CARU water quality standards are not exceeded.
564Decree No. 253/79, Regulation of Water Qualit y (hereinafter “Decree No. 253/79”), Art. 5
(9 May 1979, as amended). UCM, Vol. II, Annex 6.
565Ibid., Art. 11.
- 255 - C. A RGENTINA AND U RUGUAY H AVE,T HROUGH CARU,A GREED U PON THE
ENVIRONMENTAL STANDARDS FOR THE U RUGUAY R IVER
4.20 Argentina and Uruguay are in agreement that CARU has fulfilled its
mandate to enact rules and regulations for the environmental protection of the
Uruguay River. In the years following th e signing of the 1975 Statute, the Parties,
operating through CARU, created a care fully drawn regime regulating the
prevention of pollution in accordance with Article 41. The applicable rules are
found in the CARU Digest, at Subject E3. Argentina does not dispute that CARU
has enacted such a regime or that it ibinding upon the Parties. To the contrary,
Argentina expressly concedes that “La CARU a édicté des standards relatifs à la
qualité des eaux” and that “[c]es standards sont compilés dans les sections E3 . . .
566
du Digest” . Moreover, Argentina adm its that “[l]’object et le but de Digeste” is
“de protéger et de préserver le milieu aquatique et son équilibre écologique” and
“d’assurer toute utilisation légitime des eaux en tennant compte de nécessités à long
567
terme et particulièrment celles relatives à la consommation humaine.
4.21 Nor does Argentina dispute that CA RU standards establish the substantive
obligations concerning pollution imposed by the 1975 Statute. Argentina admits that
the environmental rules contained in these sections of the Digest are “l’expression
directe de la volonté des parties et de leur interprétatīon des dispositions du Statut de
1975” 56. As Argentina stated in a 1990 diploma tic note, CARU standards set forth
in Subject E3 “déterminent les principe s normatifs essentiels pour prévenir la
566AM, para. 3.147. (“CARU has issued standards for … water quality”) (“[t]hose standards
are compiled in sections E3 . . . of the Digest.”).
567AM, para. 3.150. (“[t]he object and purpose of the Digest”), (“to protect and preserve the
aquatic environment and its ecological equilibrium”).
568AM, para. 3.147. (“the direct expression of the desire of the two parties and their
interpretation of the provisions of the 1975 Statute”).
- 256 - 569
contamination des eaux du fleuve et définir les standards de qualité de ces eaux.”
The Parties are thus in agreement that a determination of whether a Party has
satisfied its substantive oblig ations under the 1975 Statute with respect to pollution
is made by measuring the Party’s action against the applicable CARU regulations,
namely Subject E3 (prevention of pollution).
4.22 The State practice of the Parties fu rther confirms that CARU is endowed
with the competence to promulgate aut horitative environmental standards that
embody the substantive obligations imposed by the 1975 Statute. In the early years
of CARU, the question arose as to whether CARU had independent authority to
issue binding norms and regulations, or whet her these required the approval of the
Parties’ respective Foreign Ministers. In 1981, it was definitively resolved that
CARU regulations do not require such approval. As stated by Uruguay’s
Ambassador González Lapeyre:
It is fitting to make the distin ction between resolutions that are
binding on the Parties and resolutions that do not have that
character. The resolutions that are indicated within the
provisions of the Treaty are directly binding on the State Parties.
The others that are adopted by in terpretation, analogy, extension
or advice do not have a binding character, and they would have
to be ratified by an exchange of corresponding diplomatic notes
between both Governments. But in this case, in which there
exists an express provision that leaves this issue to the
Commission, the resolution that is adopted on the issue binds
570
both Governments .
Given these long-standing views of CARU and the regulations codified in the
Digest, it is indisputable that the Digest is the dispositive standard by which alleged
substantive violations must be judged.
569AM, para. 3.148. (“determine the essential normative principles for preventing the pollution
of the river’s water and define the quality standards of those waters”).
570CARU Minutes No. 5/81, pp. 225-230 (21 August 1981). UCM, Vol. IV, Annex 66.
- 257 -4.23 The Digest constitutes the codifi cation of the binding norms that CARU
has established with respect to the govern ance of the Uruguay River pursuant to the
1975 Statute. It was recognized early in CARU’s history that “the Digest is the Law
of the River, applicable in full both fo r the authorities and for the users, and it will
also be a source of reference and application for the respective courts whenever they
might act on issues under their jurisdiction referring to the river” 571. Argentina
572
agrees that this continues to be the case .
4.24 Subject E3 of the Digest, entitled “Pollution”, sets forth the environmental
norms and regulations governing the Uruguay River. The stated purposes of Subject
E3 demonstrate that a Party’s compliance with the environmental norms and
standards established therein is intended to be dispositive of whether it has satisfied
its substantive obligations. Specifically, the purposes of Subject E3 include the
following:
• To protect and preserve the a quatic medium and its ecological
equilibrium;
• To ensure any legitimate use of the water considering long term needs
and particularly human consumption needs; and
• To prevent any new form of pollution and to procure its reduction
when the values of the standards adopted for the different legitimate
uses of the waters of the river are exceeded.
The language used to describe the purposes of Subject E3 parallels that which
describes the obligations of CARU set forth in Article 56(a) of the Statute, and those
of the Parties in Article 41. This reflects the understanding of the Parties that they
571CARU Minutes No. 2/81, pp. 47-55, Annex, pp. 62-64 (11 March 1981). UCM, Vol. IV,
Annex 65.
572AM, paras. 3.147-3.152.
- 258 -were creating enforceable, binding norms to which they would refer in determining
their compliance with the substantive obligations of Article 41.
4.25 CARU regulates the water quality of the Uruguay River and the presence
of pollution therein primarily through the development of water quality standards,
while leaving to the Parties the responsibilit y to determine the discharge limitations
of any given source 573. The Digest defines water qua lity standards as “the numeric
concentration levels or specific reco mmendations for water quality parameters,
which are set forth as a permanent reference both for allowing the legitimate uses of
574
the water and adopting measures aimed at preventing pollution” . The Digest
enumerates four different classes of water use and then specifies the acceptable
levels of various contaminants that may not be exceeded for each use.
4.26 Although Article 56(a)(4)’s grant of regulatory authority to CARU to
prevent pollution includes the authority to set discharge limitations for all potential
sources of pollution, CARU has decided not to set its own discharge limits. Rather,
it has generally left the determination of discharge limitations to the Parties.
Specifically, the Digest provides that:
Each Party will dictate the standards to which effluents that
could enter the river from activities carried out in its jurisdiction
must conform. In said regulations, the Parties will take into
account the water quality standards incorporated into Chapter 4
of the present Title 575.
573The Digest does set forth discharge limitations for a limited number of substances, Digest of
the Administrative Commission of the Uruguay River (CARU), Subject E3 (hereinafter
“CARU Digest Subject E3”), Title 2, Chap. 5, Art. 7 (1984, as amended), UCM, Vol. IV,
Annex 60, but the discharges of the Botnia plant will not contain, and Argentina does not allege
that they will contain, any of those substances.
574
Ibid., Title 1, Chap. 1, Sec. 2, Art. 1(f).
575Ibid., Title 2, Chap. 5, Art. 1.
- 259 -4.27 By choosing not to exercise CARU’s authority to set discharge limits, but
to allow each of themselves to do so, the Parties have established a system that
allows each State a high degree of flexibility in regulating projects within its borders.
Discharges from each of the States’ jurisdictions are permitted regardless of the
concentration of their effluent, so long as the activity does not itself cause an
exceedance of CARU water quality standards. In other words, each State is
permitted to structure its industrial, agricultural, or municipal development
according to the environmental protection regime of its choosing, so long as it does
not cause an exceedance of a CARU water quality standard.
4.28 CARU water quality standards are the product of mutual agreement
between Argentina and Uruguay. Achieving consensus is the cornerstone of the
decision-making process of CARU. Article 50 specifically provides that CARU will
be composed of an equal number of delegates from each Party, and Article 55
provides that, with respect to the adoption of decisions by CARU, each delegation of
the Parties shall have one vote. This pr ocess ensures that, for CARU to make a
decision, agreement between the Argent ina delegation and the Uruguay delegation
must be achieved. Therefore, Argentin a cannot assert that the water quality
standards of the CARU regulatory framework are inadequately protective when they
are the result of its express consent and it had an equal role in developing them.
4.29 Moreover, CARU has an affirmative duty periodically to assure that its
regulatory framework and norms are sufficiently protective of the environment.
Article 2 of Title 2, Chapte r 1, Subject E3 specifically provides that CARU has the
responsibility of undertaking the revision of the water quality standards and the
conditions for discharges every three years, and of modifying them if necessary. In
- 260 -fact, CARU approved changes to the water quality standards for Use 4 (crude or raw
waters destined for public supply) and Use 2 (waters used for recreation with direct
576
human contact) as recently as 14 September 2004 .
4.30 CARU has done its job well. Its water quality standards are comparable to
those promulgated by other internationally respected environmental regulators. The
IFC’s independent experts compared CARU water quality standards favourably with
those of the European Union, Australia, and the World Health Organization, among
577
others . These experts concluded that “[a]lthough there are differences, the surface
water quality standards of . . . CARU are comparable and therefore considered as
578
protective of the environment as those of other agencies” . There is thus no basis
to suggest that CARU water quality standards are out of line with international
norms, and Argentina does not so suggest.
4.31 In sum, CARU, after careful c onsideration and by agreement of the
Parties, has devised strict and binding water quality standards that are protective of
the Uruguay River. As explained in the following Section, the Botnia plant will
fully comply with these standards and all other applicable CARU regulations.
576These changes were inserted into the Dige st as an official matter on 5 May 2006. The
modification of the water quality standards for Us e 2 waters is particularly notable because
much of Argentina’s claim centres on the concern that a deterioration of water quality will
affect tourism. Had Argentina felt that the water quality standards were inadequately
protective, it was free to propose amending them to its satisfaction.
577
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills, Annex D
(hereinafter “Final CIS, Annex D”), pp. D2.5, D2.9-D2.10 (September 2006). UCM, Vol. VIII,
Annex 176.
578
Ibid., p. D2.5.
- 261 - D. U RUGUAY H ASE NSURED THAT THEB OTNIAPLANT C OMPLIES WITH THE
APPLICABLE POLLUTION PREVENTION LAWS AND R EGULATIONS
4.32 As explained above, Argentina and Uruguay have agreed upon water
quality standards that implement the subs tantive pollution prevention requirements
of Article 41, which are set forth in Subject E3 of the CARU Digest. This Section
demonstrates that the Botnia plant will not cause an exceedance of any water quality
standard found in Subject E3. First, Botn ia is required by Uruguay’s environmental
laws to comply with CARU water qua lity standards. Second, the Initial
Environmental Authorisation that Uruguay gave to Botnia expressly requires the
Botnia plant to comply with all CARU water quality standards. Third, the plant uses
state-of-the-art pollution control systems that render negligible any environmental
impacts. Fourth, scientific modelling conducted by the IFC’s independent technical
experts confirmed that the Botnia plwill not cause any exceedances of CARU
standards. Fifth, Argentina has not alleged, much less s hown, that the Botnia plant
will cause exceedances of CARU standards. Sixth, even if, contrary to the scientific
evidence and the conclusions of the IFC’s independent experts, an exceedance of
CARU water quality standards occurs, the comprehensive post-operation monitoring
that Uruguay has required will detect any such impacts, and Uruguay will ensure that
Botnia adopts any necessary remedial meas ures, up to and including a shutdown of
the facility.
- 262 - 1. Uruguay Has Required Botnia to Comply with the CARU Water Quality
Standards
4.33 The Botnia plant is required to operate in compliance with CARU water
quality standards. Specifically, Uruguay has made compliance with CARU water
quality standards an explicit condition of the Botnia AAP. In that regard, Botnia’s
AAP expressly provides that “t he water quality standards applicable for the project
shall be the lesser [i.e., the more stringent] of those established in Decree 253/79 and
its amendments (including the values dete rmined by OSE - the State Waterworks
579
Agency - in applying Article 8) and in the regulations issued by the [CARU]” .
That the Botnia plant “must independently comply with the water quality standards
by CARU” has been confirmed by the Director of DINAMA in her affidavit
submitted to the Court in June 2006 in c onnection with Argentina’s request for
provisional measures 580.
2. The Botnia Plant’s State-of-the-Art Anti-Pollution Systems Ensure Compliance
with the CARU Water Quality Standards
4.34 To ensure compliance with CARU water quality standards, Uruguay has
required the Botnia plant to use stat e-of-the-art anti-pollution technology 581.
Because of this advanced technology, the plant’s effluent discharge levels will be
among the lowest in the world. As the IF C’s independent experts found, the Botnia
582
plant will perform among the top 5% of pulp mills in North America and Europe ,
579
MVOTMA Initial Environmental Authorisation for the Botnia Plant (hereinafter “Botnia
AAP”), Art. 2(aa) (14 February 2005). UCM, Vol. II, Annex 21.
580
Sworn Declaration of Alicia Torres, Director of Department of the Environment (hereinafter
“Torres Aff.”), sec. VII, para. B(7) (June 2006). UCM, Vol. II, Annex 30.
581Botnia AAP, op. cit., Art. 2(bb) (requiring the Botnia plant to comply with IPPC BAT).
UCM, Vol. II, Annex 21.
582Final CIS, op. cit., p. 2.21. UCM, Vol. VIII, Annex 173.
- 263 -and all BAT removal efficiencies ( i.e., the plant’s ability to remove contaminants
from its discharge) will be met or exceeded 583. In that regard, the Botnia plant
employs an Elemental Chlorine Free light (“ECF-light”) bleaching process, which,
as discussed in Chapters 5 and 6, is ex tremely protective of the environment and
virtually eliminates the discharge of dioxi ns and furans. In compliance with the
IPPC BAT, the wastewater treatment plant employs both a primary treatment system
584
and an advanced secondary treatment system involving activated sludge treatment .
Other features of the plant’s state-of-the-a rt anti-pollution technology are discussed
in Chapters 5 and 6.
3. The IFC’s Independent Experts Have Confirmed that the Botnia Plant Will
Comply with the CARU Water Quality Standards
4.35 Later sections of this Chapter show that DINAMA required and obtained
definitive proof that the Botnia plant will not cause exceedances of CARU water
quality standards. However, the Court need not rely on Uruguay alone for proof of
compliance with those standards. The comprehensive analysis conducted by the
IFC’s independent technical experts also confirms that the Botnia plant will not
cause exceedances of CARU water quality st andards. As described in detail in
Chapter 5, the IFC’s independent expe rts conducted sophistic ated scientific
modelling to forecast the plant’s impact on water quality. They concluded that the
plant’s operations will have no appreciable impact on the quality of the water in the
Uruguay River 58. According to the IFC’s expe rts: “CARU has developed water
583International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills, Annex A
(hereinafter “Final CIS, Annex A”), p. A8.10 (September 2006). UCM, Vol. VIII, Annex 174.
584Final CIS, op. cit., p. 2.22. UCM, Vol. VIII, Annex 173.
585The only exception was the possibility of ex ceedances in the small area immediately
adjacent to the point of discha rge. Subject E3 the Digest defines the area immediately
- 264 -quality standards that the mills must comply with. These standards are approved by
the Governments of Argentina and Uruguay and are considered by these
Governments as acceptable and adequately protective of the aquatic environment of
586
the Río Uruguay” . The experts concluded that the Botnia plant will not violate
any of the water quality standards, and so stated in categorical terms: “The mill
operations will comply with the water quality standards provided by CARU” 58.
4. Argentina Does Not Allege that Any CARU Standard Will Be Breached
4.36 Argentina’s Memorial is striking for a conspicuous omission -- it does not
allege that operation of the Botnia plant will cause any CARU water quality standard
to be exceeded. Its inability to make that allegation is all the more notable because
Argentina clearly hoped to be able to assert that claim. In fact, an entire section of
the Memorial is entitled “L’Uruguay N’A Pas Pris Toutes Les Mesures Propres à
Empècher La Pollution en N’Appliquant Pas Les Standa rds de La CARU” 588. Yet,
nowhere does Argentina actual ly allege that Uruguay ha s permitted a discharge in
589
violation of any particular standard adopted by CARU . In this regard, Uruguay
surrounding a discharge point as a “mixing zone”, where compliance with CARU water quality
standards is not required. The Court, however, need not be concerned with this geographically-
limited exceedance, since Argentina and Uruguay have expressly agreed that such exceedances
are permitted. In that regard, Uruguay has co mplied with all requests for the mixing zone,
including giving notice to CARU. CARU Digest Subject E3, op. cit., Title 2, Chap. 5, Sec. 1,
Arts. 4, 5. UCM, Vol. IV, Annex 60. See generally Diplomatic Note CARU-ROU No. 032/07
sent from President of the CARU Uruguayan Delegation to the Argentine President of CARU
Notifying CARU of Mixing Zone for the Botn ia Mill (25 May 2007). UCM, Vol. IV, Annex
125.
586
Final CIS, op. cit., p. 4.56. UCM, Vol. VIII, Annex 173.
587
Ibid.
588
AM, Chap. 5, Sec. III(b). (“Uruguay Did No t Take All Necessary Measures to Prevent
Pollution by Failing to Abide by the CARU Standards”).
589Argentina has not challenged the conclusion that the plant will not cause any exceedances of
these standards. Although the technical cons ultants retained by Argentina expended
tremendous efforts analysing the potential impacts of the Botnia plant, none asserted, much less
- 265 -invites the Court to review paragraph 5.78 of Argentina’s Memorial. It will find no
mention of any particular water quality standard esta blished by CARU that the
Botnia plant will violate. It will find no mention of any particular substance that will
be discharged by the Botnia plant in exceedance of CARU standards.
5. The Botnia Plant Will Not Cause an Exceedance of Uruguay’s Phosphorus
Standard
4.37 Unable to allege that the Botnia plant will cause an exceedance of CARU
water quality standards, Argentina tries to save its case on pollution by alleging that
the Botnia plant will cause an exceedance of a Uruguayan standard, namely
Uruguay’s standard for phosphorus. Arge ntina’s claim regarding phosphorus is
baseless.
4.38 As an initial matter, Argentina fails to inform the Court that CARU did not
set a water quality standard for phosphorus. Similarly, CARU could have, but did
not, create a mandatory discharge limit for phosphorus. Of course, there is nothing
improper about CARU’s decisi ons in that regard. Under the 1975 Statute, it is
CARU’s prerogative to delegate such matters to the State Parties individually. In
this regard, it is worth noting that CARU had the opportunity to set a phosphorus
standard and/or a discharge limit as recently as 2006, but Argentina did not propose
590
such regulations . Had Argentina felt that a CARU water quality standard or a
discharge limit for phosphorus was needed to protect the Uruguay River, Argentina
was free to propose one. It is notable, therefore, that Argentina chose not to do so.
demonstrated, that the Botnia plant will case an exceedance of any CARU water quality
standard.
590See generally Digest of the Administrative Commission of the Uruguay River (CARU),
Subject E3 (June 2006 proposed revisions). UCM, Vol. IV, Annex 62.
- 266 -4.39 Consistent with its delegation of authority from CARU, Uruguay, as an
environmentally responsible State, prom ulgated both a phosphorus water quality
standard and a phosphorus discharge limit. Uruguay’s water quality standard is
particularly rigorous (0.025 mg/L for drinking water), and in fact is more demanding
591
than even the European Union’s phosphorus standard . Decree 253/79 also sets
forth a strict phosphorus discharge standard of 5 mg/L, with which the Botnia plant
must comply.
4.40 Argentina, in contrast, has not enacted a water quality standard for
phosphorus. Neither has Argentina create d a phosphorus discharge limit. Thus,
Argentine industrial facilities and municipalities are unrestrained by regulation from
dumping large quantities of phosphorus into the river. The result is not surprising:
areas on the Argentine side of the river exhibit high amounts of phosphorus 592.
Uruguay thus finds itself in the remarkable position of being accused of contributing
to the violation of its own water quality standard for phosphorus by a State that has
decided that a phosphorus standard is unnece ssary, and that imposes no restrictions
whatsoever on phosphorus discharges from its territory.
4.41 Leaving aside the contradictory, double-standard that Argentina advocates,
Uruguay has taken action to ensure that the Botnia plant will not pollute the Uruguay
River with phosphorus. The Botnia plant is required both under general Uruguayan
law and as a strict condition of its AAP to comply with a 5 mg/L discharge limit.
591Final CIS, Annex D, op. cit., p. D2.5. UCM, Vol. VIII, Annex 176.
592Ibid., p. D6.15. See also ibid., D6.30 (Table D6.4-1) (showing baseline phosphorus levels at
point on the Argentine side of the river to be 0.200 mg/L under extreme low flow conditions),
and pp., D6.30-D6.31 (Tables D6.4-2a, D6.4-2b) (showing base line phosphorus levels at
Ñandubaysal to be 0.100 mg/L during extreme lo w flow and flow reversal with low flow
conditions). See also D3.20 (Table D3.2-2) (showing baseline concentration of phosphorus at
the discharge of the Gualeguaychú River to be 0.102 in 2005).
- 267 -And, as set forth in Chapter 7, Uruguay mand ates a strict regime of monitoring that
will rapidly detect any exceedance of this standard, and will require immediate
remedial action to bring the plant into co mpliance with the standard. Accordingly,
there is no basis to the claim that the Botnia plant will cause Uruguay’s water quality
standard for phosphorus to be exceeded.
4.42 Although it is true that, after Botn ia commences operation, the river will
display a phosphorus concentration that exceeds the Uruguayan standard, that is
because the river already exceeds the standard, due to phosphorus being discharged
into the river indiscriminately by Argentin a. Argentina itself acknowledges that the
elevated level of phosphorus at the beach area at Ñandubaysal is most likely caused
by its proximity to the mouth of the Gu aleguaychú River, which carries effluents
from the Gualeguaychú Industrial Park and sewage from the City of Gualeguaychú,
among other sources of phosphorus, into the Uruguay River a short distance
593
upstream from Ñandubaysal .
4.43 The Botnia plant will not cause a harmful increase in phosphorus in the
river. In that regard, independent modelling by the IFC’s technical experts
demonstrated that under almost all conditions , operation of the Botnia plant and the
ENCE plant (combined) would not cause any measurable increase in the phosphorus
level. It is only under the rare occurrence of low or reverse flow of the river that the
level of phosphorus would measurably increase at all, and even then only
temporarily, in isolated locations, and by a miniscule amount. For instance, the
IFC’s technical experts found that at Yaguareté Bay on the Uruguay side of the river,
the existing phosphorus concentration is 0.220 mg/L. If both the Botnia and ENCE
593
AM, para. 6.32.
- 268 -plants were operating, it would remain at 0.220 mg/L. If both plants were operating
and there was low flow, the phosphorus concentration would increase by only the
insignificant amount of 0.001 mg/L, to 0.221 mg/L. Similarly, at Fray Bentos (also
on the Uruguay side), under average flow conditions, operation of both plants
(combined) would have no impact on the level of phosphorus; it would remain at
0.140 mg/L. Under low flow conditions, it would increase by only 0.002 mg/L, to
0.0142 mg/L (assuming the operation of both plants). Likewise, at Esteros de
Farrapos/Islas del Río Uruguay (again, on the Uruguay side), the current level of
phosphorus is 0.140 mg/L, and would rema in at 0.140 mg/L under normal flow
conditions even if both the ENCE and Botnia plants were operating. Under low flow
and reversal conditions, and with both plants operating, it would rise by only 0.001
mg/L, to 0.141 mg/L. Finally, at Ñandubaysal (on the Argentine side), the current
phosphorus level is 0.100 mg/L. Under normal conditions and if both the ENCE and
Botnia plants were operating, it would rise by only 0.001 mg/L, to 0.101 mg/L, and
would remain at that level even under low flow and reverse flow conditions 59.
4.44 As these results show, under normal conditions there will be no elevation
of the level of phosphorus in the river. It is only during the temporary and
infrequent instances of low flow and when both plants are operating that the river
would show any increase in phosphorus, and ev en then only to a miniscule extent in
a few isolated locations. And it is wo rth emphasising that the IFC’s modelling
overstates the discharge of all substan ces into the river, including phosphorus,
because the IFC’s experts assumed that both the Botnia and the ENCE plants would
be in operation. Without the ENCE plan t, impact on the river of any phosphorus
594
Final CIS, Annex D, op. cit., pp. D6.19-D6.32. UCM, Vol. VIII, Annex 176.
- 269 -discharged by the Botnia plant alone will be even less significant. The elimination
of the ENCE plant cuts the flow of efflue nts to the river by 40%, and the change in
phosphorus concentrations will fall by 41%.
4.45 Phosphorus can affect the health of a river because it can -- in some
instances -- contribute to eutrophication, which is the slow process by which a water
body evolves into a bog or marsh due to l ong-term increases in concentration of
nutrients, such as phosphorus. However, as found by the IFC and as supported by
Uruguay’s own analysis, even during rare low flow conditions, the increase in
phosphorus from the discharge of the Botnia plant at any relevant location would be
less than 2% and well within the natural va riability of phosphorus concentrations in
595
the river . It thus presents no risk of eutrophication or other harm to the river.
6. Comprehensive Monitoring Will Ensure Compliance with the CARU Standards
4.46 Finally, as discussed in detail in Chapter 7, even if, despite all the
evidence, the Botnia plant were to cause exceedances of any water quality standards,
there would be no significant harm to the ri ver or its aquatic environment. Uruguay
has mandated a sophisticated and comprehe nsive program of monitoring that will
ensure that any such exceedances are rapi dly detected. Uruguay has the authority to
require that Botnia take all necessary measures to stop such impacts, including
halting operation of the plant, and it hereby reaffirms its commitment to exercise that
authority should any violations of CARU or Uruguayan standards be detected.
595
See ibid. , pp. D6.19-D6.32. See also Dr. Charles A. Menzie, Evaluation of the Final
Cumulative Impact Study for the Botnia S.A.’s Bleached Kraft Pulp Mill (Fray Bentos,
Uruguay) with Respect to Impacts on Water Qua lity and Aquatic Resources and with Respect
to Comments and Issues Raised by the Government of Argentina (Exponent, Inc.), pp. 26-27 &
Ex. 5.5 (July 2007). UCM, Vol. X, Annex 213.
- 270 - Section II.
Uruguay has Ensured that the Botnia Plant Will Not Alter the Ecological
Balance of the River Uruguay in Violation of Article 36 of the 1975 Statute
4.47 Argentina’s allegation that the Botnia plant will detrimentally affect the
ecological balance of the Uruguay River is as baseless as its assertion that Uruguay
has not adequately prevented pollution. This Section demonstrates that the Botnia
plant will fully comply with Uruguay’s obl igations to protect the ecological balance
of the river.
A. CARUR EGULATIONS IMPLEMENT THE PARTIES ’O BLIGATIONS U NDER
A RTICLE 36
4.48 Argentina’s claim concerning the ecological balance of the river is based
on Article 36, which provides that the “Parties shall coordinate, through the
Commission, the pertinent measures to prevent any alteration of the ecological
balance and to control pests and other harm ful factors in the river and its areas of
596
influence” . As with the prevention of pollution, the Parties’ substantive
obligations under Article 36 are given specifi city in regulations adopted by CARU.
In that regard, among the enumerated func tions that CARU “shall perform” that are
listed in Article 56 is the requirement th at CARU adopt binding “rules governing”
the “conservation and preservation of living resources” 597. The central role of
596
Argentina’s claim also purports to be based on Articles 35 and 37. These arguments may be
dismissed summarily. Article 35 provides that “[ t]he Parties undertake to adopt the necessary
measures to ensure that the management of the soil and woodland and the use of groundwater
and the waters of the tributaries of the r do not cause changes which may significantly
impair the regime of the river or the quality of the waters.” However, Argentina does not make
any arguments that are based on Uruguay’s management of soil or woodlands. Nor has it made
any allegations concerning the waters of tributarie s. Accordingly, Article 35 is inapplicable to
the present dispute. Argentina’s claim based on Article 37 fails for similar reasons. Article 37
provides that “[t]he Parties shall agree on rule s governing fishing activities in the river with
regard to the conservation and preservation oliving resources.” However, nothing in the
Memorial states a claim based on “fishing activities”.
5971975 Statute, op. cit., Art. 56 (a)(2). UCM, Vol. II, Annex 4.
- 271 -CARU in maintaining the ecological balance of the river is confirmed by Article 36
itself, which establishes that the Parties’ obligations under that Article “shall” be
“coordinate[d]” through CARU. Argentin a and Uruguay are in agreement that
CARU has enacted rules that implement the substantive obligations of Article 36.
As Argentina states in its Memorial, the “[l]’objet et le but du Digeste” is to
“protéger et de préserver le milieu aquatique et son équilibre écologiqu.”
B. U RUGUAY H ASE NSURED COMPLIANCE WITH SUBJECT E3 OF THE CARU
D IGEST
4.49 CARU regulations governing the ecological balance of the river are found,
in the first instance, in Subject E3 of the CARU Digest. Subject E3 expressly states
that one of its “purposes” is to protect and preserve the “ecological balance” of the
river. Subject E3’s use of the term “ecological balance”, which precisely mirrors the
language found in Article 36 of the 1975 Statute, leaves no doubt that it is intended
599
to implement the State Pa rties’ substantive obligations under that Articl. This
linkage of the water quality of the river with its ecological balance is sound; the
health of an aquatic ecosystem is inextricably connected to the level of contaminants
in its water. As discussed in Section I above, it is beyond dispute that none of
CARU water quality standards will be violated by operation of the Botnia plant, and
Argentina makes no such claim. The IFC’s independent experts specifically found
that the discharges from both the ENCE and the Botnia plants (combined) would not
cause exceedances of either CARU or th e Uruguayan water quality standards, and
598AM, para. 3.150. (“[t]he object and purposthe Digest” is “to protect and preserve the
aquatic environment and its ecological equilibrium”).
599CARU Digest Subject E3, op. cit., Title 1, Chap. 2, Art. 1(a). UCM, Vol. IV, Annex 60.
- 272 -they concluded that “[t]he mill discharge will therefore have no adverse effect on
600
human health or aquatic life” .
C. U RUGUAY HAS E NSURED C OMPLIANCE WITH SUBJECT E4 OF THE CARU
D IGEST
4.50 The Parties have further implem ented the substantive obligations of
Article 36 by enacting binding rules that are located in Subject E4 of the CARU
Digest. These rules state that they “have as their object the regulation of the
conservation and preservation of the living resources of the River and promotion of
the investigation of the same in accord ance with the provisions of Chapter IX,
Articles 36, 37, 38, and 39 [of the 1975 Statute]”01. Argentina itself acknowledges
that “La CARU a édicté des standards” for the “conservation et à la préservation des
ressources biologiques de fleuve Uruguay” that are “sont compilé. . . en E4 du
Digeste” 60. Moreover, with respect to Subject E4, Argentina stated in a 1995
diplomatic note that this s ection of the Digest “determine les règles pour rendre le
possible la conservation, l’utilisation et la préservation des ressources vivantes dans
603
le tronçon du fleuve Uruguay partagé” .
4.51 As with Subject E3, Uruguay has re quired compliance with all applicable
CARU regulations in Subject E4, thereb y ensuring that there will be no adverse
impact to the ecological balance of the river. Although many of the requirements of
600
Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
601
Digest of the Commission for the Administration of the River Uruguay (CARU),
Subject E4 (1984, as amended) (hereinafter “CARU Digest, Subject E4”), Title 1, Chap. 1, Sec.
1, Art. 1.
602
AM, para. 3.147. (“CARU has issued standards” for the “conservation and preservation of
the biological resources of the Uruguay river” that are “found in Subject E4 of the Digest”).
603
AM, para. 3.149. (“determines the rules for ensuring the conservation, use and preservation
of the living resources in the shared section of the Uruguay river”).
- 273 -Subject E4 are inapplicable to the Botnia plant as they pertain solely to regulation of
fishing and aquaculture, Subject E4 does se t forth certain substantive requirements
that are applicable to the plant. Uruguay has ensured that the Botnia plant complies
with those requirements.
4.52 First, Subject E4 prohibits a party from introducing into the river
substances that would prejudice th e consumption of fishery resources 604. No such
prejudice will be caused by the operation of the Botnia plant. As discussed in detail
in Chapters 5 and 6, the IFC’s independent experts have concluded that operation of
the Botnia plant will not impact fisheries, finding that “[t]he mill discharge[]” would
“have no adverse effect on … aquatic life” 605.
4.53 Second, Subject E4 requires that any project that may affect fishing
resources either adopt ade quate correctional measures or attenuate its negative
606
effects . By scrupulously adhering to CARU water quality standards and
Uruguayan discharge limits, the Botnia plant will not adversely impact water quality
or aquatic life. Moreover, as indicated above (and discussed more fully in Chapter
7) comprehensive monitoring will ensure the rapid detection of any adverse impacts.
Also as previously stated, in the unlikely event that such negative impacts occur,
Uruguay has the authority, which it pledges to exercise, to adopt any and all
necessary remedial measures. As was represented to the Court in June 2006 by the
Director of DINAMA, “[s]hould any prohibited impacts occur . . . DINAMA
604
CARU Digest Subject E4, Title 2, Chap. 2, Sec. 1, Art. 1. UCM, Vol. IV, Annex 61.
605
Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
606
CARU Digest Subject E4, op. cit., Title 2, Chap. 2., Sec. 1, Ar t. 6. UCM, Vol. III, Annex
61.
- 274 -commits to use all powers at its disposalto halt those impacts and remedy their
607
effects if any”.
4.54 Finally, Subject E4 requires that the proponent of a project be responsible
for potential impacts to protected resour ces. Uruguay has ensured compliance with
this requirement by mandating in the Botnia AAP that Botnia strictly monitor the
river and adopt corrective measures should unexpected impacts be detected. Not
only does the AAP require monitoring of wate r quality, which pertains to the health
of aquatic life, it also requires direct “monitoring of living be. As such, any
impact on the ecological balance of the rive r will be rapidly detected and corrective
measures ordered accordingly.
D. T HE IFC’ SINDEPENDENT E XPERTS CONCLUDED THAT THE BOTNIA P LANT
W ILL NOT A DVERSELY MPACT THE ECOLOGICAL B ALANCE OF THE U RUGUAY R IVER
4.55 The Botnia plant’s lack of impact on the ecological balance of the river is
confirmed by the findings of the independen t experts retained by the IFC. These
experts found that, even under extreme low flow conditions, effluents from the
Botnia plant will dissipate into insignificant concentrations within 35 metres of the
point of discharge. This rapid dilution necessitates the conclusion that the “water
quality within this extremely small exposur e area will not pose a risk to human or
aquatic life”0. The IFC’s experts further found that because the small area around
the point of discharge is “confined” to the “main channel on the Uruguayan side of
the river away from sensitive habitat, valued recreational areas and drinking water
607Torres Aff., op. cit., Sec. VII, para. (C).
608Botnia AAP, op. cit., Art. 2(l). UCM, Vol. II Annex 21.
609Ibid.
610Final CIS, op. cit., p. 4.48. UCM, Vol. VIII, Annex 173.
- 275 -supplies”, the operation of the Botnia plan t “do[es] not pose a direct risk to the
611
valued components of the ecosystem” . The experts further described as
“minimal” the “potential for effects on fish”, and noted that “[e]xperience at pulp
mills in Canada shows that fish health re sponses are non-measurable” in the type of
612
circumstances presented by the Botnia plant .
4.56 The IFC’s independent experts also assessed potential impacts to
Uruguay’s Ramsar site at Esteros de Farrapos and Islas del Río Uruguay, which they
observed “supports a high diversity of birds and serves as an important wildlife
refuge and corridor” 613. They found that this “area will not be exposed to
wastewaters from the mill operations” and that during “most flow conditions the
downstream direction of flow carries the wastewaters from [the ENCE and Botnia
614
plants] away from this area thereby preventing all risk of exposure” . Even during
“rare occasions when the flow reverses di rection and travels upstream”, they found
that “the wastewaters move upstream” only at “trace levels”. As a result, the IFC’s
experts concluded “there is virtually no potential for mill effluents to impact the
Island Delta area” 615. Their conclusion is now even more unimpeachable in light of
ENCE’s decision to relocate its plant away from the Uruguay River. The only
remaining plant in the area, that of Botnia, is located approximately six kilometres
downstream from the former location of the ENCE plant and approximately 16
611
Ibid., p. 4.49.
612
Ibid.
613
Ibid., p. 4.55.
614Ibid.
615Ibid.
- 276 -kilometres downstream from the protected sites, rendering it impossible, even during
rare reverse flow events, for its effluents to reach those sites.
4.57 The IFC’s experts reached the same conclusion -- that the Botnia plant
would cause no impact on the ecological ba lance of the Uruguay River -- even on
the Argentine side. They analysed potential impacts to fish in Yaguareté Bay
(Uruguay) that cross the river into Argen tina. The experts concluded that because
the “aquatic resources within Yaguareté Bay are not expected to be adversely
affected by mill operations”, the “fish species that move between Yaguareté Bay and
Argentina” are “protected from the perspective of the mill operations” 616. The IFC’s
experts likewise found that the area around Ñandubaysal (Argentina) would be
“unaffected by mill operations” and thus there would be no impact on aquatic life 61.
4.58 In sum, Uruguay has satisfied its obligations to protect the ecological
balance of the river under Article 36 by requiring strict compliance with CARU
regulations found at Subjects E3 and E4 of the CARU Digest; and the IFC’s
technical experts have inde pendently concluded that no adverse impacts to the
ecological balance of the river will be caused by operation of the Botnia plant.
Section III.
Uruguay’s Choice of Site for the Botnia Plant Complies with All Applicable
Obligations
4.59 Argentina complains that the site at Fray Bentos is unsuitable for a pulp
mill. To make a claim in relation to the c hoice of site, Argentina must show that the
plant creates a risk of significant harm and that this risk could only be mitigated or
removed by relocating the plant. It has made no such showing. The definitive
616Ibid., p. 4.56.
617Ibid., p. 4.57.
- 277 -answer to Argentina’s argument has already been given and need not be reiterated.
If there is no prohibited pollution and no prohibited alteration of the ecological
balance -- that is, no violation of Article 41 or Article 36, and no violation of CARU
water quality or other regulations -- then the choice of site is wholly immaterial,
since the plant, as presently located, will cause no harm to Argentina or the river.
The possibility of harm is even more remote now that ENCE has decided to relocate
its plant elsewhere. Moving the Botnia plant would serve no valid purpose, since its
impact on the river at its present location will not be significant or harmful. The
only effects of relocation woul d be negative. It would result in a very significant
economic burden on Botnia, on the population of Fray Bentos, and on Uruguay.
4.60 State practice shows that there is no prohibition on the construction of
theoretically harmful installations near international rivers or borders. There are, for
example, some 500 nuclear reactors worldwide and many of these are sited near
border rivers or along coastlines adjacent to other States. So are many chemical
plants and smelters, including the infamous Trail Smelter, which is still in operation.
The International Law Commission’s Articles on Prevention of Transboundary
618
Harm deal precisely with such situations, and they too do not suggest that States
must locate such facilities inland or well away from other States. States must of
course regulate and control activities within their jurisdictions so as to prevent,
reduce, and control transboundary pollution and environmental damage, and consult
where necessary with their neighbours. But that is all they are required to do. The
evidence shows that Uruguay fulfilled its obligations in this regard and gave careful
618Draft Articles on Prevention of Transboundary Harm from Hazardous Activities with
commentaries (hereinafter “2001 Draft Articles”), appears in Yearbook of the International
Law Commission, 2001, vol. II, Part Two.
- 278 -consideration to the suitability of the location selected for the Botnia plant by
analysing the potential impacts associated with the site, and concluding that it was
appropriate.
4.61 As Uruguay has already shown, it ha s more than fulfilled its obligation to
regulate and control pollution from the Botnia plant. Relocating the plant is neither
necessary nor useful as a means of minimizing the risk of transboundary harm.
Other measures already adopted by Uruguay fully address that issue. In the absence
of any significant risk to Argentina, when authorising a site for the plant Uruguay is
fully entitled to rely on its sovereign ri ght to pursue its own environmental and
developmental policies in accordance with international law and the Charter of the
619
United Nations .
Section IV.
The Approach to Environmental Regulation Adopted in the 1975 Statute is
Consistent with General International Law
4.62 This Section de monstrates that the approach to environmental regulation
adopted in the 1975 Statute is consistent with general international law. In
particular, under international law as well as the 1975 Statute, Uruguay has a right to
equitable and reasonable use of the rive r; neither the Convention on Biological
Diversity, the Ramsar Convention, nor th e POPS Convention assist Argentina; and
the precautionary principle neither prohibits projects where there is no risk of serious
or reversible harm, nor transfers to Uruguay what is properly Argentina’s burden of
proof.
619Río Declaration on Environment and Develo pment (hereinafter “Río Declaration”),
Principle 2 (1992); Legality of the Threat or Use of Nuclear Weapons , I.C.J. Reports 1996, p.
242, para. 29.
- 279 - A. E QUITABLE AND REASONABLE USE OF THE RIVER
4.63 International law gives Uruguay the right to make equitable and reasonable
620
use of the river, and the Statute must be interpreted and applied accordingly .
621
Argentina concedes as much in its own Memorial .
4.64 As an initial matter, Uruguay’s use of the river has always been, and will
continue to be, equitable and reasonable. That will not change because of the
operation of the Botnia plant. As Uruguay has demonstrated in Section I, the Botnia
plant will not cause an ex ceedance of any applicable CARU or Uruguayan water
quality standards, and to the extent th at Uruguay’s standard for phosphorus is
already exceeded, that is because of th e discharge of phosphorus from Argentina,
which has chosen to leave phosphorus unr egulated. Moreover, as shown above, the
discharge of phosphorus from the Botnia plant will cause no harmful impacts to the
river or its aquatic environment. Accordingly, the legitimate use to which Uruguay is
putting the river, and the substantial benefits that it is deriving therefrom, will cause
no harm to Argentina.
4.65 Even if, arguendo, existing water quality ( i.e., without the operation of the
Botnia plant) is a threat to the aquatic environment, Argentina cannot deny Uruguay
the right to make equitable and reasonabl e use of the river for industrial purposes
that are authorised by the Statute, while allowing pollution from its own side to
continue unchecked. Argentina’s own evidence shows that it is the main contributor
622
to pollution in the vicinity of Gualeguaychú and where the Gualeguaychú River
620
Case Concerning the Gabčikovo-Nagymaros Project (Judgment), I.C.J. Reports 1997, p. 56,
para. 85.
621
AM, paras. 3.163-3.167.
622Figures are given in the Argentine Memorial at para. 5.78.
- 280 -empties into the Uruguay River, and it accepts that there is no automatic priority for
623
established polluting uses of a river over new uses . Article 10 of the 1997 UN
Watercourses Convention recognizes this point by providing that no category of use
624
has inherent preference over any others . An inflexible rule privileging existing
Argentine pollution would in effect allow th e creation of servitudes. It would also
be inequitable. In such circumstances, Uruguay is not required by international law
to refrain from undertaking new developments which might affect the Uruguay
River. Rather, it is for the Parties jointly to agree on such measures to restore water
quality to such standards as are reasonable and equitable in the circumstances. Joint
protection and preservation efforts must be “proportional to the measure in which
625
they have contributed to the threat or harm to the ecosystem in question” . As
demonstrated in Chapter 2, at paragraph 2.23, it is a fundamental objective of the
1975 Statute to assure the “optimum” use of the Uruguay River; and both Uruguay
and Argentina agree that the phrase “rational and optimum use” is best understood as
“equitable and reasonable use.” In the International Law Commission’s words, “[t]he
requirement of article 20 [of the draft Wa tercourses Convention] that watercourse
States act ‘individually or jointly’ [to protect and preserve the ecosystems of
international watercourses] is therefore to be understood as meaning that joint,
623
AM, paras. 3.166-3.167.
624
“Special regard” must be given to the requirements of “vital human needs”, i.e., drinking
water and domestic uses.
625
Draft Articles on the Law of Non-navigationa l Uses of International Watercourses and
Commentaries Thereto (hereinafter “1994 Draft Articles”), p. 119, comment 4 (1994), appears
in Yearbook of the International Law Commission, 1994, vol. II, Part Two.
- 281 -cooperative action is to be taken where appr opriate, and that such action is to be on
an equitable basis”62.
B. T HE A LLEGED PRINCIPLE OF NON -H ARMFUL U SE OF T ERRITORY
4.66 Argentina refers to a so-called “p rincipe de l’utilisation non-dommageable
du territoire”27, and alleges that the “principe de l’utilisation non-dommageable
d’un cours d’eau international s’inscrit dans une approche écosystèmique” required
628
by Article 35 of the 1975 Statute . Insofar as Argentina asserts some rule
prohibiting any theoretically harmful use of an international river, it cannot be found
in Article 35 or any other provision of the Statute. Moreover, no such rule of
international law exists, nor can it be derived from any of the authorities cited. The
International Law Commission articulated no such rule, either in its work on
international watercourses or in its Articles on Prevention of Transboundary Harm.
4.67 In the Commission’s view, the ob ligation established by the relevant
precedents, including those cases relied on by Argentina, is to take diligent measures
629
to prevent, reduce, and control pollution . Thus, Article 7 of the UN Convention
on International Watercourses provides:
Obligation not to cause significant harm
626See also Case Concerning Diversion of Water from the River Meuse (Netherlands v.
Belgium) (Judgment), PCIJ Ser., A/B No 70 - Ser. C No. 8, p. 77 (28 June 1937). Thus, if
eutrophication is presently a problem for the river as a whole, then measures must be taken by
both Parties to address this shared problem e quitably and reasonably. Argentina cannot place
the whole burden on Uruguay or on the Botnia plant. In its own words, it manifestly would not
be “rational” nor “optimal” to attempt to do so. See AM, para. 3.168.
627AM, para. 3.169. (“principle of non-harmful use of territory”Argentina relies on the
Corfu Channel Case, the Legality of the Threat or Use of Nuclear Weapons Advisory Opinion,
and the Gabčikovo-Nagymaros Case.
628AM, para. 3.171. (“principle of non-harmful use of an international waterway is part of an
ecosystemic approach”).
629
1997 Watercourse Convention, op. cit., Art. 21(2), p. 30, paras. 164 et seq.
- 282 - 1. Watercourse States shall, in utilizing an international
watercourse in their territories, take all appropriate measures to
prevent the causing of significant harm to other watercourse
States.
2. Where significant harm neve rtheless is caused to another
watercourse State, the States whose use causes such harm shall,
in the absence of agreement to such use, take all appropriate
measures, having due regard for the provisions of articles 5 and
6, in consultation with the affected State, to eliminate or mitigate
such harm and, where appropriate, to discuss the question of
compensation 630.
4.68 This article is not an obligat ion of result. The UN Convention on
International Watercourses does not prohibit all harm. It is formulated as an
631
obligation of conduct: to take all appropriate measures -- or to compensate in
cases where, having due regard to Articles 5 and 6, the harm caused is inequitable.
4.69 Article 41 of the 1975 Statute is si milarly an obligation of conduct that
requires the Parties to prescribe “appropriate rules and measures” that are “in
accordance with applicable international agreements and in keeping, where relevant,
with the guidelines and recommendations of international technical bodies.” In this
respect it is also comparable to Article 21(2) of the UN Watercourses Convention
and to many other environmental treaties in setting out an obligation of due diligence
in the regulation and control of polluti on and environmental risks. It does not
prescribe the content of those regulations or the type of controls which are to be
employed, except to the extent that they must be consistent with applicable
international agreements or other internationally agreed standards.
630
Ibid., Art. 7.
631Indeed, this is the response expressly contemplated in the CARU Digest. See CARU Digest,
op. cit., Subject E3, Title 2, Chap. 3, Sec. 2, Arts. 1-3.
- 283 -4.70 The ILC adopted a very similar fo rmulation of the general rule in its
Articles on the Prevention of Transboundary Harm, which provides in Article 3 that
“[t]he State of origin shall take all a ppropriate measures to prevent significant
transboundary harm or at any event to minimize the risk thereof” 632. Interpreting
this obligation, the Commission’s commentary notes that:
Such measures include, first, formulating policies designed to
prevent significant transboundary harm or to minimize the risk
thereof and, second, implementi ng those policies. Such policies
are expressed in legislation and administrative regula633ns and
implemented through various enforcement mechanisms .
As set out more fully elsewhere in this Counter-Memorial, (see especially Sections I,
II and VI of this Chapter, and Chapte rs 5-7), Uruguay has taken all necessary
measures to regulate and control the risk of pollution from the Botnia plant, to
protect water quality and the aquatic ecosystem, and to secure compliance with
applicable international standards. Neither the 1975 Statute nor general international
law require more.
C. APPLICABLE INTERNATIONAL STANDARDS PURSUANT TO THE 1975S TATUTE
4.71 Reference to the 1992 Conventi on on Biological Diversity as an
international standard for the purposes of the 1975 Statute does not advance the case
Argentina is attempting to make. Firstly , the Convention recognizes (at Article 3)
that:
States have in accordance with the Charter of the United Nations
and the principles of international law, the sovereign right to
exploit their own resources pursuant to their own environmental
policies and the responsibility to ensure that activities within
their jurisdiction or control do not cause damage to the
6322001 Draft Articles, op. cit., Art. 3.
633Ibid., p. 393, comment 10.
- 284 - environment of other states or areas beyond the limits of national
jurisdiction.
4.72 This is no more than a repetition of Principle 2 of the Río Declaration on
634
Environment and Development and of customary international law. It adds
nothing to Argentina’s case.
4.73 Secondly, the obligations undertaken by parties to the Convention are very
general in character. They include: c ooperation (Article 5); developing national
strategies, plans, or programmes (Article 6); identifying and monitoring biological
diversity (Article 7); and in-situ conservation (Article 8). All of these articles are to
be implemented in so far as “possible and appropriate”.
4.74 Thirdly, it is not clear in what re spect Argentina claims that Uruguay is or
will be in violation of the Convention. If there is significant harm to the river
environment or to Argentina then it does not need to rely on the Biodiversity
Convention. The 1975 Statute would itself be sufficient to sustain Argentina’s
claim. If there is no such harm, then the Convention remains irrelevant. As set forth
in Chapter 5, the Botnia plant will not violate the Biodiversity Convention, as the
IFC found in approving its participation in the Botnia project.
4.75 Nor is it clear how the 1971 Ramsar Convention assists Argentina. The
Ramsar site at Esteros de Farrapos and Islas del Río Uruguay (collectively “Esteros
de Farrapos”) is entirely within the territory of Uruguay. The southernmost point of
the Ramsar site is 16 kilometres upstream from the Botnia plant. The minimum
distance between the Botnia plant and the pr otected area is more than two times the
distance cited by Argentina. The IFC’s technical experts concluded that Esteros de
634
Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) , op. cit., p. 241, para.
29.
- 285 -Farrapos could not be affected by discharges from the plant, even in conditions of
635
reverse flow in the river . Thus, in regard to Esteros de Farrapos, there is no
evidence that, in the words of Article 3 of the Ramsar Convention:
the ecological character of any wetland in its territory and
included in the List has changed, is changing or is likely to
change as the result of technolog ical developments, pollution or
other human interference 63.
4.76 Nor is the site currently included in the list of sites threatened with such
change that the Ramsar Convention Bureau (known as the Montreux Record)
637
maintains . Since Esteros de Farrapos is not threatened by the operation of the
Botnia plant, there can be no violation of the Convention on that basis.
4.77 Even if Esteros de Farrapos were threatened in the longer term, the
relevant provisions of the Ramsar Conven tion (Articles 2-5) require a party to do
little more than promote conservation of wetlands in some other way 63. In such
case, the obligations which ar ise would be essentially to notify and consult, and “as
639
far as possible compensate for any loss of wetland resources” . Uruguay has no
desire to put the future of Esteros de Fa rrapos at any risk, still less to promote its
635
Final CIS, op. cit. , p. ES xxi (Table ES-4 “Water quality unaffected”). UCM, Vol. VIII,
Annex 173.
636Convention on Wetlands of International Im portance Especially as Waterfowl Habitat
(hereinafter “Ramsar Convention”), Art. 3(2) (1971).
637Recommendation 4.8. The Record is available at http://www.ramsar.org/key_montreux_
record.htm (last visited on 9 July 2007).
638
M.J. Bowman, one of the leading experts on the Convention, concludes: “On the one hand,
the Convention seems clearly to stop short of imposing a duty to avoid or prevent any change
in the ecological character of listed sites, since a procedural obligation to provide notification
of such changes cannot be equated with a substantive obligation to prevent them from
occurring. On the other, a State which permits the total ecological degradation of its listed sites
can scarcely be said to have promoted their conservation.” M.J. Bowman, Netherlands
International Law Review, vol. 42, pp. 1-52, section 6, last paragraph (1995).
