INTERNATIONAL COURT OF JUSTICE
_________________________________________________________________
CASE CONCERNING PULP MILLS
ON THE RIVER URUGUAY
ARGENTINA
v.
URUGUAY
REJOINDER OF URUGUAY
VOLUME I
_________________________________________________________________
29 JULY 2008 VOLUME I
REJOINDER OF URUGUAY TABLE OF CONTENTS
Page
CHAPTER 1. INTRODUCTION AND SUMMARY OF
ARGUMENT ........................................................................
.....................................1
Section I. Further Observations on Jurisdiction................................................7
Section II. Summary of Argument....................................................................9
Section III. Structure of the Rejoinder ............................................................24
PART I
CHAPTER 2. THE LAW APPLICABLE TO THE
PROCEDURAL ISSUES........................................................................
.................27
Section I. The Nature and Scope of CARU’s Involvement Under
Articles 7-12 ........................................................................
...........................34
A. The Role of CARU ......................................................................34
B. The Timing of Notice to CARU...................................................47
C. The Relevance of the 1997 Watercourse Convention ..................59
D. The Relative Status of Procedural and Substantive
Rights........................................................................
...................67
E. The Issue of Argentina’s Industrial Plants ...................................72
Section II. The Issue of Implementation During Dispute Resolution..............79
A. The Veto Issue and the Consequences of a Disagreement ...........79
B. Implementation of a Project as Distinguished from
“Preparatory Works”..................................................................102
C. The Importance of Environmental Protection............................105
D. The Role of the Court.................................................................109
Conclusion........................................................................
............................113
CHAPTER 3. THE EVIDENCE REGARDING THE
PROCEDURAL ISSUES........................................................................
...............115
Section I. The Evidence Regarding Argentina’s Claim that Uruguay
Violated the 1975 Statute by Failing to Notify CARU and Await Its
Summary Determination Before Authorizing the Botnia and ENCE
Projects ........................................................................
.................................120
A. The GTAN Consultative Process...............................................121
B. The March 2004 Agreement ......................................................132 1. ENCE........................................................................
...........132
2. The Extension to Botnia. .....................................................159
C. The Timing of Notice to CARU.................................................163
Section II. The Evidence Regarding Argentina’s Claim that Uruguay
Violated the 1975 Statute by Implementing the Botnia Project
Before the Court Has Rendered Its Judgment in This Case. .........................180
A. Uruguay Complied with Its Procedural Obligations
During Consultations. ................................................................180
1. Uruguay Participated in Consultations in Good Faith..........180
2. Uruguay Provided More Than Adequate Information.........181
3. Uruguay Engaged Only in Preparatory Works ....................185
B. Uruguay Complied with Its Procedural Obligations
During Dispute Resolution.........................................................188
Conclusion........................................................................
............................191
PART II
CHAPTER 4. THE EVIDENCE REGARDING START-UP
AND OPERATION OF THE BOTNIA PLANT ...................................................197
Introduction........................................................................
...........................199
Section I. Prior to Uruguay’s Authorisation of Operations, the Botnia
Plant Was Subject to Comprehensive Evaluations by Both Uruguay
and the IFC to Ensure It Would Not Harm the Environment........................204
A. The IFC’s Technology Audit for Compliance With BAT..........209
B. Environmental Management Plans.............................................212
1. Management of Hazardous Materials..................................213
2. Emergency Preparedness and Response ..............................215
3. Transportation Management................................................216
4. Conservation........................................................................
218
5. Solid Waste Management....................................................219
6. Social Impact Monitoring....................................................220
C. Pre-Operational Environmental Quality Monitoring..................220
1. Pre-Operational Water Quality Monitoring.........................222
2. Pre-Operational Sediment Monitoring.................................227
3. Pre-Operational Biological Monitoring ...............................229
- ii -Section II. Monitoring Results for the First Six Months of Operation..........231
A. The Post-Operational Monitoring Program................................234
B. The Botnia Plant’s Exceptional Environmental
Performance Has Not Impacted the Uruguay River...................242
1. The Plant Effluent Complies with Applicable
Regulations, Standards and Predictions...............................244
(a) Phosphorus..............................................................246
(i) The Botnia Plant’s Superior
Performance Regarding Phosphorus..............246
(ii) Uruguay’s Efforts to Reduce
Phosphorus in the Uruguay River..................248
(b) Nitrogen ..................................................................253
(c) Biological Oxygen Demand....................................254
(d) Chemical Oxygen Demand .....................................255
(e) Total Suspended Solids...........................................256
(f) AOX........................................................................
256
(g) Dioxins and Furans .................................................257
(h) Metals...................................................................
...257
(i) Acute Toxicity.........................................................259
(j) Flow........................................................................
259
(k) Other Aquatic Parameters.......................................259
(l) Air........................................................................
...260
2. The Botnia Plant Has Not Caused Any Change to
Ambient Water Quality in the Uruguay River.....................261
Section III. Uruguay’s Continuing Commitment to Protect the River ..........265
A. Continued Post-Operational Monitoring....................................265
B. Continued IFC Oversight...........................................................266
C. Uruguay’s Ongoing Regulatory Oversight and
Commitment to Prevent Unacceptable Impacts to the
River ........................................................................
..................267
Conclusion........................................................................
............................268
- iii -CHAPTER 5. THE APPLICABLE LAW REGARDING
ENVIRONMENTAL ISSUES ........................................................................
.......271
Section I. The Risk Prevention Regime Created by the 1975 Statute
Requires Joint and Equitable Measures to Promote the Optimum and
Rational Use of the River........................................................................
......274
Section II. CARU Standards Define the Content of Articles 36 and
41 of the Statute........................................................................
....................290
Section III. General Principles of International Environmental Law
Do Not Alter the Terms of the Statute ..........................................................294
A. Sustainable Utilisation ...............................................................295
B. Equitable and Reasonable Use...................................................300
C. Prevention of Transboundary Damage.......................................301
D. The Precautionary Principle.......................................................304
Section IV. Uruguay Has Carried Out the Required Environmental
Impact Assessment........................................................................
................312
Section V. Uruguay is Not Required to Assess the Suitability of
Alternative Sites........................................................................
....................322
Conclusion........................................................................
............................325
CHAPTER 6. RESPONSE TO ARGENTINA’S TECHNICAL
CRITICISMS.......................................................................
...................................327
Introduction........................................................................
...........................329
Section I. The Evidence Shows that the Botnia Plant Will Not Cause
Eutrophication or Otherwise Harm the Uruguay River.................................330
A. Argentina Cannot Show Any Risk of Increased
Eutrophication in Ñandubaysal Bay From the Operation
of the Botnia Plant......................................................................332
B. Argentina Is the Major Source of Phosphorus in
Ñandubaysal Bay, and Any Problems with Nutrients in
the Bay Cannot Be Attributed to Uruguay or the Botnia
Plant.........................................................................
..................343
Section II. The Evidence Shows that the Botnia Plant Complies with
BAT and Is Among the Best Cellulose Plants in the World..........................347
A. Effluent Treatment Technology.................................................348
B. Emergency Basins......................................................................352
C. Chemical Synthesis....................................................................353
D. Use of Water Resources.............................................................356
- iv - Section III. Argentina’s Criticisms of the Botnia Plant Are
Contradicted by the Facts........................................................................
......359
A. The Uruguay River is Not a “Uniquely Sensitive
Environment”........................................................................
.....359
B. Risk Associated with the Botnia Plant Has Been
Assessed and Minimized............................................................364
C. The Botnia Plant Meets European Union Standards ..................367
D. Uruguay Has Comprehensively Reviewed and Regulated
Emergency Preparation and Management..................................370
E. The Botnia Plant Will Not Cause or Exacerbate
Accumulation or Contamination of Sediments ..........................372
F. Argentina Has Shown No Adverse Impacts to Tourism.............376
Conclusion........................................................................
............................379
CHAPTER 7. REMEDIES........................................................................
.............381
Section I. Dismantling the Botnia Plant Is Not an Appropriate
Remedy for a Procedural Violation of the 1975 Statute................................386
Section II. Dismantling the Botnia Plant Is Not an Appropriate
Remedy for a Substantive Violation of the 1975 Statute in the
Circumstances of This Case.........................................................................
.394
Section III. The Court Should Reject Argentina’s Claims and
Confirm Uruguay’s Right to Operate the Botnia Plant in Compliance
with the 1975 Statute.........................................................................
............401
Submissions........................................................................
.................................... 409
List of Annexes
- v - CHAPTER 1.
INTRODUCTION AND SUMMARY OF ARGUMENT1.1 Pursuant to Order of the Cour t dated 14 September 2007 fixing the
pertinent time limits, Uruguay respectfully submits this Rejoinder in response to
Argentina’s Reply dated 29 January 2008. As provided in Article 49(3) of the Rules
of Court, Uruguay’s Rejoinder will focus on bringing out the legal and factual issues
that still divide the Parties.
1.2 The single largest issue still dividing the Parties is the question of whether
or not the Botnia plant is causing or will cause significant harm to the Uruguay
River. The grounds for dispute, however, have all but disappeared in the time since
Argentina submitted its Reply. The Botnia plant entered operation on 9 November
2007. Thus, more than eight months of real-world data now exist with which to
evaluate the Parties’ predictions. The evidence shows that Uruguay’s predictions
were right and Argentina’s wrong. Independent reports by technical experts confirm
that the plant is performing up to the high environmental standards expected of it,
and that it is not causing any harm to the Uruguay River or its aquatic environment.
Indeed, the scientific evidence shows that the plant is having no measurable impact
whatsoever on the river or the quality of its water.
1.3 On 10 July 2008, the independent experts retained by the International
Finance Corporation (“IFC”) issued thei r report evaluating the plant based on its
operation thus far. According to the IFC’s public statement issued the same day:
The report finds that the mill is performing to the air and water
quality standards projected in the Cumulative Impact Study
[“CIS”] and Environmental Imp act Assessment [“EIA”], as
required by IFC, and well within the limits established by the
- 3 - environmental permits issued by the Uruguayan regulator,
DINAMA . 1
1.4 The text of the 68-page technical report itself is unequivocal. It states:
From this review and to this point in time, all indications are that
the mill is performing to the high environmental standards
predicted in the EIA and CIS, and in compliance with
Uruguayan and IFC standards. Thes e results are also consistent
2
with the performance measures for other modern mills .
Elsewhere, the report states:
• The water of the Río Uruguay is c onsidered to be of high quality
since the concentrations of most indicator parameters are well below
the most restrictive of the applicable Uruguayan and CARU
standards.…
• A comparison of the monitoring data pre- and post-commissioning of
the mill shows that the water qu ality of the Río Uruguay has not
changed as a result of the mill.…
• The water quality between the mill and Fray Bentos is comparable to
the water quality further upstream beyond the influence of the mill,
indicatin3 that the mill has not affected water quality within the Río
Uruguay .
1.5 Uruguay invites the Court to read for itself the full text of the technical
report on the operation of the Botnia plant. It is submitted as Annex R98 and is
located in Volume IV of this Rejoinder. The Court will see that, according to the
independent experts reporting to the IFC, th e plant is operating in a manner that is
1
International Finance Corporation (hereina fter “IFC”) Web Site, Latin America & The
Carribean, “Orion Pulpmill - Uruguay”, available at : http://www.ifc.org/ifcext/lac.nsf/
content/Uruguay_Pulp _Mills (last visited on 11 July 2008). Uruguay Rejoinder (hereinafter
“UR”), Vol. IV, Annex R95.
2
IFC, Orion Pulp Mill, Uruguay Independent Perf ormance Monitoring as Required by the
International Finance Corporation, Vol. IV (Phase 2: Six-Month Environmental Performance
Review) (hereinafter “Environmental Performance Review”) (July 2008), ES.ii. UR, Vol. IV,
Annex R98.
3Ibid., ES.iii.
- 4 -fully compliant with European Union BA T (Best Available Technologies), and its
emissions into the Uruguay River are below -- in most cases far below -- the limits
established for environmentally-safe disc harges by Uruguay (in its environmental
regulations and its permits to Botnia), by CARU (in its anti-pollution regulations and
water quality standards) and by the IFC itself (in its Final CIS of September 2006).
1.6 The experts’ report shows that wa ter quality monitoring data were
collected before operation of the plant began and at regular intervals thereafter. In
all cases, emissions of the following s ubstances were well within the allowable
limits set by Uruguay and CARU , and consistent with the levels predicted in the
IFC’s Final CIS: phosphorus, nitrogen, biological oxygen demand, chemical oxygen
demand, total suspended solids, dioxins and furans, cadmium, nickel, copper,
arsenic, chrome, mercury, lead and zinc.
1.7 The independent experts conclude that there is no reason to believe that
the plant will not continue to operate in the environmentally safe and responsible
manner that has characterized it s performance thus far. If a nything, the experts
forecast, the plant will perform even better in the future. Modern pulp mills, like the
Botnia plant, require an initial start-up period to optimize their performance. It is
remarkable, therefore, that the Botnia plan t has already fulfilled the goals set for it,
even before it has reached its peak performance.
1.8 While Uruguay is pleased by these re sults, and encouraged by the IFC
experts’ confidence in the plant, this does not mean it will be any less vigilant than it
has been so far. As Uruguay discussed in the Counter-Memorial, environmental
protection and sustainable deve lopment are core national principles enshrined in its
- 5 -Constitution 4. Moreover, as the State in whose te rritory the Botnia plant in located,
Uruguay has an obvious interest and responsibility to ensure that the plant continues
to operate to the highest environmental st andards. It will therefore continue
vigorously to monitor all aspects of the plant’s operations, including but not limited
to its emissions into the Uruguay River and its impact, if any, on water quality and
the aquatic environment. Uruguay reiterates that it will not hesitate to use the full
authority available to it unde r its stringent environmental laws and regulations, and
the strict conditions of the permits and licen ces issued to Botnia, to ensure Botnia’s
full compliance with those laws, regulations and conditions.
1.9 What remains in dispute is Argentina’s speculation that the Botnia plant
could cause significant harm to the river and its ecosystem at some point in the
distant future, around 15 years from now according to the Reply. The Counter-
Memorial demonstrated that Argentina’ s fears are groundless and scientifically
unsupportable. This Rejoinder responds to their reformulation in the Reply, and
demonstrates that no matter how Argentina might package them, its attempts to sow
doubt about the future performance of the Botnia plant have no serious scientific
basis or credibility. The independent experts retained by the IFC, as distinguished
from Argentina’s hired consultants, completely refute all of Argentina’s hypotheses.
1.10 This leaves standing only Argentina’s complaint that Uruguay violated the
procedural requirements set forth in Arti cles 7-12 of the 1975 Statute of the River
Uruguay, which require notice, consultation and, if necessary, consultations between
the Parties concerning any project that might affect navigation, the régime of the
4
See Counter-Memorial of Uruguay (hereinafter “UCM”), para. 1.12.
- 6 -river or the quality of its water. Uruguay affirms, as it has from the outset of this
case, that it has fully satisfied the ob ligations incumbent on it under Articles 7-12
with respect to the Botnia plant, as we ll as the ENCE plant (which was never
constructed). Uruguay demonstrated this in the Counter-Memorial. This Rejoinder
will refute Argentina’s continued insistence on Uruguay’s alleged procedural
violations of Articles 7-12 and will dem onstrate again that Uruguay has committed
no such violations and that Argentina’s arguments are entirely without merit.
1.11 The remainder of this Introduction is divided into three sections. Section I
presents further observations by Uruguay on the scope of the Court’s jurisdiction in
this case. Section II provides a chapter-by-chapter summary of the arguments
presented in this Rejoinder. Section III very briefly describes the structure of the
Rejoinder.
Section I.
Further Observations on Jurisdiction
1.12 In Chapter 1 of the Counter-Memorial, Uruguay presented its observations
on the Court’s jurisdiction and showed that it is defined by Article 60 of the 1975
5
Statute . Under Article 60, the Court can resolve “[a]ny dispute concerning the
interpretation or application” of the Statute 6. That is the scope of the Court’s
jurisdiction in this case. While the jurisdiction of the Court includes all matters
covered by the Statute, it does not extend to matters beyond the Statute’s reach.
Thus, the Court plainly has jurisdiction over such matters as pollution and other
5
UCM, para. 1.23.
6
Article 60 also provides for jurisdiction ove r disputes concerning the interpretation and
application of the 1961 Treaty Concerning the B oundary Constituted by the River Uruguay.
Argentina does not, however, state any claims based on that instrument in this case.
- 7 -forms of harm to the Uruguay River itself, to the organisms that live within it, and to
the quality of its waters. But the Court’s jurisdiction under Article 60 does not
extend to such concepts as air pollution, noise pollution or “visual” pollution, since
none of these three subjects is covered by the Statute.
1.13 The response Argentina offers in the Reply is notably muted. Argentina
does not argue that non-aquatic forms of pollution are, in fact, embraced within the
scope of the Statute and thus the Court’s jurisdiction. Neither does it argue more
generally that Uruguay’s analysis is incorrect in any way. All that Argentina argues
is that Uruguay puts “la charrue avant les bŒ ufs” because “[l’]objet de la présent
instante est précisément de déterminer l’objet et la portée des obligations des Parties
7
en vertu du Statut” . In this manner, Argentina sidesteps the question of which
subjects lie within the Court’s jurisdiction and which do not. The failure of the Reply
to address the substance of Uruguay’s argum ent effectively concedes the point that
the Statute, to the extent it addresses pollution, is exclusively concerned with water
pollution. And rightly so. The plain terms of the Statute (which is the Statute on the
River Uruguay, after all) make clear that to the extent it addresses matters of
pollution, only aquatic pollution is included. The Court will find nothing in that
instrument that pertains to air, noise or “visual” pollution, and Argentina points to
nothing of this nature. Accordingly, any claims concerning those non-aquatic forms
of pollution are outside the scope of the Statute and beyond the Court’s jurisdiction.
7Reply of Argentina (hereinafter “AR”), para. 0.17 (“the cart before the horse”, “[t]he subject
of this proceeding is precisely to determine th e subject and scope of the Parties’ obligations
under the Statute”).
- 8 - Section II.
Summary of Argument
1.14 Like the Counter-Memorial, this Rejoinder consists of two Parts and seven
Chapters, followed by Uruguay’s Submissions. Part One , which consists of
Chapters 2 and 3, responds to the portions of the Reply dealing with Argentina’s
claims that Uruguay violated the procedural requiremen ts of the 1975 Statute, and
demonstrates that Uruguay has fully satisfied all of its procedural obligations. Part
Two, which consists of Chapters 4 through 7, responds to the portions of the Reply
addressing Argentina’s claims that Uruguay has violated the Statute’s substantive
obligations pertaining to protection of the Uruguay River and its aquatic
environment, and demonstrates that Uruguay has fulfilled those obligations as well.
1.15 Chapter 2 of Part One follows immediately after this Introduction and sets
forth Uruguay’s response to Chapter 1 of Argentina’s Reply concerning the law
applicable to the procedural issues. The Parties’ written pleadings to date make
clear that there are two core issues lying at the heart of the procedural dispute
between them. They are: (i) whether Uruguay violated Article 7 of the 1975 Statute
by issuing preliminary environmental au thorisations to Botnia and ENCE, and
proceeding directly to State-to-State consultations with Argentina without, as a first
step, sending a formal notice to CARU and awaiting its 30-day summary
determination; and (ii) whether Uruguay violated Article s 8-12 of the Statute by
authorizing the construction and operation of the Botnia plant before receiving the
final judgment of the Court in this case. In Chapter 2, Uruguay will address these
issues by examining the plain text of the Statute, by describing the Parties’ practice
thereunder and, where appropriate, by look ing to pertinent principles of general
- 9 -international law. As the Court will read, the analysis Uruguay initially presented in
the Counter-Memorial stands undiminished by anything in Argentina’s Reply.
1.16 As shown in Chapter 2, nothing in Articles 7-12 of the Statute or in
general international law prevents the Parties from agreeing with each other (as they
did in this case) to dispense with CARU’s preliminary review under Article 7 and to
proceed immediately to direct State-to-State consultations. By proceeding in
precisely this manner -- the manner that was agreed with Argentina -- Uruguay
cannot be faulted, and certainly not by Argentina, for failing to comply with
preliminary procedures that they both agreed to bypass.
1.17 As the Court will read, the purpose of CARU’s initial screening of projects
under Article 7 is to determine in a summary fashion whether a particular project is
one that might impact navigation, the régime of the river or the quality of its waters,
and if the Commission so determines, to invite the Parties to engage in the direct,
State-to-State consultations prescribed in Articles 8-12. In the Reply, Argentina
agrees with Uruguay that this is CARU’s ro le under these provisions of the Statute.
Argentina recognizes explicitly that CARU does not authorize projects, and that its
review of projects under Article 7 is preliminary in nature. While CARU’s
substantive functions under the 1975 Statut e relating to environmental protection
and pollution control are both extensive and critical to the proper management of the
Uruguay River, the Commission’s role in the Articles 7-12 consultative process is,
according to the plain text of the Statute, distinctly more limited. There is thus no
legal or logical impediment to prevent the Parties from agreeing to bypass CARU’s
summary review under Article 7 in favour of proceeding directly to State-to-State
consultations. The Statute’s procedural rules plainly do not constitute jus cogens,
- 10 -and Argentina rightly makes no argument that they do. Thus, the Parties are free to
derogate from the Statute’s procedural steps pursuant to an appropriate agreement
between them, which is what they did here both with respect to the Botnia plant and
the ENCE plant.
1.18 In Chapter 2, Uruguay will also reiter ate a point it first established in the
Counter-Memorial, which Argentina still denies in the Reply: Article 7 does not
require notice to CARU before the initiating State may issue a Preliminary
Environmental Authorisation (“AAP,” per the Spanish initials). The text of Article 7
is silent and therefore ambiguous as to exactly when notice of a planned project must
be given. Using general international law to resolve this ambiguity, the Statute is
most sensibly read to require notice that is “timely,” in the sense that it is given
sufficiently early to allow the remaining procedures stipulated in Articles 7-12 to run
their course before a project is implemented. In fact, the AAPs that Uruguay issued
to Botnia and ENCE required that numerous conditions be satisfied before further
authorisations would be issued to allow even construction, let alone operation, to
begin. Since the consultations required by the Statute were completed before
Uruguay authorized construction of the Botnia plant (and construction of the ENCE
plant was never authorized), Argentina plainly had timely notice of the project.
1.19 In marked contrast with Uruguay’s behaviour, Argentina has repeatedly
authorized the construction and operation of industrial plants on its side of the river
without ever notifying Uruguay or CARU, and without engaging in the consultations
or negotiations required by the 1975 statute. Uruguay presented the pertinent facts
about the scores of such Argentine plants in the Counter-Memorial; significantly, the
Reply makes no effort to dispute them. Rather, Argentina attempts to blunt the force
- 11 -of the point by contending that its own industrial plants pose no threat to the
Uruguay River. The truth is, however, to the contrary. Moreover, recent reports
show that some of these plants have be en sanctioned by Argentine environmental
authorities, and even temporarily shut down, precisely because they are polluting the
river.
1.20 Chapter 2 also addresses Uruguay’ s legal obligations under the 1975
Statute during both the period of State-to -State consultations under Article 12 and
during any subsequent dispute resolution proceedings. Although Argentina’s Reply
argues to the contrary, the fact is that the Statute does not expressly address the
Parties’ obligations during either time period. Argentina points to no specific
language on this point because there is none. Turning again to general international
law -- especially the 1997 UN Convention on the Law of Non-navigational Uses of
International Watercourses -- to fill this l acuna, the Statute is most reasonably read
to prohibit the initiating State from implementing its project until consultations have
ended, but to permit implement of the pr oject thereafter, whether or not dispute
resolution proceedings have been initiated. As explained in Chapter 2, this reading
best achieves the dual objectives of the 1975 Statute: promoting both the equitable
and rational use of the Uruguay River, and th e protection of the river and its aquatic
environment.
1.21 This does not mean that the State initiating a project can present the other
with a fait accompli as the Reply protests. A llowing the initiating State to
implement a project during the time a case is pending before the Court represents
only an interim solution pending the Court’s consideration of the case. The Court at
all times retains the power both (i) to indicate provisional measures prohibiting
- 12 -construction or operation of the project in the event of an urgent threat of irreparable
harm, and (ii) to order the dismantling of the project in its judgment on the merits.
The Court thus has full power to prevent a fait accompli from occurring.
1.22 In such circumstances, there is no logical argument for interpreting the
Statute to prohibit project implementation while the case is pending in the Court. To
the contrary, such an interpretation would effectively give each State a de facto veto
over the economic development projects of the other, whether or not they are
environmentally sustainable. Simply by filing an Application in this Court, one State
would be able to frustrate the projects of the other. Few investors would be willing
to tie up their capital for the three-to-five years it ordinarily takes for a case to
proceed from Application to Judgment. Even Argentina agrees that the Statute does
not allow one State to veto the economic development projects of the other. Yet,
that is precisely the power Argentina claims for itself when it argues that merely by
initiating litigation in the Court it can bring implementation of the Botnia project to a
halt.
1.23 In Chapter 3 of Part One , Uruguay responds to the Reply’s factual
arguments relating to the procedural issues in this case. As in Chapter 2, Uruguay
will again focus its presentation through the lens of the two core procedural issues
still in dispute; namely, (i) whether the Parties in fact agreed to dispense with
CARU’s 30-day summary determinations fo r the Botnia and ENCE projects, and
instead to proceed directly to State-to-S tate consultations; and (ii) whether Uruguay
complied with its obligations concerni ng implementation of the project during
consultations and dispute resolution.
- 13 -1.24 Uruguay will first show that, Argen tina’s arguments to the contrary
notwithstanding, the Parties agreed to address the issues presented by the ENCE and
Botnia plants at a State-to-State level rather than submit them to CARU for
preliminary review under Article 7. Indeed, in each case it was Argentina that
sought to have the project handled directly at a bilateral level rather than through
CARU. In October 2003, for example, Argentina solicited and r eceived information
concerning the ENCE project directly from Uruguay at a time when -- in Argentina’s
words -- CARU was “paralyzed”. The information provided by Uruguay was
reviewed by Argentina’s technical advisors, who pronounced the plant
environmentally sound. On this basis, Argentina and Uruguay expressly agreed in
March 2004 that the plant could and would be built, subject to subsequent water
quality monitoring by CARU to assure co mpliance with CARU’s water quality and
anti-pollution regulations. Thus, the 2004 Annual Report to the Congress on the
State of the Nation, submitted by the Office of Argentina’s President, stated that
“both countries signed a bilateral agreemen t which put an end to the controversy
over the pulp mill installation at Fray Bentos”.
1.25 Similarly, in May 2005, Argentina’s then Minister of Foreign Affairs,
Rafael Bielsa, sent a letter to his Uruguayan counterpart, Reinaldo Gargano,
explicitly requesting direct negotiations by the two States outside the ambit of
CARU, which Argentina considered to be at an “impasse” at the time. Uruguay
agreed to Argentina’s invitation and, under the auspices of what was known as the
“High-Level Technical Group” (“GTAN”, pe r the Spanish initials), the Parties
proceeded to engage in the direct consultations envisioned by the Statute. Thus, in
both cases it was at Argentina’s initiative that the Parties agreed to dispense with
- 14 -CARU’s preliminary review under Article 7 and proceed directly to State-to-State
consultations. The fact that no such revi ews were made by CARU therefore cannot
constitute the basis for a claim against Uruguay.
1.26 Chapter 3 will also demonstrate that Uruguay complied with its procedural
obligations during the GTAN consultations, as it has during the pendancy of this
case before the Court. The ENCE project as initially conceived was abandoned in
September 2006 before any implementati on took place. Implementation of the
Botnia project did not occur until after the GTAN consultations had run their course.
To be sure, some preparatory work (like ground clearing and the construction of a
cement plant) continued as consultations were in progress, but such preparatory
work is not prohibited by the 1975 Stat ute and is entirely permissible under
international law. Actual construction of the Botnia plant itself was not authorized
until after consultations with Argentina had ended. Because neither the Statute nor
general international law prohibit implemen tation of a project during judicial or
other dispute resolution proceedings, Ur uguay has not violated its procedural
obligations under the 1975 Statute by permitting the construction or operation of the
Botnia plant during these proceedings.
1.27 Part Two of this Rejoinder begins with Chapter 4 and continues through
Chapter 7 which, taken together, refute the Reply’s efforts to show that Uruguay has
not complied or is not complying with its substantive oblig ations under the 1975
Statute to protect the Uruguay River and its aquatic environment. Chapter 4 of Part
Two demonstrates that Uruguay’s and the IFC’s prediction that the plant “will cause
no harm to the environment” has been fully realized by its actual performance.
Proven false are Argentina’s claims to the contrary in its Application, its Memorial
- 15 -and its Reply. Chapter 4 demonstrates that , as part of their continuing review, the
independent experts retained by the IFC confirmed in November 2007, prior to start-
up of the plant, that it was subject to “extremely comprehensive” monitoring
programs, that Botnia was “well-positioned from an organisational aspect to meet its
operational objectives including its environm ental management goals”, and that the
plant would use “[m]odern process technol ogies” which would make it “perform
with low emission and world-leading environmental performance”. The Chapter
shows that the Botnia plant’s performance not only met these high expectations, it
exceeded them. As the IFC’s technical experts concluded after an exhaustive post-
operational review, “the mill is performing to the high environmental standards
predicted in the EIA and CIS, and in compliance with Uruguayan and IFC
standards” 8. As a result, the Botnia plant’s lack of environmental impact is firmly
established. In the words of the IFC’s independent expert s: “comparison of
monitoring data pre-and post-start-up shows th at the water quality characteristics of
the Rio Uruguay have not changed as a result of the discharge of mill effluent” . 9
1.28 Section 1 of Chapter 4 describes the comprehensive pre-operational
measures Uruguay, Botnia and the IFC adopted to ensure that the plant is
environmentally sustainable. For Uruguay’s part, these include, among other things,
requiring Botnia to prepare acceptable environmental management and contingency
plans, as well as to continue comprehens ive monitoring of the river’s water quality,
sediments and aquatic life. Proceeding simultaneously, the IFC verified through
8Environmental Performance Review, op. cit., p. ES.ii.
9Ibid., p. 4.3.
- 16 -independent expert evaluations that the plant was in compliance with BAT and that
it would not harm the environment.
1.29 Section 2 of Chapter 4 shows that the Botnia plant has not caused any
environmental harm. It summarizes the plan t’s operational performance to date. It
shows that the plant has satisfied each and every regulatory requirement, whether
imposed by Uruguay or CARU; that it has operated in accordance with the IFC’s
projections in the Final CIS; and that it has caused no harm to the Uruguay River. It
shows that this exceptional performance is all the more remarkable given that
modern pulp mills require a start-up period to optimise their performance. Section 2
of Chapter 4 shows that, with respect to phosphorous discharges in particular --
about which Argentina focuses most of its attention in the Reply -- the plant’s
performance has been outstanding; emissi ons have fully complied with Uruguayan
law (CARU does not regulate phosphorous em issions, nor does Argentina) and the
forecasts of the Final CIS. This section of Chapter 4 further demonstrates the
significant steps Uruguay has taken to re duce the emission of phosphorus into the
river, including treatment of the Fray Bentos municipal sewage in Botnia’s
environmentally friendly wastewater treatment facility; improvements to the sewage
treatment in other Uruguayan munici palities through World Bank-financed
infrastructure projects; and institution of a far-reaching program to reduce non-point
discharges of phosphorus from Uruguayan s ources into the Uruguay River. These
measures will more than offset the rela tively insignificant amount of phosphorus
generated by the Botnia plant which, as demonstrated, has had no impact on water
quality or other features of the aquatic environment.
- 17 -1.30 Section 3 of Chapter 4 shows why the Court can have full confidence that
the Botnia plant will continue to exhibit exemplary environmental performance. It
reaffirms that Uruguay has promulgated a comprehensive regulatory regime that
both requires the continuous collection of environmental data and gives the
competent Uruguayan authorities the power to enforce compliance. Thus, should
any adverse impacts unexpectedly o ccur, Uruguay can and will respond
expeditiously. Further, the IFC is equally committed to assuring the
environmentally sustainable operation of the Botnia plant and has mandated ongoing
independent performance evaluations, incl uding two additional formal reviews
through the end of 2009.
1.31 Chapter 5 demonstrates that Uruguay has fully complied with the
applicable law in relation to the environmental issues in dispute. The Chapter shows
that Argentina has fundamentally misconstr ued the substantive obligations imposed
by the 1975 Statute. Contrary to Argentina’ s assertions, the purpose of Article 36 is
to establish the joint responsibility of the Parties, acting through CARU, for
coordinating the measures necessary to avoid changes to the Uruguay River’s
ecological balance. Article 36, by itself, does not prohibit emissions or anything
else. Rather, the substantive content of Article 36 is defined by the CARU standards
that the Parties have bilaterally adopted through the Commission. Argentina is
equally wrong in its view of Article 41. That provision is correctly understood as
creating an obligation of due diligence for the adoption of appropriate rules and
measures to prevent contamination of the Uruguay River and its aquatic
environment. Uruguay has unquestionably adopted such rules and measures, and
thereby fulfilled its obligations under that Article. It has done far more in this regard
- 18 -than Argentina, which im poses no limits on phosphorus discharges by Argentine
sources into the Uruguay River or its tribut aries. Finally, Chapter 5 demonstrates
that Argentina’s case is aided neither by the Convention on Biological Diversity, the
RAMSAR Convention on International Wetla nds, or the Convention on Persistent
Organic Pollutants; nor by the general principles of international law that it cites,
including those of sustainable utilisation, equitable and reasonable use, prevention of
transboundary damage, and the precautionary principle. In fact, as shown in Chapter
5, Uruguay readily accepts the application of all these conventions and principles to
the present dispute, and has fully complied with each and every one of them.
1.32 Chapter 6 refutes the technical allegations raised by Argentina’s hired
experts that are not addressed in earlier parts of the Rejoinder. Section 1 of Chapter
6 demonstrates that Argentina’s only attempt to show likely environmental harm -- a
report by two Argentine government employees that purports to predict
eutrophication (i.e., algae growth caused by the presence of too much phosphorous
or nitrogen) in Ñandubaysal Bay beginni ng in 2023 -- is so riddled with basic
scientific errors as to be useless. Among other obvious problems, the report assumes
the river flows backwards 100% of the time. It also assumes, contrary to the laws of
physics, that any phosphorus from the Botnia plant that flows into the bay is trapped
there forever, instead of flowing out with the current of the river, and it completely
ignores the much greater amount of phosphorus that enters the bay from Argentina.
Indeed, when fundamental errors like these are corrected, the model presented in
Argentina’s Reply only confirms that the Botnia plant will not cause any of the
impacts Argentina predicts.
- 19 -1.33 Chapter 6 further shows that it is Argentina, not Uruguay (and certainly
not Botnia) that is responsible for phosphor ous entering Ñandubaysal Bay. Most of
Argentina’s contribution comes from the Gu aleguaychú River, which feeds into the
bay. Indeed, the models presented by Ar gentina’s experts, when their fundamental
errors are corrected, demonstrate that the contribution of phosphorus to the bay from
Argentina is over 3,000 times the contri bution of phosphorus from Botnia. Yet,
Argentina (unlike Uruguay) has no laws or regulations that limit in any way its
citizens’ discharges of phosphorous into the Uruguay River or any of its tributaries --
a salient fact that Uruguay pointed out in the Counter-Memorial and Argentina did
not contest. Argentina’s industrial and agricultural enterprises, and its municipal
sewage facilities, are free to dump as much phosphorous into the river as they like --
and they do. This fact, which Argentin a does not dispute, raises doubts about the
seriousness of Argentina’s stated concerns regarding the phosphorous discharges
from the Botnia plant. If Argentina is truly concerned about phosphorus in
Ñandubaysal Bay, it, not Uruguay or Botnia, holds the key to a solution, by reducing
phosphorous discharges from Argentine sources.
1.34 Section 2 of Chapter 6 rebuts the allega tions in Argentina’s Reply that the
Botnia plant employs anything other than stat e-of-the-art technology or fails fully to
satisfy the European Union BAT standard s. Uruguay makes this showing with
respect to the plant’s effluent treatment technology, emergency basins and chemical
synthesis facilities, as well as its use of water resources. The final section of Chapter
6 refutes the remaining technical arguments presented in the Reply. It shows that
Uruguay has comprehensively assessed all lik ely risks associated with the Botnia
- 20 -plant, determined that the risks are minimal and taken all reasonable measures to
ensure that the plant will not cause unacceptable harm to the Uruguay River.
1.35 Chapter 7 responds to Argentina’s arguments on the subject of remedies.
It shows that the primary remedy Argentina seeks -- an order compelling the
dismantling of the Botnia plant -- is not warranted under any conceivable view of the
case. Argentina’s argument for the dismantling of the plant is predicated on what
10
Argentina contends is the “lien intrinsèque” between the 1975 Statute’s procedural
and substantive rules. According to Argentina, “[s]ans le respect des obligations
procédurales, il ne peut point étre affi rmé qu’un État a objectivement mis en Œuvre
ses obligations substantielles” . Argentina’s motive in insisting on this so-called
“strict link” is obvious: knowing it does not have a viable substantive case
demonstrating actual or likely harm to the Uruguay River or its aquatic environment,
Argentina constructs an argument that even a purely technical procedural violation
warrants the remedy of restitutio in integrum in the form of dismantlement of the
plant. But, of course, Argentina’s “stric t link” argument is fallacious; procedural
and substantive compliance are distinct issues. And it is clear that the remedy for a
procedural violation, like the remedy for a substantive violation, must be
commensurate with (and not disproportionate to) the nature of the particular
violation.
1.36 The remedy of dismantlement would plainly be incons istent with the
principle of proportionality pursuant to which the nominal benefits of the remedy
10AR, para. 1.4 (“strict link”).
11AR, para. 1.28 (“[a]bsent respect for procedural obligations, it cannot be firmly stated that a
nation has objectively implemented its substantive obligations”).
- 21 -must be weighed against the burdens imposed. Here, there is no question that
dismantling the plant would be grossly disproportionate in the sense just stated. The
benefits to Uruguay associated with the Bo tnia plant are enormous; it is expected to
generate over 8,000 new jobs and contri bute more that US$250 million to the
Uruguay economy. It would be unreasonable to deny Uruguay the benefits of such
economic development absent proof of actual or likely harm to the Uruguay River.
Put simply, if the development is sustai nable, there is no logical reason, and
certainly nothing in the 1975 Statute, to prev ent it. Argentina’s nominal interest in
securing redress for an alleged procedural violation (assuming quod non one had
occurred) can be more than adequately addressed by the granting of satisfaction; i.e.,
declaratory relief. As the Court just recently held in the Case Concerning Certain
Questions of Mutual Assistance in Criminal Matters (Djibouti v. France) , a finding
by the Court that a State has violated its treaty obligations itself “constitutes
adequate satisfaction” 1. In any event, the discussion of remedies for procedural
violations is purely acad emic since, as shown in Chapters 2 and 3, Uruguay
committed no procedural violations of the 1975 Statute.
1.37 Chapter 7 will also show that the remedy of dismantling the Botnia plant is
inappropriate for any substantive violation of the Statute that hypothetically might
occur in the future. It is telling that Argentina makes no argument that the plant is
currently causing such harm to the river su ch that it must be shut down. Argentina
makes no such argument because none can be made, given the undeniably strong
environmental performance of the plant, recently confirmed by the IFC in its 10 July
12
Case Concerning Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v.
France) (Judgment) (4 June 2008), para. 204.
- 22 -2008 report concerning operations to date. Instead, Argentina argues that the plant
must be shut down to exclude the risk of future harm to the river. As Uruguay will
demonstrate, this argument fails on at least three separate grounds. First, Argentina
has failed to establish that there is any likelihood that the Botnia plant will ever harm
the river, at any time. Second, even if, arguendo, some such risk were demonstrated,
there are other ways to mitigate a future risk to the river short of shutting the plant
down. Any deterioration in the plant’s current strong performance will rapidly be
detected by Uruguay’s intensive monitori ng of the river. In the highly unlikely
event that unacceptable impacts occur, Uruguay can and will take prompt action and
order all necessary corrective action. And third, as stated above, account must again
be taken of the principle of proportionality, which, where the burden on Uruguay
associated with dismantling the plant would be disproportionate to any remote
benefit that might theoretically accrue to Argentina, militates strongly against such
an extreme remedy. For all these reasons, and even assuming against all the
evidence that any violations warranting a re medy of any kind have occurred in this
case, the remedy Argentina seeks is entirely unwarranted.
1.38 In its Submissions, which conclude this Rejoin der, Uruguay asks that the
Court reject all of Argentina’s claims, and affirm Uruguay’s right to continue
operating the Botnia plant in compliance with the 1975 Statute. Uruguay seeks such
an affirmation from the Court to leave no room for doubt as to the respective rights
and obligations of the Parties on an ongoi ng basis and to avoid future disputes
between them.
- 23 - Section III.
Structure of the Rejoinder
1.39 Uruguay’s Rejoinder consists of four volumes. Volume I contains the
main text of the Rejoinder. Volumes II through IV contain supporting materials
arranged in the following order: Govern ment Documents (Uruguay); Government
Documents (Argentina); CARU Documents; Technical Documents; Press Articles;
Miscellaneous; Expert Reports; and Supplemental Documents.
1.40 The main text of the Rejoinder consists of seven Chapters divided into two
parts. Part One begins immediately following this Introduction and addresses
Argentina’s allegations that Uruguay did not comply with its procedural obligations
under the 1975 Statute. Chapters 2 and 3 together form the body of Part One. Part
Two responds to Argentina’s allegations that Uruguay has not complied, and is not
complying, with its substa ntive obligations to protec t the Uruguay River and its
aquatic environment under the 1975 Statute, and is comprised of Chapters 4 through
7. Uruguay’s Submissions are included following Chapter 7.
1.41 The Chapter-by-Chapter outline of this Rejoinder is as follows:
Chapter 1 Introduction
Chapter 2 The Law Applicable to the Procedural Issues
Chapter 3 The Evidence Concerning the Procedural Issues
Chapter4 The Evidence Regarding Start-up and Operation
of the Botnia Plant
Chapter 5 The Law Applicable to the Environmental Issues
Chapter 6 Response to Argentina’s Technical Criticisms
Chapter 7 The Question of Remedies
Submissions.
- 24 -PART I CHAPTER 2.
THE LAW APPLICABLE TO THE PROCEDURAL ISSUES2.1 The purpose of this Chapter is to respond to the arguments concerning the
law applicable to the procedural issues presented in Chapter 1 of Argentina’s Reply.
As Uruguay will show in the pages to follo w, its analysis of the provisions of the
1975 Statute in Chapter 2 of the Counter-M emorial stands undiminished by any of
the arguments advanced in the Reply. Indeed, if anything, Argentina’s most recent
pleading only underscores the soundness of Uruguay’s prior presentation.
2.2 In its Counter-Memorial, Uruguay showed that:
• The object and purpose of the 1975 Stat13e is the sustainable
development of the Uruguay River ;
• The Statute does not give either Pa rty a veto over the projects of the
other 14;
• Instead, the Statute creates only a system of prior notice, information
sharing and consultation ; 15
• The Statute’s procedural rules exist to help assure compliance with its
substantive ob16gations concerni ng the protection of the aquatic
environment ; and
• Each of the Parties is obliged to accept the other’s projects when the y
do not cause significant harm to navigation, the régime of the river, or
the quality of its waters .7
Argentina’s Reply admits the truth of each of these points. No dispute remains as to
any of them.
13UCM, para. 2.29.
14UCM, paras. 2.110-2.165.
15
UCM, paras. 2.110-2.165.
16
UCM, paras. 2.45-2.47.
17
UCM, paras. 2.102-2.105.
- 29 -2.3 However, at the heart of this case there continue to be two fundamental
disagreements between the Parties concerni ng the precise nature of the procedural
rights and obligations the 1975 Statute does (and does not) create. All of the other
disputed issues concerning the Parties’ procedural rights and obligations derive from
these two. They are: (i) whether CARU’s involvement in the process set forth in
Articles 7-12 is indispensable, or whether the Parties are free to agree to engage in
direct bilateral consultations over plan ned projects that might affect the Uruguay
River; and (ii) whether, following direct consultations between the Parties, the
initiating State may implement a planned project while dispute resolution is in
progress.
2.4 The Parties are in agreement that -- in Argentina’s words -- “le Statut de
1975 met en place un régime complet d’oblig ations procédurales consistant en
18
l’échange d’informations, la notification et la consultation” . They also agree that
the Statute’s procedures are -- again, in Argentina’s words -- “en effet conçu de
manière à éviter les blocages préjudiciables à une exploitation rationnelle et
respectueuse des droits de l’autre Patie de la resource partagée que constitue le
19
fleuve Uruguay” , and to maintain a “l’équilibre . . . entre les intérêts des deux
Parties” . The end goal of all this, too, is a matter of agreement between the Parties.
As stated, Uruguay and Argentina both re cognize that the ultim ate aim of both the
18AR, para. 1.31 (“the 1975 Statute puts into place a complete system of procedural obligations
consisting of the exchange of information, notification and consultation.”).
19AR, para. 1.119 (“in fact designed to avoid harmful blockages of a rational and respectful
exploitation of the rights of the other party to the shared resource that constitutes the Uruguay
River”).
20AR, para. 1.120 (“balance . . . between the interests of the two Parties.”).
- 30 -procedural and substantive provisions of the 1975 Statute is the sustainable
21
development of the Uruguay River .
2.5 Where the Parties disagree, and disa gree substantially, is on the question
of whether the procedures set forth in Articles 7-12 constitute a set of shackles from
which no derogation is permitted, even pur suant to the express agreement of the
Parties. Argentina, for its part, argues that notice of a planned project to CARU
must in all cases be given before the initiating State may issue even a preliminary,
contingent authorisation that itself permits no actual activities. It argues further that
in the absence of such a notification, the Statute’s procedural rules have been so
irretrievably violated that nothing that comes afterwards can possibly remedy the
situation. In making these arguments, Argentina insists that CARU has a mandatory
role in the Articles 7-12 process with which the Parties may not dispense.