639
Ramsar Convention, Art. 4(2).
- 286 -destruction. Its conservation, like othe r elements of the aquatic environment and
biodiversity, is best assured by comprehensive monitoring and joint action, as
envisaged by Article 5 of the Convention. In sum, the Ramsar Convention will not
be breached by operation of the Botnia plant, a conclusion shared by the independent
experts retained by the IFC. 640
4.78 With regard to Argentina’s claims about dioxins and furans, Uruguay fully
accepts that, pursuant to Article 41 of the 1975 Statute, the 2001 POPS Convention
is an applicable international agreement. Article 1 of the POPS Convention
provides: “Mindful of the precautionary a pproach as set forth in Principle 15 of the
Río Declaration … the objective of this Convention is to protect human health and
the environment from persistent organic pollutants” 64. Nevertheless, as Argentina
642
notes in its Memorial , although this Convention requires States to minimize or
eliminate as far as possible the use of dioxins and furans, it does not ban them
outright. The Convention refers to the ap plication of “available, feasible and
practical measures that can expeditiously achieve a realistic and meaningful level of
643
release reduction or source elimination” . Annex C of the Convention sets out
BAT standards to be applied for that purpos e. Argentina’s references to Annexes A
and B of the Convention are irrelevant. Uruguay has fully complied with all the
644
applicable requirements of the POPS Convention, a conclusion shared by the IFC .
640
See Chap. 5.
641
Stockholm Convention on Persistent Organic Pollutants (hereinafter “POPS Convention”),
Art. 1 (2001).
642
AM, para. 3.223.
643
POPS Convention, op. cit., Arts. 5(a) & (b).
644
See Hatfield Consultants, Report of Expert Pa nel on the Final Cumulative Impact Study for
the Uruguay Pulp Mills, p. 5 (14 October 2006) (concluding that the dioxin discharges from the
Botnia plant will be trivial). UCM, Vol. VIII, Annex 178.
- 287 -As the IFC’s independent experts found, because the dioxin discharges from the two
proposed plants would be “trivial, and aa concentration well below US drinking
water standards,” they are not of concern. This finding is particularly conservative
because the IFC’s independent experts were considering the level of dioxins released
in a situation in which both the Botnia and the ENCE plants were operating.
D. T HE PRECAUTIONARY PRINCIPLEN EITHER CALLS INTO Q UESTION THE
DECISION TO AUTHORISE THE B OTNIA PLANT N OR TRANSFERS THE BURDEN OF PROOF
4.79 Argentina relies on the precautionary principle, as defined in Principle 15
of the 1992 Río Declaration, to reinfore its arguments regarding environmental
impact assessment and prevention of harm. Argentina also asserts that the
precautionary principle transfers to Uruguay the burden of proving that the Botnia
plant will not cause significant harm to the environme. However, nothing in the
precautionary principle calls into question the decision to proceed with the Botnia
project or reverses the usual burden of proof.
4.80 Principle 15 of the 1992 Río Declaration provides:
In order to protect the environm ent, the precautionary approach
shall be widely applied by States according to their capabilities.
Where there are threats of serious or irreversible damage, lack of
full scientific certainty shall not be used as a reason for
postponing 646t-effective measures to prevent environmental
degradation .
4.81 Argentina accepts that this prin ciple is applicableto environmental
protection only where there is “un risque de dommage s graves ou irréversibles”
This standard is a high one: serious orreversible harm requires more than mere
645
AM, para. 5.14.
646
Río Declaration, op. cit., Principle 15.
647AM, para. 5.14 (“risk of serious or irreversible harm”).
- 288 -“significant” harm, the term used in the ILC’s Articles on Prevention of
Transboundary Harm. As will be shown in Chapters 5 and 6, Argentina has not
come close to demonstrating that there is a real risk of serious or irreversible harm in
this case. On the contrary, as set out in this and later Chapters, Uruguay has taken
all necessary measures to regulate and control the risk of pollution from the Botnia
plant, to protect water quality and the aquatic ecosystem, and to secure compliance
with applicable national, CARU, and international standards. This is not a
substandard plant that would not be permitted in Europe or North America. It is a
world class facility, judged by the IFC’s independent experts to perform to a
648
standard of the top five mills in the world . It will be regulated and operated to the
highest international standard s consistent with international law. The discharges
from the plant will be within CARU limits; there is no reason to believe that such
discharges will cause significant pollution; and there is no likelihood whatsoever of
significant or harmful changes to the aquatic ecosystem of the river resulting from
the operation of the plant. A fortiori, there can be no grounds for believing that the
plant is likely to cause any harm, let alone “serious or irreversible harm” to the water
quality of the Uruguay River or any othe r form of serious or irreversible
transboundary damage.
4.82 Second, the measures taken by Uruguay would fully comply with the
requirements of Principle 15 even if it were applicable. Principle 15 requires States
not to use scientific uncertainty to post pone “cost-effective measures to prevent
environmental degradation”. But far from postponing such measures, Uruguay has
648
Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay Pulp Mills,
op. cit., p. 2. UCM, Vol. VIII, Annex 178.
- 289 -actively taken and required them from the star t of the Botnia authorisation process,
as detailed elsewhere in this and later Chapters.
4.83 Nevertheless, what Argentina seems to want are measures that address
risks that are remote, unlikely to result in significant harm, or purely hypothetical.
No such measures are required by the precautionary principle. The very reference to
“cost-effective measures” in Principle 15 contradicts Argentina’s arguments in this
respect. Nor does science cease to be rele vant when judging the existence of risk.
On the contrary, there still has to be some objective scientific basis for predicting the
likelihood of significant harmful effects, so me “reason to believe” or “reasonable
grounds for concern,” before it can be asserted that States have a legal responsibility
to act 649. Many of Argentina’s allegations of possible harm are not based on
reasonable grounds or objective evidence, as demonstrated in Chapter 6.
4.84 Nor is Argentina correct in asserting that the precautionary principle “qui
transfère la charge de la preuve à l’Uruguay” 650. Argentina’s only authority for the
proposition that the precautionary principle has such an effect is a misquotation from
International Law and the Environment . Once the quoted section is read in full, it
becomes apparent that only in a few exceptional cases, and only by express
agreement of the parties, have treaties tr ansferred to the respondent State the burden
of proving that there is no risk of harm. The full paragraph thus reads:
649See EC Measures Concerning Meat and Meat Products (Hormones), WTO Appellate Body,
WT/DS26/AB/R, paras. 120-125 (1998); Japan - Measures Affecting the Import of Apples ,
WTO Appellate Body, WT/DS245/AB/R, para. 202 (2003); 1996 Protocol to the Convention on
the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (1972), Art. 3(1)
(“reason to believe”); Convention for the Protectoin of the Marine Environment of the North-East
Atlantic, Art. 2 (1992) (“reasonable grounds for concern”); Convention on the Protection of the
Marine Environment of the Baltic Sea Area, Ar t. 3(2) (1992) (“reason to assume”); Gray and
Bewers, 32 Mar. Poll. Bull . (1996), pp. 768-771 (criticising some uses of the precautionary
principle for relying on “unsustainable suspicion” rather than scientific evidence).
650AM, para. 5.15. (“transfers the burden of proof to Uruguay”).
- 290 - Exceptionally, in this form, it becomes impermissible to carry
out an activity unless it can be shown that it will not cause
unacceptable harm to the environment. Examples of its use in
this sense include the resolutions suspending the dumping of
low-level radioactive waste at sea without the prior approval of
the parties to the Paris and London Conventions, the suspension
of industrial dumping in the 1972 Oslo Convention area without
prior justification to the Oslo Commission, and the moratorium
on whaling, which can be recommenced only with the approval
of the parties to the Whaling Convention. The main effect of the
principle in these situations is to require states to submit
proposed activities affecting the global commons to international
scrutiny, although it is doubtful whether these few rather
exceptional examples at present support the conclusion that prior
cons651 of this kind is generally required under international
law.
4.85 Even the 2001 POPS Convention does not reverse the burden of proof,
notwithstanding that it is expressly based on the precautionary approach set out in
Principle 15 of the Río Declaration. With regard to its treatment of dioxins and
furans -- which are the only substances re gulated by the POPS Convention raised by
Argentina -- the POPS Convention does not ba n them outright or require States to
show that they are harmless .652
4.86 There is thus nothing in Principle 15 of the Río Declaration, or in the
Preamble to the Convention on Biological Dive rsity, or in the POPS Convention, to
justify interpreting the 1975 Statute to re quire that Uruguay show that industrial
developments taking place within its terr itory will pose no risk of harm to the
Uruguay River. On the contrary, the scheme set out in Article 7 of the Statute
envisages CARU determining, in the firs t instance and as a preliminary matter,
whether the proposed works “might cause significant damage to the other party.” It
651
P.W. Birnie and A. Boyle, International La w and the Environment. 3rd edition, 2002, p.118
(emphasis added).
652POPS Convention, op. cit., Annex C.
- 291 -is then for the notified party “to assess the probable impact of such works on
navigation, the regime of the river or th e quality of its waters” before responding
accordingly. Article 7 plainly does not require the proponent State to demonstrate
that there is no risk of harm. Argentin a thus has no basis for suggesting that the
1975 Statute falls within the exceptional category of situations where such a reversal
of the burden of proof has been agreed by the parties to a treaty.
4.87 In sum, Argentina has initiated the present proceedings, and it is Argentina
that alleges a risk of serious or irreversible harm. In accordance with a general
principles of law endorsed by the Court’s consistent case law, it is Argentina’s
burden to prove these allegations 65. Argentina has come nowhere close to doing so.
Section V.
The International Law of Environmental Impact Assessment
4.88 Argentina’s Memorial presents a ve ry simplistic account of the purpose of
an EIA and the context in which an EIA takes place. It argues in conclusory fashion
that “L’Uruguay a donc négligé de s’assure r que des évaluations environnementales
complètes soient préparées préablement à ses décisions d’autoriser la construction
des usines Orion et CMB ” 654. Seemingly, the most important part of this argument
is the timing: an EIA must precede authorisation -- and be “complete” at that point -
- or it is fatally and irretrievably flawed. Argentina contends that this alleged failure
is a violation of international law, although it nowhere attempts to set out a coherent
653Case Concerning the Application of the C onvention on the Prevention and Punishment of
the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro) , I.C.J. Reports
2007, para. 204; Case Concerning Military and Paramilitary Activities in and Against
Nicaragua (Nicaragua v. United States of America) (Jurisdiction and Admissibility) , I.C.J.
Reports 1984, p. 437, para. 101.
654AM, para. 5.63. (“Uruguay neglected to ensure that complete environmental assessments be
prepared prior to its decision to authorise the Orion and CMB plants.”).
- 292 -or comprehensive account of the law on this subject. This Section demonstrates the
errors in Argentina’s view of the law on EIA.
4.89 As demonstrated below, an EIA is inherently a national procedure, not an
international one as Argentina claims. Argentina is similarly incorrect in conceiving
an EIA as a static rather than a continuing process. Moreover, contrary to
Argentina’s claims, the only minimum content of an EIA in international law is that
there must be an assessment of possibl e harmful transboundary effects on people,
property, and the environment. The rest is a matter for national law to prescribe.
Finally, an EIA is not required to assess all risk no matter how remote or speculative;
it is required to assess only risks that are likely to have a significant impact.
A. E NVIRONMENTAL IMPACT A SSESSMENT IS A NATIONAL P ROCEDURE ,N OT AN
NTERNATIONAL ONE
4.90 Contrary to the view expressed by Argentina, an EIA is “a national
procedure for evaluating the likely im pact of a proposed activity on the
environment” 655, or in the words of Principle 17 of the 1992 Río Declaration on
656
Environment and Development, “a national instrument” . The International Law
Commission takes the same view. In the commentary to its draft Articles on the
Prevention of Transboundary Harm, it cites Principle 17 and notes that it is the State
of origin which should ensure that a risk assessment is undertaken657. The point of
emphasising that it is a national instrument or procedure is to stress that it is not a
joint procedure to be carried out in co-operation with other States. Argentina relies
655
Convention on Environmental Impact Assessment in a Transboundary Context (hereinafter
“1991 EIA Convention”), Art. 1(vi) (1991).
656
Río Declaration, op. cit., Principle 17.
6572001 Draft Articles, op. cit., p. 366, p. 402, comment 1.
- 293 -on Principle 17 and refers to the ILC draft articles in its arguments 658. It makes no
reference to Principle 12 of the 1987 UNEP Goals and Principles of Environmental
Impact Assessment (hereinafter “UNEP EIA Principles”), which require notification
of an EIA to be given to States likely to be significantly affected; it does not provide
for participation by other States in the EIA itself. Principle 12 reads as follows:
When information provided as part of an EIA indicates that the
environment within another Stat e is likely to be significantly
affected by a proposed activity, the State in which the activity is
being planned should, to the extent possible:
a) notify the potentially affected State of the proposed activity;
b) transmit to the potentially affected State any relevant
information from the EIA, the transmission of which is not
prohibited by national laws or regulations; and
c) when it is agreed between the States concerned, enter into
timely consultations 659.
4.91 Even the 1991 UNECE Convention on EIA in a Transboundary Context
(hereafter “1991 Convention on EIA”) gives a potentially affected State the right to
participate in a national EIA only to the extent of providing information and making
660
representations . Under neither this instrument nor the UNEP EIA Principles is the
process one of prior joint approval. There is thus no basis for Argentina’s complaint
661
that a “unilateral” EIA violates international law . EIAs will normally be unilateral
unless they involve joint projects such as bridges, dams, or motorways between two
States. The Botnia plant is in no sense a project undertaken jointly with Argentina.
658AM, paras. 3.200, 3.201.
659United Nations Environmental Programme Goals and Principles of Environmental Impact
Assessment (hereinafter “UNEP EIA Principles”), Principle 12 (1987) .
6601991 EIA Convention, op. cit., Arts. 3(5) & (6).
661AM, para. 5.63.
- 294 - B. E NVIRONMENTAL MPACT ASSESSMENT IS AP ROCESS N OT AN EVENT
4.92 Uruguay does not dispute that an EI A is required for the Botnia project.
Argentina does not deny that such an EIA was in fact carried out in accordance with
Uruguayan law before Botnia’s AAP wa s granted by DINAMA on 14 February
2005, and well before any authorisations were granted for construction of the
662
plant . What Argentina appears to argue is that the adequacy of the EIA must be
judged at that moment, without regard to later assessments or subsequent
monitoring, and without regard to the limite d character of the authorisation granted
in February 2005. According to Argentina’s conception of the process, Uruguay has
one chance, and only one chance, to produce a full and adequate EIA, and it must be
done before even initial authorisation of the project is given.
4.93 Leaving aside the fact that Urugua y did in fact approve a fully adequate
EIA prior to authorising construction of the Botnia plant -- a conclusion that will be
demonstrated later in this Chapter -- even if (contrary to the evidence) Uruguay’s
EIA was materially inadequate in certain respects at the initial stage, subsequent
assessments and eventual monitoring have rectified any earlier deficiency.
662
Construction permits were granted as follows : 12 April 2005 (removal of vegetation cover,
fencing, and land movement); 22 August 2005 (cons truction of a chimney, concrete plant, and
foundation); 18 January 2006 (construction of bleached cellulose plant); 10 May 2006
(construction of waste water treatment pla; and 9 April 2007 (construction of landfill).
DINAMA Environmental Management Plan Approval for the Botnia Plant (for the removal of
vegetation and earth movement) (12 April 2005). UCM, Vol. II, Annex 22. DINAMA
Environmental Management Plan Approval for th e Botnia Plant (for the construction of the
concrete foundation and the emissions stack22 August 2005). UCM, Vol. II, Annex 23.
DINAMA Environmental Management Plan A pproval for the Botnia Plant (supplement to
prior environmental management plans) ( 18 January 2006). UCM, Vol. II, Annex 26.
DINAMA Environmental Management Plan Approval for the Botnia Plant (for the
construction of the wastewater treatment plan t) (10 May 2006). UCM, Vol. II, Annex, 28.
DINAMA Environmental Management Plan Appr oval for the Botnia Plant (9 April 2007)
(approving plan for the construction of solid industrial waste la ndfills). UCM, Vol. II, Annex
37.
- 295 -4.94 EIA is not an event, but a process. The object of an EIA is to provide
decision-makers with information about lik ely environmental effects when deciding
whether to authorise the proposed activity and on what terms. An EIA will normally
take place before authorisation is granted, but it may occur in several stages, for
example in schemes which require an “in itial environmental examination” followed
by a full EIA only if a likelihood of significant harm is then identified 66. In cases
involving complex projects, where the ti me between initial authorisation and
eventual operation is prolonged, it is often necessary to conduct several EIAs -- or at
least to review and revise the initial EI A -- before the plant is authorised to
commence operations. A great deal will de pend on the circumstances of the case,
including the need to respond to criticisms and comments from regulatory bodies,
public consultations, and other governments. In the case of the Botnia plant, the fact
that this process was extended should be viewed favourably, not as a defect, since it
shows the rigour and seriousness with which the process was conducted.
4.95 Plainly, the response of a neighbouring State to a project as complicated as
the Botnia plant may raise additional questions for consideration some time after the
original EIA has been carried out. The regime of co-operati on envisaged by the
UNEP Principles and the 1975 Statute may thus necessitate a further EIA, or
additions to the existing EIA, in order to take account of the matters raised by the
other Party. It makes no sense for Argentin a to say that its concerns must be taken
into account, while at the same time insisting on judging the adequacy of the process
by reference solely to the initial EIA. That EIA will necessarily have been carried
out by Uruguay before Argentina has had any opportunity to comment on the
663
See, e.g., Protocol on Environmental Protection to the Antarctic Treaty (hereinafter “1991
Protocol”), Art. 8, Annex I (1991 ); UNEP EIA Principles, op. cit., Principle 1.
- 296 -findings. Argentina’s simplistic asse rtion that Uruguay must ensure that
“évaluations environmentales complètes” are prepared prior to its decision to
664
authorise the Botnia plant takes no account of this reality . If Argentina wants its
concerns to be taken seriously, then it has to accept that environmental impact
assessment is an ongoing process including c onsultations between the Parties. It is
not a once-and-for-all event.
4.96 For the same reason, it makes no sense to assess the adequacy of an EIA
without also considering what matters may be better addressed through monitoring.
The need to take account of environmental risks does not stop at the EIA stage, nor
when the project comes into operation. Some risks may be inherently difficult to
assess in advance; others may be too un likely or remote, but nevertheless merit
monitoring on precautionary grounds once the project has come into operation;
others may have come to light only after the initial EIA. The Court will recall how
in the Case Concerning the Gabcikovo-Nagymaros Project it required the parties to
“look afresh at the effects on the envir onment of the operation of the Gabcíkovo
power plant” 665. The Court’s approach rightly treats prior EIA and subsequent
monitoring of the ongoing risks and impact s as a continuum which will operate
throughout the life of a project. This vi ew of the relationship between EIA and
monitoring (or “post project analysis”) reflects State practice in many national
systems and in the provisions of modern treaties such as the 1982 UN Convention on
666
the Law of the Sea and the 1991 Convention on EIA in a Transboundary Context .
664
AM, para. 5.63. (“complete environmental assessments”).
665Gabčikovo-Nagymaros Project (Judgment), op. cit., p. 78, para. 140.
6661982 Convention, op. cit., Arts. 204, 206; 1991 EIA Convention, op. cit., Arts. 2, 7; see also
1991 Protocol, op. cit. , Arts. 3(2)(c),(d) & (e). In the present dispute there is plainly an
- 297 - C. R EQUIRED CONTENT OF A T RANSBOUNDARY E NVIRONMENTAL IMPACT
A SSESSMENT
4.97 The only requirement for a transbounda ry EIA in international law is that
there must be an assessment of possibl e harmful transboundary effects on people,
property, and the environment.
4.98 Argentina argues that the content of an EIA must follow the listing and
format given in Appendix II of the 1991 Convention on EIA 667. The court should
reject this argument for two reasons. First, the 1991 Convention is a European
Convention. It is the only one of its kind in existence. It provides a particularly
advanced and demanding regime of EIA, largely based on European Community
law. Plainly it is not binding on Argentina or Uruguay, nor is it applicable law in the
present proceedings. Nor can it be part of the context for the purpose of interpreting
the 1975 Statute since it is neither a “related agreement” within the terms of Article
31(2) of the Vienna Convention on the Law of Treaties, nor is it one of the “relevant
rules of international law applicable between the parties” within the terms of Article
31(3)668. For the same reason it cannot be counted as one of the “applicable
international agreements” which provide a standard for prescribing appropriate rules
and measures under Article 41(a) of the 1975 Statute. The EIA Convention is not
uninteresting, but it is not law in these proceedings. Nor does it become applicable
opportunity to monitor the effect of the pulp mill on water quality and the aquatic environment,
and thus a need for the Parties to agree on a rrangements for doing so. Uruguay has on previous
occasions repeated its regret at Argentinarefusal to enter intoco-operative monitoring
arrangements. See, e.g., CR 2006/47, p. 30, paras. 40-43 (8 June 2006) (Boyle). It remains
willing to do so when or if Argentina agrees. However good it is, an EIA is made better with
effective monitoring.
667AM, para. 3.204.
668Dispute Concerning Access to Information Under Article 9 of the OSPAR Convention
(Ireland v. United Kingdom), P.C.A., paras. 101-105 (2003).
- 298 -law merely because the IFC uses this Convention as one of the standards by
reference to which it assesses project finance applications.
4.99 Second, Argentina’s argument on the content of an EIA entirely ignores
general international law on EIA. A ppendix II of the 1991 Convention on EIA
669
largely follows Principle 4 of UNEP’s Goals and Principles of EIA . Principle 4
sets out a minimum standard for national EIA laws that are principally focused on
670
internal or domestic impacts . Principle 4 is thus a model law for national
legislation, not a statement of what international law requires States to assess in a
transboundary setting. The distinction can be seen in Principle 12, the final article in
the UNEP EIA Principles, which does apply to transboundary EIA, but which only
requires transmission to the potentially affected State of “any relevant information
from the EIA, the transmission of which is not prohibited by national law.” 671 What
stands out here is that there is no requireme nt to transmit to other States information
about all of the matters listed in Principle 4.
4.100 Moreover, there is no evidence that in adopting UNEP Principle 4 the
States concerned believed they were reflecting existing international law on the
content of an EIA or intending to create new international law. The necessary opinio
juris is lacking. Nor is this surprising. How States carry out EIAs internally is a
matter of domestic jurisdiction. The alleged inadequacy of an EIA is not something
about which they would be entitled to complain unless the failure relates to the
assessment of possible transboundary imp acts. No doubt Argentina would be the
669This was endorsed by United Nations General Assembly Resolution 42/184 (1987).
670
UNEP EIA Principles, op. cit., Principle 4.
671
Ibid., Principle 12.
- 299 -first to object if Uruguay started to draw attention to alleged inadequacies in the
assessment by Argentina of environmental impacts within its own borders.
4.101 The conclusion that Argentin a’s proposed list does not represent
international law is confirmed by the ILC Commentary to Article 7 of the draft
Articles on Prevention of Transboundary Harm. It is worth setting this out in full:
(6) The article does not specify what the content of the risk
assessment should be. Obviously the assessment of risk of an
activity can only be meaningfully prepared if it relates the risk to
the possible harm to which the risk could lead. This corresponds
to the basic duty contained in article 3. Most existing
international conventions and le gal instruments do not specify
the content of assessment. There are exceptions, such as the
Convention on Environmenta l Impact Assessment in a
Transboundary Context, which provides in detail the content of
such assessment. The 1981 study of the legal aspects concerning
the environment related to offshore mining and drilling within
the limits of national jurisdiction, prepared by the Working
Group of Experts on Environmental Law of UNEP, also
provides, in its conclusion No. 8, in detail the content of
assessment for offshore mining and drilling.
(7) The specifics of what ought to be the content of assessment
is left to the domestic laws of the State conducting such
assessment. For the purposes of article 7, however, such an
assessment should contain an evaluation of the possible
transboundary harmful impact of the activity. In order for the
States likely to be affected to evaluate the risk to which they
might be exposed, they need to know what possible harmful
effects that activity might have on them.
(8) The assessment should include the effects of the activity not
only on persons and property, but also on the environment of
other States. The importance of the protection of the
environment, independently of any harm to672dividual human
beings or property is clearly recognized .
4.102 We can see from this that the only minimum content of a transboundary
EIA in international law, as far as the ILC is concerned, is that there must be an
6722001 Draft Articles, op. cit., pp. 403-405, comments 6-8.
- 300 -assessment of possible harmful transboundary effects on people, property, and the
environment. As shown in Section VI of this Chapter, the EIA conducted by Botnia
for the Uruguayan authorities fully satisfied these obligations.
D. A N E NVIRONMENTAL IMPACT A SSESSMENT S N OTR EQUIRED TO ASSESS
REMOTE OR SPECULATIVE R ISKS
4.103 Argentina also fails to appreciate that an EIA is not required to assess risks
that are too remote, or that are unlikely to result in significant harm, or that are too
speculative. As Argentina has noted, Prin ciple 17 of the Río Declaration provides
that an EIA “shall be undertaken for proposed activities that are likely to have a
significant adverse impact on the environment and are subject to a decision of a
competent national authority” 67. Although Argentina makes no reference to a
threshold of “significant adverse impact”, the same terminology is used by the 1992
674
Convention on Biological Diversity . UNEP’s Goals and Principles on EIA also
refer to “activities that are likely to significantly affect the environm. UNEP
Principle 5 further states that “[t]he nvironmental effects in an EIA should be
assessed with a degree of detail commens urate with their likely environmental
significance”. Argentina cites Article 29 of the 2004 Berlin Rules on International
Watercourses of the ILA, but these ru les also require a threshold of significant
676
effect on the aquatic environment or sustainable development of waters” .
Evidently Argentina assumes that any imp act, however insignificant, must be the
673
Río Declaration, op. cit., Principle 17 (emphasis added).
674
Convention on Biological Diversity, Art. 14(1)(a) (1992) (“significant adverse effects”).
675UNEP EIA Principles, op. cit., Principle 1.
676AM, para. 3.205 & n. 365.
- 301 -subject of detailed enquiry and preventive m easures. This is not what international
law requires.
4.104 The International Law Commission’s Articles on the Prevention of
Transboundary Harm provide authoritative guidance on the point. They refer to “an
assessment of the possible transboundary harm caused by that activity, including any
environmental impact assessment” 677. However, the articles only apply to activities
posing a risk of significant transboundary ha rm (Article 1). This includes “risks
taking the form of a high probability of ca using significant transboundary harm and
678
a low probability of causing disastrous transboundary harm” . At no point does the
Commission suggest that insignificant risk s must be assessed or avoided. The
Commission’s commentary to Article 7 says th at “[t]he requirement of article 7 is
fully consonant with principle 17 of the Río Declaration on Environment and
679
Development” . Clearly, the ILC does not regard Article 7 as a departure from the
existing and very consistent practice reflected in Principle 17 of the Río Declaration,
and adopted by consensus by the very la rge number of States, including Argentina
and Uruguay, which participated in th e 1992 UN Conference on Environment and
Development.
4.105 Significant harm is neither “likel y” nor “possible” within the terms of
existing international precedents if it is not reasonably foreseeable on some objective
basis. According to the International Law Commission, whether there is such a risk has
to be determined objectively: “as denoting an appreciation of possible harm resulting
6772001 Draft Articles, op. cit., Art. 7.
678
Ibid., Art. 2(a).
679
Ibid., p. 402, comment 3.
- 302 - 680
from an activity which a properly informed observer had or ought to have had” . A
similar view was taken by the Appellate Body of the World Trade Organization in
Japan - Measures Affecting the Import of Apples . Upholding the United States’
complaint that restrictions on apple imports were inconsistent with the Application
of Sanitary and Phytosanitary Measures, the Appellate Body concluded that Japan
had failed in its duty to conduct a proper risk assessment when it assumed the
existence of a risk and simply referred to generally available scientific data: there
must be specific and objective data to demonstrate a significant risk arising from the
681
particular trade that a member sought to restrain .
4.106 Nor would the position be any different if formulated in accordance with
the precautionary principle. The Intern ational Law Commission was well aware of
the precautionary principle when it drafted its Articles on Prevention of
Transboundary Harm and the commentary ther eto. The precautionary principle is
referred to at several points in the commentary, including the commentary to Article
7682, but nowhere does the Commission suggest that harm which is speculative or
unlikely, or which cannot be measured objectively, constit utes a potentially
significant adverse impact that must be assessed in an EIA. On the contrary, the
680Ibid., p. 385, comment 14.
681Japan - Measures Affecting the Import of Apples , op. cit., para. 202. The Appellate Body
stated: “Under the SPS Agreement, the obligation to conduct an assessment of ‘risk’ is not
satisfied merely by a general discussion of the disease sought to be avoided by the imposition
of a phytosanitary measure. The Appellate B ody found the risk assessment at issue in EC -
Hormones not to be ‘sufficiently specific’ even though the scientific articles cited by the
importing Member had evaluated the ‘carcinogeni c potential of entire categories of hormones,
or of the hormones at issue in general.’” Applie d to the present dispute this means that it is not
enough for Argentina to show that pulp mills in general are known to pollute rivers. There are
after all various types of pulp mills. It must be shown that a mill of the type under construction,
discharging into a river with characteristics like those of the Uruguay River, is likely to cause
significant harm.
682
2001 Draft Articles, op. cit., p. 403, comment 4.
- 303 -Commission interprets the phrase “significant adverse impact” in the following way:
“[t]he harm must lead to a real detrimental effect on matters such as, for example,
human health, industry, propert y, environment or agriculture in other States. Such
detrimental effects must be susceptible of being measured by factual and objective
683
standards” . The Commission did not say by “subjective or opinionated views”,
yet that is the standard Argentina would have the Court adopt.
Section VI.
The Environmental Review of the Botnia Plant Satisfies the Requirements of
the 1975 Statute and International Law
4.107 Article 7 of the 1975 Statute provides for notification of projects that can
“affect” the “quality” of the “waters” of the Uruguay River. As discussed in Chapter
3, Uruguay has fully complied with its ob ligations under that Article. As this
Section will demonstrate, to the extent the 1975 Statute imposes any additional
requirements for Environmental Impact Assessment, Uruguay has fully met those
requirements as well. In particular, Uruguay has comprehens ively assessed the
potential for all significant adverse transboundary impacts, and provided its
assessment to Argentina 68. Neither the 1975 Statute nor general international law
require more.
A. U RUGUAY ’S LAW ON EIA
4.108 Uruguayan law requires the ri gorous assessment of potential
environmental impacts, and is consistent with international standards. The IFC’s
independent experts analysed Uruguay’s environmental protection regime and
683Ibid., p. 388, comment 4.
684See infra, Chaps. 2, 3.
- 304 -concluded that “the permit setting pro cess used by DINAMA is practical and
rigorous” 685.
4.109 Before major projects like the Botnia plant can even initiate the process to
obtain an AAP 686, the proponent must submit extensive information to DINAMA,
including, at a minimum, a description of: the project itself; the location where the
project will be executed and its area of influence; the potential environmental impact
that may result from the project; and anticipated preventive, mitigation, and
687
corrective measures .
4.110 Based on that submission and its own independent judgment, DINAMA
places the project into one of three categories: “A”, “B”, or “C” 688. Category C
projects include those “entailing activities , constructions or works whose execution
could cause a negative environmental im pact of quantitat ive or qualitative
significance, regardless of whether preventive or mitigation measures are
689
planned.” Classification of a project as Category C (which is how DINAMA
classified the Botnia plant) does not mean that negative impacts are likely or even
expected to occur. Rather, a Category C classification signifies only that Uruguayan
law mandates the strictest form of environmental review.
4.111 Proponents wishing to carry out Ca tegory C projects must apply for, and
obtain, an AAP. To receive this, the proponent must submit for DINAMA’s
685
Final CIS, Annex A, op. cit., p. A6.7. UCM, Vol. VIII, Annex 174.
686 See generally Decree No. 435/994, Environmental Impact Assessment Regulation
(hereinafter “Decree No. 435/994”), Art. 1 (21 September 1994). UCM, Vol. II, Annex 9.
687
Ibid., Art. 4. The proponent must also provide its proposed classification of the project,
according to the categories established in the following paragraph of text.
688
Ibid., Art. 5.
689
Ibid., Art. 5(c).
- 305 -consideration: (a) Project Documentation; (b) an Environmental Impact Assessment
Report; and (c) an Environmental Impact Assessment Summary.
4.112 Project Documentation must contain, at a minimum:
• the executive summary of the project, containing a project description
and the basic design and plans;
• a reference to the legal and admi nistrative framework, which must
identify the applicable regulations and permits or authorisations
needed;
• the location of the project and its area of influence, from the
perspective of its geographic and political-administrative location;
• a description of the different activities to be carried out within the
project, staff to be employed, raw materials to be used, and waste
expected to be produced; and
• a description of the stages of the project (construction, operation, and
termination) and of the activities it entails, both directly and
690
indirectly .
4.113 The Environmental Impact Asse ssment Report must both “consider the
project and its potential area of influenc e, including a general macro-environmental
framework” and provide an “objective comparison between conditions prior to and
after execution of the project”, cons idering its “construction, operation and
691
termination stages” . The EIA Report must contain detailed information and
analyses. It requires assessment of the features of the “receiving environment”,
including an assessment of the “existing use of resources” and of “sensitive or risk
areas”. This must entail, at a minimum, assessment of the physical environment,
including “water, soil, [and] landscape”, the “biotic e nvironment”, including the
690
Ibid., Art. 10.
691
Ibid., Art. 11.
- 306 -“fauna, flora, [and] aquatic biota”, and the “anthropogenic environment”, including
“population, activities, soil uses, [and] historical and cultural sites” 692.
4.114 The EIA Report must also cont ain a detailed “identification and
assessment of impacts”. This must include a “prediction of direct and indirect,
simple and cumulative impacts, as well as risks derived from the environmental
situation resulting from execution of the project”. It must have “predictions of the
evolution of negative environmental imp acts, comparing the environmental state
with and without the project.” The EIA Report must also provide a “quantification
of the identified environmental impacts, both from a geographical and temporal
perspective”, as well as a “comparison of results with both the present situation and
accepted standards” 693.
4.115 In addition, the EIA Report must contain a “determination of mitigation
measures”. This must include considera tion, at a minimum, of “the mitigation
measures that must be applied in order to reduce identified environmental impacts”;
the “compensatory or restorative measures that will need to be adopted”; the
“project’s environmental management pl ans”; and the “termination programs that
694
will need to be adopted” . Finally, the EIA Report must “clearly and explicitly
state any informational deficiencies, as well as any uncertainties encountered during
preparation”, and must “identify th e technicians who took part in its
development” 69.
692
Ibid., Art. 12, para. I.
693Ibid., Art. 12, para. II.
694Uruguayan law also provides that the EIA should include a “[m]onitoring, control and
auditing plan” where such a plan is to be “implemented in connection to the related
environmental factors within the project’s area of influence.” Ibid., Art. 12, para. IV.
695Ibid., Art. 12, para. IV.
- 307 -4.116 The Environmental Impact Asse ssment Summary (“EIA Summary”) must
contain a “succinct summary of the information contained in the Project
Documentation and the Environmental Impact Assessment”, as well as “the
conclusions of the principal environmental impacts identified in the Environmental
Impact Assessment and the measures that will be adopted with respect to each
impact.” Because the EIA Summary is used to facilitate public review and
comment, it is required to be “written in ea sily understood terms” while maintaining
696
its “technical accuracy and rigor” .
B. BOTNIA ’S NITIAL E NVIRONMENTAL IMPACT A SSESSMENT S UBMISSIONS TO
DINAMA
4.117 The formal approval process for the Botnia project commenced on 30
October 2003 when Botnia notified Uruguayan regulatory authorities of its intent to
undertake the project 69. DINAMA classified the Botnia project as Category C
(necessitating the strictest review), and required Botnia to apply for an AAP, which,
as described above, involved the subm ission of Project Documentation, a
comprehensive EIA Report, and an EIA Summary. DINAMA also explicitly
required that the material prepared by Botnia include an evaluation of the cumulative
impacts of both the Botnia and ENCE plants. Botnia retained professional
environmental consulting and engineering firms to prepare the EIA Report and EIA
Summary, and made its initial presen tation of these materials for DINAMA’s
consideration on 31 March 2004. These documents provided a tremendous amount
of technical information c oncerning the expected envi ronmental impacts of the
696
Ibid., Art. 9.
697
Botnia solicited its request for an authorisation of the port and duty free zones on 22 August
2004. These, however, were approved in the same Initial Environmental Authorisation as the
Botnia plant. Botnia AAP, op. cit., Art. 1. UCM, Vol. II, Annex 21.
- 308 -project that allowed Uruguay to assess th e proposed project, including its potential
transboundary impacts. The 31 March 2004 submission contained, inter alia ,
voluminous information on site selection, plant operations, existing environmental
conditions, and an assessment of potential impacts 698.
4.118 The 31 March 2004 submission explained that the plant’s proposed
location in Fray Bentos was chosen because the river in that area has a large volume
of water and thus a large capacity for dilution. As a result, effluents from the plant
would be quickly diluted to inconsequential concentrations. In addition, there were
699
no ecologically sensitive sites nearby . The site was also close to forest
plantations; as a result, environmental impacts from transporting raw materials to the
plant would be minimized. The IFC’s technical experts later conducted an
independent technical review of the siting of the plant, and confirmed the high river
flow, the lack of sensitive sites, and the pr oximity of plantations. The experts found
that Botnia had sufficiently considered the relevant environmental issues when
deciding where to locate the plant; and they confirmed the environmental suitability
700
of the location .
4.119 The 31 March 2004 report also expl ained the technical details of the
plant’s operations 701. It included detailed discussion of, among other things: (1) the
698
Botnia’s Project Documentation was included in its EIA Report.
699Botnia Environmental Impact Assessment Submitted to DINAMA, Chap. 3, pp. 1-2 (31
March 2004). UCM, Vol. X, Annex 218.
700
See Final CIS, op. cit., pp. 2.9-2.12. UCM, Vol. VIII, Annex 173.
701See generally Botnia Environmental Impact Assess ment Submitted to DINAMA, Chap. 4
(hereinafter “Botnia EIA, Chap. 4”) (31 March 2004). UCM, Vol. VI, Annex 158 . See also
Additional Report No. 2 of the Botnia Environmen tal Impact Assessment (2 September 2004).
UCM, Vol. VII, Annex 161. Additional Report No . 3 of the Botnia Environmental Impact
Assessment (5 October 2004). UCM, Vol. VII, Annex 162. Additional Report No. 5 of the
Botnia Environmental Impact Assessment (12 November 2004). UCM, Vol. VII, Annex 163.
- 309 -kraft bleaching process; (2) consumption, handling, storage, and disposal of
chemicals; (3) target levels of water c onsumption, emissions, and discharges; (4)
comparison of discharge levels with I PPC BAT, U.S. Envi ronmental Protection
Agency standards, and levels achieved by state-of-the art Scandinavian facilities; (5)
the chemical production plants and their expected emissions; and (6) target levels of
air emissions 702. Botnia pledged that operation of the plant would comply with IPPC
BAT 703. In their subsequent assessment, independent experts commissioned by the
IFC agreed that there was sufficient inform ation about the operation of the plant to
determine that adverse impacts would not occur 70. They also concurred that the
Botnia plant would comply with IPPC BAT in all respects 705.
4.120 The EIA provided Uruguay with deta iled information about the existing
environmental conditions in the Uruguay River, including:
• average flows over a period of twenty years and historic variations in
706
water levels ;
• loading and settling of sediments;
• existing water quality based on review of historical data collected by
CARU, as well as monitoring conduc ted by Botnia and ENCE, at
several locations;
Annex VIII to Additional Report No. 5 of th e Botnia Environmental Impact Assessment,
Studies of Plume Dispersion and Sediment St udies (12 November 2004). UCM, Vol. VII,
Annex 166. Botnia Cellulose Plant in Fray Bent os: Blueprint of the Port Works (report within
Botnia EIA submissions) (December 2004). UCM, Vol. VII, Annex 167.
702Botnia EIA, Chap. 4, op. cit., § 4. UCM, Vol. VI, Annex 158.
703See Ibid., § 4.(contains 280 pages of such information).
704See generally Final CIS, Annex A, op. cit. UCM, Vol. VIII, Annex 174. See also Final
CIS, Annex D, op. cit.. UCM, Vol. VIII, Annex 176.
705See, e.g., Final CIS, op. cit., pp. 2.21-23. UCM, Vol. VIII, Annex 173. See generally Final
CIS, Annex A, op. cit. UCM, Vol. VIII, Annex 174. See also Report of Expert Panel on the
Final Cumulative Impact Study for the Uruguay Pulp Mills, op. cit. , p. 2. UCM, Vol. VIII,
Annex 178.
706Botnia Environmental Impact Assessment Submitted to DINAMA, Chap. 5 (hereinafter
“Botnia EIA, Chap. 5”) pp. 13-15 (31 March 2004). UCM, Vol. VI, Annex 159.
- 310 - • existing uses of the Uruguay River, including municipal and
industrial uses that may effect water quality;
• characteristics of the geology, hydrology, and subterranean waters;
• survey of the flora and vegetation species in the area of influence;
• biodiversity of the arthropodic community, freshwater fish species,
bird species, bat species, and certain large mammals from among
eleven different locations, includi ng two sites along the coast of the
Uruguay River, one directly in the river, and one near Yaguareté Bay;
• sampling of benthos, phytoplankton, and zooplankton from three
sites, located upstream, downstream, and in the area of the plant, and
an extensive literature review of these communities 707.
The IFC’s independent experts later agreed that the information about the existing
environmental conditions in the river was adequate to assess the potential impacts of
708
the Botnia plant .
4.121 The 31 March 2004 report provided Uruguay with extensive analysis of
the potential environmental impacts of the Botnia plant’s operations, including
potential transboundary impacts. Because the assessment of impacts contained in
the EIA assumed that both the Botnia and ENCE plants would be in operation, its
conclusions regarding impacts were overstated. Nonetheless, as set forth below, the
report concluded that, even with both pl ants operating, neither Argentina nor
Uruguay would be adversely affected, a conclusion later endorsed by the IFC’s
independent technical consultants 709.
707
Ibid., pp. 13-211. The Botnia EIA also conduc ted baseline surveys of aspects of the
environment outside the scope of this disput e, including the human environment and an
appraisal of the landscape, which incorporated an analysis of the recreational, cultural, and
historic sites in the surrounding area. Ibid., pp. 212-280.
708
See generally Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay
Pulp Mills, op. cit. UCM, Vol. VIII, Annex 178.
709 See Final CIS, op. cit. , pp. 4.48-4.57 (analysing impacts to various locations on the
Argentine and Uruguayan side of the river and concluding that th e plant discharges will have
“no adverse effect on human health or aquatic life”). UCM, Vol. III, Annex 173.
- 311 -4.122 The 31 March 2004 report contained extensive modelling of the potential
impacts from the plant’s effluent discharge, including analysis of impacts during the
average, maximum, and mi nimum monthly flows of th e river, and during flow
reversals. It also modelled the impact of effluents under a condition referred to as
“summer low flows”, which were calculated based on data from a period of 20 years,
and under extreme low flow conditions. Th e EIA assessed the expected discharge,
dilution ratios, and effluent concentrations at the discharge points for each of those
flow conditions. The EIA modelled the exp ected increases for water temperature,
Biologically Dissolved Oxygen (“BOD”), Chemically Dissolved Oxygen (“COD”),
Total Suspended Solds (“TSS”), total nitrogen, total phosphorus, absorbable organic
halides (“AOX”), chlorinated phenolic co mpounds, chlorates, phenols and metals,
and dioxins and furans during average, summer low flow, and extreme low flow
conditions, and concluded that during average flow and summer low flow
conditions, the increase in the concentrati ons of these contaminants would be so
insignificant as to be undetectable. Even during extreme low flow conditions, the
EIA concluded that operation of the Botnia plant would not cause an increase in the
level of nutrients and COD beyond their normal pre-existing levels in the river. It
specifically assessed transboundary impacts, and found that, because the effluent
discharge would reach high levels of di lution within a short distance from the
diffuser, the effluents would not reach the Argentine side of the river, and therefore
Argentina would not be adversely impacted 710. Subsequent inde pendent modelling
by the IFC’s technical experts endorsed all of these conclusions, and confirmed that
during typical flow situations, the efflue nt discharge “will remain on the Uruguayan
710
Botnia EIA, Chap. 5, pp. 2-7, 2-12, 18-20. UCM, Vol. VI, Annex 159.
- 312 -side of the river and will not cross over to Argentina beyond trace levels” 71. During
rare flow reversals, the IFC’s technical expe rts confirmed that effluent may travel to
the Argentine side of the river, but at ex tremely small concentrations that would not
cause adverse effects 712.
4.123 The 31 March 2004 report found that there would be no significant impact
on recreational areas in Uruguay, and no effect whatsoever on other recreational
areas, including in Argentina, even taking into account the operation of the ENCE
plant. The report evaluated the impacts to the flora and fauna in the river, including
in Argentina. It conducted this analysis by drawing upon studies of both the impact
of pulp mills on other rivers and studies of the existing biology of the Uruguay
River, and found that no adverse impacts were expected. Finally, the report assessed
impacts to fish, and concluded that adverse impacts were highly unlikely in either
713
Uruguay or Argentina . The IFC’s technical experts later agreed with these
conclusions, finding that “[w]astewater from the two plants is treated to levels at
which it poses no direct threat to aquatic life or recreational use of the river, and it is
further diluted to undetectab le limits within a short di stance of the point of
discharge” .714
4.124 The 31 March 2004 report concluded that eutrophication would not be
caused in either Uruguay or Argentina by the discharge of nitrogen or phosphorus
from the Botnia plant. It found that, ev en under summer low flow conditions, the
711
Final CIS, op. cit., pp. 4.50 & 4.56-4.57. UCM, Vol. VIII, Annex 173.
712
Ibid., 4.56-57.
713
Botnia Environmental Impact Assessment Submitted to DINAMA, Chap. 6 (hereinafter
“Botnia EIA, Chap. 6”), pp. 69-70 (31 March 2004). UCM, Vol. VI, Annex 160.
714
Final CIS, op. cit. , pp. 4.56-4.57. UCM, Vol. VIII, Annex 173. See also ibid. , pp. 4.85-
4.86.
- 313 -contribution of nitrogen from plant effluents would be twenty times lower than the
amount of nitrogen required for eutrophication. It likewise found that the amount of
phosphorus in the river after operation of the plant would be forty times lower than
needed for eutrophication 71. The IFC’s independent experts likewise found that the
discharge of nitrogen and phosphorus from the Botnia plant would not increase the
716
risk of eutrophication .
4.125 The report assessed the impact of the Botnia plant on the quality of the
water used for human consumption. It found that there would be no adverse impact
for either Argentina or Uruguay because the plant would not cause an exceedance of
any CARU water quality standard 717. The IFC’s independent experts concurred with
this conclusion, finding that the discharges from the Botnia plant would not travel to
the Argentine side of the river, and theref ore would not adversely impact water used
there for human consumption, and that the drinking water of Fray Bentos (on the
718
Uruguayan side) would likewise not be affected .
C. U RUGUAY ’S RESPONSE TO THE B OTNIA ENVIRONMENTAL IMPACT A SSESSMENT
REPORT
4.126 Uruguay did not simply take the analysis provided in the 31 March 2004
report at face value. Far from it, rather, Uruguay applied its independent analysis
and judgment in examining the report’s adequacy. DINAMA scrupulously reviewed
the materials submitted by Botnia 719. Although the conclusions in the EIA were
715
Botnia EIA, Chap. 6, op. cit., p. 66. UCM, Vol. VI, 160.
716
See Final CIS, op, cit., pp. 4.50, 4.56-4.57. UCM, Vol. VIII, Annex 173.
717
Botnia EIA, Chap. 6, op. cit., pp. 75-80. UCM. Vol. VI, Annex 160.
718
Final CIS, op. cit., pp. 4.52-53, 4.56-4.57. UCM, Vol. VIII, Annex 173.
719
Decree No. 435/994, op. cit., Art. 14. UCM, Vol. II, Annex 9.
- 314 -ultimately substantiated (both by DINAMA and later by the IFC), to ensure that the
potential impacts of the plant were fully assessed before deciding whether to issue an
AAP, DINAMA issued five written requests for additional information 72. These
requests required significant expansions of the 31 March 2004 report, including
more detailed evaluation a nd calculation of the dilution factors, plume modelling
during low flow periods, specific concentr ation values at various locations on the
Uruguay River 721, and more information on the chemical production line 72. Botnia
responded to these requests with additional informati on in August, September,
October, November, December of 2004 and January of 2005. In addition, DINAMA
held extensive and frequent in-person consultations with representatives from Botnia
723
throughout this period .
4.127 With respect to water quality issues, the most significant additional
information provided by Botnia was its 12 November 2004 report. The 12
November 2004 report presented the results of two sets of complex numerical plume
720
The specific dates of the requests were 23 Ju ly, 13 August, 24 September, 19 October, and
20 December 2004. DINAMA Environmental Imp act Assessment Report for the Botnia Plant
(hereinafter “DINAMA EIA Report, Botnia”), p. 1 (11 February 2005). UCM, Vol. II, Annex
20.
721Additional Report No. 2 of the Botnia Envi ronmental Impact Assessment, pp. 2239, 2241-
2244, 2248-2254 (2 September 2004). UCM, Vol. VII, Annex 161. Additional Report No. 5
of the Botnia Environmental Impact Assessment, pp. 2415-2419 (12 November 2004). Annex
VIII to Additional Report No. 5 of the Botnia Environmental Impact Assessment, Studies of
Plume Dispersion and Sediment Studies, pp. 2415-2419 (12 November 2004). UCM, Vol. VII,
Annex 164. Additional Report No. 7 of the Botnia Environmental Impact Assessment, p. 3792
(17 January 2005). UCM, Vol. VII, Annex 167.
722
See Additional Report No. 2 of the Botnia Envi ronmental Impact Assessment, p. 2296 (2
September 2004). UCM, Vol. VII, Annex 161. Additional Report No. 3 of the Botnia
Environmental Impact Assessment, p. 2650 (5 October 2004). UCM, Vol. VII, Annex 162.
Annex VIII to Additional Report No. 5 of th e Botnia Environmental Impact Assessment,
Studies of Plume Dispersion and Sediment Studies, pp. 2423-2425 (12 November 2004).
UCM, Vol. VII, Annex, 164. Additional Report No. 7 of the Botnia Environmental Impact
Assessment, pp. 3792 (17 January 2005). UCM, Vol. VII, Annex 167.
723DINAMA EIA Report, Botnia, op. cit., p. 1. UCM, Vol. II, Annex 20.
- 315 -modelling studies during low flow periods in the river. The 12 November 2004
report also estimated both dilution and concentration of effluents at ten key locations
along the river based on this modelling, in cluding two key locations in Argentina:
the mouth of the Gualeguaychú River and Isla el Sauzal. Ba sed on this refined
modelling, no adverse impacts to water quality were predicted. In particular,
because the modelling showed that effluent discharges will rarely, if ever, cross over
to the Argentine side of the river beyond tr ace levels, the impacts were predicted to
be practically nil. This analysis is si milar to the process followed in the Final
Cumulative Impact Study prepared by the IFC’s independent e xperts, and yielded
very similar results. The 12 November 2004 report also presented a detailed
evaluation of fish toxicity and bioaccumulation, as well as modelling and analysis of
potential sedimentation impacts from the Botnia port. The results of the modelling
showed that any impacts to sedimentation from the port would be small and
insignificant. With respect to all of these issues, the 12 November 2004 report
provided a further basis for DINAMA’s ultimate conclusion that adverse impacts
will not occur, including on the Argentine side of the river.
4.128 After thoroughly reviewing all of the reports and other information
submitted by Botnia, DINAMA provided public notice of the project in the Official
Gazette before deciding whether to issue an AAP. The notice was also published in
several widely circulated newspapers: El Páis, El Observador, and La República 724.
The EIA Summary was also made available for public comment from 7 December
724Botnia AAP, op. cit., subsec. (X). UCM, Vol. II, Annex 21.
- 316 -2004 to 3 January 2005 72, and a public meeting was held in Fray Bentos on 21
726
December 2004 .
4.129 After the public comment peri od ended, DINAMA published a report
detailing its environmental assessment review of the potential impacts of the Botnia
plant 727. DINAMA’s report, dated 11 February 2005, covered inter alia:
• the existing water quality of the Uruguay River and historical average
flow, low flow, and flow reversal conditions;
• the existing conditions with respect to noise and air quality;
• the potential impacts from effluent discharges of contaminants,
including introduction of BOD, COD, AOX, a nd others to both the
Uruguayan and Argentine side of the river;
• the cumulative impacts of the effluent discharge from the Botnia and
ENCE plants;
• the potential for eutrophication as a result of nitrogen and phosphorus
discharges;
• the potential impacts to sedimentation from the Botnia port;
• the potential impacts from air emissions and noise related issues;
• soil emissions; and
• effects on the biota of the Uruguay River.