2.6 Where the Parties also disagree, and with equal intensity, is on the
question of whether or not the initiating State may implement a project after direct
consultations under the Statute have ended and dispute resolution proceedings have
been initiated. Relying on what it perceives to be an implication from what Article 9
does not say, Argentina argues that an initiating State is obligated to cease and desist
from all activity in furtherance of a project throughout the several-year period
leading to the Court’s final judgment on th e merits. Argentina further argues that
when a Party violates a procedural duty, anything other than an order compelling it
to tear down the project (regardless of the impact on the Uruguay River or the
aquatic environment) constitutes an encouragement of further violations.
21
See UCM, paras. 1.26 & 2.29; AR, para. 1.48.
- 31 -2.7 Uruguay will respond to and refute each of Argentina’s arguments in this
Chapter. In Section I, Uruguay will address Argentina’s arguments concerning
CARU’s involvement in the procedures set out in Articles 7-12 of the Statute and
show:
• CARU’s substantive functions under the 1975 Statute are both
extensive and critical to the proper management and protection of the
Uruguay River. Yet, according to the Statute’s plain text, the
Commission’s role in the procedural mechanisms created by Articles
7-12 is limited. As stated in the Statute, the Commission conducts
only a preliminary tec hnical review of a project for purposes of
determining whether or not direct consultations between the Parties
are necessary. Once that preliminary review is complete, the
Commission’s role is essentially over, except to serve as an
intermediary of communications between the Parties;
• The Statute does not require notice to CARU before the initiating
State may issue even a preliminary, contingent authorisation. What it
requires is notice that is “timely” in the sense that it is given in
sufficient time to allow the consultations between the Parties
stipulated in Articles 7-12 to run their course before a project is
implemented; and
• There is no reason in the Statute, or in logic, that the Parties may not
agree to skip CARU’s preliminary review and proceed to direct
consultations at any moment they consider appropriate.
In Section I, Uruguay will also (i) disp rove Argentina’s argument that Uruguay has
ostensibly set up a “hierarchy of rights” within the Statute; and (ii) reiterate the
relevance of a subject the Reply tries very hard to avoid: the scores of contaminating
industrial plants Argentina has built on its own side of the Uruguay River without
ever -- not once -- notifying CARU or Urugua y, let alone consulting with Uruguay
about them.
2.8 In Section II of this Chapter, Urugua y will rebut Argentina’s arguments
about the Parties’ duties during dispute resolu tion. In particular , it will establish
that:
- 32 - • Argentina’s reading is tantamount to conferring a veto right on it, a
right which has no basis in the 1975 Statute or in general international
law;
• Subject to the Court’s power both to indicate provisional measures in
the event of an urgent threat of irreparable harm, and to order the
dismantling of a project in its judgment on the merits, the initiating
State is, as an interim solution, permitted to implement a project after
consultations have ended but befo re dispute resolution proceedings
have run their course; and
• Absent a finding by the Court that a project causes significant harm to
navigation, the régime of the river or the quality of its water, there is
no cause to order the modification or dismantling of a project, even if
a procedural violation has occurred.
Uruguay will also refute Argentina’s contention that Uruguay belittles the
importance of environmenta l protection. To the contrary, it is Uruguay, not
Argentina, that has been most protectiv e of the Uruguay River and most supportive
of CARU.
* * *
2.9 Uruguay is mindful of the fact that the Court has already been presented
with some 316 pages of argumentation c oncerning the nature of the procedural
obligations created by Articles 7-12 of the 1975 Statute. It will therefore not attempt
to respond to each and every one of the points raised in Chapter 1 of Argentina’s
Reply. Instead, Uruguay will focus on the ke y issues that continue to separate the
Parties. In so doing, there will inevitably be some points stated in the Reply that are
not addressed in this Rejoinder. This should not, however, be taken as an admission
of the validity of Argentina’s arguments in any respect. To the contrary, Uruguay
stands by the analysis presented in Chapter 2 of the Counter-Memorial in its entirety.
- 33 - Section I.
The Nature and Scope of CARU’s Involvement Under Articles 7-12
A. THE R OLE OF CARU
2.10 Uruguay devoted an entire section of the Counter-Memorial to elucidating
the powers and functions of CARU 2. As described there, the Commission’s
functions fall essentially into five categories: (i) establishing regulations concerning
pollution prevention, the conservation of liv ing resources, navigation, pilotage, and
the installation of pipelines; (ii) fixing the limits on fish catches; (iii) facilitating co-
ordination between the Parties; (iv) facilitating the exchange of information; and (v)
serving as an intermediary for communications during consultations between the
23
Parties . CARU’s functions are set forth in Ar ticle 56. According to that Article,
“[t]he Commission shall perform the following functions”:
• Draw up rules governing the safety of navigation, pilotage, the
prevention of pollution and the preservation of natural resources
(Article 56(a));
• Co-ordinate joint scientific studies (Article 56(b));
• Establish maximum fish catches (Article 56(c));
• Co-ordinate joint law enforcement activities (Article 56(d));
• Co-ordinate the mechanisms for search and rescue operations (Article
56(e), (f) and (g));
• Co-ordinate buoying and dredging (Article 56(h));
• Establish the legal and administrative régime for bi-national works
(Article 56(i));
22UCM, paras. 2.188-2.205.
23UCM, para. 2.189.
- 34 - • Publish and update the official map of the river (Article 56(j));
• Transmit communications between the Parties in accordance with the
Statute (Article 56(k)); and
• Perform such other tasks as the Parties may agree to assign to it
(Article 56(l)) .
2.11 The Counter-Memorial also quoted the words of Dr. Julio Barberis,
Argentina’s leading expert on the Statute, at a 1987 CARU-sponsored “Technical
Legal Symposium” in which he descri bed the Commission’s f unctions at some
length 2. Uruguay will not repeat Dr. Barberis’ observations here, but invites the
Court to review his analysis at paragraph 2.200 of the Counter-Memorial. As the
Court will read, Dr. Barberis precisely echoed Uruguay’s observations about the
scope of CARU’s functions. Not surp risingly, Argentina’s Reply nowhere
challenges the words of its own leading expert on the Statute.
2.12 Notwithstanding these undeniably broad and critical competencies, one
power CARU distinctly does not have is the power to approve or reject projects
planned by either of the Parties. Although Argentina’s Memorial rather laboriously
attempted to claim such a power for the Commission, the Court can readily see that
no such function is identified in the text of Article 56 or anywhere else in the Statute.
Nor did Dr. Barberis claim the Commission had that role, either at the 1987
symposium just mentioned or at any other ti me. Relying on the te xt of the Statute,
the provisions of the CARU Digest and th e Parties’ consistent practice under the
24
Statute of the River Uruguay (hereinafter “1975 Statute”) , Art. 56 (26 February 1975).
UCM, Vol. II, Annex 4.
25
UCM, para. 2.200, citing CARU Technical-Legal Sym posium (17-18 September 1987).
UCM, Vol. IV, Annex 72.
- 35 -Statute, the Counter-Memorial conclusive ly established that the Commission does
not have the competence to approve or reject projects as the Memorial had claimed.
2.13 As it is on other issues, the response Argentina offers in the Reply is
notably contradictory. In Chapter 1, Arge ntina directly admits that CARU does not
approve or reject projects. It states:
Le leitmotiv du contre-mémoire à cet égard consiste à affirmer
que ‘CARU does not approve or reject projects’, ce que
l’Uruguay répète pratiquement á chaque paragraphe de26ette
section. Bien inutilement: l’Argentine en est d’accord!
2.14 Having admitted this in Chapter 1, however, Argentina then proceeds to
argue exactly the opposite in Chapter 2. It appears that the two Chapters were
written by different authors who failed to harmonize their positions. If the “leitmotiv
of the Counter-Memorial” is as Argentina st ates, the Reply’s theme song, at least in
Chapter 2, is that CARU does have the power to decide whether or not a project may
go forward. Indeed, an entire section of the argument in Chapter 2 appears
underneath the heading “L’Uruguay N’A Pas Attendu la Décision de la CARU
Avant de Délivrer les Autorisations de Construction Des Usines, Comme Il En Avait
L’Obligation” 27. In the text that follows, the Reply then directly challenges
Uruguay’s insistence “sur son argument sel on lequel la CARU n’a aucune capacité
pour autoriser les projects, qui échoit uniquement aux parties” , and argues that it is,
26AR, para. 1.158 (“The leitmotiv of the Counter-Memorial in th is regard consists of the
statement that the ‘CARU does not approve or reject projects’, which Uruguay repeats
practically in each paragraph of this section. Indeed unnecessarily: Argentina is in
agreement!”) (emphasis added).
27
AR, argument heading Chap. 2, Sec. I (C). (“Uruguay Did Not Wait for CARU’s Decision
Before Issuing the Plant Construction Authorisations, As Was Its Obligation to Do”).
28
AR, para. 2.44 (“on its argument according to which CARU has no standing to authorize
projects, since only the parties have standing”).
- 36 -in fact, up to CARU to “decide” or “d etermine” whether or not a project can go
forward 29. This refrain echoes throughout the Chapter 30. Indeed, Argentina even
invokes this Court’s case law concerning the scope of the term “decision” in the
context of UN Security Council resolutions in order to buttress its argument about
CARU’s decision-making role . 31
2.15 The first thing to be said about thes e arguments, of course, is that they
have been expressly refuted by Argentina itself. As much as the author(s) of
Chapter 2 might disagree with the author(s) of Chapter 1, Argentina cannot
manufacture an issue by contradicting itself. It has admitted that CARU does not
approve or reject projects and must be held to that admission.
2.16 Argentina’s contradictory argument that CARU has a decision-making
role is meritless in any event. The oste nsible textual basis for it is Article 7,
paragraph 1, which provides that when a Party plans a work that might affect
navigation, the régime of the river or the quality of its waters, “it shall notify the
Commission, which shall determine on a preliminary basis and within a maximum
period of 30 days whether the plan might cause significant damage to the other
32
Party” . Paragraph 2 of the same Article then states: “If the Commission finds this
to be the case, or if a decision cannot be reached in that regard, the Party concerned
33
shall notify the other Party of the plan through the said Commission.”
29
See AR, para. 2.45.
30
See, e.g., AR, paras. 2.47 & 2.49.
31
AR, para. 2.46.
32
1975 Statute, op cit., Art. 7, para. 1 (emphasis added). UCM, Vol. II, Annex 4.
33
Ibid., Art. 7, para. 2.
- 37 -2.17 The Reply seizes on the words “deter mine” and “decision” to support its
argument about CARU’s power. Its effort to rip the terms out of the context in
which they appear is inconsistent with the most basic tenets of treaty interpretation.
Under Article 31(1) of the 1969 Vienna Convention on the Law of Treaties, a “treaty
shall be interpreted in good faith in accordance with the ordinary meaning to be
given to the terms of the treaty in their context and in the light of their object and
34
purpose” . Reading Article 7 in context, it is clear that the isolated words Argentina
relies on are not meant to confer on the Commission the power to authorize or reject
projects. Consistent with the largely technical nature of its functions generally, what
CARU is called upon to do is perform an initial screening of the proposed project for
the limited purpose of ascertaining whether or not it “might” cause significant
damage, and thus needs to be brought to the attention of the non-initiating State itself
(rather than just its delegation to CARU).
2.18 This understanding emerges unmistakably from a consideration of the text
of Article 7 as a whole. The Commission is given what Argentina itself calls as “le
35
délai très bref de 30 jour” to determine “on a prelimin ary basis” whether a project
“might” cause significant damage to th e non-initiating State. If the Commission
preliminarily determines that it “might”, or if it cannot come to a decision in that
regard, it is then incumbent on the initiating State to notify the other State about its
plans. The preliminary, contingent character of CARU’s initial determination could
hardly be clearer. What is described is not a broad power to approve a project or
341969 Vienna Convention on the Law of the Treaties, Art. 31(1).
35AR, para. 1.91 (“very short period of 30 days”).
- 38 -not, but rather a limited technical review, preliminary in nature, to determine
whether the project is one that requires direct dealings between the Parties.
2.19 This understanding emerges too from the consequences of CARU’s
review. According to the Commission’s own protocol, if it comes to the summary
conclusion that the project will not caus e significant damage to the other Party, it
does not issue an authorisation or anything lik e it. It merely reports its findings to
36
the Parties . If, on the other hand, it comes to the summary conclusion that the
project “might” cause signi ficant harm, or if it ca nnot reach consensus on the
question, it does not issue an order suspe nding the project or anything of the sort.
Instead, it becomes incumbent on the initiating State to inform the other of the
project (albeit through the intermediary of CARU), thereby setting in motion the rest
of the procedures contemplated in Ar ticles 7-12, potentially including direct
consultations/negotiations and a referral to this Court . 37
2.20 Argentina’s tendency to contradict itself reasserts itself again here.
Although from one side of its mouth it argu es that CARU has the authority to
determine whether a projec t can go forward, from the other side it expressly
recognizes the limited nature of CARU’s role under Articl e 7. In the context of
discussing the 30-day period applicable to CARU’s initial review, Argentina states,
for example: “30 jours semblent d’autant plus justifiés qu’il ne s’agit que d’une
38
détermination sommaire” . And elsewhere, in connection with arguing the facts
36Annex 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). UCM, Vol. IV, Annex 84.
37Ibid.
38AR, para. 1.120 (“30 days seems more than justified since what we are talking about is only
a summary determination”) (emphasis added).
- 39 -about ENCE and Botnia, it contends: “la CARU s’est vue empêchée de procéder au
39
‘preliminary technical review’ qu’elle doit faire conformément à l’article 7” .
Uruguay will show in Chapter 3 that the fa ctual assertion that it prevented CARU
from performing an Article 7 review is incorrect. But the point here is that even as
some of the authors of the Reply attempt to portray CARU as authorizing or
rejecting projects, still others correctly recognize that CARU’s role is only to make a
“summary determination” via a “preliminary technical review”. Fortunately, the
Court need not be distracted by Argentina’s contradictory interpretations because, as
demonstrated above, the plain text of Article 7 speaks for itself.
2.21 The text of Article 7, together with that of Articles 8 through 12, likewise
make clear that once it has performed its preliminary screening function, CARU’s
role in the process envisioned in those Artic les is essentially complete. To be sure,
under the third paragraph of Article 7, and under Articles 8 and 11, CARU continues
to act as an intermediary for communications between the Parties. Yet, the Statute
gives the Commission no further role in ev aluating the planned project, or in
determining whether or not it will be implemented. That is left entirely to the Parties
or, if they fail to reach agreement, to the Court.
2.22 Argentina vociferously objects, clai ming that “il n’est pas exact qu’une
fois la décision (ou l’absence de décision) acquise sur le risque de préjudice sensible,
la CARU soit réduite au rôle de simple boîte aux letters” 40. Argentina seems
39AR, para. 2.49 (“CARU has been prevented from proceeding to the ‘ preliminary technical
review’ which it must conduct pursuant to Article 7”).
40AR, para. 1.109 (“it is not accurate to say that once the decision (or absence of decision) is
made on the risk of considerable harm, the CARU’s role is reduced to that of a simple letter-
box”).
- 40 -especially displeased with the use of the term “letter-box” to describe CARU’s role,
and comes back to it repeatedly 41. As stated in the Counter-Memorial, however, it
was not Uruguay that used the phrase to de scribe CARU’s role in the Articles 7-12
process 42. In point of fact, it was Ambassador Julio Carasales, the former head of
Argentina’s own delegation to CARU, and a past president of the Commission as a
whole. Speaking in 1995, Ambassador Carasales clearly stated that once CARU has
performed its summary 30-day review,
the fundamental issue is no longer in 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 that of a postal agent that may not take any
substantive action . … The dialogue must be formalized
bilaterally from Government to Government and not through
[CARU] 43.
2.23 Argentina attempts to get out from under Ambassador Carasales’ analysis
(which, of course, is consiste nt with the text of the Statute) by insisting that CARU
is not a “simple boite postale” 4. Its basis? The fact that under Article 8, CARU is
given the authority to extend the notified State’s period for responding to a
45
notification about a project “if the complexity of the plan so requires” . But this
does not change the analysis at all. Extendi ng a deadline is not a substantive action.
41
See, e.g., AR, paras. 1.118, 1.165 & 1.167.
42
UCM, para. 2.90.
43CARU Minutes No. 5/95, pp. 712-713 (23 June 1995). UCM, Vol. IV, Annex 77 (emphasis
added).
44
AR, para. 1.118 (“a mere letter-box”).
45
1975 Statute, op cit., Art. 8. UCM, Vol. II, Annex 4; see AR, para. 1.109.
- 41 -Instead, it is entirely in keeping with CARU’s role as a facilitator of communications
rather than a decision-maker.
2.24 In a speech to the Foreign Affairs Commission of the Argentine Chamber
of Deputies in February 2006 (i.e., long af ter the dispute in this case had been
joined), Argentina’s then Foreign Minist er, Jorge Taiana, correctly observed that
after CARU performs its preliminary review under Article 7, the matter ceases to be
within the Commission’s competence. Discussing the legal background to this case,
he tellingly stated:
It may occur, however, that the Parties may not reach an
agreement within the sphere of CARU over the impact of the
projected works on the ecosystem associated with the Uruguay
River. In this last situation, the matter leaves the orbit of
competence of the Commission and is turned ove46to be
considered at the level of the Governments .
2.25 Uruguay hastens to add that none of this can seriously be said to diminish
CARU’s critical role in ensuring the rati onal and optimal use of the river, or in
protecting the aquatic envir onment. As described in the Counter-Memorial, and
reiterated above, CARU fulfils a large num ber of irreplaceable functions expressly
stated in the text of the 1975 Statute 4. It does not follow from this, however, that
CARU is involved every step of the way in the procedures set forth in Articles 7-12.
In fact, it is not.
2.26 The relevant guide must be the text of the Statute which, as described,
makes clear that once the Commission has performed its screening function under
46Presentation of the Argentine Minister of Foreign Affairs, Jorge Taiana, Regarding the
Controversy with Uruguay to the Foreign Affa irs Commission of the Argentine Chamber of
Deputies (14 February 2006). UR, Vol. II, Annex R16.
47UCM, paras. 2.189-2.205.
- 42 -the first paragraph of Article 7, its role in the Articles 7-12 procedures for
notification, information sharing and consultation is essentially complete.
Thereafter, its role is as e xpressly stated in the second paragraphs of Articles 7 and
8, and the first paragraph of paragraph 11; that is, it is an intermediary of
communications between the Parties (excep t only for its authority under the fourth
paragraph of Article 8 to extend the 180-day period the notified State has to reply to
the notice of a project).
*
2.27 Another of Argentina’s procedural th emes is that CARU’s role in the
48
Article 7 process is “obligatory” . Argentina’s purpose here is clear. As stated at
paragraph 1.161 of the Reply: “En ne s’acqui ttant pas, dès l’origine, de l’obligation
49
de saisir la CARU, l’Uruguay a d’ emblée vicié toute la procédure” . In other
words, Argentina argues that because CARU was never called on to undertake the
preliminary technical review contemplated by Article 7 in this case, everything that
happened thereafter was necessarily inconsistent with the 1975 Statute.
2.28 Uruguay agrees that CARU was not ca lled on in this case to perform
Article 7 reviews of the ENCE or Botnia plants. The entirely legitimate reasons for
this are discussed at length in Chapter 3. As the Court will read there, in the cases
both of the ENCE plant and the Botnia plant, the Parties mutually agreed to dispense
with CARU’s initial screening of the projects in favor of immediate direct
48See, e.g., AR, paras. 1.159-1.161.
49AR, para. 1.161 (“By not complying, right from the outset, with the obligation to go to
CARU, Uruguay invalidated the entire procedure”).
- 43 -consultations 50. Uruguay’s purpose in this Chapter is simply to analyze Argentina’s
legal theory that CARU’s preliminary review of a project under Article 7 is a
condition precedent to satisfying the procedural obligations of the Statute.
2.29 Argentina’s argument is easily dispr oved. The procedural provisions of
the 1975 Statute, although they certain ly are critical elements of the lex specialés
between the Parties, do not constitute jus cogens. Argentina has not argued that they
do. There is thus nothing to prevent the Parties from derogating from them pursuant
to an appropriate understanding between them . If by their actions and/or words the
Parties agree to dispense with CARU’s preliminary technical review (or any other
statutory step, for that matter) and advance directly to government-to-government
consultations, they may do so. It is a simple matter of the consent of the Parties.
Argentina’s argument that “the entire procedure” was invalidated because, in the
circumstances of this case, the Parties mu tually chose to dispense with CARU’s
preliminary review under Article 7 cannot stand.
2.30 It bears noting that in addition to being consistent with the Statute,
Uruguay’s understanding that the Parties are free to agree to proceed without
CARU’s “summary determination” under Ar ticle 7 in favor of immediate direct
consultations is also in keeping with the dictates of good sense. The purpose of the
procedures envisioned in Articles 7-11 is to obviate the need for direct consultations
under Article 12 (just as the purpose of direct consultations is to obviate the need for
recourse to this Court). CARU is first given an opportunity to conduct a preliminary
review in order to determine whether or not additional procedural steps are even
50
See infra paras. 3.10-3.29.
- 44 -necessary. When CARU determines that th ey are, or when it is unable to make a
determination, the initiating State is then required to provide the notified State with
information concerning the project so that the latter may conduct a more extensive
review. Only if, after that review, the notified State comes to the conclusion that the
project might adversely affect it, does a round of consultations ensue. Each of these
steps creates an opportunity to obviate the need for direct consultations. Based on its
preliminary review, CARU might find that the project poses no threat of harm. And
even if CARU finds that the project might cause harm, the notified State might reach
a different conclusion, or nevertheless decide that the project is acceptable, based on
its more extensive review. In either case, no consultations will be necessary.
2.31 There is also no logical reason that the Parties should be precluded from
jointly deciding to dispense with these earlier steps and proceed directly to
consultations under Article 12. If they have an obvious difference of opinion about a
project, or if there is any other reason th ey consider appropriate, the Parties should
be free to agree to go straight to direct talks without being constrained to abide by
the procedural formalities set forth in Articles 7 through 11.
2.32 As expected, this sensible approach finds support in general international
law. Article 18, paragraph 2, of the Wa tercourse Convention, for example, provides
that if watercourse States disagree about the need for a notification under Article 12,
they shall proceed directly to consultations and negotiations 5. There is no need to
first decide whether notice is necessary and then revert the matter back to the
beginning of the process under Articles 12 et seq. Similarly, the ILC commentary to
51Convention on the Law of the Non-Naviga tional Uses of International Watercourses
(hereinafter “1997 Watercourse Convention”), Art. 12 (1997).
- 45 -the 2001 Draft Articles on the Prevention of Transboundary Harms makes clear that
States may proceed straight away to consultations “ whenever there is a question
about the need to take prev entive measures”, without re gard to whether the prior
52
procedural steps have been invoked or not .
2.33 This does not mean, and Uruguay does not argue, that one of the Parties
acting unilaterally can dispense with any of the procedures set forth in Articles 7-11.
What it means is simply that if the Parties jointly agree that their interests are best
served in a particular case by proceed ing directly to consultations and/or
negotiations -- and avoiding the steps prescribed in the Statute that normally precede
such direct dealings -- they are free to do so. As shown in the Counter-Memorial,
and as further demonstrated in Chapter 3 of this Rejoinder, that is exactly what
happened here. With respect to both the ENCE and Botnia plants, Argentina and
Uruguay specifically agreed to dispense with CARU’s Article 7 review and to
proceed straight away to direct talks 53. Indeed, in both cases, they did so at
54
Argentina’s behest . Thus, the Parties’ mutually agreed deviation from the Statute’s
procedural steps, including their agreement to proceed directly to State-to-State
consultations without awaiting a “summary determination” by CARU, cannot be
considered a violation of the Statute.
52Draft Articles on Prevention of Transboundary Harm from Hazardous Activities with
commentaries (hereinafter “2001 Draft Articles”), Art. 9, Commentary, para. 1 (emphasis
added), appears in Yearbook of the International Law Commission, 2001, Vol. II, Part Two.
53See infra paras. 3.10-3.29.
54Ibid.
- 46 - B. T HE T IMING OF NOTICE TO CARU
2.34 Given the Parties’ agreement to proceed immediately to the direct
consultations envisioned by Article 12, the question of exactly when notice is due to
CARU under Article 7 is larg ely academic in the circum stances of this case.
Whenever that notice might have been due, the fact is that the Parties specifically
agreed to dispense with that step here. There is thus no need for the Court to resolve
what is largely an abstract debate. In the event the Court is nonetheless inclined to
consider the issue, Uruguay will s how below that notice to CARU was not required
before Uruguay issued AAPs to ENCE and Botnia.
2.35 In the Counter-Memorial, Uruguay show ed that the text of Article 7 is
55
imprecise about exactly when notice of a project to CARU is due . It provides
merely that when “one Party plans to construct new channe ls, 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
56
Commission …” . Relying on the CARU Digest a nd the practice of the Parties,
Uruguay showed that authorisations by th e initiating State can and frequently have
come before notice to the Commission. In no such case did the notified State object.
Using general international law to reso lve the Statute’s ambiguity, the Counter-
Memorial established that Article 7 should be construed to require notice that is
“timely” in the sense that it occurs early enough in the planning process that ample
time remains for the procedures specified in subsequent Articles to be followed
55UCM, para. 2.52.
561975 Statute, op. cit., Art. 7 (emphasis added). UCM. Vol. II, Annex 4.
- 47 - 57
before the project is implemented . The reasons suppor ting this practical
interpretation of the Statute will be reiterated below.
2.36 The Reply disagrees. Because Argentina’s entire procedural case is built
around the foundational proposition that notice to CARU was required before
Uruguay issued AAPs to ENCE and Botnia in October 2003 and February 2005,
respectively, the Reply gives the issue substantial attention. Argentina appropriately
begins with the text of Article 7 which, it says, is not imprecise, and cannot be read
58
simply to require notice that is “timely” . Argentina focuses on the term “plan”
(“proyectar”), and states: “Le mot n’a pas de connotation juridique particulière
mais, conformément au sens commun, que reflète le dictionnaire: «Ce que l’on a
59
l'intention de faire dans un avenir plus ou moins éloigné» ” . From this, Argentina
concludes, “un project est quelque chose qui sera réalisé dans le futur mais qui ne
l’est pas: c’est au moment où l’État envisage (projette) de construire un chenal, de
réaliser ou d’autoriser la construction d’ un ouvrage, qu’il doit en informer la
CARU.” 60
2.37 Uruguay confesses that it does not see how any of this advances
Argentina’s argument that notice to CA RU must in all cases precede even a
preliminary, highly conditional authorisation such as an AAP. Indeed, in Uruguay’s
57
UCM, para. 2.52.
58
AR, para. 1.89.
59
AR, para. 1.90 (“The word does not have a pa rticular legal connotation, in accordance with
the common or ordinary meaning, but reflects the dictionary meaning: ‘What one intends to do
in the near or di stant future’”) ( citing Dictionary Littré on line,
http://atilf.atilf.fr/academie.htm).
60Ibid. (“a project or plan is something that willbe realized in the future, but which may not
be: it is when the State envisages (projects) the construction of a channel, or undertakes or
authorizes the construction of an installation, that it must so inform or report to the CARU.”).
- 48 -view, the citation to the dictionary serv es only to prove the point made in the
Counter-Memorial: the text of Article 7 is ambiguous. Argentina’s own definition
underscores the plasticity of the term inasmuch as it states that a “plan” may relate to
events envisioned for either “the near or distant future”. To say further, as Argentina
does, that “plan” means “envisage” merely perpetuates the debate; it does not end it.
The verb “envisage” is at least as imprecise as “plan” and is thus no more helpful in
answering the question of whether the text of Article 7 states explicitly when notice
is due.
2.38 One additional observation concerning th e text of Article 7 is warranted.
If anything, the use of the term “plan” actually suggests that notice must come after
authorisation by the initiating State, at least in the case of private projects. Although
it may well be possible to say that the private entity seeking to build a project was
“planning” it before receiving authorisation from the initiating State, the same
cannot be said of the State itself. Until the State puts its imprimatur on a privately
conceived project by granting an initial authorisation, the State cannot formally be
said to be planning anything. Until that moment, in a very real sense, the project
exists only as a proposal from the private entity to the St ate, which may or may not
be accepted. It is only when the State acts by approving that proposal (i.e., issuing
an authorisation) that the State adopts the private entity’s plan as its own. The
consequence, of course, is that in such cases, no notice to CARU can be due until
after the authorisation issues.
2.39 The conclusion that notice to CARU may follow authorisation finds
support in the CARU Digest, which, as Argentina acknowledges,
procède à une interprétation authentique du Statut de 1975 et
constitute en tout cas un ‘accord ultérieur intervenu entre les
- 49 - Parties au sujet de l’interprétation du traité ou de l’application de
ses dispositions’ au sens de l’arti cle 31, paragraphe 3 (a) d61la
Convention de Vienne sur le droit des traités de 1969 .
In particular, Subject E3, Chapter 1, Article 1(a) of the Digest specifically states that
each of the Parties has the competence to “ promulgate authorisations, restrictions or
prohibitions related to the differ ent legitimate uses of the water , informing CARU
about said authorisations, restrictions or prohibitions whenever they are originated
62
by or related to risks for human health” . This provision clearly contemplates that
CARU will be notified about authorisations related to the legitimate uses of the river
only when those authorisations have already been issued.
2.40 Uruguay cited this portion of the CARU Digest in the Counter-
Memorial . In response, the Reply argues that it does not help Uruguay because “le
mot ‘légitimes’ renvoie aux dispositions tant de procédure que de fond du Statut” 64.
Argentina seems to be suggesting, in other words, that the use of the term
“legitimate” in the Digest necessarily contemplates compliance with the procedural
norms of the Statute (which, of course, are to be understood as Argentina argues).
This surprising assertion badly misunders tands the structure and content of the
65
Digest. As Uruguay previously showed , “legitimate use of the water” is a defined
61
AR, para. 1.75 (“proceeds with an authentic interpretation of the 1975 Statute and in any case
constitutes a ‘later agreement made between the parties on the subject of the interpretation of
the treaty or the application of its provisions’ in the sense of Article 31, paragraph 3(a) of the
1969 Vienna Convention on the Law of Treaties”).
62
Digest of the Administrative Commission of the Uruguay River (CARU) (hereinafter
“CARU Digest”), Subject E3 (1984, as amended). UCM, Vol. IV, Annex 60 (emphasis added).
63
UCM, para. 2.57.
64
AR, para. 1.100 (“the w ord ‘legitimate’ refers back to both the procedural and substantive
provisions of the Statute”).
65
UCM, para. 2.28.
- 50 -term in the Digest and means “any use or exploitation of the water that deserves
66
protection” . Moreover, “industrial supply” is included among the eight
presumptively legitimat e uses of the river 67. “Legitimate” thus has a precisely
defined meaning that has nothing to do with the procedural norms of the Statute, as
Argentina suggests. The provisions of the Digest thus very much support the notion
that authorisations of industrial projects come before notice to CARU.
2.41 This interpretation is also amply s upported by the limited practice of the
Parties under Article 7. As Uruguay previous ly showed, of the six examples of the
Parties’ practice cited in Argentina’s Memorial, at least three (that is, half) constitute
instances in which authorisations preceded notification to CARU 68. Those three
examples are: the Traspapel cellulose plant; the M’Bopicua port terminal and the
Nueva Palmira freight terminal. Here, Ar gentina seems to have some trouble with
its arithmetic. In the Reply, Argen tina dismisses Uruguay’s invocation of the
Parties’ practice as unpersuasive because it mentions “deux seulement” of the six
cases originally referenced in the Memorial 69. But, of course, this is wrong. It is
interesting also that the one instance Argentina found it convenient to ignore was the
case most directly analogous to the current dispute: the Traspape l cellulose plant.
As Uruguay previously showed, the Traspa pel case is uniquely instructive. In
response to an informal inquiry from CARU, Uruguay’s first communication with
66CARU Digest, Subject E3, Title 2, Chap. 1, S ec. 2, Art. 1(d) (1984, as amended). UCM,
Vol. IV, Annex 60.
67Ibid., Title 2, Chap. 4, Sec. 1, Art. 1(f).
68UCM, paras. 2.58-2.70.
69AR, para. 2.23 (“only two”).
- 51 - 70
the Commission came only after it had issued its AAP on 11 August 1995 . CARU
not only had knowledge of but also had actual possession of the AAP itself for many
months in 1995 and 1996 without there being even a hint of a complaint that the
Article 7 notice (which, in fact, never came because the project was eventually
abandoned) should have come before the AAP was issued. The case thus stands as
an unmistakable counterpoint disproving Argentina’s current argument that notice to
CARU must precede authorisation as a matter of law.
2.42 The other two cases are equally instructive. With respect to the
M’Bopicua port, for example, Uruguay prev iously showed that the project was
authorized by Uruguay’s Ministry of Transport and Public Works on 7 March 2001
71
and that that authorisation was communicated to CARU after the fact . CARU then
proceeded to review the port project as a matter of routine. As Argentina itself
stated in the Memorial: “Les étapes suivies par la CARU dans le cadre du projet de
port M’Bopicuá correspondent à ce qui doit êt re fait avant la Commission ne prenne
une décision” . In the Reply, Argentina attempts to downplay the significance of
the fact that the Ministry of Transport and Public Works’ authorisation preceded
notice to CARU by claiming that “les authorisations étaient d’une nature différente
des AAP. Par ailleurs, pour le port M’Bopi cuá, l’autorisation par le gouverment
73
uruguayen a été aussitôt suivie par le saisine de la CARU …” Argentina is
70
UCM, paras. 2.59-2.64.
71
UCM, para. 2.66.
72
AM, 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.”).
73
AR, para. 2.20 (“the authorisations [were] of a different kind than the AAPs. In addition, for
the M’Bopicua Port, the authorisation of the Uruguayan government was immediately followed
by a notification to CARU”).
- 52 -certainly correct that the Transportation Mi nistry’s authorisation was distinct from
the AAP issued by MVOTMA. Yet, it is hard to know what significance this fact
has, given that Argentina’s legal argument is that notice to CARU is due in all cases
before the initiating State may issue any authorisation, no matter how preliminary or
contingent. On its face, Argentina’s argument applies just as much to the
Transportation Ministry’s authorisation as to MVOTMA’s AAP. Even accepting
there is a meaningful di stinction between the two authorisations, however,
Argentina’s argument still fails because, as the Reply rather conveniently omits, the
74
AAP for the M’Bopicua port was actually issued on 18 December 2000 , nearly
three months before the Transportation Mi nistry’s authorisation and a full three
months before notice of the project wa s sent to CARU. The M’Bopicua port
example thus very much stands as compelling evidence refuting Argentina’s
argument that notice to CARU is legally mandated before any authorisation may
issue.
2.43 The case of the Nueva Palmira freight terminal is to the same effect.
Although Argentina attempts to sow confusi on by presenting the issue in a rather
disjointed fashion , the Court need not bother to untangle Argentina’s story. In
truth, the undisputed facts are simple and clear. On 3 November 2005, DINAMA
76
issued the AAP for the project ; on 30 January 2006, the Transportation Ministry
74Inter-American Development Bank, Environm ental and Social Impact Report for the
M’Bopicuá Port (September 2002), available at http://idbdocs.iadb.org/wsdocs/
getdocument.aspx?docnum=423041. UR, Vol. III, Annex R66.
75See AR, paras. 2.22 & 2.65-2.70.
76Ministry of Housing, Land Use Planning and Environmental Affairs (hereinafter
“MVOTMA”) Initial Environmental Authorisation for ONTUR (3 November 2005). UR, Vol.
I, Annex R1.
- 53 -issued its own authorisation; and on 17 February 2006, more than three months after
the AAP and nearly three weeks after the authorisation by the Transportation
77
Ministry, CARU was notified . As Argentina itself admits, in the face of these
facts, the Argentine delegation to CARU did nothing other than to say that, under
Article 7, the Commission had 30 days to evaluate whether the project might cause
significant harm to Argentina 78. It did not object to the timeliness of Uruguay’s
notification; neither did it claim that the notice was inconsistent with the
requirements of Article 7. In fact, it did the opposite. CARU accepted the notice
without comment other than to note that the Commission had 30 days to perform its
preliminary review.
2.44 Notwithstanding Argentina’s vain attempts to belittle it, the fact that
authorisation came before notice to CARU in at least half of the instances of State
practice cited by Argentina constitutes probative -- indeed irrefutable -- evidence
disproving Argentina’s argument that not ice is legally required before any
authorisation may be issued. At least as often as the converse was true, the Parties
authorized before notifying, without hint of objection.
2.45 The probative value of the point is still further highlighted by the fact that
these three cases represent fully three quarters of the projects initiated by Uruguay
and cited in Argentina’s Memorial. The fact that it was Uruguay’s dominant
practice to authorize then notify, combined with the fact that Argentina never once
77UCM, para. 2.69, citing CARU Minutes No. 02/06, p. 302 (17 February 2006). UCM, Vol.
IV, Annex 116.
78See AM, para. 3.122.
- 54 -complained about this practice, confirms that Argentina’s current position represents
an about-face that was crafted purely for purposes of the current dispute.
2.46 It also bears mention that all three of the projects in connection with which
authorisation came before notification to CARU were initiated by private entities. In
all three cases, the private concerns submitted proposals for their projects to
Uruguay, which in turn evaluated those proposals and decided to make those
projects its own only upon issu ance of the initial authoris ations in question. This
point confirms as a matter of fact the legal observation first made above; that is, it is
only when the initiating State ratifies a priv ate proposal by issuing an authorisation
that the State itself may be said to be “planning” the project in the sense of Article 7
of the 1975 Statute.
2.47 In response to Uruguay’s argument th at notice to CARU is not required
before a Party may issue a preliminary authorisation so long as it is given “timely” in
the sense discussed above, Argentina argues that notice following authorisation is, in
fact, prejudicial. Argentina contends:
[L]’État ne peut influencer sur le projet et ses conséquences
qu’au stade préliminaire de la conception de l’ouvrage par le
biasis de l’attribution ou du refu s des autorisations nécessaries à
son exécution. Logiquement, une notification utile au sens de
l’article 7, alinéa 1, du Statut doit donc également intervener
avant la délivrance de l’autorisation nécessaire 79.
The Reply does not offer any support for this proposition becaus e there is none.
Argentina persists in misunderstanding th e nature of preliminary and conditional
79
AR, para. 1.101 (emphasis in original) (“[T]he state may influence the project and its
consequences only at the preliminary design st age of the facility or installation through the
granting or denial of authorisations or permitsrequired for its execution. Logically, a useful
notification pursuant to paragraph 1 of Article 7 must therefore be made before the delivery of
the required authorisation or permit.”).
- 55 -authorisations under Uruguayan law. In the Counter-Memorial, Uruguay showed
that the preliminary environmental author isations, or AAPs, about which Argentina
complains reflect only the initial determination by MVOTMA that, based on the
review conducted to date, the proposed project is environmentally viable 80. An AAP
serves the administrative functions of establishing (i) the environmental
requirements with which the project must comply; and (ii) the further environmental
81
reviews and authorisations required to assess compliance with these requirements .
It is thus not the end point of the perm itting process, as Argentina suggests, but
merely the beginning. Following the AAP, a substantive, interactive process ensues
between Uruguay and the initiating company during which Uruguay retains the right
to and does, in fact, continue to insist on modifications to the project before
construction, and eventually operation, can begin.
2.48 The case of the Botnia project is an instructive example 82. Following
issuance of its AAP in February 2005, it was required to and did, in fact, receive the
following additional authorisations before it was permitted to enter operation in
November 2007:
• Environmental Management Plan (“EMP”) approval for the removal
of vegetation and earth movement, 12 April 2005;
• EMP approval for the construction of the concrete foundation and the
emissions stack, 22 August 2005;
80UCM, para. 3.10.
81UCM, paras. 3.10-3.11.
82ENCE is less clearly instructive for the simple reason that, because the plan to build it in its
original location was abandoned, it only received one of the many subsequent authorisations
that would have been required.
- 56 - • EMP approval for the construction phase of the works, 18 January
2006;
• EMP approval for the construction of the wastewater treatment plant,
10 May 2006;
• EMP approval for an industrial non-hazardous waste landfill, 9 April
2007;
• EMP approval for the construction of solid industrial waste landfill, 9
April 2007;
• EMP approval for operations, 31 October 2007; and
• Authorisation to operate, 8 November 2007.
2.49 Argentina’s argument that, in order to be useful and effective, notification
to CARU must in all cases come before even a preliminary authorisation may issue
is refuted by other elements of its own argument. In Chapter 2 of the Reply,
Argentina argues that in March 2004 the Par ties agreed to submit the ENCE project
(which had received its AAP in October 2003) back to CARU for a preliminary
83
review under Article 7 . Uruguay will show in Chapter 3 that this argument is false,
and that the agreement reached by the Parties in March 2004 did not include
referring the matter to CARU for a preliminary review under Article 7 84.
Nevertheless, what is interesting for presen t purposes is that in attempting to justify
its version of the March 2004 agreement, Argentina states:
Il est à relever que durant toute l’année 2004, la construction de
CMB n’avait pas commencé. La CARU était donc toujours en
mesure d’évaluer les projets et leur impact sur le fleuve Uruguay
83
See, e.g., AR, para. 2.106.
84See infra paras. 3.36-3.37.
- 57 - et sa zone d’influence avan t même que ces travaux ne
85
commencent .
In other words, even though the AAP had issued some five months earlier, there was
still adequate opportunity for CARU to fulfil its statutory role! This, of course, is a
frank refutation of Argentina’s own argumen t about when notice to CARU must be
given, and specifically, its argument that notice cannot be timely if it is given after
issuance of an AAP.
2.50 Given the ambiguity of Article 7 on th e question of when notice must be
given to CARU (i.e., before or after an authorisation is issued), recourse to general
international law is appropriate. In this re spect, it is particularly interesting that
Article 12 of the 1997 Watercourse Conventi on, which governs notice of projects to
other watercourse States, uses exactly the sa me verb as the 1975 Statute: “plan”. In
particular, Article 12 of the Convention provides:
Before a watercourse State implements or permits the
implementation of planned measures which may have a
significant adverse effect upon ot her watercourse States, it shall
provide those States with timely notification thereof 86.
The question of when notice is due under the Convention thus reduces to exactly the
same question as under the Statute: when in the course of the planning process is
notice due? The answer given by the C onvention -- “timely no tification” -- is
therefore of material interest to answering the same question under the Statute.
85
AR, para. 2.110 (“It should be pointed out that throughout the year 2004, the CMB [ENCE]
construction didn’t start. Consequently, CARU was still in a position to assess the projects and
their impact on the Uruguay River and its area of influence even before such works had
started”).
86
1997 Watercourse Convention, op. cit., Art. 12 (emphasis added).
- 58 -2.51 As stated, the Convention, as elucidated in the ILC commentary, provides
that notice must be given “timely” in the sense that it comes “sufficiently early in the
planning stages to permit meaningful consultations and negotiations under
87
subsequent articles” . Applying this same approach to Article 7 of the 1975 Statute
is not only consistent with the text of the Statute itself, it also makes eminent
practical sense. So long as notice to CA RU and the other Party comes early enough
to allow the process envisioned in the s ubsequent Articles to play itself out, the
notified State cannot plausibly claim prej udice from the fact that notice might
conceivably have been given at some earlier moment in time. To put the same point
from the opposite perspective, so long as th e notice does not come so late that it
precludes meaningful consul tations between the Parties, the notified State has no
grounds to complain.
2.52 For all these reasons, Argentina’s argum ent that notice to CARU must be
given before even an AAP may issue is an untenable, impractical and unprecedented
interpretation of Article 7 of the 1975 Statute.
C. THE R ELEVANCE OF THE 1997 W ATERCOURSE CONVENTION
2.53 Uruguay cited Article 12 of the Watercourse Convention as well as the
ILC commentary in the Counter-Memorial. Argentina does not respond directly, but
opts instead for a general attack on Uruguay’s reliance on the Convention and
commentary. The Reply argues, for instance, that
l’analogie affirmée entre les dispositions du Statut de 1975 d’une
part et de la Convention de 1997 d’autre part est assez fantaisiste
87UCM, para. 2.52.
- 59 - – et témoigne à nouveau de l’acharnement avec lequel l’Uruguay
s’efforce de minimiser les spécificités du premier . 88
Similar dismissive statements are included elsewhere in the Reply . 89
2.54 This is yet another issue on which Argen tina is in conflict with itself. As
much as some portions of Chapter 1 of the Reply attempt to portray the 1997
Watercourse Convention as irrelevant, other portions of the same Chapter
enthusiastically embrace it. So, for example, the Reply also states: “Le Statut qui
était, sans aucun doute, ‘en avance sur son temps’, a constitué l’une des sources
d’inspiration principales pour l’élaboration de maintes dispositions de la Convention
de 1997. Ainsi, les articles 7 à 12 … constitué un précédent auquel la Commission
[du Droite International] s’est référé pour rédiger les dispositions relatives à
l’obligation de notification, à sa teneur , au délai de réponse et aux ‘procédures
90
applicables au cas où les pa rties ne s’entendraient pas sur le projet proposé’” .
Similar positive citations to the Waterc ourse Convention and the ILC commentary
can be found at various places in the Memorial as well 91. Indeed, Argentina
recognizes that the Convent ion contains “les principes pertinents du droit
88AR, para. 1.62 (“the analogy made between the provisions of the 1975 Statute on the one
hand, and the 1997 Convention on the other, is qu ite fanciful -- and once again is witness to the
determination shown by Uruguay to minimize the specificities of the 1975 Statute.”).
89
See, e.g., AR, paras. 0.15, 1.61, 1.63-1.64, 1.92, 1.93 & 1.110.
90
AR, para. 1.140 (“The [1975] Statute, which was without any doubt ‘ahead of its time’,
constituted one of the principal sources of insp iration for the formulation of many of the
provisions of the 1997 Convention. Thus, Artic les 7 to 12 … constituted a precedent to which
the [International Law] Commission referred wh en drawing up the provisions respecting the
obligation of notification, the purport and tenor thereof, the response period and the ‘applicable
procedures in the event that the parties are unable to come to an agreement on the proposed
project.’”).
91
See, e.g., AM, paras. 3.44, 3.53-3.54, 3.71, 3.92, 3.128, 3.142, 3.163 & 3.165-3.166.