4.130 DINAMA’s report concluded “that th e analysis that concludes in the
present report is of sufficient quality to enable the issuance of an opinion with regard
728
to the application for environmental authorisation of the project” . It found that:
No negative residual impacts making [the project] inadmissible
were found in the study of the project of cellulose plant and
structures related, in the sense that the impacts generated can be
725DINAMA EIA Report, Botnia, op. cit., p. 2. UCM, Vol. II, Annex 20.
726Ibid.
727See generally ibid.
728
Ibid., p. 19.
- 317 - prevented, mitigated, or compensated, if activities are c729ied out
as planned and appropriate safety measures are taken .
4.131 DINAMA’s February 2005 report e xplicitly evaluated the impacts on
Argentina and found that:
The results obtained when applying the hydrodynamic model
indicate that the expected increase in contam730nt concentrations
on the coast of Argentina is practically nil .
4.132 DINAMA based this conclusion on numerous factors. In particular,
DINAMA found that, even under a modelled low flow condition when the river has
less dilutive capacity, the dilution will still be more than sufficient so that the
materials from the Botnia effluent discharge will not reach the Argentine side of the
731
river in amounts beyond trace levels . DINAMA’s conclusion with respect to
impacts on Argentina was well-supported by its extensive review of substances of
potential concern in the Botnia effluent discharge, including BOD, COD, AOX, and
phosphorus. DINAMA also concluded that no adverse impacts from the Botnia port,
such as sedimentation, were likely to occur, particularly in any location outside the
immediate vicinity of the port.
4.133 After careful review of the Botnia EIA, including all of the supplemental
reports and information supplied by Botnia, DINAMA recommended that
MVOTMA issue an AAP for the Botnia plant. By the time DINAMA made that
recommendation, nearly 16 months after Botnia first requested this authorisation,
DINAMA had assembled an extensive file on the project that included, among other
729
DINAMA stated that a monitoring program would be required to ensure protection of the
environment. Ibid., pp. 28-29.
730
Ibid., p. 9.
731
See ibid., p. 9.
- 318 -things, the original Botnia EIA Report and the seven supplements to the EIA, public
comment, and its own internal analysis. The approximately four thousand pages of
technical and scientific data contained therein were more than sufficient to assess the
plant’s environmental impacts. They included detailed information regarding the
baseline condition of the Uruguay River, the production processes of the plant, the
effluent treatment process, the effluent quality, the expected concentrations of
effluent at various points in the river (including on the Argentine side), and the
expected impacts to water and sediment quality , as well as to the fauna of the
Uruguay River. Only after this extensive assessment was completed did MVOTMA
grant Botnia its AAP, on 15 February 2005.
D. U RUGUAY ’SC ONTINUING ENVIRONMENTAL A SSESSMENT AND C ONTROL
4.134 The AAP for the Botnia plant contai ns explicit conditions to ensure that
the actual performance of the plant will be as assessed. Effluent discharge
limitations are among the most important of these conditions. DINAMA imposed
the following effluent discharge limitations on the Botnia plant pursuant to Decree
253/79 and the provisions of the AAP73:
• Floating material - Absent
• Temperature - Maximum 30 degrees Celsius, provided that the
effluent does not elevate the temperature of the water body by more
than 2 degrees
• Ph - Between 6.0 and 9.0
• DBO5 - Maximum 60 mg/L
• Total Suspended Solids - Maximum 150 mg/L
• Oils and Greases - Maximum 50 mg/L
• Sulfur - Maximum 1 mg/L
• Detergents - Maximum 4 mg/L
• Phenolic substances - Maximum 0.5 mg/L
• Flow - The maximum flow cannot exceed the mean flow of the
period of activity
732
Botnia AAP, op. cit., Art. 2(y) & (z). UCM, Vol. II, Annex 21.
- 319 - • Amonium - Maximum 5 mg/L
• Phosphorus - Maximum 5 mg/L
• Fecal Coliforms - Maximum 5000 FC / 100 mL
• Cyanide - Maximum 1 mg/L
• Arsenic - Maximum 0.5 mg/L
• Cadmium - Maximum 0.05 mg/L
• Copper - Maximum 1 mg/L
• Cromium - Maximum 1 mg/L
• Mercury - Maximum 0.005 mg/L
• Nickel - Maximum 2 mg/L
• Lead - Maximum 0.3 mg/L
• Zinc - Maximum 0.3 mg/L.
• AOX - 6 mg/L
• Total Nitrogen - 8 mg/L
• Nitrates - 4 mg/L.
4.135 The AAP also requires that the Botn ia plant operate in strict accordance
with the water quality standards establis hed both by Uruguayan law and the CARU
Digest. Where these standards differ, the Botnia plant must operate in compliance
733
with the strictest standard.
4.136 Uruguay’s issuance of the AAP for the Botnia plant did not end its
continuing assessment of the environmental im pacts of the project. As explained in
Chapter 3, the AAP is an initial environmental authorisation. It is the first in a series
of environmental authorisations that must be issued by DINAMA before
construction of the plant can commence, and before the plant can begin to operate.
The AAP itself sets out the additional author isations that must be issued, and the
requirements that the project proponent, in this case Botnia, must satisfy in order to
obtain them. Thus, as stipulated in its AAP, Botnia submitted to DINAMA detailed
environmental management plans for the various construction phases, which were
approved by DINAMA (and the corresponding authorisations were issued) on 12
733See ibid. , Art. 2(aa) (providing that at a minimum the Botnia plant must operate in
compliance with the CARU and the Uruguayan water quality standards).
- 320 -April 2005 (plan for the removal of vegetation and earth movement) 734, 22 August
2005 (plan for the construction of the concrete foundation and the emissions
735
stack) , 18 January 2006 (supplement to prior environmental management
736
plans) , 10 May 2006 (plan for the constructi on of the wastewater treatment
plant) , and 9 April 2007 (plan for the constructio n of the landfill). Each of these
approvals reflects a further, more de tailed control by DINAMA of the project
impacts.
4.137 In addition, any project involving industrial discharges to the Uruguay
River must receive a Wastewater Treatment System Approval, as well as a
738
Discharge Authorisation . DINAMA first issues the Wastewater Treatment
Approval which contains effluent discha rge limitations (such as annual maximum
loading and concentration values), with which the project must comply. Once
operations have begun and compliance with the discharge limitations is verified, as a
739
formal matter, the Discharge Authorisation is issued . DINAMA has issued the
740
Wastewater Treatment System Approval for the Botnia plant , which confirms
requirements such as maximum permitted average monthly and annual loads for
734DINAMA Environmental Management Plan Approval for the Botnia plant (for the removal
of vegetation and earth movement) (12 April 2005). UCM, Vol. II, Annex 22.
735DINAMA Environmental Management Plan Approval for the Botnia Plant (for the
construction of the concrete foundation and the emissions stack) (22 August 2005). UCM, Vol.
II, Annex 23.
736
DINAMA Environmental Management Plan A pproval for the Botnia Plant (supplement to
prior environmental management plans) (18 January 2006). UCM, Vol. II, Annex 26.
737DINAMA Environmental Management Plan Approval for the Botnia Plant (for the
construction of the wastewater treatment plant) (10 May 2006). UCM, Vol. II, Annex 28.
738Decree No. 253/79, op. cit., Arts. 28, 29. UCM, Vol. II, Annex 6.
739Ibid., Art. 29, para. 3.
740 DINAMA Resolution No. 0148/07, Approval of the Wastewater Treatment
System for the Botnia plant (4 July 2007). UCM, Vol. X, Annex 225.
- 321 -COD, DBO, TSS, total nitr ogen, total phosphorus, and AOX 741. The Discharge
Authorisation will only be issued upon verification that the Botnia plant is operating
in compliance with these additional requir ements, as well as the requirements of
Decree 253/79. Moreover, by law, a Discha rge Authorisation is only valid for eight
years, and Botnia must seek a renewal of this authorisation prior to its expiration as a
condition to continuing operations 742.
4.138 In addition, prior to commencing operations, Uruguay has required Botnia
to obtain approval of another environmental management plan before receiving an
authorisation to begin operating the plant. At a minimum, this plan must include:
• an implementation plan for mitigation measures and compensation;
• a monitoring plan;
• a contingency plan;
• an abandonment plan;
• a management plan for the part of the plot not directly affected by the
plant;
• a plan for the prevention of accidents; and
• a solid waste management plant 74.
DINAMA must review and approve each of these items before operation can begin,
and each approval itself entails the continuing analysis and supervision of the plant
and its operations. As of the presentati on of this Counter-Memorial, DINAMA has
not yet approved Botnia’s proposed e nvironmental management plan for the
operational phase of the project, and cons equently MVOTMA has not issued an
authorisation to commence operations.
4.139 The EIA process for the Botnia plant will not end even with DINAMA’s
approval of the Botnia’s monitoring plan, contingency plan, and other environmental
741Ibid., p. 2 (Table 1).
742Decree No. 253/79, op. cit., Art. 29, para. 3. UCM, Vol. II, Annex 6.
743Botnia AAP, op. cit., Art. 2(h) & (i). UCM, Vol. II, Annex 21.
- 322 -management plans required by the AAP or the issuance of the Discharge
Authorisation. It will continue throughout th e life of the plant. For example, the
AAP provides that Botnia may be requi red to submit an updated EIA before
744
commencing operations . And, as discussed more fully in Chapter 7, prior to
commencing operation, the Botnia plant must receive an Authorisation to Operate
(“AAO”), which will be granted only upon a sh owing that the project will comply
with the requirements of the AAP, the re presentations in the EIA, and other
authorisations 745. Continued operation of the plant is contingent upon receiving a
746
renewal of the AAO from DI NAMA every three years . Renewal of the AAO
must include revision and updating of the environmental management plans for the
plant, in addition to a review of all au thorisations permitting the discharge of
747
effluents into the Uruguay River . As a condition for renewing the AAO,
DINAMA may require that the Botnia plant adopt additional protective measures
with respect to its monitoring and other environmental management plans, as well as
its operational processes, as DINAMA deems necessary to ensure compliance with
applicable law, including CARU water quality standards. Therefore, the
environmental review process for the Botn ia plant will continue throughout the life
of the plant, and changes to effluent li mitations and plant operational processes may
be made as necessary.
744Ibid., Art. 2(d).
745Ibid., Arts. 23, 24.
746Ibid., Art. 23.
747Ibid., Art. 24, para. 2.
- 323 - E. U RUGUAY S C OMPLIANCE WITH THE 1975S TATUTE
4.140 Uruguay has done precisely what it agreed to do in Articles 41 and 36 of
the 1975 Statute regarding the prevention of pollution and the preservation of the
ecological balance of the Uruguay River. Working jointly with Argentina, Uruguay
has designed through CARU a detailed en vironmental regulatory regime that
stipulates binding standards for the riverThese mutually agreed upon regulations
have as their express purpose the preventio n of pollution and the maintenance of the
ecological balance of the river. Accordingly, there can be no dispute that they are
deemed by both Argentina and Uruguay to be adequately protective of the river.
4.141 Uruguay has ensured and will continue to ensure that neither the
construction nor operation of the Botnia plant will transgress any of these CARU
regulations. It has made mandatory, as a principle of its general environmental law,
compliance with all CARU regulations. Uruguay has also made Botnia’s fulfillment
of all CARU regulations an express condition of the project’s Initial Environmental
Authorisation, as well as all subsequent au thorisations. It has also formally and
repeatedly pledged to exercise its sovereign powers to the fullest extent necessary
should any violations unexpectedly occur. Simply put, there is nothing else that
Uruguay could have done, or should have done, to guarantee compliance with
CARU environmental standards. Arge ntina itself tacitl y acknowledges the
unimpeachable strength of Uruguay’s environmental case by failing to cite a single
CARU regulation that will be breached by the operation of the Botnia plant.
Argentina has not done so, of course, because it cannot. All of CARU standards will
be fully complied with, as the IFC’s inde pendent experts who reviewed the Botnia
project so found.
- 324 -4.142 Faced with a complete inability to present an environmental case based on
the environmental standards it mutually agreed with Uruguay would govern the
Uruguay River, Argentina has attempted to save its claim by focusing on the Botnia
plant’s alleged discharge of phosphorus. Bu t this focus serves to reveal the utter
poverty of Argentina’s environmental case. The discharge of phosphorus is not
regulated by CARU, and Argentina has never once suggested it should be. Rather,
the regulation of phosphorus has fallen to th e Parties’ respective national regulatory
systems. Although Uruguay ha s duly enacted both a wate r quality standard and a
discharge limitation for phosphorus, Argentina has not. Leaving aside the hypocrisy
of Argentina’s claim -- that no limits apply to phosphorus discharges from the
Argentine side, but Uruguay must apply its own law to limit discharges from its side
-- the Botnia plant will not raise the le vel of phosphorus in the river beyond
insignificant amounts that will have no impact on the health of the river, a fact
confirmed by the IFC’s independent experts.
4.143 Argentina’s attempts to base its case on general international law fare no
better. Nothing relating to the Botnia plant violates any provision of the Convention
on Biological Diversity, the Ramsar Convention, or the POPS Convention. Nor does
the precautionary principle assist Argentina, which has not, and cannot, identify any
risk of serious or irreversible harm. Argentina’s attempt to avoid its burden of proof
by invoking the precautionary principle to transfer that burden to Uruguay is
significant only as an admission by Argentina that it cannot sustain that burden; as
shown above, Argentina’s attempted burden- shifting lacks any foundation in law.
Finally, Uruguay has fully complied with al l its obligations under international law
regarding environmental impact assessment since Uruguay has diligently assessed --
- 325 -and is continuing to assess -- all significant risks, including those presenting
potential transboundary harm. Having identified no such risks in the course of the
sixteen-month permitting process that resulted in Botnia’s Initial Environmental
Authorisation, nor in the review that continues still, there is nothing in the
international law of environmental imp act assessment that suggests the project
should not move forward.
4.144 In sum, Uruguay has fully complied with all the substantive environmental
obligations set forth in the 1975 Statute. Th e proof of this lies not only in the work
performed by DINAMA -- which is itself suff icient to support this conclusion -- but
also in the findings of the Internationa l Finance Corporation and its independent
experts. That work, which resulted in an overwhelming endorsement of the Botnia
project, is the subject of the next Chapter.
- 326 - CHAPTER 5.
THE CONCLUSIONS OF THE INTERNATIONAL FINANCE
CORPORATION AND ITS INDEPENDENT EXPERTS Section I.
Deference Due to the International
Finance Corporation and Its Independent Technical Experts
5.1 On 21 November 2006, the Board of Directors of the International Finance
Corporation (IFC), a part of the World Bank Group, approved a US$170 million
investment in the Botnia plant. 748 In conjunction with this decision, the Multilateral
Investment Guarantee Agency (MIGA) also approved a US$350 million guarantee
for the project. As the IFC stated in announcing the approvals, the IFC and MIGA
agreed to participate in the Botnia project only after they were “convinced” the plant
would not only “generate significant economic benefits for Uruguay” but would also
“cause no environmental harm” 74.
5.2 The IFC’s decision was made only after “a thorough review of the facts”
confirmed that the Botnia plant “will be operated to the highest global standards and
comply with IFC and MIGA’s respective environmental and social policies.” 750 The
IFC explained that it arrived at this conclusion after an “extensive due diligence
process”, which included “conclusive and positive findings of a cumulative impact
study and a subsequent review of the st udy undertaken by independent experts
751
(Hatfield).” These expert analyses laid to rest any concerns about the
environmental impact of the proposed proj ect. In the view of the IFC, its
748
The IFC’s membership consists of the 179 States that are members of the International Bank
for Reconstruction and Development (World Ba nk) that have signed and deposited with the
Corporate Secretariat of the World Bank Group an Instrument of Acceptance of the IFC
Articles of Agreement.
749International Finance Corporation, Press Release, “IFC and MIGA Board Approves Orion
Pulp Mill in Uruguay, 2,500 Jobs to be Created , No Environmental Harm” (hereinafter “IFC
and MIGA Board Approves Orion Pulp Mill in Uruguay, 2,500 Jobs to be Created, No
Environmental Harm”), p. 1 (21 November 2006). UCM, Vol. IX, Annex 206.
750
Ibid.
751
Ibid.
-329-independent experts provided “conclusive evidence that the local area, including the
Argentine city of Gualeguaychú, will not experience adverse environmental
impacts” 75.
5.3 The precise contents of the IFC’s Final Cumulative Impact Study (Final
CIS) will be examined at length below. Among the many noteworthy (and, to
Argentina’s case, devastating) findings it contains are:
• “ENCE and Botnia have combin ed their operating experience and
process knowledge with vendor offers to develop mill configurations
that would be accepted in Canada, the USA or Europe. The mills will
employ state-of-the-art process technologies in every respect and it is
anticipated that once they are operational, they will perform better
than any of the companies’ existing mills with respect to
environmental performance.” 753
• “The expected performance with respect to bleaching effluent flow,754
COD content and color will be among the best in the world.”
• “Based on emissions levels from the IPPC-BAT (2001) and
Tasmanian-AMT (2004) standards, it was found the mills are
755
implementing BAT.”
• “In summary, based on the above an alysis, the BEKP mills proposed
by Botnia-Orion and ENCE-CMB are considered by the CIS team to
be IPPC-BAT (2001) or better.” 756
• “The cumulative assessment of water quality in the Río Uruguay
indicates that no water quality standards or guide lines will be
exceeded as a result of the discharge of effluents from the two
mills.”757
• “The AAPs also require the mills to comply with international surface
water quality standards developed by the Administrative Commission
of the Río Uruguay (Comision Ad ministradora del Río Uruguay).
752Ibid.
75International Finance Corporation, Cumu lative Impact Study, Uruguay Pulp Mills
(hereinafter “Final CIS”), p. ES.v. (September 2006). UCM, Vol. VIII, Annex 173.
754Ibid.
755Ibid., p. ES.iv.
756Ibid., p. ES.vi.
757Ibid., p. ES.xx.
-330- These water quality standards are approved by the Governments of
Argentina and Uruguay and are consid ered by these Governments as
acceptable and adequately protective of the aquatic environment of
758
the Río Uruguay.”
• On the “Rio Ur759ay along the Argentina Side: Water quality
unaffected.”
• In the “Beach Area at Ñandubaysal, Argentina: Water quality
unaffected” 76.
5.4 Understandably, Argentina’s Memo rial studiously ignores the Botnia
project’s unqualified endorsement by the IF C and its impartial technical experts.
Instead, Argentina asserts, in the face of all evidence, that the Botnia project will
somehow cause environmental harm that w ill violate the substantive provisions of
the 1975 Statute. Uruguay subm its that the project’s unchallenged compliance with
CARU and Uruguayan regulations, as discussed in Chapter 4, are legally dispositive
in this regard. On this basis alone, Ar gentina’s claim that Uruguay has violated the
substantive provisions of the 1975 Statute must fail. Above and beyond this basic
defect in Argentina’s case, the IFC’s independent evaluation of the facts further
confirms that Argentina’s substantive environmental arguments lack merit. It is
axiomatic that Argentina bears the burden of proof of establishing the technical facts
761
upon which its claim is founded . Yet, it has come nowhere close to doing so; nor
could it. Especially in light of the findings of the Final CIS, the facts are clear: the
758
Ibid., pp. ES.i-ii.
759
Ibid., p. ES.xxi.
760Ibid.
761Case Concerning the Application of the C onvention on the Prevention and Punishment of
the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), Judgment, I.C.J.
Reports 2007 , p. 75, para. 204 (“On the burden or onus of proof, it is well established in
general that the applicant must establish its case and that a party asserting a fact must establish
it…”); Case Concerning Military and Paramilitary Activities in and against Nicaragua
(Nicaragua v. United States of America), Jurisdiction and Admissibility, I.C.J. Reports 1984, p.
437, para. 101 (“it is the litigant seeking to establish a fact who bearsthe burden of proving
it”).
-331-Botnia plant is not only environmentally viable, it will be among the best such plants
in the world.
A. T HE W EIGHT TO BE A CCORDED THE IFC’ SF INDINGS
5.5 It is, of course, the Court’s responsibility to determine which of the
materials submitted by the Parties “have probative value with regard to the alleged
facts” and to “make its own clear assessment of their weight, reliability and
762
value” . In the present case, the Court has before it not just the assessments of the
Parties themselves. It also has the bene fit of a comprehensive technical assessment
prepared by the independent and impartia l International Finance Corporation that
fully and without qualification endorses th e project. The IFC’s conclusions are
entitled to great weight. As this Court noted in the Case Concerning Armed
Activities on the Territory of the Congo (Democratic Republic of the Congo v.
Uganda), “evidence obtained” by independent persons “experienced in assessing
large amounts of factual information, some of it of a technical nature, merits special
attention”76. Independent fact-finding reports prepared by disinterested
764
international organizations are ofte n found to be particularly credible . As the
762Case Concerning Armed Activities on the Territo ry of the Congo (Democratic Republic of
the Congo v. Uganda), Judgment, I.C.J. Reports 2005 , p. 34, paras. 58-59; see also Genocide
Case (Judgment), op. cit., p. 77, para. 212 (“The Court must itself make its own determination
of the facts which are relevant to the lawhich the Applicant claims the Respondent has
breached.”).
763
Armed Activities (Judgment), op. cit., p. 35, para. 61. The report under consideration was
the report of the Porter Commission, which examined persons involved in the actions at issue
in the case.
764Genocide Case (Judgment), op. cit. , p. 145, para. 408 (“The Court notes the fact that the
report of the United Nations Secretary-Genera l does not establish any direct involvement by
President Milošević with the massacre.”); Armed Activities (Judgment), op. cit., p. 34, para. 60,
and p. 75, para. 237 (giving evidentiary weight to the United Nations Panels of Experts on the
Illegal Exploitation of Natural Resources andOther Forms of Wealth of the Democratic
Republic of the Congo); Legal Consequences of the Construction of a Wall in the Occupied
Palestinian Territory, Advisory Opinion, I.C.J. Reports 2004 , pp. 161-162, paras. 56-58 (The
-332-Court observed in the Case Concerning Military and Paramilitary Activities in and
against Nicaragua (Nicaragua v. United States of America) , “evidence of a
disinterested witness -- one who is not a part y to the proceedings and stands to gain
or lose nothing from its outcome” is “regarded as prima facie of superior credibility”
765
than evidence prepared on behalf of a Party . Thus, in the Genocide Case , the
Court found that the United Nations Secr etary-General’s report on “The Fall of
Srebrenica” had “considerable authority” because of the “care taken in preparing the
report, its comprehensive sources and the independence of those responsible for its
766
preparation” .
5.6 The IFC’s independent validation of the Botnia project is precisely the sort
of evidence to which considerable weight should be given. The IFC, a part of the
World Bank Group, is an independent international organization of which both
Argentina and Uruguay are members. The process that resulted in the IFC’s
approval of the Botnia project was delib erate and careful, and its outcome never
predetermined. Throughout, the IFC repeatedly made clear that it would participate
in the project only if Botnia demonstrat ed its compliance with the IFC’s mandatory
environmental and social standards. Convincing the IFC to its satisfaction was long
and involved. In over nineteen months of due diligence, the IFC, among other
things:
• reviewed extensive submissions from Botnia;
Court found “sufficient information and evidence to enable it to arrive at a judicial conclusion
upon any disputed questions of fact” because it had been provided reports by the Secretary-
General of the United Nations and reports by sp ecial rapporteurs and competent organs of the
United Nations).
765
Military and Paramilitary Activities (Merits), op. cit., p. 43, para. 69.
766
Genocide Case (Judgment), op. cit., pp. 81-83, paras. 228-230.
-333- • conducted site visits to Argentina and Uruguay;
• commissioned a draft Cumulative Impact Study (CIS) by outside
environmental experts;
• solicited and considered comments on the draft CIS from interested
parties, including from Argentina and Argentine citizens and groups;
• retained further independent experts from Hatfield to evaluate
whether there were deficiencies in the draft CIS;
• engaged still other experts from Ec oMetrix and elsewhere to revise
the draft CIS based on comments provided by Hatfield;
• retained Hatfield to assess whether its comments on the draft CIS
were fully addressed by EcoMetrix in the final CIS.
5.7 Against this, Argentina has commissi oned several “expert” reports solely
for purposes of these proceedings. The authors of these reports are not independent;
they are being paid by Argentina and are acting on its behalf. The Court’s
jurisprudence is clear that such reports are accorded less weight. As it stated in
Democratic Republic of the Congo v. Uganda , and repeated in the Genocide Case,
“[t]he Court will treat with caution evidentiary materials specially prepared for this
case …” 76. The Court’s scepticism is particularly appropriate for the reports offered
by Argentina in this case, for the reasons stated in Chapter 6. They are no match for
the comprehensive, well-documented, and impartial reports produced by the
independent experts retained by the IFC.
B. IFCP OLICY AND P ERFORMANCE STANDARDS ARE DETAILED ,EXTENSIVE ,AND
C OVER A LLP OTENTIAL ENVIRONMENTAL IMPACTS
5.8 In evaluating the weight to be accord ed the IFC’s conclusions, it is useful
to understand the process that led to them . As a matter of policy, the IFC takes
76Ibid., p. 77. para. 213; Armed Activities (Judgment), op. cit., p. 35, para. 35.
-334-environmental concerns with the utmost seriousness 768. It does not participate in
projects that it determines after review ar e environmentally harmful. This guiding
principle is set forth in the IFC’s Policy on Social and Environmental Sustainability,
which mandates that “[c]entral to the IFC’s development mission are its efforts to
carry out its investment operations” in “a manner that ‘do no harm’ to people or the
769
environment” . Accordingly, IFC policy forbid s the financing of “new business
activity that cannot be expected to meet” the IFC’s environmental and social
Performance Standards 770. To give effect to its environmental and social protection
policy, the IFC requires its clients to provi de a rigorous “assessment” of the “social
and environmental risks and impacts of their projects” and to implement “measures
771
to meet the requirements” of a set of comprehensive Performance Standards . It
768
Multilateral financial institutes, such as the IFC and MIGA, are obligated under general
international law to ensure that their activities are adequately pr otective of the environment.
As one commentator has stated, “multilateral de velopment banks” have a “sufficient degree of
international personality to subject them to certain duties under international law, including
duties which arise under the operation of gene ral and specific rules of international
environmental law.” Sands, Philippe: Principl es of International Environmental Law. 2 nd
Edition. Cambridge, Cambridge University Press, 2003, pp. 1024-1025. As a result,
“[m]ultilateral development banks are under an oblig ation to comply with general principles of
international law relating to the protection of th e environment, and any failure to comply with
such obligations might entail their international responsibility, as well as liability for damages”.
Ibid.
769
International Finance Corporation, Policy on Social and Environmental Sustainability
(hereinafter “IFC Policy”), para. 8 (30 April 2006), available at http://www.ifc.org/ifcext/
enviro.nsf/AttachmentsByTitle/pol_SocEnvSustainability2006/$FILE/SustainabilityPolicy.pdf
(last visited on 9 July 2007). The IFC has a long and distinguished history of promoting
sustainable development by participating only in projects that it determines will not be harmful
to the environment. Even prior to the adoption of the current Policy on Social and
Environmental Sustainability , the IFC’s policies in this regard were manifested in its
Operational Policies on Environmental Assessment , including Operational Policy 4.01, which
governed Environmental Assessment, and Operational Policy 7.50, which governed Projects on
International Waterways. These operational policies, now superseded by the Policy on Social
and Environmental Sustainability , imposed strict requirements regarding the assessment of
potential environmental impacts, including those of a transboundary nature.
770
IFC Policy, op. cit., para. 17.
771
Ibid., para. 10.
-335-then reviews the client’s assessment, assists it in developing “measures to avoid,
minimize, mitigate or compensate for social and environmental impacts”. and
monitors its “social and environmental performance throughout the life of IFC’s
772
investment” .
5.9 The IFC’s social and environmen tal review of a potential project
comprises three “key components” that it uses to ascertain whether the project can
be expected to meet the Performance Standards. First, the IFC reviews the “social
773
and environmental risks and impacts of the project as assessed by the client.” If
the client’s assessment is insufficient, the IFC “requires the client to undertake
additional Assessment or, where appropriate, to commission Assessment by external
774
experts” . Second, the IFC analyses the client’s “commitment and capacity” to
“manage these expected impacts, including the client’s social and environmental
management system.” 775 Third, the IFC assesses the “role of third parties in the
776
project’s compliance with the Performance Standards” .
5.10 In conducting its envir onmental and social review , the IFC places a high
premium on the engagement of local stakeh olders. In that regard, the IFC has
“committed” itself to putting “into practice processes of community engagement that
777
ensure the free, prior, and informed consultation of the affected communities” . To
ensure that such local consultation takes place, the IFC “reviews the client’s
772Ibid., para. 11.
773Ibid., para. 15.
774Ibid.
775Ibid.
776Ibid.
777Ibid., para. 20.
-336-documentation of the engagement process” 778. The IFC also, prior to presenting the
project for approval by the IFC’s Board of Directors, engages in its “own
investigation” to “assure[] itself that the client’s community engagement is one that
779
involves free, prior, and informed consultation” .
5.11 In addition, the IFC requires projects to “set up and administer appropriate
mechanisms or procedures to address pr oject-related grievances or complaints”
780
regarding social and environmental issues . To that end, the IFC has established a
mechanism through the Compliance Advisor/Ombudsman (CAO) -- who is
independent of IFC management and reports directly to the President of the World
Bank Group -- to “enable individuals and co mmunities affected by IFC projects to
781
raise their concerns to an i ndependent oversight authority” . The CAO is tasked
with responding to complaints relating to IFC-funded projects and overseeing
“audits of IFC’s social and environmental performance, particularly in relation to
sensitive projects, to ascertain compliance with policies, guidelines, procedures, and
systems” .82
C. THE IFC’ S PERFORMANCE S TANDARDS
5.12 TIhCe’s Policy on Social and Environmental Sustainability is realized
through eight Performance Standards that are intended to “manage social and
778Ibid.
779Ibid., para. 20.
780Ibid., para. 31.
781Ibid., para. 32.
782Ibid., para. 33.
-337-environmental risks and impacts” 78. Compliance with the Performance Standards is
784
required “throughout the life of an investment by IFC” . The Performance
Standards are meant to be comprehensive. They address the following topics:
1. Social and Environmental Assessment and Management System;
2. Labour and Working Conditions;
3. Pollution Prevention and Abatement;
4. Community Health, Safety and Security;
5. Land Acquisition and Involuntary Resettlement;
6. Biodiversity Conservation and Sustainable Natural Resources
Management;
7. Indigenous Peoples; and
8. Cultural Heritage.
5.13 Importantly, the Performance Standard s take full account of obligations
under international environmental law by incorporating into the standards, inter alia:
• the Convention on Environmenta l Impact Assessment in a
Transboundary Context;
• the POPS Convention;
• the Convention on Long-Range Transboundary Air Pollution;
• the Basel Convention on the Control of Transboundary Movements of
Hazardous Wastes;
• the Convention on Biological Diversity;
• the Convention on Wetlands;
• the Rotterdam Convention of Prior Informed Consent for Certain
Hazardous Chemicals and Pesticides in International Trade;
783International Finance Corporation, Performance Standards on Social and Environmental
Sustainability (hereinafter “IFC Performance Standards”), Introduction, para. 1 (30 April
2006), available at http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/
pol_PerformanceStandards2006_full/$FILE/IFC+Performance+Standards.pdf (last visited on 9
July 2007). The standards, published on 30 April 2006, were a result of two and a half years of
evaluation both within the IFC through public solicitation of outside input. They were subject
to a stakeholder comment process, and are meant to reflect the expectation of broad
constituencies, including environmental NGOs and private sector entities.
784Ibid.
-338- • the Convention on International Trade in Endangered Species of Wild
Fauna and Flora;
• the Convention Concerning the Protection of World Cultural and
Natural Heritage; and
• the Convention on Migratory Species.
Moreover, separate and independent of th e Performance Standards, the IFC requires
a project to “comply with applicable national laws, including those laws
785
implementing host country obligations under international law ” . As a result, in
approving the Botnia project, the IFC n ecessarily determined that the project
complied with all applicable Uruguayan en vironmental laws a nd regulations, and
with all applicable international legal obligations, specifically including the 1975
Statute and CARU regulations, and each of the aforementioned Conventions.
5.14 Four Performance Standards are particularly pertinent to these
proceedings.
1. Performance Standard 1
5.15 Performance Standard 1 requires that a project be comprehensively
assessed for potential environmental and social impacts and that it have a
satisfactory management system to address all environmental and social issues. At a
minimum, the management system must incorporate a Social and Environmental
Assessment; a management program; sufficient organisa tional capacity; training;
786
community engagement; monitoring; and reporting . In the words of the IFC,
Performance Standard 1 “underscores th e importance of managing social and
785Ibid., Introduction, para. 3 (emphasis added).
786Ibid., Performance Standard 1, para. 3.
-339-environmental performance throughout the life of a project” 787. To that end, the
objectives of the standard are:
• To identify and assess social and environmental impacts, both
adverse and beneficial, in the project’s area of influence;
• To avoid, or where avoidance is not possible, minimize, mitigate, or
compensate for adverse impacts on workers, affected communities,
and the environment;
• To ensure that affected communities are appropriately engaged on
issues that could potentially affect them; and
• To promote improved social and environmental performance of
companies through the effective use of management systems.
5.16 As discussed in Chapter 4, an a ssessment of environmental risk is not
intended to be accomplished in a single report, but rather is an ongoing process.
This approach is reflected in the IF C assessment regime , which requires an
“effective social and environmenta l management system” based on a “ dynamic,
continuous process” that involves a “thorough assessment of potential social and
environmental impacts and risks from the earl y stages of project development, and
provides order and consistency for mitigating and managing these on an ongoing
788
basis.”
5.17 Performance Standard 1 imposes strict requirements for a project’s Social
and Environmental Assessment. The Assess ment must “consider in an integrated
manner the potential social and environmenta l (including labour, health, and safety)
789
risks and impacts of the project.” It must be “based on current information,
including an accurate project description, and appropriate social and environmental
787Ibid., Performance Standard 1, para. 1.
788Ibid. (emphasis added).
789Ibid., Performance Standard 1, para. 4.
-340- 790
baseline data.” Importantly, the IFC mandates that the Assessment consider “all
relevant social and environmental risks and impacts of the projects” and “those who
791
will be affected by such risks and impacts.” Further, the Assessment must take
into account the “[a]pplicable laws and regul ations of the jurisdictions in which the
project operates that pertain to social and environmental matters, including those
laws implementing host country obligations under international law.” 792
5.18 The impacts that must be assesse d are comprehensive. The IFC requires
that “[r]isks and impacts” be analysed in the context of the project’s area of
influence, which is defined as encompassing:
(i) the primary project site(s) and related facilities that the client
(including its contractors) devel ops or controls, such as power
transmission corridors, pipelines, canals, tunnels, relocation and
access roads, borrow and disposal areas, construction camps;
(ii) associated facilities that are not funded as part of the project
(funding may be provided separately by the client or by third
parties including the government), and whose viability and
existence depend exclusively on the project and whose goods or
services are essential for the successful operation of the project;
(iii) areas potentially impacted by cumulative impacts from
further planned development of th e project, any existing project
or condition, and other project-related developments that are
realistically defined at the time the Social and Environmental
Assessment is undertaken; and
(iv) areas potentially affected by impacts from unplanned but
predictable developments caused by the project that may occur
later or at a different location. The area of influence does not
include potential impacts that would occur without the project or
793
independently of the project .
790Ibid.
791
Ibid.
792
Ibid.
793
Ibid., Performance Standard 1, para. 5.
-341-5.19 Such risks and impacts must be asse ssed for all “key stages of the project
cycle, including pre-construction, cons truction, operation, and decommission or
closure”, as well as, where relevant, the “role and capacity of third parties (such as
local and national governments, contractors an d suppliers), to the extent that they
794
pose a risk to the project.”
5.20 Significantly for the present case, Performance Standard 1 requires that the
Assessment “consider potential transboundary effects, such as pollution of air, or use
or pollution of international waterways, as well as global impacts, such as the
795
emission of greenhouse gasses.” In that regard, the Performance Standard is
intended to give effect to the Conventi on on Environmental Impact Assessment in a
Transboundary Context, which, in the vi ew of the IFC, “lays down the general
obligation of states to not ify and consult each other on all major projects under
consideration that are likely to have a significant adverse en vironmental impact
across boundaries” 79. Thus, even if the 1991 Conventi on is not directly applicable
to Uruguay, in approving the Botnia project the IFC found that Uruguay had
satisfied all obligations thereunder.
5.21 In addition to requiring a compre hensive assessment of the social and
environmental impacts of the project, th e IFC mandates that a project adopt a
Management Program. This must consist of operational policies, procedures, and
practices that take “into account the relevant findings of the Social and
794Ibid., Performance Standard 1, para. 6.
795Ibid.
796
International Finance Corporation, Guidance Notes: Performance Standards on Social and
Environmental Sustainability, (hereinafter “IFC Guidance Notes”) (30 April 2006), Guidance
Note 1, p. 31, available at http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/
pol_GuidanceNote_full/$FILE/GuidanceNote_full.pdf (last visited on 9 July 2007).
-342-Environmental Assessment and the resu lt of consultation with affected
communities.” 797 The Management Program must “favor avoidance and prevention
of impacts over minimization, mitigation, or compensation, where technically and
financially feasible”, and where “risks a nd impacts cannot be avoided or prevented,
mitigation measures and actions” must be “identified so that the project operates in
compliance with applicable laws and regula tions, and meets the requirements” of all
798
of the IFC’s Performance Standards. The IFC also requires a project to submit
periodic Monitoring Reports based on its management program throughout the life
of the investment, to consult with affected communities, and to establish a grievance
mechanism 799.
5.22 In sum, by finding that the Botn ia project satisfied Performance Standard
1, the IFC found that Botnia had, among ot her things, properly assessed all relevant
social and environmental impacts, including potential transboundary effects, and that
it had done so in accordance with the 1 991 Convention and all other applicable
international legal obligations; adopted adequate policies, procedures, and practices
to take account of the a ssessment; sufficiently consulte d with stakeholders; and
adequately committed to monitor the project.
2. Performance Standard 3
5.23 Performance Standard 3 estab lishes the IFC’s requirements for Pollution
Prevention and Abatement. It is based on the recognition that “increased industrial
activity” can “generate increased levels of pollution to air, water, and land” that can
797IFC Performance Standards, op. cit., Performance Standard 1, para. 13.
798
Ibid., Performance Standard 1, para. 14.
799
Ibid.
-343-“threaten people and the environment at the local, regional, and global level.” 800
Performance Standard 3’s objective is th erefore to “avoid or minimize adverse
impacts on human health and the environment by avoiding or minimizing pollution
from project activities.” 801 To achieve this objective, it imposes an expansive
definition of “pollution”, which it defines as including “both hazardous and non-
hazardous pollutants in the solid, liquid, or gaseous forms.” 802 The definition is
expressly intended to encompass other forms of pollution as well, including
“nuisance odors, noise, vibration, radiation, electromagnetic energy, and the creation
of potential visual impacts including light.” 803 As a result, the IFC’s definition of
pollution is significantly broader than the one found in the 1975 Statute.
5.24 Performance Standard 3 sets se veral binding requirements regarding
pollution that are particularly pertinent to the present case. First, the standard
mandates that during the “design, cons truction, operation and decommissioning of
the project”, it must “consider ambient conditions and apply pollution prevention
and control technologies and practices (techni ques) that are best suited to avoid or,
where avoidance is not feasible, minimi ze or reduce adverse impacts on human
health and the environment while remaining technically and financially feasible and
804
cost-effective.” These pollution prevention and control techniques must be
“tailored to the hazards and risks associated with project emissions and consistent
800Ibid., Performance Standard 3, para. 1.
801Ibid.
802Ibid., Performance Standard 3, para. 1, note 1.
803
Ibid.
804
Ibid., Performance Standard 3, para. 3.
-344-with good international industry practice, as reflected in internationally recognized
sources, including the IFC’s Environmental, Health and Safety Guidelines.” 805
5.25 Second, Performance Standard 3 requi res the project to “avoid the release
of pollutants or, when avoidance is not feas ible, minimize or control the intensity or
load of their release.” 806 This requirement, by its terms, “applies to the release of
pollutants due to routine, non-routine or ac cidental circumstances with the potential
for local, regional and transboundary impacts”, including those covered by the
Convention on Long-Range Transboundary Air Pollution. 807
5.26 Third, Performance Standard 3 requi res the project to “avoid or minimize
the generation of hazardous and non-haza rdous waste materials as far as
808
practicable.” Where “waste generation cann ot be avoided but has been
minimized”, the project must “recover and reuse waste.” 809 If such waste cannot be
recovered or reused, the project must “t reat, destroy, and dispose of it in an
810
environmentally sound manner.” Where the generated waste is considered
hazardous, as defined by local legislation or international conventions, the project
must “explore commercially reasonable alternatives for its environmentally sound
disposal considering the limitations applicable to its transboundary movement.” 811
805
Ibid.
806
Ibid., Performance Standard 3, para. 4.
807
Ibid., and note 4.
808
Ibid., Performance Standard 3, para. 5.
809
Ibid.
810
Ibid.
811
Ibid.
-345-This must be done in a manner consiste nt with the objectives of the Basel
812
Convention on the Control of Transboundary Movements of Hazardous Wastes.
5.27 Fourth, the Performance Standard s tipulates that the project must “avoid
or, when avoidance is not feasible, minimize or control the release of hazardous
materials resulting from their production, tr ansportation, handling, storage and use
for project activities.”813 The project must further “avoid the manufacture, trade, and
use of chemicals and hazardous materials subject to international bans or phase-
outs” due to, among other things, “high toxicity to living organisms”,
814
“environmental persiste nce”, and “potential for bioaccumulation.” i
requirement is expressly intended to be in terpreted consistent with the objectives of
the POPS Convention. In that regard, a project is required to “minimize the
unintentional generation and release” of ch emicals listed in Annex C of the POPS
Convention, which includes dioxins and furans 81. In addition, the project must
review the list of chemicals in Annex III of the Rotterdam Convention of Prior
Informed Consent for Certain Hazardous Chem icals and Pesticides in International
816
Trade, and “seek to prevent their manufacture, trade and use” .
5.28 Fifth, Performance Standard 3 requi res the project to be “prepared to
respond to process upset, accident, and emergency situations in a manner appropriate
to the operational risks and the need to prevent their potential negative
812Ibid., & note 6.
813Ibid., Performance Standard 3, para. 6.
814Ibid.
815IFC Guidance Notes, op. cit., Guidance Note 3, para. G20.
816Ibid., Guidance Note 3, para. G21.
-346- 817
consequences.” This must include having a “p lan that addresses the training,
resources, responsibilities, communication, procedures, and other aspects required to
effectively respond to emergencies associated with project hazards.” 818
5.29 Sixth, the Performance Standard requires the project to refer to the current
version of the Environmental Health a nd Safety Guidelines, which “contain the
performance levels and measures that are normally acceptable and applicable to
projects”, when evaluating and selecting pollution prevention and control
techniques. If the host country’s regulati ons differ from the levels and measures
found in the EHS Guidelines, the project must “achieve whichever is more
819
stringent.”
5.30 Finally, to address “adverse project impacts on existing ambient
conditions”, such as air, surface and groundwater, and soils, the project must
consider, among other things, the “finite assimilative capacity of the environment”,
i.e., the “capacity of the environment for absorbing an incremental load of pollutants
while remaining below a threshold of unacceptable risk to human health and the
environment.” 820 It must also take account of existing and future land use; the
existing ambient conditions; th e project’s proximity to ecologically sensitive or
protected areas; and the potential for cumulative impacts with uncertain and
irreversible consequences. Further, the pr oject must “promote st rategies that avoid
or, where avoidance is not feasible, minimize or reduce the release of pollutants,
including strategies that contribute to the improvement of ambient conditions when
817
IFC Performance Standards, op. cit., Performance Standard 3, para. 7.
818Ibid.
819Ibid., Performance Standard 3, para. 8.
820Ibid., Performance Standard 3, para. 9 & note 9.
-347-the project has the potential to constitute a significant source of emissions in an
already degraded area.” 821 Such strategies must include, among other things, the
822
“evaluation of project location alternatives and emissions offsets.”
5.31 In sum, in finding that the Botnia project has complied with the
requirements of Performance Standard 3, the IFC found, among other things, that the
project was designed and would be constructed and operated in a manner best suited
to avoid pollution, including with respect to transboundary impacts covered by the
Convention on Long-Range Transboundary Air Pollution; that it adequately
addressed hazardous and non-hazardous ma terials, consistent with the POPS
Convention, the Basel Convention on the Control of Transboundary Movements of
Hazardous Wastes, and the Rotterdam Convention on Prior Informed Consent for
Certain Hazardous Chemicals and Pesticides in International Trade; that it had
evaluated and selected pollution prevention and control techniques in accordance
with the EHS Guidelines; and that it had sufficiently addressed adverse impacts on
ambient conditions, including on air, surface and groundwater, and soils.
3. Performance Standard 4
5.32 Performance Standard 4 sets forth the IFC’s requirements for Community
Health, Safety, and Security. It is based on the IFC’s recognition that projects can
“increase the potential for community e xposure to risks and impacts arising from
equipment accidents, structural failures, and releases of hazardous materials”, and
823
that communities may also be “affected by impacts on their natural resources.”
821
Ibid., Performance Standard 3, para. 9.
822
Ibid.
823Ibid., Performance Standard 4, para. 1.
-348-The Performance Standard therefore is in tended “to avoid or minimize risks to and
impacts on the health and safety of the local community during the project life cycle
from both routine and non-routine circumstances.” 824
5.33 Performance Standard 4 requires th e project to “evaluate the risks and
impacts to the health and safety of the affected community during the design,
construction, operation, and decommissioning of the project” and to “establish
preventive measures to address them in a manner commensurate with the identified
825
risks and impacts” . In establishing such measures, the project must “favour the
prevention or avoidance of risks and impacts over minimization and reduction” 826.
To fulfil these obligations, the IFC requi res that, among other things, the project
“design, construct, and operate and decommission the structural elements or
components of the project in accordance with good internationa l industry practice”
and to “prevent or minimize the potential for community exposure to hazardous
materials that may be released by the project” 827.
5.34 In sum, by approving the Botnia pr oject, the IFC determined that Botnia
had properly evaluated the risks and impacts to the health and safety of the affected
community.
4. Performance Standard 6
5.35 Performance Standard 6 concer ns Biodiversity Conservation and
Sustainable Natural Resource Management. It is founded upon the IFC’s view that
“protecting and conserving biodiversity -- the variety of life in all its forms,
824
Ibid.
825Ibid., Performance Standard 4, para. 4.
826Ibid.
827Ibid., Performance Standard 4, paras. 6-7.
-349-including genetic, species and ecosystem di versity -- and its ability to change and
828
evolve, is fundamental to sustainable development.” The Performance Standard
takes as its reference point the appro ach to biodiversity in the Convention on
Biological Diversity, which defines biodiversity to include “ecosystems and habitats,
species and communities, and genes and genomes, all of which have social
economic, cultural and sc ientific importance.” 829 By its terms, Performance
Standard 6 reflects the “objectives of the Convention on Biological Diversity to
conserve biological diversit y and promote use of renewable natural resources in a
sustainable manner.” 830 It is therefore meant to address how a project “can avoid or
mitigate threats to biological diversity ar ising from” its operation as well as
“sustainably manage rene wable natural resources.” 831 Performance Standard 6 is
also intended to reflect the “standard s set” by the Convention on Wetlands; the
Convention on International Trade in Endangered Species of Wild Fauna and Flora;
the Convention Concerning the Protection of World Cultural and Natural Heritage;
832
and the Convention on Migratory Species .
5.36 Performance Standard 6 mandates th at, in order to “avoid or minimize
adverse impacts to biodiversity in the proj ect’s area of influence”, the project must
“assess the significance of project impacts on al l levels of biodiversity as an integral
part of the Social and Environmental A ssessment process”, which is required to
828Ibid., Performance Standard 6, para 1.
829Ibid.
830Ibid.
831
Ibid.
832
IFC Guidance Notes, op. cit., Guidance Note 6, p. 124.
-350-“take into account the differing values attached to biodiversity by specific
833
stakeholders, as well as identify impacts on ecosystem services.”
5.37 In sum, by approving the Botnia project, the IFC found that the project had
properly assessed potential impacts on biodiversity in accordance with the standards
set in the Convention on Biological Diversity and other applicable treaties.
Section II.
The Botnia Plant Was Evaluated According to the IFC’s Performance
Standards Prior to the Decision to Finance the Project
5.38 Botnia’s request for IFC financi ng subjected it to evaluation under the
Performance Standards described above. The IFC’s ultimate decision to participate
in the Botnia project was made only after it concluded that all requirements set forth
in those standards were fully satisfied. As the IFC stated in announcing its funding
decision: the Botnia plant “ will be operated to the hi ghest global standards and
834
comply with IFC and MIGA's respective environmental and social standards” .
5.39 In December 2004, Botnia submitted its extensive Environmental Impact
Assessment (EIA) prepared during the Uruguayan environmental permitting process
to the IFC. The EIA, in nearly 1,000 pages exclusive of the seven additional
informational supplements, assessed the an ticipated environmental impact of the
Botnia plant. As discussed in more detail in Chapter 4, it included, among other
things, details regarding the pulp manufactur ing process to be used at the plant,
anticipated effluents and emissions, the potential environmental impacts, mitigation
to prevent environmental risks, emerge ncy/accident management plans, and a
833IFC Performance Standards, op. cit., Performance Standard 6, para 1.
834“IFC and MIGA Board Approves Orion Pulp Mill in Uruguay, 2,500 Jobs to be Created, No
Environmental Harm,” p. 1 (emphasis added). UCM, Vol. IX, Annex 206.
-351-comprehensive monitoring plan. The Botnia EIA also detailed the plant’s
compliance with EU BAT and with IPPC directives.
5.40 In April 2005, the IFC publicly released the Botnia EIA pursuant to its
internal disclosure policies. To ensure compliance with its environmental and social
policies, the IFC also commissioned an independent Cumulative Impact Study (CIS)
to evaluate the impacts of the Botnia and ENCE plants taken together. The Draft
CIS was publicly released on the IFC we bsite on 19 December 2005, and was then
opened to a 60-day public comment period. Stakeholder input was solicited in both
written form and in public forum held in Buenos Aires and Montevideo in February
2006 .35
5.41 Simultaneously, the IFC’s Co mpliance Advisor Ombudsman (CAO)
conducted its own oversight pursuant to a complaint issued in September 2005 by an
Argentine non-governmental organization, the Center for Human Rights and
Environment. The CAO issued a prelim inary assessment in November 2005 and a
final audit report in February 2006, which recommended that the IFC
“systematically document its appraisal of the adequacy of the clients’ social and
environmental processes and documentati on prior to public disclosure of
835International Finance Corporation, Transcription of Public Meeting Concerning the
Cumulative Impact Study of Uruguayan Pulp Mills, Puente Carrasco, Buenos Aires (16
February 2006), available at http://www.ifc.org/ifcext/lac.nsf/AttachmentsByTitle/
Uruguay_Transcript_BA_Feb06/$FILE/Uruguay_Transcript_BA_02-16-06.pdf (last visited on
9 July 2007); International Finance Corporation, Transcription of Public Meeting Concerning
the Cumulative Impact Study of Uruguayan Pulp Mills, Torre de los Profesionales, Montevideo
(14 February 2006), available at http://www.ifc.org/ifcext/lac.nsf/AttachmentsByTitle/
Uruguay_Transcript_Mont_Feb06/$FILE/Uruguay_Transcript_Mont_02-14-06.pdf (last
visited on 9 July 2007).
-352-[Environmental Assessment] documents, so that IFC in detail outlines the findings
of its environmental and social due diligence” 836.
5.42 In order to ensure that the Botn ia plant would be environmentally sound,
the IFC retained Hatfield Consultants Ltd. (“Hatfield”) of Canada, a team of
experienced environmental consultants, to serve as an Independent Expert Panel
charged with critically reviewing the draft CIS and Botnia EIA. The independence
and expertise of these consultants is not in dispute; Argentina it self has repeatedly
referred to them as “indépendants” 83, and referenced their work no less than thirteen
838
times in its Memorial . On 27 March 2006, Hatfield issued a report categorically
rejecting as “unsupported” and “unreasonable” claims th at “the mills will cause
catastrophic environmental damage” 839. It “did not find any reason to support the
predictions of catastrophic environmental da mage in the receiving environment that
840
have been presented by several stakeholders” . In so finding, the independent
experts rejected the dire environmental consequences that had been predicted in
comments provided to the consulting team by Argentina and the Center for Human
Rights and the Environment.