- 60 -international général” 9, and relies on it heavily to assist with the interpretation of
93
certain provisions of the 1975 Statute .
2.55 The Parties’ mutual invocation of the Watercourse Convention makes
perfect sense. It constitutes an especially pertinent source of general international
law for this case. Covering much of the same subject matter as the 1975 Statute, the
Convention was the subject of extended co mment and discussion among States and
among the leading publicists on the subject over the course of more than 20 years.
As Argentina itself has acknowledged, the 1975 Statute, which was indeed ahead of
its time, was a main source of inspiration for its drafters. Moreover, the Watercourse
Convention was adopted by the UN Genera l Assembly in 1997 by a vote of 104 to
three, with both Uruguay and Argentina vot ing in favor. This Court itself has
recognized the importance of the Convention in its judgment in the case concerning
94
the Gabčikovo-Nagymaros Project (Hungary/Slovakia) .
2.56 Lest there be any confusion (although there should not be), Uruguay here
95
reiterates the reasons and the ways it draws upon the Watercourse Convention . It
should perhaps go without saying that, unde r Article 31, paragraph 3(c), of the
Vienna Convention on the Law of Treaties, general principles of general
international law can assist with the interpre tation of provisions of the 1975 Statute.
92
AR, para. 1.64 (“pertinent principles of general international law”).
93
See, e.g., AR, para. 1.140.
94
Case concerning the Gabčikovo-Nagymaros Project (Hungary/Slovakia) (Judgment), I.C.J.
Reports 1997, p. 56, para. 85.
95
In fact, Uruguay’s Counter-Memorial already did so. UCM, para. 2.23 fn. 62.
- 61 - 96
Argentina agrees . It equally goes without saying that principles of general
international law cannot be used to override the plain text of the Statute. Here again,
Argentina agrees . It therefore follows that to the extent they are compatible,
general principles can very much be helpful in resolving ambiguities or filling
lacunae in the text of the Statute. It is exactly in this sense that Uruguay cites the
Watercourse Convention.
2.57 Consistent with the approach just outlined, Uruguay’s Counter-Memorial
cited the Watercourse Convention and th e ILC commentary thereto to support its
analysis of the 1975 Statute on several issues, not just the question of when notice of
a project is due to CARU under Article 7. Other such issues included:
• The meaning of the “rational and op timum utilization” of the river
under Article 1 (which both Uruguay and Argentina equate to
98
“equitable and reasonable use”) ;
• The nature of the information required to be exchanged under Article
99
8 ;
• The duty of the notified State to accept harm that does not rise to the
level of significant 10;
• The notifying State’s duties duri ng consultations under Article 12 101;
and
96
AR, para. 0.16 (referring to “droit internationa l général, dont la Partie uruguayenne indique
ailleurs à juste titre qu’il est pertinent ‘insofar as it gives assistance in interpreting and applying
the various provisions of the 1975 Statute’”) (citing UCM, para. 4.7, note 545).
97Ibid.
98UCM, para. 2.23.
99UCM, para. 2.93.
100UCM, para. 2.103.
101UCM, para. 2.180.
- 62 - • The notifying State’s duties during dispute resolution under Article
102
60 .
2.58 The 1975 Statute and the 1997 Watercourse Convention are not, of course,
identical in all material re spects. Uruguay has never cont ended that they are. It
therefore does not rely on any portions of the text of the 1997 Watercourse
Convention or the ILC commentary where the terms are inconsistent with those of
the 1975 Statute. Neither does it rely on them where the meaning of the terms of the
1975 Statute are clear on their face, except only to show the extent to which the
terms of the Statute are consistent with general international law 103. It is only where
the two are compatible and the meaning of the Statute is not free from ambiguity that
Uruguay has turned to the Watercourse Convention as an interpretive aid. Under the
circumstances, the propriety of doing so is not open to serious question (as
Argentina’s own reliance on the Convention makes clear).
2.59 The principal difference between the 1975 Statute and the 1997
Watercourse Convention that Argentina relies on to support its argument that
Uruguay’s analogy to the Convention is “trompeuse et irrecevable” 104 is that the
105
Convention “ne comporte aucun élément d’institutionnalisation” . By this,
Argentina presumably means that the Wa tercourse Convention does not establish a
body equivalent to CARU. This, of course, is true, and is a function of the fact that
102
UCM, para. 2.184.
103See, e.g., UCM, para. 2.38 (concerning the obligation of the Parties to prevent pollution by
prescribing appropriate rules and measures) & para. 2.107 (concerning the procedural
consequences that attach when the notified St ate comes to the conclusion that the planned
project might cause it significant harm).
104
AR, para. 1.63 (“deceptive and inadmissible”).
105
AR, para. 1.62 (“does not embody any element of institutionalism”).
- 63 -the UN Convention is a general, multilateral convention rather than a treaty designed
for a specific watercourse. Uruguay does note, however, that Article 24 of the
Watercourse Convention specif ically contemplates “the establishment of a joint
management mechanism” among St ates sharing a watercourse 106. There is thus
nothing incompatible with the terms of the Convention and the concept of
“institutionalism” to which Argentina attaches such importance.
2.60 Although Uruguay accepts the fact of th e distinction Argentina mentions,
it denies its relevance. It certainly does not render the procedural provisions of the
UN Convention meaningless with respect to the interpretation of the procedural
elements of the Statute. As elaborated in Section I.A. above, the institution the 1975
Statute establishes -- CARU -- has a lim ited role in the process envisioned in
Articles 7-12. Under the first paragraph of Article 7, it performs a preliminary
technical review of a project lasting no mo re than 30 days in order to determine
whether or not further procedures are warranted. Once it has done so, its job (in
terms of the Articles 7-12 procedures) is for all intents and purposes done, save only
for the fact that it continues to act as an intermediary for communications between
the Parties.
2.61 Setting CARU’s screening function aside, the truth is that the procedures
established by the Statut e and the Watercourse Convention are very much
analogous. To be sure, they are not word-for-word identical, and Uruguay has never
suggested that they are. Nonetheless, the general principles bear a strong affinity,
exactly as one would expect given that the Statute -- as Argentina states -- “a
106
1997 Watercourse Convention, op. cit., Art. 24.
- 64 -constitué l’une des sources d’inspiration principales pour l’élaboration de maintes
dispositions de la Convention de 1997” 10. Just like the 1975 Statute, the UN
Convention contains articles providing that:
• The initiating State must provide pr ior notice the other State(s) of
planned measures, and provide inform ation sufficient to enable the
notified State to ascertain the effects of the project (Article 7 of the
Statute; Article 12 of the Convention);
• The notified State has 180 days to respond to the notification,
although in the case of both instruments, that period may be extended
if necessary (Article 8 of the Statute; Article 13 of the Convention);
• The initiating State may implement the planned project in the event it
does not receive a response from the notified State within the
specified period (Article 9 of the Statute; Article 16 of the
Convention);
• The notified State must inform the initiating State if it objects to the
planned measure, and must inform th e initiating State of the basis of
its objections (Article 11 of th e Statute; Article 15 of the
Convention);
• If the States concerned disagree about the possible effects of the
project, they must enter into consultations and negotiations
concerning the planned measure (A rticles 11-12 of the Statute;
Article 17 of the Convention);
• The States concerned shall submit to dispute resolution in the event
they are unable to reach agreement during their
consultations/negotiations (Article 12 of the Statute; Article 33 of the
Convention) .108
107AR, para. 1.140 (“constituted one of the princi pal sources of inspiration for the formulation
of many of the provisions of the 1997 Convention”).
108Article 10 of the 1975 Statute which gives the notified State the right to inspect the works
has no analog in the 1997 Watercourse Convention.
- 65 -2.62 Argentina contends that the 1975 Statute embodies “dispositions plus
précises et plus opératoires” than the Convention 10. But this is distinctly not true.
In fact, between the two, it is the 1997 Watercourse Convention that contains more
fully elaborated procedural norms. Thus , the Watercourse Convention contains a
number of provisions covering procedural issues about which the 1975 Statute is
entirely silent. For example, the Conve ntion contains provisions concerning the
following important points:
• The obligations of the notifying State during the period for reply
(Article 14);
• Compensation for costs incurred as a result of a late reply to a
notification (Article 16(2));
• The obligations of the notifying State during the pendancy of
consultations/ negotiations (Article 17(3));
• Procedures in the absence of notification (Article 18); and
• The urgent implementation of planned projects (Article 19).
2.63 In historical context, it is not surp rising that the Watercourse Convention
explicitly addresses topics the Statute does not. The 1997 Convention came some 20
years after the 1975 Statute on which it drew heavily for inspiration. Especially
given the attention the Convention receiv ed from both States and members of the
ILC, it thus makes perfect sense that areas where there were lacunae in the Statute
received explicit treatment in the text of the Watercourse Convention, as well as
analysis in the ILC’s commentary.
109AR, para. 1.62 (“more precise and operational provisions”). Elsewhere, Argentina states
that the procedural provisions of the 1997 UN Watercourse Convention “sont infiniment moins
spécifiques et moins contraignantes” than the Statut e. AR, para. 1.93. As demonstrated in the
text, this is false.
- 66 -2.64 For all of these reasons, Uruguay stands by its well-placed reliance on the
Watercourse Convention. It indisputably constitutes a source of relevant general
international law dealing with virtually iden tical subjects that itself drew substantial
inspiration from the 1975 Statute. To the ex tent its terms are consistent with the
Statute, it can therefore very much constitute an interpretive aid.
D. T HE RELATIVE STATUS OF PROCEDURAL AND SUBSTANTIVE R IGHTS
2.65 In the context of trying to lay the groundwork for its arguments about
CARU’s role in the procedures created by Articles 7-12 of the Statute, the opening
portions of Chapter 1 of the Reply invest substantial energy in arguing that the
Counter-Memorial belittles the procedural rules set forth in Articles 7-12 of the 1975
Statute. According to Argentina, Uruguay impermissibly sets up a putative
“hierarchy of rights” th at contradicts the maxim ut res magis valeat quam pereat .
The Reply argues, for example, that Uruguay’s
lecture restrictive des obligations prévues par le Statut de 1975
se manifeste par la tentative de hiérarchiser les obligations
substantielles et les obligations de nature procédurale, les
premières prenant le dessus su r les secondes, ramenées à
110
d’inutiles détours .
And elsewhere:
Toute sa stratégie [de l’Uruguay] est construite autour de la mise
en avant de droits subtantiels … et de certaines obligations
substantielles y afférentes … Ce faisant, l’Uruguay occulte
110AR , para. 1.20 (“restrictive reading of the obligations set forth by the 1975 Statute is
manifested by the attempt to establish a herarchy for the substantive and procedural
obligations, with the former taking precedence over the latter, reduced now to useless
circumlocutions”).
- 67 - ostensiblement le régime d’obligations procédurales établi par le
Statut de 1975 111.
2.66 As Uruguay will demonstr ate, Argentina is attempting to manufacture an
argument about an issue on which there is no real disagreement. In truth, the
Parties’ dispute about the role of the Statut e’s procedural rules is relatively narrow.
That being the case, Argentina’s own strate gy in insisting on the point is obvious.
By mischaracterizing Uruguay’s presentation, the Reply seeks to cultivate the
impression that Uruguay is afraid of the Statute’s procedural rules which, by
hypothesis, it knows it has violated. Equally, Argentina attempts to aggrandize the
procedural rules in order to lay the found ation for its later argument on remedies.
That is, Argentina is intent on nurturing the idea that a bare procedural violation can,
without more, be sufficiently grave to warrant the remedy of dismantling the Botnia
plant.
2.67 The fallacy of each of these points will be dealt with elsewhere in this
Rejoinder. In Chapter 3, Uruguay will show that it has fully satisfied the procedural
provisions of the 1975 Statute. And in Ch apter 7, Uruguay will show that even if,
quod non, there were a violation of a procedural element of the Statute, the remedy
of dismantling the Botnia plant would be grossly disproportionate, especially given
the strong environmental performance of the plant.
2.68 Notwithstanding Argentina’s contrary rhetoric, the Parties are actually in
substantial agreement about the importance and the function of the Statute’s
111AR, para. 1.24 (“[Uruguay’s] entire strategy is built around the concept of pushing forward
the substantive rights … and certain substantive obligations relative thereto …. Having done
this, Uruguay ostensibly hides the system of pr ocedural obligations established by the 1975
Statute”).
- 68 -procedural obligations. In the Counter-M emorial, Uruguay observed that the object
and purpose of Articles 7-12 is to help gua rantee compliance with the substantive
112
obligations set out elsewhere in the Statute . It also noted the multiple places in
the Memorial where Argentina had stated exactly the same thing 113.
2.69 Surprisingly, especially given the lengths to which Argentina goes to make
it seem that the Parties’ positions are irreconcilably opposed, the Reply makes
exactly the same point on repeated occasions. Thus, for instance, Argentina states:
[C]e sont les obligations procédurales qui permettent de garantir
que les obligations substantie lles telles la protection de
l’écosystème du fleuve Uruguay, la prévention de la pollution et
la préservation de la qualité des eaux ont été respectées 114.
2.70 Nor is this a mere inadvertent slip of the pen. Argentina later emphasizes
the same point with words that Uruguay is content to adopt as its own:
Les dispositions et obligations pr océdurales des Parties en vertu
des articles 7 à 12 du Statut de 1975 ne peuvent pas être
considérées isolément, sans prendre en compte la finalité de ces
obligations précises et spécifiques, cést-a-dire la réalisation des
115
obligations substantielles du Statut .
2.71 In saying that the Statute’s procedural mechanisms are designed to
facilitate the achievement of its substantive goals, Urugua y does not diminish their
importance nor does it set up a “hierarchy of rights” (anymore than Argentina does
112UCM, para. 2.45.
113UCM, para. 2.46 (quoting AM, paras. 3.31 & 5.2).
114AR, para. 1.28 (“The procedural obligations are those which allow for guaranteeing that the
substantive obligations, such as the protection of the ecosystem of the Uruguay River,
pollution-prevention and preservation of water quality have been and will be respected”).
115AR, para. 1.69 (emphasis added) (“The procedur al provisions and obligations of the parties
under Articles 7 to 12 of the 1975 Statute cannot be considered in an isolated manner, without
taking account of the end-purpose of these precise and specific obligations, namely the
performance of the Statute’s substantive obligations.”).
- 69 -when it says the exactly same thing). It is merely stating the obvious and admitted
truth: the procedures do not exist for th eir own sake as an empty exercise in
formalism. Rather, they exist as an important instrument for achieving mutually
agreed goals that themselves constitute the ultimate aim of the 1975 Statute: to
balance economic development with enviro nmental protection. This fact has
important consequences for the interpretati on of the Statute’s procedural norms. In
cases of ambiguity or uncertainty, the in terpretation of Articles 7-12 that best
advances the substantive goals of the 1975 Statute should be preferred.
2.72 Contrary to the straw man presented by Argentina, Uruguay’s argument is
not that “l’exécution des obligations procédurales [est dépendant] de la violation des
116
obligations substantielles” . Uruguay does not contend that “les obligations
procédurales ne trouvent pas application du fait d’une prétendue conformité à des
117
obligations substantielles” . To be clear: Uruguay recognizes that violations of the
procedural rules can occur either with or without concomitant substantive violations.
It could not be otherwise. Articles 7-12 are integral components of the 1975 Statute.
Exactly as the Court stated in its July 2006 Order on Argentina’s request for the
indication of provisional measures: “the procedural mechanism put in place under
the 1975 Statute constitutes a very important part of that treaty régime” 118. The non-
compliance with the rules stated in t hose provisions plainly gives rise to
international responsibility.
116
AR, para. 1.21 (“the execution of procedural vi olations [is dependent] on the violation of
substantive obligations”).
117AR, para. 1.35 (“the procedural obligations have no applicability because of some claimed
conformity with substantive obligations”).
118Case Concerning Pulp Mills on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2006, p. 19, para. 81 (13 July 2006).
- 70 -2.73 It does not follow from this, however, that “[s]ans le respect des
obligations procédurales, il ne peut point être affirmé qu’un État a objectivement mis
119
en Œuvre ses obligations substantielles”, as Argentina contends . Just as
procedural violations do not depend on subs tantive violations, so too substantive
compliance does not depend on procedural compliance. Indeed, to suggest, as
Argentina does, that perfect compliance with all applicable procedural provisions is
a pre-condition to complying with the subs tantive rules of the 1975 Statute defies
logic 12. One can readily imagine a situation in which one of the Parties commits a
purely technical violation of the procedural rules in the course of implementing an
entirely non-polluting project. In such a situation, it would be illogical to contend
that the earlier procedural error dictates the finding of a substantive violation.
Indeed, in this respect it is Argentina’s reading of “the 1975 Statute that runs the risk
of bringing about ‘unreasonable or absurd results’” 121.
2.74 The fact that non-compliance with the Statute’s procedural rules is
sufficient to trigger a State’s internati onal responsibility does not mean that the
remedies for a procedural violation and fo r a substantive violat ion must be exactly
the same, regardless of the nature or gravity of the specific violation in question. As
already mentioned, this subject will be dealt with at length in Chapter 7. For present
purposes, it is suffici ent to note the applicability of the principle of proportionality
pursuant to which the nominal benefits of the remedy must be weighed against the
119AR, para. 1.28 (“[a]bsent respect for the pro cedural obligations, it cannot be firmly stated
that a nation has objectively implemented its substantive obligations”).
120See AR, para. 1.26 (“Compliance with substantive obligations is conditioned by respect for
the procedural obligations and vice versa.”).
121AR, para. 1.26 quoting Danzig case, (Advisory Opinion), P.C.I.J., Series B , No. 11, p. 39
(16 May 1925).
- 71 -burdens imposed. Argentina’s effort to cultivate the argument that a procedural
violation can only be remedied by the dismantling of a project can and must be
rejected.
E. THE ISSUE OF A RGENTINA ’SINDUSTRIAL PLANTS
2.75 Even as it is otherwise dedicated to aggrandizing the importance of both
CARU and the Statute’s procedural rule s, one subject on which the Reply is
conspicuously restrained is the scores of Argentine industrial plants that discharge
contaminating effluents into the Uruguay Rive r. Perhaps recognizing that there is
little it can say about this subject that is consistent with its case, Argentina says very
little.
2.76 In Chapter 2 of the Counter-Memoria l, Uruguay showed that since 1975
when the Statute was adopted, Argentin e federal, provincial and municipal
authorities have authorized the construc tion and operation of more than a hundred
industrial plants that discharge liquid and solid waste into the Uruguay River or its
tributaries, all without even once -- no t once -- notifying CARU or awaiting its
122
summary determination under Article 7 . Uruguay identified many of these plants
by name and location, and it specified the environmental risks associated with them.
To mention just one example (of many), Uruguay cited the chem ical plant, Fana
Química, S.A., in Colón, Entre Ríos Province which operates along side the Uruguay
River. The plant began operations in 1976, and manufactures chemical adhesives,
plastics, paint, glue, aerosols, insecticides and silicon sealers. It discharges liquid
122UCM, paras. 2.140-2.150.
- 72 -effluents directly into the Uruguay River and, in 2000, was sanctioned by Argentine
123
authorities for violating local environmental laws .
2.77 In its Reply, Argentina does not deny or otherwise take issue with any of
the facts Uruguay presented to the Court. They can therefore be taken as admitted in
their entirety. Argentina’s entire responsive argument on this point is to contend that
all of these plants, presumably both individually and collectively, cannot be
124
compared to the ENCE and Botnia projects because they are smaller in scale .
According to Argentina, none of the 170 plants Uruguay identified were “of
sufficient scope” (“ de entidad suficiente”) to affect water quality and therefore did
not need to be reported to CARU under Article 7 125.
2.78 This halfhearted response is remarkable in its inconsiste ncy with the rest
of Argentina’s argument about the 1975 Statute. Throughout the history of this case,
and again in the Reply, Argentina has decried Uruguay’s alleged “unilateralism” as
inconsistent with the letter and spirit of the 1975 Statute. It states, for instance, that
“la grande question qui divise les Part ies au présent différend est celle de
126
l’‘unilatéralisme’ …” . Elsewhere, it states:
L’ensemble des obligations formulées par le Statut de 1975 vise
avant tout à prévenir toute utilisation unilatérale des eaux du
fleuve Uruguay en déni des prescriptions du Statut, notamment
123UCM, para. 2.141.
124AR, paras. 1.83-1.84.
125
AR, para. 1.84.
126
AR, para. 1.156 (“the major question that divides the parties in the present dispute is that of
‘unilateralism’ …”).
- 73 - lorsque cette utilisation est susceptible de porter préjudice à
l’écosystème du fleuve 127.
2.79 Yet, Argentina now claims the right unilaterally to determine for itself
whether a given project is “of sufficient sc ope” to affect water quality. Argentina
cannot have it both ways. It is not enti tled to stand on the Statute’s “common and
joint mechanisms” when it suits its purpose while simultaneously reserving for itself
the privilege of disregarding those same mechanisms when it does not. Exactly as
Argentina itself says, “une fois les engagements internationaux contractés, il n’est
pas loisible à l’État de s’exonérer unilatéra lement de ses obligations ni de présumer
128
qu’une telle auto-exonération est opposable aux autres États” .
2.80 There is still another inconsistency in Argentina’s argument on this point.
The Reply attempts to deflect the force of the facts concerning Argentina’s practice
with respect to industrial facilities by clai ming that many of the plants identified by
Uruguay “ne se trouve pas directement sur la rive droite du fleuve mais sur les, ou à
129
proximité des tribut aires de celui-ci” . Although this is certainly true as a
statement of fact, Argentina’s own interpreta tion of the Statute deprives it of any
force. Argentina is fond of emphasising that the scope of the Statute is not confined
130
to the river itself, but also includes its “zones of influence” . Plainly, the river’s
127
AR, para. 1.31 (emphasis added) (“All of th e obligations formulated by the 1975 Statute
look before all else to prevent any unilateraI use of the waters of the Uruguay River that is
contrary to the provisions of the Statute, notably whenever such use has the potential of
damaging the river’s ecosystem.”).
128AR, para. 1.33 (“once international commitments are contracted, it is not possible for the
State to exempt itself unilaterally from its obliga tions or to presume that such a self-exemption
may not be challenged by other nations”).
129AR, para. 1.84 (“are not located directly on the right bank of the river, but on the tributaries
thereof, or otherwise close to those tributaries”).
130
See, e.g., AR, paras. 0.4, 1.47, 1.57 & 2.83.
- 74 -tributaries fall within any conceivabl e definition of the pertinent “zones of
influence.” Indeed, Article 35 of the Statute specifically states: “The Parties
undertake to adopt the necessary measures to ensure that the management of … the
waters of the tributaries do not cause ch anges which may significantly impair the
régime of the river or th e quality of its waters” 131. Argentina’s acknowledged
discharge of chemical contaminants into the Gualeguaychú River, which flows into
the Uruguay River in close pr oximity to Argentina’s Ña ndubaysal beach, are thus
very much relevant.
2.81 Quite apart from the obvious logical inconsistencies in Argentina’s
argument, the facts also disprove it. At least some of the plants Argentina has built
since 1975 are demonstrably of sufficient scope to affect the river’s water quality.
As stated above, Fana Química was previously sanctioned by Argentine
environmental authorities in 2000. This was not an isolated event. According to
news reports, as recently as January 2008, Fana Química was sanctioned yet
132
again . Indeed, the situation was so serious that operations were temporarily
suspended altogether 133. An investigation by the Secretariat of the Environment and
Sustainable Development of Argentina, along with the government of Entre Ríos
and Colón, revealed that the company’s effluents were producing a visible dark
131
1975 Statute, op. cit., Art. 35. UCM, Vol. II, Annex 4.
132Letter SMAER 02/08 sent from the Secretary of the Environment of the Province of Entre
Ríos, Eng. Fernando Raffo, to the President of the Argentine Delegation to CARU,
Ambassador Hernán Darío Orduña (hereinafter “Letter SMAER 02/08”) (14 January 2008).
UR, Vol. II, Annex R24.
133Ibid.
- 75 - 134
sheen on the water . On 11 January, they issued an order temporarily closing the
135
Fana Química plant in order to put a stop to the contamination . Two weeks later,
after the company presented a plan to clean up its operations and reach compliance
with the law, it obtained authorisation to renew its operations for the line of
136
production that does not generate liquid effluents . Uruguay applauds Argentina’s
belated response to the pollution caused by this industrial facility; as the saying goes:
“better late than never”. But the point remains: Argentina never notified CARU (or
Uruguay) of its authorisation of this plant, or otherwise submitted it (or the scores of
other plants it authorized) to the proce dures set forth in Articles 7-12 of the 1975
Statute.
2.82 News reports from Argentina also indicate that that State has recently
begun efforts to build an effluent treatme nt plant for the Gualeguaychú industrial
park 137. As discussed in Uruguay’s Counter-Mem orial, the park was established in
1975, the same year the Statute was signed, and is now home to some 25 industrial
facilities, including an industrial dyeing facility, a battery manufacturing plant and a
food and beverage processing plant that ha s elicited strong complaints from local
134
Secretariat of the Environment and Sustai nable Development of Argentina Web Site,
“Clandestine Chemical Plant Closes in Entre Ríos” (11 January 2008), available at
http://www.ambiente.gov.ar/?aplicacion=noticias&idarticulo=5192&idsecci… (last visited
on 3 July 2008). UR, Vol. II, Annex R17.
135Letter SMAER 02/08, op. cit. UR, Vol. II, Annex R24.
136Letter SMAER 03/08 sent from the Secretary of the Environment of the Province of Entre
Ríos, Eng. Fernando Raffo, to the President of the Argentine Delegation to CARU,
Ambassador Hernán Darío Orduña (25 January 2008). UR, Vol. II, Annex R25.
137
Entre Ríos Entre Todos, “The Draft Project for the Effluent Treatment Plant of the
Gualeguaychú Industrial Park Was Sent to the [Secretariat of the Environment of the] Nation”
(10 January 2008). UR, Vol. III, Annex R61.
- 76 - 138
residents . Waste water from the Gualeguaychú industrial park is discharged into
the Gualeguaychú River which in turn flows into the Uruguay River very close to
Argentina’s Ñandubaysal beach 13. The newly acknowledged need for an effluent
treatment plant stands as unmistakable evidence that (i) for the previous 23-year
history of the park, effluents were bei ng dumped into the river without adequate
treatment, and (ii) those same effluents have the capacity to affect the water quality
of the Uruguay River and add to the al ready high levels of phosphorous which
Argentina does nothing to regulate or cont rol. Here again, the facts disprove
Argentina’s argument about the need to notify CARU about its industrial projects
along the Uruguay River since 1975.
2.83 Uruguay hastens to add that it does not bring up Argentina’s consistent
practice of building industr ial plants without notifying CARU for purposes of
arguing that the ENCE and Botnia plants did not fall within the ambit of Articles 7-
12. As it has now repeatedly made clear to the Court, its position is that the projects
140
do fall within the scope of the Statute’s procedural rules . The point is simply that,
as discussed in the Counter-Memorial, prior to the advent of this dispute, the Parties
did not manifest a consistent, or even clear, understanding of the Statute’s
application to industrial plants. 141 Never once has an industrial plant on either side
of the river been the subject of a formal notification to CARU. It is only very
recently that Argentina has adopted the position that it currently articulates -- and
138
See UCM, paras. 2.144-2.146.
139UCM, para. 2.144.
140See UCM, para. 2.76; CR 2006/49, p. 10, para. 2 (Boyle) (8 June 2006).
141See UCM, para. 2.150.
- 77 -even now that position would seem to a pply only to faciliti es located on the
Uruguayan side of the river, not to those on Argentina’s side.
2.84 Argentina’s practice of building scores of industrial plants along or within
the zones of influence of the Uruguay River without ever once having informed
CARU also powerfully refutes Argentina’s effort to portray itself as the lone
guardian of both the Statute and the envir onment. Argentina’s pleadings are replete
with pointed references to what it calls “la banalisation du Statut de 1975 opérée par
l’Uruguay” 14, or Uruguay’s “mépris de ses obliga tions relatives à la préservation
143
de la quialité des eaux du fle uve Uruguay et son écosystème” . Uruguay invites
the Court to see these statements for what they are: transparent attempts to sully
Uruguay by casting baseless aspersions that might, with great er merit, be directed at
Argentina itself.
* * *
2.85 In the foregoing Section I, Uruguay showed: (i) according to the plain text
of the 1975 Statute, CARU’s role in the pr ocedures established in Articles 7-12 is
limited. Once the Commission has completed its preliminary technical review of a
project, its role is essentially over; (ii) there is no reason the Parties may not agree to
skip CARU’s preliminary review and go stra ight to direct consultations; (iii) the
Statute does not require notice to CARU before the initiating State may issue an
authorisation for a project. It requires only notice that is “timely” in the sense it is
given in sufficient time to allow the remaining procedural steps in Articles 7-12 to
142AR, para. 0.21 (“the trivialization of the 1975 Statute by Uruguay”).
143
AR, para. 4.136 (“disregard of its obligations relative to preservation of the Uruguay River’s
water quality and ecosystem”).
- 78 -be followed before a project is implem ented; (iv) Uruguay’s (and Argentina’s)
recognition that the Statute’s procedural rules are there to facilitate the observance of
its substantive provisions does not set up an impermissible “hierarchy of rights”; and
(v) Argentina’s actions permitting the c onstruction and operation of scores of
contaminating industrial plan ts on its own side of the Uruguay River without ever
once notifying CARU directly contradict its arguments in this case.
Section II.
The Issue of Implementation During Dispute Resolution
2.86 In the preceding Section, Uruguay a ddressed the first of the two core
procedural disputes remaining between the Pa rties; that is, the nature and scope of
CARU’s involvement in the Articles 7-12 pr ocess and, more pa rticularly, whether
the Parties are free to agree to proceed straight away to direct consultations and to
dispense with CARU’s intermediation. In this Section, Uruguay will turn to the
second remaining dispute -- whether a Part y may implement a project when dispute
resolution proceedings are underway -- and s how that the analysis set forth in the
Reply does not withstand serious scrutiny. Indeed, it is in large measure refuted by
the very authority on which Argentina purpor ts to rely. The inescapable conclusion
is that, properly interpreted, the Statute permits the initiating State to implement a
project after dispute resolution procedures have been commenced.
A. THE V ETO ISSUE AND THE C ONSEQUENCES OF A D ISAGREEMENT
2.87 In the Counter-Memorial, Uruguay observed that Argentina’s Memorial
was studiously ambiguous on the question of whether or not the 1975 Statute
requires the prior consent of the notified State before the initiating State may
- 79 -implement a planned project 144. Notwithstanding the obvious centrality of the issue
to the dispute now before the Court, Arge ntina’s first written pleading steadfastly
refused to take a clear position. Although the Memorial seemed intent on nurturing
the impression that the Statute requires prior consent, it never actually said so. In
fact, the words “prior consent” and “veto” were not used anywhere in its pages. On
the other hand, the phrase “prior agreement” (“accord préable”) did turn up with
some frequency. But even when it did, the words were used in the context of opaque
references to the Statute’s “obligations relating to prior agreement” and like phrases
that left the reader uncertain whether Argentina was actually claiming that the
Statute requires such prior agreement.
2.88 In response, relying on the text of th e Statute, the Parties’ consistent
course of conduct and the rules of gene ral international law, Uruguay’s Counter-
145
Memorial showed that the 1975 Statute does not require prior consent . In
particular, the Counter-Memorial demonstrated that the text of the Statute is silent on
this point. The Statute neither says that pr ior consent is required nor that it is not.
Using general international law to fill this lacuna, it is clear that the Statute should
be construed not to require prior consent. As the arbitral tribunal in the Lake Lanoux
case (Spain v. France) stated:
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
144See UCM, paras. 2.110-2.113.
145See UCM, paras. 2.110-2.165.
- 80 - sovereignty of a State, and su ch restriction could only be
admitted if there were clear and convincing evidence 146.
2.89 The Tribunal’s reasoning was echoed in the work of Dr. Julio Barberis,
one of Argentina’s lead negotiators of the 1975 Statute and a leading Latin American
authority on shared natural resources. Wr iting in 1979, he stated: “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 othe r contracting State. … The existence of a
legal régime of this type must be expressly stipulated in a treaty” 147. Notably, Dr.
Barberis listed examples of treaties that expressly stipulate a prior consent régime,
none of which was the 1975 Statute 148.
2.90 Since there is no such express stipul ation in the Statute, the only possible
conclusion is that prior agreement is not required. This conclusion is also amply
supported by the practice of the Parties, as amply described in the Counter-
149
Memorial . Put simply, the Statute does not give either Party a right of veto over
the projects of the other. What the Statue creates instead is a system of prior
notification and prior consultation, without however requiring prior agreement.
2.91 In contrast to the Memorial, the Reply finally makes clear what
Argentina’s argument is. In particular, Argentina argues that in the absence of a
specific agreement between the Parties, the Statute prohibits the initiating State from
implementing a project over the objections of the notified State until such time as
146Lake Lanoux Arbitration (France v. Spain), International Law Reports, vol. 24, p. 129, para.
13 (16 Nov. 1957).
147Julio A. Barberis, Shared Natural Resources Among States and International Law , p. 46
(1979). UCM, Vol. IX, Annex 198.
148Ibid.
149See UCM, paras. 2.124-2.129 & 2.140-2.155.
- 81 -this Court renders a final judgment on the meri ts. The Reply claims that “le fait est
que, sans l’accord de la Partie notifiée, l’autre Partie ne peut mettre en Œuvre son
150
projet sans un ‘feu vert’ de la Cour internationale de Justice” .
2.92 Before exploring the basis of this argument, two threshold observations are
in order. First, Argentina now recognizes that, as a matter of law, the Statute does
not give either Party a right of veto. It ad mits, for example, that “ni l’une ni l’autre
des Parties ne peut empêcher que soit menée à bien la construction d’un ouvrage
151
répondant à ces conditions” [i.e., l’utilisation rationnelle du fleuve Uruguay] .
2.93 Second, and equally important, it also recognizes that a veto, or what it
calls a “blockage”, is undesirable from a pr actical perspective and inconsistent with
the scheme of the Statute as a whole. It states, for instance, that “[e]ncore fault-il
que ce désaccord ne dure pas indéfiniment, ce qui viderait de substance l’équilibre
réalisé par le Statut entre les intérêsts des deux Parties” 152. This theme of the
“balance” the Statute strikes between the interests of the two States, and the need to
avoid “blockages” is one that Argentin a returns to repeatedly throughout the
153
Reply . At paragraph 1.169, it states, for example:
En effet, et l’Argentine a insisté sur ce point, le Statut, même s’il
ne concède aucun droit de décision unilatérale à l’une des Parties
150AR, para. 1.126 (“the fact is that without the agreement of the notified party, the other party
may not implement its project without a ‘green light’ from the International Court of Justice”).
151AR, para. 1.119 (“neither party can prevent th e construction of a facility or installation
meeting these conditions [i.e., the rational use of the river] from being duly implemented”).
152AR, para. 1.120 (“it is essential that this di sagreement not last i ndefinitely, which would
substantially dissipate the balance achieved by the Statute between the interests of the two
parties”).
153
See, e.g., AR, paras. 1.151-1.152 & 1.175.
- 82 - s’emploie à éviter que puisse s’instaurer (lorsqu’il est respecté)
154
une situation de blocage .
Elsewhere it similarly emphasizes that the Statute’s procedures are “en effet conçu
de manière à éviter les blocages préjudic iables à une exploi tation rationnelle et
respectueuse des droits de l’autre Partie de la ressource partagée que constitue le
155
fleuve Uruguay” , and that the purpose of giving the notified State a limited period
to raise objections is “afin d’éviter de bloquer le processus” 156.
2.94 Argentina’s argument that the initiating State may not implement a project
absent a final decision from the Court is pr emised entirely on an inferential reading
of Article 9 of the Statute. Article 9 provides that if the notified State raises no
objections or does not respond within the 180-day period established by Article 8,
157
the initiating State may carry out the work planned . Based on an a contrario
reading of this text, Argentina c oncludes that if the notified State does object, the
initiating State may not carry out the work planned 15. The flaws in this argument,
and the reasons to be cautious about yielding to simplistic a contrario reasoning,
have already been well documented in Uruguay’s Counter-Memorial and need not
be revisited in full here 159. It is sufficient for present purposes to note that there is
154AR, para. 1.169 (footnote omitted) (“In eff ect, and Argentina has emphasized this point,
even if the Statute does not grant any unilateral decision making ri ght on one of the parties, it
attempts to avoid (whenever complied with) the occurrence of a blockage situation.”).
155
AR, para. 1.119 (“in fact designed to avoid harmful blockages of a rational and respectful
exploitation of the rights of the other party to the shared resource that constitutes the Uruguay
River”).
156
AR, para 1.130 (“in order avoid any blocking of the process”).
157
1975 Statute, op. cit., Art. 9. UCM. Vol. II, Annex 4.
158
See AR, para. 1.138.
159
See UCM, paras. 2.130- 2.136.
- 83 -another perfectly logical way to read Article 9 that does not necessitate the ever-
perilous step of drawing negative infere nces from what is not said. Under this
reading, Article 9 (as read together with Article 10) states the procedural
consequences when the notified State does not object to a project. That is, Article 9
states that the initiating State may proceed with the project without incurring any
further procedural obligation except the re quirement (under Article 10) to allow the
notified State to inspect the project in question. Articles 11 and 12, in turn, state the
procedural consequences when the notified State does object to a project. Under that
alternative scenario, the two States must consult with one another and, if their
disagreement persists, they agree to submit their dispute to this Court. But the
procedural consequences under Artic le 9 when the notified State has no objections
say nothing about the procedural consequences in the contrary situation when it does
have objections. So viewed, Article 9 mean s exactly, but only, what it says: if the
notifying State has no objections, the initiating State may go forward with its project
without incurring any additional procedural obligations (save only for the duty under
Article 10 to allow the notified State to inspect the project).
2.95 The Parties appear to be in agreement on this point insofar as they both
recognize that Articles 9 and 10, on the one hand, and Articles 11 and 12, on the
other, address alternative scenarios. At paragraph 1.132 of the Reply, Argentina
states:
Les articles 9 à 12 du Statut du fleuve Uruguay concernent les
dernières étapes de la procédure que doivent suivre les Parties à
la suite de la communication par cel le qui projette de construire
un ouvrage. Comme cela est rappelé ci-dessus, ces étapes se
présentment sous la forme d’une alternative:
- ou bien la Partie ne formule pas
d’objections dans les délais requis et ‘l’autre
- 84 - Partie peut construire ou autoriser la
construction de l’ouvrage projeté’ – et les
dispositions des articles 9 et 10 s’appliquent;
- ou bien la Partie notifiée conclut que le
projet risque de causer un préjudice sensible
et, faute d’accord entre les deux États, le
dernier mot revient à la Cour de céans,
comme cela résulte des articles 11 et 12 du
160
Statut .
2.96 Thus, Argentina recognizes that Articles 9 and 10, and Articles 11 and 12,
lay out the scope of procedures to be followed under alternative scenarios, i.e., when
the notified State does not object to the project (Articles 9 and 10) and when it does
object (Articles 11 and 12).
2.97 The open question is whether impl ementation is permitted during the
period after a notified State objects to a proj ect -- thereby bringing it within Articles
11 and 12, as opposed to Articles 9 and 10 -- and the dispute is pending before the
Court. For Uruguay, the Statute is silent on this point. But since the Statute does
not afford either Party a veto right (a point with which Argentina now agrees),
Uruguay concludes that the initiating State can proceed unless and until the Court
orders it to stop, assuming the risk that the Court may ultimately order the
dismantling of the project. By contra st, Argentina claims that Article 9 implies that
if the notified State does object, the initiating State may not implement the project
160AR, para. 1.132 (“Articles 9 to 12 of the Statute of the River Uruguay deal with the final
stages of the procedure that the parties must follow after communication by the party planning
to build a facility or installation. As stated a bove, these stages present themselves in the form
of an alternative: -Either the party makes no obj ections within the required periods of time and
“the other party may carry out or authorize the work planned” -- with the provisions of Articles
9 and 10 applying; -Or else the notified part y concludes that the project risks causing
considerable harm and, absent an agreement between the two Stat es, the last word falls to the
ruling Court, as results from Articles 11 and 12 of the Statute.”).
- 85 -until the Court rules. Yet, as even Argen tina must recognize, Article 9 actually says
no such thing.
2.98 To support to its argument about Ar ticle 9, Argentina places heavy
reliance on the 1997 Watercourse Conventi on and the ILC’s commentary thereto.
Yet, as will be demonstrated immediately below, the Convention actually refutes
Argentina’s argument. Specifically, the Convention rejects the contention that when
watercourse States disagree and dispute resolution arises, the implementation of a
project must await the outcome of the dispute resolution process.
2.99 The pertinent portion of the Reply is worth quoting in extenso precisely
because it is so very telling. It states:
Le Statut qui était, sans aucun doute, ‘en avance sur son temps’,
a constitué l’une des sources d’inspiration principales pour
l’élaboration de maintes dispositions de la Convention de 1997.
Ainsi, les articles 7 à 12 ont-ils été intégralement reproduits dans
le texte du commentaire de l’article 12 du projet d’articles de la
C.D.I. sur le droit relatif aux utilisations des cours d’eau
internationaux à des fins autres que la navigation (qui allait
devenir l’article 12 de la Convention) et ont-ils constitué un
précédent auquel la Commission s’est référé pour rédiger les
dispositions relatives à l’obligati on de notification, à sa teneur,
au délai de réponse et aux ‘procédures applicables au cas où les
parties ne s’entendraient pas sur le projet proposé’, sans pour
autant adopter une solution aussi avancée que celle préuve par le
Statut. Au surplus, comme le relève la C.D.I. dans le
commentaire de son projet final:
‘La seconde obligation qui incombe à l’État
auteur de la notification en vertu de l’article
14 est de ne pas mettre en Œuvre ou de ne
pas permettre que soient mises en Œuvre les
mesures projetées, sans le consentement des
États auxquels a été adressée la notification.
(…) Peut-être va-t-il sans dire que cette
seconde obligation est un élément nécessaire
des procédures prévues dans la troisième
partie du projet, puisque celles-ci sont
destinées à maintenir un état de choses
caractérisé par l’expression ‘utilisation
- 86 - équitable’ au sens de l’article 5. Si l’État
auteur de la notification devait procéder à la
mise en Œuvre avant que l’État à qui a été
adressée la notification ait eu la possibilité
d’évaluer les effets éventuels des mesures
projetées et d’informer l’État auteur de la
notification de ses conclusions, ce dernier
n’aurait pas à sa di sposition toutes les
informations dont il a besoin pour être à
même de se conformer aux articles 5 à 7. Le
devoir de ne pas procéder à la mise en Œuvre
a ainsi pour but d’aider les États du cours
d’eau à s’assurer qu’aucune des mesures
qu’ils projettent n’est incompatible avec les
obligations qui leur incombent en vertu des
articles 5 et 7’
L’obligation de l’État qui projette une opération de s’abstenir de
la mettre en Œuvre est donc une conséquence inhérente à
l’obligation de notification et à son objectif, qui seraient privés
de signification si l’on devait admettre que, nonobstant
l’obligation de notifier et d’informer le projet pouvait être mené
161
à bien .
161
AR, para. 1.140 (emphasis added) (“The statut e, which was without any doubt “ahead of its
time”, constituted one of the principal sources of inspiration for the formulation of main
provisions of the 1997 Convention. Thus, Articles 7 to 12 have been totally reproduced in the
text of the comments on Article 12 of the draf t articles of the International Law Commission
(ILC) respecting the law relative to the uses of international waterways for purposes other than
navigation (which become Article 12 of the Convention), and constituted a precedent to which
the Commission referred when drawing up the provisions respecting the obligation of
notification, the purport and tenor thereof, the response period and the “applicable procedures
in the event that the parties are unable to co me to an agreement on the proposed project” ,
without nonetheless adopting a solution as adva nced as that provided by the Statute.
Moreover, as the ILC states in its commentary on the final draft: “The second obligation that is
incumbent upon the notifying State pursuant to Article 14 is not to implement the proposed
measure or cause them to be implemented wit hout the consent of the States to which the
notification has been addressed… It perhaps goe s without saying that this second obligation is
a necessary component of the procedures stipulated in the third part of the draft, since they are
intended to maintain a state of things charact erized by the expression “equitable use” in the
meaning of Article 5. If the notifying State should proceed with the implementation before the
notified State has been able to assess the possibl e effects of the proposed measures and inform
the notifying State of its findings or conclusion, th e latter would not have at its disposal all of
the information needed to adhere to the provisions of Articles 5 to 7. Thus, the purpose of the
obligation not to proceed with implementation is to help the waterway States to ensure that
none of the proposed measures is incompatible with the obligations incumbent upon them
under Articles 5 and 7.” The obligation of the St ate that is proposing an operation to abstain
- 87 -2.100 This piece of reasoning is remarkable and, Uruguay submits, conclusive of
the issue now under consideration; that is, does Article 9 of the Statute prohibit the
initiating State from implementing a project before the Court issues its final
judgment on the merits? In the first inst ance, of course, this invocation of the
Watercourse Convention evidences Argentin a’s agreement that the Convention is
pertinent to the interpretation of the terms of the Statute. Indeed, for reasons
Argentina itself identifies, it is hard to see how it could be otherwise. The 1975
Statute was a key source of inspiration for the ILC when crafting the “procédures
applicables au cas où les parties ne s’entendraient pas sur le projet proposé”.
2.101 Argentina’s invocation of the Watercourse Convention is also critical
because, while it is true that the Convention bars the implementation of a project
during certain specified periods of time, it is not true that it prohibits implementation
until the end of the dispute resolution pr ocess, as Argentina’s quotation might
suggest. The ILC commentary that Argentina quotes at such length is actually taken
from the comments to Article 14 of the C onvention, which expressly provides that
the duty not to implement the project persists during the period given to the notified
State to Reply to a notification 16. This, incidentally, is in contrast to the 1975
Statute, which is silent on the point and says nothing about a duty not to implement
the project during the period given to the not ified State to reply to a notification.
Article 17, paragraph 3, of the Conventi on further extends the period during which
from implementing it is thus an inherent conse quence of the obligation of notification and its
objective, which would be deprived of meaning if one allowed, notwithstanding the obligation
to notify and report, the project to be carried out.”).