5.43 Although Hatfield concluded th ere was no rational basis for these
criticisms, it did find that the draft CIS had some inadequacies, which it emphasized
836
Compliance Advisor Ombudsman, CAO Aud it of IFC’s and MIGA’s Due Diligence for
Two Pulp Mills in Uruguay, Fi nal Report, p. 2 ( 22 February 2006). UCM, Vol. IX, Annex
202.
837AM, paras. 5.58, 7.1. (“independent”).
838AM, paras. 4.78, 5.17, 5.34, 5.39, 5.58, 5.59, 5.71, 7.5, 7.7, 7.42, 7.96, 7.107, 7.108.
839Hatfield Consultants, Report of Expert Pane l on the Draft Cumulative Impact Study for the
Uruguay Pulp Mills (hereinafter “Report of Expert Panel on the Draft Cumulative Impact
Study”), p. 2 (27 March 2006). UCM, Vol. VIII, Annex 170.
840Ibid.
-353-were primarily the result of a “lack of information, rather than environmentally
deficient factors in the proposed mill designs and operations” 841.
5.44 The IFC would not approve par ticipation in the project given the
deficiencies identified by Hatfield, however limited they were. It required that these
deficiencies be rectified before particip ation could occur. In pursuance of this
objective, on 9 May 2006, the IFC announced that Hatfield had identified a need for
“additional information and analysis about the environmental impacts” of the Botnia
project and had recommended certain “tec hnical improvements for consideration
842
that could enhance” the plan t’s “environmental performance” . To follow up on
these findings and recommendations, the IF C and Botnia agreed to “undertake”
843
actions to “complete” the “IFC’s environmental and social due diligence” . These
included the retention of new “independent consultants” by the IFC to “gather
additional data, perform additional analysis, and recalculate cumulative impacts” in
keeping with the recommendations of Hatf ield for incorporation into the final
CIS. 844 Hatfield would then review the “revised CIS and updated environmental
information” to “verify consistency and responsiveness to the findings and
845
recommendations of their report.” After its completion, the revised CIS would be
publicly disclosed for sixty days and would be an “essential factor” in the IFC’s
846
decision whether to participate in the project. In other words, the IFC publicly
841Ibid.
842International Finance Corporation, Uruguay Pulp Mills: IFC Action Plan Based on Findings
of Independent Expert Panel, p.1 (9 May 2006). UCM, Vol. IX, Annex 203.
843Ibid.
844Ibid.
845Ibid.
846
Ibid.
-354-committed to participating in the project only if the deficiencies identified by
Hatfield were fully addressed.
5.45 The IFC commissioned EcoMetrix, an independent environmental
consulting firm based in Toronto, to revise and complete the CIS in accordance with
Hatfield’s findings and recommendations. Sp ecifically, EcoMetrix was tasked with
revising the December 2005 draft CIS, incl uding its annexes, “to include additional
information to address all points raised by the expert panel in its April 2006 report”
and to “correct any inaccuracies, based on the latest available information” 847. Over
the following months, EcoMetrix complete d extensive modelling and analysis, and
also visited Uruguay to meet with DINAMA and to conduct a field visit to the site of
the Botnia plant 848. The Final CIS was released on 12 October 2006. As
summarized above, and as detailed more fully in the sections to follow, the Final
CIS enthusiastically endorsed the Botnia an d ENCE projects as “among the best in
849
the world.”
5.46 As it had with the draft CIS, the IFC retained the Hatfield consultants to
review the Final CIS. On 14 October 2006, Hatfield issued its report. After noting
that it had previously identified “def iciencies in the draft CIS” and had
“recommended courses of ac tion”, Hatfield dispelled any doubt about the
environmental and social soundness of th e project, and gave it an unqualified
endorsement: “We consider that the re vised CIS of September 2006 effectively
847International Finance Corporation, Cumula tive Impact Study, Uruguay Pulp Mills, Annex
H, p. H2.0 (September 2006). UCM, Vol. X, Annex 228.
848See ibid., p. H3.6 (terms of reference requiring in teraction with project management teams
and a field visit). UCM Vol. X, Annex 228. See also Final CIS, op. cit., p. 4.104 (noting that
the Final CIS team met with staff members of DINAMA). UCM, Vol. VIII, Annex 173.
849Final CIS, op. cit., p. ES.v.
-355-addresses the issues raised by ourselves and by stakeholders” for the Botnia
project.850 The report found that the plant would be built to the highest and most
sophisticated design specifications, concluding that “the mills are designed in
accordance with modern, environmentally su stainable practices, in accordance with
BAT, as defined by IPPC and other re gulatory agencies experienced with pulp
industry issues.” 851 Further, Hatfield concluded that the “current design and
planning process is appropriate for sust ainable, environmentally sound operations,
with no impacts on the health of people in the area, on either side of the Rió
852
Uruguay.” Indeed, the independent experts noted that “[w]e consider that these
mills will probably perform to a standard of the top five in the world” and that they
would discharge “lower quantities of pollutants than most of the older, smaller mills
853
in Latin America, USA and Canada.”
5.47 With regard to the concentration of possible pollutants, Hatfield noted that
the “Rió Uruguay is a very large river by world standards, the local meteorology and
topography have no features that lead to high concentrations of air pollutants, and no
urban or industrial areas exist in the region that may cause high concentrations of air
pollutants.” 854 Regarding the “concern expressed by many stakeholders regarding
dioxin discharges from the mills” -- a concern that was stressed by Argentina at the
June 2006 hearing on provisional measures -- Hatfield found this “concern to be
850Hatfield Consultants, Report of Expert Panel on the Final Cumulative Impact Study
for the Uruguay Pulp Mills (hereinafter “Rep ort of Expert Panel on the Final Cumulative
Impact Study”), p. 2 (14 October 2006). UCM, Vol. VIII, Annex 178.
851
Ibid.
852Ibid.
853Ibid.
854Ibid.
-356-unnecessary, given that the dioxin discharges from the two proposed mills will be
trivial, and at a concentration well below US drinking water standards.”
5.48 Based on Hatfield’s unqualified e ndorsement of the Botnia project, the
IFC’s Board of Directors approved participation in it on 21 November 2006 by a
vote of 24-1, with only the Ar gentine delegate voting agains t the project. It did so
because, in the view of the IFC, the Botnia project complied with all of the required
Performance Standards and applicable international legal obligation. In sum, the
IFC has verified through independent techni cal experts that the Botnia project will
cause no environmental harm. Uruguay su bmits that, on this basis alone,
Argentina’s claims that the project will violate the substantive obligations of the
1975 Statute must be rejected.
Section III.
The Evaluation in the Final Cumulative Impact Study
A. THE E XHAUSTIVE E NVIRONMENTAL REVIEW IN THE CISD EMONSTRATES THAT
THE BOTNIA P LANT W ILLN OT H ARM THE E NVIRONMENT
5.49 The thorough review by independent scientific experts retained by the IFC
leaves only one conclusion: there is no r easonable or objective scientific basis for
believing that the Botnia plant will cause any meaningful adverse impacts to the
857
Uruguay River .
85Ibid, p. 5.
85“IFC and MIGA Board Approves Orion Pulp Mill in Uruguay, 2,500 Jobs to be Created, No
Environmental Harm,” op. cit., p. 1 (noting that the Botniawill be operated to the
highest global standards and comply with IFC and MIGA’s respective environmental and
social standards”). UCM, Vol. IX, Annex 206.
857The First Hatfield Report was principally authored by Dr. L. Wayne Dwernychuk, but
involved the assistance of six other scientthe fields of fisherie s, pulp mull effluent,
effluent plume delineation modelling, process engineering, forestry, and air modelling . Report
of Expert Panel on the Draft Cumulative Impact Study, op.cit., p. 29. UCM, Vol. VIII, Annex
170. The Final CIS was prepared by a team twenty scientists, including scientists from
EcoMetrix Inc. (aquatic assessment, overaoject coordination), Processys Inc. (process
-357-5.50 The First Hatfield Report, on whic h Argentina heavily relies, concluded
that “[t]he panel did not find any reason to support the predictions of catastrophic
environmental damage in the receiving environment that have been presented by
858
several stakeholders” . The Second Hatfield Report, which Argentina
conspicuously ignores in the Memorial 859, goes even farther and concludes that the
Botnia plant will have “sustainable environmentally sound operations, with no
impacts on the health of the people in the area, on either side of the Rió Uruguay”:
We further consider that the CIS shows that the mills are
designed in accordance with modern, environmentally
sustainable practices, in accordance with BAT, as defined by the
IPPC and other regulatory agencies experienced with pulp
industry issues. The current design and planning process is
appropriate for sustainable envi ronmentally sound operations,
with no impacts on the health of the people in the area, on either
side of the Uruguay River.
We consider that these mills will probably perform to a standard
of the top five in the world if operated to design specifications,
discharging lower quantities of pollutants than most 860the older,
smaller mills in Latin America, USA and Canada.
5.51 Predictably, Argentina attempts to criticise the conclusions of the Final
CIS and the other earlier studies that found an absence of meaningful risk to the
environment. But Argentina has not come close to meeting its burden of proving on
the basis of scientifically sound informati on that the conclusions of the Final CIS
technology), SENES Consultants Ltd. (air quality, socio-economic assessment, economic
assessment, human health assessment), and independent consultants for hydrodynamic
modelling and plantation assessments. Final CIS, op. cit., p. 1.10. UCM Vol. VIII, Annex
173. The Second Hatfield Report was authored by Dr. Dwernychuk and Neil McCubbin of
Hatfield Consultants Inc.
858
Report of Expert Panel on the Draft Cumulative Impact Study, op. cit., p. 2. UCM, Vol.
VIII, Annex 170.
859See AM, para. 7.7.
860
Report of Expert Panel on the Final Cumulative Impact Study, op. cit., p. 2 (emphasis
added). UCM, Vol. VIII, Annex 178.
-358-and other scientific studies are erroneoand that significant adverse impacts are
likely to occur.
5.52 The remaining sections of this Chapter summarize the conclusions reached
in the Final CIS.
B. T HEIMPACTS ANALYSIS IN THEF INALCISA SSUMED THE CONSTRUCTION OF
B OTH THE ENCE AND B OTNIA PLANTS ,AND THUS SIGNIFICANTLY O VERSTATED
THE IMPACTS FROM OPERATION OF THE B OTNIAP LANT ALONE
5.53 Although the Final CIS is generally conservative, it extraordinarily
conservative in one obvious and important way: the Final CIS assumed that both the
ENCE and the Botnia plants would operate in Fray Bentos, as ENCE had not
announced its decision to relocate the EN CE plant at the time the Final CIS was
prepared. The authors of the Final CIS thus properly state that:
[R]eaders of this cumulative study, which was initiated 14
months prior to ENCE’s annou ncement, should now view all
references to cumulative impact on the environment of the region
as being correspondingly less taking into account only the Orion
[Botnia] pulp mill will be operating at the Fray Bentos
861
location .
The Second Hatfield Report confirms this conclusion, noting that “if only the Botnia
mill is built, there would be an additional margin of safety in all predictions of
potentially adverse environmental impacts, with some loss in the positive economic
benefits and impacts”62. Indeed, the removal of the ENCE facility eliminated a
plant with a cellulose production capability of 500,000 tons/year and total effluent
flow of 46 million litres per da. The allowable discharge rates from the ENCE
86Final CIS, op. cit., p. 1.1 (emphasis added). UCM, Vol. VIII, Annex 173.
86Report of Expert Panel on the Final Cumulative Impactop. cit., p. 10. UCM, Vol.
VIII, Annex 178.
86Final CIS, op. cit., p. 2.20. UCM Vol. VIII, Annex 173
-359-facility, although very low, were somewhat higher than the rates permitted for the
Botnia plant.64The ENCE mill was located closer to the Esteros de Farrapos
protected wetlands, which Argentina has asserted may be threatened from the
operation of the plants. Since even teffluents from the ENCE plant would not
reach the upstream area of Esteros de Farrapos, as demonstrated in the Final CIS,
there is absolutely no risk that thofrom the Botnia plant, which is located
approximately six kilometres further downs tream, will even come close to reaching
that area. In short, ENCE’s decision has conclusively resolved one of the principal
concerns of Argentina prior to the initiati on of this action, that two mills should not
be sited in such close proximity to onnother. Therefore, the analysis and the
conclusions of the Final CIS are highly conservative and, to the extent they
anticipate impacts at all, they overstate the magnitude of those impacts.
C. T HEB OTNIAP LANT W ILLCOMPLY WITH THE R EQUIREMENTS OFIPPCBAT
AND W ILLOPERATE AS ONE OF THEB ESTPLANTS IN THEW ORLD
5.54 DINAMA has from the outset required th at the Botnia plant be a state-of-
the-art facility. To that end, Botnia’s Initial Environmental Authorisation explicitly
requires that plant operations and technology comply with the Integrated Pollution
Prevention and Control Best Available T echniques Requirements of the European
Union (“IPPC BAT (2001)”), the requirements of which are contained in the
Integrated Pollution Prevention and Contro l contained in the IPPC BAT Reference
865
document (“IPPC BREF”) . IPPC BAT (2001) reflects the most widely accepted
864
Ibid., p. 2.7
865
MVOTMA Initial Environmental Authorisation for the Botnia Plant (hereinafter “Botnia
AAP”), Art. 2(bb) (14 February 2005). UCM, Vol. II, Annex 21.
-360- 866
definition of “best available techniques” for pulp mill operations . After
extensively analysing the processes and technology to be employed by the Botnia
plant, the Final CIS concluded that the pl ant design complies with or exceeds IPPC
BAT and otherwise represents the “state-of-t he-art” with respect to cellulose plant
technology 86. For example, the Final CIS notes that in terms of water usage, the
Botnia mill will be in the top 5% of mills in North America and Europe and “among
868
the best in the world” . In terms of effluent treatment, the Final CIS concluded that
the extended aeration activated sludge treatment facility meets or exceeds the levels
identified as IPPC-BAT 869; the Second Hatfield Report concurred, indicating that
“treatment systems . . . incorporate all the features of high performance BAT
870 871
designs” . The “ECF-light” bleaching technology received similar endorsement .
In short, the Final CIS found that the “expected performance with respect to
bleaching effluent flow, COD content, a nd colour will be among the best in the
world” 872. The Final CIS undertook a rigorous an alysis of numerous other factors
relating to mill operations, including: overall emission rates, energy issues, auxiliary
866
Final CIS, op. cit., p. 2.30. UCM, Vol. VIII, Annex 173.
867
The Final CIS’s complete comparison between the performance of the Botnia plant and
BAT is included in Annex A to the Final CIS.
868
Final CIS, op. cit., p. 2.21. UCM, Vol. VIII, Annex 173.
869Ibid., p. 2.23.
870Report of Expert Panel on the Final Cumulative Impact Study, op. cit., p. 3. UCM, Vol.
VIII, Annex 178.
871Although in earlier filings, much was made of the difference between TCF and ECF
bleaching, the Final CIS concluded that TCF pulp and ECF pulp have similar environmental
impacts on water emissions and ne ither emit dioxins at environm entally significant levels, and
both are acceptable under the POPS Convention, IPPC BAT, US EPA and all significant
permitting authorities. Final CIS, op. cit., p. 2.25. UCM, Vol. VIII, Annex 173. In short, the
Final CIS concluded that there is no objective reason for requiring the use of TCF over the
selected bleaching process, partic ularly in light of the inferior quality of pulp produced by the
TCF process.
872Final CIS, op. cit., p. 2.26.
-361-boilers, evaporation and recovery, liquospills collection, odour management,
residuals management, compliance monitoring, and environmental management. In
each case, the Final CIS concluded thathe process met or exceeded BAT and is
873
otherwise state-of-the-ar.
5.55 The Second Hatfield Report confir med the Final CIS’s conclusion as to
plant technology, noting that the Botnia plant “is designed in accordance with
modern environmentally sustainable practices, in accordance with BAT, as defined
by IPPC and other regulatory agencies e xperienced with pulp industry issues” and
concluding that it “will probably perform to a standard of top five in the
874
world . . .” .
D. THE B OTNIAP LANT W ILLN OTA DVERSELY MPACT W ATER QUALITY OR THE
ECOLOGICAL BALANCE OF THE R IVER,AND ANY P OTENTIAL MPACTS
ARE LIKELY TO BE MMEASURABLE
5.56 The Final CIS concluded that the combined effluent discharfrom both
the Botnia and ENCE plants would not adversely affecteither human health or
aquatic life, nor would it cause an exeedance of the applicable water quality
standards. The conclusion is all the sronger with the elimination of ENCE’s
discharge.
5.57 The Final CIS rigorously assessed water quality, involving two different
types of complementary mathematical modelling75. The first involved “near-field”
873
See, e.g., International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills,
Annex A, p. A8.10 (September 2006) . UCM, Vol. VIII, Annex 1See also Report of
Expert Panel on the Final Cumulative Impact op. cit., p. 3. UCM, Vol. VIII, Annex
178. (“Analysis shows that both mills comply with the letter and spirit of BAT as defined by
the IPPC, as well as US and Australian concepts of BAT.”)
87Report of Expert Panel on the Final Cumulative Impactop. cit., p. 2. UCM, Vol.
VIII, Annex 178.
87Final CIS, op. cit., p. 4.9. UCM, Vol. VIII, Annex 173.
-362-modelling, which predicts wa ter quality changes at the point of discharge. Two
876
separate near-field models were used . The CORMIX model, which was
developed by Cornell University, in New Yo rk, was used as the primary near-field
model. The VPLUME model, which is distributed by the US Environmental
Protection Agency, was used as a cross-check to ensure that the results obtained
using the CORMIX model were valid and conservative. Far-field modelling, which
predicts impacts at greater distances ba sed on the hydrodynamics, bathymetry, and
shoreline geometry of the river, was conduc ted using a series of models available
from the US Army Corps of Engineers 877. These included two- and three-
dimensional finite element hydrodynamic models. Together, these models compute
the lateral and longitudinal distribution of water surface elevation and horizontal
velocity and the vertical di stribution of velocity. Based on the results of those
analyses, the transport, dispersion, and fa te of water quality constituents were then
calculated 878. These models are widely accepted and are used all over the world as
879
conservative predictors of the impacts of industrial sources on water quality .
5.58 As with any water body, the fl ow volume of the Uruguay River is not
constant. To ensure that the Final CIS considered the impacts of the effluent
discharges under any reasonably anticipated scenarios, it evaluated the dilutive effect
of river flow under three conditions: typical flow (6,230 m 3/s), extreme low flow
876
Ibid.
877
Ibid., p. 4.10.
878
Ibid.
879Dr. J. Craig Swanson & Dr. Eduardo A. Yassuda, Hydrologic Analysis for the Proposed
Botnia Cellulose Plant on the Uruguay River, p. 20 (Applied Science Associates, Inc.) (June
2007). UCM Vol. X, Annex 214.
-363- 3 880
(500 m /s), and flow reversal during extreme low flow . The latter two conditions,
low flow and flow reversal, represent unusual “worst case” scenarios. The “extreme
low flow” condition represents river flow during serious drought or other conditions
and is expected to occur only once every 5 to 20 years, which is a more conservative
scenario (lower flow) than is required by provisions of the CARU Digest relating to
river modelling; the CARU Digest requires low flow modelling to consider only the
lowest flow that is expected to occur on ce every 5 years. Flow reversal, where the
river flows “backwards”, is a rare, short-term event 881.
5.59 Apart from effluent quality (which for Botnia will be “among the best in
the world”), a critical factor in evaluating potential impacts to the environment is the
degree of effluent dilution -- the larger the dilution, the lower the effect. The
relatively high flows of the river, combined with offshore, submerged, multi-port
diffusers located in the deepest, fastest fl owing portion of the river, mean that the
882
effluents from the Botnia plant rapidly disperse . The Final CIS modelled the
degree of dispersion using the near- and far-field modelling.
5.60 The Final CIS used as one benc hmark the standards of Environment
Canada, the environmental regulatory authority of Canada. Applying Environment
Canada standards, the Final CIS noted that where dilution is more than 100:1 (where
one litre of effluent is mixed with 100 litres of river water), no environmental
impacts are generally expected to occur. Dilution ratios of 1000:1 are considered to
reflect background conditions, i.e., as if the plant had never been placed into
880
Final CIS, op. cit., p. 4.47. UCM Vol. VIII, Annex 173.
881Ibid., p. 4.47; see also Final CIS Annex D, op. cit., pp. D3.3, D6.4 (reverse flow expected a
few times a year or less). UCM, Vol. VIII, Annex 176.
882Final CIS, Annex D, op. cit., p. D4.3. UCM, Vol. VIII, Annex 176.
-364- 883
operation . Environment Canada developed th ese reference dilution ratios as a
result of the Environmental Effects Mon itoring program for the pulp and paper
sector in Canada, which constitutes the most comprehensive monitoring program in
the world for assessing the effects of the effluent discharges from pulp and paper
mills 88, and should therefore be given considerable weight.
5.61 In addition to the dilution factors, the Final CIS also predicted the actual
changes in concentration of pollutants in the river, and compared them against water
quality standards under a variety of flow conditions. Both the di lution analysis and
the prediction of changes in pollutant concentrations in the river result in the same
conclusion: operation of the Botnia and EN CE plants together -- and certainly the
operation of the Botnia plant alone -- will not have any adverse effect on the river.
5.62 Under typical flow conditions, the combined effluent of the Botnia and
ENCE plants would constitute 0.02% of th e average flow of the river; the Botnia
plant alone, of course, would be more than one-third less 88. Due to the high river
flow and the functioning of the Botnia plant’s effluent diffuser, the discharged
effluents will be rapidly mixed and diluted to at least 100:1 (1%) within a few metres
886
of the diffuser . Based in part on the Environment Canada dilution ratio of at least
100:1, the Final CIS concluded that no adverse impacts are expected to occur. Trace
levels of effluent would extend further downstream, but even then would quickly
reach a dilution ratio of 1000:1 in the area of Yaguareté Bay, Uruguay (1.5 km
883
Final CIS, op. cit., pp. 4.47-4.48. UCM, Vol. VIII, Annex 173.
884Ibid., p. 4.48.
885Ibid.
886Ibid.
-365-downstream), which the Final CIS considers representative of “background”
887
conditions .
5.63 Under an extreme low flow condition, the combined effluent of the Botnia
and ENCE plants would constitute 0.28% of the flow of the river; the Botnia plant
888
alone would be more than one-third less . Under this rare condition, the Final CIS
concluded that the 100:1 dilution exposure ar ea is expected to extend no more than
35 metres downstream from the Botnia plant diffuser and 200 metres along the
length of the diffuser 889. Because fish usually range over areas significantly larger
than 35 metres, the Final CIS found minimal potential for adverse effects, even
890
under this worst case scenario . Moreover, the boundary of this exposure area is
located a great distance from the boundary line separating Uruguayan and Argentine
waters; thus, the exposure area would be entirely within Uruguayan waters and
would have no transboundary impact whatsoever. Outside of this 35 meter radius,
trace levels of effluent might be diluted to a ratio of 200:1 in the vicinity of Fray
Bentos (Uruguay), but, as noted, these le vels are far below anything that could
891
reasonably be expected to cause adverse effects .
887
Ibid., p. 4.47.
888
Ibid.
889
As part of its analysis of the impacts exp ected to occur at the diffuser, the Final CIS
analysed the impact of the temperature differe ntial between the effluent discharge and the
Uruguay River. The Final CIS noted that within the very small mixing zone at the diffuser, the
temperature change is estimated to be 0.3 degr ees Celsius, and once fully mixed, 0.1 degrees
Celsius at low flow. Final CIS, Annex D, op. cit. , pp. D4.4-D4.5. UCM, Vol. VIII, Annex
176. Given the extremely minor quality of these variations, the Final CIS concluded that such
temperature changes are “indistinguishable fr om the natural variability in the river.” Ibid., p.
D4.5.
890Final CIS, op. cit., p. 4.47. UCM, Vol. VIII, Annex 173.
891
Ibid., p. 4.49.
-366-5.64 As noted in the Final CIS, flow reversals of the Uruguay River are rare,
occurring only during low flow periods, and are expected to occur only a few times
892
per year or less . These events are caused by a rapid change in the water elevation
of the River Plate and do not last more than a few hours 893. Nevertheless, the IFC’s
independent experts analysed the impact of the Botnia plant under such conditions.
The Final CIS concluded that the effluent plumes of the Botnia and ENCE plants
(combined) may extend upriver (instead of downriver), but that they would achieve
894
the 100:1 dilution within 35 metres of discharge . Trace levels of effluent at a
dilution ratio of 700:1 may extend into water on the Argentine side, also well below
the levels that could potentially cause any adverse effect. Assuming the existence of
both the Botnia and ENCE plants, the Fina l CIS concluded that trace levels of
effluent may also extend further upstream to a maximum point of 7 kilometres above
the former location of the ENCE plant, at a dilution ratio of 1000:1 or more
(background concentrations) 895. Of course, the absence of the ENCE plant will
greatly diminish the actual reach of the effluent plume because the Botnia plant is
located approximately 6 kilometres downs tream from the former location of the
ENCE plant . 896
5.65 The Final CIS predicted the expected impact that the operations of the
Botnia plant will have on levels of numerous pollutants and other effluent
characteristics. To complement the near field and far field water quality monitoring
892Ibid., p. 4.48.
893Ibid.
894Ibid.
895
Ibid., p. 4.48.
896
Ibid., p. 1.2.
-367-exercise described above, the Final CIS analysed the potential impacts from the
combined effluent discharges of the Botnia and ENCE plants at eleven specific
897
water receptor sites, including two on the Argentine side of the river . Analysis of
these particular sites was conducted because they were deemed “of particular interest
from the perspective of water quality, recreation, and environmental effects due to
898
the value of aquatic resources” . Parameters evaluated included temperature,
colour, conductivity, bacter ia, biochemical oxygen de mand, nitrogen, phosphorus,
ammonia, total suspended solids, AOX, phenols, dioxins and furans, TCDDs,
899
endocrine disrupting compounds, and metals . With respect to each receptor site,
the Final CIS concluded that no adverse im pacts would occur and that the effluent
discharges would not contribute to any exceedances of CARU or Uruguayan water
900
quality standards . Among other conclusions, the Final CIS documented that the
contribution of phosphorus to those receptor sites from the operation of the Botnia
plant would be immeasurable 901. Although Argentina’s Memorial stresses the
importance of phosphorus as a potential cause of eutrophication, the Final CIS
confirmed that the contribution of phosphorus from the Botnia plant to the river will
897
Ibid., p. 4.48-4.57. The specific water receptors an alysed by the Final CIS are: 1) the
diffuser of the Botnia plant in the Uruguay Rive r; 2) Yaguareté Bay (Uruguay); 3) Playa Ubici
at the Downstream Edge of Yaguareté Bay (Ur uguay); 4) Fray Bentos Drinking Water Intake
(Uruguay); 5) Beach Area near Arroyo Fray Bentos (Uruguay); 6) Beach Area at Las Cañas
(Uruguay); 7) The River Plate; 8) Esteros de Farrapos and Islas del Río Uruguay (Uruguay); 9)
the Black River (Uruguay); 10) The Uruguay River on the Argentine Side; and 11) Beach Area
at Ñandubaysal (Argentina). Ibid.
898
Final CIS, Annex D, op. cit., p. D6.1. UCM, Vol. VIII, Annex 176
899
Ibid., p. D5.6.
900
Section 4.6 and Annex D of the Final CIS c ontain an extensive analysis of the potential
impacts to each of the eleven receptor sites.
901
Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
-368-be insignificant, and its operations will not increase the likelihood of eutrophication
in the Uruguay River.
5.66 The following paragraphs documen t the results of the water quality
modelling in the Final CIS for those water receptor sites that Argentina has placed at
the forefront of the dispute, which include Yaguareté Bay (Uruguay), the beach at
Arroyo Fray Bentos (Uruguay), Esteros de Farrapos (Uruguay), the Argentine side
of the river, and the beach at Ñandubaysal (Argentina). Before proceeding further,
however, it must be observed that three of these four sites lie entirely within
Uruguayan sovereign territory. It is thus not at all clear that Argentina has standing
to voice concerns about them. The focus of the 1975 Statute is ensuring each Party’s
uses of the river do not unfairly impair the ot her’s correlative rights to use the river.
Thus, for example, Article 7 requires notif ication of a project to CARU only when
902
the project is “capable of causing si gnificant harm to the other Party” . As the
former head of Argentina’s delegation to CARU put it at the time of the discussions
within CARU about the Transpapel cellulose plant discussed in Chapter 2: “[T]he
goal of the consultation in accordance with the Statute of the River Uruguay is solely
to determine if the undertaking causes significant harm to the other Party” 903. Even
setting aside this sizable problem and assuming that Argentina does have some basis
to raise concerns about nominal harms o ccurring entirely in Uruguay, the following
paragraphs demonstrate that there is no legitimate scientific basis for concern.
5.67 YaguaB raryu,guay . The Final CIS analysed the potential impacts to
Yaguareté Bay, which is a relatively shallow embankment on the Uruguayan side of
902Statute of the River Uruguay (hereinafter “1975 Statute”), Art. 7 (26 February 1975). UCM,
Vol. II, Annex 4.
903CARU Minutes No. 7/96, p. 1077 (23 August 1996). UCM, Vol. IV, Annex 82.
-369-the river, located approximately 1.5 kilometres downstream from the Botnia plant 904.
This location is shown in Figure 5-1.
905
Figure 5-1
5.68 Yaguareté Bay serves as a habitat for various fish species 906. The Final
CIS examined potential impacts to sedimentation and specific contaminants to water
quality and concluded that no adverse impacts can be expected to occur. Although
Yaguareté Bay is shallower and the water flow is slower than in the rest of the river,
the Final CIS concluded that currents, waves, and other factors prevent undue
907
accumulation of sediments . The Final CIS also concluded that the Botnia plant
would not change sedimentation in the bay because the effluent contains very low
904
Final CIS, op. cit., p. 4.49. UCM, Vol. VIII, Annex 173.
905
Figure adopted from Final CIS, Annex D, op. cit., Figure D6.1-1.
906
Final CIS, op. cit., p. 4.49. UCM, Vol. VIII, Annex 173.
907
Ibid., p. 4.50. See also Final CIS, Annex D, op. cit., p. D6.7. UCM, Vol. VIII, Annex 176.
-370- 908
levels of suspended solids . The Final CIS acknowledged that, under existing
conditions at Yaguareté Bay ( i.e., without the Botnia plant), eutrophication is a
potential issue due to the presence of nitrogen and phosphorus. However, even
assuming the operation of both the Botnia and ENCE plants, and even under extreme
low flow conditions, the Final CIS conclude d that plant operations would not cause
909
any measurable change in phosphorus levels in water and sediments . Likewise,
the Final CIS concluded that the operatio n of the plants would not measurably
elevate the concentration of chlorinated organics in Yaguareté Bay, and that no
910
adverse effects would be experienced even under extreme low flow conditions .
Further, given the extraordinarily low conc entrations of dioxins and furans in the
effluent of the Botnia and ENCE plants, the Final CIS concluded that measurable
concentrations of those chemicals in the bay are not expected to change, again even
under extreme low flow conditions, and that concentrations would be compliant with
the water quality guidelines established by the United States Environmental
Protection Agency for protection of fish consumption 911. The Final CIS also found
that the presence of phytosterols in the Bo tnia plant’s effluents is unlikely to affect
the reproductive success of fish in Yaguareté Bay. Under a worst case scenario,
phytosterols from the effluents of the plants will be diluted at a ratio of at least 300:1
908
Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
909
Ibid.
910
Final CIS, Annex D, op. cit., p. D6.8. UCM, Vol. VIII, Annex 176.
911
Ibid. The Second Hatfield Report found that the “[l] evels in the CIS are conservative. It is
expected that the actual discharge levels will proba bly be lower than that specified. At either
level no threat will exist to the receiving envi ronment.” Report of Expert Panel on the Final
Cumulative Impact Study, op. cit., p. 3. UCM, Vol. VIII, Annex 178. The Second Hatfield
Report continued: “We believe . . . concern [reg arding dioxin discharges] to be unnecessary,
given that the dioxin discharges from the tw o proposed mills will be trivial, and at a
concentration well below US drinking water standards.” Ibid., p. 5.
-371-in the bay, resulting in no measurable change and well below any threshold level of
induction of estrogenic effects in fish, and well below the levels that have been
associated with reproductive effects 912.
5.69 Finally, the Final CIS addressed the issue of fish tainting, a phrase that
refers to the build up of contaminants in fi sh, which can affect their odour and taste.
It concluded that no such tainting would occur because fish tainting is not associated
with effluent concentrations above a 25:1 to 50:1 dilution ratio, even in older, higher
polluting pulp mills, and the dilution ratio in Yaguareté Bay will generally be at
300:1 or higher 913. In addition, the Final CIS noted that fish tainting is never
observed in the vicinity of modern pulp mills with adequate secondary treatment
914
systems, like the treatment system at the Botnia plant . The Second Hatfield
Report unequivocally endorsed these conclusions 915.
5.70 Beach Area Near Arroyo Fray Bentos, Uruguay . The beach near Arroyo
Fray Bentos, located downstream from the Fray Bentos municipal discharge, is used
in Uruguay for swimming and other outdoor recreational activities 916. It is shown on
Figure 5-1. The Final CIS concluded that the Botnia plant operations will not cause
exceedances of water quality standards a nd will have no adverse effects on human
917
health or aquatic life in this area .
912Final CIS, Annex D, op. cit., p. D6.8. UCM, Vol. VIII, Annex 176.
913Ibid.
914Ibid.
915Report of Expert Panel on the Final Cumulative Impact Study, op. cit., p. 3. UCM, Vol.
VIII, Annex 178.
916Final CIS, op. cit., p. 4.54. UCM, Vol. VIII, Annex 173.
917Ibid.
-372-5.71 Esteros de Farrapos and Islas del Río Uruguay, Uruguay. The Final CIS
fully assessed the impacts to Esteros de Farrapos and Islas del Río Uruguay
(collectively “Esteros de Farrapos”), a site protected under the Ramsar Convention,
and concluded that the effluent discharg es from the operation of the Botnia and
ENCE plants collectively would not impact them. Generally, all effluents will be
flowing downstream from the plants, and hence away from Esteros de Farrapos. On
the brief rare occasions when the flow of the river reverses, the Final CIS concluded
that the combined effluent of both plants would be diluted to a completely harmless
1000:1 dilution ratio at seven kilometres upstream from the former location of the
918
ENCE plant . As indicated, the Botnia plant is located six kilometres downstream
from the former ENCE location. Thus, the upper boundary of the combined plume
under these conditions would be thirteen kilometres upstream from the Botnia plant,
which would be nine kilometres downstream from the southernmost point of the
protected area. Therefore, the Final CIS co ncluded, “there is virtually no potential
for mill effluents to impact the [Esteros de Farrapos] area” 91.
5.72 The Argentine Side of the River and Ñandubaysal Beach . The Final CIS
also examined the potential impacts of the Botnia plant on the water quality of the
Argentine side of the river generally, and specifically examined the impact to the
area of Ñandubaysal Beach. See Figure 5-1. The Final CIS concluded that, under
almost all scenarios, effluents from the Botnia plant will remain on the Uruguayan
side of the river and will only cross over to Argentine waters at trace levels. During
918
Ibid., p. 4.55.
919
Ibid. Argentina’s Memorial contains significant inaccuracies and misrepresentations with
respect to the potential impacts to Esteros de Fa rrapos. These specific issues are discussed in
Chapter 7.
-373-typical and extreme low flow conditions , the modelling demonstrated that the
dilution ratio of the effluents in Argentine waters will exceed 1000:1, which is
920
equivalent to background conditions . During the rare times that the flow of the
river reverses, the water qua lity modelling showed that the dilution ratio on the
Argentine side may be less than 1000:1, but well above the 100:1 no-adverse-effect
guidance adopted by Environment Canada. Most significantly for purposes of this
case, at all times, the effect on water quality will be well within the standards
established by CARU 921. As regards the effect on aquatic life, the Final CIS
concluded that fish species that move betw een Yaguareté Bay or other places on the
Uruguayan side of the river and the Argentine side of the river are not expected to be
adversely impacted 922. Finally, the Final CIS considered the potential impacts on
923
tourism raised in Argentina’s Memorial and determined that there would be no
924
adverse effect .
5.73 Indeed, to the extent there are or will be water quality problems on the
Argentine side of the river, they are due to Argentina’s current poor pollution control
and have nothing whatsoever to do with the Botnia plant. Today, before the plant
920Ibid., p. 4.56.
921Ibid.
922Ibid. Given the Final CIS’s conclusions regard ing the dilution ratios and impacts to the
river, this conclusion would apply to all parts of the river that fish use as migratory pathways,
and thus Argentina’s concern about potential expos ures in those other pathways as a general
matter is unfounded. See AM, para. 7.47.
923
See, e.g., AM, para. 5.72(5).
924
Final CIS, op. cit., p. 4.83-4.84. UCM, Vol. VIII, Annex 173. Argentina criticises the Final
CIS because “la même CIS ne fait aucune reférénce a des problèmes locaux ou de
dépassements de critères de qualité des eaux du côté argentin du fleure.” AM, para. 7.42. (“the
same CIS makes no reference whatsoever to local problems or to exceeding water quality
criteria on the Argentinean Bank of the River.”) As with many of Argentina’s other assertions,
this statement is patently false as the analysis contained in the Final CIS with respect to the
Ñandubaysal Beach demonstrates.
-374-begins operation, the phosphorus leve ls in Ñandubaysal Bay (Argentina)
925
occasionally exceed Uruguayan water quality standards . As Argentina
acknowledges in its Memorial, the mouth of the Gualeguaychú River empties just a
short distance from Ñandubaysal Bay, and the Argentine industrial, agricultural and
municipal sources that discharge to the Gualeguaychú River are major contributors
926 927
of phosphorus and organic matter to the Uruguay River. The Final CIS reached
this same conclusion 928. The Botnia plant will not exacerbate these problems
because effluent discharge from the plant will remain largely along the Uruguayan
929
shoreline and will not disperse across the river . As the expected dilution ratio at
Ñ andubaysal under both typical and low fl ow conditions will exceed 1000:1, the
Final CIS concluded that the beach area at Ñandubaysal will be unaffected by the
925
See Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
926
Historical records from CARU show that th e phosphorus levels at the discharge of the
Gualeguaychú River are 0.102 milligrams per litre , Final CIS Annex D, D3.20, in comparison
with the DINAMA water quality standard for phosphorus, which is 0.025 milligrams per litre.
927AM, para. 6.32; see also Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
928Final CIS, op. cit., p. 4.57 (noting that elevated phosphorus levels are most likely influenced
by the water quality of the Gualeguaychú River). UCM, Vol. VIII, Annex 173. As a general
matter, problems with water quality are widespread in Argentina. For instance, the
Reconquista River, which flows into the Lujan Ri ver and eventually into the River Plate, was
characterised by the Argentine Environmental Ombudsman as an “open-air sewer” due to the
amount of pollution. Special Report: Basin of the Reconquista River (Part 1) at 2. The
Argentine Environmental Ombudsman found that, in comparison with other rivers on a global
basis, the water quality of the Reconquista River was low to very low and that the state of
pollution presents “[a]n extremely grave risk to the health of the 4,200,000 inhabitants [in the
area.]” Argentina Defender of the People of the Nation, Special Report on Reconquista River
Basin (9 April 2007). UCM, Vol. VIII, Annex 179. In addition, it was found that 22% of the
organic matter, hydrocarbons, and metals present in the River Plate come from the Reconquista
River. Ibid. Finally, and most astoundingly, the Argentine Ombudsman noted that the public
authorities were not even aware of this severe state of pollution. Ibid. Indeed, the contribution
of contamination to the River Pl ate from Argentina is so substantial that Dr. Mario Feliz has
estimated that 95% of that contamination comes from Argentina. La República, “Unexpected:
At a Crucial Time, Argentine Scientists Speak Out in Favour of the Uruguayan Plants,” p. 7
(31 March 2006). UCM, Vol. IX, Annex 186.
929Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
-375-plant. Even under rare occasions of flow reversal, the modelling predicted that
effluents from the Botnia plant will move at no more than trace levels towards
930
Ñandubaysal . Hence the Final CIS concluded that the Botnia plant would not
931
cause adverse impacts with respect to drinking water, aquatic life, human health ,
or tourism (discussed more fully below) 932. The Final CIS further concluded that
because discharges from the plant will not cause any adverse water quality impacts,
operations of the Botnia plant will pose no di rect threat to recreational use of the
Uruguay River or to tourism in Gualegua ychú, in particular to the area of
Ñandubaysal . 933
5.74 Impacts on Tourism . The Final CIS included an extended evaluation of
934
impacts on tourism on both sides of the Uruguay River and concluded that no
effects on recreation would occur due to air or water emissions from the Botnia
plant . This conclusion, though well-substantia ted, is only marginally relevant to
the dispute at hand, because impacts to tourism can only come under the jurisdiction
of the 1975 Statute if they are the direct re sult of adverse impacts to water quality,
and the remainder of the Final CIS demonstrates that there is no basis for concluding
that such impacts will occur.
930Ibid.
931Ibid.
932Ibid., p. 4.86.
933Ibid., p. 4.9.
934Ibid., pp. 4.82-4.91; International Finance Corporation, Cumulative Impact Study, Uruguay
Pulp Mills, Annex E (hereinafter “Final CI S, Annex E”) pp. 5.27- 5.35 (September 2006).
UCM, Vol. X, Annex 227.
935
Final CIS, op. cit., pp. 4.85-4.86. UCM Vol. VIII, Annex 173.
-376-5.75 The IFC’s independent experts found that “[t]ourism is well established in
and around the area of the pulp mills and that Gualeguaychú in Argentina is also an
936
important center of tourist activity” . The IFC’s assessment showed beyond doubt
that tourism will not be impacted in an y meaningful way by emissions from the
plant. With regard to impact to tourism resulting from a potential decline in water
quality -- the only impact to tourism over which the Court can even arguably
exercise jurisdiction -- the Final CIS conclu ded that tourism would not be affected
by water discharged by the Botnia plant because the water “is treated to levels at
which it poses no direct threat to aquatic li fe or recreational use of the river, and is
further diluted to undetectable levels within a short distance of the point of
discharge” . In that regard, the IFC’s experts noted that their “detailed computer
modeling” confirmed “the rapid dilution of the treated wa ste to undetectable levels”
938
even when both the Botnia and ENCE plants were “considered together” .
5.76 The IFC’s experts also found that tourism will not be affected by air
939
emissions from the Botnia plant . Leaving aside the fact that the Court has no
jurisdiction over air quality, the Final CI S concluded that “there will be no
significant impacts to air quality in the re gion” and that both the Botnia and ENCE
940
plants have “advanced technology to capture and eliminate . . . odours.” The
Final CIS specifically concluded that under normal conditions odour “will not be
detectable” at the Argentine recreational site at Ñandubaysal. Likewise, the IFC’s
936Ibid., pp. 4.82-4.83.
937Ibid., p. 4.85.
938Ibid., p. 4.85-4.86.
939
Ibid.
940
Ibid., p. 4.85.
-377-independent experts found that the visual impact of the Botnia plant -- another factor
941
outside the Court’s jurisdiction -- will not impact tourism in Ñandubaysa.
5.77 Argentina has not challenged the conclusions of these independent experts
in any defensible manner. The report of Argentina’s consultants is a picture of
vagueness. It merely asserts -- without any support -- that “various factors” “suggest
there may be a reduction in the number of visitors to the area”2. The report does
not predict that tourism will be negatively impacted, or explain why it might occur.
Nor did Argentina’s consultants even spec ulate as to the size of any reduction,
943
stating instead it would be “difficult to estimate.” In any event, many factors
identified by Argentina’s consultants as potentially contributing to a loss of tourism -
- for example, air quality impacts and visual impacts -- are outside the Court’s
jurisdiction, and the alleged impact to water quality has been comprehensively
refuted by the IFC’s independent experts.
E. T HE T REE PLANTATIONS W ILL N OT CAUSE A DVERSE IMPACTS TO THE
U RUGUAY R IVER.
5.78 The Final CIS engaged in an exte nsive analysis of the environmental
impacts associated with the ongoing opera tion of eucalyptus plantations, including
the plantation holdings of Forestal Oriental (“FOSA”), which will supply the Botnia
plant with a majority of its wood. The Final CIS concluded that “[i]n all cases, these
impacts have been found to be low to medium, and can be mitigated” 944. The
941Ibid., p. 4.90.
942AM, Vol. V, Annex 3, p. 11.
943Ibid.
944Final CIS, op. cit., p. 4.27. UCM, Vol. VIII, Annex 173 .
-378-Second Hatfield Report concluded that the Final CIS had adequately and accurately
945
assessed the effects of the existing tree plantations .
5.79 The conclusions of the Final CIS were based on numerous key facts. First,
sufficient pulpwood supplies exist in curren tly established plantations owned by
946
Botnia or available from third-party suppliers . This has two implications that
sever any effects of the plantations from the Botnia plant: (1) any impacts associated
with existing plantations currently exist and are not connected to the construction of
the Botnia plant; and (2) the construction of the Botnia plant will not necessitate the
creation of new plantations or the creation of any new environmental effects. To the
extent that new plantations are being plan ned for the area, the Final CIS found that
947
they will be used “principally for saw logs and exports” .
5.80 Second, the Final CIS noted the careful controls Uruguay has placed on its
forest industry to ensure that plantati ons are developed and maintained in an
948
environmentally sustainable manner . Uruguay has enacted a detailed and rigorous
regulatory system mandating sust ainable forestry practices. Applications to create
new forest plantations are evaluated by the Ministry of Herding, Agriculture, and
Fishing to determine whether the proposed area has adequate drainage and capacity
945
Report of Expert Panel on the Final Cumulative Impact Study, op. cit., pp. 2, 4. UCM, Vol.
VIII, Annex 178.
946
Final CIS, op. cit. , p. 4.29. UCM, Vol. VIII, Annex 173. The Final CIS noted that the
pulpwood industry has been long-established in Uruguay, historically for the purpose of
exporting wood chips abroad. Ibid., p. 4.27. It found that “the total existing plantation area
owned by, and potentially available to, the co mpanies exceeds the area required to supply both
mills at full production.” Ibid., p. 4.28 Finally: “there are su fficient existing plantations to
supply all of the required fibre. Hence an y impacts (positive and negative) due to the
conversion of former grazing areas have already taken place.” Final CIS, Annex B, p. B6.1.
UCM, Vol. 175.
947Final CIS, op. cit., p. 4.28. UCM, Vol. VIII, Annex 173.
948Ibid., p 4.27
-379-for the trees to take root 949. Plantations are permitted only in areas specially
950
designated by the Comisión Nacional de Estudio Agroeconomico de la Tierra .
Further, proposed plantations larger than 100 hectares are required to submit to the
environmental review process pursuant to Decree 349/005 and thus must apply for
951
and obtain an AAP and possibly other approvals from MVOTMA before planting .
5.81 Third, the Final CIS noted the co mmitments independently undertaken by
Botnia to ensure that its pulp consum ption would not nega tively impact the
environment by seeking certification of its suppliers from the Forest Stewardship
Council, which has developed an internatio nally respected standard for sustainable
952
forest management . To obtain certification, a plantation must submit to an audit
by an independent certifying body which, if warranted, may issue a certification of
953
compliance . Botnia’s affiliated company, Forestal Oriental and its partner the
Otegui Group, which collectively will s upply approximately 72.9% of Botnia’s
wood, have been so certified 95.
5.82 The Final CIS did note that “[t]he main environmental effect of Eucalyptus
is known to be its heavy use of groundwater. Since water is not currently a limiting
949
Decree 452/988, Ministry of Livestock, Agriculture, and Fish, Regarding Forest
Designation, Arts. 3 & 5(II)(a) (6 July 1988). UCM, Vol. II, Annex 8.
950
Ibid., Art. 5(II)(b).
951
Decree No. 349/005, Environmental Impact Assessment Regulation revision, Art. 2(30),
Art. 29-31(21 September 2005). UCM, Vol. II, Annex 24. Law No. 17,283, General Law for
the Protection of the Environment, Art. 14 (28 November 2000), UCM, Vol. II, Annex 11.
952The FSC’s Forest Management Principles are se t out at page B5.2 of the Final CIS, Annex
B, and include conservation of biological divers ity, water resources, soils and ecosystems, and
mandatory management and maintenance plans to ensure the continued protections of these
values.
953
Final CIS, Annex B, op. cit. UCM Vol. VIII, Annex 174.
954
Ibid., p. B5.3. The third-parties that will suppl y the bulk of the remainder are also in the
process of becoming certified pursuant to FSC criteria. Ibid.
-380- 955
factor in Uruguay, this is apparently not of immediate concern” . Argentina
alleges that the plantations may have an impact on surface water, specifically the
956
flow of the Uruguay River, but supplies no scientific basis for its allegation, and,
as discussed in Chapter 6, its own expert s found that there will be no particular
effect on river flow, and Uruguay’s experts have indicated that even if flow
somehow did decline as a result of plantations, the impact on water quality would be
insignificant.
5.83 In sum, the trees that are the apparent subject of Argentina’s claim already
exist, having been planted years ago, and have grown to maturity, without complaint
(until the Memorial) from Argentina. As the IFC’s independent experts observed,
these plantations are “currently producing round wood and chips for export” and that
the only change that will be brought about by the commissioning of the Botnia plant
is that “this wood will instead be directed to domestic pulp production” 957, thereby
allowing Uruguay to reap the economic bene fits of value-added processing. The
construction or operation of the Botnia plant thus will have no bearing on any
theoretical environmental impact from these trees. Even if hypothetically, additional
wood supplies were needed, those new plan tations would be carefully regulated
under Uruguayan law and internationally recognised certification programs. At
bottom, unable to state a viable case with respect to the operation of the Botnia plant,
Argentina has resorted to complaining about actions taken decades ago to promote
955
Ibid., p. B4.7 (quoting Forest Management Certification Report on ENCE’s Plantations,
SGS Qualifor), p. 29 (31 July 2003)).
956
AM, para. 5.80.
957Final CIS, op. cit., p. 4.27. UCM, Vol. VIII, Annex 173.
-381-the cultivation of sustainable plantation forests. Argentina’s case on the forests fares
no better than its other environmental claims.
Section IV.
Conclusions with Respect to the International Finance Corporation
5.84 Although the clear compliance of the Botnia project with applicable law
and the exhaustive review conducted by Uruguay described in Chapter 4 set forth a
dispositive argument that Uruguay has met its substantive obligations under the 1975
Statute, the IFC’s independent review process has left no doubt that the Botnia plant
will not cause unacceptable environmental harm to the Uruguay River. Botnia
submitted itself to a searching, nineteen month, multi-layered and comprehensive
critique by the impartial IFC to determine whether the project would comply with
the IFC’s rigorous environmental and social performance standards. Those
standards incorporate, inter alia, the Convention on E nvironmental Impact
Assessment in a Transboundary Context, the POPS Convention, the Convention on
Biological Diversity, the Convention on Wetlands, the Convention on International
Trade in Endangered Species of Wild Fauna and Flora, the Convention Concerning
the Protection of World Cultural and Natural Heritage, and the Convention on
Migratory Species. Moreover, by manda ting that the project “comply with
applicable national laws, including t hose laws implementing host country
obligations under international law”, the IFC had to examine whether the Botnia
project would comply with all applic able Uruguayan environmental laws and
regulations, and with all applicable inte rnational legal obligations, specifically
including the 1975 Statute and CARU regulations. 958
958
IFC Performance Standards, op. cit., Performance Standard 1, para. 4.
-382-5.85 The IFC’s unambiguous conclusion that the Botnia plant fully satisfies
each and every one of these requirements was made only after internationally
reputable independent technical experts used universal ly accepted techniques and
referenced internationally accepted sta ndards to thoroughly assess the plant and its
potential impacts. Their conclusion, that the project would have “no impacts on the
health of the people in the area, on either side of the Río Uruguay” and that it would
be in the “top five of the world” 959-- is scientifically unimpeachable, a fact that is
further demonstrated in the following Chapter.
959
Report of Expert Panel on the Final Cumulative Impact Study, op. cit., p. 2.
-383--384- CHAPTER 6.
THE OPINIONS OF THE EXPERTS RETAINED BY THE PARTIES Section I.