162Draft Articles on the Law of Non-Navigational Uses of International Watercourses and
Commentaries Thereto (hereinafter “1994 Dr aft Articles”), p. 114 (1994), appears in Yearbook
of the International Law Commission, 1994, Vol. II, Part Two.
- 88 -the initiating State may not implement a pr oject to the consul tation and negotiation
phase specified in paragraphs 1 and 2 of the same article. Again, the 1975 Statute
says nothing on the topic.
2.102 The fact that the Watercourse Convention prohibits implementation during
these two earlier periods does not, however, support Argentina’s argument that the
duty not to implement extends all the way to the end of dispute resolution
proceedings. Indeed, the Watercourse Convention leads to exactly the opposite
conclusion. Just as Article 17 of the C onvention makes clear that the obligation not
to carry out a project lasts through the period for consultations and negotiations, it
makes equally clear that the obligation ends when consultations end. The text of
Article 17 is plain. It provides that during consultations and negotiations, the
notifying State shall, if so requested by the notified State, “refrain from
implementing or permitting the implementation of the planned measures for a period
163
not exceeding six months” . According to the ILC:
Implementation of the measures during a reasonable period of
consultations and negotiations woul d not be consistent with the
requirements of good faith laid dow n in paragraph 2 of Article
17 and referred to in the Lake Lanoux arbitral award. By the
same token, however, consulta tions and negotiations should not
further suspend implementation for more than a reasonable
period of time. … After this period has expired, the notifying
State may proceed with implementation of its plans , subject
always to its obligations unde r articles 5 and 7 [concerning
equitable and reasonable utilizat ion, and the obligation not to
cause significant harm] 16.
2.103 The differences between the 1975 Statute and the Watercourse Convention
can thus be summarised as follows: under the Convention, there is an express duty
163
1997 Watercourse Convention, op. cit., Art. 17 (emphasis added).
1641994 Draft Articles, op. cit., p. 116, comment 4 (emphasis added).
- 89 -not to implement a project both during the notification and repl y period, and during
the consultation and negotiation period. During dispute resolution, however,
implementation is pe rmitted. In contrast, the 1975 Statute does not address the
initiating State’s duties during any of these phases. The Statute’s silence leads to
two logical alternatives. Under the firs t, the silence of the Statute would be
interpreted to permit implementation since no express prohibitions are stated. Under
this alternative, Uruguay would be free at all times to implement the project unless
and until the Court ordered it not to or (if the project were already implemented)
ordered the project dismantled. The second alternative would be to fill the lacunae
in the 1975 Statute by reference to general in ternational law. Under this alternative,
the void in the Statute would be filled, c onsistent with the Watercourse Convention,
by a duty not to implement during the periods of notification and consultation, but
there would be no such duty during the dispute resolution phase.
2.104 As shown, Argentina relies on th e Watercourse Convention for its
argument that a duty not to implement s hould be read into the 1975 Statute.
Uruguay agrees. Argentina should be bound by its own reasoning. Having enlisted
the Convention as authority concerning the “applicable procedures in the event the
parties are unable to come to an agreem ent on the proposed project”, it cannot now
pick and choose among those procedures , accepting the ones that it likes and
rejecting those that do not support its case. It cannot in good faith invoke the
Watercourse Convention for the principle that there is a duty not to implement a
project during the periods of notificati on and consultation without accepting the
principle that there is no such duty duri ng the dispute resolution phase. Thus, by
force of Argentina’s own analysis, just as the Watercourse Convention permits the
- 90 -notifying State to implement a project upon conclusion of consultations, so too does
the 1975 Statute.
2.105 The plain terms of Article 16 of the Watercourse Convention also stand as
a stark refutation of Argentina’s a contrario reading of Article 9 of the 1975 Statute.
Although perhaps more verbose, Article 16 of the Convention is quite similar to
Article 9 of the Statute. It states:
If, within the period applicable pursuant to article 13 [concerning
replies to notifications], the notifying State receives no
communication under paragraph 2 of article 15 [concerning
objections to projects], it may, subject to its obligations under
articles 5 and 7 [concerning equitable and reasonable utilization,
and the obligation not to cause significant har165 proceed with
the implementation of planned measures … .
Quite obviously, Article 16 is susceptib le to exactly the same sort of a contrario
reading that Argentina gives to Article 9 of the Statute. Were one to apply
Argentina’s logic, Article 16 could be made to mean not only what it actually says,
but also that if the notifying state does receive a communication voicing an objection
to its planned measures, it may not proceed with the implementation of its plans, at
least until such time as all dispute resolution proceedings have run their course. Yet,
that is distinctly not what Article 16 means. Instead, as shown above, under the
Watercourse Convention implementation of a project is only prohibited through the
166
end of consultations and is permitted during dispute resolution . Thus, if the
language of Article 16 of the Convention may not be given an a contrario
interpretation, neither should the very similar language in Article 9 of the Statute.
1651997 Watercourse Convention, op. cit., Art. 16 (emphasis added).
166See supra, paras. 2.101-2.103.
- 91 -2.106 The reason the implementing State is permitted to implement its plans
after a reasonable period of consultations is precisely because the purpose of the
procedural articles of the Watercourse Convention is “to assist watercourse States in
maintaining an equitable balance between th eir respective uses of an international
watercourse” 167. While each watercourse State has “the obligation not to exceed its
right to equitable utilization”, it also ha s the concomitant “right to utilize an
168
international watercourse in an equitable and reasonable manner” . Maintaining
the proper balance between these competin g rights and obligations means that at
some point in the process, the notifying State’s duty not to implement until it has
heard the notified State’s obj ections in good faith must yield to its entitlement “to
169
make use of the waters of an interna tional watercourse within its territory” .
Without that balance, the notified State c ould effectively place the notifying State’s
development plans on indefinite hold through the simple expedient of continuing to
insist on its objections, well-founded or not.
2.107 These same considerations apply equa lly to the 1975 Statute, the agreed
purpose of which is “to establish the join t machinery necessary for the optimum and
rational utilization of the River Uruguay” 17. As Argentina itself states in the Reply:
1671994 Draft Articles, op. cit., p. 111, comment 1.
168Ibid., p. 97, comment 2.
169Ibid., p. 98, comment 8.
1701975 Statute, op. cit., Art. 1. UCM, Vol. II, Annex 4.
- 92 -[e]ncore faut-il que ce désaccord ne dur e pas indéfiniment, ce qui viderait de
substance l’équilibre réalisé par le Statut entre les intérêts des deux Parties” 171.
2.108 In this respect, it is interesting th at even as Argentina acknowledges the
fact that the Statute does not confer a veto right on either party, it tries to minimize
the importance of this issue claiming that “il n’importe guère que l’on parle de veto,
172
d’accord préalable ou de consultations préalables” . In a similar way, Argentina
attempts to reduce the significance of the fact that general international law does not
give notified States a veto over the projec ts of the notifying State by arguing: “il est
sans intérêt de discuter la question de savoir s’il existe un droit de veto en droit
173
international général …” But it is of interest. Knowing that both general
international law and the 1975 Statute reject a veto right necessarily affects the
interpretation of the Statute. Given that the Parties specifically chose not to confer
de jure veto rights on each other, an interpretation of the Statute that would have the
effect of creating de facto veto rights is logically to be avoided. Argentina appears
to agree. It states for example that the Statute is “en effet conçu de manière à éviter
les blocages préjudiciables à une exploita tion rationnelle et respectueuse des droits
de l’autre Partie de la ressource partagée que constitue le fleuve Uruguay” 174. Yet,
171AR, para. 1.120 (“[I]t is essential that this disagreement not last i ndefinitely, which would
substantially dissipate the balance achieved by the Statute between the interests of the two
parties”).
172
AR, para. 1.129 (“it hardly matters whether one is talking about veto, prior agreement or
prior consultations”).
173
AR, para. 1.124 (“it is of no interest to disc uss the question of knowing whether a veto right
exists in general international law …”).
174
AR, para. 1.119 (“in fact designed to avoid harmful blockages of a rational and respectful
exploitation of the rights of the other party to the shared resource that constitutes the Uruguay
River”).
- 93 -this is exactly what Argentina’s reading of the Statute would do. It is not just that
Argentina’s interpretation of the Statute w ould enable the notified State to hold the
initiating State’s project hostage pendi ng the outcome of protracted dispute
resolution proceedings. It is more than that. As Uruguay stated in the Counter-
Memorial, the extended “blockage” Argentina’s reading of the Statute would likely
kill any disputed private investment project 17. Few, if any, private investors are
likely to wait the years required for litigation in this Court to run its full course.
Nowhere in the 510 pages of its Reply does Argentina even try to dispute this fact.
And since Argentina has admitted this re sult is not what the Statute intends, the
Statute should be interpreted in a way that avoids it.
2.109 Even as the Reply embraces the 1997 Watercourse Convention as relevant
authority concerning the “procédures applicables au cas où les parties ne
s’entendraient pas sur le projet proposé”, it simultaneously attempts to limit its
application because, unlike the 1975 Statute, it supposedly does not contain a
176
“clause de règlement obligatoire des différends” . According to Argentina, this
ostensible distinction is pertinent because the Convention leaves open “la possibilité
d’une impasse”, inasmuch as the absen ce of mandatory dispute resolution means
there would be “rien ne garantit que le blocage puisse être surmonté” 177. As a
threshold matter, Uruguay disputes the exis tence of the distinction Argentina seeks
to draw. Article 33 of the Watercour se Convention expressly provides for
175
UCM, para. 1.31.
176
AR, para. 1.151 (“mandatory dispute resolution clause”).
177AR, para. 1.151 (“the possibility of impasse”, “nothing to guarantee that the blockage could
be cleared”).
- 94 -mandatory dispute resolution in the form of impartial fact-finding (or, if agreed,
mediation or conciliation) followed by opti onal arbitration or j udicial settlement.
The mandatory nature of these procedures is emphasized in Article 33(b), which
states that the Parties “shall”, at the reque st of any one of them, have recourse to
impartial fact-finding.
2.110 More to the point, Argentina’s claimed distinction is irrelevant. There is
nothing either in the text of the Conventi on or the ILC commentary to suggest that
the reason it permits the implementation of planned measures upon conclusion of
consultations is because there is no ma ndatory provision for binding judicial
178
settlement, and therefore “rien ne garantit que le blocage puisse être surmonté” .
To the contrary, the text and commentary make clear that the reason for permitting
implementation upon conclusion of consultations is be cause the initiating State
should only have to put its plans on hold for a “reasonable period” (not to exceed six
months) while it hears the other side out and consults in good faith. Requiring the
notifying State to wait any longer risks seri ously impairing its right “to make use of
the waters of an international watercourse within its territory”.
2.111 Argentina’s argument to the contrary does not withstand logical analysis.
If the reason the Watercourse Convention pe rmits the initiating State to implement
its planned measures even in the face of objections from the notified State were truly
because there is “nothing to guarantee that the blockage could be cleared” at the end
of the dispute resolution phase, one would expect that implementation of a project
would be permitted not upon the conclusion of consultations, as it is, but rather upon
178
AR, para. 1.151.
- 95 -conclusion of the impartial fact-finding pr ocedure in the event the disagreement
persists. That the Convention permits implementation at the earlier moment in time
still further underscores the fact that th e underlying purpose is to maintain the
delicate balance at the heart of the C onvention (and the 1975 Statute); namely,
between “the obligation not to exceed its right to equitable utilization” and the “right
to utilize an international watercourse in an equitable and reasonable manner”.
2.112 Uruguay notes too that Article 33 of the Watercourse Convention
contemplates the possibility of referring disputes either to arbitration or to judicial
179
settlement if the Parties so agree . Again, if the reason the implementation of
planned measures were because there is “nothing to guarantee that the blockage
could be cleared” at the end of the dis pute resolution phase, one would also expect
that the Convention would provide an exception to the rule permitting
implementation upon the conclusion of consultations in the event of an agreement to
binding arbitration or judicial settlement. In that case, of course, there would be a
guarantee that the “blockage” could be cleared and, under Argentina’s analysis,
implementation should not be permitted. That implementation of a project is
permitted even when arbitration or judicial settlement is agreed to underscores that
the purpose of allowing the project to go forward after the notified State has had a
full and fair opportunity to be heard in good faith is to prevent the notifying State
from having to put its right to use a wate rcourse in an equitable manner on hold for
more than a reasonable period of time.
179
1997 Watercourse Convention, op. cit., Art. 33.
- 96 -2.113 The Reply recognizes, as it must, that “[e]ncore fault-il que ce désaccord
ne dure pas indéfiniment, ce qui viderait de substance l’équilibre réalisé par le Statut
entre les intérêsts des deux Parties” 180. Argentina does not and cannot deny that an
indefinite or prolonged suspension of a project is the practical equivalent of a death
sentence. Painted into this corner, Argentina tries to escape by arguing that forcing
the initiating State to put its plans on hold until the Court has rendered a final
judgment on the merits does not threaten an unreasonable delay. To support this
argument, the Reply attempts to minimi ze the time required for the procedures
contemplated in Articles 7-12 to play out. It does this by emphasising the time
181
periods specified in Articles 7 (30 days), 8 (180 days) and 12 (180 days) . Yet, it
completely ignores the time required for submitting a case to this Court and
litigating it to final judgment. As the history of this case shows, the time required
for litigating in the Court vastly exceeds the time required for all the other
procedural steps combined. The Court w ill recall that Article 12 consultations
between Argentina and Uruguay under the au spices of GTAN reached impasse in
December 2005 when Argentina announced its inte nt to bring this case to the Court.
Argentina’s Application was filed in Apr il 2006. It is now July 2008 and the oral
proceedings, which have not yet been scheduled, seem unlikely to be held before
2009. And even when they are complete , the Court will, of course, require
additional time to reach its decision. By the time all this is done, it appears likely
that more than three and a half years will have passed since Argentina first filed its
180
AR, para. 1.120 (“it is essential that this sagreement not last i ndefinitely, which would
substantially dissipate the balance achieved by the Statute between the interests of the two
parties”).
181
AR, paras. 1.120-1.121.
- 97 -Application, and more than four years will have elapsed since consultations ended.
Under Argentina’s analysis of the Statute, the notifying State (in this case, Uruguay)
should wait this entire time, doing absolutely nothing in furtherance of its planned
project pending the Court’s decision. The untenable nature of this result speaks for
itself.
2.114 Argentina’s final argument against a llowing the project to proceed during
dispute resolution proceedings is that “l’Éta t qui projette de construire l’ouvrage ne
peut mettre l’autre Partie devant le fait accompli de sa construction et de sa mise en
182
Œuvre” . This argument completely mis understands both the Statute and
Uruguay’s position. Uruguay has never s uggested, and does not now suggest, that
by permitting implementation of a proj ect upon conclusion of consultations, the
Statute leaves the objecting State no choice but to accept the notifying State’s
project. Exactly as the text of the Statute says, the notified State may continue to
press its objections by bringing them before the Court. Moreover, Uruguay has
always accepted, and reiterates here, that the Court has the authority to order
whatever form of relief it considers a ppropriate under the circumstances, including
the ultimate sanction of dismantling the facili ty in dispute. Uruguay hereby affirms
its acceptance of the Court’ s statement in its 13 July 2006 Order on Argentina’s
request for the indication of provisional measures:
Whereas in proceeding with the authorisation and construction
of the mills, Uruguay necessarily bears all risks relating to any
finding on the merits that the Court might later make; whereas
the Court points out that their c onstruction at the current site
182AR, para. 1.122 (“the State which plans to construct the facility or installation cannot place
the other party in the position of looking at the fait accompli of its construction and
implementation”).
- 98 - cannot be deemed to create a fait accompli because, as the Court
has had occasion to emphasize, ‘if it is established that the
construction of works involves an infringement of a legal right,
the possibility cannot and should not be excluded a priori of a
judicial finding that such works must not be continued or must
be modified or dismantled’” 183[.]
2.115 In effect the debate between the Parties over whether implementation is
permitted during dispute resolution reduces to the question of which is the more
sensible solution on an interim basis : (i) prohibiting implementation, with the
attendant substantial delay and risk of lost opportunities for investment and
economic development that such an option necessarily involves, or (ii) permitting
implementation, subject to the reservation that the Court retains the right to order the
modification or even dismantling of the works in question. In Uruguay’s estimation,
the proper choice is obvious.
2.116 As Uruguay previously showed, reading the Statute to allow
implementation while the case is before the Court does not mean that the notified
State is threatened with a risk of substa ntial harm in the interval between when
consultations end and the judgment of the Court 184. The notified State has the right
under Article 41 of the Statute of the Court, and Article 73 of the Rules, to bring a
request at any time for the indication of appropriate provisional measures, including
putting the implementation of the project on hold. Thus, if the notified State truly
believes that it is threatened with irreparable harm by the implementation of the
project during dispute resolution proceedings, it has the ability to protect itself by
183
Case Concerning Pulp Mills on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2006 , para. 78 (13 July 2006) (citing Passage through the Great Belt (Finland v.
Denmark), Provisional Measures, Order of 29 July 1991, I.C.J. Reports 1991, p. 19, para. 31).
184
See UCM, para. 2.185.
- 99 -petitioning the Court for provisional measures. Under Article 8 of the 1975 Statute,
the objecting State has the prior obligation to “specify which aspects of the work
might significantly impair navigation, the ré gime of the river or the quality of its
waters, the technical reasons on which th is conclusion is based and the changes
185
suggested to the plan or programme of operations”. If the notified State has
evidence that the implementation of the project presents an imminent threat of
irreparable harm to the Uruguay River or th e quality of its waters, the Court will be
available on short notice to order the suspension of the project as well as other
necessary protective measures.
2.117 As the Court is well aware, the notif ied State is not limited to seeking
provisional measures upon the filing of its Application. Under Article 73, paragraph
1, of the Rules of the Court, a provisiona l measures request may be brought at any
time during the course of proceedings. Thus, if at any point after a project has been
implemented but before final judgment has been rendered the notifying State can
show that is likely to suffer irreparable in jury, it may come to the Court and obtain
relief on an urgent basis.
2.118 Argentina attempts to dismiss the re levance of provisional measurers by
contending that Uruguay’s argument “ne répond pas à la logique du Statut de 1975,
mais à celle des dispositions du Statut et du Règlement de la Cour de céans relatives
186
aux mesures conservatoires” . Uruguay confesses that it does not understand what
Argentina is trying to say. By providing for mandatory dispute resolution in this
1851975 Statute, op. cit., Art. 8. UCM, Vol. II, Annex 4.
186
AR, para. 1.153 (“does not respond to the logic of the 1975 Statute, but to that of the
provisions of the ruling Court’s Statute and rules relative to interim measures”).
- 100 -Court, the “logic of the 1975 Statute” ne cessarily encompasses all the remedies
available under the Court’s Statute and Rules, including those available as
provisional measures. Moreover, in the abse nce of a showing that the notified State
is confronted with actual or imminent irreparable harm, the “balance achieved by the
Statute”, to which Argentina itself repeatedly refers, favors permitting
implementation pending the final decision of the Court. Conversely, the
achievement of the “balance” called for by the Statute would favor suspension of the
project if its implementation during dispute resolution threatened or caused
irreparable harm. Uruguay readily agrees that if Argentina were able to demonstrate
that the Botnia plant were causing irreparable harm, or was likely to do so, it would
be entitled to have implementation halted. But Argentina has made no such
showing. Indeed, the Court observed in its 13 July 2006 decision on Argentina’s
request for the indication of provisional m easures that “Argentina has not provided
evidence at present that suggests that any pollution resulting from the
commissioning of the mills would be of a character to cause irreparable damage to
the River Uruguay” 187.
2.119 Nor, in the two years since that Order, has Argentina provided evidence of
such a nature. As shown in the Counter-M emorial, and again in this Rejoinder,
Argentina has failed to come forward with credible evidence that the Botnia plant
will cause any harm, let alone irreparable harm, to the Uruguay River or to
Argentina itself. All of the evidence contradicts Argentina’s dire forecasts. As of
the filing of this Rejoinder, the Botnia plant has been in operation for more than
187
Case Concerning Pulp Mills on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2006, op. cit., para. 75.
- 101 -eight months. Its environmental performance thus far has been outstanding. It is
fully complying with BAT standards in all respects, as well as CARU’s and
Uruguay’s water quality regulations. There is no reason to suspend operation of the
plant, and no evidence that would support such a result.
B. IMPLEMENTATION OF A PROJECT AS DISTINGUISHED FROM “PREPARATORY
W ORKS ”
2.120 Throughout this section, Uruguay has referred to the “implementation” of
a project as an act that is (or, in Arge ntina’s view, is not) permitted upon conclusion
of consultations under Articles 11 and 12 of the 1975 Statute. The use of the term
(in Spanish, “ realizar”) thus raises the obvious que stion: what does it mean to
“implement” a project? Neither the Stat ute nor the Watercourse Convention (which
uses the same term) define it. And, unfor tunately, the dictionary definition does not
shed any meaningful light on the issue. According to the Royal Spanish Academy
Dictionary, “ realizar” means to “[p]erform, carry something out or execute an
action”188. These definitions do little but beg the question.
2.121 As Uruguay previously showed, in the context of the Statute as a whole,
given that it seeks to prevent significant ha rm to navigation, the régime of the river
or the quality of its waters, the implementa tion of a project must be the initiation of
189
activities that are capable of harming to the river . In this case, that is not the
construction of the ENCE and Botnia plants (which Argentina nowhere contends
threatened significant harm to it or the river), but only their operation. The
188
Royal Spanish Academy Web Site, Dictionary of the Spanish Language , Twenty Second
Edition, available at http://buscon.rae.es/draeI/SrvltConsulta?TIPO_BUS=3&LEMA=realizar
(last visited on 9 July 2008). UR, Vol. III, Annex R67.
189
See UCM, para. 2.72.
- 102 -construction of the plants, as distingui shed from their operation, involves no
discharges of any kind into the river. C onstruction itself has no impact whatsoever
on the river, and Argentina nowhere argues th at it does. Thus, the plants cannot be
said to have been “implemented”, in the sense of having an impact on the river, until
they have gone into operation. Argentina appears to disagree, although it is unclear
what the precise basis for its disagreement is. The Reply states: “Il serait contraire à
cet objectif fondamental [i.e., l’utilisation rationnelle et optimale du fleuve Uruguay]
qu’un État puisse s’engager dans la c onstruction d’un équipement considérable
(deux, à l’origine, en l’espèce) et extrêmement coûteux sans que la procédure des
articles 7 à 12 ait été suivie”190. The Reply does not bother to explain why this is so.
But in any event it is beside the point since, as shown in Chapter 3 of this Rejoinder,
the procedures set forth in Articles 7 through 12 were satisfied in this case before
construction was undertaken. Construction on the Botnia plant commenced on 18
January 2006 191. That is one month after Argentina declared that the consultations
with Uruguay over the plant had reached an impasse and announced its intention to
file suit in this Court in December 2005. Prior thereto, only preparatory work had
been carried out on the Botnia plant. (It is undisputed that construction of the ENCE
plant was never undertaken.)
2.122 In the Counter-Memorial, Uruguay pointed to the work of a leading
publicist on prior consultation in international law for the proposition that
190AR, para. 1.94 (“It would be counter to this objective [i.e., the rational and optimum use of
the river] if a State could undertake the construc tion of an extremely co stly major installation
(originally two in the case under discussion) without the procedure set forth in Articles 7 to 12
being followed”).
191UCM, para. 3.117, citing DINAMA Environmental Management Plan Approval for the
Botnia Plant (for the construction of the bleached cellulose plant). UCM, Vol. II, Annex 26.
- 103 - 192
“preparatory works” are permissible even as consultations are on-going .
Tellingly, Argentina nowhere addresses, much less disputes, this authority. It can
thus be taken to admit its veracity.
2.123 In first making this point in the Counter-Memorial, Uruguay cited this
Court’s decision in the Gabčikovo-Nagymaros Project case, in which the Court
observed: “A wrongful act or offence is fre quently preceded by preparatory actions
193
which are not to be confused with the act or offence itself” . The Reply disputes
the relevance of the Court’s statement to this case, arguing that the nature of the
substantive dispute there differed “radicalement” from the procedural issue now
under consideration 19. Even assuming that is so, the force of the Court’s
observation is undiminished. Uruguay invok ed it not because it was arguing that
there is an exact parallel between the tw o cases, but rather because the Court’s
comment evidences judicial recognition of the common sense point that the actions
to which the law attaches significance are frequently preceded by other actions to
which the law does not attach significance. Thus, Uruguay made clear that it was
invoking Gabčikovo because it recognizes that the “implementation” of a project
under the Statute should not be confused with mere preparatory acts that themselves
pose no risk of harm to the river. Uruguay stands by its point.
2.124 In this case, the Court is not called on to decide whether construction of an
industrial facility (as distinguished from its operation) does or does not constitute
192
UCM, para. 2.180 (citing Kirgis, F., Prior Consultation in International Law: A Study in
State Practice, Charlottesville, University Press of Virginia, 1983, p. 75).
193UCM, para. 2.73 (citing Gabčikovo-Nagymaros Project (Judgment), p. 54, para. 79).
194AR, para. 1.96 (“radically”).
- 104 -permissible “preparatory work” while activ e consultations are on-going. As shown
in the Counter-Memorial, and reiterated in Chapter 3 of this Rejoinder, no actual
construction of the Botnia facility was undertaken during the consultations between
Uruguay and Argentina 195. During this period, Uruguay authorized only works that
were themselves preparatory to the ultimate construction of the Botnia plant while
GTAN consultations continued 196. Actual construction was not authorized until 18
January 2006 after consultations in GTAN had, by Argentina’s own admission,
reached impasse and Argentina had indicated its intention to initiate dispute
197
resolution proceedings before the Court . Given the undisputed authority cited just
above, there can be no argument that work preliminary to construction of the Botnia
plant constitutes anything other than “preparatory work” that is permitted while
consultations are taking place. Since actual construction of the plant did not
commence until after consultations ended, and since, as shown in subsection II.A.
above, implementation is permissible af ter consultations and during dispute
resolution, the implementation of the Botnia project did not viol ate Articles 7-12 of
the 1975 Statute.
C. T HE IMPORTANCE OF E NVIRONMENTAL P ROTECTION
2.125 In the context of decrying Uruguay’s act ions in this case, Chapter 1 of the
Reply devotes a surprising amount of tim e to arguing that Uruguay denigrates the
importance the 1975 Statute attaches to prot ecting the environment. It states, for
example:
195
See infra, paras. 3.106-3.109
196See infra, para 3.108.
197See infra, para. 3.109.
- 105 - L’autre point sur lequel l’analyse que fait l’Uruguay du Statut de
1975 pêche gravement concerne sa dimension environnementale,
que la contre-mémoire s’emploie à minimiser systématiquement
tout en lui payant tribute du bout des lèvres … 198.
2.126 Argentina’s stratagem here is obvious. Just as it is intent on cultivating the
(false) impression that Uruguay would pref er to ignore the Statute’s procedural
rules, so too it laboriously tries to make it seem as if Uruguay fears the Statute’s
environmental protection provisions. This argument too is a fiction of Argentina’s
creation.
2.127 The truth is that Uruguay fully embraces the environmental protection
aspects of the Statute. It stands behi nd its commitments and considers that its
conduct throughout this dispute only undersco res them further. Stripping away the
rhetorical excesses, if either Party can be said merely to be paying “lip-service” to
the importance of protecting the aquatic environment of the Uruguay River, that
Party is Argentina. As first detailed in the Counter-Memorial, and discussed further
in Section I.E. above, Argentina does not deny that since the 1975 Statute was
adopted, it has built scores of industrial pl ants near the Uruguay River, many of
which discharge contaminati ng effluents into the Uruguay River. In no case were
any of these plants notified either to CARU or to Uruguay. Only after these
embarrassing facts were highlighted in the Counter-Memorial has Argentina acted to
remedy them.
198AR, para. 1.46 (“The other point on which the analysis made by Uruguay of the 1975
Statute is seriously troubling concerns its environmental dimension, which the Counter-
Memorial systematically minimizes, all the while paying lip-service tribute ...”).
- 106 -2.128 The reality, of course, is that the Counter-Memor ial in no way sought to
diminish the importance of environmental pr otection, but only to state the obvious:
protection of the aquatic environment is not the only subject of the Statute. Once
again, the Parties are actually in substan tial agreement on this point. Argentina’s
Reply states:
L’Argentine n’a bien sûr jamais prétendu –et ne prétend pas—
que les considérations écologiques soient les seules qui ont été à
l’origine du Statut et que la pr otection de l’environnement des
eaux du fleuve et de ses zones d’influence soient ses seuls
objectifs. … Il ne peut faire de doute que la prévention de la
pollution du fleuve et de ses zones d’influence constitue l’un des
objectifs essentiels de la gestion commune établie par le Traité et
l’une des composantes inhérentes à l’utilisation rationnelle et
optimale du fleuve 19.
For a second time, Uruguay is content to adopt Argentina’s words as its own.
2.129 The Parties’ agreement about the role of environmental protection within
the overall scheme of the 1975 Statute runs deeper still. According to the Reply:
l’Argentine est en complet acco rd avec l’Uruguay: ‘… the 1975
Statute must be interpreted in accordance with the principle of
sustainable development, whic h requires that the goals of
economic 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 protection 200[.]
199
AR, para. 1.47 (emphasis added) (“Argentina has never claimed -- and does not claim -- that
ecological considerations are the only ones that are at the source of the Statute, and that the
environmental protection of the waters of the river and its zones of influence are the sole
objectives. … There can be no doubt that the prevention of pollution of the river and its zones
of influence constitutes one of the essential objectives of the joint management structure
established by the treaty and one of the components inherent in the rational and optimum use of
the river.”).
200AR, para. 1.48 (quoting UCM, para. 2.29) (empha sis added by Argentina) (“Argentina is in
complete agreement with Uruguay”).
- 107 -2.130 The Parties’ agreement that the 1975 Statute must be interpreted
consistently with the principle of sustainable developm ent has important
consequences for this case. As Uruguay discussed in the Counter-Memorial, and as
the Court well knows in any event, ach ieving sustainable development means
finding the appropriate balance between economic development, on the one hand,
and protection of the environment, on the ot her. Development is permitted (indeed,
required under Article 1 of the UN Covenants on Civil and Political Rights and on
Economic, Social and Cultural Rights, among other places) so long as the
environment is protected for the benefit of future generations. Indeed, this very
point is captured in the Preamble to the 1975 Statute which sets out what both
Parties accept as the Statute’s central object: the “rational and optimal use” of the
Uruguay River. An interpretation of the Stat ute that sacrifices either developmental
goals or environmental protection at the altar of the other must be rejected. It is no
more acceptable to eviscerate the Parties’ respective right to economic development
than to eviscerate their mutual right to a healthy environment.
2.131 To state this does not in any way imply that Uruguay exalts economic
development above environmental protection. It does not: not as a matter of national
policy, or as a practice with respect to the ENCE and Botnia plants. Uruguay has
authorized these plants, and approved the operation of the Botnia plant, only because
it is convinced that they pose no risk of harm to the Uruguay River or the aquatic
environment. And the eviden ce, as shown in Chapters 4 through 7 of the Counter-
Memorial, and in Chapters 4 through 6 of this Rejoinder, fully supports Uruguay’s
decisions.
- 108 - D. T HE R OLE OF THE COURT
2.132 In the Counter-Memorial, Uruguay discussed the role of the Court in the
procedural scheme of the 1975 Statute. It showed that Articles 7-12 set up a system
of notification, information sharing and consultations all of which are focused on
one question: whether or not a project will cause significant harm to navigation, the
201
régime of the river and/or the quality of its waters . It follows as a simple matter
of logic that when a case comes to the Court through Article 12, the Court’s role is
to make an objective decision about the very same issue: does a project cause
significant harm to any of the three enumerated subjects?
2.133 Argentina’s Reply does not directly cont radict the logic of this argument.
Instead, it seeks to recast the dispute now before the Court. According to Argentina:
À lire les quelques paragraphe s que la Partie uruguayenne
consacre, dans son contre-mémoi re, au rôle de la Cour, on a
l’impression que celle-ici a été saisie par l’Argentine sur le
fondement de l’article 12. Ce n’es t pas le cas. Pour qu’il en fût
ainsi, il eût fallu que la procédure des articles 7 à 11 eût été
convenablement suivie et menée à son terme, c’est-à-dire eût
abouti à la conclusion qu’un accord était impossible. Tel n’ayant
pas été le cas, la voie de l’article 12 était fermée et c’est 202 le
fondement de l’article 60 que l’Argentine a saisi la Cour … .
2.134 As discussed below, the reason Argen tina now insists on this argument is
clear. The trouble with it, however, is that it is directly contradicted by Argentina’s
201
UCM, paras. 1.27, 2.3, 2.48, 2.94, 2.95, 2.194 & 2.207.
202
AR, para. 1.173 (emphasis added) (“To read the several paragraphs that the Uruguayan
party devotes in its Counter-Memorial to the role of the Court, one gets the impression that the
Court was appealed to by Argentina on the basis of Article 12. This is not the case. In order
for that to have been, it would have been essential for the procedure spelled out by Articles 7 to
11 to have been properly followed and conclu ded, namely a conclusion saying than an
agreement was impossible. With this not having been the case, the path of Article 12 was
closed, and it was rather on the basis of Article 60 that Argentina appealed to the Court …”).
- 109 -own words, including those from the Memorial. Argentina seems to have forgotten,
for instance, that in its first pleading, it clearly stated:
On December 14, 2005, Argentina sent Uruguay a memo in
which it officially 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 Statute was open to the parties, and that the
180-period provided in [Article 12 of] this treaty to help the
parties reach a settlement by direct negotiations had started on 3
August 2005, the date of the first GTAN meeting 203.
Argentina therefore should not now be heard to argue that “la voie de l’article 12
était fermée”.
2.135 In a purely literal sense, of course, it is a truism that this case did not get to
the Court by operation of Article 12 standing alone. Article 12 itself makes no
provision for referring cases to this Court. Instead, it states merely that in the event
the Parties are unable to reach agreement during the applicable 180-day period for
consultations, “the procedure indica ted in Chapter XV shall be followed” 20. It is
Chapter XV, Article 60, which provides th at any dispute concerning the Statute
“may be submitted by either Party to the International Court of Justice” 205. Yet, the
important point is that the Court’s deci sion-making authority has been invoked, at
least in the first instance, to resolve the dispute the Parties were unable to resolve
between themselves; namely, does the Botnia project threaten significant harm to
navigation, the regime of the river or th e quality of its waters? Indeed, Argentina
203
AM, para. 2.72 (citing 14 Dec. 2005 Diplomatic Note) (emphasis added).
204
1975 Statute, op. cit., Art. 12. UCM, Vol. II, Annex 4.
205
Ibid., Art. 60.
- 110 -asks the Court to resolve this very di spute in the Reply as well and in the
Memorial 20.
2.136 That is not to say that the Court lack s the competence to render a decision
concerning the meaning of Articles 7-12, or whether either of the Parties has
violated those procedural provisions. Uruguay readily acknowledges that the Court
does have such competence. The plain term s of Article 60, which state that “[a]ny
dispute concerning the interpretation or application” of the Statute may be submitted
to the Court, make that abundantly clear. Ye t, the fact that the case has come to the
Court through Article 12 nonetheless has im portant implications for the issue of
remedies. As Uruguay explained in the Count er-Memorial, if the Court finds that a
project will not cause significant harm to navigati on, the régime of the river or the
quality of its waters, there is no basi s on which to impose additional technical
requirements on the project or to order it dismantled. 207 In logic, if the Court finds
that a project will not cause significant harm, the s ituation should be no different
than it would have been if, as under Article 9, the notified State had come to the
conclusion that the project did not threaten harm; i.e., the initiating State may
proceed with its project without any furthe r procedural obligations. The mere fact
that the notified State did object should not be enough to change this result,
especially where the Court has decided those objections lack merit.
2.137 Again, this is not to say that the Court lacks authority to sanction an
offending State for procedural violations. It may certainly do so. But in the absence
of finding that a project causes significa nt harm, ordering the dismantling of a
206See, e.g., AM, para. 4.80; AR, para. 1.170.
207UCM, para. 2.208.
- 111 -project is not appropriate. A number of al ternatives are available, including the
standard remedy of satisfac tion, or declaratory relief. The Court may declare that
the initiating State has violated its specifi c procedural obligations under the Statute,
and it may order the State to refrain from continuing to violate the Statute or from
engaging in new violations in the future. It is difficult to see how such sanctions
imposed by the Court could seriously be said to “constituerait un encouragement à
de futures violations” 208, as Argentina states. Indeed, Argentina’s hyperbolic
assertion that anything less than an order dismantling a project would constitute “the
death warrant of the Statute” 209 cannot be taken seriously. It is also stunningly
inconsistent with notions of State responsib ility (as discussed in Chapter 7 of this
Rejoinder), and disingenuously dismissive of the seriousness of a finding by the
Court that a State has violated its obligations under a treaty.
2.138 Argentina’s scheme is clear: unable to demonstrate by credible scientific
evidence that the Botnia plant threatens ha rm to the Uruguay River or to Argentina
itself -- and therefore to obtain an order from the Court shutting the plant down on
this basis -- the Applicant State seeks to justify the same result on the basis of an
alleged technical violation of the Statut e’s procedural provisions concerning
notification and consultation. Argentina’ s argument fails on both the law and the
facts. The law simply does not countenance the disproportionate remedy of shutting
down an environmentally safe plant base d on a mere technical violation of
procedural obligations that Uruguay sought in good faith to carry out. On the facts,
as will be demonstrated in the next Chapter, there was no violation of the Statute’s
208AR, para. 1.172 (“constitute an encouragement of future violations”).
209AR, para. 1.172.
- 112 -procedural obligations, technical or otherwise. In fact, Uruguay satisfied its
procedural obligations under the Statute, and its only deviations from the formal
process set forth in Articles 7-11 were by agreement with Argentina and in
conformity with that agreement. Under these circumstances, there cannot have been
a violation of the Statute.
* * *
2.139 In this section, Uruguay showed: (i) as an interim solution, the initiating
State is permitted to implement a project after consultations have ended but before
dispute resolution proceedings have run their course, subject however to the Court’s
power both to indicate provisional measures in appropriate cases and to order the
dismantling of a project in its final judgment; (ii) “implementation” of a project in
the circumstances presented here means putting it into operation. But even if it
meant commencement of construction, Ur uguay did not begin to implement the
Botnia plant until after consultations with Argentina concluded (it never
implemented the ENCE project); (iii) if either Party can be said to belittle the
importance of environmental protection, that party is Argentina; and (iv) absent a
finding by the Court that a project might cause significant harm to the Uruguay
River or its aquatic environment, there is no cause to order the modification or
dismantling of a project, even if (quod non) a procedural violation has occurred.
Conclusion
2.140 In this Chapter 2, Uruguay analyzed the applicable procedural law for
purposes of elucidating the legal context in which Argentina’s claims must be
viewed. In Chapter 3 which follows, Uruguay will turn to an examination of the
facts showing its compliance with its proce dural obligations as presented in this
- 113 -Chapter. Taken together, Chapters 2 a nd 3 demonstrate why Argentina’s arguments
that Uruguay has violated its procedural obligations in this case must fail.
- 114 - CHAPTER 3.
THE EVIDENCE REGARDING THE PROCEDURAL ISSUES3.1 This Chapter responds to the factual allegations in Chapter 2 of
Argentina’s Reply, in which it asserts that Uruguay violated the procedural rules set
forth in Articles 7-12 of the 1975 Statute. Notwithstanding the contrary showing in
Uruguay’s Counter-Memorial, Argentina pers ists in arguing that Uruguay violated
Articles 7-12 by failing to notify CARU and await its “summary determination”
about the ENCE and Botnia projects befo re issuing AAPs to either company.
Argentina also continues to argue that Uruguay violated Articles 7-12 by authorizing
Botnia to complete construction of its plan t and to begin operations before this case
has been finally decided by the Court.
3.2 Before delving into the relative merits of these accusations, a comment
concerning the manner in which Argentina has chosen to present its case is
necessary. As Uruguay will demonstrate in the text that follows, the Reply
frequently distorts pertinent facts, mischaracterizes key documents or is otherwise
demonstrably unfaithful to the evidence. It also habitually misrepresents Uruguay’s
arguments, all of which were clearly laid out in the Counter-Memorial. Uruguay
therefore respectfully invites the Court to treat Argentina’s statements of fact and its
characterisations of Uruguay’s position with caution.
3.3 As shown in the previous Chapter of this Rejoinder, notwithstanding the
extended treatment both Argentina and Ur uguay have now given the subject, there
are, in essence, just two core procedural issues dividing the Parties: (i) whether
Uruguay violated Article 7 of the Statut e by authorizing the ENCE and Botnia
projects before formally notifying CARU or obtaining its “summary determination”
about them; and (ii) whether Uruguay vi olated Articles 8-12 by permitting
implementation of the Botnia project af ter consultations had ended but before
- 117 -dispute resolution proceedings in the Court were completed. All of the particular
violations Argentina accuses Uruguay of committing can be analysed under one of
these two rubrics.
3.4 In the previous Chapter of this Re joinder, Uruguay showed that CARU
performs a central role in the proper ma nagement of the Uruguay River. The
important substantive functions it is gi ven under Article 56 of the 1975 Statute
include, among others: prescribing rules governing the prevention of pollution and
the conservation of living resources (including setting maximum fish catches),
conducting scientific studies, managing the safety of navigation on the river, and co-
ordinating search-and-rescue operations. In addition to these broad substantive
functions, all of which are vital to the pr otection of the Uruguay River, CARU also
plays a role in the notice, information sh aring and consultation procedures set forth
in Articles 7-12. The Commission’s role und er Articles 7-12 is, however, distinctly
more limited than its function under Article 56 and other substantive provisions of
the Statute. As the plain text of Article 7 states, CARU is to be given notice of
projects liable to affect navigation, the régime of the river or the quality of its waters.
Upon receipt of this notice, the Commission performs a summary, 30-day review of
the project for the purpose of determining whether additional procedures are
210
warranted in a given case . Once it has done so, its procedural role under Articles
7-12 is essentially over. Thereafter, the matter is within the exclusive competence of
the Parties themselves (except only that CARU continues to serve as a conduit for
210
See supra, para. 2.30.
- 118 - 211
communications between them) . As shown in the previous Chapter, there is
nothing in the text of the Statute, the provi sions of general international law or the
sound administration of justice to prohibit the Parties from agreeing to dispense with
CARU’s summary review of a project under Article 7 in favor of immediate direct
212
consultations between the Parties themselves under Article 12 .
3.5 In this Chapter, Uruguay will show that the Parties reached just such
agreements about the ENCE and Botnia projects. In particular, Uruguay will
demonstrate that the Parties agreed to address the issues presented by both the ENCE
and Botnia plants at a State-to-State level instead of submitting them to CARU for a
preliminary review. Uruguay will further demonstrate that (i) not only did the
Parties agree to proceed to immediate direct consultations, they also agreed that both
plants would be built; and (ii) as a resu lt of the Parties’ agreements, Uruguay was
not obligated to notify the Commission or await its “summary determination” under
Article 7 before issuing initial environmen tal authorisations to either ENCE or
Botnia, or proceeding with implementation of the Botnia project. Thus, Uruguay did
not violate Article 7.
3.6 In the previous Chapter, Uruguay also analysed the text of the 1975 Statute
and the provisions of general internationa l law for purposes of illuminating the
nature of the Parties’ legal obligati ons during the course of government-to-
government consultations under Article 12 , as well as any subsequent dispute
resolution proceedings. The 1975 Statute is, as shown, silent on both issues. Using
the pertinent rules of general international law to fill these gaps, the 1975 Statute is
211See supra, para. 2.21.
212See supra, paras. 2.30-2.33.
- 119 -properly interpreted as obligating the initiating State not to implement a project
during government-to-government consultations, but as allowing it to move forward
during dispute resolution proceedings, unless and until the Court rules otherwise.
3.7 In this Chapter, Uruguay will show th at it complied with these obligations
in all respects. The ENCE project as in itially conceived was abandoned before any
implementation of the project took pl ace. And the Botnia project was not
implemented until after consultations had ended. While implementation of the
Botnia project has, in fact, gone forward during dispute resolution before the Court,
that is not prohibited by the Statute or general international law. Accordingly,
Uruguay has not violated its obligations under Articles 8-12 of the 1975 Statute.
Section I.
The Evidence Regarding Argentina’s Claim that Uruguay Violated the 1975
Statute by Failing to Notify CARU and Await Its Summary Determination
Before Authorizing the Botnia and ENCE Projects
3.8 Perhaps the central theme of Argentina’s procedural case, a theme that
pervades both the Memorial and the Reply, is that Uruguay systematically
undermined CARU, first by failing to no tify the Commission prior to issuing AAPs
to ENCE and Botnia, then by failing to secure the necessary authorisation from it,
and still later by attempting to by-pass the Commission in favor of direct State-to-
State negotiations. First in the Counte r-Memorial and again in Chapter 2 above,
Uruguay demonstrated that none of these “facts” -- even if true, which they are not --
would constitute a violation of the Statute. Notice to CARU is not required at the
AAP stage, the Commission does not have the power to authorize or reject projects,
and there is nothing to prevent the Parties from agreeing to go straight to direct
consultations under Article 12 without obt aining a preliminary review by CARU
under Article 7.
- 120 -3.9 Quite apart from these basic legal flaws, the facts disprove Argentina’s
argument in all material respects. The truth is simple and plain: Uruguay has done
nothing to undermine CARU; everything it did was pursuant to express agreement
with Argentina. Both in the case of EN CE and in the case of Botnia, the Parties
agreed to dispense with CARU’s prelimin ary review under Article 7 and to proceed
immediately to direct consultations under Article 12. Indeed, it was Argentina that,
in both cases, initiated direct consultations with Uruguay outside CARU at times
when the Commission was not a viable option either because it had suspended work
(in the case of ENCE) or because it was deadlocked (in the case of Botnia). In these
circumstances, Argentina cannot legitim ately complain that Uruguay by-passed
CARU in violation of Article 7. If CARU was indeed “by-passed”, it was at
Argentina’s invitation and by mutual agreement of both Parties.