Argentina Has Failed to Show that the Botnia Plant Will
Harm the Environment
6.1 As the preceding Chapters have established, there is overwhelming
evidence that the Botnia plant will meet or exceed all applicable legal requirements,
and that it will not cause significant harm to Argentina. This is shown by the Botnia
plant’s compliance with CARU water quality standards, a fact which Argentina has
not challenged, and the conclusions of the independent experts who have studied the
environmental impact of the plant as set forth in (i) the First Hatfield Report; (ii) the
Second Hatfield Report; and, of course, (iii) the Final CIS itself.
6.2 Argentina’s attempts to criticise the conclusions of the Final CIS and the
other independent studies, which found no mean ingful risk to the environment, are
without scientific basis of any kind. As discussed in Chapter 4, Argentina has the
burden of proving that the Botnia plant will cause adverse impacts on the basis of
scientifically sound information. It has come nowhere close to doing so.
6.3 Argentina recognises, as it must, that the Final CIS, supported by the
Second Hatfield Report, is definitive on the subject of the Botnia plant’s compliance
with all national and international envir onmental standards, and on the absence of
risk of significant harm to the Uruguay River or its aquatic environment. Put
simply, Argentina understands that the IF C’s independent studies close the book on
its case. In these circumstances, Argen tina did what determined litigants generally
do. It went out and hired its own consultants to issue reports supporting its own
arguments, and criticising the conclusions reached by the IFC’s independent experts.
To attack the Final CIS and the Second Hatfield Report, Argentina hired:
Latinoconsult S.A., (“Assessment of the Fluvial Environment of the Proposed Botnia
- 387 -Pulp Mill on Uruguay River and Fray Bentos, Uruguay”) 960, Howard Wheater and
Neil McIntire (“Review of the IFC Fina l Cumulative Impacts Study of Botnia’s
Uruguay Pulp Mill”) 961, and Marcelo Conti (“Consultancy Report on Pulp Mills”) 962.
The Latinoconsult Report contains a documen t entitled “Highlights of the Findings
of the Independent Argentinean Envir onmental Study Team (IAEST) in the
Environmental Analysis of the Botnia Pulp Mill,” a report addressed to Professor
Philippe Sands dated 26 November 2006.
6.4 The reports produced by Argentina were, of course, not available to the
IFC at the time the Final CIS and the Second Hatfield Report were issued. Thus,
there would have been no way for the IFC’s independent experts to anticipate,
address or rebut the arguments made by Ar gentina’s hired consultants. (Nor were
the independent experts asked by the IFC to respond to Argentina’s reports). Even
so, Uruguay will demonstrate that in many cases the issues raised in Argentina’s
reports can be refuted simply by the findings of the Final CIS or the documents
relied on by the Final CIS.
6.5 In addition, Uruguay has also reta ined its own internationally qualified
scientific experts to review and address the comments of Argentina’s experts. The
experts consulted by Uruguay conclude that the findings of the Final CIS and
Second Hatfield Report are justified, and that the criticisms offered by Argentina are
unfounded. Uruguay’s experts are:
6.6 William Sheate is a senior academic in the field of Environmental
Assessment at Imperial College London. Mr. Sheate has over two decades
960AM, Vol. V, Annex 3 (hereinafter “Latinoconsult Report”).
961AM, Vol. V, Annex 5 (hereinafter “Wheater Report”).
962
AM, Vol. V, Annex 4 (hereinafter “Conti Report”).
- 388 -experience in the environmental impact assessment field, with experience in
consultancy, academia, and th e private sector. Mr. Sheate is founder and editor of
the Journal of Environmental A ssessment Policy and Management , published by
World Scientific Publishing. Mr. Sheate concluded that the environmental impact
assessment processes were robust and met the standards of international
environmental law.
6.7 The international consulting firm Applied Sciences Associates, Inc.
(“ASA”) provides expert opinion on hydr odynamic modelling. ASA, based in
Narragansett, Rhode Island, and Sao Paolo, Brazil, is led by Dr. Craig Swanson. Dr.
Swanson specializes in the development and application of hydrodynamic, water
quality and sediment transport models for ri vers and other water bodies. He applies
these models and associated field programs to solve surface water environmental
problems, including those associated with industrial facilities such as liquefied
natural gas terminals and pipelines, power plants, and sewerage discharges. Dr.
Swanson is supported by his Brazilian colleague, Dr. Eduardo Yassuda. They
conclude that the modelling conducted by the IFC accurately predict the dispersion
of effluents and find significant errors in the reports of Argentina’s experts.
6.8 The international consulting firm Exponent, Inc. provides expert opinions
on plant technology and ecologi cal impacts. The analysis of plant technology and,
in particular, pollution control techniques employed by the Botnia plant was
conducted by Dr. Thomas Deardorff of Irvine, California and Douglas Pryke of
Ontario, Canada. Dr. Deardorff is an expert in the areas of wastewater treatment,
environmental impacts of industrial sources to aquatic ecosystems, fate and transport
of dioxins and furans. He has fifteen years of direct experience in the pulp and paper
- 389 -industry and has published dozens of papers related to the environmental effects of
pulp and paper facilities. Mr. Pryke is an internationally recognised expert in pulp
and paper bleaching technology, with more th an thirty years of industry experience.
He has consulted extensively in the development and implementation of ECF pulp
bleaching technology and is the Executive Director of the Alliance for
Environmental Technology (AET), an inte rnational associat ion of chemical
manufacturers dedicated to improving the e nvironmental performance of the pulp
and paper industry. In this capacity, Mr . Pryke has managed la rge-scale scientific
projects and presented recommendations rega rding the ecological risks associated
with pulp mills. These experts conclude that the Botnia plant will employ state-of-
the-art technology.
6.9 Exponent’s analysis of the ecological effects of the operation of the Botnia
plant was coordinated by Dr. Charles Menzie of Arlington, Virginia. Dr. Menzie has
over three decades experience in many nations examining the impacts and risks of
wastewater discharges on rivers and other aquatic environments, including those
from pulp mills. His work includes asse ssments of nutrient impacts, solids
discharges, and toxic chemicals such as di oxins. His work is supported by Pieter
Booth of Bellevue, Washington, an expert in ecological risk assessment. Mr. Booth
has led numerous projects a ddressing sediments and wetlands, including projects in
Argentina. These experts conclude that the discharges from the Botnia plant will
have none of the calamitous adverse effe cts hypothesized in Argentina’s experts
reports.
6.10 The conclusions reached by the IFC’s independent experts and confirmed
by Uruguay’s experts are also supported by impartial technical experts from
- 390 -Argentina -- although not the ones Argentina hired to support its claims. In
particular, technical studies of the environmental impacts of the Botnia plant were
performed by, inter alia , the Argentine National Academy of Engineering, the
National Institute of Technology and Indus try of the Republic of Argentina, and
other leading Argentine academics. These Argentine studies were not performed at
the initiative of Argentina or Uruguay, or paid for by Argentina or Uruguay. Like
the IFC, but unlike Argentina’s paid experts, they conclude that the Botnia plant will
produce no meaningful adverse environmental impacts. Finally, even the actions of
the Government of Argentina itself show no confidence in the conclusions of its own
experts: Argentina’s recently announced program of pulp mill modernisation fails to
require Argentina’s own pulp mills to adopt the technologies that Argentina’s
experts assert are necessary for Botnia.
6.11 The remainder of this Chapter analyses Argentina’s main criticisms of the
Final CIS and Second Hatfield Report, anddemonstrates that t hose criticisms are
invalid. Uruguay relies principally on the Final CIS and the Second Hatfield Report
themselves to refute Argentina’s criticism. Uruguay also relies, where appropriate,
on the reports of the experts identified above, and on the conclusions reached by
Argentine academic experts.
Section II.
Argentina Has Failed to Show that Potential Impacts of the Botnia Plant Have
Been Inadequately Assessed
A. A RGENTINA S EEKS TOIMPOSE A STANDARD ON ENVIRONMENTAL IMPACT
A SSESSMENT THAT NO PROJECT C OULD EVER M EET
6.12 The years of review of the project by DINAMA, then in the GTAN, and
then by the IFC Cumulative Impact Study process have resulted in an extraordinarily
comprehensive and conservative assessment of the impacts of the Botnia plant. As
- 391 -set forth in Chapters 4 and 5, these assessments meet and exceed the requirements of
the 1975 Statute, CARU regulations, and of applicable international law for
notification and environmental assessment.
6.13 Nonetheless, Argentina persists in arguing that the assessments are
inadequate or incomplete. It does so by positing an impossible standard that no
project in the world has ever been required to meet or ever could meet. If the
standard posited by Argentina were to beco me law, no project of any kind or of any
magnitude would ever be allowed to be constructed. The result would be a gross
distortion of the Parties’ rights to optim al use of the Uruguay River under the 1975
Statute and a negation of the principle of sustainable development.
6.14 Argentin Laa’tsinocosuetor t overtly displayed its bias:
The main approach of the IA EST [“Independent Argentinean
Environmental Study Team”] … followed the precept that
science can only disprove null hypot heses. In the case of the
Botnia pulp mill development, the null hypothesis was “The
development is not safe for the environment”, and the
environmental analysi963arried out was an attempt to disprove
this null hypothesis.
6.15 Stated differently, Argentina’s experts at Latinoconsult and the IAEST
(whose findings are included as part of the Latinoconsult Report) began with the
assumption (the “null hypothesis”) that the project will cause unacceptable
environmental impacts. It then set out to disprove that assumption. And, because
the assumption could not be disproved to a mathematical certainty, Argentina’s
Memorial uses the Latinoconsult Report to conclude that the project is unsafe.
6.16 Under the standard set forth by Latinoconsult, if there were a one-in-a-
billion statistical chance that the project could harm the environment, there would be
963Latinoconsult Report, op.cit., p. 12. AM, Vol. V, Annex 3.
- 392 -no mathematical certainty that the plant is not unsafe and it would fail the review.
This, of course, is not the standard that applies to the 1975 Statute, nor to any other
obligation imposed by international law.
6.17 Tellingly, the Latinoc onsult Report expressly stat es that its review was
conducted “entirely separate from regulation” 96. Both Latinoconsult and Argentina
thus recognise that, only by ignoring the legal standards of the 1975 Statute, CARU
regulations, and applicable international la w, is it possible to posit an entirely new
standard -- invented solely to support Ar gentina’s claims in this case -- and argue
that the Botnia plant fails to meet it. By itself, this throws the utility of the
Latinoconsult Report into serious question. How can it be proper to ignore
Uruguay’s compliance with substantive pr ovisions of the 1975 Statute and the
regulatory requirements of the CARU Dige st, which were jointly adopted by the
Parties, following rigorous scientific review by CARU, a body es tablished precisely
to determine those requirements? In this regard, it should be recalled that CARU’s
requirements are comparable to standards set by other responsible environmental
regulatory authorities, such as the European Union, Australia, and the World Health
Organization, and therefore are considered as protective as those representative
standards 965.
6.18 The problems with the Latinoc onsult Report, and the reports of
Argentina’s other experts, are compounded by the fact that their objections to the
adequacy of the DINAMA/Botnia EIA, and mo re particularly to the Final CIS, rest
964
Ibid.
965
See International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills,
Annex D (hereinafter “Final CIS, Annex D”), p. D2.5 (September 2006). UCM, Vol. VIII,
Annex 176.
- 393 -on speculation about risks that would never normally be the subject of detailed
environmental assessment. For example, Argentina criticises the Final CIS for
failure to assess what would happen if significant climate shifts happen in the
future , if new dams are constructed 96, or if there is an increase in the rate of flow
968
reversal . It criticises the Final CIS for failing to acknowledge that if the Uruguay
River was located in Europe, it might be subject to a different (although not
necessarily more stringe nt) regulatory regime 969. It claims the assessment is
deficient because despite “clear evidence that the aquatic environment has improved
since the implementation of secondary treatment and improved processes …
bioactive substance … may be presen t … but undetectable with current
970
resources” . One of its hired experts claims: “the range of chemicals in mill
wastewater … are too complex to reach conclusions about the reasons for
detrimental effects and further research is needed” 971. Presumably Argentina’s
experts do not mean to suggest that thes e uncertainties should mean the immediate
966AM, paras. 7.26, 7.28. Of course, even if th e climate changed as Argentina asserts it might,
there would be no measurable change in the imp act of the Botnia plant on the environment.
See Dr. J. Craig Swanson & Dr. Eduardo A. Yassuda, Hydrologic Analysis for the Proposed
Botnia Cellulose Plant on the Uruguay River (h ereinafter “Swanson Report”), p. 18 (Applied
Science Associates, Inc.) (June 2007). UCM, Vol. X, Annex 214; Dr. Charles A. Menzie,
Evaluation of the Final Cumulative Impact Study for the Botnia S.A.’s Bleached Kraft Pulp
Mill (Fray Bentos, Uruguay) with Respect to Impacts on Water Quality and Aquatic Resources
and with Respect to Comments and Issues Raised by the Government of Argentina (hereinafter
“Menzie Report”), p. 15 (Exponent, Inc.) (July 2007). UCM, Vol. X, Annex 213.
967AM, para. 7.29. Construction of new dams in the future would require a separate EIA
process, at which point the impact of the dam construction would be assessed.
968AM, para. 7.26. The frequency and extent of current reversals alleged by Argentina is
belied by observations and is a function of erroneous modelling by Argentina, see Swanson
Report, op. cit., pp. 10-13. UCM, Vol. X, Annex 214; and in any event an increase in reversals
would not have an advers e effect, Menzie Report, op. cit. , pp. 26-28. UCM, Vol. X, Annex
213.
969AM, para. 7.50.
970Wheater Report, op.cit., Sec. 1. AM, Vol. V, Annex 5.
971Ibid.
- 394 -shutdown of all pulp mills everywhere, and the resulting end to the world’s paper
supply. That is exactly, however, the implication that would have to be drawn if the
Court were to accept the standards advocated by Argentina for assessment of the
Botnia plant and its expected impacts. These standards plainly (and deliberately) set
the bar at an impossibly high level, inconsistent with factual and objective standards
set by the International Law Commission and by international law. Uruguay is under
no obligation under the 1975 Statute or international law to assess the highly remote
and purely theoretical risks required by Argentina in advance of authorising the
Botnia plant. Argentina has cited no legal authority in support of the standards it
attempts to apply to the Botnia plant, because there is none.
6.19 Uruguay does not dispute that the pr ecise impacts of the plant cannot be
predicted with 100 percent certainty. That is precisely why the assessments
performed by Botnia and the IFC consis tently employ conservative methodology
that tends to overstate impacts. To c ite the most obvious example, the Final CIS
retains the existence of the ENCE plant a nd all of its impacts even though that plant
will no longer be constructed in or near Fray Bentos. Other less obvious examples
include the discharge estimates used in th e Final CIS, particularly for dioxins and
furans, which the Second Hatfield Report confirmed are conservative 972; the use of
973
two types of models to cross-check the validity of the results obtained ; the use of
an “extreme low flow” value lower than what is required under CARU
972
Hatfield Consultants, Report of Expert Pane l on the Final Cumulative Impact Study for the
Uruguay Pulp Mills (hereinafter “Report of Expert Panel on the Final Cumulative Impact Study
for the Uruguay Pulp Mills”, p. 3 (A5) & 5 (C 12) (14 October 2006). UCM, Vol. VIII, Annex
178. See also Final CIS, Annex D, op. cit., p. D4.3. UCM, Vol. VIII, Annex 176.
973
Final CIS, Annex D, op. cit., p. D5.2. UCM, Vol. VIII, Annex 176.
- 395 -regulations 97; and the assumption that all water quality parameters do not react,
975
decompose, or transform in any way in the ambient environment .
6.20 Uncertainty about eventual impacts of the plant is also addressed by means
of the comprehensive supervision and mon itoring program that has been designed
for the plant, and that wi ll be implemented as soon as it commences operations.
Thus, Uruguay asserts not only that the asse ssments that have been prepared by
DINAMA, Botnia, and the IFC’s independent experts fully satisfy CARU
regulations and all applicable internati onal standards; it also asserts that the
extensive monitoring program that has been designed will ensure that the true
impacts are identified, assessed, and, if necessary, addressed and remediated through
existing regulatory programs 97. In some cases, the alleged “risks” described in
Argentina’s Memorial as insufficiently addressed in the Final CIS are ones where
the impacts can be properly addressed (and can only be addressed) through a
combination of monitoring and regulatory oversight 97. Argentina’s continuing
refusal to participate in any monitoring of the river is, therefore, impossible for
Uruguay to comprehend. The monitoring program for the plant is discussed in detail
974 3
Ibid., p. D5.5. As explained in the Final CI S, the extreme low flow scenario of 500 m /s
analysed in the Final CIS generally occu rs in intervals of 5 to 20 years. Ibid. CARU
regulations, whose occurrence interval was used in the Final CIS, require that the extreme low
flow intervals be assessed only on a 5 year basis. Ibid. The “low flow” value used in the Final
CIS is lower (and more conservative) than what CARU requires, and thus predicts a greater
change in water quality characteristics than would be predicted if the 5 year low flow were to
be used.
975Ibid., p. D5.6. Although these subjects are outside the scope of this dispute, the Second
Hatfield Report acknowledged that the Final CIS employed conservative estimates with respect
to air emissions and, in particular, with respect to odour. Report of Expert Panel on the Final
Cumulative Impact Study for the Uruguay Pulp Mills, op. cit., pp. 6 & 9. UCM, Vol. VIII,
Annex 178.
976
See generally Chap. 7, Sec. 1.
977
See Menzie Report, op. cit., p. 30 (uncertainties should be managed and resolved through a
comprehensive monitoring program). UCM, Vol. X, Annex 213.
- 396 -in Chapter 7, as is Argentina’s persis tent refusal to accept Uruguay’s repeated
invitations to participate as an equal partner in a joint monitoring effort.
B. T HE IMPACTS OF THE B OTNIA P LANT H AVE B EEN T HOROUGHLY AND
A DEQUATELY A SSESSED
6.21 Putting aside the impossible legal standard asserted by Argentina,
Argentina is simply wrong when it claims that inadequate information has been
provided about the Botnia plant. Indeed, even Argentina’s experts agree that the
reports prepared are consistent with intern ational norms and standards of care. The
Wheater Report noted: “The final Cumulative Impact Assessment (CIS) was much
improved, and mainly consistent with wh at might reasonably be expected from an
international impact assessment.”978 Similarly, the Latinoconsult Report states that
979
“the FCIS is consistent with current professional practice” .
6.22 Argentina sometimes criticises the provision of information by reference
to the very first submissions of Botnia to DINAMA, without recognising the later
980
submissions that followed . Yet, as Chapter 4 shows, environmental impact
assessment is a process, not a single event81. The fact that DINAMA criticised the
982
initial filings of Botnia is not a defe ct in the process, as Argentina argues but a
confirmation that it worked as intended. DINAMA, and ultimately the IFC, would
not be meeting their statutory or organisational mandates if they accepted at face
value the initial submissions of a pr oject proponent. T hus, the repeated
978Wheater Report, op.cit., p. 1 (introductory para.). AM, Vol. V, Annex 5.
979
Latinoconsult Report, op. cit., p. 13. AM, Vol. V, Annex 3.
980
AM, paras. 2.53, 4.49, 5.56.
981
See also Mr. William Sheate, Comments on the EIA Process (hereinafter “Sheate Report”),
pp. 3-4, 6-9 (Collingwood Environmental Planning) (June 2007). UCM, Vol. X, Annex 216.
982
AM, paras. 2.53, 4.49, 5.56.
- 397 -supplementation of information required of Botnia by DINAMA is precisely what
would be expected of a thorough and careful review of the environmental impacts of
a project. The same can be said of the IF C, which did not accept Botnia’s initial
submissions at face value, but rather required independent review of the draft CIS,
development of an action plan, subsequent revisions to the draft CIS, issuance of a
983
Final CIS, and a second independent review .
6.23 Argentina is equally wrong to rely solely on the Final CIS to evaluate the
sufficiency of the information provided, which is what each of Argentina’s principal
experts did: For example, the Latinoconsu lt Report pays “special attention” to the
984
Final CIS , and rarely, if ever references any of the prior submissions. The Conti
985
Report was based solely on the review of the Final CIS . The Wheater Report is
based solely on review of the same 986. Although the Final CIS is extraordinarily
comprehensive, it does not include all of th e information that has been available to
983See generally Chap. 5, Sec. 2.
984See Latinoconsult Report, op.cit., p. 1 (introductory para.). AM, Vol. V, Annex 3, (noting
that, although many reports have analysed the impacts of the Botnia plant, the report pays
special attention to the Final CIS), 12 (sam e), 13 (section entitled “Characteristics of the
environment that are not fully or erroneously characterized in the FCIS”), 18 (section entitled
“Risks not addressed in the FCIS”), & 20 (subsec tion to “Risks to Water Quality in the Rio
Uruguay” entitled “FCIS Rationale for No Significant Impact”).
985Conti Report, op.cit., p. 1. AM, Vol. V, Annex 4. The failure of the Conti Report to consider
other documents is the least of its problems. Because it is rarely referenced in Argentina’s
Memorial, it will not be addressed in detail in this Counter-Memorial. However, the Conti
Report suffers from a number of glaring errors, including its confusion of the process of
making cellulose (which the Botnia plant will do) with the process of making paper (which the
Botnia plant will not). Ibid., pp. 5-6. Its comments on the cellulose industry are general, and
make virtually no reference to the specific technology and pollution prevention mechanisms
that Uruguay has required of the Botnia plant, nor does it consider the vast quantity of
scientific research pertaining to the industry or the Botnia plant itself. Rather, it references
irrelevant topics such as asbestos contamination in abandoned industrial sites, and occupational
exposure to palladian and platinum in a catalyst plant. Ibid., pp. 11, 23. It states that the
Uruguay River is a complex ecosystem -- a propos ition that the Final CIS does not dispute --
but fails to make any affirmative argument usi ng generally accepted scie ntific techniques that
the Botnia plant is likely to disrupt or harm that system.
986Wheater Report, op. cit., p. 1. AM, Vol. V, Annex 5.
- 398 -the Parties, including Argentina. Argentina’s conclusions that insufficient
information has been provided cannot st and when those conclusions take into
account only some of the information that exists. For instance, Uruguay submitted
numerous documents relating to the potential impacts of the Botnia plant during the
GTAN process, the contents of which are comprehensively described in Chapter 3.
Moreover, the entire file leading to the issuance of Botnia’s Initial Environmental
Authorisation is approximately 4,000 pa ges long, and was ma de available to
Argentina in its entirety. As explained in Chapter 4, the adequacy of the EIA
process must be judged on the totality of information that is made available and not
on any single document. Therefore, alt hough the Final CIS is extraordinarily
comprehensive and alone is more than enough to satisfy the international law
requirements of EIA, it must be remembered that this process has involved extensive
environmental review, not all of which has been included in the Final CIS, but all of
which has been made available to Argentina.
6.24 Regardless of which reports were reviewed, Argentina has not made a case
that the EIA process was deficient. As set forth in Chapters 3 and 4, DINAMA
allowed the project to move forward only after exhaustive environmental evaluation.
As set forth in Chapter 5, the IFC would not have acted if it did not have adequate
information to understand the potential impact s, and to assure itself that its rigorous
Performance Standards were satisfied.
6.25 Mr. Sheate, Uruguay’s expert on EI A, has opined that the process of
987
preparing the EIA was robust and c onsistent with international norms . He
confirmed that the EIA process must be judged as a whole process, rather than solely
987
See Sheate Report, op. cit., p. 1. UCM, Vol. X, Annex 216.
- 399 -at the point of submission of the initial filing by Botnia in 2004, and that as a whole,
especially when considering how closely linked Uruguay’s approval process is to the
EIA process, the process met international standards 988. Mr. Sheate also notes that
“[i]n the nature of complex projects with multiple elements it is possible that the
consenting process and therefore the EIA proc ess may be a multi-stage process, i.e.
an initial authorisation with subsequent authorisations for sub-projects as these come
989
forward over time” . Mr. Sheate confirms that the “the original EIA and the CIS
together provide a transparent approach to the determination of significance in
990
relation to emission to the water environment” , in this case primarily by
comparison to applicable water quality standards. Mr. Sheate also notes the
conservative nature of the Final CIS, sp ecifically by continuing to include the
991
impacts of the ENCE plant .
6.26 Although environmental impact assessment can take many forms
depending upon its national context, Mr. Sh eate identifies a basic principle that
underpins EIA worldwide, which is stated in Principle 17 of the Río Declaration:
“Environmental impact assessment, as a national instrument, shall be undertaken for
proposed activities that are likely to have significant adverse impact on the
992
environment and are subject to a decision of a competent national authority.” Mr.
Sheate concludes that it is not necessary to include in the assessment activities that
are unlikely to have a significant adverse impact.
988Ibid., pp. 2-4 & 9.
989Ibid., p. 8.
990Ibid., p. 6.
991Ibid.
992Ibid., p. 5 (internal quotations and citation omitted).
- 400 -6.27 Uruguay’s other technical experts -- Drs. Swanson, Menzie, and Deardorff
and Mr. Booth -- concur that the informa tion provided in the environmental impact
assessment should address the activities that might have a significant adverse
impact, and that the information is sufficient to satisfy a conclusion that the plant
will not cause a significant risk of harm 99. Their conclusions are discussed in more
detail in later parts of this Chapter.
6.28 Section III of this Chapter will show why Argentina has failed to show that
the Botnia plant will be anything other than a world-class performer. Section IV will
show why Argentina has also failed to show that this world-class performer will
have any unacceptable impacts on the Uruguay River or its aquatic environment.
Section III.
Argentina Has Done Nothing to Disturb the Conclusion that the Botnia Plant
Will Perform on a World-Class Level.
6.29 In response to overwhelming evidence that the Botnia plant will meet
IPPC BAT and that it “will probably perform to a standard of top five in the
world” 994, Argentina’s Memorial raises some isolated questions, none of which
present any meaningful challenge to this conclusion. Specifically, Argentina
challenges the conclusions of the Final CIS with respect to (i) effluent treatment
technology; (ii) bleaching technology; (iii) emergency basi ns; (iv) chemical
synthesis; (v) emergency management; and (vi) facility siting. As Uruguay will now
demonstrate, each of these challenges can be easily and completely dismissed.
993
See, e.g., Menzie Report, op. cit., pp. 12-13, 15, 22. UCM, Vol. X, Annex 213. Swanson
Report, op. cit. , pp. 7, 10, 13-15, 19-22. UCM, Vol. X, Annex 214. Mr. Pieter Booth,
Sufficiency of EIA and GTAN Information for Determination of Environmental Impacts -
Botnia, S.A., Fray Bentos Uruguay (hereinafter “Booth Report”), pp. 10-12 (Exponent, Inc.)
(June 2007). UCM, Vol. X, Annex 217.
994
Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay Pulp Mills,
op. cit., p. 2. UCM, Vol. VIII, Annex 178.
- 401 -6.30 EffluT ertatmTenetchnology . Argentina’s argument that the IFC’s
independent experts, Hatfield and EcoMet rix are wrong and that the Botnia plant
does not meet BAT is primarily focused on wastewater treatment, and specifically
995
the lack of so-called “traitement tertiaire” . It is not disputed that all wastewater
produced in the cellulose production process will be treated by the Botnia plant’s
wastewater treatment plant. The plan t will use both “primary” and “secondary”
996
treatment processes . The Final CIS concluded that “[t]he effluent flows of
Botnia-Orion … comply with the IPPC-BAT (2001) range and are among the best in
997
the world.”
6.31 In spite of that finding, Argentina argues that the Botnia plant should have
been required to consider tertiary treatment of its wastewater to remove phosphorus.
Argentina’s argument is utterly devoid of proof, and relies solely on the assertion in
the Wheater Report (based on a 1999 report by another author) that “ typical nutrient
removal by an ASR [the basic form of wastewater treatment to be employed at the
998
Botnia plant] is 30-35%” . Dr. Wheater asserts--not by reference to any site-
specific analysis or to BAT requirements, but rather by reference to a 1991 Study
pertaining to Urban Wastewater Treatment in the European Union -- that the Botnia
995
AM, paras. 5.52, 5.75, 7.40, 7.90, 7.124, 7.180-186 (“tertiary treatment”).
996
Final CIS, op. cit., p. 2.22. UCM, Vol. VIII, Annex 173. “Primary” treatment is defined in
the Final CIS as “Process and equipment inte nded to remove suspended solids from the
effluent…. Primary treatment is a prerequisite for most secondary treatment processes.”
“Secondary” treatment is defined in the Final CI S as “a stage of waste treatment in which
micro-organisms decompose organi c constituents in the effluent.… Most secondary treatment
processes also reduce toxicity.” International Finance Corporation, Cumulative Impact Study,
Uruguay Pulp Mills, Annex I (hereinafter “Final CIS, Annex I”), pp. I.9-I.10 (September
2006).
997Final CIS, op. cit. , p. 2.21. UCM, Vol. VIII, Annex 173. See also ibid. , p. 2.26 (“The
expected performance with respect to bleaching effluent flow, COD content, and colour will be
among the best in the world.”).
998Wheater Report, op. cit., Sec. 6 (emphasis added). AM, Vol. V, Annex 5.
- 402 -plant “would require tertiary treatment to meet the following standards: a minimum
70% reduction in total nitrogen load and a minimum 80% reduction in total
phosphorus load” 999.
6.32 The fact that this assertion is not based on any site-specific analysis or
reference to BAT standards should be e nough on its own to dismiss it. That Dr.
Wheater is plainly wrong that Botnia’s ASR will only achieve 30-35% nutrient
reduction ends the discussion. The Botnia plant, which employs advanced ASR, will
achieve significantly higher removals than that: indeed, the Final CIS indicates that
the Botnia plant’s treatment system “fulfills all recommendations of IPPC-BAT” and
that “treatment efficiency is expected to be in the upper range (or higher) of the
recommended treatment efficiency” 100. In fact, the Final CIS found that phosphorus
removal will be on the order of 84%, which is higher than the minimum removal
1001
rate recommended by Dr. Wheater .
999Ibid.
1000Final CIS, Annex D, op. cit., p. D4.1. UCM, Vol. VIII, Annex 176. IPPC BAT guidelines
indicate that phosphorus removal for activated sludge reactors for BAT-compliant pulp mills is
40-85%, noting that “[t]he more recent plants have reduction figures in the upper part of the
ranges given.” European Commission, Integrated Pollution Prevention and Control (IPPC)
Reference Document on Best Available Techni ques in the Pulp and Paper Industry, p. 38
(December 2001) available at http://eippcb.jrc.es/pages/FActivities.htm (last visited on 9 July
2007). See also ibid., p. 84.
1001Ibid. The Wheater Report’s citation for phosphorus removal efficiency was to a chapter by
Shieh and Nguyan in a volume entitled Environmental Engineer’s Handbook. David H.F. Liu
(ed.), Environmental Engineer’s Handbook (2nd ed.) (hereinafter “ Environmental Engineer’s
Handbook”), p. 704 (1997). The Wheater Report first misquotes the article by indicating that
phosphorus removal using a typical ASR system is 30-35%; in fact, the article indicates that the
phosphorus removal is at least 30%. The Wheater Report further distorts the finding because
the percentage removal cited is applicable to municipal wastewater, not to cellulose plants. As
set forth elsewhere in the Environmental Engineer’s Handbook , phosphorus is a significant
problem with municipal/sanitary wastes; munici pal discharges account for over 82% of the
“point sources” of phosphorus discharges worldwide. Environmental Engineer’s Handbook, p.
531. In contrast, phosphorus must actually be added in precisely measured and minimal
amounts to the wastewater at the Botnia plant pr ior to treatment to ensure optimal functioning
of the ASR. See Final CIS, Annex A, op. cit. , p. A7.14. UCM, Vol. VI, Annex 174; see also
MVOTMA Initial Environmental Authorisation for the Botnia Plant (hereinafter “Botnia
- 403 -6.33 The Final CIS specifically evaluate d the issue of tertiary treatment and
concluded that any additional benefits fro m tertiary treatment are likely to be
marginal and insignificant 1002, and that tertiary treatment is not necessary to meet the
1003
applicable water quality standards . As further support, it noted that tertiary
1004
treatment is very rarely used in pulp mills . The conclusion in the Final CIS is
strengthened by studies concluding that tert iary treatment should not be considered
BAT. For instance, tertiary treatment may actually result in harmful effects by
increasing the chemical load on the environment and needlessly complicating the
wastewater treatment system 100. Given that the nutrient removal levels that will be
reached at the Botnia plant will approach or exceed those achieved with tertiary
treatment, and especially because the deta iled ecological mode lling showing that
nutrient levels in the Uruguay River will not meaningfully change as a result of the
Botnia plant, the risks clearly outweigh any theoretical, marginal benefit that could
result from tertiary treatment.
6.34 Uruguay’s pulp mill experts confirm the conclusion of the IFC’s experts
that “[t]ertiary treatment is not necessary for the Botnia mill to achieve world-class
1006
discharge releases for typical environmental parameters” . As evidence of how
EIA”), Chap. 4, Sec. 4.2.3. (14 February 2005). UCM, Vol. II, Annex 21. As indicated in the
Final CIS, phosphorus emissions from the Botnia plant are expected to be well within the
IPPC-BAT guidelines. Final CIS, op. cit., p. 2.29. UCM, Vol. VIII, Annex 173.
1002
Final CIS, op. cit., p. 2.23. UCM, Vol. VIII, Annex 173.
1003
Final CIS, Annex A, op. cit., p. A8.15. UCM, Vol. VIII, Annex 174.
1004
Final CIS, Annex I, op. cit., p. I.10. UCM, Vol. X, Annex 222.
1005
Final CIS, op. cit., p. 2.23. UCM, Vol. VIII, Annex 173. See Final CIS, Annex A, op. cit.,
pp. A8.13-A8.15 for a full discussion of this issue. UCM, Vol. VIII, Annex 174.
1006
Available Technologies and Best Environmen tal Management Practices for Botnia S.A.'s
Bleached Kraft Pulp Mill, Fray Bentos Urugua y, Dr. Thomas L. Deardorff & Mr. Douglas
- 404 -infrequently tertiary treatment is actually used, the Deardorff Report indicates that,
to the experts’ knowledge, only two of the one hundred and thirty pulp mills in the
United States employ tertiary treat ment, and then only in highly unusual
circumstances, specifically relating to minimising colour loading on aesthetically
sensitive receiving waters 1007. The Deardorff Report indicates that, to the experts’
knowledge, no pulp mills are planning conversions to tertiary treatment, and that the
newest mills in the world, the Stendal mill in Germany and the Stora Enso Veracel
mill in Brazil also do not have tertiary treatment 1008. Similarly, although Argentina
provides a list of pulp mills in Annex 2 of Volume 5 to its Memorial (“Tableau
comparatif des usines de pate a papier dans le monde”), it fails to identify any that
employ tertiary treatment.
6.35 In all contexts other than this litigation, Argentina itself does not endorse
the use of tertiary treatment for kraft pulp mills. Argentina has announced a
comprehensive program of modernisation of its pulp mills -- the Restructuring Plan
for the Cellulose and Paper Industry (“Arge ntine Pulp Mill Restructuring Program”)
-- that explicitly aims to bring the operation of Argentine cellulose plants into
conformance with BAT. The guidelines set forth in the Technical Evaluation
Manual for the Argentine Restructuring Plan “are based on the Best Available
Pryke (Exponent, Inc.) (hereinafter “Deardorff Report” ), pp. 8-9 (8 July 2007). UCM, Vol. X,
Annex 215.
1007Ibid., p. 30. When tertiary treatment is used, it is usually to lessen aesthetic impacts with
respect to the colour of the effluent discharge. See Final CIS, Annex A, op. cit., p. A8.13.
UCM, Vol. VIII, Annex 174. Co lour is not expected to aff ect the aesthetic quality of the
Uruguay River. The only expected aesthetic impact from the colour of the effluent discharge is
that during low flow conditions an observer on the internationa l bridge may notice a “slight”
differential in colour, but this impact is expected to be minimal. Final CIS, op. cit., p. 4.46.
UCM, Vol. VIII, Annex 173. Indeed, the Final CI S concluded that with respect to colour, the
effluent of the Botnia plant will be among the best in the world. Ibid., p. 2.26.
1008Deadorff Report, op. cit., p. 31. UCM, Vol. X, Annex 215.
- 405 - 1009
Techniques (BATs) for the Pulp and Pa per Industry established by the [IPPC]” .
Nowhere in the implementing guidelines of the Argentine Restructuring Plan is there
any requirement that any pulp mill consider, much less install, tertiary treatment of
effluents 1010. Pursuant to this restructuring program, Argentina has signed an
agreement with the Alto Paraná S.A. pulp mill that does not require the use of
1011
tertiary treatment . Hence, by its actions Argentina has conceded that tertiary
treatment is not a requirement for BAT 1012.
6.36 In addition, nothing in the Technical Evaluation Manual for the Argentine
Restructuring Plan requires any pulp mill to take specific action to lessen or
otherwise control phosphorus discharges, wh ich is the Wheater Report’s basis for
asserting that tertiary treatment is required.
1009
Secretariat of the Environment and Sustaina ble Development, Restru cturing Plan for the
Cellulose and Paper Industry: Technical Evaluation Manual (hereinafter “Argentine
Restructuring Plan: Technical Evaluation Manual” ), p. 13 (January 2007). UCM, Vol. III,
Annex 49.
1010Ibid., p. 17 (recommending only primary and secondary treatment as BAT).
1011Agreement of the Argentine Secretariat of the Environment on Restructuring of the Pulp
Mill Alto Paraná, Appx. 2, Objective 3 (8 May 2007). UCM, Vol. III, Annex 51.
1012
This conclusion is all the more forceful b ecause, as Secretary of the Environment, Dr.
Romina Picolotti has played a prominent ro le in the development of the Argentine
Restructuring Plan. See generally Argentine Restructuring Program: Technical Evaluation
Manual, op. cit., p. 1. UCM, Vol. III, Annex 49. See also Secretariat of the Environment,
“The Secretariat of the Environment and the A lto Paraná Company Sign an Agreement in the
Framework of the Industrial Restructuring Plan,” Press Release (8 May 2007). UCM, Vol. III,
Annex 53. Dr. Picolotti is the founder of th e Center for Human and Environmental Rights
(CEDHA, per its Spanish initials), an Argentine NGO that was an early and ardent opponent of
the Botnia plant. Dr. Picolotti was president of CEDHA when she represented Argentina in the
Court at the hearings on Argentina’s provisional measures request on 8-9 June 2006. See
generally CEDHA, “Romina Picolotti Named Head of Argentina's Environmental Secretariat,”
p. 1 (27 June 2006). UCM, Vol. IX, Annex 187. In her new position as Secretary of the
Environment, Dr. Picolotti would have every incentive to require Argentine pulp mills to adopt
the best available water treatment technologies. Thus, it is noteworthy that the Technical
Evaluation Manual for the Argentine Restructuring Plan sets forth the same requirements with
which Botnia must comply, including use of secondary treatment for pulp mills using kraft
technology.
- 406 -6.37 Finally, contrary to the Wheater Report’s suggestion that tertiary treatment
is required due to some unique feat ures of the receiving environment 101, the
Uruguay River in the vicinity of the Botnia plant is not a sensitive environment
warranting tertiary treatment. After engaging in an extensive analysis of the
environmental characteristics of the Ur uguay River, the Final CIS and the Second
Hatfield Report unequivocally found that the environment into which the plant will
discharge effluent is not one that woul d be deemed “sensitive” under IPPC BAT,
which would be the only context in which using tertiary treatment would even be
1014
considered . This conclusion was affirmed by the Second Hatfield Report, which
found that “[r]elative to most sites for pul p mills and other large process industries,
Fray Bentos is not an environmentally sensitive site” 1015.
6.38 Uruguay’s experts confirm that ther e is no reason to conclude that the
Uruguay River is a particularly sensitive environment:
[T]he fauna found in the [Uruguay River] is representative of
that found typically in large rivers with variable substrates. This
is also true for the fish community.… The variation that has
been seen across habitats is typical of such environments, and
the fact that the Latinoconsult report identified different species
is neither unusual nor alarming. There is nothing especially
unique about the planktonic or benthic communities identified in
either the studies referenced in the Latinoconsult Report or the
FCIS. Thus, they do not provide any information that would
suggest there will be any unique concerns relating to the impacts
of the operation of the Botnia mill in the Uruguay River that has
1013Wheater Report, op. cit., Sec. 6. AM, Vol. V, Annex 5.
1014
See Final CIS, op. cit. , p. 2.23 (concluding that tertiary treatment is not required). UCM,
Vol. VIII, Annex 173. Final CIS, Annex A, op. cit. , p. A8.14 (the Uruguay River is not a
sensitive environment warranting the use of tertia ry treatment). UCM, Vol. VIII, Annex 174.
Report of Expert Panel on the Final Cumulativ e Impact Study for the Uruguay Pulp Mills, op.
cit., p. 2 (“Relative to most sites for pulp mills, a nd other large process industries, Fray Bentos
is not an environmentally sensitive site”). UCM, Vol. VIII, Annex 178.
1015See Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay Pulp
Mills, op. cit., p. 2. UCM, Vol. VIII, Annex 178.
- 407 - not been addre1016 in the environmental evaluation carried out
in the FCIS.
6.39 The discussion of effluent trea tment technology underscores the reality
that the cellulose plants of today differ radically from their historic predecessors of
even two or three decades ago. The First Hatfield Report noted that “comments
expressing concern that the mills will cause catastrophic environmental damage are
unsupported, unreasonable and ignore the experience in many other modern
1017
bleached kraft pulp mills” . The Second Hatfield Report, in reference to concerns
about dioxins, noted that “perhaps stakehol ders have been misled by the extensive
body of older literature that simply refers to ‘pulp mills’ and in reading it do not
realise the dramatic difference between the discharges from modern ECF mills and
1018
the several older ones using chlorine without any chlorine dioxide” . The
conclusions in the Final CIS are underscored by the Deardorff Report, which sets out
in detail the dramatic improvement in overall performance of cellulose plants over
1016
Menzie Report, op. cit., p. 23. UCM, Vol. X, Annex 213. The Wheater Report relies
heavily on the presence of endang ered bird species and amphibian s to argue that the Uruguay
River would be considered a “sensitive environment” within the meaning of IPPC BAT.
Wheater Report, op. cit., Sec. 1. AM, Vol. V, Annex 5. The Menzie Report, however,
specifically analysed the ecology of these endangered birds, and found that adverse impacts are
unlikely to occur b ecause each of these species will have limited contact with the Uruguay
River, and no information was found to indicate that these birds feed on aquatic life. Menzie
Report, op. cit. , pp. 25-26. UCM, Vol. X, Annex 213. Given the limited opportunity for
exposure of these species to the effluent discha rges in the Uruguay River, there is no basis for
concluding that the presence of endangered bird species renders the Uruguay River a “sensitive
environment” warranting the inclus ion of tertiary treatment. Similarly, the amphibian species
that Argentina claims may be impacted by the effluent discharge are highly unlikely to come
into contact with the mill effluent. As the Me nzie Report explains, the amphibian species of
concern prefer terrestrial environments and th eir breeding grounds usually involve temporary,
calm water bodies -- characteristics that the ma in channel of the Uruguay River where the
effluent will be discharged does not share. Ibid., pp. 24-25.
1017Report of Expert Panel on the Draft Cumula tive Impact Study for the Uruguay Pulp Mills,
op. cit., p. 2 (emphasis added). UCM, Vol. VIII, Annex 170.
1018Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay Pulp Mills,
op. cit., p. 5. UCM, Vol. VIII, Annex 178.
- 408 -the past 30 years. The further improvements in the 1990s and 2000s are due in part
to the development of international sta ndards, including New Source Performance
Standards in the United States (1998), Integrated Pollution Prevention and Control
(IPPC) Best Available Technologies in the European Union (2001), and
Environmental Manage ment Best Practice s in Australia (2004) 101. The
development of “minimum impact manufac turing” through the application of new
technologies and these standards has led to dramatic declines in water use (70%
reduction since 1994), BOD water emissions (85% decline since 1994; 95% decline
since 1975), COD water emissions (60% decline since 1994), and sulphur dioxide
and odorous compounds air emissions (95% decline since 1994). Total suspended
solids have declined by 90%, and persistent organic pollutants such as dioxins have
1020
virtually been eliminated . As documented in the affidavit of Timo Piilonen,
Botnia has been a leader in improving the performance of cellulose plants, both as a
1021
general matter, and for the plant in Fray Bentos specifically . Moreover, as the
Deardorff Report confirms, the Botnia plant wi ll achieve emissions levels consistent
1022
with state-of-the-art pulp mills . Thus, much or all of the evidence of pulp mill
impacts from the past have no relevance to the Botnia plant.
6.40 Eminent Argentine scientists have expressed the same view. Of particular
significance are the evaluations conducted by the Argentine National Academy of
Engineering, which confirmed the conclusions reached in the Final CIS that the
1019Deardorff Report, op. cit., pp. 10-15. UCM, Vol. X, Annex 215.
1020
Ibid., pp. 24-27.
1021
Affidavit of Timo Piilonen, Senior Vice-Pr esident for Uruguay Operations of Botnia and
Managing Director of Botnia South America, S.A. (hereinafter “Timo Piilonen Aff.”), paras. 6-
27 (1 June 2006). UCM, Vol. IX, Annex 204.
1022Deardorff Report, op. cit., pp. 21-14. UCM, Vol. X, Annex 215.
- 409 -Botnia plant (and the ENCE plant) would not cause adverse impacts to the Uruguay
River 1023:
The mills have been designed so that liquid effluents at the discharge
point have received a complete secondary treatment 1024, which
reduces the suspended solids and biodegradable organic components
in compliance with international standards. The dilution rates were
estimated for worst-case scenarios [in the Draft CIS], for extremely
low levels of water in the Uruguay River (500 m3/sec versus a mean
module of 4000 m3/sec). Under these conditions, the discharge flows
of both plants merge, but they run on the Uruguayan margin of the
river and do not reach the Argentine coast. If the mills operate as
designed, in no case do the polluting elements affect the biodiversity
of the river or its coasts . . . .25
* * * *
[T]he resulting environmental parameters from the pulp mills’
operations are within the strict limits of the applicable national
standards. In accordance, no adverse effects on health or biodiversity
are to be 1026cted, and no pollution shall affect Argentine coasts or
territory.
6.41 The Argentine National Academy of Engineering is an independent body
specifically created by Argentine federal law, and is charged with the mission of
“studying the diverse aspects of Engineering, particularly those that are of concern to
the Nation,” and “expressing its opinion, when deemed advisable, on such
aspects” 1027. In accordance with that mission, the Argentine National Academy of
Engineering sent its findings to President Nestor Kirchner to aid in the discussions
1023
See generally National Academy of Engineering, Buenos Aires, Argentina, Letter to
President Kirchner and Document on the Cellu lose Pulp Mills on the Uruguay River,
(hereinafter “National Academy of Engineering - Letter to President Kirchner) (12 June 2006).
UCM, Vol. VIII, Annex 172.
1024(emphasis in original).
1025(emphasis added).
1026National Academy of Engineering - Letter to President Kirchner, op. cit., pp. 3-4. UCM,
Vol. VIII, Annex 172.
1027Bylaws of the National Academy of Engin eering, Approved by Decree of the National
Executive Power No. 2347 (11 November 1980). UCM, Vol. VI, Annex 155.
- 410 - 1028
with Uruguay concerning the ENCE and Botnia plants . This report, however,
like most of the objective and independent evidence regarding the Botnia plant, has
been wholly disregarded by Argentina in its Memorial.
6.42 Other Argentine expert s have also confirmed that operation of the Botnia
plant will not cause adverse impacts. For instance, the President of the National
Institute of Technology and Industry of the Republic of Argentina concluded that the
“the contamination they produce is irrele vant [and] does not entail any release of
harmful products in to the ecosystem” 102. Similarly, Dr. Mario Feliz of the
University of the Plate and Dr. Alberto Venica, concluded that the Botnia plant will
use state-of-the-art technology, and that the contamination of the river will be
minimal and will present no adverse health effects. Dr. Feliz has also stated that the
notion that the plants will cause irreparabl e harm is a “fraud that is increasingly
1030
difficult to uphold” .
6.43 BleachT iechnology . Although Argentina argued during the provisional
measures phase that the Botnia plant shoul d have been required to use a so-called
1031
“TCF” process for bleaching instead of the “ECF-light” process authorised by
1028
National Academy of Engineering - Letter to President Kirchner, op. cit., p. 1. UCM, Vol.
VIII, Annex 172.
1029
La República, “Unexpected: At a Crucial Time , Argentine Scientists Speak Out in Favour
of the Uruguayan Plants” (hereinafter “Unexpect ed: At a Crucial Time, Argentine Scientists
Speak Out in Favour of the Uruguayan Plants”), p. 1 (31 March 2006). UCM, Vol. IX, Annex
186.
1030Ibid., p. 4.
1031The Final CIS defines ECF or “Elemental Chlorine Free” bleaching as: “ECF pulps are
bleached exclusively with chlorine dioxide rather than elementa l chlorine gas or hypochlorites
as a bleaching agent. This virtually eliminates the discharge of detectable dioxins in the
effluent of pulp manufacturing facilities.” TCF, or “Total Chlorine Free” process “refers to
bleaching pulp without use of chlorine in an y form. Hydrogen peroxi de, oxygen ozone, or
peracetic acid are the most common TCF bleaching agents.” Final CIS, Annex I, op. cit., pp.
I.5 & I.11. UCM, Vol. X, 222.
- 411 -Uruguay, Argentina’s Memorial retreats fro m this position and makes no real effort
to assert that the TCF process will confer significant environmental benefits relative
to ECF-light. Rather, it alleges only that no alternative to the ECF-light bleaching
1032
process was considered . This is patently false. As the Final CIS notes, Botnia
has been one of the leaders in the adop tion of TCF technology and did consider
TCF 1033. More importantly, as the Final CIS concluded, TCF pulp and ECF pulp
have similar environmental impacts on water emissions, neither technology emits
dioxins at environmentally significant levels, and both are acceptable under the
POPS Convention, IPPC BAT, United States Environmental Protection Agency, and
all significant permitting authorities 1034. These facts are acknowledged explicitly in
1035
Argentina’s Memorial, as well . Thus, the Final CIS concluded that there is no
objective reason for requiring the use of TCF over the ECF-light bleaching process,
particularly in light of the inferior quality of pulp produced by the TCF process and
the fact that TCF requires more wood than EFC-light to produce the same amount of
cellulose 1036, which generates a series of separa te ramifications for environmental
protection including increased energy use and pollution. Argentina’s Memorial also
notes that the World Bank Pollution Prevention and Abatement Handbook agrees
1037
that ECF technology is acceptable .
1032AM, para. 7.76 & n. 683.
1033Final CIS, op. cit., p. 2.24. UCM, Vol. VIII, Annex 173.
1034Ibid., p. 2.25. Final CIS, Annex A, op. cit., p. A9.16. UCM, Vol. VIII, Annex 174.
1035AM, paras. 7.75 -7.77.
1036Final CIS, Annex A, op. cit., p. A9.18. UCM, Vol. VIII, Annex 174.
1037AM, para. 7.97.
- 412 -6.44 In addition, the Technical Evaluation Manual for the Argentine Pulp Mill
Restructuring Program contains no requirement that mills using the kraft technology
(like the Botnia plant) install TCF technology over ECF 1038. Either is acceptable to
Argentina. Specifically, the BAT guidelin es contained in the Technical Evaluation
Manual for the plan explicitly allow for mills (such as the Botnia plant) using kraft
pulping technology the “[i]nstallation of elemental chlorine free bleach (ECF with
1039
low emissions of AOX)” . The only technology not deemed to comply with BAT
in the Technical Evaluation Manual is the conventional chlorine system used by the
majority of existing Argentina mills. Accordingly, the agreement entered into by the
Alto Paraná mill and Argentina pursuant to the Argentine Restructuring Plan does
1040
not require the use of TCF technology . Therefore, the question of whether the
Botnia plant’s use of an ECF-light ble aching system complies with BAT and is
environmentally acceptable has now been answered in the affirmative by Argentina
itself.
6.45 The Piilonen Affidavit further supports the absence of environmental
benefits of TCF compared to ECF. It notes that “there is a scientific consensus that
ECF and TCF are indistinguishable in their ecotoxicity effects: they have an
identically low ecotoxic potential before effluent treatment and an identically
negligible one after the kind of effluent trea tment that will be used with the [Botnia]
mill.”1041 This conclusion is confirmed in the Final CIS, which notes that a recent
1038Argentine Restructuring Plan: Technical Evaluation Manual, op. cit., p. 16. UCM, Vol. III,
Annex 49.
1039Ibid.
1040Agreement of the Argentine Secretariat of the Environment on Restructuring of the Pulp
Mill Alto Paraná, op. cit., Appx. 2, Objective 1. UCM, Vol. III, Annex 51.
1041Timo Piilonen Aff., op. cit., para. 16. UCM, Vol. VII, Annex 204.