A. T HE GTANC ONSULTATIVE PROCESS
3.10 Because the pertinent facts are so clear, the Parties’ May 2005 agreement
to create the High Level Technical Group (“GTAN”, per the Spanish initials) as a
forum for direct consultations under Article 12 is the most obvious place to start.
Coming as it did before CARU had conducte d a preliminary revi ew of the Botnia
project, the Parties’ agreem ent to consult under the auspices of GTAN stands as a
frank refutation of Argentina’s procedural claims in at least two respectsFirst, it
shows that the Parties mutually agreed to dispense with CARU’s Article 7 screening
function in favor of immediate dire ct consultations under Article 12. Second, the
agreement to proceed straight to State-to-State talks cured whatever alleged
procedural irregularities may have occurred before that point. Each of these two
points will be addressed in the paragraphs that follow.
- 121 -3.11 The Court will recall that on 5 Ma y 2005, Uruguay’s President Tabaré
Vázquez met with Argentina’s then-President Néstor Kirchner and agreed to
establish the GTAN. Uruguay described the circumstances leading to the creation of
GTAN in the Counter-Memorial. In particular, it showed that the twin impetuses for
GTAN were (i) the mounting opposition to the ENCE and Botnia plants among
residents in Argentina’s Entre Ríos Province, and (ii) the fact that CARU had been
deadlocked since February 2005 213. In a 12 January 2006 diplomatic note to
Uruguay, Argentina itself described the circumstances leading to GTAN’s creation
as follows: “The lack of agreement within the River Uruguay Administration
Commission (CARU) … led the Governments of both countries to deal with the
question directly and to establish a Hi gh Level Technical Group (GTAN) in May
214
2005.”
3.12 In fact, it was Argentina that, in light of the “lack of agreement within
[CARU]”, initiated the effort “to deal with the question directly”. On 5 May 2005,
the same day that Presidents Vázquez a nd Kirchner met, Argentina’s Minister of
Foreign Affairs, Rafael Biel sa, sent a letter to his Ur uguayan counterpart, Reinaldo
Gargano, expressly requesti ng that discussions about th e two plants take place
outside CARU. Foreign Minister Bielsa wrote:
Dear Mr. Minister, dear friend,
I am writing to you in connec tion with the project for the
installation of two cellulose production plants in the area of Fray
213
See UCM, para. 3.67.
214
Diplomatic Note sent from the Argentine Mini stry of Foreign Affair s, International Trade
and Culture, to Ambassador of Uruguay in Argentina, D. Fran cisco Bustillo (12 January 2006).
UCM, Vol. III, Annex 59.
- 122 - Bentos, opposite the Argentine ci ty of Gualeguaychú, Province
of Entre Ríos.
In this regard, I must again convey to you the deep concern of
the population and authorities of the said province – concern that
the Argentine federal government shares – as consequence of the
environmental impact that the ope ration of these plants could
bring about.
Without prejudice of the water quality control and monitoring
procedures by CARU , this situation, due to its potential
seriousness, requires a more direct intervention of the competent
environmental authorities, with the co-operation of specialized
academic institutions 215.
Thus, it was Argentina that invited Uruguay to participate in “a more direct
intervention” by the authorities of the two States, rather than proceed according to
the strict terms of Article 7 of the 1975 Statute. Although the Argentine proposal
dispensed with CARU’s preliminary revi ew of the project under Article 7, it
expressly conserved CARU’s later substantive functions of controlling water quality
and monitoring the effects of the project.
3.13 The Foreign Ministers met later that month to operationalize the
Presidents’ decision and came to an agreement on 31 May 2005. According to a
July 2005 report prepared by the Head of the Cabinet of Ministers to the Argentine
Senate:
On 31 May, after exchanging proposals and counterproposals,
both countries reached the following agreement:
‘In conformity with what was agreed to by the Presidents of the
Republic of Argentina and the Eastern Republic of Uruguay, the
Foreign Ministries of our two countries constituted, under their
supervision a group of Technical Experts for complementary
215Letter sent from the Argentine Minister of Fo reign Affairs, Rafael Bielsa, to the Uruguayan
Minister of Foreign Affairs, Reinaldo Garga no (5 May 2005) (emphasis added). UR, Vol. II,
Annex R15.
- 123 - studies and analysis, 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 shared Uruguay River’ 216.
3.14 Argentina has recognized that the “direct intervention” of GTAN -- which
subsequently met 12 times between Augus t 2005 and January 2006 -- fulfilled the
Parties’ obligation to consult in good faith under Article 12 of the 1975 Statute.
According to the Memorial, for example:
Le 14 décembre 2005, l’Argentine 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 de puis le 3 août 2005, date de la
première réunion du GTAN 21.
3.15 Argentina’s recognition that the GTAN process constituted the direct
consultations contemplated by Article 12 was reiterated in an even more solemn
manner in its Application instituting proceedings in this case. In the section dealing
with the Court’s jurisdiction, Argentina wrote:
Malgré les efforts de l’Argentine, la négociation directe
enterprise par des canaux différents, y compris le Groupe
216Statement by the Argentine Ministry of Foreign 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 th e Argentine Ministry of Foreign Affairs to the
Argentine Senate”), Report No. 65, p. 620 (July 2005). UR, Vol. II, Annex R14.
217
AM, para. 2.72 (citing 14 December 2005 Diplomatic Note). (“On December 14, 2005,
Argentina sent Uruguay a memo in which it officially 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.”)
- 124 - technique de haut niveau (ci ap rès “GTAN”, selon le sigle en
espagnol) … n’a pas abouti 218.
3.16 It is therefore clear that by requesting the creation of GTAN, Argentina
invoked consultations under Article 12 of the Statute even though CARU had not yet
been (and indeed never was) called upon to render the prelim inary determination
provided for in Article 7.
3.17 The importance of the fact that the GTAN was convened (at Argentina’s
request) under Article 12 by mutual agreem ent cannot be overstated. Argentina’s
entire procedural argument turns on the (fa lse) claim that Uruguay disrupted the
proper functioning of the Statute’s procedur es by allegedly failing to notify CARU
under Article 7 and by failing to await the outcome of its preliminary review. Yet, it
is clear beyond cavil that the Parties mu tually agreed to dispense with CARU’s
screening function in favor of immediate direct consultations under Article 12.
Exactly as Argentina said, the “situation, due to its potential seriousness, require[d] a
more direct intervention of the competent environmental authorities” 219. Because it
was a matter of agreement to proceed directly to State-to-State consultations, the
ostensible “failure” to submit the matte r for CARU’s prelim inary review cannot
form the basis for a claim against Uruguay.
3.18 In addition, by admitting that the GTAN process fulfilled the Parties’ duty
to consult under Article 12, Argentina e ffectively acknowledges that -- whatever
might have happened beforehand -- the Par ties were able to bring themselves back
within the Statute’s procedural framework. When they did so, they remedied and
218Argentina’s Application Instituting Proceedings, para. 4 (4 May 2006) (emphasis added).
219
Letter sent from the Argentine Minister of Fo reign Affairs, Rafael Bielsa, to the Uruguayan
Minister of Foreign Affairs, Reinaldo Gargano, op. cit. UR, Vol. II, Annex R15.
- 125 -rendered immaterial whatever missteps, if any, might have occurred prior to that
time. Had the procedures set forth in Articles 7-11 been followed to the letter, the
Parties would have ended up exactly where they did -- in consultations under Article
12. Accordingly, even if Article 7 was not strictly followed, no harm was done.
3.19 Perhaps recognizing the damage the GTAN consultations inflict on its
procedural case, Argentina’s otherwise voluminous Reply is stunningly restrained on
that lone subject. It devotes just eight short paragra phs to the topic buried deep in
the middle of its Chapter 2 22. By itself, this signals Argentina’s fear of the issue.
More importantly, such rebuttal as Argentina does offer is entirely without merit.
Indeed, Argentina’s misleading depiction of events evidences its extreme discomfort
with the true facts.
3.20 Argentina opens aggressively. It claims that Uruguay’s argument that “by
the creation of GTAN, the Parties agreed to proceed directly to Party-to-Party
consultations envisioned by Article 12 of th e Statute and not to await a preliminary
determination from CARU” does not withstand “la moindre analyse” 221. It then
contends that “l’Argentina n’a jamais e nvisagé le GTAN comme un substitut de la
CARU, mais comme un moyen de négociation qui coexistait avec le fonctionnement
222
de la CARU et qui permettrai t de relancer le processus” . Argentina’s rhetoric is
strong, but its evidence is weak. Indeed, with one exception that will readily be
disposed of below, it does not cite a single source for the propositions stated.
220See AR, paras. 2.51-2.58.
221AR, para. 2.56 (“the slightest analysis”).
222AR, para. 2.56 (“Argentina never considered GTAN to be a substitute to CARU, but
considered it a negotiating means which coexis ted with the operation of CARU and which
allowed for the process to be relaunched”).
- 126 -3.21 In truth, it is Argentina’s argument that does not withstand “the slightest
analysis”. To begin with, Argentina’s contention that the GTAN process did not
constitute the “Party-to-Party consultations envisioned by Article 12 of the Statute”
is flatly refuted by its own prior statements, including the statement in its Memorial
at paragraph 2.72 which speci fically acknowledged that Article 12 “est applicable”,
and its statement in the Application that GTAN constituted “la négociation directe”
under the Statute. Having twice admitted this fact, Argentina cannot be heard now
to recant.
3.22 The Reply’s assertion that “Argentina never considered GTAN to be a
substitute to CARU” is lik ewise easily disproved by Argentina’s own prior
statements, including its 12 January 2006 dipl omatic note cited in paragraph 3.11
stating that the deadlock in CARU “led the Governments of both countries to deal
with the question directly”, as well as Minister Bielsa’s 5 May 2005 letter calling for
“a more direct intervention of the competent environmental authorities” 223. Indeed,
the final paragraph of Foreign Minister Bi elsa’s letter to Minister Gargano could
scarcely make the point any more clearly when it states that the “more direct
intervention” Argentina seeks shall be “[w]ithout prejudice of the water quality
224
control and monitoring procedures by CARU” . As will be discussed in Section
I.B. below, this is a reference to th e March 2004 agreement between Ministers
Bielsa and Opertti pursuant to which it was agreed that the plant would be built,
subject to monitoring of the water quality by CARU. For present purposes, the key
223Letter sent from the Argentine Minister of Fo reign Affairs, Rafael Bielsa, to the Uruguayan
Minister of Foreign Affairs, Reinaldo Gargano, op. cit. UR, Vol. II, Annex R15.
224Ibid.
- 127 -aspect is the extent to which it makes cl ear that CARU’s role going forward was not
the preliminary review of the project prior to its implementation prescribed in
Article 7, but the monitoring and control of water quality after operation commenced
pursuant to Article 56 and other substantive Articles in the Statute. All other topics
were to be addressed exclusively through GTAN.
3.23 In addition to being inconsistent with its own prior statements, Argentina’s
argument that the Parties intended to send the ENCE and Botnia projects back to
CARU for a preliminary 30-day review under Article 7 makes no sense. A referral
back to CARU would plainly have been futile. As Argentina recognized, the
Commission was stalemated. Indeed, by Argentina’s own admission, it was
precisely this deadlock that led it to seek “a more direct intervention” by the two
governments in the first place. The resu lt of a preliminary Article 7 review by
CARU at that stage would therefore have been a foregone conclusion; no consensus
on whether or not the projects threatened significant harm would have been reached
by the two delegations, each of which reflected and advocated the position of its own
government. What then would have been the consequences of a failure to achieve
consensus in CARU? Merely to set in motion the procedures leading right back to
direct consultations under Article 12 -- which, of course, is exactly what the Parties
were already doing through the GTAN pro cess! The irrationality of Argentina’s
argument speaks for itself.
3.24 In contrast, the decision to dispense with CARU’s preliminary review and
proceed directly to government-to-government consultations made perfect sense
under the circumstances. Given that the purpose of CARU’s initial review under
Article 7 (and, indeed, all the procedural steps laid out in Articles 7-11) is, as shown
- 128 -in Chapter 2 225, to obviate the need for State-to-State consultations under Article 12,
and given that it was clear that nothing shor t of such a “direct intervention” by the
two governments had any chance of achieving consensus, there was no reason for
the Parties to send the matter back to the beginning of the procedural queue and then
sit idly by as the issue wended its way through futile procedural steps all of which
would inevitably have led to the direct c onsultations that were clearly required (and
already in progress) in any event. It made much more sense to do what the Parties in
fact did: agree to go straight to direct talks.
3.25 The Parties’ subsequent conduct in both CARU and GTAN further refutes
Argentina’s argument that they intended to send the projects back to CARU for
summary review under Article 7. Instead, it confirms the fact that they mutually
understood that, aside from the issue of water quality monitoring and control,
discussions concerning the ENCE and Botnia plants were to be held exclusively in
GTAN. Here once more, the Reply is de monstrably unfaithful to the facts.
Argentina contends that the “poursuite de l’activité de la CARU durant le période
d’existence du GTAN et les positions de l’Arge ntine aussi bien au sein de la CARU
que du GTAN témoignent du fait que la si mple constitution du GTAN ne peut être
invoquée – comme le prétend la partie défe nderesse – pour justifier le manquement
uruguayen de suivre la procédure de l’arti cle 7 et suivants du Statut du fleuve
Uruguay” 22.
225
See supra, para. 2.30.
226AR, para. 2.58 (“continuation of CARU’s activity during the time when GTAN was in
existence and Argentina’s positions both within CARU and within GTAN prove the fact that
the mere formation of GTAN cannot be claimed -- as done by the Respondent -- to justify
Uruguay’s failure to follow the procedure under Article 7 et seq. of the Statute”).
- 129 -3.26 The one and only piece of evidence that Argentina cites to support its
claim is a 6 May 2005 discussion in CARU during which an Argentine delegate
stated that, “[d]ans le cas de Botnia, ils n’ont pas reçu non plus … l’information a fin
227
d’éterminer techniquement si ce projet peut générer un impact environmental” .
This lone reference, coming just one day after the Presidents of the two countries
had met and agreed in principle to establish the GTAN, and three weeks before
Foreign Ministers Bielsa a nd Gargano met on 31 May to concretize the Presidents’
agreement and establish the GTAN process, is insufficient to establish Argentina’s
point.
3.27 Significantly more probative -- indeed, dispositive -- is the fact that, aside
from this single statement, which was made before the creation of the GTAN,
Argentina cites no evidence suggesting that CARU expected to have any role in the
process other than monitoring and controlli ng water quality after the plants initiated
operations, exactly as Minister Bielsa indicated in his 5 May 2005 letter. This is not
a mere failure of proof; Argentina cites no evidence because there is none. Nothing
in the CARU minutes indicates that the Commission, or even the Argentine
delegation thereto, expected to conduct an Article 7 review of the plants once GTAN
was created. Throughout the period beginning in June 2005, the only references to
the plants in CARU’s minutes relate to the implementation of the PROCEL water
quality monitoring program that the Parties had previously agreed to set up to track
the performance of both the ENCE and Botnia plants. This unchallenged and
227AM, para. 2.60 citing CARU Minutes 05/05, pp. 966-968 (6 May 2005) (“[i]n the case of
Botnia, [CARU] has not received data … for the assessment and for determining on a technical
basis whether this project generates a substantia l environmental effect”). AM, Vol. III, Annex
32.
- 130 -indisputable fact still further proves th at CARU was not intended to, and did not
expect to, have any procedural role under Article 7.
3.28 In the Reply, Argentina curiously argues that Uruguay’s Counter-
Memorial provides “proof” that the GT AN was not a substitute for CARU in
paragraph 3.78, where, according to Arge ntina, Uruguay stated that it notified
CARU of the Botnia port project “pursuant to Article 7” 22. What that paragraph of
the Counter-Memorial really says, however, is that at the first GTAN meeting on 3
August 2005, “the Parties’ dele gations agreed to refer the port project back to
CARU for preliminary review” 229. In other words, the Parties jointly decided that
GTAN was not the right place for discussions about the port, and therefore, decided
to send that project to CARU. In Urugua y’s view, this supports its argument, not
Argentina’s. The fact that the Parties referred the port project to CARU for a
preliminary review under Article 7, but did not do so with the plants themselves only
underscores the fact that GTAN was the excl usive forum for consultations about the
plants. Indeed, it is noteworthy that not onl y is there nothing in the CARU minutes
to indicate that the Commission had an on-going role in discussions about the plants,
there is also nothing in the GTAN minutes either. Surely, if the participants in
GTAN had understood that CARU would be conducting a parallel process, one
would expect to see some indication of that fact somewhere in the record of the
twelve GTAN meetings. Here again, Argentina offers nothing because there is
nothing.
* * *
228See AR, para. 2.56.
229UCM, para. 3.78 (emphasis added).
- 131 -3.29 In light of all the above, two truths stand out. First, the Parties’ May 2005
agreement to create GTAN as a forum fo r direct consultations under Article 12
shows that the Parties mutually agreed to dispense with CARU’s Article 7
preliminary determination in favor of immediate dir ect consultations under Article
12. Second, assuming arguendo that some ostensible pr ocedural irregularities had
occurred prior to that point, the agreement to proceed straight to State-to-State talks
cured those irregularities. For both reasons, Argentina’s procedural claim that
Uruguay violated the 1975 Statute by oste nsibly failing to notify CARU and
awaiting the Commission’s preliminary determination under Article 7 must fail.
B. T HE M ARCH 2004A GREEMENT
1. ENCE
3.30 In the Counter-Memorial, Uruguay de monstrated that in October 2003,
long before GTAN, the Parties reached a de facto understanding to address the
ENCE plant outside the context of CARU. As shown there, following a meeting of
the two States’ Foreign Ministers on 9 October 2003, and in light of CARU’s
230
subsequent “paralysation” (Argentina’s word ), Uruguay’s Foreign Ministry sent
directly to its Argentine counterpart a s ubstantial volume of information concerning
the ENCE plant, including
• ENCE’s environmental impact assessment (“EIA”);
• DINAMA’s 2 October 2003 technical report on the EIA;
• The 9 October 2003 AAP; and
230
AM, para. 2.28.
- 132 - 231
• The entire 1,683-page MVOTMA file on the ENCE project.
3.31 As was true in the case of GTAN, the record again reveals that it was
Argentina that sought the direct involvement of the two governments. It did so at a
time when CARU was not simply “paralysed”, it was not even meeting. In the
words of a 2005 Report to Argentina’s Senate prepared by the Chief of the
Argentine Cabinet of Ministers:
As a consequence of this grave situation, and not finding within
the ambit of CARU the necessary consensus to resolve the
matter, CARU halted its sessions and consideration of the matter
was left to both Foreign Ministries. . . .
In this context and by virtue of the impasse at CARU, the
Argentinean Foreign Ministry requested the technical
information corresponding to Uruguay. In November 2003, in
accordance with the proposal by Argentinean Foreign Ministry,
the Uruguayan Foreign Ministry se nt the documentation related
to the Cellulose project in M’Bopicua, presented by the
company before the Department of the Environment (DINAMA)
when it requested the environmental authorisation, to the
Argentinean Embassy in Montevideo . 232
3.32 Based on the information sent, Argen tina’s technical advisors to CARU
conducted an analysis of the plant and, in February 2004, issued their report. The
report concluded that “there would be no significant environmental impact on the
233
Argentine side” . On the basis of the advisors’ report, two Argentine delegates to
CARU subsequently agreed:
231See UCM, para. 3.40.
232
Statement by the Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p.
616. UR, Vol. II, Annex R14 (emphasis added).
233
Statement by Argentine Ministry of Forei gn Affairs, International Trade and Culture,
included in Report of the Head of the Argentin e Cabinet of Ministers, Alberto Angel
Fernández, to the Argentine Chamber of Deputies (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.
- 133 - It must be pointed out, with co mplete 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… . 234
3.33 Argentina’s February 2004 report concluding that the plant would have no
discernable adverse envir onmental impact paved the way for further meetings
between the Parties and, ultimately, an express agreement on the way forward. As
described in detail in the Counter-Memorial, Foreign Mi nisters Bielsa and Opertti
met again in March 2004 and specifically agreed that the ENCE plant would be built
235
subject only to water quality control and monitoring by CARU . That agreement
was subsequently memori alized in CARU’s minutes on 15 May 2004. In
Argentina’s contemporaneous words, the agreement “put an end to the controversy
236
over the pulp mill installation in Fray Bentos” .
*
3.34 Confronted with these facts, Argentina spends 43 paragraphs of the Reply
attempting to refute both the substance and existence of the Parties’ agreement 237.
Argentina’s central argument is this: wh en they met in March 2004, the Foreign
Ministers agreed not to put an end to the controversy, not that the ENCE plant would
be built, and not that CARU would c onduct monitoring to assure the plant’s
compliance with water quality standards. Rather, Argentina asserts, they agreed
234CARU Minutes No. 01/04, pp. 18-19 (15 May 2004). UCM, Vol. IV, Annex 99.
235See UCM, para. 1.34.
236Annual Report on the State of the Nation for 2004, Ministry of Foreign Affairs, International
Trade and Culture, p. 105 (1 March 2005). UCM, Vol. III, Annex 48.
237See AR, paras. 2.77-2.120.
- 134 - 238
merely to send the matter to CARU for a preliminary review under Article 7 . In
the process of making its argument, Argentina also attacks Uruguay for even
mentioning the Foreign Ministers’ agreement, resorting to the oft-repeated refrain
that Uruguay does so “[d]ans le but de minimiser le rôle de la CARU” 239.
3.35 Uruguay will respond to the last of these assertions first. Although it
should go without saying, Uruguay does not invoke the Foreign Minister’s
agreement for purposes of “minimizing” CA RU or anything of the sort. It does so
for one purpose, and one purpose only: illumi nating the truth. In reality, the facts
that the Parties addressed the ENCE pl ant via direct government-to-government
consultations outside CARU and agreed that it would be built, and that CARU’s
ongoing role would be focused on contro lling water quality and monitoring the
plant’s operations, in no way denigrates the very important role the Commission
plays. As discussed in Chapter 2 of this Rejoinder, and reiterated above, CARU has
many important substantive functions that are critical to ensuring the rational and
optimal use of the river. Its role in the process outlined in Articles 7-12 of the
Statute is, by contrast, limited. Beyond performing an initial screening under Article
7, the Statute assigns CARU only a minor role as an intermediary between the
Parties in any subsequent dealings between them. That the Parties agreed to address
the ENCE plant outside the Commission is a matter of small moment that constitutes
no threat to the functioning of the Commi ssion, much less the integrity of the
Statute. And it is certainly within their power given that there is no reason in law or
238See AM, para. 2.40; AR, paras. 2.88-2.89.
239AR, para. 2.88 (“[f]or the purpose of minimizing the role of CARU”).
- 135 -in logic the Parties may not derogate fro m the procedures outlined in the Statute
pursuant to an appropriate bilateral agreement.
3.36 It bears emphasis that Argentina’s argument that the Foreign Ministers
agreed merely to send the matter back to CARU for a preliminary review under
Article 7 makes no sense. As discussed, Argentina’s te chnical advisors to CARU
reviewed the full ENCE file in Februa ry 2004 and came to the conclusion that the
240
project would not have a “si gnificant environmental impact” (which, of course,
was Uruguay’s position too). It was this conclusion that paved the way for the
Foreign Ministers’ agreement the next month. Given the existing review by
Argentina’s technical advisors to the Commission, there was no need to send the
matter back to CARU for a second such dete rmination. Any such step would have
been entirely redundant given what had al ready happened. It thus makes perfect
sense under the circumstances that the Fo reign Ministers would agree not to go
backwards to CARU but rather forward toward construction, operation and
monitoring, with CARU fulfilling the critical monitoring and control functions it is
assigned by the Statute.
3.37 Still further, it bears reiterating that CARU was not a viable option during
241
this period in any event. As Argentina itself has stated, CARU was “paralysed”
and stopped meeting during the entire si x month period between October 2003
(when Argentina reacted to Uruguay’s issu ance of the ENCE AAP by suspending
the work of the Commission) and May 2004 (when meetings resumed following the
240Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
241See AM, paras. 2.28-2.29.
- 136 -Foreign Ministers’ March agreement). Th e Commission was, as Argentina said, at
242
an “impasse” . Thus, if any progress was going to be made during this period, it
had to be outside the channels afforded by CARU; i.e., in direct negotiations
between the Parties at the level of their Foreign Ministers. As Argentina itself said
before this litigation commenced, as a result of the “impasse” at CARU,
“consideration of the matter was left to both Foreign Ministries”.
*
3.38 Given all this, it should not be surpri sing that Argentina’s argument that
the two Foreign Ministers agreed merely to send the matter to CARU for a
preliminary review under Article 7 is entirely inconsistent with the facts. Before
delving into those facts in greater detail, however, there is one single, uncontroverted
truth which, by itself, refutes Argentina’s argument. It is this: CARU’s subsequent
conduct disproves it. Following the Foreign Ministers’ March 2004 agreement,
there is no evidence to suggest that the Commission expected to conduct a
preliminary review of the project at that stage. CARU’s minutes are devoid of any
reference to the putative fact that it was waiting for a notification under Article 7.
Indeed, one of Argentina’s delegates to CARU, Mr. Darío Garín, specifically noted
at CARU’s 15 May 2004 meeting (its first in nearly seven months) that “an
important limiting factor in our position is the agreement executed by the Foreign
243
Ministers on 2 March 2004” . Rather than awaiting notice under Article 7, CARU
focused its efforts on devising and implem enting the water quality monitoring plan
(“PROCEL”) that the Foreign Ministers agreed should be the focus of the
242AM, para. 2.29.
243CARU Minutes No. 01/04, p. 18. UCM, Vol. IV, Annex 99.
- 137 -Commission’s work. Accordingly, CARU ’s contemporaneous conduct belies the
argument that Argentina now makes.
3.39 Quite apart from this key truth, the fact that the Foreign Ministers agreed
in March 2004 that the plant would be built is supported by a broad array of
additional facts carefully set out in the C ounter-Memorial. In summary form, these
facts include:
• Uruguayan Foreign Minister Opertti ’s statements at a 3 March 2004
press conference (the day after the two Foreign Ministers met and
reached their agreement) stating that a “working methodology [was]
put in place to address concerns” and detailing its three stages: “The
first phase of the project was recently completed, which represents
the first favorable test of the proj ect. The second phase consists of
construction of the plant, which will take no less than four years ....
The third phase is the operational phase, namely, when the plant starts
to operate …. At that time, it will be necessary to report on the
monitoring of the water…” 244;
• Argentine Deputy Secretary for Latin American Affairs Ambassador
Eduardo Sguiglia’s and Argentin e Foreign Minister Bielsa’s
statements to the Argentine press on 3 March 2004, referring to a
“system that we have agreed upon” for “exhaustive monitoring to
ensure compliance with the envir onmental guidelines established for
the installation of the plant”45;
• A contemporaneous Uruguayan memo randum recording the content
of the conversation between the Foreign Ministers during a dinner on
28 March 2004, stating that “an agreement on the role of CARU was
confirmed, as being the most su itable vehicle for channeling the
pertinent information for organizi ng the system of monitoring and
following the environmental manage ment plans, both in the pre-
feasibility phase (now completed) and in the construction phase
244Presidency of the Republic of Uruguay Web Site, “M’Bopicuá: Working Methodology
Established” (3 March 2004). UCM, Vol. II, Annex 17.
245La Nación, “Uruguay Promises to Inform th e Government about the Paper Mill” (3 March
2004). UCM, Vol. IX, Annex 183.
- 138 - (which will last approxi246ely 4 years), as well as after the start-up of
the plant’s operation” ;
• The exchange of numerous drafts between Argentina’s Ambassador
Sguiglia and Uruguayan Ambassador Pa blo Sader to finalize the text
of the Foreign Minister’s March 2004 agreement, the final version of
which states: “On 2 March 2004, the Foreign Ministers of Argentina
and Uruguay reached an understanding with respect to the course of
action that the matter will take, that is, to have the Uruguayan
government provide the information relating to construction of the
plant, and with respect to the operational phase, to have the CARU
undertake the monitoring of water quality in conformity with the
Statute” ;47
• The fact that the Foreign Minister’s agreement was memorialized in
the 15 May 2004 CARU Minutes. In its final form, the agreement
states (just as the drafts had): “On 2 March 2004, the Foreign
Ministers of Argentina and Urugua y reached an understanding with
respect to the course of action that this matter will take, that is, to
have the Uruguayan government provide the information 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 conformity with its Statute” 248;
• A statement from Argentina’s Minist ry of Foreign Affairs in a 2004
year-end report to the Argentine Senate which states: “On 2 March
2004, the Foreign Ministers of Argentina and Uruguay reached an
understanding on the course of action to give to this subject. That is,
for the Government of Uruguay to f acilitate 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 …. The understanding of the Foreign
Ministers … and the report of the technical experts coincide in that
CARU should 249centrate its activity on the subject of mechanisms
of control” ;
246
Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro (1 April 2004). UCM, Vol. II, Annex 18.
247
Proposed Special Minutes, Final Version, para. VIII (28 April 2004). UCM, Vol. IX, Annex
200.
248
CARU Minutes No. 01/04, p. 33. UCM, Vol. IV, Annex 99.
249Statement by Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p. 617.
UCM, Vol. III, Annex 47. UR, Vol. II, Annex R14.
- 139 - • A statement from Argentina’s Minist ry of Foreign Affairs in a 2004
year-end report to the Argentine Chamber of Deputies which states:
“In June [sic] of that same year, a Bilateral Agreement was signed
through which Argentina’s Government put an end to the
controversy. … [I]t implies a work methodology for the three phases
of the construction of the project: the 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” ;250
• A statement in the Annual Report on the State of the Nation for 2004,
prepared by the Office of Argentina’s President stating: “That same
month, both countries signed a bila teral agreement which put an end
to the controversy over the pulp mill installation in Fray Bentos. …
It also provides for a working procedure for the three phases of
251
construction of the work: project, construction, and operation” ; and
• CARU’s subsequent preparation, adoption and implementation of a
water quality monitoring program (“PROCEL”) in the vicinity of the
future plants. All drafts as well as the final version of the PROCEL
begin the same way: “Taking into account the future installation of
252
cellulose plants…” .
3.40 Faced with these facts, Argentina elects to respond to some but chooses to
ignore others altogether. Indeed, an integral part of Argentina’s strategy for dealing
with the Foreign Ministers’ March 2004 agre ement is to disregard essential aspects
250Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
251
Annual Report on the Senate of the Nation for 2004, Ministry of Foreign Affairs,
International Trade and Culture, p. 105 (March 2005). UCM, Vol. III, Annex 48.
252
Draft 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). UCM, Vol. IV, Annex 102. Draft PROCEL, Annex A to
Subcommittee on Water Quality and Preventi on 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 PROCEL, Annex A to Subc ommittee 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 107. 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.
- 140 -of the narrative which, individually and collectively, confirm the fact that the Parties
agreed that the ENCE plant would be bu ilt, subject to CARU’s monitoring of the
water quality during the operational phase.
3.41 Among the key elements of the narrative that Argentina rather
conspicuously chooses to overlook is the February 2004 report of its technical
advisors finding the ENCE plant woul d not cause significant harm. Indeed,
Argentina not only does not mention the report’s contents, it does not even advert to
its existence. This glaring omission is all the more conspicuous because in the
Counter-Memorial, Uruguay sp ecifically took note of the same omission in the
Memorial and challenged Argentina to acknowledge the existence and content of the
report253. That it did not do so can mean only one thing: there is nothing Argentina
can say to reconcile the report with its case.
3.42 Argentina also fails to acknowledge or address the statements of its
Ambassador Eduardo Sguiglia to the Argentine press on 3 March 2004, the day after
the Foreign Ministers’ meeting. Ambassador Sguiglia stated: “It was agreed that in
the next four years of construction, ther e will be exhaustive monitoring to ensure
compliance with the environmental guidelines established for the installation of the
plant, which will include permanent monitoring.” 254 Two important conclusions can
be drawn from this contemporaneous quotatio n: (i) there is no mention of sending
the matter to CARU for a preliminary review ; and (ii) there is no remaining dispute
253
See UCM, para. 3.42.
254
La Nación, “Uruguay Promises to Inform the Government about the Paper Mill,” op. cit.
UCM, Vol. IX, Annex 183.
- 141 -as to whether or not the plants will be bu ilt. The facts of construction and operation
are presumed. What remains for CARU to do is monitoring.
3.43 More remarkably, Argentina omits any mention of the fact that, following
the Foreign Minister’s March 2004 meeting, its Ambassador Sguiglia and Uruguay’s
Ambassador Pablo Sader exchanged a series of drafts for purposes of reducing the
Foreign Ministers’ agreement to writing 25. Taking place between March and April
of 2004, this exchange irrefutably confirms both the existence a nd substance of the
agreement. The final draft exchanged reads:
On 2 March 2004, the Foreign Ministers of Argentina and
Uruguay reached an understanding with respect to the course of
action that the matter will take, that is, to have the Uruguayan
government provide the informati on relating to construction of
the plant, and with respect to the operational phase, to have the
CARU undertake the monitoring of water quality in conformity
with the Statute256.
Again, this draft confirms the same two points mentioned in connection with
Ambassador Squiglia’s press comments discussed just above; namely: (i) there is no
mention of sending the matter to CARU for a preliminary review; and (ii) there is no
remaining dispute as to whether or not the plant will be built. Construction and
operation were presumed, and CARU was to focus its efforts on monitoring during
“the operational phase”. Indeed, the same two observations can be made about each
and every event listed above in paragraph 3.39: (i) the construction and operation are
presumed; and (ii) CARU will monitor operati ons to ensure that water quality is not
affected.
255See UCM, paras. 3.55-3.56; see also, e.g., Proposed Special Minutes, Final Version, para.
VIII (28 April 2004). UCM, Vol IX, Annex 200.
256Proposed Special Minutes, Final Version, op. cit., para. VIII. UCM, Vol. IX, Annex 200.
- 142 -3.44 Most remarkably of all, Argentina does not cite, or even mention, the fact
that the text of the agreement so pain stakingly negotiated between Ambassadors
Sguiglia and Sader, and approved by the Foreign Ministers, was memorialized in the
minutes of the CARU meeting on 15 Ma y 2004, CARU’s first meeting since
Argentina suspended the Commission’s work in October 2003. Because Uruguay
believes that the best evidence of the Parties’ agreement is the agreement itself, the
pertinent portions of the minutes are worth quoting at length. They state:
General Agreed Matters:
…
II) On 2 March 2004 the Foreign Ministers of Argentina and
Uruguay reached an understanding with respect to the proper
course of action that this matter will take, that , to have the
Uruguayan government provide the information relating to the
construction of the plant, and with respect to the operational
phase of the pulp mill, to have CARU undertake the monitoring
of water quality in conformity with its Statute.
Specific Agreed-Upon Matters:
I) Both delegations reasserted th at the Foreign Ministers of the
Republic of Argentina and the Republic of Uruguay agreed on 2
March 2004 that Uruguay shall communicate the information
related to the construction of the pulp mill including the
Environmental Management Plan. In this sense, CARU shall
receive the Environmental Management Plans for the
construction and operation of the plant provided by the company
to the Uruguayan government via the Uruguayan delegation.
Within the framework of its competency, CARU will consider
those, taking into account the terms included in the
aforementioned Ministerial Resolution 342/2003, particularly
those terms expressly established by the Ministry of Housing,
Land Use Planning and the Environm ent, such as actions which
require additional implementation and additional assessment by
the company before approval of those, formulating its
observations, comments and s uggestions, which shall be
transmitted to Uruguay, to be dismissed or decided with the
company. Once said issues are considered, CARU shall be
again informed.
- 143 - II) In relation to the operational phase, we will proceed to
monitor environmental quality. This monitoring shall be carried
out in conformity with the provisions of the Statute of the
Uruguay River, especially Chapter X, articles 40 to 43. Both
delegations agree that in view of the scope of the undertaking
and its possible effects, CARU shall adopt procedures in
conformity with the current minutes. On the other hand, the
sampling already done by CARU should be taken into account
as the baseline for the monitoring (these show no acute toxicity
and compliance of almost 100% with the quality standards as
compared to the reference values). CARU’s decision to add two
new water sampling stations in the work area shall make
monitoring more effective 25.
The minutes are duly authenticated by the signatures of the head of Argentina’s
delegation to CARU, Roberto García Mor itán, the head of Uruguay’s delegation,
Walter M. Belvisi, and CARU’s Administrative Secretary, Sergio Chaves.
3.45 The text of the agreement dispels whatever doubts Argentina might like to
cast on the content of the Foreign Ministers’ agreement. First, it clearly establishes
the limited nature of CARU’s role. CARU is called upon to do two things: (i) to
comment on the environmenta l management plans and to transmit these comments
to Uruguay to be “dismissed or decided with the company”, and (ii) to undertake the
monitoring of water quality during the opera tional phase. There is no mention, or
hint even, of CARU making a preliminar y determination of impact pursuant to
Article 7, as Argentina pretends to read in to the agreement. As of March 2004, that
was clearly not contemplated by the Parties.
3.46 Second, the text of the agreement as a whole again makes clear that the
construction and eventual operation of the plant were expected and accepted facts.
Thus, the paragraph appearing under the heading “General Agreed Matters” makes it
257
CARU Minutes No. 01/04, pp. 33-35. UCM, Vol. IV Annex 99 (emphasis added).
- 144 -clear that during “the operational phase of the pulp mill”, CARU will “undertake the
monitoring of water quality”. Similarly, under the heading “Specific Agreed-Upon
Matters”, the second paragraph provides that “[i]n relation to the operational phase,
we [CARU] will proceed to monitor environmental quality. This monitoring shall
be carried out in conformity with the provisions of the Statute of the Uruguay River
…”. There is nothing the slightest bit conditional about these choices of words. The
eventual operation of the plant, and the monitoring that was to accompany it, were
not the subject of ongoing debate.
3.47 Like the Memorial, the Reply tries to refute the obvious meaning of the
Parties’ agreement by citing to statements of Argentine Foreign Minister Bielsa
before the Foreign Affairs Committee of Argentina’s Chamber of Deputies on 14
April 2004 25. According to Argentina, Minister Bielsa’s comments show that the
259
Parties agreed to send the matter back to CARU for its approval . Although
Minister Bielsa’s comments can arguably be read to make it seem that the first stage
of the agreement relating to the project’s approval was not yet complete, that reading
is plainly inconsistent with all the surrounding facts. First, it is noteworthy that
Minister Bielsa’s comments were unscripted and came in response an Argentine
Deputy’s question. It is thus not surprising that they are not a model of clarity free
from ambiguity. Second, Minister Bielsa’s comment s were delivered on 14 April
2004 even as Ambassadors Squiglia and Sader were finalizing the draft text of the
agreement initially reached on 2 March 2004. That final draft was dated 28 April
2004, two weeks after Minister Bielsa’s comments, and makes clear that only two
258See AR, para. 2.88.
259See AR, para. 2.88.
- 145 -stages remained: construction and operation. This same reality comes through in
the text of the agreement as memorialized in CARU’s minutes of 15 May 2004,
discussed above, which were adopted one month after th e Minister’s comments.
There again, it is clear that the only tw o remaining stages were construction and
operation. Whatever Minister Bielsa might have been trying to say on 14 April, it is
clear that subsequent events prove that the first stage of the agreement relating to the
approval of the ENCE project was complete. As the Court will read, this same truth
is revealed in a number of subsequent admissions emanating from the highest offices
of the Argentine government.
3.48 Before leaving the text of the Parties’ agreement, it is worth pausing
briefly on the nature of the information Uruguay committed to share with CARU
“related to the construction of the pulp m ill”. As the Commission’s minutes clearly
reflect, Uruguay was to conve y the environmental management plans (“EMPs”) for
the construction and operation of the ENCE plant to CARU for purposes of
soliciting the Commission’s comments to be “dismissed or decided with the
company”. In the Reply, Argentina attempts to make much of the fact that Uruguay
never provided the pertinent information notwithstanding the al leged fact that
Foreign Minister Bielsa asked for it on re peated occasions in July, August, and
November 2004. Argentina goes so far as to attach an affidavit by the Minister
himself to buttress its case26. But the truth is that it would have been impossible for
Uruguay to turn over the requested materials in 2004 -- for the simple reason that
they did not exist yet. The only EMP (for land movement) ever generated for the
260
See AR, para. 2.89; see also AR, Vol. II, Annex 42.
- 146 -ENCE plant -- which, as the Court knows, was never built -- is dated 28 November
2005, obviously well after 2004, and after the GTAN consultations had approached
deadlock and Argentina had begun laying the groundwork for this litigation.
*
3.49 In addition to all that has already been discussed concerning the scope and
content of the Foreign Ministers’ March 2004 agreement concerning the ENCE
plant, Uruguay’s Counter-Memorial also id entified a number of key admissions in
official Argentine documents confirming the existence and substance of that
agreement. The pertinent admissions are f ound in statements: (i) by the Ministry of
Foreign Affairs in the 2004 year-end report to the Argentine Senate; (ii) by the
Office of the President contained in th e 2004 Annual Report on the State of the
Nation; and (iii) by the Ministry of Foreign Affairs in the 2004 year-end report to the
Argentine Chamber of Deputies 26. Taken individually and together, these
documents reflect exactly th e understanding of the Foreign Ministers’ agreement
discussed above; namely, the ENCE plant would be built and CARU would monitor
the water quality in conformity with the Statute.
3.50 In contrast to its determined refusal even to acknowledge other elements of
proof bearing on the Foreign Ministers’ agreement, Argentina does at least attempt
to reconcile these formal admissions with its own theory of the case. To do so,
however, the Reply resorts to highly creative interpretations, which are inconsistent
with both the text of its own publications as well as the balance of the record before
the Court.
261
See UCM, paras. 1.33-1.36, 3.47, 3.49, 3.54 & 3.63. UCM, Vol. III, Annexes 46, 47 & 48.
- 147 -3.51 Turning first to the Foreign Ministry’s report to the Argentine Senate,
Argentina contends that it “contient également un examen détaillé de l’historique du
différend et ne permet pas non plus de conclure que l’arrengement du 2 mars ait mis
fin au différend concernant le projet CMB [ENCE]. Au contra ire, il permet de
comprendre que cette expression (‘mis fin au différend’) concernait l’opposition des
thèses argentine et uruguayenne relatives à la compétence de la CARU pour
s’occuper de la question.” 262 Uruguay agrees that the report contains a detailed
history of the dispute but disagrees that one can draw therefrom the conclusion
Argentina claims.
3.52 The best way to demonstrate the point is to quote the “detailed
examination” presented in the report. Af ter recounting the history prior to March
2004, including the fact of CARU’s para lisation, the exchange of technical
information between the Foreign Ministries and the report of Argentina’s technical
advisors to CARU, it states:
V. On 2 March 2004, the Foreign Ministers of Argentina and
Uruguay reached an understanding on the course of action to
give to this subject. That 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 Ríos 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
262AR, para. 2.104 (“includes a detailed examination of the history of the dispute, and likewise,
does not allow us to conclude that the arrangement of 2 March had put an end to the dispute
concerning the CMB [ENCE] project. On the contrary, it helps us understand that such
wording (“put an end to the dispute”) concerned the opposition of the Argentinean and
Uruguayan theses related to CARU’s competence to handle this matter.”).
- 148 - construction stage and particularly for the period of operation, to
the effect of relying on this bi-national organisation and the
Statue 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 Ríos and the report of the technical experts
coincide in that CARU should concentrate its activity on the
subject of mechanisms of control.
VI. On 15 May 2004, the Argentinean Delegation to CARU
again called for a special meeting for the purpose of reaching an
agreement with the Uruguayan De legation over the concrete
actions to be followed in conformity with the understanding by
both Foreign Ministers in their agreement of 2 March and
considering the requested by the Government of the Province of
Entre Ríos in their note P-74/2 dated 24 March 2004.
VII. Consequently, CARU initiated the drafting of the
Monitoring Plan in conformity with the provisions from the
Statute of the River Uruguay, esp ecially Chapter X, articles 40
to 43 .63
3.53 Uruguay respectfully submits that there is no way to draw from this
“detailed examination” a conclusion other than the Parties had reached agreement
that the plant would be built and that CA RU would “concentrate its activity on the
subject of mechanisms of control”, exac tly as Uruguay has always maintained.
There is absolutely nothing in this report to indicate either (i) that the construction
and eventual operation of the plant was in any way contingent, or (ii) that the Parties
had agreed to return the matter to CARU for a preliminary review. Indeed, the fact
that the report indicates that “CARU initiated the drafting of the Monitoring Plan”
shows plainly that CARU was not waiting for anything else to happen and was
proceeding directly to prepare for monitoring of the water quality per the Parties’
agreement.
263
Statement by the Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., pp.
617-618. UR, Vol. II, Annex R14.
- 149 -3.54 Argentina also accuses Uruguay of leav ing out a section of the report to
264
the Senate which Argentina quotes in its Reply (as it also did in the Memorial) .
Yet, the section Argentina cites comes from a different part of the report setting forth
a different set of questions and answers. Moreover, Argentina itself leaves out the
questions immediately preceding the section it quotes, which provide essential
context for understanding the answers quoted in the Reply. Uruguay invites the
Court to review both the questions and answers in context, whereupon it will quickly
see that the section quoted by Argen tina stands only for the unremarkable
propositions that Argentina received information concerning the ENCE plant, that it
sought information regarding Uruguay’s admi nistrative approval processes and that
265
it played no role in Uruguay’s administrative approval process .
3.55 Significantly, in another portion of the response to these very same
questions, the Ministry of Health and Environment makes two key statements: First:
“Once the construction works have finish ed and the plant is in operation, a
monitoring plan should be implemented ove r the area of influence on the Uruguay
River.” 266 From this, one can see yet again that completion and operation of the
plant were no longer subject to doubt or dispute. One can also see that the proposed
monitoring related not only to the pre-implem entation period, but rather to the time
when “the plant is in operation”. Second: “Taking into account the technology of
which we have been informed, it is not believed that there will be any effects on our
264
See AR, para. 2.102.
265
See Statement by the Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit.,
p. 528. UR, Vol. II, Annex R14.
266
Ibid., p. 531.
- 150 -territory, given the distances, the river’s diluting capacity and the technologies
267
involved” . This is the same conclusion that was reached separately by
Argentina’s technical advisors to CARU in February 2004, and together these
findings explain why Argentina (and Uruguay) agreed in March 2004 that the ENCE
plant could be built, subject to water quality monitoring by CARU.
3.56 With regard to the Annual Report on the State of the Nation for 2004
prepared by the Office of the President, the Court will recall that it states:
That same month [i.e., June 2004 [sic]], 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….
It also provides for a working procedure for the three phases of
construction of the work: project, construction, and operation 268.
In a later section, it also states:
In view of the “specific agre ements of both delegations at
CARU” regarding the possible installation of pulp mill plants on
the Uruguay River bank, a “Monitoring Plan for Environmental
Quality of the Uruguay River in the Areas of the Pulp Mill
Plants” was designed, which together with the “Plan of
Environmental Quality of the Ur uguay River” helps to maintain
water quality. The “water quality” standards were also reviewed
and updated, considering they remain to 269included in the
Digest of Uses of the Uruguay River .
267Ibid.
268
Annual Report on the State of the Nation for 2004, Ministry of Foreign Affairs, International
Trade and Culture, p. 105 (1 March 2005). UCM, Vol. III, Annex 48 (emphasis added).
269
Ibid.
- 151 -3.57 Argentina tries to blunt the force of these statements, at least in part, by
resorting to the rather curious tactic of questioning the reliability of its own
Presidency. It argues, for example, the statement is not reliable because it gets the
timing of the agreement wrong, and because it refers to a “signed” agreement when,
270
Argentina claims, the agreement was verbal only . The issue of the timing of the
agreement is unimportant. Although the agreement dates to May (when it was
memorialized in CARU), not June, such a minor discrepancy is hardly enough to
invalidate the entire content of a formal report of such significance. With respect to
the issue of whether or not the agreement was signed, the fact is that it was signed --
not at the time of the Foreign Minister s’ initial agreement in March 2004, but
subsequently, when it was memorialized in CARU in May 27.
3.58 At a more substantive level, Arge ntina acknowledges that the language
“put an end to the controversy over the pulp mill installation in Fray Bentos” could
272
“peut-être prêter à équivoque, si elle est lue en dehors de son contexte” .
According to Argentina, the context show s that the dispute “settled” related to
273
whether or not the project would be submitted to CARU for a preliminary review .
While Uruguay might agree with Argentina that the phrase “put an end to the
controversy” could “peut-être prêter à e quivoque, si elle est lue en dehors de son
contexte”, it cannot agree with Argentina’ s conclusion about the meaning of those
words. The truth is that when read in the full context of the surrounding
270
See AR, para. 2.92.
271
See supra, para. 3.44 for the names of the signatories.
272AR, para. 2.111 (“perhaps cause ambiguity, if read out of context”).
273AR, para. 2.111.
- 152 -circumstances, the phrase can only mean that the dispute about whether or not the
plant would be built was “put [to] an end”. This conclusion emerges from the entire
history that Uruguay has now recounted for the Court, including not least the express
text of the agreement memorialized in CARU’s minutes. Per the February 2004
report of its technical advisors, Argentina had satisfied itself that the ENCE plant
would not cause harm, and the Parties had agreed that CARU would focus its efforts
on monitoring water quality. In contrast, there is nothing to support (and everything
to contradict) Argentina’s argument that the Parties agreed merely that Uruguay
would resubmit the ENCE project to CARU for a preliminary review under Article
7. The truth is, the dispute concerning the ENCE plant was over on 15 May 2004.
3.59 The Reply also argues that the de sign and implementation of a water
quality monitoring plan mentioned in the President of Argentina’s Report does not
mean that Argentina had accepted that the plant would be built 274. Instead, the
Reply claims, the “but du m onitoring était, tout simplement, d’obtenir le maximum
d’information sur la qualité des eaux afin d’être en mesure de s’acquitter de sa tâche
275
au moment où l’Uruguay notifierait la CARU du projet, conformément au Statut” .
The trouble with this aspect of Ar gentina’s argument is two-fold. First, as Uruguay
has now demonstrated repeatedly, the a ssertion that “Uruguay was going to notify
CARU about the project” pursuant to Arti cle 7 is entirely without support in the
facts. Second, Argentina’s suggestion that the monitoring was merely for purposes
of establishing a baseline in the wholly hypothetical event the plant was later built is
274
See AR, para. 2.96.
275
AR, para. 2.96 (“purpose of the monitoring was, simply, to obtain the maximum of
information on the water quality so as to be in a position to complete our task in time when
Uruguay was going to notify CARU about the project, pursuant to the Statute”).
- 153 -directly contradicted by CARU’s own unde rstanding of what it was doing and why.
The text of the Foreign Ministers’ agreement memorialized in the CARU minutes,
for example, is unambiguous. It states: “In relation to the operational phase, we
[CARU] will proceed to monitor envir onmental quality.” CARU’s October 2004
draft of the PROCEL monitoring plan is similarly unambiguous. It begins by
unconditionally “[t]aking into account the future installation of cellulose plants”, and
then states: “The plan is based on a sequence of continuous monitoring that permits
the evaluation of trends every three years of work, allowing for a real long-term
evaluation of the impact of the efflue nts, with results from some quarterly
276
evaluations.” The monitoring envisioned was thus clearly for the operational
phase and not, as Argentina s uggests, merely for purposes of establishing a baseline
in case the plant was ever ultimately built.
3.60 Lastly, the Reply tries to distance its elf from the import of the President’s
Report on the State of the Nation by claiming that the reference to “possible”
installation of the pulp mills shows there was no acceptance of the ENCE plant 277.
Perhaps the most interesting part of this argument is the extent to which Argentina
seeks to have it both ways. While at all other moments, it is eager to distance itself
from a literal reading of its own documents, in this one case, Argentina is intent on
standing on a rigid, literalistic interpretation of the word “possible”. Here, Argentina
would do well to heed its own invocation of the Nuclear Tests Case (Australia v.
276
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, p. 1717 (12 October 2004), approved in CARU Minutes No. 07/04 (15 October
2004). UR, Vol. II, Annex R21.
277
See AR, para. 2.98.
- 154 -France), in which the Court stated that “[i] t is from the actual substance of these
statements, and from the circumstances attending their making”, that their true
meaning is to be derived 278. In this case, the “actua l substance” of Argentina’s
statements, and the “circumstances attending their making” make clear that
Argentina had in fact accepted the construction and operation of the ENCE plant.
All of the evidence Uruguay has laid out fo r the Court, including but not limited to
technical reports by Argentina favorable to the ENCE pulp mill, statements from
Uruguayan and Argentine officials, the signed agreement in CARU, and the design
and implementation of the PROCEL, show that Argentina had agreed that the ENCE
plant would be built, no matter how much Argentina might dislike that fact now.
3.61 Turning finally to the 2004 year-end Report to the Argentine Chamber of
Deputies, the Reply asserts that it “témoi gne du fait que l’Argentine avait manifesté
une certaine compréhension à l’égard des préoccupations uruguayennes, mais ne
279
signifie pas qu’un quelconque consentement ait été donné au projet” . Uruguay
confesses that it does not know what Argentina means when it says that the Report
shows that Argentina “had manifested a certain understanding”. Whatever it may
mean, the plain language of the Report clearly refutes Argentina’s contention that no
approval was given to the project. It states:
In June [sic] of that same year, a Bilateral Agreement was signed
through which Argentina’s Government put an end to the
controversy.
278
See AR, para. 2.93 (citing para. 51).
279
AR, para. 2.101 (“shows the fact that Argentina had manifested a certain understanding with
respect to the Uruguayan concerns, but this doe s not mean that any approval was given to the
project”).
- 155 - Said agreement respects, on the one hand, the Uruguayan
national character of the project, and on the other hand, the
regulations in force, that regulate the waters of the Uruguay
River through 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 proced ures were carried out on the
Uruguay River, which means they will continue after the plants
are in operation.
Controls on both plants will be more extensive than those our
own country has on its own plants on the Paraná River, which
were nevertheless accepted by Uruguay (the technologies that
the province of Entre Ríos questions Uruguay about are the same
ones that are used in our country).
Said controls will be carried out by a team that includes
technicians from the National Office of Water Resources and the
Government of t280Province of Entre Ríos and the city of
Gualeguaychú .
3.62 Argentina attempts to minimize the significance of this Report by claiming
that “[i]l a été rédigé au moment où l’Argentine n’avait pas pris connaissance du fait
que l’Uruguay avait autorisé la construction d’Orion [Botnia] le 14 février 2005” 281.
Even if this is true, it is hard to know what significance it has for the Parties’
agreement concerning the ENCE plant. Mo reover, the text of the statement itself
makes it abundantly clear that Argentina was very much aware of the Botnia plant at
the time it was issued. For instance, the statement refers to “the plants” and “both
plants”. Indeed, the caption under whic h the cited language reads “Construction of
280Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
281
AR, para. 2.101 (“it was prepared at a time when Argentina had not yet become aware of the
fact that Uruguay had authorized the building of Orion [Botnia] on 14 February 2005”).
- 156 -Cellulose Plants on the River Uruguay”, and the question to which the Ministry of
Foreign Affairs was responding similarly referred to the “decision by the Uruguayan
Government to authorize the construction of the cellulose plants on the Uruguay
River.” This is no accident. As detaile d in the Counter-Memorial, CARU first
became aware of the Botnia plant no later than April 2004, and even sent a
delegation to Finland in August of that year to learn more about Botnia’s cellulose
282
plant technology . (For its part, the Argentine government was aware of Botnia’s
plans no later than November 2003 28.)
3.63 In Uruguay’s view, the text of the Report could scarcely be any clearer.
No amount of dissembling by Argentina can mask its evident import. The
agreement “put an end to the controversy”. The plants were to be built, brought into
operation and, consistent with its substantive functions, CARU was to monitor their
operation: “Thus inclusive control proce dures were carried out on the Uruguay
284
River, which means they will continue after the plants are in operation.”
Argentina cannot backtrack from that agreement now.
3.64 Argentina’s final stratagem in its effort to insulate itself from the
consequences of its agreement and to distance itself from its own official statements
is to invoke its 2005 State of the Nation Report which, its says, shows that it never
285
“cessé de dénoncer les violations uruguayennes” of the 1975 Statute . This bit of
revisionist history was, however, publishe d on 1 March 2006, a full year after the
282See UCM, paras. 3.23-3.30.
283See UCM, para. 3.62.
284
Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
285AM, para. 2.99 (“ceased to denounce the Uruguayan violations”).
- 157 -prior Reports and after Argentina had already decided to file its Application in this
Court (which it did on 4 May 2006). It therefore cannot overcome the weight of all
of Argentina’s contemporaneous statements made at a less adversarial time.
* * *
3.65 In summary, the overwhelming weight of the evidence confirms
Uruguay’s version of the facts. In late 2003, at Argentina’s initiative, the Parties
agreed to consider the ENCE project at the State-to-State level outside CARU
(which had ceased m eeting in any event). Then, in the first few months of 2004,
Argentina satisfied itself that the ENCE plant would not cause a significant
environmental impact. In light of this de termination, and the continued impasse in
CARU, Uruguay and Argentina’s Foreign Ministers met and decided on a way
forward. They agreed the plant woul d be built and CARU would monitor its
construction and operation. Ambassadors Sguiglia and Sader reduced the agreement
to writing, and it was memorialized in CARU’s minutes of 15 May 2004. The
monitoring plan was designed and impl emented by CARU as the agreement
mandated. The Parties’ agreement to address the issues raised by the ENCE plant
directly, in State-to-State negotiations -- resulting in their agreement that the plant
would be built -- obviated any need to obtain a preliminary determination about the
plant from CARU. Indeed, the agreement to proceed to direct negotiations was
made precisely because the Parties concluded that it was not feasible to seek a
preliminary determination from CARU because the Commission was, in Argentina’s
words, “paralysed” and at “an impasse”. These simple truths refute claims that
- 158 -Uruguay violated Article 7 with respect to the ENCE plant by not seeking
“authorisation” from CARU prior to approving the project 286.
2. The Extension to Botnia.
3.66 Argentina’s procedural claims ag ainst Uruguay concerning the Botnia
plant are similarly without merit because the Parties’ agreement concerning ENCE
was subsequently extended to Botnia. In the Counter-Memorial, Uruguay discussed
287
the many elements of pr oof establishing this fact . Argentina was aware of the
Botnia project at least as early as November 2003 when its officials first met with
corporate representatives from Botnia, and CARU itself had taken cognizance of the
project as early as April 2004 when it first met representatives of the company 288. In
fact, a delegation comprised of members of CARU and representatives from local
governments in the area, including Argentina’s Entre Ríos Province, visited Finland
in August 2004 to learn more about Botnia’s cellulose plant technology. It is thus
not surprising that when in July 2004 the CARU Subcommittee on Water Quality
began drafting the water quality monitoring plan mandated by the Foreign Ministers’
agreement in March of that year, it incorporated both plants into the plan. From the
beginning, each and every draft bore the same caption: “Plan for Monitoring the
Environmental Quality of the Uruguay River for the Areas Around the Pulp
Mills” . Each and every draft, and the final ve rsion too, begins with the same line
286See infra, paras. 7.7.
287
See UCM, paras. 3.61-3.65.
288
See UCM, paras. 3.23-3.25; see also Memorandum from Minister Counsellor Daniel
Castillos to Ambassador Dr. Alberto Volonté Berro (4 November 2003). UCM, Vol. II,
Annex. 16.
289See, e.g., Draft 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
- 159 -“Taking into account the future installation of cellulose plants … the plan described
290
below was developed, focusing on areas which the facilities may impact.”
3.67 As the Court can readily see, in all cases “the future installation of
cellulose plants” was a given. Uruguay relied on these stat ements. When the
PROCEL was completed by CARU’s technical advisors in November 2004, it was
then approved by both delegations to the Commission in plenary session on the 12th
of that month. As stated in Argentina’s own “detailed history” of the dispute set
forth in the 2004 year-end Report to the Argentine Senate:
In November 2004, the technical advisors completed the
development of the “Environmental Quality Monitoring Plan for
the Uruguay River in Areas of Cellulous Plants.” The said Plan
was approved by the agreement of both delegations to the
CARU during plenary meeting on 12 November 2004. The
actions from the Monitoring Plan are centered in areas of
possible influence by the projects mentioned and include the
implementation of monitoring actions by CARU for the
protection of the quality of the waters… 291.
Quality and Prevention of Pollution Report No. 243, p. 863 (13 July 2004), approved in CARU
Minutes No. 04/04 (16 July 2004). UCM, Vol. IV, Annex 102 (emphasis added).
290
Ibid. Draft PROCEL, Annex A to Subcomm ittee on Water Quality and 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 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 107. Draft
PROCEL, Annex A to the Subcommittee on Water Quality and Preventio n 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 (emphasis added).
291
Statement by the Argentine Ministry of Foreign Affairs to the Argentine Senate, op. cit., p.
618. UR, Volume II, Annex R14.
- 160 -After that, CARU asked for and received DINAMA’s approval of the plan 292.
Consequently, Uruguay’s delegation to CA RU, and Uruguay itself, understood that
Argentina had agreed that both plants could and would be built.
3.68 The 2004 year-end reports discussed above similarly contemplate the
construction and operation of two plants, not just the ENCE plant. The Report to the
Argentine Chamber of Deputies cited above contains a very instructive question
(from a legislator) and answer (from the Ministry of Foreign Affairs) that make clear
that the agreement was extended to both plants. Uruguay will not burden the Court
by quoting the question and answer in full he re. It did so in the Counter-Memorial
and invites the Court to review paragraph 3.63 thereof. As the Court will see, the
Argentine Report not only contains repeated plural references to the “cellulose
plants”, it also makes it abundantly clea r it was “Argentina’s position” that the
“controversy” concerning “both plants” was “put an end to” 29.
3.69 Remarkably, the Reply never directly responds to Uruguay’s showing that
the Foreign Ministers’ March 2004 agreement was extended to Botnia. Nor does it
make any effort to refute the pertinent f acts stated in the Counter-Memorial. They
should therefore be taken as admitted. All th at Argentina says is this: “S’il en était
ainsi [i.e., if the agreement had been ex tended to Botnia], il n’y aurait eu aucun
294
besoin” for the Parties to negotiate directly in GTAN . Yet, this misses the point
292
UCM, para. 3.28, citing 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.
293
Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op. cit., p.
136. UCM, Vol. III, Annex 46.
294AR, para. 2.51 (“If this were the case”, “there would have been no need”).
- 161 -entirely. If anything, the facts surroundi ng the creation of GTAN only underscore
Uruguay’s point. Uruguay has already cited the Parties’ joint press release (which
Argentina itself labels an “agreemen t”) issued on 31 May 2005 announcing the
creation of GTAN 295. The language is, however, worth revisiting here in light of the
point currently under discussion. It states that the Parties will constitute
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 shared Uruguay River 29.
By referring to “the cellulose plants that are being constructed” and by alluding to
the effects the operation of both “will have”, this joint release again makes clear that
it is understood and accepted that the plants -- both plants -- will be built.
3.70 Given Argentina’s existing agreement that the plants would be built,
subject only to water quality monitoring by CARU, Uruguay was, just as it stated in
the Counter-Memorial, under no obligation to participate in additional consultations
297
with Argentina . Nonetheless, Uruguay reco gnised that mounting opposition
within Argentina’s Entre Ríos Province was causing a political problem for
Argentina’s government. Uruguay saw the GTAN as a way to provide additional
information to Argentina and Entre Ríos and reassurance that the plants were
environmentally viable. In no sense, however, did the creation of GTAN detract
295
See supra, para. 3.13.
296
Joint Argentine-Uruguayan Press Release Constituting GTAN No. 176/05 (31 May 2005).
UCM, Vol. V, Annex 126 (emphasis added).
297
See UCM, para. 3.71.
- 162 -from the Parties’ prior agreement that the pl ants would be built, as evidenced by the
text of the joint press release announcing the creation of GTAN.
3.71 Just as with ENCE, Argentina’s agreem ent that the Botnia plant would be
built, and that CARU would monitor its construction and operation, mooted any
298
procedural claim it might have had under Articles 7 et seq. of the 1975 Statute .
C. T HE TIMING OF N OTICE TO CARU
3.72 In the Counter-Memorial, and again in Chapter 2 of this Rejoinder,
Uruguay showed that Article 7 of the 1975 Statute is vague as to exactly when notice
of a project must be submitted to CARU for its preliminary review. Uruguay
showed that based on the text of the Statut e, the Parties’ historical practice under it,
and the rules of general international law, it is clear that notice is not required prior
to an initial environmental authorisation of the sort issued to ENCE and Botnia here.
Rather, what is required is “timely” notice such that ample time remains for 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
preventative measures before a potentially harmful project is carried out99.
3.73 In the face of this demonstration, the Reply persists in the argument that
Uruguay breached its obligations under Article 7 by “failing” to notify CARU prior
to issuing AAPs to ENCE and Botnia in October 2003 and February 2005,
respectively. Indeed, Argentina goes so fa r as to argue that Uruguay’s ostensible
“failure” to notify CARU before issuing AAPs to the two companies “vicié toute la
298See infra, paras. 7.7.
299See supra, paras. 2.35; see also UCM, para. 3.13.
- 163 -procédure” under the 1975 Statute 30. Argentina thereby seeks to leverage what it
claims is Uruguay’s initial error into a reason to disregard everything else that came
afterwards, and -- most extremely of all -- a reason to dismantle the Botnia plant.
Such an argument fails for several reasons. First, as shown above, the Parties agreed
to direct negotiations rather than formal compliance with Article 7; notice to CARU
per Article 7 was not required. Second, even if arguendo, the Parties had not agreed
to dispense with the formal requirements of Article 7, Uruguay did not “fail” to
notify CARU prior to the issuance of the AAPs because notice to the Commission
was not due at that preliminary stage of Uruguay’s review of the project. Third, as
Uruguay will detail in Chapter 7 of this Rejoinder, even if, quod non, there were a
procedural error, the remedy of disman tling the Botnia plant, the environmental
performance of which is undeniably excellent , would be grossly disproportionate to
that error.
*
3.74 Uruguay has already demonstrated at paragraphs 3.11-3.71 above that
notice to CARU was not required because the Parties agreed to proceed immediately
to direct negotiations, without awaiting a summary determination by CARU.
Accordingly, there was no reason for a formal notification to CARU under Article 7,
and the question of whether Uruguay should have notified CARU before or after
issuance of the AAPs to ENCE and Botnia is moot. Even absent the Parties’
agreement to dispense with CARU’s summ ary determination, however, Argentina’s
argument that notice was required before issuance of the AAPs continues to
300
AR, para. 1.161 (“invalidated the entire procedure”).
- 164 -misapprehend the nature of an initial en vironmental authorisation under Uruguayan
law. Notwithstanding Uruguay’s detailed explanation in the Counter-Memorial of
301
the preliminary, contingent nature of an AAP , the Reply repeatedly insists on
claiming that an AAP is tantamount to “autorisation immédiate de construction” 302.
Yet, AAPs represent nothing of the sort. They constitute only an initial
determination by MVOTMA, based on the review conducted to date, that a project is
303
environmentally viable . Several additional appr ovals are required before
construction may commence, including, for example, approval of environmental
management plans for all pre- and post-ope rational phases in the life-cycle of the
304
plant . As succinctly explained by the Director of DINAMA, who administers and
applies Uruguayan environmental laws and regulations on a daily basis:
The AAPs authorize Botnia and ENCE merely to request
approval to begin construction on ly; 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 Gestión Ambiental”
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 effect on
living creatures) 305.
3.75 Argentina’s Reply attempts to bolster its argument by citing to Article 7 of
Law No. 16466 of 19 January 1994, which esta blishes that an AAP is required prior
301
See UCM, paras. 1.15 & 3.10-3.12.
302
AR, para. 2.13 (“an immediate construction permit”).
303
Decree No. 435/995, Environmental Assessment Regulation (hereinafter “Decree No.
435/994), Art. 17, para. 3 (21 September 1994). UCM, Vol. II, Annex 9.
304
See UCM, para. 3.11.
305
Sworn Declaration of Alicia Torres, Director of the Department of the Environment, p. 6,
para. 3 (June 2006). UCM, Vol. II, Annex 30.
- 165 - 306
to the “execution of activities, construction, or works” . From this, Argentina
concludes: “L’AAP est la condition indispensable pour le début de la construction,
indépendamment du fait que d’autres autorisations partielles – liées au degré
d’avancement des travaux-puissent ou non être ultérieurement octroyées.” 307 Yet,
none of this undermines the essentia l point: although an AAP is certainly a
necessary condition for commencing construc tion of a project, it is not a sufficient
condition. As Argentina itself acknowledges, the additional authorisations required
“shall or shall not be granted”; that is, they are contingent and far from certain.
Indeed, this very point is neatly captured in the next paragraph of the Reply where
Argentina quotes the February 2005 Botnia AAP which authorizes “the execution of
the project in question subject to the fulfillment of a series of additional conditions
308
stipulated in paragraph 2 of this resolution” .
3.76 The point is perhaps best illustrated simply by listing the various
additional authorisations and permits Botnia was required to obtain after it obtained
its February 2005 AAP but before proceedi ng with the various aspects of that
project. They are:
• Environmental Management Plan (“EMP”) approval for the removal
of vegetation and earth movement, 12 April 2005;
• EMP approval for the construction of the concrete foundation and the
emissions stack, 22 August 2005;
306See AR, para. 2.15.
307AR, para. 2.15 (“The AAP is a prerequisite to the beginning of construction works,
regardless of the fact that other partial authorisations -- related to the degree of progress of the
works -- shall or shall not be granted subsequently.”)
308AR, para. 2.16 (quoting Botnia AAP) (emphasis added).
- 166 - • EMP approval for the construction phase of the works, 18 January
2006;
• EMP approval for the construction of the wastewater treatment plant,
10 May 2006;
• EMP approval for an industrial non-hazardous waster landfill, 9 April
2007;
• EMP approval for the construction of solid industrial waste landfill, 9
April 2007;
• EMP approval for operations, 31 October 2007; and
• Authorisation to operate, 8 November 2007.
3.77 Ironically, even as it erroneously characterizes the AAPs as a “final
construction permit”, Argentina elsewhere recognizes that notification after an AAP
can still be “timely” in the sense of permitting meaningful consultations to take place
before a project comes into operation. At paragraph 2.110 of the Reply, after earlier
noting that Uruguay issued the AAP to EN CE in October 2003, Argentina expressly
states:
Il est à relever que durant toute l’année 2004, la construction de
CMB n’avait pas commencé. La CARU était donc toujours en
mesure d’évaluer les projets et leur impact sur le fleuve Uruguay
et sa zone d’309luence avan t même que ces travaux ne
commencent .
Argentina therefore recognizes that there is no magic to an AAP such that the date of
its issuance must be given dispositive significance for determining when notice to
CARU is due. In the passage quoted above , Argentina clearly admits that after the
309AR, para. 2.110 (“It should be pointed out that, throughout the year 2004, the CMB
construction didn’t start. Consequently, CARU was still in a position to assess the projects and
their impact on the Uruguay River and its area of influence even before such works had
started.”).
- 167 -AAP was issued to ENCE, there was still sufficient time (if the Parties had so
desired) for CARU to asses the projec t and its impact on the Uruguay River.
Uruguay agrees. Ipso facto, notice to CARU prior to issuance of the AAP was not
required.
3.78 The Reply also makes much out of the issue of the specific location of the
plants, and appears to argue that because the AAPs assume specific locations they
are effectively final construc tion permits. The first thing to be said about this
argument is that it again mis understands the nature of an AAP. As stated, an AAP
by itself implies nothing other than the fact that, based on an initial assessment, a
project appears to be environmentally viable. Before construction will be permitted,
the entity undertaking the project mu st submit and receive approval for
environmental management plans which are site-specific. If the proponent fails to
demonstrate that the project will not harm the environment at that site, it will be
rejected.
3.79 The second thing to be said about th is argument is that location has no
independent relevance under the 1975 Statute. Article 7 of the 1975 Statute requires
notification when a work is liable to cause significant harm to (i) water quality, (ii)
navigation, or (iii) the regime of the river. Argentina acknowledges the limited
substantive scope of the Statute’s procedural rules 31. Consequently, location as
such is only pertinent only insofar as it has a necessary bearing on these three
factors. Otherwise, it does not fall within the purview of the 1975 Statute.
310
See AR, para. 1.112 (agreeing that the notifying State has “no obligation to provide
information that has no bearing on these issues”).
- 168 -3.80 Even as it agrees with Uruguay that the scope of the Statute’s procedural
rules is limited to water quality, navigation and the régime of the river, Argentina
not so subtly tries to expand that scop e by arguing for an inappropriately broad
definition of the river’s “régime”. At paragraph 1.113 of the Reply, it claims that
“par ‘régime du fleuve’ (et de ses zones d’influence), il faut entendre l’ensemble des
éléments qui influencent, ou qui sont influencés par, l’ écosystème du fleuve pris
311
dans son ensemble.” Argentina seems to be arguing, in other words, that “régime
of the river” means essentially anything that either affects or is affected by the river.
Under such an expansive definition, it is hard to imagine anything that would not be
included in the régime of the river.
3.81 Argentina appears to have forgotten in the Reply what it acknowledged in
the Memorial. In point of fact, “régime” is a hydrographic term with a well-defined
meaning. In its first pleading, Argentina cited the Hydrographic Dictionary for the
proposition that “régime” in general means “l’esemble d’éléments don’t les
variations saisonnières caractérisent la situation en un lieu donné” 312. In the context
of a river, this means “the condition of a rive r with respect to the rate of its flow as
measured by the volume of water passing different cross sections in a given time” 313.
The Dictionary of Hydrology and Related Sciences (“ Diccionario de Hidrología y
Ciencias Afines”) is to the same effect. It defines “régimen” in Spanish as:
311
AR, para. 1.113 (“the term ‘régime of the ri ver (and its zones of influence), must be
understood as all of the elements that influe nce or which are influenced by the river’s
ecosystem in its entirety”).
312
AM, para. 3.129 (“all elements whose seasonal variations characterize the situation in a
given place”).
313
Webster’s Third New International Dicti onary (Unabridged, Massachusetts, Miriam
Webster, 2002) p. 1911.
- 169 - Characteristic behavior of a body of water in a watershed or
lake, including losses or gains in a period of the year. Flow
characteristic of a current with respect to the speed, volume,
shape and alteration of the channel, as well as in its capacity to
transport sediments and the quantity of the material
314
transported .
The location of the plants is therefore relevant to the procedural rules of the Statute
only to the extent it has an effect on wate r quality, navigation, or the flow of the
river. And since Argentina nowhere maintains that it does have such an affect,
location is irrelevant to this dispute.
*
3.82 Uruguay showed in the Counter-Memorial that both Argentina and CARU
were well aware of the ENCE and Botnia projects before either received their AAPs
from DINAMA 31. In the case of ENCE, CARU fi rst became aware of the project
on or around 14 December 2001, nearly two years before ENCE’s AAP was
316
issued . In the case of Botnia, CARU first became aware of the project no later
than April 2004, some ten months before Botnia received its AAP 317. The Reply
responds by asserting that CARU’s knowledge “l’existence des projects n’est pas un
314G. Lanza, C. Cáceres, S. Adame, S. Hernández, Dictionary of Hydrology and Related
Sciences (“Diccionario de Hidrología y Ciencias Afines ”), First Edition, Editorial Plaza y
Valdés, Mexico (1999) p. 236. UR, Vol. III, Annex R65. (Comportamiento característico de
una cantidad de agua en una cuenca de drenaje o lago, incluyendo pérdidas y ganancias en un
periodo del año. Flujo característico de una co rriente con respecto a la velocidad, volumen,
forma y alteración del canal, así como en la capacidad de transporte de sedimentos y la
cantidad de material transportado.)
315See UCM, paras. 3.14 & 3.23.
316See UCM, para. 3.16.
317See UCM, para. 3.23.
- 170 - 318
raison pour que l’Uruguay s’abstienne de s’acquitter de ses obligations” .
Elsewhere, it states: “la CARU peut être au courant des projets, recevoir de
l’information de source diverse, demande r davantage d’information sur un projet,
sans que cela signifie que l’une ou l’autre des Parties au Statut soit libérée de
l’obligation claire et dépourvue d’ambiguïté qu’elles ont stipulée à l’article 7” 319.
3.83 Here again, Argentina misrepresents Uruguay’s argument. Uruguay stated
quite plainly in the Counte r-Memorial that the purpose of demonstrating CARU’s
knowledge of the plants was not, as Argentina suggests, to argue that that knowledge
relieved it of the obligation to comply w ith Article 7 of the St atute. (Uruguay was
relieved of that obligation by Argentina when the Parties agreed to proceed directly
to State-to-State consultations and dispense with CARU summary determination
under Article 7, as described above.) In stead, Uruguay’s point in demonstrating
CARU’s early knowledge about the plants was simply that the fact that CARU both
knew about the projects before the AAPs were issued, and knew too that the AAPs
were imminent, yet did not request notification pursuant to Article 7 (as it is
expressly and undisputedly empowered to do) constitutes additional evidence that
320
notice was not due at the AAP stage . This is not to say, as the Reply suggests,
that Uruguay considered it CARU’s “duty” to request notification 321. It is merely to
318AR, Chap. 2, Sec. 1 Heading B (“of the exis tence of the projects does not justify Uruguay’s
failure to fulfill its obligations”). See also paras. 2.30-2.32.
319AR, para. 2.31 (“CARU can be aware of th e existence of the projects, can receive
information from various sources, ask further information on a project without that meaning
that one or the other Party to the Statute be released from the clear unambiguous obligation that
the Parties stipulated under article 7.”).
320
See UCM, para. 3.15.
321
See AR, para. 2.34.
- 171 -say that, whatever Uruguay might have thought, if CARU had considered that notice
was due prior to the issuance of the AAPs, one would expect to see some indication
of that fact in the record given the Commission’s awareness of the projects and the
stage of Uruguay’s review . But there is none. There is nothing even from
Argentina’s own delegates to the Commission to indicate that they expected to be
formally notified under Article 7 before Uruguay issued the AAPs. Argentina
nowhere disputes these facts.
3.84 Argentina does, however, try to sow conf usion by asserting that it “a déjà
démontré que la CARU a insisté auprès des autorités uruguayennes en demandant de
l’information sans que celles-ci se soient acquittées de cette obligation au moment
où l’Uruguay a procédé à délivrer les autori sations préalables,” thus implying that
CARU requested formal notification 322. Yet, the documents cited by Argentina
confirm merely that CARU knew that EN CE and Botnia would imminently receive
AAPs. At the same time, it never requested formal notification pursuant to Article 7
prior to their issuance.
3.85 The Reply cites paragraphs 2.5, 2.7 to 2.16, and 2.50 to 2.51 of the
Memorial to support its position. Yet, none of these refer to Article 7 notification.
Paragraph 2.5, for instance, cites to a letter of 17 October 2002, which requests
information from MVOTMA to assist CA RU in developing its water quality
monitoring program. But it says nothing about Article 7 notif ication or the 1975
Statute. It reads:
322AR, para. 2.33 (“already proved that CARU in sisted that the Uruguayan authorities provide
further information and the latter failed to fulfill this obligation at the time Uruguay granted the
prior authorisations”).
- 172 - This Commission, as you know, has been developing within the
scope of its competencies programs pertaining to the
preservation of water quality in the Uruguay River through its
sampling stations in coastal areas and in the center of the
navigation channel, located in the said area.
Consequently, with the goal of taking official notice of the
Environmental Impact Assessment study that M’Bopicua may
have presented to your consideration, we request that you
consider the possibility of providing us with a copy of the said
material and any other background information that may be
useful to us.323
3.86 As another example, Paragraph 2.7 of the Memorial refers to the CARU
Minutes of 21 March 2003. The Minutes st ate that CARU has not yet received
information on the ENCE environmental impact study, and that Mr. Belvisi (of
Uruguay) personally requested the document 32. Again, it makes no reference to
Article 7 notification or to the 1975 Statute. The others are to similar effect.
3.87 Statements by Argentina’s delegati on to CARU show that Uruguay was
open about ENCE and was attempting to k eep the Commission informed. On 17
October 2003 -- following the issuance of the ENCE AAP -- Ambassador García
Moritán, the President of the delegation, acknowledged:
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
323Letter SET-10413-UR sent from CARU President, Walter M. Belvisi, to the Minister of
MVOTMA, Carlos Cat (17 October 2002). UR, Vol. II, Annex R19.
324Subcommittee on Water Quality and Preven tion of Pollution Repor t No. 233, p. 463 (18
March 2003), approved in CARU Minutes No. 03/03 (21 March 2003). UR, Vol. II, Annex
R20.
- 173 - agreed that new monitoring stati ons would have to be installed
to check the water quality in those 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 325.
3.88 The situation was the same with respect to Botnia. In paragraph 2.50 of
the Memorial, Argentina states that on 19 October 2004 (four months before
issuance of the AAP), CARU met with Bo tnia representatives and “souligne le
besoin de disposer d’information au suje t de la procédure en cours devant la
326
DINAMA.” The document cited in support mentions that CARU met with Botnia
representatives, and then states:
Regarding the project for the cellulose plant of the referenced
group that will be installed at Fray Bentos (ROU), it would be of
interest to have information about the status of the steps initiated
to obtain the Initial Environmental Authorisation from the
Department of the Environment (DINAMA). It was agreed: To
take note and to stay informed about the group’s steps before
DINAMA . 327
Here again, there is nothing about Article 7 notification, although CARU was aware
that Botnia was seeking an AAP.
3.89 Paragraph 2.51 of the Memorial states that on 16 November 2004, CARU
indicated that it was aware of Botnia’s intention to seek a “construction permit” for a
cellulose plant and asked DINAMA to provide it with information. The letter from
325
CARU Minutes No. 11/03, pp. 2181-2182 (17 October 2003). UCM, Vol. IV, Annex 97.
326AM, para. 2.50 (“emphasized the need to ob tain information on the current proceeding
before DINAMA”).
327Subcommittee on Legal and Institutional Affairs Report No. 193, pp. 1870-1871 (8
November 2004), approved in CARU Minutes No. 08/04 (12 November 2004). UR, Vol. II,
Annex R22.
- 174 -CARU does not reference a “construction pe rmit,” but rather indicates that CARU
was aware that BOTNIA “a entamé des dé marches … afin d’obtenir l’Autorisation
environnementale preamble” and “il est dans le plus grand intérêt” for CARU to
“connaître les demarches faites jusqu’á présent...” 328. In reality, this then is just one
more piece of evidence showing that CARU knew Botnia was in the process of
seeking an AAP, yet said nothing about Uruguay having to provide notice under
Article 7 of the 1975 Statute. Instead, CARU ’s request was based solely on what it
termed its “interest”.
3.90 Argentina neglects to mention th at in December 2004, DINAMA replied
to CARU’s November request, sending th e Commission a fax “forwarding the text
of the public file for the Kraft cellulose plant project, appl ication for initial
329
environmental authorisation [AAP] filed by Botnia S.A.” . Tellingly, in the same
CARU minutes in which receipt of DINAM A’s fax is noted, Ambassador Moritán,
the President of Argentina’s delegation to CARU, expressed his pleasure at how well
CARU was fulfilling its mandate with resp ect to ENCE and Botnia, stating that
330
“congratulations are in order for the ma nner in which this matter was treated” but
saying nothing about any notification required under Article 7 of the Statute.
3.91 Argentina also contends that at a summit meeting on 9 October 2003 then
Uruguayan President Jorge Battle and Foreign Minister Didier Opertti both promised
328AR, Vol. II, Annex 27. In the Memorial Argentina incorrectly cited a different 16
November 2004 document as Annex 36 thereto. The correct document is included as Annex 27
to the Reply (“has began the process … with the goal of obtaining the corresponding AAP” and
“it is of [CARU’s] interest” to “learn about the steps taken up to the present date”).
329CARU Minutes No. 09/04, p. 2148 (10 December 2004). UCM, Vol. IV, Annex 111.
330Ibid., pp. 2153-2153bis. See also UCM, para. 3.29.
- 175 - 331
to inform CARU about the plant before issuing an AAP . The Reply bases its
argument on a 27 October 2003 diplomatic note from Argentina to Uruguay. The
note is not reliable evidence for the propositions stated. First, contrary to
Argentina’s assertion that it was written “a couple of days” after the 9 October
meeting 33, it was actually written nearly three weeks later at a time when relations
between the Parties on the subject had become significantly more strained. The self-
serving assertions set forth therein must therefore be viewed with caution. Second,
the note’s contents are refuted by a contem poraneous internal (i.e., not for public
consumption) Uruguayan document which ma kes clear that no such promises were
made 333. Third , Argentina’s argument defies logi c. On the one hand, Argentina
complains because Uruguay allegedly promised to inform CARU before issuing the
AAP to ENCE. Yet, on the other hand , it complains that Uruguayan Foreign
Minister Opertti ostensibly denied that CARU was competent to review the matter
334
around the same time . Both allegations obviously cannot be true. Fourth,
according to Argentina’s 27 October diplomatic note, President Battle promised to
335
consult with Argentina before issui ng ENCE’s “contractual authorisation” . Even
accepting Argentina’s (erroneous) depiction of events, it is not clear that the 9
October AAP was the contractual authorisation to which President Battle referred.
Given the very preliminary nature of an AAP , it is more likely that President Battle
331See AR, paras. 2.78-2.82.
332AR, para. 2.78.
333Memorandum from Minister Counsellor Dani el Castillos to Ambassador Dr. Alberto
Volonté Berro (28 October 2003). UCM, Vol. II, Annex 15.
334See AM, para. 2.26.
335Diplomatic Note No. 226/03, sent from the Embassy of Argentina to the Uruguayan
Ministry of Foreign Affairs (27 October 2003). AM, Vol. II, Annex 20.
- 176 -was referring to a later authorisation, such as the authorisation to construct the plant
or even the final authorisation to operate.
3.92 In light of the above, it is therefore clear both (i) that Argentina and CARU
were well aware of the ENCE and Botnia plants long before either company
received its AAP from MVOTMA; and (ii) that neither CARU nor Argentina’s
delegates thereto stated (or even suggested) that they expected to receive notification
pursuant to Article 7 before the AAPs we re issued. Especially given CARU’s
undisputed power to request formal notif ication under the Statute, these facts
constitute additional probative evidence that neither Party authentically considered
notice to CARU to be required before the AAPs were issued.
3.93 In response to Uruguay’s showing that notice to CARU was not due at the
AAP stage, the Reply responds that “[l’ ]argument du caractère ‘préliminaire’ des
autorisations préalables est fallacieux car aucune des autorisations postérieures
délivrées par l’Uruguay … n’ont été soumis es à la CARU pour sa considération
conformément à l’article 7 du Statut” 336. According to Arge ntina, “non seulement
n’a pas soumis à la CARU le projet Orion avant de délivrer l’AAP, mais il ne l’a pas
fait non plus après” 337. It is Argentina’s argument that is “fallacious”, for the
reasons discussed immediately below.
336AR, para. 2.18 (“the argument of the ‘preliminary’ nature of these prior authorisations is
fallacious, since none of the subsequent authorisations issued by Uruguay … were submitted to
CARU to consider them as stipulated under Article 7 of the Statute”).
337AR, para. 2.18 (emphasis in original) (“not only did Uruguay fail to submit the Orion project
to the approval of CARU before issu ing the AAP but it never submitted it, not even
subsequently”).
- 177 -3.94 First, as explained in both the Counte r-Memorial and Chapter 2 of this
Rejoinder, it is not CARU’s role to “approve” anything 338. Indeed, Argentina itself
admits this very fact in Chapter 1 of its Reply where it specifically agrees that
“CARU does not approve or reject projects” 339.
3.95 Second, the fact that Uruguay never subsequently submitted the projects to
CARU for a preliminary determination under Article 7 of the 1975 Statute is due to
the fact, described above, that the Parties agreed between themselves to dispense
with CARU’s preliminary review under Ar ticle 7 and to proceed directly to
government-to-government talks. In Octo ber 2003, with CARU paralysed and at
Argentina’s initiative, Uruguay’s Foreign Mi nistry sent its Argentine counterpart a
large amount of information concerning th e ENCE project. Argentina’s technical
advisors to CARU proceeded to review that information and, in February 2004,
came to the conclusion that the project did not pose a risk of harm. With CARU still
at an impasse in March 2004, Foreign Ministers Bielsa and Opertti met and, on the
basis of the advisors’ February report, agreed that the plant would be built subject to
monitoring by CARU. That understanding was later extended to Botnia, as
Argentina itself has recognized at the high est levels. Still la ter, when mounting
opposition in Argentina forced that government’s hand, Uruguay agreed to
additional talks about the plants under GTAN. It was Argentina that asked for these
direct consultations under Article 12 of the Statute because, in its words, “a more
direct intervention” than CARU could offer was necessary. Argentina thus has no
cause to complain about the fact that CA RU was never formally notified and called
338See UCM, paras. 2.188-2.205; see also supra, para. 2.12.
339AR, para. 1.158
- 178 -upon to perform the preliminary review contemplated by Article 7. At Argentina’s
initiative on both occasions, in October 2003 (with respect to ENCE) and in May
2005 (with respect to Botnia), the Parties ag reed to dispense with these procedural
steps.
3.96 These facts deprive Argentina’s repeated invocation of Uruguayan
Ambassador Felipe Paolillo’s comments at a 29 May 2006 symposium of any force.
The Court may recall that on that date Ambassador Paolillo stated that “Uruguay has
informed the Argentinean authorities about the projects and the construction works
and, several times, provided the info rmation requested by the Argentinean
authorities. However, it did not follow th e procedure provided in the Statute of the
Uruguay River. Why? Because the authorit ies of the two nations, at the highest
levels -- in one case, the Ministers of Foreign Affairs [ENCE], and in another, the
Presidents of the two countries themselves [Botnia] -- agreed to other alternative
340
procedures” . In both the Memorial, and again in the Reply, Argentina insists that
Ambassador Paolillo’s comments somehow prejudice Uruguay’s case 341. Not at all.
In fact, as the Court has read, they fully support Uruguay’s legal position -- that
Argentina and Uruguay “agreed to other alte rnative procedures” in place of those
specified in Article 7 of the 1975 Statute. As has already been demonstrated the
Parties agreed, at Argentina’s request, to dispense with the initial procedures
provided in the Statute in favor of direct information-sharing and consultation
between the Parties themselves, something they had every right to do. Argentina
340
Press release from the Presidency of the Re public of Uruguay, “Uruguay informs about the
construction of Cellulose Plants” (29 May 2006). AM, Vol. VI, Annex 13.
341
See AM, para. 4.73; see also AR, para. 2.2.
- 179 -may not now pretend that it never agreed with Uruguay to dispense with these
procedural steps and try to hold Uruguay accountable for proceeding directly to
State-to-State consultations, as Argentina invited it to do, rather than formally
notifying CARU and waiting 30 days for its summary determination before engaging
in the direct consultations. In thee circumstances, Urugua y cannot honestly be
accused of violating Article 7. The evidence plainly shows that it did not.
Section II.
The Evidence Regarding Argentina’s Claim that Uruguay Violated the 1975
Statute by Implementing the Botnia Project Before the Court Has Rendered Its
Judgment in This Case.
A. URUGUAY COMPLIED WITH ITSPROCEDURAL O BLIGATIONS D URING
CONSULTATIONS .
1. Uruguay Participated in Consultations in Good Faith
3.97 As Uruguay explained in Chapter 2 of the Counter-Memorial, the Parties’
foremost duty during consultations is to pa rticipate in the process in good faith with
342
an open mind and willingness to take into account the other side’s views . The
Parties are not obligated to agree with each other, but they are obligated to listen to
and take each other’s views into consid eration. And as Uruguay described in
Chapter 3 of the Counter-Memorial, it did just that during the Article 12
consultations conducted under the auspices of GTAN. Nowhere either in the
Memorial or most recently in the Re ply does Argentina dispute Uruguay’s good
faith in the GTAN process. It should therefore be taken as admitted.
3.98 If either Party can be accused of a lack of good faith in the GTAN process,
that Party is Argentina. Argentina’s be havior in the GTAN process showed that it
34See UCM, para. 2.174.