- 413 -study examining pulp mills all over the world found that “TCF pulp and ECF pulp
have similar environmental impacts from ai r and water emissions, and that neither
emit dioxins at environmen tally significant levels” 1042. Finally, as shown in the
Final CIS, in contrast to the rapid expa nsion of ECF technology, there has been
1043
essentially no new TCF production over the past decade .
6.46 Finally, the Argentine National Academy of Engineering has also
confirmed that the choice of ECF bleaching technology was “justified” 1044. This
conclusion was based on the acknowledgement that neither TCF nor ECF bleaching
will emit elemental chlorine and that ECF produces a higher quality of paper 1045.
6.47 EmergenB cyasins . Argentina argues that the Botnia plant’s spills
collection system has inadequate storage capacity and that an additional emergency
basin is required 104. The Final CIS specifically considered this issue and concluded
that the emergency basins for the Botnia’s wastewater treatment plant are sufficient
and will comply with IPPC BAT. The Bo tnia wastewater treatment plant will be
equipped with a system of three equalisa tion and safety basins with a storage
capacity of 25,000 m 3 each, which can be used to contain spills of materials 1047.
During normal operation of the plant, one of these basins is em pty, one is being
1042Final CIS, op. cit., p. 2.25. UCM, Vol. VIII, Annex 173.
1043Final CIS, Annex A, op. cit., p. A9.16. UCM, Vol. VIII, Annex 174. Only about 5% of the
world’s production is TCF; since 1990, ECF prod uction has grown from insignificant levels to
more than 80% of the world’s production.
1044National Academy of Engineering - Letter to President Kirchner, op. cit., p. 2. UCM, Vol.
VI, Annex 172. See also Unexpected: At a Crucial Time, Ar gentine Scientists Speak Out in
Favour of the Uruguayan Plants, op. cit., p. 2 (statements of Enrique Martinez). UCM, Vol.
VII, Annex 186.
1045National Academy of Engineering - Letter to President Kirchner and Document on the
Cellulose Pulp Mills on the Uruguay River, op. cit., p. 2. UCM, Vol. VI, Annex 172.
1046AM, paras. 5.52, 5.76,7.122, 7.124, 7.178-7.188.
1047Final CIS, Annex A, op. cit., p. A7.14. UCM, Vol. VIII, Annex 174.
- 414 -filled with process effluent, and the other is being emptied into the biological
treatment system 104. The Final CIS concluded that this design was adequate to
protect against emergency spills in accordance with IPPC BAT:
The design incorporates genero us equalization and emergency
basins, and in particular has an innovative design to avoid high
organic loads to be charged into the AST. This design includes
three 8-h[our] retention time ba sins (equalizati on/emergency)
that operate in a semi-continuous manner. . . . In the event that a
spill occurred in the mill, the basin contents would have a high
COD and would be discharged into the AST in a manner that
1049
does not overload the system.
6.48 Argentina has provided no evidence to support its assertion, or to
undermine the conclusion of the Final CIS. It has provided no explanation for why
emergency storage capacity of many millions of litres is insufficient to contain the
effluent from a plant that can be shut down promptly in the event of an emergency.
Thus, although in the Latinoconsult Re port, the IAEST recommended (without
explanation) that the “emergency ba sin be designed with 18 to 24 hours of
1050
operation” , IPPC BAT contains no guidelines with respect to the size of
emergency spill basins or to the vol ume representing a certain period of
1051
operation , nor does IAEST provide any t echnical justification for its
recommendations.
6.49 Not surprisingly, Argentina’s own Argentine Pulp Mill Restructuring
Program includes no minimum size for an emergency basin. Rather, the BAT
1048Ibid.
1049Ibid., p. A8.10.
1050
See Report to Professor Philippe Sands (26 November 2006), Appendix B to the
Latinoconsult Report, op. cit., p. 4. AM, Vol. V, Annex III. (Annexes to the Latinoconsult
Report formerly available at http://www.ec opaedia.com.ar/publico/ea_report/ (username:
ea_annex ; password: ea_annex) (last visited on 9 July 2007).
1051Deardorff Report, op. cit., p. 33. UCM, Vol. X, Annex 215.
- 415 -guidelines for the Argentine Restructuri ng Plan require only “[a]rrangement of
intermediate storage tanks of sufficient size for the storage of spilled liquors from
the cooking processes, recovery, and dirty condensates to prevent occasional abrupt
1052
load peaks and/or overflows in the effluent treatment plant” . As these guidelines
are expressly based on IPPC BAT, Argentina itself has conceded that there is no
minimum size requirement; it need only be shown that the emergency basins are of a
sufficient capacity for the pulp mill in question.
6.50 Uruguay’s experts concur with the conclusions of the Final CIS that the
emergency basin is adequately sized. As the Deardorff Report notes, the spill
capacity of the emergency basi ns is not only adequate but is actually within the
values recommended by IAEST, after appropriately disregarding the IAEST’s
inaccurate statement that the extra basin cannot be considered an emergency basin in
1053
that “it is more an operation facility” . Even excluding this third basin, the
emergency basin system will provide 16 hours of storage capacity under typical
operating conditions, and 24 hours of st orage capacity under other operational
scenarios 1054.
6.51 Similarly, Argentina’s own Nati onal Academy of Engineering raised no
concern that the emergency basins do not meet BAT, when it unequivocally
concluded that “[t]he mills have been designed pursuant to IPPC BAT . . .
standards” 105.
1052
Argentine Restructuring Plan: Technical Evaluation Manual, op. cit., p. 17. UCM, Vol. II,
Annex 49.
1053
Deardorff Report, op. cit., pp. 33-35. UCM, Vol. X, Annex 215.
1054Ibid., pp. 34-35.
1055National Academy of Engineering - Letter to President Kirchner, op. cit., p. 3 (emphasis in
original). UCM, Vol. VI, Annex 172.
- 416 -6.52 Chemsic ynlthesis. The Botnia plant will include an area for synthesis of
chemicals, both for use by the plant, and potentially for use elsewhere. These
chemicals are essential for the environmentally friendly ECF-light bleaching
process, and as noted in the Second Hatf ield Report, the production has significant
potential to be environmentally beneficial because it enables conventional bleaching
mills (such as the majority of mills in Argentina) to convert economically to the
lower polluting ECF technology 1056. Argentina claims, not that these processes will
cause a risk, but rather that they were not assessed 1057. This is simply incorrect: as
noted in the Final CIS, the chemical synthesis process was analysed within the
1058
CIS . Moreover, in addition to the information contained in the Botnia EIA, as
submitted on 31 March 2004, Botnia, in re sponse to DINAMA’s request, submitted
additional information regarding the onsite chemical production, which included
information on the production method and capa cities of these units, the potential for
air and effluent emissions, and wastes 105. Finally, the emergency management and
response plans for the chemical synthesis is part of the Botnia plant’s overall
1060
emergency management system .
1056Report of Expert Panel on the Final Cumulative Impact Study for the Uruguay Pulp Mills,
op. cit., p. 10. UCM, Vol. VIII, Annex 178.
1057AM, paras. 7.133-7.137.
1058See, e.g., Final CIS, op. cit., pp. 1.3, 4.1, 4.97. UCM, Vol. VI, 173. Final CIS, Annex A,
op. cit., p. A7.13. UCM, Vol. VIII, Annex 173.
1059See Additional Report No. 2 of the Botnia Envi ronmental Impact Assessment, p. 2296 (2
September 2004). UCM, Vol. VII, Annex 161. Additional Report No. 3 of the Botnia
Environmental Impact Assessment, p. 2650 (5 October 2004). UCM, Vol. VII, Annex 162.
Annex VIII to Additional Report No. 5 of th e Botnia Environmental Impact Assessment,
Studies of Plume Dispersion and Sediment Studies, pp. 2423-2425 (12 November 2004).
UCM, Vol. VII, Annex, 164. Additional Report No. 7 of the Botnia Environmental Impact
Assessment, pp. 3792 (17 January 2005). UCM, Vol. VII, Annex 167.
1060
See Botnia AAP, Art. 2(h). UCM Vol. II, Annex 21. Argentina erroneously asserts that the
chemical synthesis facility is to be used to tr ansform pulp into paper. AM, para. 7.113. This,
- 417 -6.53 EmergenM cyanagement. The Botnia EIA presented a preliminary
analysis of emergency and accidental events that are most likely to occur at pulp
mills, as well as the measures that it will take to prevent such accidents and
responsive actions to be taken 1061. It found that incidents of accidental bypassing of
the effluent treatment are very rare 1062. The Final CIS found that the worst case
scenario for an industrial acci dent at the Botnia plant would be an explosion at the
recovery boiler, but, even for that extreme event, any harmful consequences would
1063
occur within a few meters of the boiler inside the confines of the project site .
Given the preventative measures that will be put in place at the Botnia plant, the
Final CIS found that “[t]he event of a seri ous industrial accident at either or both
plants during operation is highly unlikely as appropriate measures have been taken
to prevent spills of chemical products, fires, contaminating emissions, etc.” 1064.
6.54 Given the unpredictability and infrequency of accidental and emergency
events, rather than speculate as to their potential impacts, the most appropriate
approach is to require appropriate preventive measures and a comprehensive
emergency response plan, which is exactly what DINAMA has done with respect to
the Botnia plant. As discussed in detail in the Final CIS, the Botnia plant must and
will comply with the requirements of IPPC BAT, which incorporate rigorous
however, is inaccurate as the production of the Botn ia plant will be limited to the production of
pulp, which will then be exported to paper producin g plants in Europe, Asia, and other regions.
Final CIS, op. cit., p. 1.2. UCM, Vol. VIII, Annex 173.
1061Botnia Environmental Impact Assessment Submitted to DINAMA (hereinafter “Botnia EIA
Submitted to DINAMA”), Chap. 7, pp. 2-11 (31 March 2004). UCM, Vol. X, Annex 219.
1062
Botnia Environmental Impact Assessment Submitted to DINAMA, Chap. 8, p. 2. (31
March 2004). UCM, Vol. X, Annex 220.
1063
Final CIS, op. cit., p. 4.86. UCM, Vol. VIII, Annex 173.
1064
Ibid., p. 4.86.
- 418 -preventative measures. In addition, pursuant to its Initial Environmental
Authorisation, Botnia is required to s ubmit a contingency plan and a plan for the
prevention of accidents that will address such events at both the plant and the
port1065. The plan for prevention of accidents will focus on the measures that Botnia
will take to prevent the occurrence of emergency and accidental events, while the
contingency plan will set forth the manner in which Botnia personnel should respond
to those events if they occur despite preventative measures. Operations can only
commence after DINAMA has found that th e preventative meas ures and response
actions in these plans are appropriate.
6.55 Landfill . As part of the operation of the plant, Botnia is constructing an
onsite landfill to dispose of its non-hazardous waste. Argentina’s complaint
regarding the onsite landfill focuses on the alleged inadequacy of the environmental
review process, rather than potential negative environmental impacts 1066.
Argentina’s criticism is wholly unfounded given the rigorous review to which the
landfill was subjected. Moreover, this st renuous review has resulted in a location
and design that will cause no adverse impacts to the Uruguay River, and Argentina
has not alleged, much less proven, otherwise.
6.56 The landfill constitutes an integral part of the Botnia plant; its potential
environmental impacts were properly assessed as part of the ongoing permitting
process for the plant as a whole. As initially proposed, the landfill was to be located
in an area known as Cañada de los Perros 1067. DINAMA, however, found this
1065Botnia AAP, op. cit., Art. 2(h). UCM, Vol. II, Annex 21.
1066AM, para. 7.117.
1067Argentina’s Memorial incorrectly states that the landfill is to be located at Cañada de los
Perros, and hence overlooks a significant part of the environmental review process for the
- 419 -location unsuitable, and required Botnia to submit a separate proposal regarding
1068
where to locate the landfill . In accordance with the Initial Environmental
Authorisation, Botnia submitted its Environmental Management Plan for the
construction of the onsite landfill to DINAMA 1069. Botnia also submitted a plan of
1070
operation for the landfill for DINAMA’s approval . The application for the
landfill describes the manner in which the landfill will be operated and the steps that
will be taken to minimize and prevent impacts from its operation. After careful
review, DINAMA approved both of these submissions on 9 April 2007. By
approving the landfill project, DINAMA determined that it will be operated in an
environmentally sound manner that will min imize impacts, if any. The wastes
deposited there must be non-hazardous, and any wastes not expressly authorised by
1071
DINAMA may not be deposited . As a result of the additional review by
DINAMA, the landfill has been located on the eastern border of Botnia’s plot and
poses absolutely no risk to the Uruguay River 1072. Although DINAMA has approved
the construction and proposed manner of operation of the landfill, its operation
cannot commence until DINAMA approves Botnia’s Monitoring Plan and the
landfill, as expressly set forth in the Initial Environmental Authorisation (AAP). AM, para.
7.117.
1068Botnia AAP, op. cit., Art. 2(dd). UCM, Vol. II, Annex 21.
1069See DINAMA Environmental Management Plan Approval for the Botnia Plant (9 April
2007) (approving plan for the construction of solid industrial waste landfills). UCM, Vol. II,
Annex 37.
1070
See DINAMA Environmental Management Plan Approval for the Botnia Plant (authorising
industrial non-hazardous waste landfill) (9 April 2007). UCM, Vol. II, Annex 36.
1071Ibid., Arts. 1 & 2(b).
1072
DINAMA Maps of Landfill Location (June 2007). UCM, Vol. X, Annex 223.
- 420 -Environmental Management Plan for Solid Wastes, as required by the Initial
Environmental Authorisation 1073.
6.57 In addition to the review conduct ed by DINAMA, the Final CIS reviewed
the design of the landfill to be located at the Botnia plant (and the one that would
have been constructed at the ENCE plant) and concluded that “[b]oth landfill
designs are consistent with state-of-the-art practice. . . . The landfills are designed to
minimize potential environmental impacts to groundwater or adjacent surface
1074
waters” .
6.58 FacilS itting . Argentina complains that inadequate information was
1075
provided about facility siting . In fact, the Final CIS contained a detailed
evaluation of siting criteria, including a thorough analysis of the water supply,
capacity of the receiving waters to assimila te effluent, potential conflict with other
water uses, and the existence of sensitive receptors, and ultimately did not dispute
the environmental acceptability of the Botnia plant’s location 1076. It also included
consideration of the availability of land, labour and energy, the proximity of forests
and availability of transportation infrastructure. Three potential areas were
evaluated, and Fray Bentos was chosen as the optimal site. Once Fray Bentos was
selected, a micro-scale analysis was conducted to locate the plant where the water is
deeper and relatively remote from the conservation areas upstream at Esteros de
Farrapos. Locations further downstream were disfavoured because they were closer
1073Botnia AAP, op. cit., Art. 2(h) & (i). UCM, Vol. II, Annex 21. See also DINAMA
Environmental Management Plan Approval for the Botnia Plant (authorising industrial non-
hazardous waste landfill), op. cit., Art. 2(d). UCM, Vol. II, Annex 36.
1074Final CIS, op. cit., p. 4.70. UCM, Vol. VIII, Annex 173.
1075AM, paras. 7.107-7.110.
1076Final CIS, op. cit., pp. 2.7 -2.12. UCM, Vol. VIII, Annex 173.
- 421 -to recreational areas. As the Final CIS noted, this work was not done solely for the
Final CIS; it was done in 2003 prior to the initiation of permitting activities 1077.
6.59 Of course, there is no requirement in the 1975 Statute that a project even
undergo a siting analysis. What is required is that information be provided about the
project (Article 7) and that the project not cause unacceptable environmental harm
(discussed in Chapter 4). Here, because the scientific evidence shows that the
project will not cause unacceptable environmental harm, Argentina can make no
separate claim that the siti ng process was inadequate, or somehow contrary to the
requirements in the 1975 Statute.
Section IV.
Argentina Has Not Met Its Burden of Showing that the Botnia Plant Will
Adversely Impact Water Quality or the Ecological Balance of the River
6.60 The Final CIS concluded that the e ffluent discharge from the Botnia plant
will not adversely affect either human hea lth or aquatic life, nor will it cause an
exceedance of the applicable water quality standards. It is of particular importance
here to recall that the conclusions of the Final CIS reflect the assumption that the
ENCE plant would also be in operation. Hence the anticipated impacts of the Botnia
plant alone will be proportionally less th an those described in the Final CIS 1078.
Argentina’s Memorial tries to brush off this important fact, stating that the removal
of the ENCE plant -- and the elimination of a 500,000 ton/year pulp mill with its
1077See ibid., p. 2.9. UCM, Vol. VIII, Annex 173. Argentina alleges that Uruguay
misrepresented the extent to which the site was suitable with regard to its navigability because
maintaining navigability will requi re dredging. AM, para. 5.67. Other than its unfounded
allegations with respect to the effluent disp ersion, which are discussed below, Argentina
provides no reason why this would affect the Final CIS’s conclusion that the site is suitable and
the Botnia plant will have no adverse impacts.
1078
As set forth in Chapter 1, relocation of the ENCE plant will reduce total effluent flow by
40%, phosphorus by 41%, AOX by 38%, COD by 35%, BOD by 50%, and total suspended
solids by 39%. See Final CIS, Annex D, op. cit., pp. D4.7-9 (Tables D4.2-1, D4.3-1 & 4.3-2).
UCM, Vol. VIII, Annex 176.
- 422 - 1079
related discharges into the river -- “n ’affecte pas en substance le différend” .
Much as it would like, Argentina is not free to ignore or cast aside important facts
that undermine its case.
6.61 In an attempt to meet its burden of proof of showing that the Botnia plant
will impermissibly affect water quality, Argentina raises a number of concerns about
the water quality evaluation performed by Botnia, DINAMA, and the authors of the
Final CIS. Specifically, Argentina claims that (1) the Final CIS misused dilution
factors to predict areas of no adverse impact; (2) the frequency of current reversals
was underestimated, and the protected Es teros de Farrapos site was therefore
threatened; (3) the “low flow” estimate generated in the Final CIS was not low
enough because the models did not account for climate change, wet/dry cycles,
potential changes in operations of the ups tream Salto Grande Dam, and impacts of
plantations; (4) the impacts of sedimentation were not adequately considered; (5) the
assessments understated the ecological impacts of the e ffluents, especially with
respect to phosphorus; and (6) the Final CIS did not fully consider impacts to fish
and other wildlife. Argentina’s claims are unfounded and incorrect, and, with
respect to modelling, even if the claims were correct, they would make no difference
to the overall conclusions that the plant will not cause unacceptable environmental
effects.
6.62 (1) Dilution Factor/No Adverse Impact Area . Argentina incorrectly
asserts that the Final CIS improperly used dilution ratios as one benchmark against
1080
which to measure impacts of the Botnia plant . A dilution ratio is a measure of
1079AM, para. 0.5 (the relocation of the ENCE project “did not materially affect the dispute”).
1080AM, paras. 7.171-7.176.
- 423 -the degree to which the effluent of the Botnia plant is mixed with the waters of the
Uruguay River. A dilution ratio of 100:1 means that every litre of effluent has been
mixed with 100 litres of river water. In ge neral, the greater the dilution, the lower
the concentration of effluent-related parameters in the river. The Final CIS relied
upon the experience of Environment Canada, the environmental regulatory authority
of Canada, when it selected dilution ratios as a tool to evaluate the impacts of the
Botnia plant 1081. Environment Canada’s 2005 Technical Guidance, 1082which
reflects numerous studies of pulp mills, finds the 100:1 dilution ratio delineates the
boundary outside of which adverse environmen tal effects are not likely to occur.
With respect to fish habitat, the Techni cal Guidance also suggests that zones less
than 250 meters in dimension are simply too small to result in measurable effects on
local fish 1083. The zone of 100:1 dilution at the Botnia plant will extend less than
250 meters from the discharge. Indeed, as previously stated, the dilution ratio will
reach 100:1 even under low flow conditions at only 35 meters from the point of
effluent discharge 1084.
6.63 In the face of extensive Environment Canada evidence, the Wheater
Report criticises the use of dilution ratios in assessing impacts on aquatic life, calling
1085
it “contradictory” . But the utility of dilution ratios is confirmed by the applicable
1081
Final CIS, op. cit., pp. 4.47-48. UCM, Vol. VIII, Annex 173.
1082
Environment Canada 2005 Pulp and Paper EEM Technical Guidance Document
(Environment Canada 2005) available at
http://www.ec.gc.ca/eem/english/PulpPaper/Guidance/default.cfm (last visited on 9 July 2007).
1083Ibid., Chap. 1, p. 1-12.
1084Final CIS, op. cit., pp. 4.47-4.48.
1085Wheater Report, op. cit., Sec. 2. AM, Vol. V, Annex 5.
- 424 - 1086
Canadian Technical Guidance document . Another expert for Argentina
specifically acknowledges that dilution ratios are an accepted basis from which to
predict meaningful exposure levels:
In Canada it has been genera lly accepted that dilution ratios
between 1:100 and 1:1,000 may be used to guide the conduct of
the Canadian Pulp and Paper Environmental Effects Monitoring
(EEM) Program. In particular, “Environment Canada” defines
areas beyond 1:1,000 as potential reference areas, and considers
them representative of background conditions. 1087
6.64 Uruguay’s experts also contest the criticisms that Argentina has levied
against the use of the dilution ratios in the Final CIS. As Dr. Menzie explains,
dilution estimates provide a “well accepted and scientifically valid” framework for
judging expected impacts, particularly wh en relied upon in conjunction with other
key pieces of information, including the treatment technology, the nature and
volume of the effluent, the characteristics of the receiving environment, the degree
of dilution during typical and low flow conditions, the length of time of the
exposure, and experience from other facilities 1088. Dr. Menzie found that the Final
CIS properly considered the dilution ratios in conjunction with all of those
1089
factors .
6.65 Moreover, the Menzie Report confir ms that technical studies on Canadian
pulp mills shows that “effects, if any, are likely to be minimal between dilutions of
1086
Environment Canada Pulp and Paper EEM Technical Guidance Document , Chap. 2, 2-30
available at http://www.ec.gc.ca/eem/english/PulpPaper/Guidance/default.cfm (last visited on
9 July 2007).
1087Ronco, A.E., G.M. Somoza, P. Carriquiriborde, and G.D. Bulus Rossin (2006) Biological
Effects of the Pulp Mill Effluents on the Aquatic Biota (hereinafter “Ronco, et al.,”), Annex C
to the Latinoconsult Report, op. cit., p. 16. AM, Vol. V, Annex 3. (Annexes to the
Latinoconsult Report formerly available at http://www.ecopaedia.com.ar/publico/ea_report/
(username: ea_annex ; password: ea_annex) (last visited on 9 July 2007)).
1088
Menzie Report, op. cit., pp. 12-15. UCM, Vol. X, Annex 213.
1089
Ibid., pp. 12-13.
- 425 -1:100 and 1:1,000” because extensive experi ence in monitoring the impacts of pulp
mill effluent has shown that impacts generally do not occur at dilutions greater than
1:100 109. As further noted in the Menzie Report, reliance on the Canadian
experience is particularly conservative in Botnia’s case because the Botnia plant will
be a state-of-the-art facility, so the effluent to be diluted is cleaner than the average
effluent from the pulp mills used to derive the dilution ratio 1091. Because the quality
of the effluent will be the same or, more likely, better than the effluent discharges
used to develop the Environment Canada guidance, “there is high confidence that the
plant will have an effluent that will not present any unusual characteristics” 1092.
6.66 The Menzie Report further demonstrates that Argentina’s attempt to refute
the utility of the 100:1 benchmark is weak and of no particular relevance to the
Botnia plant. Ronco, et al. (part of Argentina’s IAEST team) reviewed 200 papers
on mill effluent 1093. No effects of any kind were identified when dilution ratios
1094
exceeded 1000:1 . Dr. Menzie then assessed the studies identified by Ronco, et
al. and concluded that, where effects were found at a dilution ratio between 100:1
and 1,000:1, those effects were not negative in nature 109. Specifically, Dr. Menzie
found that at dilutions greater than 100:1, “none of the studies support a conclusion
that there will be adverse impacts on fi sh growth, reproduction, condition, or
1090
Ibid., pp. 15 & 21.
1091
Ibid., p. 3.
1092
Ibid.
1093
Ronco, et al., op. cit., Annex C to the Latinoconsult Report, op. cit., p. 16. AM, Vol. V,
Annex 3. (Annexes to the Latinocons ult Report formerly available at
http://www.ecopaedia.com.ar/publico/ea_report/ (username : ea_annex ; password : ea_annex)
(last visited 9 July 2007)).
1094Menzie Report, op. cit., p. 18. UCM, Vol. X, Annex 213.
1095Ibid.
- 426 - 1096
survival” . In fact, of the 13 primary studies used by Ronco, et al. to extrapolate
its proposed “safe” dilution ratio of 10,000:1, nine found no adverse impacts at all,
nine involved exposure to completely undiluted effluent or effluent diluted to 8:1 or
less, and all involved continual exposures to this concentrated effluent of seven days
1097
or longer , conditions bearing no resemblance to what will actually exist in the
Uruguay River. Of course, as noted in the Final CIS, even under worst case
conditions, the 100:1 exposure area will be very small and the effluent discharge is
1098
otherwise expected to dilute rapidly beyond those levels . Since fish and other
aquatic life are mobile, they would spe nd minimal time in the 100:1 exposure area;
the duration of exposure to effluents is critical for understanding the impacts 1099.
This is why Environment Canada has concluded that because of the mobility of fish,
it is not necessary to even evaluate impacts to fish wh en the 100:1 exposure area is
less than 250 meters 1100.
6.67 Against all of the evidence, the Latinoconsult Report asserts that a dilution
factor of 10,000:1 should be employ ed, a conclusion Dr. Menzie found was
“seriously flawed” and which “should not be relied upon for making any
recommendation concerning safe dilution levels of pulp mill effluents employing
1101
state of the art technology” . The Latinoconsult r ecommendation is 100 times
more stringent than the dilution factor used by Environment Canada for the design of
1096Ibid., p. 21.
1097Ibid., p. 21, Exhibit 5.2.
1098Final CIS, op. cit., pp. 4.47-4.48. UCM, Vol. VI, 173. See also Menzie Report, op. cit., p
3. UCM, Vol. X, Annex 213.
1099Ibid., p. 3. UCM, Vol. X, Annex 213.
1100Ibid., p. 15.
1101Ibid., p. 21.
- 427 -impact studies, far more stringent than any other standard that exists anywhere in the
world, and completely unsubstan tiated by the facts and science 1102. Given the lack
of a scientific basis, the Latinoconsult Report falls far short of showing even a slight,
much less a reasonable, likelihood of adverse effects upon the fish community. Yet,
only by adopting such an unsupportable th esis -- accepted nowhere in the world --
can Argentina find fault with the Final CIS.
6.68 It should be noted that Argentina does not attempt to challenge
meaningfully the calculation of the ratio by which the Botnia plant’s effluent will
actually be diluted in the Uruguay River. In fact, Argentina agrees that the dilution
1103
zone of 100:1 will be small . The Swanson Report not only reaffirms the
modelling techniques used in the Final CIS but also notes “the LATINOCONSULT
report fundamentally agrees with the dilution factors calculated in the Final CIS” 1104.
For example with respect to dilutions in Argentina, it concludes that:
The LATINOCONSULT report states that lower dilution factors
(up to 500:1) can be found for s hort periods of time. However,
as demonstrated by all the mode lling studies (Botnia EIA, draft
CIS, FCIS, and LATINOCONSULT Report figures 4.1.4 to
4.1.28) the Botnia effluent plume is clearly attached to the
Uruguayan margin of the river even during the flow reversal
events, which delimitates its area of influence. The FCIS
analysis of the potential effects of the discharge on the Beach
Area at Ñandubaysal (Annex D, S ection D6.4.2) concluded that
the dilution rate inside the Bay “ exceeds 1,000:1 under both
1102
Ibid., p. 4.
1103
For example, Figure 9 to Annex A of the La tinoconsult Report shows that at a distance of
only 100 meters from the discharge, dilution will always be greater than 100:1, and that it will
be greater than 200:1 over 99% of the time, and greater than 500:1 92% of the time. Annex A
to the Latinoconsult Report, op. cit. AM, Vol. V, Annex 3. (Annexes to the Latinoconsult
Report formerly available at http://www.ecopaedia.com.ar/publico/ea_report/ (username :
ea_annex ; password : ea_annex) (last visited on 9 July 2007)). See also Swanson Report, op.
cit., pp. 14-15. UCM, Vol. X, Annex 214.
1104Swanson Report, op. cit., p. 15. UCM, Vol. X, Annex 214.
- 428 - average and low flow conditions (Table D6.2-1), and t1105fore
is considered to be unaffected by mill operations.”
The Swanson Report indicates that its analysis of the Argentine modelling
report shows the fundamental agreement between Argentina and Uruguay
that effluents will be dramatically diluted before entering Argentina:
The results of the LATINOCONSULT Report study, as shown
in Figures 4.1.4 to 4.1.28 of A nnex XX, are in close agreement
with the BOTNIA EIA and the final CIS study with dilution
factors from 1000:1 to 10000:1 in the area of Ñandubaysal. The
plume trajectory shown in the LATINOCONSULT report is
always close to the Uruguayan si de, even during flow reversal
events, and any water that enters the Bay in the reversal scenario
is clearly coming from the Argentinean side of the river. Thus,
even when there is a flow reversal, effluent from the plant is not
predicted to accumulate in the Bay.
The LATINOCONSULT report shows that during mean and low
flow conditions in the Rio Uruguay the dilution levels at
Ñandubaysal, Argentina are greater than 1000:1. During rare
reversal events the LATINO CONSULT report shows that
dilution drops slightly to 693:1. This difference is not significant
because the dilution is great (i.e., above the amount that is likely
to generate any adverse effects), even at 693:1. 1106
6.69 Thus, the modelling undertaken by Latinoconsult leads to essentially the
same conclusions of the Final CIS with respect to the amount of dilution. Any
differences are minor and do not serve as a basis for finding that the Botnia plant
will cause negative impacts to the Uruguay River.
6.70 Of course, as valuable as the En vironment Canada conclusions relating to
dilution factors are, the Final CIS did not re ly solely on these dilution factors. For
example, as set forth in Chapter 5, co mplex water modelling was used to predict
changes to over two dozen contaminants at more than ten sensitive locations under
1105
Ibid.
1106Ibid., p. 14.
- 429 -three flow regimes. Comparisons of the resultant change in concentrations of these
substances to CARU and Uruguayan water quality standards show that water quality
impacts will be negligible. As the Sw anson Report points out, this approach
(considering dilution ratios in conjuncti on with concentration changes in water
1107
quality) is standard in US Environmental Protection Agency-approved models .
6.71 (2) Current Inversions and the Effect on Esteros de Farrapos . Argentina
argues erroneously that the current inve rsions modelled in the Final CIS and
elsewhere will occur much more frequently than predicted 110. Argentina also
erroneously argues that these “more fre quent” current inversions will impact
negatively on Esteros de Farrapos and Isla s del Río Uruguay (collectively “Esteros
de Farrapos”), a designated Ramsar site located within Uruguayan territory and
1109 1110
sixteen kilometres upstream from the Botnia plant . Even assuming Argentina
had standing to voice concerns about pote ntial effects to Uruguayan territory, its
arguments are entirely unsupported and lack merit. Its conclusions about the
frequency of flow reversal are inaccurate, and even if they were correct, there would
1107Ibid., pp. 14-16.
1108AM, paras. 7.14-7.19, 7.60 & 7.179.
1109Argentina erroneously asserts that the site is only 7 kilometres upstream of Botnia. AM,
para. 5.67.
1110
Argentina claims that “[C]e qui n’a été er oqué dans avcon des études d’impact esr qu’a
seviement quelques kilomètres en amont de l’usine orion se situe ie site Ramsar ae Esteros de
Farrapos.” AM, para. 5.46. (“[s]omething that has not been discussed in any of the impact
studies is the Ramsar de Esteros de Farrapos site is located just a few kilometres upstream from
the Botnia plant.”) Given the ex tensive analysis of this site in the Final CIS, and Argentina’s
own criticisms of that analysis, this allegation, ofcourse, is false. In addition, in paragraph
7.61 of its Memorial, Argentina argues that the pot ential impacts to the Islas Fiscales del Río
Uruguay have not been evaluated. This is ye t another oversight by Argentina. The Islas
Fiscales del Río Uruguay (also referred to as the Islas del Río Uruguay) constitute the southern
portion of the Ramsar site, and the Final CIS expr essly considered the impact to those islands
in conjunction with its analysis of the potential impacts to Esteros de Farrapos. Final CIS, op.
cit., at 4.55 (considering the potential impacts to “Esteros de Farrapos e Islas del Río
Uruguay”). UCM, Vol. VIII, Annex 173.
- 430 -be no negative impact on the indicated Ramsar sites and the conclusions in the Final
CIS about the environmental impact of the flow reversal would stand.
6.72 The Final CIS indicated that flow reversals of the Uruguay River are rare,
occurring only during low flow periods, and occur only a few times per year or less,
lasting no more than a few hours 1111. Under these conditions (combined with a low
flow volume), the Final CIS concluded that the combined effluent plumes of the
Botnia and ENCE plants (together) may extend upriver, but that they would achieve
the 100:1 dilution concentration within 35 metr es of discharge and that trace levels
of effluent at a dilution ratio of 1000:1 would extend no further upstream than a
maximum point of seven kilometres above the former location of the ENCE
plant 111. Of course, the elimination of the ENCE plant will greatly reduce the actual
upstream reach of the effluent plume because the Botnia plant is located
approximately six kilometres downstream from the former location of the ENCE
plant, i.e., six kilometres further downstream from the Ramsar sites. Therefore, the
Final CIS had ample basis to conclude “t here is virtually no potential for mill
1113
effluents to impact the [Esteros de Farrapos] area.”
1111Final CIS, op. cit., p. 4.48. UCM, Vol VIII, Annex 173.
1112Ibid., pp. 4.48 & 4.55.
1113Ibid. In addition, Argentina criticises the Final CIS for not specifically considering
wetlands in addition to Esteros de Farrapos. AM, para. 7.61. With respect to wetlands located
in Argentina, a specific analysis of the poten tial impacts was not necessary because the Final
CIS concluded that, under a worst case condition of low flow with flow reversal, the potential
for effluent to exceed background levels on the Ar gentine side was marginal, and in any event,
the water quality would remain “well within the standards provided by CARU.” Final CIS, op.
cit., p. 4.56. The wetlands of Potrero and Islas del Río Negro are located downstream from
Fray Bentos. The Final CIS determined that th e water quality in the Fray Bentos area would
not be adversely impacted by the plan t’s effluent discharges. Final CIS, op. cit. , p. 4.54
(finding no adverse impacts at Las Cañas, a beach area downstream from Fray Bentos).
Because these wetlands are even further from the discharge point, impacts there would be even
less.
- 431 -6.73 The modelling used by Argentina utte rly fails to prove its point. First,
even if the modelling in Argentina’s reports is accepted exactly as presented, they do
not show that the flow reversal would cause any effluent to reach Esteros de
Farrapos. Instead, the model shows that dilu ted effluent would reach no closer than
2.5 kilometres below the southern reache s of the protected wetlands, completely
1114
precluding any possibility of adverse effects .
6.74 Second, the modelling performed by Latinoconsult contains significant
errors that account for the misstatements in the Memorial about the frequency of
flow reversals. As noted in the analys is of Uruguay’s expert, Dr. Swanson, the
modelling actually performed by Latinoconsult and cited in the Latinoconsult Report
and the Memorial do not support the statements in both that flow reversal conditions
exist “22% of the time, that is, an average of 80 days per year” 1115. In fact, although
the Latinoconsult Report did not present adequate information from which to
conduct a detailed review of its model, it is clear that Latinoconsult counted as a
“day” any time when the flow is predic ted to reverse by as little as an hour 1116.
Thus, the approximately “80 days” of flow reversal referred to in the Memorial and
1117 1118
the Latinoconsult Report could actually be 80 hours . The Wheater Report
merely relies on the Latinoconsult Repor t and thus contributes no independent
support for Argentina’s assertions.
1114AM, para. 7.179 (“la frontière en amont du modèle de dispersion est seulement à 2,5
kilomètres au sud du site Ramsar”) (“the upstream boundary of the dispersion model is only 2.5
kilometres south of the Ramsar site”).
1115Swanson Report, op. cit., pp. 10-11. UCM, Vol. X, Annex 214. Latinoconsult Report, op.
cit., p. 3. AM, Vol. V, Annex 3.
1116Swanson Report, op. cit., p. 12. UCM, Vol. X, Annex 214.
1117Latinoconsult Report, op. cit., p. 3. AM, Vol. V, Annex 3.
1118Swanson Report, op. cit., p. 12 (internal quotations omitted). UCM, Vol. X, Annex 214.
- 432 -6.75 In further confirmation of the errors in Argentina’s Memorial, Uruguay’s
expert Dr. Swanson conducted an in-depth review of the Final CIS modelling and
concluded that the assessment by the IFC’s independent experts was “performed
conservatively and in accordance with generally prevailing scientific and
1119
professional practice” . He confirmed that the modelling referenced in the CIS
was appropriate, employed internationally recognised dispersion models for
hydrodynamics and water quality, used cons ervative estimates as to river flow, and
1120
met the requisite standard of care for conducting complex modelling .
6.76 Dr. Swanson also found that the “v ery basic” one dimensional model used
by Latinoconsult “grossly simplified and distorts the actual behavior of the river, and
in the vicinity of the Botnia discha rge overstates the reversal frequency” 1121. The
use of a one dimensional model assumes that the entire river behaves like a
unidirectional “tube,” which may be “particu larly misleading in the vicinity of the
Botnia discharge, which is the deepest and fastest flowing part of the river and thus
1122
the part least likely to experience complete flow reversal” . The model is also
flawed because it takes its flow input s from 300 kilometres upstream and 100
kilometres downstream of the Botnia pl ant, rather than from more proximate
gauging stations. As Dr. Swanson concl udes: “[t]he net effect is that the
LATINOCONSULT model provides almost no useful information about flow
1123
reversal patterns of the river near the Botnia plant” .
1119Ibid., p. 12.
1120Ibid.
1121Ibid., pp. 11-13.
1122
Ibid.
1123
Ibid., p 13.
- 433 -6.77 Finally, even if, contrary to all evidence, the water dispersion modelling
conducted by the Final CIS and confirmed by Dr. Swanson was incorrect, and the
modelling by Latinoconsult was correct, and effluent from the Botnia plant did reach
the Esteros de Farrapos, it would reach the we tlands at such diluted concentrations
that no adverse effects would be expected. As already noted and specifically
1124
recognised in the Latinoconsult Report , if the effluent did extend that far
upstream, dilutions would be s ubstantially greater than 100:1. Therefore, the water
quality impacts would be negligible, and no negative impacts on the benthic and fish
communities would be expected.
6.78 The Swanson Report further confirms that Argentina has vastly overstated
the importance of flow reve rsal frequency and that adverse impacts are unlikely to
occur if the modelling is accurate:
It should also be emphasized that the precise duration and
frequency of flow reversals is un important in understanding the
overall water quality impacts associated with the operation of the
Botnia mill. This is because under any flow regime modeled or
suggested by Argentina the effluents become highly diluted
within a very short distance of the discharge point. Once so
diluted the effluent is unlikely to affect water quality regardless
of the direction of river flow.125
6.79 (3) “Low Flow” Estimates . Argentina spends considerable time arguing
that the Uruguay River may at some point now or in the future contain less water
than is predicted in the “extreme low flow” situation modelled by the Final CIS.
However, as Uruguay’s experts show, even if the “low flow” of the River is as
Argentina predicts, there w ould be no meaningful change in the results of the
analysis performed by the IFC’s independent experts as part of the Final CIS.
1124
Latinoconsult Report, op. cit., p. 13. AM, Vol. V, Annex 3.
1125Swanson Report, op. cit., p. 14. UCM, Vol. X, Annex 214.
- 434 -6.80 The Final CIS modelled a low rive r flow of 500 cubic metres/second.
CARU requirements for modelling low flow are to use a 5-year low flow (the lowest
flow that is predicted to occur during any 5-year period) 1126. As Argentina’s
1127
Wheater Report acknowledges , the Final CIS in fact used a more stringent 10-
year low flow (the lowest flow that is pr edicted to occur during any 10-year period).
Argentina cannot credibly dispute the appropr iateness of this figure for an analysis
of the low flow conditions. The CARU Digest specifically provides how low flow is
to be calculated and the Final CIS went beyond even these mutually-agreed,
conservative standards.
6.81 Argentina argues that an even lower flow should be used, despite the
complete absence of regulatory or scientific support for doing so. It argues that the
lower flow should be used because: (1) the climate might change in the future, and
the change might include reduced rainfall; (2) the method of operation of the
(upstream) Salto Grande Dam may change; and (3) new trees might need to be
planted to support the plant, which in turn might change the hydrologic flow in the
river1128. The net result, Argentina argues, is that the low flow should have been
modelled at 440 cubic metres/second, not 500.
6.82 As for Argentina’s argument on climate change, Dr. Swanson concludes
that there is no scientific basis to predict a change in rainfall. As his report notes,
ample data indicate increases in precipitation over the period from 1921 to 2003 1129.
1126
Digest of the Administrative Commission of the River Uruguay (CARU), Subject E3, Title
2, Chap. 5, Sec. 1, Art. 6(g) (1984 as amended). UCM, Vol. III, Annex 60.
1127
Wheater Report, op. cit., Sec. 4. AM, Vol. V, Annex 5.
1128AM, paras. 7.14, 7.20, 7.22, 7.29, 7.62-7.63. Wheater Report, op. cit., Sec. 3-4, 9. AM,
Vol. V, Annex 5. Latinoconsult Report, op. cit., pp. 16-18. AM, Vol. V, Annex 3.
1129Swanson Report, op. cit., p. 16. UCM, Vol. X, Annex 214.
- 435 -Moreover, other evidence shows that flows in the river are increasing at a rate
1130
greater than precipitation . Indeed, the article on which Section 2.3 of the
Latinoconsult Report relies specifically states although a humid cycle began in 1971,
“[w]hat is less clear is the change in tendency from a cycle of medium
characteristics to one of dry characteristics, which has been indicated in prior studies
for about 1943. In fact, the present study has not found any firm evidence of such a
1131
change.” Thus, Argentina’s argument is contradicted by its own evidence.
6.83 As for a possible change in th e operation of the Salto Grande Dam,
Argentina presents absolutely no eviden ce that the method of operation of this
decades-old dam will change. Of course, an y significant change in operation of the
dam would require review by CARU (pursu ant to the 1975 Statute) at which point
the environmental consequences of that change would be fully considered.
Moreover, since the dam is jointly administered by Argentina and Uruguay (through
their delegates to CARU), Argentina c ould block the unanimous consensus that
would be required to authorise any signifi cant change in dam operations. In any
event, it is hard to fathom why eith er Argentina or Uruguay would approve a
significant change to dam operations that would allow the Uruguay River to run
1132
dry . Accordingly, Argentina’s argument about a theoretical change in dam
operations fails to make its case.
1130Ibid., p. 18.
1131Ibid. (quoting GTAN/DU/14/14-09-05, Extract of Analysis of Climate Statistics and
Development and Evaluation of Climatic and Hydrological Scenarios in the Main
Hydrographic Basins of Uruguay and the Coas tline Thereof (Uruguay River, Negro River,
Merin Lagoon, River Plate, the Atlantic Ocean ), prepared by the Climate Change Unit,
DINAMA (14 September 2005) (emphasis added). UCM, Vol. V, Annex 134).
1132Argentina’s allegation that the Final CIS gnored potential changes in flow rates due to
potential future modifications in the Salto Gra nde Dam is false. The Final CIS specifically
noted that operations of the Salto Grande Dam can “substantially” affect flow rates and that the
- 436 -6.84 As for the possible impacts of future tree plantations on the hydrologic
cycle, the Final CIS found that there will be no change in the number of plantations
resulting from operation of the Botnia plant because sufficient wood already
1133
exists . The only criticism levied by Argentina against the Final CIS with respect
to tree plantations is based on the Wheater Report. That report said only that the
effects of the plantations on the hydrologic cycle “depend[] on the local hydrology
and hydrogeology, and require proper assessment” 113. Dr. Wheater did not actually
do the assessment he recommended, but La tinoconsult did. After reviewing the
local hydrology, Latinoconsult found that there would be no change in the
hydrologic cycle:
The area has a precipitation regimen of approximately 1300 mm.
year-1, enough to balance the expected envirotranspiration of
Eucalyptus plantations in the area. . . . [C]onsidering the small
slope of the land and the heavy texture of most of the soils, only
a small effect is expected from the plantations on the waster
[sic] regime of the rivers of the region, and only if
conservationist criteria are used in the installation of the
plantations 1135.
In addition, Uruguayan law provides that any new plantation of more than 100
hectares is required to undergo an environmental review process and receive an
Initial Environmental Authorisation prior to its establishment 1136. Based on the
findings of the Final CIS and the Latinocons ult Report, there is no reason to believe
bringing on- and off- line of turbines can likewis e cause abrupt changes. Final CIS, Annex D,
op. cit., p. D3.2. UCM, Vol. VI, Annex 176.
1133See Final CIS, op. cit., p. 4.28-29. UCM, Vol. VI, Annex 173.
1134Wheater Report, op. cit., Sec. 9 (emphasis added). AM, Vol. V, Annex 5.
1135Latinoconsult Report, op. cit., p. 49 (emphasis added). AM, Vol. V, Annex 3.
1136Decree No. 349/005, Environmental Impact A ssessment Regulation revision, Art. 2 (30)
(21 September 2005). UCM, Vol. II, Annex 24.
- 437 -that existing or any possible future plantations will adversely affect the regime of the
Uruguay River or its water quality.
6.85 Finally, even if, despite all the evidence to the contrary, Argentina is right,
and the appropriate “low flow” should ha ve been 440 cubic metres/second, instead
of 500 cubic metres/second, there still would be no adverse impact on the regime of
the river or water quality. The Swanson Report evaluated this issue and concluded
that because the change is small relative to the flow of the river, and because such a
low flow would only occur in the most unusual circumstances, it would have no
meaningful effect on any of the calcula tions or conclusions of the Final CIS.
Specifically, the Swanson Report explains that the insignificance between a low
flow of 440 cubic metres/second and 500 cubic metres/second is in fact
demonstrated by the results of the Latinoconsult Report, which show, even using this
extreme low flow condition, dilution ratios that are very similar to those presented in
1137
the Final CIS .
6.86 (4) Sedimentation . Argentina criticises three aspects of the Final CIS
pertaining to sediments: (1) the sedimentation rates used by the Final CIS; (2) the
alleged failure to consider the geomor phology of the river and its impacts on
sedimentation; and (3) the adequacy of the analysis of the impact to sediment
quality, particularly with respect to chlorophenols. Each of these criticisms is
unwarranted.
6.87 With respect to sedimentation rates, Argentina, through the Wheater
Report, alleges that the Final CIS incorrectly used an unreasonably low
sedimentation rate to find that the Botnia port and the operations of the plant would
1137
Swanson Report, op. cit., p. 18. UCM, Vol. X, Annex 214.
- 438 - 1138
not cause adverse impacts. The Final CIS specifically considered both of these
issues. With regard to the port, it examined earlier estimates projecting that the
Botnia port could have a potential 50% in crease in the sedimentation rate in
localised areas, specifically Uruguay’s Yaguareté Bay. The Final CIS dismissed the
concern after it concluded that these es timates were unrealistically high due to
1139
factors that would act to mitigate this ac cumulation, such as currents and waves .
The Final CIS also specifically evaluated whether the discharge of effluent from the
Botnia plant itself could cause sedimenta tion. The Final CIS concluded that the
effect of suspended solids from the discharge of the Botnia plant will be exceedingly
low, even under low flow conditions, in comparison with baseline data 1140.
6.88 Argentina’s Wheater Report critic ises these conclusions as “counter-
intuitive” and “no[t] convincing.” 1141 But it makes no attempt to rebut the specific
data relied upon in the Final CIS. By contrast, Dr. Swanson concurs with the
conclusions in the Final CIS that the Botnia port will not alter the present circulation
patterns of the river. He also concludes that any impacts will be highly localised
(generally within 35 metres of the port), and that erosion processes will further
1142
reduce any effects . The Swanson Report further c onfirms that because the water
discharged from the Botnia plant will have comparable suspended sediment levels as
1138
Wheater Report, op. cit., Sec. 5. AM, Vol. V, Annex 5.
1139
Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
1140
Ibid., p. 4.50 (finding that contribution of sediments to Yaguareté Bay is exceedingly low
and that net sedimentation levels are unlikely to change). UCM, Vol. VIII, Annex 173. See
also Swanson Report, op. cit., p. 19. UCM Vol. X, Annex 214.
1141
Wheater Report, op. cit., Sec. 5. AM, Vol. V, Annex 5.
1142
Swanson Report, op. cit., p. 19. UCM, Vol. X, Annex 214.
- 439 -the ambient levels in the river as a whole, no matter how much effluent is discharged
1143
by the plant, that effluent will not cause an increase in sedimentation.
6.89 Argentina’s argument with resp ect to geomorphologic changes likewise
fails to expose a defect in the Final CIS. The Wheater Report argues that the
patterns of sedimentation ca n never be precisely predicted (with or without the
installation of the Botnia plant) 1144. If the failure to predict precisely future
unknowable events reflects a fa tal defect in the Final CIS, then no project located
near any aquatic resource would ever be allowed to proceed. Hence, the more
reasonable approach is to consider potential affects based on actual, current
1145
sedimentation rates, as the Final CIS did . To address the uncertainty raised by
Dr. Wheater, the appropriate response is to institute a long-term monitoring
program, such as the one that the Botnia plant and DINAMA will employ, as
described in Chapter 7. In fact, as of the issuance of the Final CIS, daily monitoring
had shown no impacts on water quality from the construction of the Botnia port 1146.
1147
6.90 Finally, as noted in the Menzie Report , although geomorphologic
changes cannot always be predicted, these changes are unlikely to affect river flow
or the effluent plumes. Changes in geom orphology will be slow relative to the
lifespan of the facility. River flow will be largely dictated by rainfall, and effluent
mixing and dispersion will be dictated by river flow. Monitoring during plant
operations will determine whether sl ow processes such as changes in
1143Ibid.
1144Wheater Report, op. cit., Sec. 5. AM, Vol. V, Annex 5.
1145See Menzie Report, op. cit., pp. 28-29. UCM, Vol. X, Annex 213.
1146
Final CIS, op. cit., p. 2.14. UCM, Vol. VIII, Annex 173.
1147
Menzie Report, op. cit., pp. 28-29. UCM, Vol. X, Annex 213.
- 440 -geomorphology and sedimenta tion have any influence on water quality, and if the
impacts are observed, then appropriate remedial measures can be taken.
6.91 Argentina’s final criticism re garding sediments also relies upon the
Wheater Report. Argentina asserts that the Final CIS neglected to consider the
impacts of effluent discha rge on sediment quality, i.e., whether pollutants in the
effluent will cause harm to organisms living in the sediments. This is incorrect. The
Final CIS concluded that the fauna in th e river are not currently under stress from
toxic chemicals, an importa nt consideration when judging the potential impacts of
new effluent discharges 1148. (Argentina’s Latinoconsult Report reaches the same
1149
conclusion .) Given this consideration and th e state-of-the-art technology to be
employed by the Botnia plant, the Final CIS concluded that negative impacts to
1150
sediment quality were not expected to occur . In reaching this conclusion, the
Final CIS engaged in an extensive literature review of the impacts of two classes of
contaminants of historical concern, (i ) dioxins and furans, and (ii) endocrine-
1151
disrupting compounds . Based on this review a nd the expected effluent
concentrations of both the Botnia and the ENCE plants, the Final CIS concluded that
effluent discharges would not measurably change, would be below the baseline
concentrations for the Uruguay River, or would not accumulate at concentrations of
concern, for both classes of chemicals 1152. The Wheater Report offers no specific
evidence to rebut these conclusions, only citing to a study involving a lake in
1148Final CIS, op. cit., p. 4.51. UCM, Vol. VIII, Annex 173.
1149
Latinoconsult Report, op. cit., p. 7. AM, Vol. V, Annex 3. See also Menzie Report, op. cit.,
p. 29. UCM, Vol. X, Annex 213.
1150See, e.g., Final CIS, op. cit., pp. 4.49-50. UCM, Vol. VIII, Annex 173.
1151
Final CIS, Annex D, op. cit., pp. D5.7-11. UCM, Vol. VIII, Annex 176.
1152
Ibid., D6.3-4.