- 180 -was intent on frustrating not just an agreement but any kind of meaningful progress.
So, for example, Argentina flooded Uruguay with information requests that far
exceeded any conceivable interpreta tion of Uruguay’s information-sharing
obligations under the Statute. It asked Uruguay to generate a wealth of new data and
studies -- most of which Uruguay produced in its efforts to accommodate Argentina
-- and sought information bearing on subjects that had nothing whatever to do with
the effect of the projects on navigation, the régime of the river or the quality of its
water.
3.99 Perhaps the best illustration of Argentina’s approach to the GTAN process
was discussed at paragraph 3.105 of the C ounter-Memorial. As described there, the
water quality sub-group was engaged in a pr eviously scheduled meeting in Buenos
Aires in late in the GTAN process to finali ze the text of its report on the effects of
plant emissions on water quality. The gr oup had made substantial progress and was
able to reach agreement on a large number of points. In the middle of the group’s
meeting, however, Argentina’s Ambassador García Moritán (the same Ambassador
Moritán who headed Argentina’s delegation to CARU) came into the room and
perfunctorily announced without explana tion that the session was over and the
group’s work terminated 343. As a result, the report was never finalized and all the
progress the group had made went to waste.
2. Uruguay Provided More Than Adequate Information
3.100 Under the third paragraph of Article 7 of the 1975 Statute, the initiating
State is required to provide the notified St ate with information describing “the main
343
See UCM, para. 3.105.
- 181 -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
344
of its waters” . The ILC commentary to the 1997 Watercourse Convention, which
reflects the content of gene ral international law, suggest s that a “notifying State is
not required to conduct additional research at the request of a potentially affected
State, but must only provide such relevant data and information as has been
345
developed in relation to the planned measures and is readily accessible” . The
Reply does not question either of these points as matters of law.
3.101 As a matter of fact, the Reply is all but silent on the issue of the quality
and quantity of information it received from Uruguay. Only one paragraph (in
Chapter 2) even addresses the issue 346, notwithstanding the fact that Uruguay
devoted nearly twenty-five pages of the C ounter-Memorial to detailing the array of
information Uruguay provided to Argen tina both before and during the GTAN
347
process . Argentina’s lone paragraph states meekly that even if “l’information
transmise à l’Argentine était plus que su ffisante – à supposer même qu’elle soit
avérée, quod non – ne sert pas non plus à justifie r le comportement uruguayen”
because a party cannot “s’ériger en juge de sa propre information”, and
“[l’]Argentine est en droit de considér er que l’information transmise était
imcomplète et/ou inadéqua te, tout comme l’Uruguay a le droit d’avoir l’avis
344
1975 Statute, op. cit., Art. 7. UCM, Vol. II, Annex 4.
3451994 Draft Articles, op. cit., p. 112, comment 5.
346See AR, para. 2.42.
347See UCM, paras. 3.86-3.106.
- 182 -opposé” 348. Argentina is entitled to have its opinion, but it is not entitled to have the
Court adopt it unless it furnishes suffici ent evidence to support it. Argentina
furnishes none. It fails to state how or in what ways the voluminous information
supplied by Uruguay was “incomplete and/ or inadequate”. Given the thoroughness
of Uruguay’s presentation on this point, the weakness of Argentina’s argument is
apparent.
3.102 The only support that Argentina offers for its assertion that Uruguay’s
information was insufficient is that a DINAMA Report issued in February 2005
found some problems with Botnia’s EIA, and that on 27 March 2006, IFC advisors
believed that sufficient information had not been provided in the IFC’s original
349
Cumulative Impact Study (“CIS”) . Yet, even if both assertions are true, they say
nothing about the sufficiency of informa tion Uruguay supplied to Argentina. The
information given to Argentina about Botnia was not limited to the EIA; much more
was given. Indeed, the Counter-Memorial contains an 11-page, single-spaced list of
all the information Uruguay gave Argentina in the context of GTAN, none of which
350
Argentina disputes .
3.103 With respect to Argentina’s reliance on the March 2006 Report from the
IFC, Uruguay already showed in the C ounter-Memorial that such reliance is
351
misplaced . The consultants who prepared the report were focused on the
348AR, para. 2.42 (“the information sent to Argentina was more than enough -- supposing even
that it would be proven, quod non -- is not enough to justify Uruguay’s conduct”, “be the judge
of its own information”, “Argentina is entitled to consider that the information sent was
incomplete and/or inadequate, just as Uruguay is entitled to have the opposite opinion.”).
349
See AR, para. 2.42.
350UCM, para. 3.100.
351UCM, para. 3.103.
- 183 -adequacy of the IFC’s own CIS, not on th e adequacy of the information in the
Botnia EIA or the information Uruguay ga ve to Argentina before or during the
GTAN process.
3.104 Argentina’s own conduct demonstrates the adequacy of the information
Uruguay gave it. As discussed above, in February 2004, Argentina’s technical
advisors to CARU reviewed the inform ation Uruguay had sent to Argentina’s
Foreign Ministry in Oct ober and November of 2003, and issued their report
concluding that “there would be no si gnificant environmental impact on the
352
Argentina side” . This same conclusion was echoed by Argentina’s delegates to
CARU in May 2004 when Dr. Darío Garín so emphatically stated: “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
353
unavoidable damage to the environment…” . Dr. Garín’s statements were
seconded by another Argentine delegate, Dr . Héctor Rodriguez, who “adopt[ed] as
354
his own” Dr. Garín’s comments .
3.105 The information concerning Botnia wa s even more abundant. During the
12 GTAN meetings convened over the course of six months, Uruguay gave
Argentina all the information set forth on the 11-page list contained in the Counter-
Memorial, as noted above. Given that th e more limited information concerning
ENCE had clearly been sufficient for Argentina to review the impact of that plant,
352
Statement by Argentine Ministry of Fore ign Affairs to the Chamber of Deputies, op.cit., p.
136. UCM, Vol. III, Annex 46. See also UCM, para. 3.96.
353
CARU Minutes No. 01/04, pp. 18-19 (15 May 2004). UCM, Vol. IV, Annex 99.
354
Ibid. p. 23.
- 184 -the vastly more extensive information conc erning Botnia must certainly have been
sufficient as well.
3. Uruguay Engaged Only in Preparatory Works
3.106 Although Argentina does not challenge the fact that Uruguay consulted
with it in good faith during the GTAN process, it argues that Uruguay nonetheless
violated its procedural obliga tions during this time. In particular, Argentina argues
that Uruguay undertook more than mere pr eparatory works in furtherance of the
355
Botnia project while GTAN consultations were on-going .
3.107 As Uruguay explained in the Counter-M emorial, and reiterated in Chapter
2 of this Rejoinder, the 1975 Statute is sile nt as to whether or not the notifying State
356
may or may not implem ent a project while consultations are ongoing . General
international law provides that the initia ting State should refrain from implementing
a project during that period. That does not mean, however, that all work must be
stopped. Instead, preparatory work is permitted 357. Notably, Argentina nowhere
disputes this principle.
3.108 What Argentina does argue is that “[a] u moment de la fin de l’activité du
GTAN en février 2006, il est difficile d’ac cepter que les travaux de foundation de
l’usine Orion et sa cheminée, ainsi que le post par lequel la pâte à papier sera
acheminée, revêtaient un caractère ‘préliminaire’” 358. While Argentina may purport
355See AR, paras. 2.59-2.64.
356See UCM, paras. 2.179-2.182.
357Kirgis, F., Prior Consultation in International Law: A Study in State Practice ,
Charlottesville, University Press of Virginia, 1983, p. 75.
358AR, para. 2.61 (“it is difficult to accept thatat the time when GTAN’s activity ended, in
February 2006, the foundation work of the Orion plant foundation and its road, as well as the
port through which the pulp would be shipped had a ‘preliminary’ character”).
- 185 -to find this “difficult to accept,” it is none theless true. None of the specific steps
authorized by Uruguay threatened to fore close meaningful consultations about the
elements of the plant that could conceivably 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. Merely
laying the groundwork for the plant, as Uruguay did, did not constitute anything
more than preparatory works.
3.109 It was only on 18 January 2006 that Uruguay might be said to have taken a
step that was not purely preparatory, when it authorized the construction of the
Botnia bleached cellulose plant. Alt hough the Reply suggests that GTAN activities
ended in February 2006, the truth is that they formally ended in January and were
effectively over more than a month before that in December 2005. In its diplomatic
note dated 14 December 2005, Argentina itself declared consultations “on the way to
an impasse” and set the stage for f iling its Application to this Court 359. The same
position was reiterated twice subsequent ly on 26 December and 12 January 360.
Significantly, even as the Reply attempts to make it seem that GTAN was on-going
through February 2006, it nowhere denies th e existence of an impasse in December
2005. The relevant period for measuring when Uruguay became entitled to
undertake more than preparatory works is thus December 2005. That Uruguay then
proceeded to authorize the construction of the Botnia plant a month later, in January
2006, after the consultations had ended, affords Argentina no grounds for complaint.
359UCM, para. 3.117.
360See UCM, para. 3.114.
- 186 - *
3.110 Before concluding this subsection, Uruguay pauses to make some brief
observations on Argentina’s complaint that Uruguay has also violated the Statute by
constructing the Botnia port and bringing it into operation in 2007. The facts
concerning the port were thoroughly set out in the Counter-Memorial and need not
361
be revisited here . The point to emphasize is that Argentina offers no serious basis
to oppose the port. As Uruguay demonstrated in the Counter-Memorial, the port is
environmentally innocuous, an d Argentina nowhere contends to the contrary.
Neither in the Memorial nor more recently in the Reply does Argentina argue that
the port will cause any harm, let alone significant harm to navigation, the régime 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 th e project, it would have said so. In
this connection, it bears recalling that the Botnia port is significantly smaller than the
M’Bopicuá port which CARU summarily determined posed no threat to the river in
2001. Rather than allow CARU to cons ider the project, Argentina instead has
chosen to stymie the Commission’s work entirely by refusing to let the topic be
addressed at all.
3.111 It also bears recalling that Uruguay showed in the Counter-Memorial that
Argentina has repeatedly authorized port construction and rehabilitation projects on
its side of the Uruguay River without bot hering to notify Uruguay or CARU, let
alone to consult with Uruguay 36. Argentina’s Reply does not -- because it cannot --
361
See UCM, paras. 3.77-3.80.
362
See UCM, para. 3.80.
- 187 -challenge any of these facts. The Botnia port thus stands as yet a further example of
Argentina’s efforts to hold Uruguay to sta ndards by which it cannot be bothered to
abide itself.
B. U RUGUAY C OMPLIED WITH ITSPROCEDURAL OBLIGATIONS D URING D ISPUTE
RESOLUTION
3.112 After the end of the GTAN process, Uruguay did in fact take steps to move
toward the implementation of the Botnia project. As just noted, on 18 January 2006,
Uruguay authorized Botnia to begin construction of the plant itself. On 4 July 2007,
Uruguay approved Botnia’s wastewater treatment system; on 31 October 2007,
DINAMA approved Botnia’s Environmental Management Plan, an umbrella
management plant containing 11 annexes addressing various aspects of the plant’s
operations; and on 8 November 2007, Botnia received its AAO authorizing
operations. The plant began operations on 9 November 2007.
3.113 Argentina challenges Uruguay’s impl ementation of th e project as
inconsistent with the terms of the 1975 St atute. In Argentina’s view, Uruguay was
obligated to desist from carrying out the work until such time as this Court renders
its final judgment on the merits. Uruguay’s response to this argument turns not on
the facts, which are not in dispute, but rath er on the law. In particular, as shown in
Chapter 2 of this Rejoinder, Argentina’s view of the law is plainly incorrect. The
Statute permits the initiating State to implement a project following the end of
consultations, and while dispute resoluti on proceedings are under way, unless and
until the Court rules otherwise.
3.114 Because Uruguay’s analysis of the law has already been fully elaborated in
Chapter 2 above, it will not be repeated in detail here. Instead, Uruguay respectfully
refers the Court back to Section II.B. the previous Chapter where the pertinent
- 188 -analysis is presented. It is sufficient for present purposes to note that the 1975
Statute does not expressly address the question now under c onsideration. It states
neither that the initiating State may ca rry out a planned project during dispute
resolution proceedings nor that it may not. Argentina’s argument that the Statute
prohibits implementation is based entirely on an a contrario reading of Article 9 of
the Statute which provides merely that “i f the notified Party raises no objections”
within the mandated period, “the other Party may carry out” the planned project.
But as shown in Chapter 2, Article 9 cannot bear the weight of Argentina’s
argument.
3.115 This is perhaps most easily demonstrated by reference to Article 16 of the
1997 UN Watercourse Convention. The Wate rcourse Convention expressly permits
implementation of a planned project after the period for consultations has expired,
even if dispute resolution procedures have been invoked. Of particular interest,
Article 16 of the Watercourse Convention is susceptible to exactly the same a
contrario reasoning that Article 9 of the 1975 Statute is. Stripped of unnecessary
verbiage (which contains only internal cross-references), Article 16 reads: “If, within
the period applicable to [replies to notifications], the notifying State receives no
communication [concerning objections to projects], it may … proceed with the
363
implementation of planned measures” . Adopting Argentina’s logic, one could
equally turn this provision around to mean that if the notifying State does receive a
communication objecting to the project, it may not implement it, at least until all
dispute resolution procedures have been exhausted. But that is not what the
363
1997 Watercourse Convention, op. cit., Art. 16.
- 189 -Convention does. It permits implementation at the end of consultations. That it
does so, at a bare minimum, contradicts Argentina’s a contrario reading of Article 9.
3.116 It also bears reiterating that Argen tina now expressly recognizes that the
1975 Statute does not give either Party a veto right over the projects of the other, and
that the Statute is designed to avoid what Argentina labels “blockages” because that
“viderait de substance l’équilibre réalisé pa r le Statut entre les intérêts des deux
364
Parties” . This point too is critical becau se giving the Stat ute the reading
Argentina advocates would create a “blockage” for a period not just of months, but
for years as a case is heard to conclusi on by the Court. Although perhaps not a de
jure veto, such a sustained delay would plainly constitute the de facto equivalent.
And since Argentina admits that a veto right is inconsistent with the scheme of the
Statute, the interpretation it now presses on the Court must, under its own reasoning,
be rejected.
3.117 Uruguay showed in Chapter 2 that none of this means that the notified
State must accept a fait accompli. Uruguay accepts that the Court retains the power
to order the dismantling of a project that has already entered operation if it concludes
that the circumstances so warrant. It is thus up to the initiating State to decide
whether or not it wants to bear the risk associated with implementing a project that is
the subject of active opposition from the notified State while dispute resolution
proceedings are under way. In effect, the operative question before the Court is
which of the Parties’ two readings of the Statute constitutes the preferable interim
solution pending final decision of the Court, either (i) forbidding implementation at
364
AR, para. 1.120 (“would substantially dissipate the balance achieved by the Statute between
the interests of the two parties.”).
- 190 -the end of consultations, with the veto power that would effectively confer, or (ii)
allowing implementation subject to the Court’s power to order a return to the status
quo ante upon resolution of the dispute. Part icularly given the availability of
provisional measures as a way to protect the notified State from likely irreparable
harm, Uruguay submits that the choice between the alternatives offered by the
Parties is clear. Implementation pending the final decision of the Court is consistent
with the language of the Statute as well as its object and purpose. Accordingly,
Uruguay’s decision to author ize the implementation of the Botnia plant after
consultations ended and while dispute resolution proceedings were in progress was
entirely consistent with the terms of the 1975 Statute.
Conclusion
3.118 Uruguay has now come to the end of Part I of this Rejoinder addressing
the procedural aspects of Argentina’s case. As discussed first in Chapter 2 and
reiterated in this Chapter 3, there are, in essence, just two fundamental procedural
points of dispute between the Parties: (i) whether CARU’s role in the Articles 7-12
process in indispensable, or whether the Parties are free, by mutual agreement, to
proceed directly to bilateral consultations over planned projects without awaiting
CARU’s summary determination; and (ii) whether the initiating Party may
implement a planned project at the conclusion of consu ltations and while dispute
resolution is in progress.
3.119 In Chapter 2, Uruguay responded to the analysis of Articles 7-12 set forth
in Chapter 1 of Argentina’s Reply and show ed that that analysis is riddled with
errors and inconsistencies. In particular, Uruguay showed that:
• CARU’s substantive functions under the 1975 Statute are both
extensive and critical. According to the Statute’s plain text, however,
- 191 - the Commission’s role in the procedural mechanisms created by
Articles 7-12 is limited. The Commission conducts a preliminary
technical review of a project fo r purposes of determining whether
direct consultations between the Parties are necessary. Once that
preliminary review is complete, the Commission’s role is all but over;
• The Statute does not require notice to CARU before the initiating
State may issue a preliminary, conti ngent authorisation like an AAP.
What it requires is notice that is “ timely” in the sense it is given in
sufficient time to allow the remaining procedures stipulated in
Articles 7-12 to run their course before a project is implemented;
• There is no legal or logical reason the Parties may not agree to skip
CARU’s preliminary review and proceed to direct consultations at
any mutually agreed moment;
• Subject to the Court’s power to indicate provisional measures and to
order the dismantling of a project in its Judgment on the merits, the
initiating State is -- as an interim solution -- permitted to implement a
project after consultations have e nded but before dispute resolution
proceedings are over; and
• Absent a finding by the Court th at a project is likely to cause
significant harm to navigation, the régime of the river or the quality
of the river, there is no cause to order the modification or dismantling
of a project, even if a procedural violation has occurred.
3.120 In this Chapter 3, Uruguay responded to the factual allegations of in
Chapter 2 of Argentina’s Reply and showed that at all times Uruguay complied with
its procedural obligations under the 1975 St atute. In particular, Uruguay showed
that:
• At Argentina’s initiative, the Parties agreed to address the issues
presented by both the ENCE and Botnia plants directly at a State-to-
State level instead of submitting them to CARU for a preliminary
review;
• Not only did the Parties agree to proceed to immediate direct
consultations, they also agreed that both plants would be built;
• As a result of the Parties’ agreements, Uruguay was not obligated to
notify the Commission or await its “summary determination” under
Article 7 before issuing AAPs to either company, or proceeding with
implementation of the projects;
- 192 - • The ENCE project as initially c onceived was abandoned before any
implementation of the project took pl ace, and the Botnia project was
not implemented until after consultations had ended; and
• While implementation of the Botnia project has, in fact, gone forward
during dispute resolution proceedings before the Court, that is not
prohibited by the 1975 Statute or general international law.
3.121 For all the reasons thus articulated, Argentina’s procedural submissions
can and should be rejected.
3.122 With this, Part I of this Rejoinder is complete. Uruguay will now turn to
Part II, which will address the environm ental claims that make up Argentina’s
substantive case. Part II will show that those claims too are without merit, and
should be rejected by the Court.
- 193 -PART II CHAPTER 4.
THE EVIDENCE REGARDING START-UP AND OPERATION OF THE
BOTNIA PLANT Introduction
4.1 The Botnia plant has not harmed the Uruguay River or the organisms that
live in it. This is the unqualified conclusion not only of Uruguay and Botnia, but
also of the independent technical experts retained by the IFC to provide an impartial
evaluation of the plant’s potential impacts. The conclusions of these technical
experts categorically demonstrate the environmental suitability of the Botnia plant
and are fatal to Argentina’s attempts to show otherwise.
4.2 The IFC, in addition to commissioni ng the Final CIS (which, along with
the Botnia EIA, exhaustively assessed the plant’s potential impacts), arranged for
equally extensive technical evaluations prior to start-up of the plant. These
evaluations showed beyond a doubt that the plant was ready for operation; in the
words of the IFC, it proved that the plant “will not cause harm to the environment”
and “will comply with the IFC and MIGA’s environmental and social policies”.
Among their findings, the IFC’s inde pendent experts concluded that the Botnia
monitoring programs were “extremely co mprehensive and exceed the commitments
identified in the CIS” 36; that Botnia was “well-positioned from an organizational
aspect to meet its operational objectives including its environmental management
goals” ; and that the plant uses “[m]odern process technologies” which “promise to
367
perform with low emission and world-leading environmental performance” .
365
International Finance Corporation (hereinafter “IFC”), Orion Pulp Mill, Uruguay
Independent Performance Monitoring as Requi red by the International Finance Corporation
(Phase I: Pre-Commissioning Review) (hereinafter “ Pre-Commissioning Review”), p. ES.iv
(November 2007). UR, Vol. III, Annex R50.
366
AMEC Forestry Industry Consulting, Orion BKP Mill Pre-Startup Audit (hereinafter
“Pre-Startup Audit”), p. 2 (September 2007). UR, Vol. III, Annex R48.
367Ibid., pp. 5-6.
- 199 -4.3 The sanguine views of the IFC’s impa rtial technical experts have been
fully realized by the actual operational performance of the Botnia plant. To verify
that the plant was operating in accordance with all Uruguayan, CARU and permit
standards, and that it was having no impact on the river, the IFC commissioned an
exhaustive follow-up study. Based on th e first six months of operation, its
independent experts concluded without qualification that “all indications are that the
mill is performing to the high environmental standards predicted in the EIA and
368
CIS” . Their technical analysis found that not only is the plant’s effluent entirely
within the required regulatory limits but also that the effluent characteristics are fully
consistent with the predictions made in the Final CIS. Given that the effluent was
within the permitted levels, the IFC’s technical experts made a crucial (and, to
Argentina’s case, devastating) finding -- th e Botnia plant has had absolutely no
adverse impact on the environmental quality of the river. In the words of the IFC’s
technical experts, “comparison of monito ring data pre-and post-start-up shows that
the water quality characteristics of the Rio Uruguay have not changed as a result of
369
the discharge of mill effluent discharge ” . Put simply, Argentina’s predictions of
environmental degradation have been proven wrong.
4.4 As the Court has no doubt noticed, Argentina’s case rests entirely on
speculative predictions about the environmental performance of the Botnia plant. In
fairness, Argentina had no other choice , because a cellulose plant cannot, by
368
IFC, Orion Pulp Mill, Uruguay Independent Perf ormance Monitoring As Required by the
International Finance Corporation (Phase 2: Six-Month Environmental Performance Review)
(hereinafter “Environmental Performance Review”), p. ES.ii (July 2008). UR, Vol. IV, Annex
R98.
369
Ibid., p. 4.3 (emphasis added).
- 200 -definition, cause emissions before it is operational and Argentina’s submissions were
prepared before the plant began to operate . Now that the plant is in operation,
however, Argentina can no longer rely on criti cism of the environmental analysis of
Uruguay, the IFC and others, or on its own conclusory forecasts of catastrophic
damage to the river, because there ar e actual operating data and environmental
quality monitoring results which reveal the plant’s performance. This Chapter
demonstrates that those data and results comprehensively refute Argentina’s case on
alleged substantive harm. The evidence is indisputable that the Botnia plant is not
harming the environment of the Uruguay River.
4.5 This Chapter is divided into 3 sections. Section 1 describes the exhaustive
measures that Uruguay, Botn ia and the IFC undertook before allowing the plant to
operate in order to ensure that it does not have any detrimental environmental
impact. It shows that Uruguay, among ot her things, required that Botnia adopt
elaborate environmental management and cont ingency plans to ensure that the plant
operates safely and wit hout impacting the Uruguay River or the aquatic
environment. Only after Uruguay approved these plans, after studious review, was
Botnia authorized to begin operating the plant. In parallel with Uruguay’s regulatory
actions, prior to commencement of operation, the IFC and its associated technical
experts undertook extensive scientific evaluations to verify its compliance with BAT
and its ability to operate without detrimenta l impacts. Section 1 shows that, in the
view of the IFC, technical reviews of the Botnia plant by independent experts
“confirm[ed] that the Orion pulp mill will generate major economic benefits for
- 201 - 370
Uruguay and will not cause harm to the environment” . Further, Section 1 details
the comprehensive pre-operational monitoring conducted by Uruguay and Botnia of
the Uruguay River, its sediments and aquatic life, in order to amass a sufficient store
of data against which to measure any potential environmental impacts.
4.6 Section 2 shows that the Botnia plan t has not caused any environmental
harm during the first six months of actual performance by the plant. The operational
results confirm that the plant has functioned in conformity with the IFC’s projections
and has not perceptibly impacted the environmental quality of the Uruguay River, as
determined by the IFC’s own independent technical experts. The results also
confirm that the plant has met or exceeded Botnia’s regulatory obligations under
Uruguayan law and under CARU regulations, both with respect to the concentrations
of all relevant parameters in the plant’s effluent and with regard to its impact on the
water quality of the river. Section 2 demonstrates that the first six months of
operation are all the more remarkable because during its start-up phase a cellulose
plant is expected to operate below its long-term environmental performance. That,
during even this initial period the Botnia plant is already operating in conformance
with the IFC’s estimates and Uruguayan law, is a testament to its world-class, state-
of-the-art technology, precisely as predicte d in the Final CIS. The conclusion that
the plant has not impacted th e environment is widely he ld: as one Argentine news
370IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill - Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills (last visited on 2 July 2008).
UR, Vol. III, Annex R80.
- 202 -source reported, there have been “no reports that show that the plant contaminates
371
the environment” .
4.7 Section 2 also documents other im portant developments in Uruguay’s
continuing efforts to preserve and prot ect the Uruguay River from nutrient-induced
eutrophication, the only concern discussed in any detail by Argentina in its Reply.
Because the plant has not and will not cause any of the impacts hypothesized by
Argentina, these actions cannot be consider ed “remedial” or “compensatory” for the
operation of the plant, nor are they necessary to avoid impacts that would otherwise
be caused by the plant. They are, howev er, responsible measures taken by a State
committed to preserving and improving the environmental quality of the resources it
controls. The efforts described in Sec tion 2 include a groundbreaking agreement to
treat the Fray Bentos municipal sewage in Botnia’s advanced wastewater treatment
plant; major World Bank-backed investment s to improve the sewage treatment of
other Uruguayan cities along the river; a nd a far-reaching program to minimize
nutrient discharge from non-point sources. Although Uruguay has shown
conclusively in its Counter-Memorial and in this Rejoinder that the Botnia plant will
not have adverse effects on the river, which has been confirmed by actual
operational data, these actions will furthe r reduce Uruguay’s overall discharge of
nutrients to the river, thereby rendering any potential for eutrophication even more
remote.
4.8 Finally, Section 3 dem onstrates the comprehensive procedures that
Uruguay has implemented to ensure that if any impacts were to occur, they would be
371
Infobae.com, “Eight Months After Start-up, Experts Agree that Botnia Does Not
Contaminate” (3 July 2008). UR, Vol. IV, Annex R93.
- 203 -detected and addressed immediately. Th is includes a summary of the actions
Uruguay and Botnia have taken, and will continue to take throughout the life of the
plant, to ensure the absence of any e nvironmental impacts by comprehensively
monitoring the plant’s effluent, the wate r quality of the river and any potential
impacts to its biota. Put simply, if unacceptable impacts were unexpectedly to
materialise, Uruguay has both the legal regi me and the monitoring program in place
to ensure that they are eliminated without delay.
Section I.
Prior to Uruguay’s Authorisation of Operations, the Botnia Plant Was Subject
to Comprehensive Evaluations by Both Uruguay and the IFC to Ensure It
Would Not Harm the Environment
4.9 For years prior to allowing the Botnia plant to commence operation,
Uruguay’s regulatory authoritie s subjected the plant to se arching scrutiny and, in
accordance with its authorisations and Ur uguayan law, required that Botnia apply
for, and receive, a succession of regulatory permits. Proceeding in parallel with
Uruguay’s program, the IFC conducted its own review of the plant to ensure that it
was fully protective of the environment before it commenced operation. This
Section demonstrates that before Uruguay permitted the plant to operate, Uruguay
and the IFC independently confirmed its environmental suitability.
4.10 As explained in detail in the Count er-Memorial, Uruguay granted Botnia
its Initial Environmental Authorisation (AAP), on 14 February 2005 37. Botnia’s
AAP was merely the first stage in the pe rmitting process and did not, itself, allow
Botnia to engage in any construction or rela ted activities, let alone begin to operate.
Under the terms of the AAP, final author isation was contingent upon, among other
372
UCM, para. 4.92.
- 204 -things: the approval by DINAMA of detail ed environmental management plans for
each phase of construction; detailed environmental management plans for the
operation of each component of the plant, including contingency plans to address a
host of potential issues; completion of ex tensive baseline environmental quality
monitoring; and the presentation of an acceptable post-opera tional environmental
monitoring program. In addition, Botnia wa s required to receive an approval of its
wastewater treatment system from DINAMA 373and, ultimately, an Authorization to
374
Operate (AAO) .
4.11 At the time Uruguay submitted its Counter-Memorial, Botnia had partially
completed this regulatory course. It had received its AAP and Wastewater
Treatment System Approval, as well as the necessary approvals of the environmental
management plans for the construction phase of the project. However, Uruguay had
not yet issued any of the other required permits. Ultimately, after extensive review
by DINAMA, Uruguay determined that Botn ia had complied with the requirements
of the AAP and Uruguayan law, and as a result, issued Botnia’s AAO on 8
November 2007 37.
373
Decree No. 253/79, Regulation of Water Qualit y (9 May 1979, as amended) (hereinafter
“Decree No. 253/79”), Arts. 28-29. UCM, Vol. II, Annex 6.
374Decree No. 349/005, Environmental Impact A ssessment Regulation revision, Art. 23 (21
September 2005). UCM, Vol. II, Annex 24. In accordance with the AAP, MVOTMA Initial
Environmental Authorisation for the Botnia Plant, Art. 2(d) (14 February 2005), UCM, Vol. II,
Annex 21, Uruguay required that Botnia submit an update of its Environmental Impact
Assessment, prior to the issuance of the AAO. The update, among other things, provided an
expanded description of the plant’s operations, anupdated discussion of the water dispersion
study from the diffuser, and an updated air dispersion study with meteorological data as well as
a study of the thermal inversion layer. (Sec ond) Affidavit of Eng. Alicia Torres, National
Director of DINAMA (24 June 2008) (hereinafter “(Second) Torres Aff.”), para. 4. UR, Vol.
IV, Annex R92.
375
MVOTMA Authorisation to Operate for the Bo tnia Plant (8 November 2007) (hereinafter
“Botnia AAO”), Secs. III, VI & VII. UR, Vol. II, Annex R6. Certain works were pending but
- 205 -4.12 While the Botnia plant was being scrutinized by the Uruguayan regulatory
authorities, it was simultaneously subject to an equally searching review pursuant to
the terms of its financing arrangements w ith the IFC. In the Counter-Memorial,
Uruguay described how the IFC, after subj ecting the Botnia plant to extensive
review, determined it would “cause no e nvironmental harm” and that it complied
with the World Bank environmental and so cial guidelines, based on a Final CIS
376
prepared by the independent technical experts EcoMetrix .
4.13 Uruguay will not burden the Court by repeating the Final CIS’s
conclusions here, other than to note th at the Final CIS included recommendations
regarding certain actions to be taken to a ddress environmental and social issues. To
ensure that the Botnia plant complied w ith those recommendations, Botnia and the
IFC agreed that the company would implement a 16-item Environmental and Social
Action Plan (“ESAP”). The ESAP in cluded action items relating to such
environmental issues as independent m onitoring of environmental and social
performance; independent verification of process and preparedness; hazardous
materials; emergency preparedness and resp onse; conservation; and solid waste.
The IFC required in the ESAP that each such topic be subject to review by its
technical advisors.
were found to involve no technical or enviro nmental impediment to the commencement of
operations. Ibid., Sec. II. The AAO required that these works be completed by 31 December
2007, ibid., Sec. II, a condition with which Botnia complied. See DINAMA Resolution
Approving Further Works Pursuant to the Author isation to Operate (31 December 2007). UR,
Vol. II, Annex R7.
376
UCM, para. 5.48. Faced with such a cate gorical endorsement by an indisputably
independent multilateral organization and its impartial technical experts, Argentina’s Reply did
not challenge the independence or objectivity of either the IFC or its experts. Nor could it,
since Argentina had on previous occasions recognized them as “indepéndants”. See, e.g. ,
Application of Argentina, 4 May 2006, para. 20 (referring to the authors of the CIS as “experts
indépendants”) (“independent experts”).
- 206 -4.14 On 13 November 2007, the IFC released two reports, prepared by separate
sets of “independent external consultants” -- to use the IFC’s words -- who had been
377
tasked with reviewing the status of each of the 16 action items in the ESAP .
These reports concluded that Botnia had completed each such item or was on
schedule to do so. As these same experts later noted, “[p]rior to the commissioning
of the mill, EcoMetrix undertook an independent review to confirm compliance with
the commitments detailed in the ESAP. It concluded that the requirements identified
in the ESAP had been achieved, and, for many of the identified actions, the
378
minimum requirements had been exceeded.”
4.15 The analyses contained in the IF C’s expert reports verified the
environmental suitability of the Botnia plant. That was certainly the conclusion of
the IFC, which upon the reports’ release, stated that they demonstrated “that
Botnia’s Orion pulp mill in Uruguay is r eady to operate in accordance with IFC’s
379
environmental and social requirement s and international BAT standards” . The
IFC concluded that the reports, in conjunc tion with an updated ESAP released the
same day, “confirm[ed] that the Orion pulp mill will generate major economic
380
benefits for Uruguay and will not cause harm to the environment ” . The IFC
therefore found that “the mill will comply with IF C and MIGA’s environmental and
377IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill - Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills (last visited on 2 July 2008).
UR, Vol. III, Annex R80.
378Environmental Performance Review, op. cit., p. 1.1. UR, Vol. IV, Annex R98.
379IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill - Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills, op. cit. UR, Vol. III, Annex
R80.
380
Ibid. (emphasis added).
- 207 -social policies while generating significant economic benefits for the Uruguayan
economy” 381.
4.16 The first expert report, entitled Orion Pulp Mill, Uruguay, Independent
Performance Monitoring as Required by th e International Finance Corporation,
Phase 1: Pre-Commissioning Review (“Pre-Commissioning Review”), was prepared
382
by EcoMetrix, the same independent tech nical experts who drafted the Final CIS .
This was the first of four planned reports to be published over a two-year period
regarding the ESAP’s require ments for Independent Monitoring of Environmental
and Social Performance. As the Pre-Commissioning Review itself explained, its
purpose was: (1) “to review the environmen tal, health, safety and social monitoring
program” for the Botnia plant to “verify that it has been designed according to plan
and serves the purpose of stakeholders”; and (2) to “review the progress of Botnia in
383
meeting commitments detailed in the ESAP” . As noted above, the IFC, based on
the report of its technical experts, concluded that both objectives were fully satisfied.
4.17 Second, as described in more detail below, to fulfil the ESAP requirement
for independent verification of process and preparedness, another set of independent
experts (AMEC) audited the Botnia plant’ s technology to verify that it was fully
compliant with BAT. Again, these expe rts confirmed the plant’s environmental
fitness.
38Ibid. (emphasis added).
382
See Pre-Commissioning Review, op. cit. UR, Vol. III, Annex R50.
383
Ibid., p. ES.i. Although Argentina made passing references to the Pre-Commissioning
Review in the Reply, the Applicant State neglect ed to inform the Court that the report
categorically affirmed the plant’s environmental suitability. It therefore falls to Uruguay in this
Rejoinder to identify for the Court the salient points of the Pre-Commissioning Review.
- 208 -4.18 In the paragraphs that follow, Uruguay describes in more detail the
thorough review to which Uruguay and the IFC have subjected the Botnia plant.
A. T HE IFC’S TECHNOLOGY A UDIT FOR COMPLIANCE W ITHBAT
4.19 As discussed in detail in the Counter-Memorial, Uruguay required
confirmation that the Botnia plant complies with BAT in all respects. The IFC
imposed the same obligation, and require d that the plant be subject to an
independent audit prior to commissioning to verify that it was designed and would
operate in accordance with BAT (in fu lfilment of the ESAP’s Independent
Verification of Process and Preparedness requirement). The independent technical
experts from the international engineering consulting firm AMEC were contracted to
provide: (1) “[i]ndependent verification that the mill has been constructed as
described in the EcoMetrix Cumulative Impact Study (i.e., to meet EU IPPC BREF
384
standards of performance for Kraft Pulp Mills)” ; and (2) confirmation of “the
preparedness of the mill to commence operations prior to start-up” 385. The IFC
required these consultants to conduct a co mprehensive assessment of the technical
components and protocols for the plant; in particular, they were mandated to:
(1) Review the specifications of all installed major
equipment to ensure consistency with the description of the mill
in the CIS;
(2) Review the training programs for operators,
maintenance personnel and their supervisors and recommend
corrective action as necessary;
(3) Review the written procedures for ensuring that each
piece of equipment, and system , is ready to be commissioned
384Ibid., p. ES.vii
385Ibid.
- 209 - before the start-up of the digesting process. Follow-up to ensure
that these procedures are followed completely in operations; and
(4) Verify that before any effluent flows out of the system,
or stack gases are vented, the ap propriate monitoring equipment,
laboratory procedures and environmental management systems
are operating 386.
4.20 In sum, AMEC was retained to, in the words of the IFC, “assess[] whether
the Orion pulp mill in Uruguay has been built to BAT standards and whether plant
operators have been adequately trained” 38.
4.21 AMEC’s audit of the Botnia plant proceeded in two stages, involving both
site visits and extensive review of docum entation. In Phase I, AMEC undertook to
“[r]eview process equipment installed or pl anned to be installed at the Orion mill,
with particular emphasis on those facilities that influence or control the quantity and
quality of liquid, gaseous and solid waste discharges, to confirm that the equipment
is similar or equivalent to the best av ailable techniques (BAT) described in the
CIS” . AMEC also sought to “[r]eview the Orion commissioning plan” in order to
“assess the capacity of Botnia to implement that plan and to meet its environmental
requirements and performance commitments at mill start-up and during the
389
commissioning phase” . In Phase II, AMEC reviewed the “commissioning and
operational status of the mill production facilities” and “confirm[ed] that the
386Ibid.
387IFC Web Site, Latin America & the Caribbean , “Audit of Readiness to Begin Operations:
Nov. 2007,” available at http://www.ifc.org/ifcext/lac.ns f/Content/Uruguay_Orion_AMEC_
Report (last visited on 3 July 2008). UR, Vol. III, Annex 81.
388Pre-Startup Audit, op. cit., p. 1. UR, Vol. III, Annex R48.
389Ibid.
- 210 -recommendations for corrective action and improvements identified in the first audit
visit had been carried out” 390.
4.22 AMEC’s report, entitled Orion BKP Mill Pre-Startup Audit (“Pre-Startup
Audit”), was released simultaneously with the Pre-Commissioning Report on 13
November 2007. On every measure, the Pre-Startup Audit demonstrated the fitness
of the Botnia plant and its compliance with BAT. Regarding Botnia’s organization,
the audit found that “Botnia has built a strong organization for the Orion Fray
Bentos mill” 391. Regarding process equipment and technology, the Pre-Startup
Audit concluded that “[a]ll process equipment and technology installed or planned to
be installed at Botnia-Orion is similar or e quivalent to best available technology as
described in the CIS” 392. It further found that Botnia’s environmental management
team “has an appropriate level of environmental awareness for a project of this type”
and that “Botnia’s and Kemira’s commission plans and procedures” as well as those
selected to carry out these plans “have the features and characteristics that are
393
normal for a project of this type” . It likewise noted that the “caliber of personnel
compare favourably with other projects of this type”, and that the “mill appears well-
positioned from an organizational aspect to meet its operational objections including
394
its environmental management goals” . In sum, the Pre-Startup Audit concluded:
390Ibid., p. 2.
391Ibid.
392Ibid.
393Ibid., pp. 3-5. Kemira is the entity that operate s the chemical synthesis facility used by the
Botnia plant.
394Ibid., p. 2.
- 211 - The overall impression was gained of a well designed and
generally well execute d project. Modern process technologies
are used that promise to perform with low emission and world-
leading environmental performance 39.
4.23 In light of Uruguay’s and the IFC’s independent verifications that the
Botnia plant conforms with BAT, despite Argentina’s unsupportable protestations to
the contrary, the Court should have no doubt as to the plant’s state-of-the-art anti-
pollution technology 39.
B. ENVIRONMENTAL M ANAGEMENT P LANS
4.24 As a further pre-condition to author ising the Botnia plant to operate,
Uruguay required that Botnia submit for approval a comprehensive Environmental
Management Plan for Operations, which Botn ia prepared in close consultation with
the Uruguayan authorities. Spanning hundreds of pages, this plan included, among
other things:
• a Mitigation and Compensation Measures Implementation Plan;
• an Environmental Monitoring and Follow-up Plan;
• an Operation and Monitoring Plan;
• an Analysis of Environmental Risks;
• a Contingency Plan;
• an Abandonment Plan;
• an Environmental Management Plan for the Premises Not
Directly Affected by the Plant;
• an Accident Prevention Plan;
• a Solid Waste Management Plan; and
• an Environmental Management Plan for the Operation of the
Port.397
395
Ibid., pp. 5-6 (emphasis added).
396
The issues raised in Argentina’s Reply pertaining to choice of technology are further
discussed in Section 2 of Chapter 6, paras. 6.31 through 6.49.
397
(Second) Affidavit of Eng. Alicia TorrNational Director of DINAMA (24 June 2008),
pp. 1-2. UR, Vol. IV, Annex R92. A complete copy of the Environmental Management Plan
for Operations is contained on the CD submitted to the Court herewith.
- 212 -4.25 After thorough review, DINAMA approved the plan and its various
398
subcomponents on 31 October 2007 . These plans, and the additional management
and contingency plans required by the IFC as part of the ESAP, are discussed in the
paragraphs that follow. They represent further binding commitments on the part of
Botnia to ensure that the plant operates safely and without damage to the
environment.
1. Management of Hazardous Materials
4.26 Both Uruguay (in the AAP) and the IFC (in the ESAP) required that
Botnia develop comprehensive plans to addr ess hazardous materials. In that regard,
Botnia was required to “[d]evelop and implement a Hazardous Material
Management Plan as specified in IFC gui delines” that would, among other things,
“[m]anage the risks associated with all Hazmat facilities and activities” through
399
appropriate management actions . This was required to include “training, worker
health and safety, record keeping, and reporting”; prevention plans, including for
“transportation, processes and operations, and hazardous wastes”; and emergency
preparedness and response plans, incl uding for “response act ivities, medical
400
assistance, communications , and incident reporting” . Botnia’s Hazardous
Material Management Plan was described in detail in the Environmental
Management Plan for Operations that it submitted to DINAMA pursuant to its AAP,
and in that document’s various annexes, including its Continge ncy Plan, Accident
398
DINAMA Resolution Approving the Environmental Management Plan for Operations (Final
Consolidated Text), Sec. 4 (31 October 2007). UR, Vol. II, Annex R4.
399
Pre-Commissioning Review, op. cit., p. 2.1. UR, Vol. III, Annex R50.
400
Ibid., p. 2.1.
- 213 -Prevention Plan, Solid Waste Management Plan, and Environmental Management
401
Plan for the Operation of the Port .
4.27 Both Uruguay and the IFC found that Botnia had fully satisfied its
obligations to address hazardous materials. The Pre-Commissioning Review
concluded that Botnia had “complete[d]” its requirement to prepare a Hazardous
Material Management Plan 402. And, contrary to the suggestion in Argentina’s
Reply , the Pre-Commissioning Review expressly included hazardous materials
associated with the so-called Kemira chemical synthesis facility in this
assessment 404. With respect to management actions, the report found that Botnia had
“developed management actions to address” the various “ potential risks” posed by
hazardous materials, including those concerning the “release of liquid effluent;
release of gaseous emissions; handling of hazardous wastes; transport of hazardous
materials; fire; and procedure” 405.
4.28 The IFC’s Pre-Commissioning Review likewise approved Botnia’s
approach to prevention, finding that its “hazardous materials management plan
incorporates a prevention program to address potential risks associated with the
406
accidental release of uncontrolled hazardous materials” . The Pre-Commissioning
401
See ibid., p. 2.2 (“The hazardous materials management plan is described in the following
documents: “Plan de Autoprotección de Botnia”, “Plan de Gestion de Residuos”, “Plan de
Gestion Ambiental - Operación”, “Plan de Ges tión Ambiental Operación del Puerto”, and
“Plan de Contingencias”).
402Ibid., p. 2.2.
403AR, para. 3.107.
404Pre-Commissioning Review, op. cit., pp. 2.2-2.4. UR, Vol. III, Annex R50.
405Ibid., p. 2.6.
406Ibid., p. 2.7.
- 214 -Review found that the plan “considers an array of factors to minimize the potential
risk”, including “design elements for the ove rall layout and construction of the plant
processes; the types and quantities of materials used or produced; transportation and
storage requirements; monitoring and reporting; operational procedures; contingency
407
plans; and training and supervision” . The Pre-Commissioning Review found that
the plant was “designed to diminish potential risks”; that its “layout” provided “for a
logical flow and storage of materials”, wh ich “minimiz[e] the degree of handling,
transport and interaction”; and that “[d]esign elements include comprehensive
systems of automatic sensing and alarm” , which “provide continuous information
408
regarding security and process control” .
4.29 In light of Uruguay’s and the IFC’s independent approvals of the plant’s
approach to hazardous materials, the Cour t should have full confidence that Botnia
has treated and will treat hazardous materi als in an environmentally responsible
manner.
2. Emergency Preparedness and Response
4.30 Botnia was also required by bot h Uruguay and the IFC to produce
comprehensive plans for emergency preparedness and response. Botnia fulfilled this
obligation by describing in exhaustive deta il its plans for addressing emergencies in
the following documents that it submitted to DINAMA as part of its Environmental
Management Plan for Operations pursuant to its AAP: Analysis of Environmental
Risks; Contingency Plan; Accident Prevention Plan; and the Environmental
Management Plan for the Operation of the Port.
407Ibid.
408Ibid.
- 215 -4.31 The Pre-Commissioning Review left no doubt as to the adequacy of
Botnia’s plans, demonstrating again that Argentina’s critiques of Botnia’s
emergency planning have no basis 409. With regard to prevention, the IFC experts
found that Botnia’s approach included “avoid[ing]” “unnecessary use of dangerous
chemicals”; “minimiz[ing] volumes of storage and use of chemicals”; “contain[ing]
hazardous zones using structures”; adopting an “effective design of the plants and all
processes”; using “automatic monitoring”; ensuring adequate “training of all
personnel”; mandating “contin uous availability of appr opriate personnel with
knowledge and decision authority for res ponse to any type of incident”; and
adopting a “high standard of practice requir ed of all contractors working for Botnia
or Kemira” 410.