- 441 -Finland that received discharges from an antiquated pulp mill over a period of
decades. And, even there, the Wheater Report indicates that (i) the contaminants in
sediments fell “significantly” after polluti on control technology similar to what will
be employed at the Botnia plant had been installed, and (ii) the rate of contaminant
accumulation in the Uruguay River will be lower than what was observed in the
lake. In short, that study indicates that old-style mills can cause sediment
contamination in lakes, but says nothing a bout what will actually be encountered in
1153
the Uruguay River near the Botnia plant.
6.92 Dr. Menzie reviewed the data on potential accumulation of contaminants
in sediments and confirmed the results of the Final CIS, concluding that any
1154
accumulation is expected to be insignificant, and no adverse effects are expected .
6.93 (5) Phosphorus and Eutrophication . Argentina repeatedly asserts that
operation of the Botnia plant might increase phosphorus levels in the river, and that
1155
any such increase may increase the ri sk of eutrophication, or algal blooms .
Argentina’s assertions stand in stark c ontrast to the careful (and unchallenged)
calculations in the Final CIS that effluents from the Botnia plant will not measurably
1156
change the amounts of phosphorus in the Uruguay River . Thus, the Final CIS
found that the operation of the Botnia plant will not contribute to any exceedances of
1153
See Wheater Report, op. cit., Sec. 5. AM, Vol. V, Annex 5.
1154
Menzie Report, op. cit., pp. 29-30. UCM, Vol. X, Annex 213.
1155
AM, paras. 7.38, 7.41, 7.189-7.190. The Latinoconsult Report, which is the nominal source
of the allegations, provides no information to support them. Rather, it only raises the spectre of
a potential for risk and wholly ignores the scie ntific analyses that have been conducted
specifically with respect to the Botnia plant that predict that the dire results simply will not
occur. See Laltinoconsult Report, op. cit., pp. 39-44. (listing potential adverse health effects
from exposure to algae blooms, but not predicting that alg ae blooms will be caused by the
operation of the Botnia plant). AM, Vol. V, Annex 3.
1156
See, e.g., Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
- 442 -the DINAMA water quality standard for phosphorus, and will not increase the
potential for eutrophication in the Uruguay River. (As noted, CARU has established
no standards or other limits for phosphorus discharges into the river). The
conclusion reached in the Final CIS by th e IFC’s independent experts is confirmed
by Dr. Menzie, whose report notes that “even under worst-case conditions of
extreme low flow the changes in the phosphorus levels are ‘de minimis’” 115. Dr.
Menzie found:
There are three basic reasons why this change in phosphorus
levels is not of scientific conc ern. First, because changes in
phosphorus concentrations of this magnitude would not cause
eutrophication, even if they were persistent and widespread.
Second, the changes are not pers istent and widespread, because
measurable impacts only occur in small locations during rare
periods of extreme low flow. Third, they are within the natural
variability of the phosphorus concentrations in the river 1158.
The Menzie Report specifically found that , even under worst case conditions, the
1159
effluent discharges would not cause any perceptible change in the algal biomass .
In addition, as discussed below, to the extent that Argentina is experiencing elevated
concentration levels of phosphorus on its own side of the river, the evidence shows,
and Argentina concedes 1160, that this is most likely due to discharges from its own
territory. These discharges from Argentine territory, particularly the water
emanating from the Gualeguaychú River, are major contributors to elevated
phosphorus in Ñandubaysal Bay (on Argentina’s side of the river). The Botnia plant
1157Menzie Report, op. cit., p. 26. UCM, Vol. X, Annex 213.
1158
Ibid., p. 26.
1159
Ibid., pp. 27-28. Although it is not entirely clearArgentina appears to allege that Botnia
has admitted that its effluent discharges will aggravate the problem of eutrophication. AM,
para. 7.169. Botnia made no such statement, and the material cited contains none.
1160AM, para. 6.32.
- 443 -will not exacerbate these problems because its effluent discharge will remain along
the Uruguayan shoreline, and will not disperse across the river in measurable
quantities 116.
6.94 The Menzie Report confirms that changes in phosphorus levels predicted
in the Final CIS are well within the natural variation of phosphorus levels in a water
body, and are not the type of changes that result in eutrophication 1162. With respect
to the normal variation of phosphorus levels in the river, Dr. Menzie found that:
The small potential increases in phosphorus will be undetectable
within the natural variability of phosphorus in the river. This
can be seen when small changes (a few percent at most) are
compared to the ranges observed at various locations in the river.
Table D3.2-1 of the FCIS presents ranges observed during the
CARU Program for the years 1987-1990. The ranges in
phosphorus values for four locat ions on the river are 0.02-0.31
mg/L at Salto, 0.04-0.32 mg/L at Paysandu, 0.01-0.72 mg/L at
Gualeguaychú, and 0.04-24 mg/L at Fray Bentos. Sampling
performed in the river at Botnia on seven occasions during 2005
and 2006 yielded phosphorus values that ranged between 0.03
and 0.11 mg/L [Table D3.2-4 of the FCIS]. These ranges reflect
natural variability that spans factors of 3 to 70 at specific
locations. Changes on the order of a few percent would not be
observable against this range of natural variability 116.
6.95 (6) Impacts to Fish, Bent hic Organisms, and Other Animals . Argentina
1164
asserts that there is a possibility that migrating fish, birds, benthic organisms , and
other animals might be affected by effluent from the Botnia plant 1165. The
Latinoconsult Report claims that “a very strong probability” exists that effluent
1161Final CIS, op. cit., p. 4.57. UCM, Vol. VIII, Annex 173.
1162
Menzie Report, op. cit., pp. 26-28. UCM, Vol. X, Annex 213.
1163
Ibid., p. 27.
1164
The Final CIS defines “benthic” organisms as “a form of aquatic plant or animal life that is
found on or near the bottom of a stream, la ke or ocean.” Final CIS, Annex I and I2.
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills, Annex I, p.
I.2 (September 2006). UCM, Vol. X, Annex 222.
1165AM, paras. 7.46-7.48.
- 444 -discharges will affect the fish community of the Uruguay River even when the
dilution exceeds the 1:100 exposure envelope 1166. The Memorial also cites the
Wheater Report for the proposition that it is difficult to predict precisely the impacts
of effluent on aquatic life; the Wheater Report itself, however, does not predict any
adverse effects.
6.96 As set forth in Chapter 5, the Fi nal CIS concluded that adverse impacts to
fish will not occur. Even under extreme low flow conditions (which only last a short
time), the water quality modelling relied on by the IFC’s independent experts
showed that the dilution of effluent rapi dly (within 35 metres of the discharge)
exceeds 100:1 (the level adopted by E nvironment Canada beyond which adverse
impacts are generally not found). And, ev en within those small areas (ranging from
a few metres under normal conditions to 35 metres under low flow), the exposure to
effluent with lower dilution poses no threat to fish because they naturally move and
1167
can be expected to remain in the very small affected area for only brief periods .
6.97 In fact, because the 100:1 dilution area is so small and adverse impacts to
aquatic species so unlikely, the Envir onment Canada guidance would dismiss the
need for monitoring of fish 116. As set forth in Chapter 7, however, despite the
remote likelihood of adverse impacts, DINAMA will require Botnia to conduct
chronic and acute toxicity tests for the fish population. These tests will ensure that
the effluent is not harmful to fish and that any long-term impacts, if any, are detected
and that appropriate remedial measures can be taken.
1166AM, para. 7.176. As discussed earlier in this Chapter, the Latinoconsult Report suggested
as a protective standard a dilution ratio of 1:10,000.
1167Final CIS, op. cit., p. 4.49. UCM, Vol. VIII, Annex 173. See also Menzie Report, op. cit.,
p. 15. UCM, Vol. X, Annex 213.
1168Menzie Report, op. cit., p. 14. UCM, Vol. X, Annex 213.
- 445 -6.98 The Latinoconsult Report also did not show any likelihood of impacts to
fish. Specifically, although Annexes H a nd I to that report contain population
models regarding a fish known as Sabalo , the model does not even attempt to
consider impacts from the Botnia plant in that model and thus cannot provide any
1169
meaningful information about whether the plant will affect the fish .
6.99 Finally, Argentina has not shown that other vertebrates or amphibians will
experience more exposure to the effluent discharge than fish or benthic
communities, nor has it alleged that they are ecologically more sensitive to effluent
discharges with limited exposure. In fact, the Menzie Report confirms that the Final
CIS appropriately evaluated exposures to fish and other species.
With regard to exposures associat ed with aqueous effluents, the
FCIS adequately describes the majo r exposure pathways [to the
effluent discharges] and adequately describes the major types of
effects. Potentially exposed species are primarily those that live
in the aquatic environments (i.e., fi sh, invertebrates, and plants).
Thus, exposures to other animals that do not live in the aquatic
environment (birds and reptil es) with respect to aqueous
discharges are best evaluated by considering how they might
come into contact with the aquatic system; animals that have low
or incidental contact with the river will have a lower exposure to
the effluent from the mill, and thus would be expected to be
affected even less than fish, benthic organisms, or aquatic
plants 117.
6.100 With respect to endangered birds, the Menzie Report points out that due to
the ecology of these bird species, thei r exposure to the aquatic environment is
limited. Moreover, there is no evidence that any of them feed on aquatic organisms.
Therefore, any impacts to these endangered species will be “negligible” 1171.
1169Ibid., p. 24.
1170Ibid.
1171Ibid, p. 25.
- 446 -Similarly, the Menzie Report explains that there is no scientific basis from which to
conclude that any of the amphibian species identified by the Latinoconsult Report
will be impacted by the Botnia plant’s effluent discharge. Each species generally
prefers terrestrial environments for the majority of their lives 1172. As Dr. Menzie
explains, during the reproductive stage, these species prefer temporary water bodies,
such as puddles, small ponds/lakes, flooded gr asslands, or low current streams --
aquatic environments that are very different from the main channel of the Uruguay
River where the effluent will be discharged 117. Therefore, the chances of any of
these amphibian species coming into contact with, and thus being impacted by, the
effluent discharge from the Botnia plant are extremely remote.
6.101 Argentina also asserts that the c onclusions of the Final CIS are unreliable
1174
because of a lack of baseline data with respect to fish and other aquatic life.
Contrary to Argentina’s assertion, the Final CIS engaged in an extensive
characterisation not only of the fish comm unity but also of the benthic community,
the phytoplankton, and the zooplankton of the Uruguay River 1175. The Final CIS
also evaluated information regarding the levels in fish of several contaminants of
concern 1176. Review by Dr. Menzie confirms that the Final CIS contains an adequate
description and analysis of the fauna of the Uruguay River from which to analyse the
1177
potential impacts of the Botnia plant’s effluents . Moreover, based on a review of
1172Ibid., pp. 24-25.
1173Ibid.
1174AM, para. 7.129.
1175Final CIS, Annex D, op. cit., pp. D3.7-17. UCM, Vol. VIII, Annex 176.
1176Ibid., D3.15-16.
1177
See, e.g., Menzie Report, op. cit., p. 22. UCM, Vol. X, Annex 213.
- 447 -the information in the Final CIS, Dr. Menzie concluded that the Uruguay River biota
are similar to those of other large rive rs. Given the information provided with
respect to the biota of the Uruguay River, its similarity to other large water bodies,
and the well-studied state-of-the-art technology employed by the Botnia plant, Dr.
Menzie concluded that “there is high confid ence that the plant will have an effluent
that will not present unusual chemical characteristics that will pose unknown or
unanticipated risks to aquatic life.” 1178
6.102 Argentina’s concerns that emissi ons of COD, AOX, or other parameters
1179
could have adverse impacts on the aquatic ecosystem are also unfounded. After
extensive analysis of the pl ant technology and process to be used and the estimated
contents of the Botnia plant’s effluent discharge, the Final CIS specifically
concluded that “[t]he expected performance with respect to bleaching effluent flow
[and] COD content . . . will be among the best in the world.” 1180 The Deardorff
Report confirms that the discharge of COD from the Botnia plant will be equivalent
to other state-of-the-art pulp mills 1181. Dr. Menzie notes that the extensive literature
evaluating the impacts from modern pulp mills further increases the confidence in
1182
the predictive tools and studies used in the Final CIS . Argentina has provided no
evidence showing that the effluent disc harges of COD, AOX, temperature,
suspended solids, or phosphorus will be great er than those estimated in the Final
1178Ibid., p. 3.
1179See, e.g., AM, para. 7.169.
1180Final CIS, op. cit., p. 2.26. UCM, Vol. VIII, Annex 173.
1181Deardorff Report, op. cit., p. 23. UCM, Vol. X, Annex 215.
1182Menzie Report, op. cit., p. 3. UCM, Vol. X, Annex 213.
- 448 -CIS, would not be equivalent to other state-of-the-art pulp mills, or that the
estimated levels would result in adverse impacts to the aquatic environment.
6.103 The Final CIS concluded that, given the state-of-the-art technology to be
used at the Botnia plant, “the expectation is that treated mill effluents will not show
acute toxicity to aquatic biota” 118. Argentina nevertheless criticises the Final CIS
and Botnia for not having conducted acute and chronic toxicity studies “comme le
1184
recommande l’USEPA” . However, this comment is inconsistent with or
misinterprets the recommendation of the Hatfield Report, which calls for such tests
only on final plant effluents. A chronic toxi city study of final plant effluents could
only begin after the Botnia plant commences operations 1185. Thus, these studies will
be part of the monitoring program for the Botnia plant, to be implemented after
operations begin. As detailed in Chapte r 7, Botnia has committed to performing
acute toxicity tests once mill operations commence as recommended by the Final
1186
CIS, and by the Hatfield and Menzie Reports .
Section V.
The Conclusions of the IFC’s Final Cumulative Impact Statement Are Valid in
All Respects
6.104 As the above analysis demonstrates, Argentina’s attempts to criticise the
findings of the Final CIS with respect to the Botnia plant are completely without
merit. Argentina has come nowhere close to meeting its burden of proof. It has
1183
Final CIS, Annex D, op. cit., p. D7.3. UCM, Vol. VIII, Annex 176.
1184
AM, para. 7.170 (“as recommended by the US EPA”).
1185
Per the recommendation of the Final CIS, see Final CIS, Annex D, op. cit., p. D7.4. UCM,
Vol. VIII, Annex 176, Botnia is committed to us ing chronic toxicity testing to monitor the
impacts of the plant, ibid., and DINAMA and The Technological Laboratory of Uruguay
(“LATU” per the Spanish initials) are coordinating its implementation. See ibid., D7.3.
1186Final CIS, Annex D, op. cit., p. D7.3. UCM, Vol. VIII, Annex 176.
- 449 -furnished no evidence capable of sustaini ng a finding that significant harm to the
Uruguay River or its aquatic environment is likely to result from the operation of the
Botnia plant. Because it cannot satisfy the burden of proof established by law,
Argentina has attempted to set forth a standard of environmental review that no
project could ever hope to meet, and that is not required by any applicable law.
Even if one accepts this impermissibly he ightened burden, however, the results of
the exhaustive environmental review conducted during the DINAMA permitting
process, the IFC application process, and by Uruguay’s own experts demonstrate
that there is not a scintilla of evidence that adverse impacts will occur. With respect
to challenges raised by Argentina regarding particular technical issues, review by
Uruguay’s experts has confirmed and corrobor ated the findings of the Final CIS in
all respects. Therefore, the only reasonable conclusion is that the potential impacts
of the Botnia plant were adequately asse ssed by the IFC’s independent experts and
that unacceptable impacts will not occur. As the next Chapter will explain, the
comprehensive monitoring and oversight pr ogram for the Botnia plant will confirm
these conclusions and ensure that any unanticipated impacts to water quality or the
ecological balance of the river will be quickly identified and addressed.
- 450 - CHAPTER 7.
ENSURING PROTECTION OF THE URUGUAY RIVER AND THE
AQUATIC ENVIRONMENT7.1 Chapters 4 through 6 demonstrated that Uruguay has complied with all of
the substantive requirements of the 1975 Statute, CARU regulations, and general
international law; and they documented th e comprehensive environmental review to
which the Botnia plant has been and con tinues to be subject by Uruguay and the
IFC. This Chapter describes the measures taken, and the framework that has been
put in place, to ensure that in the highly unlikely event that operations cause adverse
impacts, they will be rapidly detected and necessary remedial measures will
immediately be implemented. These include comprehensive pre- and post-
operational monitoring, and Uruguay’s authority, technical capacity, and
commitment to require the Botnia plant to adopt whatever remedial measures are
necessary to prevent any prohibited adverse impacts. This Chapter also explains
why Argentina’s proposed remedy of demolishing the Botnia plant for alleged
violations of the 1975 Statute is unjustified, unprecedented, and unreasonable.
Section I.
Extensive Pre- and Post-Operational Monitoring of the Botnia Plant Will
Ensure Rapid Detection and Correction of Any Prohibited Impacts
7.2 The environmental studies conducte d to date convincingly demonstrate
that operation of the Botnia plant will have none of the impacts hypothesized in
Argentina’s Memorial. However, in the unlikely event that adverse impacts occur
that have not been anticipated by Uruguay or the IFC’s independent experts, those
impacts will be quickly detected and remedied through a combination of pre-
operational baseline data collection and post-operational sampling, as well as by
vigorous enforcement of Uruguay’s rigorous environmental laws and regulations.
7.3 The extensive pre-operational m onitoring data collected by CARU,
Uruguay, and Botnia already establish a subs tantial baseline against which to gauge
- 453 - 1187
whether impacts occur as a result of the operation of the Botnia plan. Moreover,
the collection of additional baseline monitoring data has been and will be an integral
aspect of the remaining steps in the permitting and commissioning process of the
Botnia plant prior to commencement of operations, and monitoring will continue
after the operations begin. The robust pre- and post-operational monitoring will
allow for the rapid detection of any unacceptable impacts.
A. M ONITORING OF THE W ATER Q UALITY AND AQUATIC LIFE OF THEU RUGUAY
R IVER TOD ATE
7.4 Until February 2006, CARU took primary responsibility for monitoring
the water quality and aquatic health of the Uruguay River. In fulfillment of that
function, CARU developed two primary wa ter monitoring plans: 1) the Pollution
Control and Prevention Program (“PROCON”, per the Spanish initials); and 2) the
Uruguay River Environmental Quality Mon itoring Plan for Areas with Cellulose
Plants (“PROCEL”, per the Spanish initials).
7.5 CARU developed and approved PROCON in 1987 118. This monitoring
program covered the entirety of the Uruguay River, extending from Bella Unión,
approximately 323 kilometres upstream of the Botnia plant, to Nueva Palmira,
approximately 85 kilometres downstream of the plant 118, and included 30 sampling
118A compilation of baseline information availabl e at the time the Final CIS was prepared is
compiled in Annex D of the Final CIS. Intern ational Finance Corporation, Cumulative Impact
Study, Uruguay Pulp Mills, Annex D (hereinaf“Final CIS, Annex D”), pp. D3.19-D3.31
(September 2006). UCM, Vol. VIII, Annex 176. ENCE also compiled ex tensive baseline data
as part of the environmental review of trmerly proposed plant, which was incorporated
into the Final CIS. Ibid., p. D3.24.
118El Telegrafo, “President of CARU: Argentina Lacks the PolitiWill to Control the
Quality of the Water in the Uruguay River,” p. 1 (17 Aug. 2006). UCM, Vol. IX, Annex 187A.
1189Ibid., p. 1. See alDINAMA Press Release, “New Environmental Monitoring of the
Uruguay River” (hereinafter “DINAMA August 2006 Pr ess Release”), p. 1. (17 August 2006).
UCM, Vol. II, Annex 32.
- 454 - 1190
locations . Since the beginning of PROCON, CARU has engaged in water quality
monitoring in four annual campaigns 119, comprised of more than 50 water quality
monitoring events 119. In 2005, the GTAN (the High-Level Technical Group
established by Argentina and Uruguay) collected the most recent data available from
CARU and combined it with older data from the sampling points near the locations
of the Botnia and ENCE plants, and produced an updated summary of the water
quality of the Uruguay River 1193.
7.6 In addition to water quality, CARU has also analysed various other
environmental conditions of the Uruguay Ri ver, including 1) metal and organic
contaminant data for sediments 119; and 2) data on various aspects of fish
communities, including diversity of populations 1195, spawning of fish species 1196,
1197
and levels of certain contaminants in fish flesh .
7.7 To further ensure that any environmental impacts by the Botnia and ENCE
plants would be detected, in Nove mber 2004, CARU approved the PROCEL
monitoring program 1198. Monitoring pursuant to the PROCEL program was to
include an analysis of water and sediment quality, the benthic communities, and the
1190
Ibid., p. 1. UCM, Vol. II, Annex 32.
1191
Ibid.
1192
Final CIS, Annex D, op. cit., p. D3.4. UCM, Vol. VIII, Annex 176.
1193Ibid., pp. D3.4-D3.5, D3.20 (Table D3.2-2).
1194Ibid., p. D3.7.
1195Ibid.
1196Ibid., p. D3.10.
1197Ibid., p. D3.16.
1198Diplomatic Note CARU-ROU No. 014/06 se nt from President of the CARU Uruguayan
Delegation to the President of the CARU Argentine Delegation, p. 2 (25 May 2006). UCM,
Vol. IV, Annex 117.
- 455 -fish communities. Annual progress reports were planned as a result of these
1199
monitoring activities .
7.8 In February, June, August, and November 2005 1200, monitoring campaigns
were undertaken by CARU pursuant to PR OCEL. In addition, in December 2005
1201
and January 2006 , studies of fish communities were undertaken.
7.9 Unfortunatteh lysnitoring activities by CARU have now been
suspended at Argentina’s insistence. Ar gentina first blocked CARU from carrying
out any further monitoring activities under PROCON or PROCEL in February 2006,
shortly before it initiated the pres ent legal proceedings against Uruguay 1202. Since
that date, Argentina has consistently refu sed to allow CARU’s monitoring activities
to resume. Uruguay has repeatedly expre ssed its deep regret at the suspension of
monitoring efforts, and consistently reitera ted its desire for CARU to resume those
efforts, to no avail 1203. As of the date of this Counter-Memorial, Argentina
1204
continues to veto any monitoring activities related to the Botnia plant .
7.10 Uruguay strongly favors joint monitoring of the river and its aquatic
environment, either via CARU (as set forth in the 1975 Statute) or through direct
1199
Ibid.
1200Ibid.
1201Ibid.
1202See, e.g., Diplomatic Note CARU-ROU No. 024/06 sent from President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation, p. 1 (18 September
2006). UCM, Vol. IV, Annex 120. Diplomatic Note CARU-ROU No. 033/06 sent from
President of the CARU Uruguayan Delegation to the President of the CARU Argentine
Delegation, p. 1 (13 October 2006). UCM, Vol. IV, Annex 121.
1203 See, e.g., Diplomatic Note CARU-ROU No. 024/06, op. cit., p. 1. UCM, Vol. IV, Annex
120. See also Diplomatic Note CARU-ROU No. 033/06, op. cit., p. 1. UCM, Vol. IV, Annex
121.
1204
See, e.g. , Diplomatic Note DACARU No. 019/06 sent from President of the CARU
Argentine Delegation to the President of the CARU Uruguayan Delegati on, p. 1 (20 October
2006). UCM, Vol. III, Annex 122.
- 456 -bilateral cooperation of the two States. However, because Uruguay is committed to
ensuring that the water quality of the Uruguay River remains within the agreed upon
standards, with or without the cooper ation of Argentina, DINAMA has been
conducting a monitoring program of its own. DINAMA ha s thus assumed
responsibility for acquiring additional baseline data with respect to the water quality,
sediments, and biota of the river in th e plant’s areas of influence. DINAMA
released a draft of its monitoring plan in March 2006 (the “March 2006 Monitoring
Plan”), shortly after Argentina insisted on the suspension of CARU’s monitoring
1205
activities .
7.11 DINAMA revised its March 2006 Monitoring Plan in August 2006 (the
“August 2006 Monitoring Plan”) 1206. As ENCE did not announce its decision to
relocate its plant until September 2006, the August 2006 Monitoring Plan required
monitoring that would assess environmental conditions in the areas of influence of
both plants. Due to the relocation of the ENCE plant, DINAMA made minor
changes to the August 2006 Monitoring Plan , which are reflected in a May 2007
1207
Monitoring Plan . Even given the relocation of the ENCE plant, the May 2007
and August 2006 Monitoring Plans are highly similar. Since Argentina and Uruguay
1205
Draft of March 2006 “DINAMA Monitoring Plan for Cellulose Plants in Fray Bentos”
(Borrador de marzo de 2006 “Plan de seguimiento DINAMA plantas de celulosa en F) available at
http://www.dinama.gub.uy/modules.php?op=modload&name=
dinama&file=actualizacion_inf_celulosa_26-4-06 (last visited 9 July 2007).
1206DINAMA Monitoring Plan for Cellulose Pl ants in Fray Bentos, Preliminary Draft
(hereinafter “August 2006 Monitoring Plan”) (August 2006). UCM, Vol. II, Annex 31. See
also ibid., Annex 1. The August 2006 monitoring plans also provided for the establishment of
baseline data with respect to air quality. Ibid., Annex 2.
1207
DINAMA Monitoring Plan for Cellulose Plan t in Fray Bentos (hereinafter “May 2007
Monitoring Plan”) (May 2007). UCM, Vol. II, 39. The May 2007 Monitoring Plan is not a
new plan; rather, it reflects the monitoring th at DINAMA has undertaken since the relocation
of the ENCE plant, although DINAMA did not incorporate these minor modifications into a
formal document until May 2007.
- 457 -had previously agreed on the adequacy of the PROCEL program, the August 2006
and May 2007 Monitoring Plans were specifica lly designed to take into account the
1208
requirements of PROCEL . In addition, DINAMA plans to post the results of its
pre-operational monitoring on its website before the Botnia plant commences
operations.
7.12 The water quality parameters monitored pursuant to the May 2007
Monitoring Plan are comprehensive 1209. In accordance with the plan, Uruguayan
authorities have conducted pre-operational water quality monitoring activities every
1210
two months since August 2006, with each monitoring event lasting three days .
Water quality monitoring has been conducte d at 15 different locations, including
locations not expected to be impacted by the plant’s operations, which serve as
control sites1211. Six of the monitoring locations are upstream from the Botnia plant,
including one located approximately 10.3 kilometres upstream in the secondary
1212
canal east of Isla Zapatero . Monitoring at these six locations will provide
additional pre-operational baseline data from which it can be determined whether
operation of the plant causes an increased presence of contaminants upstream.
Monitoring will also be conducted at nine downstream locations, the furthest being
located 16.5 kilometres downstream of the pl ant. In total, the monitoring program
covers a 26.8 kilometres stretch of the river, considerably more than enough to
determine whether any impacts occur upstream or downstream of the plant.
1208
August 2006 Monitoring Plan, op. cit., § 1.1.1. UCM, Vol. II, Annex 31. May 2007
Monitoring Plan, op. cit., Annex A, § A1. UCM, Vol. II, 39.
1209
May 2007 Monitoring Plan, op. cit., Annex A, § A1. UCM, Vol. II, 39.
1210
Ibid., Annex A, § A3.
1211
Ibid., Annex A, § A2.
1212
Ibid., Annex A, § A2.
- 458 -7.13 Monitoring of sediments is c onducted at various locations, which
1213
correspond to the water quality monito ring stations in the coastal area .
Assessment of EOX and TOX (which are the technical corollaries to measuring the
presence of AOX in sediments, as opposed to water), dioxins, furans, and PCBs are
1214
included in the monitoring parameters . As with the assessment of water quality,
in the pre-operational period samples of sediments have been taken every two
1215
months for a period of three days .
7.14 Uruguayan authorities have also collected baseline data for the benthic and
fish communities in the Uruguay River. The May 2007 Monitoring Plan provides
for three monitoring locations for the benthic community, which include both
upstream and downs tream locations 1216, and includes the following parameters:
taxanomic identification, pulp weight, density, diversit y, composition, and mercury
1217
and lead levels .
7.15 With respect to the fish community, the May 2007 Monitoring Plan
provides for six pre-operational monitoring campaigns. Parameters monitored
include taxanomic identification, longitudes, total and eviscerated weight, sex,
gonadal and liver weight, number and weight of eggs, bone structure, mercury, lead,
1213Ibid., Annex A, § B2.
1214Ibid., Annex A, § B1.
1215Ibid., Annex A, § B3.
1216Ibid., Annex C, § C2.
1217
Ibid., Annex C, § C1.
- 459 -dioxins, furans, AOX, PCB, and polyhydrocarbons 121. Monitoring occurs at a total
1219
of three locations, including upstream and downstream locations .
7.16 In addition to the pre-operational monitoring performed by DINAMA,
Botnia itself has also collected significant baseline data. Baseline data was obtained
by Botnia at various locations and for several parameters, which include, among
others, colour, temperature, pH, dissolv ed oxygen, BOD5, detergents, phenolics,
ammonia, nitrites, phosphorus, nitrogen fecal coliforms, arsenic, cadmium, copper,
chromium, mercury, lead, and AOX 122. The results of this monitoring are presented
1221
in Annex D of the Final CIS . As discussed in Chapter 4, the Botnia EIA also
included extensive baseline data with respect to the biota of the Uruguay River. As
of the date of this Counter-Memorial, Botnia continues to collect baseline data.
7.17 In sum, the efforts by CARU (until early 2006) and by Uruguay and
Botnia have resulted in the establishm ent of comprehensive baseline data from
which it will be possible to determine rapidly whether unexpected adverse impacts
are occurring after the Botnia plant commences operations 1222.
1218
Ibid., Annex D, § D1.
1219
Ibid., Annex D, § D2. As a technical matter, two locations are being monitored in the Las
Cañas area. Ibid., Annex D, § D2.
1220
Final CIS, Annex D, op. cit., p. D3.21-D3.22 (Table D3.2-3). UCM, Vol. VIII, Annex 176.
1221
Ibid., pp. D3.21-D3.22 (Table D3.2-3).
1222
Dr. Charles A. Menzie, Evaluation of the Final Cumulative Impact Study for the Botnia
S.A.’s Bleached Kraft Pulp Mill (Fray Bentos, Uruguay) with Respect to Impacts on Water
Quality and Aquatic Resources and with Respect to Comments and Issues Raised by the
Government of Argentina (Exponent, Inc.), pp. 30-31 (July 2007). UCM, Vol. X, Annex 213.
Mr. Pieter Booth, Sufficiency of EIA a nd GTAN Information for Determination of
Environmental Impacts - Botnia, S.A., Fray Bentos Uruguay (Exponent, Inc.), p. 1 (June 2007).
UCM, Vol. X, Annex 217.
- 460 - B. P OST -OPERATIONAL M ONITORING BY DINAMA
7.18 DINAMA’s monitoring activities w ill intensify after the Botnia plant
commences operations, pursuant to the provisions of the May 2007 Monitoring Plan.
Post-operational monitoring by DINAMA w ill be conducted with respect to the
following areas:
• operational compliance of the Botnia plant with the requirements of
Uruguayan law and its environmenta l management plans (including
its monitoring and contingency plans);
• water quality;
• sediment quality;
• the benthic community; and
1223
• the fish community .
7.19 This Section summarizes the mon itoring that will be undertaken with
respect to the above-listed issues. Many aspects of the monitoring of the water
quality, the sediment quality, and the biot a of the Uruguay River will be highly
similar to DINAMA’s pre-operational monitoring to ensure continuity of
information, although DINAMA may make modifications in light of monitoring
1224
results and other information obta ined during the operational phase . All data
collected, and monitoring and testing procedures conducte d, during this time will
conform to strict qual ity control requirements225. The post-operational monitoring
will allow DINAMA to ensure that the Botnia plant is operating in compliance with
the conditions of the requirements of its Initial Environmental Authorisation,
Environmental Management Plans, and the Wastewater Treatment System Approval,
1223See generally May 2007 Monitoring Plan,op. cit., Annexes A-D, F, G. UCM, Vol. II,
Annex 39.
122Ibid., § 1.2.
1225
See generally ibid., Annex G.
- 461 -including the applicable discharge limitations and water quality standards in those
permits. It will also allow DINAMA to detect rapidly whether the Botnia plant is
causing any unacceptable adverse impact s and to respond appropriately and
immediately by requiring Botnia to undertak e any additional remedial or protective
measures that DINAMA deems necessary. As discussed in Chapter 6, Argentina’s
experts do not show that any particular adverse impacts from operation of the plant
are likely; instead, they complain of “uncertainties” as to the potential impacts
caused by effluent discharges from the pl ant. Alleged “uncertainties” are not
sufficient in themselves to satisfy Argen tina’s burden of proof of likely significant
harm to the river. But, to the extent they identify risks, however theoretical, these
will be fully addressed via Uruguay’s pos t-operational monitoring program. Thus,
even the abstract “uncertainties” of Dr. Wh eater will be addressed in the monitoring
program, and any unexpected adverse impacts resulting from his “uncertainties” will
be quickly detected and remedied.
7.20 To ensure Botnia’s compliance with the applicable provisions of
Uruguayan law (including CARU water- quality regulations, which have been
incorporated into Uruguayan law), the AAP, the Wastewater Treatment System
Approval, and other permits required by Uruguayan law, DINAMA will
scrupulously monitor the operations of the pl ant. This monitoring will occur in two
phases 122. The first phase will correspond to the plant’s start-up and
commencement of operations, a nd is anticipated to last a minimum of six months
and a maximum of one year (the “Start -Up Phase”), depending upon the operational
performance of the plant. During the Start-Up Phase, DINAMA will closely
1226
See generally ibid., Annex F, § F1.
- 462 -monitor the Botnia plant, including c onducting an analysis of impacts on water-
quality, an evaluation of the operational as pects of the plant, an assessment of the
monitoring results obtained by Botnia, and a review of the information provided by
the Follow-up Committee (discussed in Part C). DINAMA will also conduct
management inspections every two months during this tim e. The purpose of these
management inspections is to evaluate the plant’s compliance with its environmental
management plans for the entire facility , including its monitoring and contingency
plans. DINAMA will also issue monthly reports during the Start-Up Phase detailing
the results of its monitoring efforts.
7.21 The second phase, denominated th e Continuous Operation Phase, is
expected to commence at month seven of the plant’s operations and to extend
through the life of the plant. During this period, and assuming no adverse impacts
by DINAMA monitoring activities are detected during the Start-Up Phase,
DINAMA will monitor the operations of the plant on a monthly basis, and will
conduct management inspections on a half-y early basis. The results of DINAMA’s
monitoring and inspections will be validated every two months 122.
7.22 With regard to water quality, DINAMA will scrutinise Botnia’s
compliance with the effluent discharge limitations under Uruguayan law (including
CARU regulations on water quality) and its AAP and Wastewater Treatment Plant
Approval 1228. This will entail the inspection and monitoring of Botnia’s effluent at
the wastewater treatment plant before it is discharged into the Uruguay River, to
allow a determination of the exact effluent concentrations. DINAMA will closely
1227Ibid., Annex F, § F1.
1228Ibid., Annex F, Table F2.
- 463 -monitor Botnia’s effluent for the followi ng parameters: pH, biological and chemical
oxygen demand, phenols, AOX, acute t oxicity, nitrogen, phosphorus, chlorine,
colour, mercury, dioxins, and furans. DI NAMA will also evaluate the solid waste
generated as a result of the Botnia plant’s operations, as well as the operation of its
1229
landfill, to ensure that adverse impacts are not caused by these activities .
7.23 In addition to monitoring the pl ant’s operational compliance, DINAMA
will continue to undertake extensive monitoring of the Uruguay River and its biota
to ensure the rapid detection of any potential impacts resulting from the plant’s
operation. As with the pre-operational monitoring, DINAMA will conduct post-
operational monitoring of water quality at the same 15 locations as the pre-
1230
operational monitoring . Results from the six upstream stations will enable
DINAMA to confirm the environmental effects in the event of a flow reversal. The
other nine locations include the area of the effluent discharge, and extend
downstream from there, with two stations in the area of Yaguareté Bay and a station
at the drinking water intake for the city of Fray Bentos. The two stations furthest
downstream from the Botnia plant will be in the area of Las Cañas (Uruguay),
approximately 16.5 kilometres from the plant. DINAMA will make the results of its
monitoring publicly available through its website 1231. This extensive monitoring will
allow DINAMA to detect any exceedan ces of CARU and/or Uruguayan water
quality standards rapidly and to undertak e corresponding remedial measures as
deemed necessary. Through these procedures, the questions regarding dilution
1229
DINAMA will conduct weekly monitoring of the Botnia plant’s compliance with the air
emissions limitations. Ibid., Annex F, Table F2.
1230
Ibid., Annex A, § A2.
1231
Ibid., Annex A, § A5.
- 464 -ratios, and low flow and flow reversal c onditions will be answered conclusively and
will no longer remain a matter of conjecture. If, contrary to the conclusions reached
by the IFC’s independent experts, imperm issible impacts unexpectedly occur, they
will be detected and remedied promptly. In essence, DINAMA’s comprehensive,
rigorous and thoroughly transparent monitoring program constitutes an insurance
policy against all of the hypothetical, remo te, and imaginative “risks” conjured by
Argentina’s consultants.
7.24 DINAMA will conduct post-operational monitoring of sediment quality
for the same parameters and at the same nine locations as the pre-operational
monitoring 123. As sediment quality is of particular importance with respect to
Yaguareté Bay, monitoring will be conducted at two locations in that area. Sediment
quality will be monitored ev ery two months, with each monitoring event lasting
three days, and the results will be made available on DINAMA’s website 1233. This
monitoring will answer the concerns expressed in the Wheater Report about the need
for AOX monitoring 123, it will conclusively establish whether or not unacceptable
impacts to sediment quality are occurring due to the presence of AOX in the effluent
discharge, and allow this impact to be remedied if, in fact, it is occurring.
7.25 Monitoring of the benthic community will take place at the same three
stations as pre-operational monitoring, one located upstream from the Botnia plant in
the area of Isla Abrigo, and two located downstream in the areas of Yaguareté Bay
1232
Ibid., Annex B, § B2.
1233Ibid., Annex B, § B5.
1234AM, Vol. V, Annex V, §5. As explained in Part 1(A), EOX and TOX are the technical
corollaries for AOX with respect to sediments.
- 465 - 1235
and Las Cañas . Parameters that will be monitored include density, diversity, and
composition of the benthic co mmunity, as well as dioxin and furan levels. One
annual campaign is planned during each of the first three years of the Botnia plant’s
1236
operations . DINAMA will issue annual reports containing the monitoring results
that will track any changes in the benthic community 1237. After the first three years
of the plant’s operation, the necessity and frequency of additional monitoring will be
determined by DINAMA, based on the data obtained during this time.
7.26 Monitoring of potential impacts to fish populations will be conducted for
the same parameters and at the same locations as in the pre-operational
1238
monitoring . One annual monitoring campaign is planned during each of the first
three years of the plant’s operations, and annual reports tracking any changes to the
fish community will be issued. DINAMA will then determine the necessity and
frequency of additional monitoring based on the data obtained.
7.27 DINAMAp ’ost-operationm alon itoring of the fish and benthic
communities will be more than sufficient to dispel the concerns expressed by
Argentina in its Memorial. Indeed, with re spect to this issue, the Wheater Report
largely confines itself to the following:
Given the need for precautionary measures, there should be a
commitment to monitoring fish, rather than just conceptual
designs as a contingency measure. . . and developing capacity to
do tests. . . . A well-defined operable programme of testing
should be in place before operations begin 1239.
1235
May 2007 Monitoring Plan, op. cit., Annex C, § C2. UCM, Vol. II, Annex 39.
1236
Ibid., Annex C, § C1.
1237
Ibid., Annex C, § C5.
1238Ibid., Annex D, § D2.
1239AM, Vol. V, Annex V, § 1.
- 466 -Uruguay agrees and, to those ends, DINAMA has established a rigorous post-
operational monitoring program. The partic ular monitoring program for the benthic
and fish communities that DINAMA will undertake once plant operations begin, in
conjunction with the substantial baseline data already collected, more than satisfies
this recommendation. DINAMA is committed to this monitoring effort even though
the high standards set by Environment Canada do not require fish monitoring in this
1240
situation .
C. T HE FOLLOW -U PC OMMITTEE
7.28 As a complement to the environm ental monitoring that will be conducted
by DINAMA, a Follow-Up Committee has been established pursuant to Article 2(x)
1241
of Botnia’s AAP . The purpose of this Follow- Up Committee is to supplement
the technical monitoring that DINAMA w ill undertake by formulating observations
and recommendations to ensure that envi ronmental monitoring and management are
carried out effectively, and to promote the participation of and effective exchange of
information between Botnia, the Govern ment of Uruguay, and various local
1242
actors . The Director of MVOTMA will preside over the Committee and will
work in conjunction with the following governmental and nongovernmental entities
as Committee members:
124International Finance Corporation, Cumula tive Impact Study, Uruguay Pulp Mills, p. 4.47
(September 2006). UCM, Vol. VIII, Annex 173.
124MVOTMA Initial Environmental Authorisation for the Botnia Plant (hereinafter “Botnia
AAP”), Art. 2(x) (14 February 2005). UCM, Volume II, Annex 21. See generally MVOTMA
Resolution No. 113/2007, Creating Follow-Up Committee for the Botnia Pulp Mill (hereinafter
“MVOTMA Resolution No. 113/2007) (March 2007) . UCM, Vol. II, Annex 33.
124MVOTMA Resolution No. 113/2007, Creating Follow-Up Committee for the Botnia Pulp
Mill, Art. I (Considerations). UCM, Vol. II, Annex 33See also Botnia AAP, op. cit., Art.
2(x). UCM, Vol. II, Annex 21.
- 467 - • the Ministry of Foreign Relations;
• the Ministry of Industry, Energy, and Mining;
• the Ministry of Public Health;
• the City Councils of the Municipalities of Río Negro and Soriano;
• the Provincial Governments of th e Departments of Río Negro and
Soriano;
• Botnia 124; and
• seven representatives of non-governmental stakeholders, including
non-governmental agencies 124.
7.29 The non-governmental actors currently forming part of the Follow-Up
Committee include the Commercial and Indus trial Association of Río Negro, the
Young Ecological Group, the Interunion Plen ary Group, and the Rural Society of
Río Negro 1245. The Committee already has met four times, on 28 March, 13 April,
18 May, and 15 June 2007. It functions as an additional oversight mechanism with
respect to DINAMA’s monitoring of the Botnia plant, and ensures the effective
disclosure and exchange of informati on between DINAMA, Botnia, the various
governmental and non-governmental entities represented on the Committee, and the
public at large. The Committee will continue to meet for as long as the Botnia plant
operates.
D. P OST -OPERATIONAL M ONITORING BY B OTNIA
7.30 Botnia, too, will conduct ongoing monitoring to supplement the work by
DINAMA and provide additional assurance that operations of the plant are not
causing adverse impacts. The requirement that Botnia undertake comprehensive
1243
Both Botnia S.A. and Botnia Fray Bentos S.A. are members of the Follow-Up Committee.
1244
MVOTMA Resolution No. 113/2007, Creating Follow-Up Committee for the Botnia Pulp
Mill, op. cit., Art. 2(i). UCM, Vol. II, Annex 33.
1245
DINAMA Botnia Follo w-Up Committee, Inaugural Meeting, Minutes No. 1, Introductory
para. (28 March 2007). UCM, Vol. II, Annex 35.
- 468 -post-operational monitoring -- under the di rection and review of DINAMA -- has
been an integral aspect of DINAMA’s a pproval process. As with many other
aspects of the approval process, the post-ope rational monitoring that Botnia will be
required to conduct has been and continues to be part of a careful and incremental
process in which monitoring requirements ha ve been and will continue to be added
as further information becomes available. Ultimately, these requirements will be
embodied in a monitoring plan to be approved by DINAMA prior to the
commencement of operations (the “Botnia Monitoring Plan”).
7.31 The Botnia EIA set forth a preliminary, proposed monitoring plan for the
1246
post-operational phase of the plant . With respect to monitoring of the effluent
treatment plant, the proposed monitoring pl an identified the locations within the
wastewater treatment plant to be monito red, the corresponding parameters, and the
1247
frequency of the monitoring . The Botnia EIA proposed that results for
parameters of potential concern, including materials such as COD, suspended solids,
1248
AOX, and phosphorus be made available to the public .
7.32 Botnia proposed that monitoring of water quality be conducted by
independent professional parties 124. The Botnia EIA proposed four locations to
monitor water quality: the Fray Bentos drinking water intake, the mouth of the
Gualeguaychú River, a point one kilometre upstream of the plant, and a point one
1246Botnia Environmental Impact Assessment Submitted to DINAMA, Chap. 8, pp. 5-7 (31
March 2004). UCM, Vol. X, Annex 220. The Botnia EIA set forth a proposed plan with
respect to monitoring of air emissions, air quality, and other potential impacts to the
environment. See ibid., pp. 7-12. Potential impacts to air and other environmental media,
however, are not within the Court’s jurisdiction.
1247Ibid., pp. 5-6.
1248
Ibid., p. 6 (Table 8-2).
1249
Ibid., p. 1.
- 469 -kilometre downstream 1250. The Botnia EIA proposed monitoring various parameters
at these sites, including temperature, colour, phosphorus, nitrogen, and other effluent
components, as well as monitoring bent hic and fish communities at appropriate
1251
locations . It also proposed making the results of this monitoring available to the
public.
7.33 For purposes of issuing the AAP, DINAMA found the monitoring plan
proposed in the Botnia EIA to be sufficient. In addition to the minimum monitoring
requirements proposed by Botnia in the Botnia EIA, the AAP specified that
monitoring must at least include the following:
• effluent discharges and the quality of surface and groundwater 125;
1253
• sedimeq nutality ;
• an assessment of one1254cies of sessile benthic fauna indicating the
presence of AOX ; and
• the sampling frequency, locati on, methodology, and analytical
technique to be used 1255.
7.34 As the permitting process for the Botnia plant has progressed, DINAMA
has continued to specify the effluent monitoring requirements with which Botnia
must comply, as set forth in the Botnia plant’s Wastewater Treatment System
Approval. Pursuant to the Wastewater Treatment System Approval, Botnia must
monitor the concentrations of its final ef fluent for the following parameters on a
weekly basis:
1250
Ibid., p. 7.
1251Ibid., p. 8.
1252Botnia AAP, op. cit., Art. 2(m). UCM, Vol. II, Annex 21.
1253Ibid.
1254Ibid., Art. 2(l).
1255Ibid., Art. 2(k).
- 470 - • Total nitrogen;
• Total phosphorus;
• Chlorate;
• AOX;
• Phenolic substances;
• Chlorophenolasn;d
• Feccaolliform 125.
7.35 On a monthly basis, the Wastewat er Treatment System Approval requires
Botnia to monitor the concentrations of its final effluent with respect to the
following parameters:
• Resin/acids;
• Sterols;
• Metals (arsenic, cadmium, copper, chromium, nickel, lead, and zinc);
• Iron;
• Sodium an;d
• Acuttoexicity 1257.
7.36 Botnia must also monitor certain parameters, including the following, on a
daily or on a continuous basis: conducti vity, colour, pH, and total suspended
1258
solids . Chemical dissolved oxygen and biological dissolved oxygen will be
1259
monitored on a daily basis . Concentrations of dioxins and furans will be
monitored every two months 126.
7.37 In addition to the monitoring of th e final effluent concentrations, Botnia
must also submit on a monthly basis the following information to DINAMA: (i) the
average monthly production of pulp; (ii) th e amount of chlorine dioxide consumed;
1256DINAMA Resolution No. 0148/07, Approval of the Wastewater Treatment System for the
Botnia Plant, pp. 3-4 (hereina fter “Wastewater Treatment System Approval”) (4 July 2007).
UCM, Vol. X, Annex 225.
1257
Ibid., p. 4.
1258Ibid., p. 3.
1259Ibid.
1260Ibid., p. 4.
- 471 -(iii) the amount of chlorate produced; and (iv) the amount of nutrients used in the
wastewater treatment process 126. Botnia must also submit to DINAMA information
with respect to its daily discharge flow a nd information about any upset or spill at
the wastewater treatment plant 1262.
7.38 Within 90 days of commencing operations, Botnia must submit to
1263
DINAMA a report detailing the results of this effluent monitoring . Thereafter,
Botnia must submit technical reports ev ery two months, deta iling, among other
1264
things, its monitoring results . In addition, six months after the commencement of
operations, Botnia must evaluate these initial monitoring steps and submit another
report to DINAMA addressing potential modifications to the monitoring plan 1265.
7.39 In addition to these minimum m onitoring and reporting requirements, the
Wastewater Treatment System Approval requires Botnia to submit reports on the
optimisation of water consumption at va rious intervals, and two years after
operations commence, a program for the opti misation of the consumption of water,
which must include a program to minimize the consumption of chlorine dioxide to
1266
10 kg/Adt .
7.40 These effluent monitoring requiremen ts are rigorous and comprehensive.
Moreover, as noted above, these require ments may be enhanc ed by DINAMA as
necessary pursuant to the AAP (discussed below). Finally, the requirement that
1261
Ibid., p. 3.
1262
Ibid.
1263
Ibid., p. 4.
1264
Ibid.
1265
Ibid., p. 3.
1266
Ibid., pp. 4-5.
- 472 -Botnia submit reports detailing the results of its monitoring on a frequent basis, in
conjunction with the post-operational mon itoring that DINAMA itself will conduct,
ensures constant and thorough oversight by DINAMA. Through this oversight,
DINAMA will ensure that the Botnia pl ant operates in compliance with the
discharge limits of Uruguayan law and those set forth in the various authorisations,
and that its operations are not causing unacceptable environmental impacts.
7.41 The final approved Botnia Monitoring Plan will include even more
comprehensive information on the mon itoring parameters, the frequency of
monitoring, what entities will conduct th e monitoring, the frequency of monitoring,
and the methodology. In addition, the Botnia Monitoring Plan must include quality
control procedures to ensure reliability of the data collected, as well as the proper
processing and reporting of that data.
7.42 DINAMA’s involvement with the m onitoring that Botnia must undertake
does not end with the Wastewater Trea tment System Approval and DINAMA’s
initial approval of the Botnia Monitoring Plan. As discussed more fully in the
following section, continued operations at the Botnia plant are contingent upon
receiving an Initial Authorisation to Operate, and its renewal by MVOTMA every
three years 1267. These renewals sp ecifically require review and updating of
1268
environmental manageme nt plans, including the Monitoring Plan , as deemed
necessary by MVOTMA and DINAMA, which are fully empowered to require more
rigorous and additional monitoring, if the circumstances warrant.
1267Decree No. 349/005, Environmental Impact A ssessment Regulation revision (hereinafter
“Decree No. 349/005”), Arts. 23, 24 (21 September 2005). UCM, Vol. II, Annex 24.
126Ibid., Art. 24, para. 2.
- 473 -7.43 The post-operational monitoring conducted by DINAMA and Botnia will
be rigorous and will rapidly detect any une xpected, adverse impacts from the Botnia
plant’s operations. Neve rtheless, Uruguay believes that monitoring through CARU
is preferable, and again invites Argentin a to allow CARU to resume monitoring
pursuant to PROCON and PROCEL.
Section II.
Uruguay Has Broad Authority to Require Remedial Measures if
Prohibited Impacts Occur
7.44 In the unlikely event that prohib ited environmental impacts occur, the
monitoring programs described above will detect those impacts and, in the still more
unlikely event that Botnia does not address such impacts proactively, DINAMA and
MVOTMA have broad authority to require Botnia to undertake the corrective
measures necessary to prevent and halt such impacts, including, if necessary, the
cessation of the Botnia plant’s operations.
7.45 Uruguayan law prohibits actions or activities that cause unacceptable
environmental impacts, and all persons, whether legal or natural, have an obligation
1269
to avoid such actions and activities . Uruguayan law charges MVOTMA with an
affirmative duty to deny authorisation for any activities that will cause prohibited
impacts to the environment 127. As the rigorous environmental review of the Botnia
plant demonstrates, MVOTMA and DINAMA carefully assessed the potential
environmental impacts of the plant prior to granting the AAP and conditioned all
further authorisations on strict monitoring requirements, thus ensuring that they had
1269Law No. 17,283, General Law for the Protection of the Environment (hereinafter “Law
17,283), Art. 3 (28 November 2000). UCM, Vol. II, Annex 11.
127Decree No. 349/005, op. cit., Art. 17, para. 6. UCM, Vol. II, Annex 24.
- 474 -and would continue to fulfil their duties under the law to prevent prohibited
environmental impacts.
7.46 Decree 253/79 establishes water qua lity and effluent limitations with
which all industrial sources must comply . DINAMA has consistently interpreted
Decree 253/79 as prohibiting any discharge that causes exceedances of the
Uruguayan and CARU water quality standards 1271. In furtherance of those
objectives, Decree 253/79 provides that “[i]n all cases, if the authorized facilities are
insufficient to achieve the objectives of th is law, new facilities or complementary
1272
processes may be demanded” . This makes clear that if the Botnia plant causes
exceedances of the applicable water quality standards, DINAMA is fully authorised
1273
to require additional protective measures . As reinforcement of that broad
authority, Decree 253/79 further provides that the approval of treatment plants and
the granting of discharge authorisations do “not release the owner of the industrial
facility from having to carry out any and all works that may be necessary in the
event that the plant, as constructed, is insufficient to satisfy its commitments” 1274.
To emphasise, DINAMA and MVOTMA expect no such problems to arise;
however, Uruguay assures the Court that there is sufficient authority in its domestic
laws to address and remedy them if they do.
7.47 Express authority to order the suspension of the Botnia plant’s operations
is provided in Law 17,283. It states that, with respect to any prohibited
1271See Decree No. 253/79, Regulation of Water Qu ality (hereinafter “Decree No. 253/79”),
Arts. 8, 9 (9 May 1979, as amended). UCM, Vol. II, Annex 6.
1272Ibid., Art. 17.
1273Sworn Declaration of Alicia Torres, Dir ector of Department of the Environment
(hereinafter “Torres Aff.”), para. VII(c) (June 2006). UCM, Vol. II, Annex 30.
1274Decree No. 253/79, op. cit., Art. 28. UCM, Vol. II, Annex 6.
- 475 -environmental impacts, or the violat ion of any environmental regulations,
MVOTMA may “[o]rder the preventive suspension of any allegedly hazardous
activity, while the corresponding investiga tions to corroborate said hazard or the
studies or tasks for analyzing or preven ting contamination of or damage to the
environment are being carried out” 1275.
7.48 MVOTMA has exercised its authority pursuant to Law 17,283 in the past.
For example, MVOTMA ordered the suspensi on of operations of a chemical plant,
which produced chromium and vitamin K, when its operations resulted in
1276
unacceptable impacts to the environment . If the post-operations monitoring
reveals prohibited environmental impacts, MVOTMA commits to using its authority
to remedy that impact, including, if nece ssary, to exercise its authority under Law
17,283 to order suspension of the plant’s operations.
7.49 Decree 349/005 provides for additional oversight and authority to require
protective measures. Pursuant to this decree, Botnia is required to obtain an
“Authorisation to Operate” from M VOTMA prior to commencing operations 1277.
This authorisation has not yet been grante d. It can only be granted upon Botnia’s
demonstration of compliance with the provisions of the AAP and the representations
1278
in its EIA .
7.50 Decree 349/005 also requires Botnia to obtain a renewal of its
Authorisation to Operate from MVOTMA every three years 1279. This renewal
1275Law No. 17,283, op. cit., Art.14(D). UCM, Vol. II, Annex 11.
1276Torres Aff., op. cit., para. II(c)(5). UCM, Vol. II, Annex 30.
1277Decree No. 349/005, op. cit., Art. 23. UCM, Vol. II, Annex 24.
1278Ibid., Art. 24, para. 1.
1279Ibid., Art. 23.
- 476 -process ensures continuous monitoring of environmental impacts, assessment of
whether additional protective measures are needed, and an opportunity for
MVOTMA to order the plant to implement those measures:
Renewals shall include review and updating of the
environmental management pl ans and the other approvals
regarding emissions and wast e management within the
jurisdiction of [MVOTMA], as well as any environmental
analysis of the operative or functioning changes, reforms or
extensions not requiring an Initial Environmental
Authorization 1280.
Thus, the ongoing renewal process imposes an affirmative and continuous obligation
on both Botnia and MVOTMA to assess the plant’s compliance with applicable
environmental laws at successive stages, and to assess the adequacy of the applicable
environmental management plans as a cond ition to continued operations. It also
provides MVOTMA with authority to requ ire additional protective measures, if
necessary, as a condition for renewal of the plant’s Authorisation to Operate.
7.51 In sum, if operations of the Botnia plant cause prohibited environmental
impacts, or should DINAMA determine that modifications are necessary to prevent
such impacts, MVOTMA and DINAMA have a wide-range of powers to halt and
correct any such impacts. Although the im pacts are highly unlikely to occur, given
the state-of-the-art technology to be employed and the exhaustive analyses to which
the Botnia plant has been subjected, Uruguay reaffirms its commitment made to this
Court in June 2006 to use its powers to the fullest extent necessary to ensure the
1281
plant’s compliance with all applicable legal requirements .
1280Ibid., Art. 24, para. 2.
1281Torres Aff., op. cit., para. VII(C) (June 2006). UCM, Vol. II, Annex 30.
- 477 -7.52 Nowhere in its lengthy Memorial does Argentina question the authority
conferred on MVOTMA or DINAMA by Uruguayan law, the commitment of
MVOTMA and DINAMA to exercise their auth ority to the fullest extent possible to
prevent or remedy any adverse environmental impacts resulting from the Botnia
plant’s operation, or the good faith of MVOTMA, DINAMA or the Government of
Uruguay as a whole. Uruguay respectfully submits that, likewise, there is no reason
for the Court to question Uruguay’s authority, commitment, or good faith in assuring
the environmentally sound operation of the pl ant, and the avoidance of any harm to
the Uruguay River or aquatic environment.
Section III.
The Question of Remedies for Alleged Violation of the 1975 Statute
7.53 Uruguay is confident that it ha s breached no obligation under the 1975
Statute. It scrupulously complied with all applicable national and international
commitments, laws, and regulations, and it will continue to do so. However, even if,
purely for the sake of argument, Argentina were correct in alleging that Uruguay has
violated the provisions of the 1975 Statute (a proposition that Uruguay steadfastly
denies), there are available remedies that are far more reasonable -- and more
consistent with the Statute’s objective of promoting the sustainable use of the
Uruguay River -- than Argentina’s disproportionate request that the Court order the
demolition of the Botnia plant.
7.54 Argentina maintains that permanent closure of the plant is required to
remedy the breach of any obligation under the 1975 Statute, procedural or
substantive.“Seul le démantèl ement de l’usine et de ses installations connexes” or
transfering them permanently to other uses, is “de nature à rétablir le status quo
- 478 - 1282
ante” . Such a draconian measure is without precedent, and Argentina has cited
none to support this absolutist position that, given the circumstances of the present
case, goes well beyond anything that a State is entitled to request under international
law.
7.55 Article 35 of the Draft Articles on Responsibility of States for
Internationally Wrongful Acts disclaim s a State’s responsibility for making
restitution that would “impose a burden out of all proportion to the benefit deriving
from restitution instead of compensation” 128. As the International Law Commission
explained in its Commentary, restitution is inappropriate “where the benefit to be
gained from restitution is wholly dispropor tionate to its cost to the responsible
State.” This is determined “based on considerations of equity and
1284
reasonableness” .
7.56 Ordering the demolition of the Botnia plant would be grossly
disproportionate and antithetical to any sound notion of equity and reasonableness. It
would impose grave costs on Uruguay and its people without giving Argentina any
meaningful benefit. The f acility, which will create over 8,000 jobs and contribute
more than US$270 million annually to Uruguay’s economy, has been built at a cost
of approximately US$1 billion; it is the largest foreign investment in Uruguay’s
history. It represents an integral pa rt of the Uruguayan national strategy for
achieving sustainable development by al lowing Uruguay to capture the economic
benefits of value-added processing of its forest resources. All these benefits to
1282AM, para. 8.24 (emphasis in original). (“Only the dismantling of the plant and its related
facilities” . . . “sufficient to restore the status quo ante.”)
1283Draft Articles on Responsibility of States for Internationally Wrongful Acts with
commentary, Art. 35 (2001).
1284Ibid., Art. 35, comment 11.
- 479 -Uruguay and its citizens will be irretrievably lost if the plant is ordered to be
destroyed. Moreover, Argentina would not receive any meaningful benefit from the
destruction of the Botnia plant because it poses no objective risk of significant harm
to the river or its aquatic environment. As demonstrated by objective scientific
evidence and the conclusions of impartial experts, operation of the plant will not
adversely affect wate r quality or aquatic life, and an y hypothetical impacts will be
detected rapidly by Uruguay’s comprehens ive monitoring program and cured by its
vigourous law enforcement efforts. As the Court determined in the Case
Concerning the Gab čikovo-Nagymaros Project , when confronted with already-
constructed industrial works that were found to be in violation of treaty obligations,
“[i]t would be an administration of the law altogether out of touch with reality if the
Court were to order … the works at Čunovo to be demolished when the objectives of
the Treaty can be adequately served by the existing structure” 128. Thus, rather than
order the works destroyed, as Argentina seeks in the present case, the Court in
Gabčikovo refused to do so, and instead ordered the parties to resume
cooperation 128. Uruguay respectfully submits that demolition of the Botnia plant in
the circumstances presented here -- including the unimpeachable evidence that the
plant will not harm the river or its aquatic environment -- would likewise be
“altogether out of touch with reality.”
7.57 As Uruguay has demonstrated, it has committed to a strict program of
monitoring that will be fully capable of assessing any unanticipated adverse
environmental impacts from the Botnia plant. Uruguay will thus be able to detect
1285See Case Concerning the Gabčikovo-Nagymaros Project (Judgment,)I.C.J. Reports 1997, p.
77, para. 136.
1286Ibid., p. 80, para. 150.
- 480 -any changes in the river environment rapidly. If Argentina believes that some aspect
of the monitoring is inadequate for th ese purposes, Uruguay again invites Argentina
to resume its cooperation in a joint monitoring program. With or without
Argentina’s cooperation, should any detr imental changes be detected, Uruguay will
be in a position to exercise its authorit y under the relevant Botnia permits and
Uruguayan environmental laws to require that Botnia take corrective action, and, if
necessary, even to order that operation of the plant cease until such corrections are
implemented. If any damage is caused to Argentina in violation of the 1975 Statute
in the brief period before such corrective measures are completed, Uruguay can pay
an appropriate level of compensation for th at damage, as contem plated by Article
43. Moreover, if problems develop and Uruguay fails to take action -- though there
is no reason whatsoever to think this might occur -- the Court could then order the
installation of a technically appropriate modification to the plant. Or, as in the
Gabčikovo-Nagymaros Dam Case , it can order the Parties to meet and agree on
preventive or corrective measures.
7.58 Indeed, by developing an extensive restructuring program for its own pulp
mills1287, Argentina has implicitly conceded that corrective measures are the
appropriate response should adverse impact s occur from plant operations. Many of
Argentina’s pulp mills are far from state-of-the-art, and have seriously harmed the
water quality of Argentina’s rivers. Yet, Argentina’s response has not been to shut
down these antiquated plants, but simply to require that they make the technical and
mechanical improvements necessary to comply with the requirements of IPPC BAT
1287See generally Secretariat of the Environment and Su stainable Development, Restructuring
Plan for the Cellulose and Paper Industry: Technical Evaluation Manual (January 2007).
UCM, Vol. II, Annex 49.
- 481 --- the very same requirements with which the Botnia plant must comply (and with
1288
which the IFC’s independent ex perts concluded it does comply) . If the Botnia
plant were somehow found to cause harm, the same opportunity should be provided;
that is, to make the necessary technical and mechanical improvements to remedy the
problem and avoid further adverse impacts.
7.59 Argentina argues that even if it has not proven a substantive violation of
the 1975 Statute -- in the form of actual or likely harm to water quality or the aquatic
environment -- the Court should order the decommissioning of the Botnia plant in
response to Uruguay’s alleged violations of the procedural obligations imposed by
the Statute in Articles 7-12. Argentin a’s argument is unsupportable and should be
rejected by the Court. First, as demonstrated in Chapters 2 and 3, supra, Uruguay
has fully complied with its obligations under Articles 7-12, and Argentina has failed
to demonstrate any material breaches of these obligations by Uruguay. Second, both
the 1975 Statute itself and international law in general are clear that procedural
requirements such as those set forth in Articles 7-12 are intended to safeguard
against substantive harm to the environment; they are not an end in themselves. In
the words of the International Law Commission, “[t]he purpose of consultations is
for the parties to find acceptable solutions regarding measures to be adopted in order
to prevent significant transboundary harm, or at any event to minimize the risk
1288Any argument that the Botnia plant require s additional protective measures to be taken
because the Uruguay River is a fragile or sensitive environment is baseless, as demonstrated in
Chapters 5 and 6. Nor can Argentina argue that the Botnia plant requires additional protective
measures due to its large production capacity, as it is not the production capacity that
determines the need for protective measures but rather the environmental performance of the
plant, namely the quality of the effluent discharge and the dilutive capacity of a given water
body, among other factors. As detailed in Chapter 5, it is undisputed that the Botnia plant will
be among the best in the world in this respect.
- 482 - 1289
thereof” . As noted in Chapter 2, Argentina expressly acknowledges in its
Memorial that “[d]es obligations de cont enu plus procédural comme la notification
et la consultation permettent la mise en oeuvre d’obligations à contenu substantiel
comme le principe de l’utilisation équitable et raisonnable et le principe de ne pas
causer un préjudice sensible” 129. The remedy for breach of an alleged procedural
obligation must therefore be crafted with regard to the underlying substantive right
the procedure is intended to safeguard.
7.60 Accordingly, in the circumstances presented here -- where the evidence
overwhelmingly establishes that there have been no vi olations of the 1975 Statute’s
substantive provisions -- it would be wildly disproportionate and manifestly
inequitable to order, as Argentina reque sts, the plant’s closure based on alleged
violations of the Statute’s procedural re quirements (with which, in any event,
Uruguay has previously demonstrated its complete compliance).
7.61 No international tribunal has ever made such an order, nor do the ILC
Articles on Prevention of Transboundary Harm or the UN Watercourses Convention
envisage such an outcome. In cases where one State has failed to notify or consult
1291
another -- which is not the case here -- the only remedy identified by the ILC ,
case law 1292, or State practice 1293, is for the non-notified State to request the
1289
2001 Draft Articles on the Prevention of Tr ansboundary Harm from Hazardous Activities
with commentaries (hereinafter “2001 Draft Articles”), p. 411, comment 5.
1290
AM, para. 3.31. (“obligations of a more pro cedural nature like notification and consultation
are used to implement obligations of a substa ntive nature like the principle of fair and
reasonable use and the principle of not causing any significant damage.”)
12912001 Draft Articles, op. cit., Art. 11. Convention on the Law of the Non-navigational Uses
of International Watercourses (hereinafter “1997 Watercourse Convention”), Art. 18 (1997).
1292Lake Lanoux Arbitration (France v. Spain) , International Law Reports, vol. 24, p. 138 (16
November 1957) (“if a neighbouring State has not taken the initiative, the other State cannot be
- 483 -necessary information and initiate consultations. Where it is alleged that an
environmental impact assessment has not b een conducted, the only remedy so far
afforded by any international tribunal is to order appropriate studies to be carried
1294
out . Where the measures taken to protect neighbouring States from
environmental damage are inadequate, international tribunals have ordered
additional measures to be taken 1295. In most such disputes, the parties are ordered to
co-operate; they are never ordered to return to the status quo ante, if by that is meant
1296
the cessation or removal of the activity in dispute .
7.62 The circumstances of the present ca se do not remotely justify departing
from these precedents. Any alleged procedural deficiencies, if proven, can be
rectified such that no damage to Argentina can follow from any failure to comply at
an earlier stage with the procedures re quired by the 1975 Statute. In comparable
circumstances in the Gabcikovo-Nagymaros Dam Case , the Court concluded that
“[i]n this case, the consequences of the wrongful acts of both Parties will be wiped
denied the right to insist on notification of works or concessions which are the object of a
scheme”).
1293
See e.g. Sudanese-Egyptian dispute regarding the Aswan High Dam and US-Mexico
dispute regarding salinity of the Colorado River, cited in Report of the ILC , pp. 131-133
(1988); see also Kirgis, F.: Prior Consultation in Interna tional Law: A Study in State Practice,
Charlottesville, University Press of Virginia, 1983, pp. 43, 66.
1294Trail Smelter Arbitration , 33 AJIL 182, Part Four, p. 209 (1939); Gabčikovo-Nagymaros
Project (Judgment), op. cit. , p. 78, para. 140; Case Concerning Land Reclamation by
Singapore in and Around the Straits of Johor (Mal aysia v. Singapore) (Provisional Measures)
(hereinafter “Land Reclamation (Provisional Measures)”), ITLOS No. 12, para. 106 (2003).
1295Trail Smelter Arbitration , 35 AJIL 684, Sec. 3, p. 726 (1941); Gabčikovo-Nagymaros
Project (Judgment), op. cit. , p. 82, para. 155(2); Case Concerning Land Reclamation by
Singapore in and Around the Straits of Johor (Malaysia v. Singapore) (Arbitral Award)
(hereinafter “Land Reclamation (Arbitral Award)”), operative para. 2, Annex (2005).
1296
Gabčikovo-Nagymaros Project (Judgment), op. cit. , p. 80, para. 150; The MOX Plant Case
(Ireland v. United Kingdom) (Provisional Measures), ITLOS No. 10 , para. 82 (2001); Land
Reclamation (Provisional Measures) , op. cit. , para. 92; Land Reclamation Case (Arbitral
Award), op. cit., operative para. 2 and Annex.
- 484 -out ‘as far as possible’ if they resume their co-operation in the utilization of the
1297
shared water resources of the Danube” and it ordered them to do so. The same
outcome in the present case would afford Argentina entirely adequate reparation for
any violation of the 1975 Statute -- if it were proven that Uruguay violated the
procedural obligations of the Statute, which Uruguay insists is not the case.
7.63 Finally, to make the order reque sted by Argentina would impose severe
and unwarranted limitations on Uruguay’s sovereign right to pursue sustainable
economic development while ensuring that activities within its jurisdiction do not
cause damage to the environment of other States, in accordance with customary
international law as set out in Prin ciple 2 of the 1992 Río Declaration on
1298
Environment and Development, and the case law of the Court . The economic
consequences for Uruguay of a closure of the Botnia plant would be enormous and
greatly outweigh any conceivable benefit to Argentina. No considerations of equity
have been identified by Argentina whic h might even begin to justify such a
disproportionate outcome. In these circumstances, ordering the removal of the
Botnia plant would go far beyond any concept of reparation and amount to a
punitive and unjust imposition on Uruguay. Accordingly, there is no basis upon
which to order the closure or demolition of the Botnia plant. Nor, as Uruguay has
demonstrated in this Counter-Memorial, is there a legal or factual basis on which to
grant Argentina any of the other relief it has requested in these proceedings. Based
on the applicable law, and based on the ev idence, all of Argentina’s claims -- both
1297Gabčikovo -Nagymaros Project (Judgment), op. cit., p. 80, para. 150.
1298Advisory Opinion on the Legality or Threat of Use of Nuclear Weapons, I.C.J. Reports 19,9p6.
242, para. 29.
- 485 -procedural and substantive -- are entirel y without merit. Uruguay respectfully
submits that they be rejected by the Court in their entirety.
- 486 - SUBMISSIONS
On the basis of the facts and arguments set out above, and reserving its
right to supplement or amend these Submissions, Uruguay requests that the Court
adjudge and declare that the claims of Argentina are rejected.
- 487 - ∗
LIST OF DOCUMENTS IN SUPPORT
VOLUME II
Annex
TREATIES AND JOINT DECLARATIONS
Treaty Concerning the Boundary Constituted by the River Uruguay (7 April
1961) ........................................................................
.................................................. 1
Uruguayan-Argentine Joint Declaration on Water Resources (9 July 1971)..............2
Treaty Concerning the Río de la Plata and the Corresponding Maritime
Boundary (19 November 1973)........................................................................
.......... 3
Statute of the River Uruguay (26 February 1975) ......................................................4
GOVERNMENT DOCUMENTS (URUGUAY)
Constitution of Uruguay, Art. 47 (1967). ...................................................................5
Decree No. 253/79, Regulation of Water Quality (9 May 1979, as amended)............6
Law No. 15,939, Forestry Law (28 December 1987).................................................7
Decree 452/988, Ministry of Livestock, Agriculture, and Fish, Regarding
Forest Designation (6 July 1988).........................................................................
.......8
Decree No. 435/994, Environmental Impact Assessment Regulation (21
September 1994).........................................................................
................................9
Ministry of Housing, Land Use Planning and the Environment (hereinafter
“MVOTMA”) Initial Environmental Authorisation for Transpapel (11 August
1995) ........................................................................
................................................ 10
Law No. 17,283, General Law for the Protection of the Environment
(28 November 2000).........................................................................
........................11
∗
Pursuant to Article 50 of the Rules of Court, whenever Uruguay has included only excerpts of
the relevant documents in its annexes, full copies of that document will be provided to the
Registry of the Court.
- i -Department of the Environment (hereinafter “DINAMA”) Environmental
Impact Assessment Report for the ENCE Plant (2 October 2003) ...........................12
MVOTMA Initial Environmental Authorisation for the ENCE Plant (9
October 2003)........................................................................
................................... 13
Presidency of the Republic of Uruguay Web Site, “Agreements on Mercosur,
Environment and Human Rights” (9 October 2003), available at
http://www.presidencia.gub.uy/noticias/archivo/2003/octubre/2003100902…
(last visited on 29 June 2007).........................................................................
..........14
Memorandum from Minister Counsellor Daniel Castillos to Ambassador
Dr. Alberto Volonté Berro (28 October 2003)..........................................................15
Memorandum from Minister Counsellor Daniel Castillos to Ambassador
Dr. Alberto Volonté Berro (4 November 2003)........................................................16
Presidency of the Republic of Uruguay Web Site, “M’Bopicuá: Working
Methodology Established” (3 March 2004), available at
http://www.presidencia.gub.uy/noticias/archivo/2004/marzo/2004030301.htm
(last visited on 4 July 2007)........................................................................
.............. 17
Memorandum from Minister Counsellor Daniel Castillos to Ambassador
Dr. Alberto Volonté Berro (1 April 2004)................................................................18
Ministry of Livestock, Agriculture, and Fish, General Forestry Division,
Code of Good Forestry Practices (September 2004) (excerpt) ................................19
DINAMA Environmental Impact Assessment Report for the Botnia Plant (11
February 2005)........................................................................
.................................20
MVOTMA Initial Environmental Authorisation for the Botnia Plant (14
February 2005)........................................................................
.................................21
DINAMA Environmental Management Plan Approval for the Botnia Plant
(for the removal of vegetation and earth movement) (12 April 2005)......................22
DINAMA Environmental Management Plan Approval for the Botnia Plant
(for the construction of the concrete foundation and the emissions stack)
(22 August 2005)........................................................................
..............................23
Decree No. 349/005, Environmental Impact Assessment Regulation revision
(21 September 2005) ........................................................................
........................24
DINAMA Environmental Management Plan Approval for the ENCE Plant
(for the removal of vegetation and earth movement) (28 November 2005)..............25
- ii -DINAMA Environmental Management Plan Approval for the Botnia Plant
(supplement to prior environmental management plans) (18 January 2006)............26
DINAMA Environmental Management Plan Approval for the ENCE Plant
(amendment to prior approval) (22 March 2006) .....................................................27
DINAMA Environmental Management Plan Approval for the Botnia Plant
(for the construction of the wastewater treatment plant) (10 May 2006)..................28
Preliminary Considerations Submitted by DINAMA on the 27 March 2006
Hatfield Report (April 2006)........................................................................
............ 29
Sworn Declaration of Alicia Torres, Director of Department of the
Environment (June 2006)........................................................................
................. 30
DINAMA Monitoring Plan for Cellulose Plants in Fray Bentos, Preliminary
Draft (August 2006) ........................................................................
.........................31
DINAMA Press Release, "New Environmental Monitoring of the Uruguay
River" (17 August 2006) ........................................................................
.................. 32
MVOTMA Resolution No. 113/2007, Creating Follow-Up Committee for the
Botnia Pulp Mill (March 2007) ........................................................................
........33
MVOTMA Resolution No. 169/2007, Establishing Composition of the
Follow-Up Committee for the Botnia Pulp Mill (22 March 2007)...........................34
DINAMA Botnia Follow Up Committee, Inaugural Meeting, Minutes No. 1
(28 March 2007)........................................................................
...............................35
DINAMA Environmental Management Plan Approval for the Botnia Plant (9
April 2007) (authorising industrial non-hazardous waste landfill)...........................36
DINAMA Environmental Management Plan Approval for the Botnia Plant (9
April 2007) (approving plan for the construction of solid industrial waste
landfills) ........................................................................
...........................................37
DINAMA Botnia Follow-Up Committee, Minutes No. 2 (13 April 2007)...............38
DINAMA Monitoring Plan for Cellulose Plants in Fray Bentos (May 2007) ..........39
VOLUME III
GOVERNMENT DOCUMENTS (ARGENTINA)
Note to the Executive Branch Accompanying Bill 21.413 (7 September 1976).......40
- iii -Law No. 6260 on Prevention and Control of Contamination on the Part of
Industries, Government of Entre Ríos (9 November 1978)......................................41
Regulatory Decree No. 5837, Government of Entre Ríos (26 December 1991).......42
Regulatory Decree No. 5394, Government of Entre Ríos (7 April 1997).................43
Argentine National Directorate for Public Investment and Project Finance,
Report on Gualeguaychú River Basin Cleanup (August 1997) ................................44
National Water Institute, Sub-Ministry of Water Resources, Ministry of Public
Works and Services, Republic of Argentina, Analysis of the Hydrological
Regimes of the Paraná and Uruguay Rivers (July 2002) (excerpts) .........................45
Statement by Argentine Ministry of Foreign Affairs, International Trade and
Culture, included in Report of the Head of the Argentine Cabinet of Ministers,
Alberto Angel Fernandez, to the Argentine Chamber of Deputies, Report No.
64 (March 2005) (excerpts).........................................................................
.............46
Statement by Argentine Ministry of Foreign Affairs, International Trade and
Culture, included in Report of the Head of the Cabinet of Ministers, Alberto
Angel Fernandez, to the Argentine Senate, Report No. 65 (March 2005)
(excerpts)........................................................................
..........................................47
Annual Report on the State of the Nation for 2004, Ministry of Foreign
Affairs, International Trade and Culture (1 March 2005) (excerpts)........................48
Secretariat of the Environment and Sustainable Development, Restructuring
Plan for the Cellulose and Paper Industry: Technical Evaluation Manual
(January 2007)........................................................................
..................................49
Secretariat of the Environment, "Technical Experts from the Secretariat of the
Environment Will Inspect Two Paper Mills in Jujuy," Press Release (12 April
2007) ........................................................................
................................................ 50
Agreement of the Argentine Secretariat of the Environment on Reconversion
of the Pulp Mill Alto Paraná (8 May 2007)..............................................................51
Secretariat of the Environment, "A Strong Action by the National Secretariat
of the Environment: The Benfide Cellulose Company was Fined for
Violations in Waste Treatment," Press Release (8 May 2007).................................52
Secretariat of the Environment, "The Secretariat of the Environment and the
Alto Paraná Company Sign an Agreement in the Framework of the Industrial
Restructuring Plan," Press Release (8 May 2007)....................................................53
- iv -DIPLOMATIC NOTES (URUGUAY)
Diplomatic Note DGAP3 603/2003, sent from Minister of Foreign Affairs of
Uruguay to the Embassy of Argentina in Uruguay (3 October 2003).......................54
Diplomatic Note 05/2003, sent from Ministry of Foreign Affairs of Uruguay to
the Embassy of Argentina in Uruguay (27 October 2003)........................................55
Diplomatic Note DGAP/711/2003, sent from Ministry of Foreign Affairs of
Uruguay to the Embassy of Argentina in Uruguay (7 November 2003)...................56
Diplomatic Note 066/07 sent from the Embassy of Uruguay in Buenos Aires to
the Ministry of Foreign Affairs, International Trade and Culture of Argentina
(2 March 2007)........................................................................
..............................56A
DIPLOMATIC NOTES (ARGENTINA)
Diplomatic Note No. 149/2005, sent from Argentine Ministry of Foreign
Affairs, International Trade and Culture to Ambassador of Uruguay in
Argentina, D. Francisco Bustillo (14 December 2005).............................................57
Diplomatic Note No. 154/05, sent from Argentine Ministry of Foreign Affairs,
International Trade and Culture to Ambassador of Uruguay in Argentina, D.
Francisco Bustillo (26 December 2005)...................................................................58
Diplomatic Note sent from Argentine Ministry of Foreign Affairs,
International Trade and Culture to Uruguayan Ambassador in Argentina, D.
Francisco Bustillo (12 January 2006).......................................................................59
VOLUME IV
CARU DIGEST
Digest of the Administrative Commission of the Uruguay River (CARU),
Subject E3 (1984, as amended) ........................................................................
........60
Digest of the Administrative Commission of the Uruguay River (CARU),
Subject E4 (1984, as amended). ........................................................................
.......61
Digest of the Administrative Commission of the Uruguay River (CARU),
Subject E3 (June 2006 proposed revisions)..............................................................62
CARU MINUTES AND SUBCOMMITTEE REPORTS
CARU Special Minutes No. 1 (29 November 1979) (excerpts)................................63
- v -Subcommittee on Navigation and Works Report No. 21 (10 March 1981),
approved in CARU Minutes No. 2/81 (11 March 1981)..........................................64
CARU Minutes No. 2/81 (11 March 1981) (excerpts) .............................................65
CARU Minutes No. 5/81 (21 August 1981) (excerpts) ............................................66
CARU Minutes No. 8/81 (13 November 1981) (excerpts).......................................67
CARU Minutes No. 9/81 (18 December 1981) (excerpts)........................................68
CARU Minutes No. 6/83 (29 July 1983) (excerpts).................................................69
CARU Minutes No. 7/85 (13 December 1985) (excerpts)........................................70
Annex A to Subcommittee on Pollution and Research Report No. 57 (9 April
1987), approved in CARU Minutes No. 3/87 (10 April 1987) (excerpts)................71
CARU Technical-Legal Symposium (17-18 September 1987) (excerpts)................72
CARU Minutes No. 6/88 (22 July 1988) (excerpts).................................................73
CARU Minutes No. 2/89 (17 March 1989) (excerpts) .............................................74
CARU Minutes No. 8/90 (13 July 1990) (excerpts).................................................75
Subcommittee on Pollution Report No. 108 (22 November 1991), approved in
CARU Minutes No. 10/91 (22 November 1991)......................................................76
CARU Minutes No. 5/95 (23 June 1995) (excerpts).................................................77
CARU Minutes No. 6/95 (21 July 1995) (excerpts).................................................78
Subcommittee on Water Quality and Prevention of Pollution Report No. 148
(20 July 1995), approved in CARU Minutes No. 6/95 (21 July 1995).....................79
CARU Minutes No. 2/96 (15 March 1996) (excerpts) .............................................80
Subcommittee on Navigation, Works and Erosion, Report No. 185 (18 April
1996), approved in CARU Minutes No. 3/96 (19 April 1996) (excerpts)................81
CARU Minutes No. 7/96 (23 August 1996) (excerpts) ............................................82
CARU Minutes No. 8/96 (27 September 1996) (excerpts).......................................83
- vi -Annex B to Subcommittee on Water Quality and Prevention of Pollution
Report No. 167 (18 April 1997), approved in CARU Minutes No. 4/97 (18
April 1997)........................................................................
....................................... 84
Subcommittee on Legal and Institutional Affairs Report No. 115 (20 June
1997), approved in CARU Minutes No. 6/97 (20 June 1997)..................................85
CARU Minutes No. 9/97 (12 September 1997) (excerpts).......................................86
CARU Minutes No. 4/98 (17 April 1998) (excerpts) ...............................................87
Report on Meeting with Concordia Development Association, Annex E to
Subcommittee on Water Quality and Prevention of Pollution Report No. 192
(21 July 1999), approved in CARU Minutes No. 11/99 (23 July 1999)...................88
“Proposed Activities to be Carried Out in the Year 2000,” Annex to
Subcommittee on Water Quality and Prevention of Environmental Pollution
Report No. 196 (10 November 1999), approved in CARU Minutes No. 18/99
(12 November 1999)........................................................................
.........................89
Letter SET -8952-AR sent from CARU President, Dr. Rodolfo Zanoniani, to
Fana Química (10 February 2000)........................................................................
....90
CARU Minutes No. 03/01 (16 March 2001) (excerpts)............................................91
CARU Minutes No. 14/01 (14 December 2001) (excerpts)......................................92
Subcommittee on Legal and Institutional Affairs Report No. 165 (11
December 2001), approved in CARU Minutes No. 14/01 (14 December 2001)......93
CARU Minutes No. 08/03 (15 August 2003) (excerpts) ..........................................94
Subcommittee on Water Quality and Prevention of Pollution Report No. 239
[sic] (12 August 2003), approved in CARU Minutes No. 08/03 (15 August
2003) (excerpts)........................................................................
................................95
Subcommittee on Water Quality and Prevention of Pollution Report No. 239
(9 September 2003), approved in CARU Minutes No. 09/03 (12 September
2003) ........................................................................
................................................ 96
CARU Minutes No. 11/03 (17 October 2003) (excerpts).........................................97
Draft Plan for Monitoring the Environmental Quality of the Uruguay River
in the Areas of the Pulp Mills (2004). ......................................................................98
CARU Minutes No. 01/04 (15 May 2004) (excerpts)...............................................99
- vii -CARU Inter-Plenary Session, Report No. 09/2004 (15-16 April 2004),
approved in CARU Minutes No. 02/04 (21 May 2004) .........................................100
CARU Inter-Plenary Session, Report No. 10/2004 (29-30 April 2004),
approved in CARU Minutes No. 02/04 (21 May 2004). ........................................101
Subcommittee on Water Quality and Prevention of Pollution Report No. 243
(13 July 2004), approved in CARU Minutes No. 04/04 (16 July 2004).................102
CARU Minutes No. 05/04 (13 August 2004) (excerpts) ........................................103
Draft Plan for Monitoring the Environmental Quality of the Uruguay River in
the Areas of the Pulp Mills, Annex A to Subcommittee on Water Quality and
Prevention of Pollution Report No. 244 (11 August 2004), approved in CARU
Minutes No. 05/04 (13 August 2004) (excerpts) ....................................................104
CARU Inter-Plenary Session, Report No. 16/2004 (30 July 2004), approved in
CARU Minutes No. 05/04 (13 August 2004).........................................................105
Diplomatic Note 168/05 sent from the President of the CARU Uruguayan
Delegation to the President of the CARU Argentine Delegation (15 August
2005) ........................................................................
........................................... 105A
Letter sent from Vice President of Celulosas M’Bopicuá, Rosario Pou Ferrari,
to CARU Uruguayan Delegation President, Architect Walter Belvisi (24
August 2004)........................................................................
.................................. 106
Draft Plan for Monitoring the Environmental Quality of the Uruguay River in
the Areas of the Pulp Mills, Annex A to Subcommittee on Water Quality and
Prevention of Pollution Report No. 246 (12 October 2004), approved in
CARU Minutes No. 07/04 (15 October 2004) (excerpts).......................................107
CARU Minutes No. 08/04 (12 November 2004) (excerpts)...................................108
Subcommittee on Water Quality and Prevention of Pollution Report No. 247
(8-12 November 2004), approved in CARU Minutes No. 08/04 (12 November
2004) ........................................................................
.............................................. 109
CARU Inter-Plenary Session, Report No. 26/2004 (25-26 October 2004),
approved in CARU Minutes No. 08/04 (12 November 2004)................................110
CARU Minutes No. 09/04 (10 December 2004) (excerpts)....................................111
Subcommittee on the Environment and Sustainable Water Use Report No. 03
(7-11 February 2005), approved in CARU Minutes No. 02/05 (11 February
2005) ........................................................................
.............................................. 112
- viii -Diplomatic Note OCARU No. 032/2005 sent from the President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation (13
October 2005)........................................................................
................................. 113
CARU Minutes No. 09/05 (14 October 2005) (excerpts).......................................114
Diplomatic Note OCARU No. 129/2005 sent from President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation (10
November 2005)........................................................................
.............................115
CARU Minutes No. 02/06 (17 February 2006) (excerpts)......................................116
Diplomatic Note CARU-ROU No. 014/06 sent from President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation (25
May 2006)........................................................................
......................................117
Diplomatic Note DACARU No. 147/2006 sent from President of the CARU
Argentine Delegation to the President of the CARU Uruguayan Delegation (23
June 2006)........................................................................
...................................... 118
Diplomatic Note DACARU No. 152/2006 sent from President of the CARU
Argentine Delegation to the President of the CARU Uruguayan Delegation (24
August 2006)........................................................................
.................................. 119
Diplomatic Note CARU-ROU No. 024/06 sent from President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation (18
September 2006)........................................................................
.............................120
Diplomatic Note CARU-ROU No. 033/06 sent from President of the CARU
Uruguayan Delegation to the President of the CARU Argentine Delegation (13
October 2006).........................................................................
................................121
Diplomatic Note DACARU No. 019/06 sent from President of the CARU
Argentine Delegation to the President of the CARU Uruguayan Delegation (20
October 2006)........................................................................
................................. 122
Subcommittee on Environment and Sustainable Water Use Report No. 16 (17
to 20 October 2006), approved in CARU Minutes No. 07/06 (20 October
2006) ........................................................................
.............................................. 123
Diplomatic Note DACARU No. 022/06 sent from President of the CARU
Argentine Delegation to the President of the CARU Uruguayan Delegation (20
October 2006)........................................................................
................................. 124
- ix -Diplomatic Note CARU-ROU No. 032/07 sent from President of the CARU
Uruguayan Delegation to the Argentine President of the CARU Notifying
CARU of Mixing Zone for the Botnia Mill (25 May 2007) ...................................125
VOLUME V
GTAN DOCUMENTS
Joint Argentine-Uruguayan Press Release Constituting GTAN, No. 176/05 (31
May 2005)........................................................................
......................................126
First Meeting of the Uruguayan-Argentine High-Level Technical Group
(GTAN) (3 August 2005)........................................................................
............... 127
GTAN/DU/7/31-08-05, Response to Request for Information on Both Pulp
Mills from Argentina, submitted to GTAN on 3 August 2005 (31 August
2005) ........................................................................
.............................................. 128
GTAN/DU/8/31-05-05, Reflections on Document GTAN/DA4/19-05-05 (31
August 2005) .......................................................................
..................................129
GTAN/DU/9/14-09-05, Supplementary Information Responding to a Request
for Information on the Pulp Mills, submitted in the Meeting of the High-Level
Technical Group on 3 August 2005 (14 September 2005)......................................130
GTAN/DU/10/14-09-05, Supplementary Response to Document DA/4/19-08-
05 (14 September 2005). ........................................................................
................131
GTAN/DU/11/14-09-05, Supplementary Information Responding to a Request
for Information on the Pulp Mills, submitted in the Meeting of the High-Level
Technical Group on 3 August 2005 (14 September 2005)......................................132
GTAN/DU/13/14-09-05, Climate Change, Climate Variability, Climate
Trends, Variability between Decades, prepared by Professor José Luis Genta
of the Institute of Mechanics and Fluids and Environmental Engineering,
School of Engineering, Universidad de la República (14 September 2005)...........133
GTAN/DU/14/14-09-05, Extract of Analysis of Climate Statistics and
Development and Evaluation of Climatic and Hydrological Scenarios in the
Main Hydrographic Basins of Uruguay and the Coastline Thereof (Uruguay
River, Negro River, Merin Lagoon, River Plate, the Atlantic Ocean), prepared
by the Climate Change Unit, DINAMA (14 September 2005)...............................134
GTAN/DU/15/14-09-05, Comments on Document GTAN/DA/5/31-08-05,
prepared by DINAMA (undated)........................................................................
....135
- x -GTAN/DU/17/30-09-05, Pulp Mills Production Process, prepared by
Chemical Engineer Cyro Croce, DINAMA (30 September 2005)..........................136
GTAN/DU/18/30-09-05, Influence of Paper Pulp Technology on Case Study
Generation, prepared by Chemical Engineer Alberto Hernández, MSc. Institute
of Chemical Engineering, Universidad de la República (30 September 2005).......137
GTAN/DU/19/04-11-05, Botnia EIA additional report in connection with
Document GTAN/DA/14/20-10-05 (4 November 2005)........................................138
GTAN/DU/20/04-11-05, Technical Considerations with Regard to Documents
GTAN/DA/7/31-08-05 and GTAN/DA/9/14-09-05 on Botnia (4 November
2005) ........................................................................
.............................................. 139
GTAN/DU/21/07-11-05, Technical Considerations with Regard to Documents
GTAN/DA/4/19-08-05 and GTAN/DA/8/31-08-05 on ENCE (7 November
2005) ........................................................................
.............................................. 140
GTAN/DU/22/07-11-05, Analysis of the Gas Emissions Derived from the
BOTNIA and M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro
Croce, Hydr. & Environm. Engineer Eugenio Lorenzo, DINAMA (7
November 2005) (excerpts)........................................................................
............141
GTAN/DU/23/07-11-05, Analysis of the Solid Waste Derived from the
BOTNIA and M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro
Croce, Hydr. & Environm. Engineer Eugenio Lorenzo, DINAMA (7
November 2005) (excerpts)........................................................................
............142
GTAN/DU/24/07-11-05, Analysis of the Fluid Emissions Derived from the
BOTNIA and M’BOPICUÁ Pulp Mills, prepared by Chemical Engineer Cyro
Croce, Hydr. & Environm. Engineer Eugenio Lorenzo, DINAMA (7
November 2005)........................................................................
.............................143
nd
GTAN/DU/25/21-11-05, Botnia EIA 2 Additional Report in Connection with
Document GTAN/DA/14/20-10-05 (21 November 2005)......................................144
GTAN/DU/26/21-11-05, Reply to Request for Information Submitted by the
Argentine Delegation at the High-Level Technical Group sent in Note No.
2015/05 from the Ministry of Foreign Affairs, International Trade and Culture
(21 November 2005)........................................................................
.......................145
GTAN/DU/27/25-11-05, Emissions and Environmental Quality Monitoring in
Connection with the M’Bopicuá and Botnia Pulp Mills, prepared by DINAMA
(25 November 2005).........................................................................
......................146
- xi -GTAN/DU/28/25-11-05, Environmental Impact Assessment Procedure,
prepared by DINAMA (25 November 2005)..........................................................147
GTAN/DU/30/09-12-05, Additional Report Providing Information on Botnia’s
Production Process in Connection with Document GTAN/DA/15/21-10-2005
(9 December 2005) (excerpts).........................................................................
.......148
GTAN/DU/31/16-12-05, Social and Economic Impact, prepared by DINAMA
(16 December 2005) (excerpts)........................................................................
......149
th
GTAN/DU/32/16-12-05, Clarification of Items Raised during the 6 GTAN
Meeting, prepared by DINAMA (16 December 2005)...........................................150
GTAN/DU/33/21-12-05, Additional Report on the Celulosas de M’Bopicuá
Project in Connection with Documents GTAN/DA/4/19-08-05 and
GTAN/DA/8/14-09-05 (21 December 2005) (excerpts).........................................151
GTAN/DU/34/18-01-06, Effect of the Discharges of the Future Botnia and
M’Bopicuá Pulp Mills on Various Items of Interest, in a Scenario Where the
Load Factor is Not Considered, prepared by DINAMA (18 January 2006). ..........152
Meeting of Water Subgroup of GTAN (27 January 2006) .....................................153
First Report of the Uruguayan Delegation to the GTAN (31 January 2006)..........154
VOLUME VI
TECHNICAL DOCUMENTS
Bylaws of the Argentine National Academy of Engineers, Approved by
Decree of the National Executive Power No. 2347 (11 November 1980)..............155
ENCE Environmental Impact Assessment, Table of Contents (July 2002)............156
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 1
(31 March 2004)........................................................................
.............................157
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 4
(31 March 2004)........................................................................
.............................158
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 5
(31 March 2004)........................................................................
.............................159
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 6
(31 March 2004)........................................................................
.............................160
- xii - VOLUME VII
Additional Report No. 2 of the Botnia Environmental Impact Assessment (2
September 2004)........................................................................
.............................161
Additional Report No. 3 of the Botnia Environmental Impact Assessment
(5 October 2004).........................................................................
............................162
Additional Report No. 5 of the Botnia Environmental Impact Assessment
(12 November 2004).........................................................................
......................163
Annex VIII to Additional Report No. 5 of the Botnia Environmental Impact
Assessment, Studies of Plume Dispersion and Sediment Studies (12 November
2004) ........................................................................
.............................................. 164
Botnia Cellulose Plant in Fray Bentos: Blueprint of the Port Works (report
within Botnia EIA submissions) (December 2004)................................................165
Summary Environmental Report in the Botnia Environmental Impact
Assessment (2 December 2004) ........................................................................
..... 166
Additional Report No. 7 of the Botnia Environmental Impact Assessment (17
January 2005)........................................................................
................................. 167
Forest Stewardship Council Certification for Tile Forestal S.A. (23 August
2005) ........................................................................
.............................................. 168
Forest Stewardship Council Certification for Compañía Forestal Oriental S.A.
(6 January 2006)........................................................................
.............................169
VOLUME VIII
Hatfield Consultants, Report of Expert Panel on the Draft Cumulative Impact
Study for the Uruguay Pulp Mills (27 March 2006)...............................................170
Special Communiqué about the Cellulose Pulp Mills, Uruguayan Engineers
Association (May 2006)........................................................................
................. 171
National Academy of Engineering, Buenos Aires, Argentina, Letter to
President Kirchner and Document on the Cellulose Pulp Mills on the Uruguay
River (12 June 2006).........................................................................
.....................172
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills (September 2006).........................................................................
.................173
- xiii -International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex A (September 2006)........................................................................
..174
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex B (September 2006)........................................................................
..175
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex D (September 2006)........................................................................
..176
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex H (September 2006)........................................................................
..177
Hatfield Consultants, Report of Expert Panel on the Final Cumulative Impact
Study for the Uruguay Pulp Mills (14 October 2006).............................................178
Argentina Defender of the People of the Nation, Special Report on
Reconquista River Basin (9 April 2007).................................................................179
[Intentionally Omitted]........................................................................
...................180
VOLUME IX
PRESS ARTICLES
Cristina Mara Besold, EcoPortal.net, "No One for Contamination in the Paraná
River" (17 May 2001)........................................................................
.....................181
La Nación (Argentina), “Kirchner, Satisfied with His Meeting with Jorge
Battle” (9 October 2003). ........................................................................
...............182
La Nación (Argentina), “Uruguay Promises to Inform the Government about
the Paper Mill” (3 March 2004)........................................................................
......183
El Clarín (Argentina), “Mass Protest in Entre Ríos Against Installation of Pulp
Mills” (1 May 2005)........................................................................
.......................184
Ecoportal.net, "Paraguay Denounces Argentina for its Paper Mill
Contamination" (27 February 2006).......................................................................185
La República, "Unexpected: At a Crucial Time, Argentine Scientists Speak
Out in Favour of the Uruguayan Plants (31 March 2006).......................................186
CEDHA, "Romina Picolotti Named Head of Argentina's Environmental
Secretariat" (27 June 2006)..................................................................
................... 187
- xiv -El Telegrafo, “President of CARU: Argentina Lacks the Political Will to
Control the Quality of the Water in the Uruguay River” (17 August 2006)........187A
Diario El Argentino, “Residents of the Don Pedro District Complain” (25
October 2006)........................................................................
................................. 188
El Tribuno, “There Are Tons of Toxic Wastes in the Uruguay River” (3
December 2006)........................................................................
.............................189
El Diario, "Gualeguaychú is Again a Main Attraction for Tourism at the Start
of the Carnival Celebration" (5 January 2007)....................................................... 190
El Diario, "The Rain Dampened Tourism: Easter Week Did Not Produce the
Expected Results in Gualeguaychú" (8 April 2007)...............................................191
Radio Sudamerica, "Tourism Increase of 6 Percent This Season" (7 May 2007)...192
Misiones Online, "Alto Paraná Continues to Move Forward with Better
Technologies for Cellulose Production" (8 May 2007). .........................................193
Misiones Online, "Government Disagrees with the Fine Imposed by the Nation
on the Piray Cellulose Plant" (9 May 2007)...........................................................194
Ultimas Noticias, "Forestation Does Not Imply Risk to Streams, According to
Experts" (21 May 2007). ........................................................................
................195
MISCELLANEOUS
United Nations General Assembly Resolution 2995 (15 December 1972).............196
Session of General Assembly (6 December 1974) .................................................197
Julio A. Barberis, Shared Natural Resources Among States and International
Law (1979) (excerpts) ........................................................................
.................... 198
Botnia Press Release, “Botnia Investigates Prospects for Starting Pulp
Production in Uruguay” (24 October 2003)............................................................199
Proposed Special Minutes, Final Version (28 April 2004) ....................................200
2005 Environmental Sustainability Index, World Economic Forum......................201
Compliance Advisor Ombudsman, CAO Audit of IFC's and MIGA's Due
Diligence for Two Pulp Mills in Uruguay, Final Report (22 February 2006).........202
- xv -International Finance Corporation, Uruguay Pulp Mills: IFC Action Plan
Based on Findings of Independent Expert Panel (9 May 2006)..............................203
Affidavit of Timo Piilonen, Senior Vice-President for Uruguay Operations of
Botnia and Managing Director of Botnia South America, S.A. (1 June 2006).......204
Award of the “Ad Hoc” Arbitral Tribunal of Mercosur (6 September 2006).........205
International Finance Corporation, Press Release, "IFC and MIGA Board
Approves Orion Pulp Mill in Uruguay, 2,500 Jobs to be Created, No
Environmental Harm" (21 November 2006)...........................................................206
“Fanaquimica is a Guarantee of Quality,” available at
http://www.fanaquimica.com/NuestraEmpresa/Default.aspx (last visited on 6
June 2007)........................................................................
...................................... 207
“Las Camelias: Historical Evolution,” available at
http://www.lascamelias/com.ar (last visited on 29 June 2007)...............................208
“Gualeguaychú Industrial Park,” available at
http://www.pigchu.com.ar/ubicación_parque.htm (last visited on 27 June
2007) ........................................................................
.............................................. 209
“Nuestra PYMES/Textile/Rontaltex,” available at
http://pymesriouruguay.com.ar/pymes (last visited on 6 June 2007)......................210
“Baggio-RPB: The Company,” available at
http://www.baggio.com.ar/english/the company.html (last visited on 29 June
2007) ........................................................................
.............................................. 211
“Union Bat: Small History of a Great Company,” available at
http://unionbat.eurofull.com/shop/otraspaginas.asp?paginanp=12&t=Nuestr…
mpresa (last visited on 6 June 2007).......................................................................212
VOLUME X
EXPERT REPORTS
Evaluation of the Final Cumulative Impact Study for the Botnia S.A.'s
Bleached Kraft Pulp Mill (Fray Bentos, Uruguay) with Respect to Impacts on
Water Quality and Aquatic Resources and with Respect to Comments and
Issues Raised by the Government of Argentina, Dr. Charles A. Menzie
(Exponent, Inc.) (July 2007)........................................................................
.......... 213
- xvi -Hydrologic Analysis for the Proposed Botnia Cellulose Plant on the Uruguay
River, Dr. J. Craig Swanson & Dr. Eduardo A. Yassuda (Applied Science
Associates, Inc.) (June 2007)........................................................................
.......... 214
Available Technologies and Best Environmental Management Practices for
Botnia S.A.'s Bleached Kraft Pulp Mill, Fray Bentos Uruguay, Dr. Thomas L.
Deardorff & Mr. Douglas Charles Pryke (Exponent, Inc.) (8 July 2007)...............215
Comments on the EIA Process, Mr. William Sheate (Collingwood
Environmental Planning) (June 2007)....................................................................216
Sufficiency of EIA and GTAN Information for Determination of
Environmental Impacts - Botnia, S.A., Fray Bentos Uruguay, Mr. Pieter Booth
(Exponent, Inc.) (June 2007)........................................................................
.......... 217
SUPPLEMENTAL DOCUMENTS
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 3
(31 March 2004) (excerpts)........................................................................
............ 218
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 7
(31 March 2004) ........................................................................
............................219
Botnia Environmental Impact Assessment Submitted to DINAMA, Chapter 8
(31 March 2004) (excerpts) .......................................................................
............220
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex E (September 2006) (excerpts).........................................................221
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp
Mills, Annex I (September 2006) (excerpts) .........................................................222
DINAMA Maps of Landfill Location (June 2007).................................................223
Ministry of Industry, Energy and Mining, "Works on the River Uruguay"
(June 2007)........................................................................
..................................... 224
DINAMA Resolution No. 0148/07, Approval of the Wastewater Treatment
System for the Botnia plant (4 July 2007)..............................................................225
"Water: Consumption and Effluents," available
at http://stage.masisa.com/Content.aspx?idioma=2&lang+2&site=&content=9
6&menu=175 (last visited on 5 July 2007).............................................................226
Sworn Declaration of Martín Ponce de León, Undersecretary of the Ministry
of Industry, Energy, and Mining of Uruguay (June 2006)......................................227
- xvii -
Counter-memorial of Uruguay