4.32 Uruguay’s and the IFC’s dual approvals of Botnia’s plans for emergency
411
preparedness and response confirm that its plans are fully adequate .
3. Transportation Management
4.33 Both Uruguay and the IFC required Botn ia to adopt comprehensive plans
for transportation management. Th e IFC’s technical experts conducted a close
review of Botnia’s various operational plans, including those submitted to Uruguay
pursuant to the AAP, such as the Environmental Management Plan for the Operation
409See, e.g., Jorge Rabinovich & Luis Tournier, “Scientific Report to the Argentine Ministry of
Foreign Affairs with replies to Uruguay’s Count er-Memorial concerning aspects of the Botnia
Pulp Mill near Fray Bentos, Uruguay” (hereina fter “Rabinovich Report”), paras. 2.11-2.12.
AR, Vol. III, Annex 43. This issue is discussed in more detail in paras. 6.70 to 6.75.
410Pre-Commissioning Review, op. cit., p. 3.3. UR, Vol. III, Annex R50.
411Ibid., p. 3.1.
- 216 -of the Port. They concluded that Botnia fulfilled its obligations with respect to
transportation management, including for transport of chemicals.
4.34 Specifically, the IFC’s technical experts found that “[h]azardous materials
will be handled in a designated zone of the wharf specially designed to prevent
possible spills to the river” and that a “per imeter curb isolates the area and the floor
is sloped to a central drain which drains to a recovery tank” 41. In addition,
“[s]pecial procedures” would be followed “to ensure the safe transfer of materials”,
including “identification of material a nd associated danger”; review of the
corresponding material safety data sheet and safety pro cedures”; verification that
“the drainage system is closed”; “visual inspection of the state of the containers”;
413
and “preparation of the final destination” . The Pre-Commissioning Review also
noted that a “floating boom and suction hose” would be “deployed to contain the
area around the ship” 414. Moreover, Botnia’s third-party contractors responsible for
transporting chemicals are required to “ operate following international norms for
navigation and the MARPOL convention for prevention of contamination” 415.
4.35 In light of these findings, it is readily apparent that the assertions in the
Reply pertaining to whether transportation safety was adequately reviewed have no
basis in fact.
412Ibid., p. 4.12.
413Ibid.
414Ibid.
415Ibid.
- 217 - 4. Conservation
4.36 Uruguay and the IFC also both required that Botnia take action to conserve
environmental resources remote from the Botnia plant itself. The AAP mandated
that Botnia acquire and manage a conser vation area located outside the immediate
vicinity of the plant for integration into Uruguay’s National System of Protected
Areas (“SNAP”, per the Spanish initials) 416. The ESAP similarly required that
Botnia adopt a conservation plan.
4.37 Botnia, through its subsidiary Forestal Oriental, on 21 August 2007
submitted a detailed management plan to protect an ecologically valuable area of
wetlands known as Mafalda, located near Uruguay’s RAMSAR site of Esteros de
Farrapos 417. This plan was developed usi ng the Guidelines for Management
Planning of Protected Areas – Best Practice Protected Area Guidelines Series No. 10
– of the World Commission on Protected Areas 41. The Mafalda site is to be
419
integrated into Uruguay’s SNAP . Other conservation measures that are
contemplated include: (1) continuati on of the ongoing biodiversity monitoring
program; (2) implementation of a monitoring and restoration program for certain
plant species, wetlands and forest areas; (3) continuation of the ongoing program to
eliminate invasive exotic plant species; (4) eventual elimination of grazing in the
416Ibid., p. 6.1.
417
See Botnia/Forestal Oriental, Malfada Management Plan (21 August 2007), p. 12. UR, Vol.
IV, Annex R85.
418
Ibid., p. 2.
419
Ibid. Forestal Oriental and Botnia have subm itted the proposal for including Mafalda in the
SNAP. Ibid., p. 12.
- 218 -protected area; and (5) coordination of c onservation efforts with the Esteros de
420
Farrapos RAMSAR site .
4.38 DINAMA approved Botnia’s conservation plan on 24 September 2007,
and the Pre-Commissioning Review concluded that Botnia had fulfilled its
421
commitment under the ESAP .
5. Solid Waste Management
4.39 Botnia’s AAP required it to prepar e a Solid Waste Management Plan
acceptable to DINAMA, and the ESAP likewis e obligated Botnia to “[p]repare and
implement detailed design and operational procedures for solid waste management”.
Uruguay approved Botnia’s submission, and the IFC’s Pre-Commissioning Review
found that Botnia had fulfilled this obligation, concluding that the “industrial landfill
has been designed following the technica l guidelines of the IFC (International
Finance Corporation, Environmental, Health and Safety Guidelines for Waste
Management Facilities) and norms approved by [Comisión Técnica Asesora de la
Protección del Medio Ambiente ] COTAMA (Proyecto de Reglamento de Residuos
422
Sólidos Industriales, Agroindus triales y Servicios, Versión 2)” . Thus, the Pre-
Commissioning Review confirmed the earlier conclusions of DINAMA and the Final
423
CIS that the landfill poses no risk to the Uruguay River .
420
Ibid., p. 19.
421
See ibid.; DINAMA Resolution Approving the Conser vation Area Proposed by Botnia, the
“Mafalda” Establishment (24 Septembe r 2007). UR, Vol. II, Annex R3. See Pre-
Commissioning Review, op. cit., p. 6.1. UR, Vol. III, Annex 50.
422
Ibid., p. 7.4. UR, Vol. III, Annex R50.
423
UCM, paras. 6.56-6.57.
- 219 - 6. Social Impact Monitoring
4.40 The social impacts of the Botnia plant were also subject to extensive
review. Finding that the social impact monitoring programs were “comprehensive”,
the Pre-Commissioning Review noted that “Botnia has been very mindful of their
responsibility to the community”, having “invested in infrastructure, resources,
424
programs, and business partnerships” . It also found, based on “[f]irst-hand
observation”, that Botnia had “generated c onsiderable prosperity in the community
with new restaurants, hotels, art galleries, shops and businesses in evidence” and that
it was “common to hear from stakeholders how the quality of life has improved in
425
Fray Bentos and surrounding communities” . These are some of the benefits that
this heretofore depressed area of Uruguay has begun to enjoy as a result of the
Botnia plant.
C. P RE-OPERATIONAL ENVIRONMENTAL Q UALITY M ONITORING
4.41 As a final, critical element to the activities that preceded Uruguay’s
authorisation for the Botnia plant to ope rate, the Uruguay River and its biota were
subject to comprehensive pre-operational m onitoring. In Chapter 7 of the Counter-
Memorial, Uruguay described the compre hensive pre-operational monitoring
campaign it was then conducti ng to establish a database of information against
which potential environmental impacts could be measured. Uruguay completed this
pre-operational monitoring program on schedule prior to the plant’s commissioning.
In addition, between 1987 and 2005, Urugua y and Argentina, through the CARU,
424Pre-Commissioning Review, op. cit., p. ES.iv.
425
Ibid., p. ES.v.
- 220 -gathered significant water quality baseline information through the implementation
426
of the PROCON and PROCEL monitoring programs .
4.42 Complementing the data collec ted through Uruguay’s (and CARU’s)
monitoring efforts, Botnia conducted its own pre-operational monitoring of the river
and its biota. Botnia’s AAP required it to design and implement a comprehensive
environmental quality monitoring plan, and obligated Botnia to collect baseline data
427
for all relevant parameters for at leas t one year prior to commencing operations .
In fact, Botnia’s pre-operational monitoring exceeded its regulatory obligations.
Every parameter that is potentially implicated by the Botnia plant -- including all
parameters identified by Argentina as be ing of concern -- were rigorously assessed
and a comprehensive store of information was gathered. This data enables Uruguay
to detect any unacceptable environmental impacts caused by the operation of the
Botnia plant and to act to address them.
4.43 There should be no doubt regarding the adequacy of the pre-operational
428
monitoring . The IFC’s independent technica l experts conducte d an impartial
evaluation of the “[s]eparate environmen tal monitoring programs that have been
developed by Botnia and DINAMA”, including the programs for monitoring “water
426
El Telegrafo, “President of CARU: Argentina Lacks the Political Will to Control the Quality
of the Water in the Uruguay River,” p. 1 (17 Aug. 2006). UCM, Vol. IX, Annex 187A. See also
DINAMA Press Release, “New Environmental Monitoring of the Uruguay River,” p. 1. (17
August 2006). UCM, Vol. II, Annex 32. Unfortunately, Argentina refused to allow the
PROCEL program to continue. UCM, para. 7.9.
427UCM, Chap. 7.
428As noted above, the pre-operational monitoring by Uruguay and Botnia has been augmented
by wide-ranging studies conducted over the years, apart from preparation for the Botnia plant.
In that regard, Uruguay and Argentina have, th rough CARU, engaged in extensive monitoring
of the river under the PROCON program, which further helps to establish a baseline against
which impacts can be judged.
- 221 -quality, sediment quality [a nd] biological indicators (plankton, invertebrates,
429
fish)” . The conclusion of these indepe ndent experts is unambiguous and
categorical: “Overall, these monitoring programs are extremely comprehensive and
exceed the commitments identified in the CIS.” 430
1. Pre-Operational Water Quality Monitoring
4.44 Both DINAMA and Botnia conducted extensive pre-operational water
quality monitoring. The comprehensive da taset that Botnia and Uruguay amassed
goes well beyond what is reasonably needed to detect changes to water quality
caused by the plant’s effluent. Be tween August 2006 and September 2007,
DINAMA conducted seven water quality monitoring campaigns spaced at two-
431
month intervals . These were done at 15 locat ions strategica lly selected
throughout the Uruguay River, ranging from Is la Zapatero upstream from the plant
432
to Las Cañas downstream . Uruguay’s monitoring program assessed a host of
water quality parameters, including, but not limited to, phosphorus, nitrogen,
biological oxygen demand, AOX, total suspended solids, dioxins and furans and
433
metals . In addition to the comprehensive pre-operational water quality monitoring
that DINAMA conducted, the Uruguayan State Waterworks Agency ( Obras
429Pre-Commissioning Review, op. cit., p. ES.iii. UR, Vol. III, Annex R50.
430Ibid., p. ES.iv.
431
(Second) Torres Aff., op. cit., Annex A. UR, Vol. IV, Annex R92.
432
Ibid.
433
Ibid.
- 222 -Sanitarias del Estado or “OSE”) has also conducte d water quality monitoring in
Fray Bentos 434.
4.45 Botnia also conducted its own wi de-ranging pre-operational water quality
monitoring campaign. Like Uruguay’s pre-operational water quality program,
Botnia’s was extensive, involving sampling from locations both upstream and
downstream from the plant. Botnia’s program covered numerous water quality
parameters, including, but not limited to , biological oxygen demand, chemical
oxygen demand, total suspended solids, phosphorus, total nitrogen, AOX, dioxins
435
and furans and metals .
4.46 Nothing in Argentina’s Reply questions the adequacy of the pre-
operational monitoring. The principal objection raised by Argentina is that the
monitoring allegedly did not comply with Before-After-Control Impact Paired Series
(“BACIPS”) in two respects. In neither case is Argentina correct. First, Argentina
alleges that the pre-operational monito ring did not begin “antérieure au
436
commencement des opérations pendants au moins deux ans consécutive” .
437
However, Botnia’s pre-operational monitoring began in April 2005 and lasted
until October 2007 438 (the month before operations commenced), more than
43OSE Web Site, “Water Quality Monitoring at Fray Bentos,” available at
http://www.ose.com.uy.a_monitoreo_fray_bentos.htm (last visited on 5 July 2008). UR, Vol.
II, Annex R12.
435(Second) Torres Aff., op cit., Annex A. UR, Vol. IV, Annex R92.
436AR, para. 3.58 (“prior to the commencement of operations for at least two consecutive
years”).
437Argentina itself acknowledges this. AR, para. 3.57.
438Botnia Environmental Management Plan for Operations, Appendix 3 (Environmental
Monitoring and Follow-up Plan) (hereinafter “B otnia Environmental Monitoring and Follow-
up Plan”) (24 September 2007). UR, Vol. II, Annex R41. (Second) Torres Aff., op. cit.,
Annex A. UR, Vol. IV, Annex R92.
- 223 -satisfying the two-year pre-operational monitoring requirement asserted by
Argentina, even without consideration of the extensive earlier data generated
through CARU as part of the PROC ON and PROCEL water quality monitoring
439
programs (which were carried out from 1987 to 2005 ).
4.47 The other alleged non-compliance with BACIPS raised in the Reply is that
monitoring was not done at a “nombre suffisa nt de sites” since, Argentina claims,
“un site seulement a été proposé pour évaluer les conditions du flueve” 440. This is
baseless. Uruguay and Botnia conducted pre-operational monitoring at more than a
dozen sites, far more than the sole location acknowledged by Argentina. It is
therefore beyond dispute that the pre- operational monitoring program used a
“nombre suffisant de sites” 441. In short, the pre-operational monitoring was
satisfactory, even by Argentina’s own standard developed for the Reply.
4.48 Argentina also complains that the pre-operational monitoring campaign
did not begin long enough before construction of the plant commenced and that, as a
442
result, the baseline includes “la pollu tion causée par l’étape de construction” .
There is no merit in this charge either. As an initial matter, Argentina has not cited
any authority for the proposition that pre-operational monitoring for a cellulose plant
must begin before construction . Uruguay is certainly aware of none. Second,
Argentina concedes that construction of the Botnia plant did not commence until
September 2005, five months after Botnia’s monitoring began and after data were
439UR, para. 4.41 and n.426.
440AR, para. 3.58 (“sufficient number of sites”) (“only one site was proposed to evaluate the
conditions of the river”).
441AR, para. 3.58.
442AR, para. 3.57 (“the pollution caused by the construction stage”).
- 224 - 443
collected from the PROCON and PROCEL monitoring programs . Consequently,
Uruguay and Botnia have coll ected monitoring data si nce substantially before
construction began. In any event, c onstruction activities, such as pouring a
foundation and constructing an emissions st ack, do not impact the river. Indeed,
nowhere has Argentina alleged that construction of the plant caused any pollution to
the river.
4.49 Argentina’s failure to levy any valid criticisms against the pre-operational
monitoring of the Uruguay River is underscore d by the fact that the Reply alleges
that the monitoring of only one parameter was inadequate. Even there, Argentina
falls far short of the mark. The only pre-operational water quality monitoring
parameter that Argentina specifically critic ises is dioxins and furans (2,3,7,8-TCDD
and 2,3,7,8-TCDF), which the Reply alleges was inadequately monitored because, it
444
claims, samples were only taken from three locations . But Argentina has got the
facts wrong again. The evidence shows that between Uruguay and Botnia water
445
quality samples were taken for dioxins and furans in at least 19 different locations .
443
AR, para. 3.57.
444
AR, para. 3.64. Argentina also relies upon the report prepared by Hatfield Consultants for
the IFC on 27 March 2006 (hereinafter “First Ha tfield Report”), UCM, Vol. VIII, Annex 170,
for the allegation that sufficient ba seline data did not exist with respect to dioxin levels in fish.
AR, para. 3.64. As discussed in paragraph 4.56 of this Chapter, Botnia and DINAMA
conducted baseline monitoring of the presence of dioxins and furans in fish species, which both
confirmed that contaminant levels were low a nd, as Uruguay’s experts confirm, sufficient to
establish an adequate baseline. Exponent, Inc ., Response to the Government of Argentina’s
Reply, Facility Design Technology and Environmen tal Issues Associated with the Orion Pulp
Mill, Fray Bentos, Uruguay Rive r, Uruguay (hereinafter “Expone nt Report”) (July 2008), pp.
3-1 & 3.16-3.17. UR, Vol. IV, Annex R83.
445(Second) Torres Aff., op. cit. , Annex A. UR, Vol. IV, Annex R92. In addition, Botnia, as
part of its baseline fish studies, conductedfour pre-operational sampling campaigns at three
different locations, for a total of 12 additonal samples. Jukka Tana, A Baseline Study on
Concentrations of Resin Acids, Chlorinated Phenols and Plant Sterols in Fish from Rio
Uruguay – Part I, pp. 8-9 (23 June 2005). UR, Vo l. II, Annex R28. Jukka Tana, A Baseline
- 225 - 446
As a result, dioxins and furans we re sampled no fewer than 100 times . The issue
is moot in any event. As described in Section 2 of this Chapter, dioxin and furan
concentrations have been monitored in the plant’s effluent, including the key
congeners of 2,3,7,8-TCDD for dioxins a nd 2,3,7,8-TCDF for furans. These key
447
congeners are below detection levels , even with a detection limit of one part per
quadrillion.
4.50 Argentina’s Reply raises some a lleged deficiencies in Uruguay’s
448
assessment of sediment ation and geomorphology . None is valid, and Argentina
unsurprisingly fails to present any evidence of actual sedimentation or
geomorphological changes (including with respect to the Botnia port, which it raises
449
as a particular concern ) since there is none. The Counter-Memorial demonstrated
that sedimentation and geomorphological ch ange were adequately assessed before
operation began, and that operation of the Botnia plant will not meaningfully impact
450
those conditions . As described in the Counter-Memorial, the Final CIS carefully
Study on Concentrations of Resin Acids, Chlori nated Phenols and Plant Sterols in Fish from
Rio Uruguay – Part II, December 2005, pp. 7-8 ( 17 February 2006). UR, Vol. II, Annex R30.
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated Phenols and
Plant Sterols in Fish from Rio Uruguay – Part III, November 2006, pp. 7-8 (20 February 2007).
UR, Vol. II, Annex R38. Jukka Tana, A Base line Study on Concentrations of Resin Acids,
Chlorinated Phenols and Plant Sterols in Fish from Rio Uruguay – Part IV, April 2007, pp. 7-8
(27 June 2007). UR, Vol. III, Annex R46.
446
(Second) Torres Aff., op cit., Annex A. UR, Vol. IV, Annex R92.
447
Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
448
AR paras. 3.32, 3.48, 3.159, 3.166 & 3.177.
449
Professor Howard Wheater and Dr. Neil McIn tyre, Technical Commentary on the Counter-
Memorial of Uruguay in the case concerning pulp mills on the River Uruguay (hereinafter
“Second Wheater Report”), p. 115. AR, Vol. III, Annex 44.
450UCM, paras. 6.86-6.92.
- 226 -considered the issues of sedime ntation and geomorphological change 451. The
Second Wheater Report’s assertion that th e Final CIS “provided no evidence” to
452
support its conclusions is incorrect . The Final CIS noted that Yaguareté Bay (the
focus of comments in the Second Wheater Re port) is “regularly flushed during high
flow periods and due to wind/wave action, as evidenced by the lack of sedimentary
453
features (e.g., islands)” . The Final CIS also cited specific calculations regarding
flow and current rates in support of its findings 454. The ASA Report submitted by
Uruguay confirmed these conclusions 455. Apart from the conclusory assertions in
the Second Wheater Report, Argentina makes no attempt to challenge the scientific
validity of the Final CIS’s analysis.
2. Pre-Operational Sediment Monitoring
4.51 In addition to the comprehensive pre- operational water quality monitoring
discussed above, Uruguay has undertaken equall y extensive efforts to ensure that it
has a complete database of information against which to measure any potential post-
operational impacts to sediments in the river. Between August 2006 and September
2007, DINAMA conducted seve n sediment sampling cam paigns at two-month
intervals from nine locations at strategically selected sites both upstream and
downstream from the Botnia plant 45. The sediments were evaluated for numerous
451
IFC, Cumulative Impact Study, Uruguay Pulp Mills (hereinafter “Final CIS”), p. 4.50
(September 2006). UCM, Vol. VIII, Annex 173.
452
Second Wheater Report, op. cit., Sec. 9. AR, Vol. III, Annex 44.
453
Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
454
Ibid.
455
UCM paras. 6.86-6.89.
456
(Second) Torres Aff., op cit., Annex B. UR, Vol. IV, Annex R92.
- 227 -compounds, including but not limited to metals, EOX, dioxins and furans and
457
PCBs .
4.52 Botnia, as required by its AAP, also conducted extensive baseline
monitoring of sediments, upstream of the pl ant at Nuevo Berlín, at the diffuser site,
458
and downstream in the area of Las Cañas . Although only required by the AAP to
conduct pre-operational sediment monitoring for one year, Botnia exceeded this
obligation by collecting two years of se diment data, which were evaluated for
numerous compounds, including for tota l organic material, phosphorus, and
459
nitrogen . Between April 2005 and April 2007, Botnia conducted eight sediment
monitoring campaigns 46.
4.53 In light of the extensive pre-operat ional sediment monitoring by both
Uruguay and Botnia, it is unsurprising that the program was categorically endorsed
by the IFC’s technical experts, who concluded that the “sediment quality”
457
Ibid.
45Center for Applied Limnological Studies, Esta blishment of a Baseline for Phytoplankton,
Zooplankton and Benthic Communities in the Uruguay River (from Nuevo Berlín to Las
Cañas), Rio Negro-Uruguay (hereinafter “C ELA March 2006 Baseline Study”), pp. 20 & 62
(March 2006). UR, Vol. II, Annex R31. Uruguay Technological Labor atory (hereinafter
“LATU”), Assessment Report No. 952512, Study of the Communities of Phytoplankton,
Zooplankton and Macrozoobenthos in the Lower Section of the Uruguay River (Nuevo Berlín,
Fray Bentos and Las Cañas) (12 July 2007) (hereinafter “LATU July 2007 Assessment
Report”), pp. 6-7. UR, Vol. III, Annex R47.
459
CELA March 2006 Baseline Study, op. cit., p. 61. UR, Vol. II, Annex R31. LATU July
2007 Assessment Report, op. cit., p. 8. UR, Vol. III, Annex R47.
460CELA March 2006 Baseline Study, op. cit., pp. 11 & 20. UR, Vol. II, Annex R31. LATU
July 2007 Assessment Report, op. cit., p. 6. UR, Vol. III, Annex R47. Argentina criticizes the
alleged lack of data in the Final CIS rega rding dioxin and furan concentrations in the
sediments. AR, para. 3.64. It should be noted that Argentina’s own expert, Professor Wheater
is quoted in contradiction of this, only a few paragraphs before. Ibid., para. 3.62.
- 228 -monitoring was “extremely comprehensive” and “exceed the commitments
461
identified in the CIS” .
3. Pre-Operational Biological Monitoring
4.54 Argentina makes no criticism of th e pre-operational monitoring of
plankton, but it does challenge the pre-operational benthos monitoring in one
respect. According to the Reply, Botnia allegedly did not comply with the AAP’s
requirement that it monitor one species of sessile benthic fauna as an indicator of the
presence of AOX. Argentina’s criticism is misplaced. In fact, Botnia sampled and
tested the species Limnoperna fortunei for the presence of AOX in November of
2006 46. Botnia undertook ten monitoring camp aigns of the benthic and plankton
463
communities at three locations between April 2005 and November 2007 . In
addition, as required by the AAP, Botnia conducted a baseline study of epyphyte
species in the area 464.
4.55 Botnia and DINAMA also conducted se parate, extensive baseline surveys
of the fish communities in the Uruguay River. Between August 2006 and July 2007,
461
Pre-Commissioning Review, op. cit., p. ES.iv. UR, Vol. III, Annex R50.
462
Jukka Tana, Concentrations of Resin Acids, Chlorinated Phenols and Plant Sterols in Fish
from Rio Uruguay, Monitoring Studies in the R ecipient of Botnia Pulp Mill, November 2006,
op. cit., pp. 17. UR, Vol. II, Annex R38. When referring to the benthic population, AOX is
technically referred to as EOX. See ibid.
463CELA March 2006 Baseline Study, op. cit., pp. 10-11, UR, Vol. II, Annex R31; LATU July
2007 Assessment Report, op. cit., UR, Vol. III, Annex R47; ibid. , p. 6; Informe Parcial de
Ensayo, No. 1006312 (August 2007) (Partial Repor t of Assay, No. 1006312) (included on the
CD provided herewith); Informe Parcial de Ensayo, No. 1020042 (November 2007) (Partial
Assay Report, No. 1020042) (included on the CD provided herewith).
464
See GeoAmbiente, Survey of Species Belonging to the Genus Tillandsia (September 2006).
UR, Vol. II, Annex R34.
- 229 - 465
Uruguay conducted five fish baseline studies . Uruguay’s pre-operational fish
monitoring took place at three different locations -- one ups tream, one near the
Botnia discharge, and one downstream from the Botnia plant 466. Botnia
complemented Uruguay’s pre-operational fish studies with its own extensive pre-
operational monitoring of the fish communities. Beginning in April 2005, Botnia
conducted five studies that evaluated the fish communities and species diversity and
five studies that evaluated concentrations of resin acids, chlorinated phenols and
sterols in fish 467. The extensive baseline studies for fish communities collected by
468
Uruguay and DINAMA form a “robust” pre-operational fish monitoring study .
4.56 Argentina attempts to criticise the fish-monitoring program by citing a
minor and out-dated issue raised in the first Hatfield report -- that pre-operational
dioxin and furan levels should be studied in fish 469, but its criticism is groundless.
Botnia conducted five such studies of dioxins and furans in fish, and Uruguay
46National Aquatic Resources Office (DINARA-MGAP), “Establishing a Baseline for
Monitoring Fish Fauna in the Area Around the Bo tnia Pulp Mill” (Fray Bentos, Río Negro)
(hereinafter, “DINARA Baseline Fish Study”), p. 5 (March 2008). UR, Vol. II, Annex R8.
466
Ibid., pp. 4-5.
467
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated Phenols and
Plant Sterols in Fish from Rio Uruguay – Part I, op. cit., UR, Vol. II, Annex R28; Jukka Tana,
A Baseline Study on Concentrations of Resin Acid s, Chlorinated Phenols and Plant Sterols in
Fish from Rio Uruguay – Part II, December 2005, op. cit., UR, Vol. II, R30; Jukka Tana,
Studies on Fish Community and Species Diversit y in Rio Uruguay prior to the Planned Botnia
Pulp Mill, Third Test Fishi ng Period, May 2006 (27 June 20 06), UR, Vol. II, Annex R33;
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated Phenols and
Plant Sterols in Fish from Rio Uruguay – Pa rt III, November 2006 (20 February 2007), UR,
Vol. II, Annex R38; Jukka Tana, A Baselin e Study on Concentrations of Resin Acids,
Chlorinated Phenols and Plant Sterols in Fish from Rio Uruguay – Part IV, April 2007, op. cit.,
UR, Vol. III, Annex R46.
468Exponent Report, op. cit., pp. 3-4. UR, Vol. IV, Annex R83.
469AR, paras. 3.60-3.61.
- 230 -undertook four more on its own. It thus comes as no surprise that the second
Hatfield report -- which Argentina conspicuously fails to mention -- found that:
In the monitoring program suggested in the CIS, the important
ecological compartments are targeted; that is, water, bottom
sediments, benthic macroinverteb rates, and fish. Consideration
of contaminants like dioxins and furans are also integrated into
the program to ensure these contaminants are not
bioaccumulating in river organisms. Essentially the experimental
design of the monitoring program follows that of the
Environmental Effects Monitoring Program in Canada.
Appropriate sampling stations have been selected, and
comprehensive lists of test parameters are also outlined 470.
4.57 It cannot be disputed, therefore, th at Botnia and Uruguay have conducted
extensive pre-operational monitoring of the aquatic biota of the Uruguay River. As
the IFC’s independent experts concluded, the monitoring program for “biological
indicators”, including for “plankton, invert ebrates, [and] fish”, was “extremely
comprehensive” and “exceed the commitments identified in the CIS” 471.
Section II.
Monitoring Results for the First Six Months of Operation
4.58 Section 1 demonstrated that the Botnia plant was the subject of
comprehensive scrutiny prior to being allo wed to commence operations. It was,
among other things, required to prepare detail ed and exhaustive plans, submit to an
extensive audit of its technology for complia nce with BAT, have its social impacts
assessed, and most impor tantly, conduct comprehe nsive pre-operational
environmental quality monitoring for the Uruguay River and its biota. As a result of
470
Hatfield Consultants, Report of Expert Pane l on the Final Cumulative Impact Study for the
Uruguay Pulp Mills. p. 7 (14 October 2006). UC M, Vol. VIII, Annex 178. In addition,
Argentina alleges that the baselin e monitoring of fish species, as reported in the Final CIS, is
inadequate because only two studies were reported. AR, para. 3.62. This, however, ignores the
additional baseline studies detailed above, that Botnia and DINAMA undertook.
471
Pre-Commissioning Review, op. cit., p. ES.iv. UR, Vol. III, Annex R50.
- 231 -these actions, Uruguay and the IFC (based on reports by its im partial technical
experts) independently concluded that the Botnia plant had been designed and would
operate in accordance with BAT, that its management and operators were prepared
for all possible contingencies, and that the plant posed no meaningful risk to either
the Uruguay River or its biota. The evalua tive processes to which the Botnia plant
had been subjected fully entitled Uruguay and the IFC to reach these conclusions.
4.59 Section 2 now demonstrates how these conclusions have been proven
accurate by comprehensive post-operational monitoring, which, through the date of
completion of this Rejoinder, fully confirms the excellent performance of the
plant472. The IFC’s independent experts are categorical in that regard; after
reviewing the extensive effluent and water quality data generated since operations
began, they concluded that “the water qu ality characteristics of the Rio Uruguay
have not changed as a result of the discharge of mill effluent” 473. In other words, the
plant has had no impact on the environment, and Argentina’s sensational predictions
of catastrophic harm have been proven wrong.
4.60 The Botnia plant’s environmental performance is all the more exceptional
since, as the IFC’s indepe ndent experts acknowledge, “[o] perationally, the first six
months of any new pulp mill is referred to as the initial start-up phase, during which
time production is periodically interrupted to facilitate process changes to improve
474
operational efficiency and performance” . It is thus noteworthy that even during
472Environmental Performance Review, op. cit., p. 3.1. UR Vol. IV, Annex R98.
473Ibid., p. 4.3.
474Ibid., p. ES.i. The IFC’s experts further observe d that “[b]ased on” their “experience with
other new modern pulp mills, these operational improvements continue through the first two
- 232 -its initial months of operation the Botnia pl ant has demonstrated a consistent ability
to meet both the stringent regulatory limits set by DINAMA and the performance
assumptions included in the Final CIS.
4.61 The operational results place beyond all doubt that the Botnia plant, in the
475
words of the IFC, “will not cause harm to the environment” . In the paragraphs
that follow, Uruguay will review the regulatory limits established for the Botnia
plant’s effluent and for the water quality in the river, and demonstrate that Botnia
has complied with those limits. Uruguay also shows that the assumptions made by
the IFC in the Final CIS regarding the plant’s predicted performance have been fully
realized.476 In short, the Uruguay River remains unharmed.
4.62 This section, in subpart A, docum ents the program of post-operational
monitoring that forms the foundation of th e environmental performance evaluation.
It is followed, in subpart B, by a presen tation of the actual results, as documented in
the IFC’s Environmental Performance Review . Those results demonstrate the
outstanding performance of the Botnia pl ant and the absence of environmental
impacts.
years following start-up, during which time perfecting steps are taken to optimize
performance”. Ibid.
475
IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill - Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills, op. cit. UR, Vol. III, Annex
R80.
476
The only exceptions concerned inconsequential exceedances regarding colour and NOx
emissions to the air. See infra paras. 4.110-4.111.
- 233 - A. T HE POST -OPERATIONAL M ONITORING P ROGRAM
477
4.63 Uruguay, as promised in the Counter-Memorial , has been conducting
post-operational monitoring of all relevant effluent and wate r quality parameters,
including every parameter identified by Argentina as being of concern. In that
regard, Uruguay’s post-operational monitori ng includes scrutiny of the following:
pH, biological and chemical oxygen demand, phenols, AOX, acute toxicity,
nitrogen, phosphorus, colour, mercury and other metals, and dioxins and furans.
This post-operational monitoring program, which was designed in close consultation
with reputable international experts, is described in a monitoring plan adopted in
478
May 2007 , and subsequently amended in October 2007 based on the results of the
pre-operational monitoring and again in June 2008 after the plant had completed six
479
months of operation (“Post-Operational Plan”) .
4.64 Complementing Uruguay’s monitoring, Botnia is conducting its own,
equally comprehensive, post-operational monitoring. This includes, among other
things, monitoring of fl ow, phosphorus, AOX, total suspended solids, phenols,
metals (arsenic, cadmium, coppe r, chrome, mercury, nickel, lead and zinc), sterols,
acidic resins, coliforms, colour, sulphur, nitrogen, and dioxins and furans, as well as
tests for chronic toxicity, and acute toxicity in microtox, daphnia, and fish0. Like
477
UCM, para. 7.22.
478
UCM, para. 7.11.
479See DINAMA Monitoring Plan for Cellulose Plant in Fray Bentos (May 2007 (Version 2))
(October 2007), UR, Vol. IV, Annex 86; DINAMA Monitoring Plan for Cellulose Plant in Fray
Bentos (May 2007 (Version 2.1)) (June 2008), UR, Vol. IV, Annex 89.
480
See Botnia Environmental Management Plan for Operations, Appendix 4 (Operation
Monitoring and Follow-Up Plan) (hereinafter “Botnia Operation Monitoring and Follow-Up
Plan”) (30 June 2007). UR, Vol. II, Annex R42.
- 234 -Uruguay’s monitoring, this program includes monitoring of all parameters identified
by Argentina as being of concern.
4.65 The particulars of Botnia’s post- operational monitoring program were
established through a consulta tive process that involved extensive discussions with
DINAMA. As described in the Counter-M emorial, Botnia included a preliminary
post-operational monitoring plan in its EIA, which was supplemented with
additional requirements imposed by Uruguay in 2005 pursuant to Botnia’s AAP and
481
Wastewater Treatment System Approval , all of which culminated in Uruguay’s
approval of the plan on 31 October 2007 48.
4.66 Botnia’s monitoring plan renders moot the criticisms made by Argentina
in the Reply about earlier iterations of Botnia’s plan and about suggestions for
monitoring contained in the Final CIS. In particular, Argentina complains that the
483
“Final CIS is vague and non-committal on all aspects of monitoring” . Leaving
aside the fact that the Final CIS does not, as Argentina claims, lack specificity, the
binding commitments made in Botnia’s fi nal monitoring plan are unequivocally
specific and detailed. In that regard, Uruguay respectfully draws the Court’s
484
attention to the Botnia plan, found at Annex 41 of this Rejoinder , which describes
in great detail all aspects of the monitoring program to which Botnia is legally
bound.
481UCM, paras. 7.31-7.40.
482DINAMA Resolution Approving the Environmental Management Plan for Operations (Final
Consolidated Text) (31 October 2007). UR, Vol. II, Annex R4.
483AR, para. 3.222.
484Botnia Environmental Monitoring and Follow-up Plan, op. cit. UR, Vol. II, Annex R41.
- 235 -4.67 The Court can have full confidence in the adequacy of the post-operational
monitoring regime, since the IFC’s indepe ndent technical experts have given the
environmental monitoring of the Botnia plant their unqualified endorsement. The
Pre-Commissioning Review found that “[o]verall” the Botnia monitoring programs,
including its monitoring of “mill effluent, mill air emissions, water quality, sediment
quality, biological indicators (plankton, in vertebrates, fish), meteorological
parameters, air quality, air inversions, groundwater, soil quality, and terrestrial
indicators (flora and fauna)”, are “ext remely comprehensive and exceed the
commitments identified in the CIS” 485. It noted that “[c]ollectively, these
monitoring components will provide a quantif iable record of the source emissions
(effluent and air), media response (water, air, soil, and groundwater) and biological
486
response (aquatic animals, flora and fauna)” .
4.68 The Pre-Commissioning Review specifically endorsed the processes and
protocols for the monitoring of the Botnia plant, concluding that “[c]omponents of
the monitoring program follow well established protocols which will aid in design,
487
analysis and interpretation” . It singled out the mon itoring programs for “water
quality, sediment quality and biological indicators”, noting that these programs were
“similar to the Environmental Effects M onitoring (EEM) program required for pulp
and paper mills in Canada” that “has been in effect since the early 1990’s”. The
Canadian program, the Pre-Commissioning Review noted, would provide “well
established technical guidanc e for implementation of the program and analysis of
485Pre-Commissioning Review, op. cit., p. ES.iv.
486Ibid.
487
Ibid.
- 236 -monitoring data” as well as “a comprehensiv e database to support the interpretation
488
of the monitoring results” .
4.69 Indeed, the IFC’s Pre-Commissioning Review observed that the water
quality monitoring may be overly comprehensive since it “includes a long list of
physical and chemical parameters incl uding aesthetic parameters, conventional
parameters, nutrients, metals, organics, mi crobiological, toxins and pesticides …
489
many of which are not indicative of the mill effluent” . The Pre-Commissioning
Review therefore recommended that the list of parameters be reviewed periodically
490
and unnecessary parameters eliminated .
4.70 The Pre-Commissioning Review likewise concluded that the monitoring
program for biological organisms went beyond what was required for prudent
biological monitoring, finding that the “b iological monitoring program is very
extensive and perhaps more ambitious than necessary” 491. It found that the
monitoring program for soil, flora and fauna went beyond what is generally required
in other jurisdictions, noting that “[m] onitoring of soil quality, flora and fauna
exceeds the commitments made in the CIS” and that the monitoring of the
“terrestrial indicators” required for Botn ia “is not a conventional requirement of
492
most pulp mills” . It found:
The program includes a comprehensive sampling and analysis of
sediment, plankton, invertebra tes and fish collected from
488Ibid.
489Ibid., p. 10.7.
490Ibid.
491Ibid., p. 10.8.
492Ibid.
- 237 - reference (Nuevo Berlin), near-f ield exposure (Yaguareté Bay)
and far-field exposure (Las Ca ñas) areas. Sampling is
completed at a quarterly interval (every 3 months) for sediment,
plankton and invertebrates, and a semiannual interval (every 6
months) for fish. This freque ncy is perhaps too ambitious
considering it can take 6 months or more to process all of the
samples and report on the monitoring results 493.
4.71 In fact, the Pre-Commissioning Review noted that the Botnia monitoring
program was much more extensive than the monitoring programs in Canada and
other well-regulated jurisdictions: “In comparison, pulp mills in Canada are required
to complete this type of environmental effects monitoring program every 3 years,
494
and most other countries have no such requirement.”
4.72 With respect to fish, the IFC’s experts concluded that the post-operational
monitoring to be conducted by Botnia went beyond the stringent requirements of the
Canadian guidelines. Moreover, as they observed in the Final CIS, because the
effluent plume from the plant’s diffuser is small and dilutes to a ratio of 100:1 within
35 meters of the discharge site, Canadian regulations would not require any post-
495
operational fish monitoring .
4.73 The IFC’s technical experts reaffirmed their endorsement of the
monitoring regime in their assessment of the Botnia plant’s operational performance,
where they observed that “comprehensive monitoring of air and water emissions was
undertaken”, which “provide a detailed ch aracterization of the quantity and quality
of the air and water emissions, and a direct measure of the operational efficiency and
493
Ibid.
494Ibid., p. 10.9. In light of these differences, thPre-Commissioning Review stated that it
would be acceptable to modify the monitoring program.
495IFC, Cumulative Impact Study, Uruguay Pulp Mills, Annex D (hereinafter “Final CIS,
Annex D”), p. D7.13 (September 2006). UCM, Vol. VIII, Annex R176.
- 238 - 496
performance of the mill” . The experts expressly found that the information is
sufficient “to verify that the mill is operating according to the authorization limits
497
specified in the environmental authorizations for the mill” .
4.74 The IFC’s experts likewise reconfir med their endorsement of Uruguay’s
independent monitoring efforts, noting that “[m]onitoring has also been conducted
by DINAMA” as well as by OSE and other “independent laboratories” to “evaluate
the potential effects of the mill operations on the ambient environment” 498, and that
“[c]omprehensive field surveys have been undertaken along the Rio Uruguay to
499
measure water quality” . Uruguay’s experts share the same view: they deem the
monitoring program “comprehensive and we ll designed” and “more than sufficient
500
to serve the purpose of identifying future changes.”
4.75 In sum, the Botnia plant is subject to a comprehensive post-operational
monitoring regime that meets independent expert approval and which is fully
capable of detecting any unexpected envi ronmental impacts, no matter how unlikely
they might be.
4.76 None of the allegations Argentina ma kes in the Reply regarding the scope
or effectiveness of Uruguay’s or Botnia ’s monitoring program has any merit.
Despite its complaints, Argentina did not identify a single parameter it contends
496Environmental Performance Review, op. cit., p. 1.2. UR, Vol. IV, Annex R98.
497Ibid.
498Ibid.
499Ibid. The IFC’s technical experts also approve d of Uruguay’s monitoring regime for air,
finding that “an air monitoring station has been constructed near the City of Fray Bentos to
measure ambient air quality”. Ibid.
500
Exponent Report, op. cit., pp. 3-1 & 3-5. UR, Vol. IV, Annex R83.
- 239 -should be monitored but is not 501. Moreover, although Argentina cites a long-
outdated report by DINAMA that observed that an early draft of Botnia’s effluent
monitoring plan did not include certain parameters encompassed in Uruguay’s
general discharge standard, Argentina fails to acknowledge that the final version of
the monitoring plan covered all relevant parameters and, thus, was approved by both
502
DINAMA and the IFC’s independent experts . Also baseless is Argentina’s
503
assertion that the frequency of the monitoring is inadequate . Argentina does not
identify which parameters should be subject ed to more frequent analysis, nor does
the Reply cite any scientific or technical authority for its assertion that the frequency
of the monitoring is insufficient, and Uruguay is aware of no such authority. Indeed,
many parameters are monitored on a da ily basis, including chemical oxygen
demand, biological oxygen demand, total suspended solids, pH and conductivity . 504
4.77 Nor is Argentina aided by citing the early DINAMA report’s statement
505
that Botnia should implement a program to monitor metabolites . Botnia
conducted four baseline studies of the foll owing metabolites in fish: resin acids,
chlorinated phenols and plant sterols 506. To date, it has also conducted one post-
501AR, para. 3.219.
502Botnia Operation Monitoring and Follow-Up Plan, op. cit. UR, Vol. IV, Annex R42.
503AR, para. 3.220.
504See DINAMA Resolution No. 0148/07, Approval of Wastewater Treatment System for the
Botnia Plant (hereinafter “Wastewater Treatment System Approval”) Sec. 1.3, Table III (4 July
2007). UCM, Vol. X, Annex 225.
505
AR, para. 3.219.
506
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated Phenols and
Plant Sterols in Fish from Rio Uruguay – Part I, op. cit. UR, Vol. II, Annex R28. Jukka Tana,
A Baseline Study on Concentrations of Resin Acid s, Chlorinated Phenols and Plant Sterols in
Fish from Rio Uruguay – Part II, December 2005, op. cit. UR, Vol. II, Annex 30. Jukka Tana,
A Baseline Study on Concentrations of Resin Acid s, Chlorinated Phenols and Plant Sterols in
- 240 -operational study of fish metabolites, the re sults of which confirm that operation of
the plant has caused no impacts to the fish communities with respect to these
507
metabolites .
4.78 Argentina’s Reply faults Uruguay for allegedly having not committed
itself to conduct its post-operational monitoring in precisely the same manner as the
508
pre-operational monitoring . But Argentina has not cited any authority for its
assertion that post-operational monitoring must, in each and every respect, precisely
replicate the corresponding pre-operational m onitoring. Nor could it, since such a
509
system would be contra ry to accepted practice . Indeed, Argentina does not
impose that requirement for post-operati onal monitoring of its own cellulose
plants . Regardless, Botnia’s post-operationa l monitoring does, in fact, replicate
the final phase of its pre-operational monitoring.
4.79 The Court need not be detained by Argentina’s assertion that certain
suggestions for monitoring made in the Fina l CIS vary in unimportant respects from
511
the final Botnia monitoring plan . The Final CIS made clear that the suggestions
Fish from Rio Uruguay – Part III, November 2006, op. cit. UR, Vol. II, Annex 38. Jukka
Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated Phenols and Plant
Sterols in Fish from Rio Uruguay – Part IV, April 2007, op. cit. UR, Vol. III, Annex R46.
507
Jukka Tana, Concentrations of Resin Acids, Chlorinated Phenols and Plant Sterols in Fish
from Rio Uruguay, Monitoring St udies in the Recipient of Bo tnia Pulp Mill, December 2007,
op. cit., p. 22. UR, Vol. III, Annex R53.
508
AR, para. 3.223.
509
See Pre-Commissioning Review, op. cit., p. 10.7. UR, Vol. III, Annex R50.
510
Secretariat of the Environment and Sustaina ble Development, Restru cturing Plan for the
Cellulose and Paper Industry: Technical Eval uation Manual, pp. 10-11 (January 2007). UCM,
Vol. III, Annex 49.
511AR, para. 3.223 (describing differences relati ng to locations and frequency of sampling).
Although Argentina notes in the same paragraph and in paragraph 3.9 that the number of
sampling locations changed after the preparation of the Final CIS, it conspicuously fails to note
- 241 -contained therein were just that -- sugges tions -- and not binding requirements that
512
permitted no variance . Further, Argentina fails to note that the authors of the
Final CIS were subsequently tasked by the IFC with reviewing the final Botnia
monitoring plan and they did not find any deficiencies with Botnia’s monitoring
program. Had they identified any such issues, they were obligated to report them to
the IFC. Likewise, the IFC’s six-month post-operational report does not contain any
hint that the pre-operational monitoring was anything other than sufficient to use as a
baseline against which to measure any post-operational impacts513. To the contrary,
514
the IFC’s technical experts expressly endorsed it.
B. T HE BOTNIA PLANT ’SE XCEPTIONAL E NVIRONMENTAL P ERFORMANCE H AS NOT
IMPACTED THE U RUGUAY RIVER
4.80 In the paragraphs that follow, Uruguay demonstrates the superior
environmental performance of the Botnia plant through the date of submission of
this Rejoinder. First, Uruguay shows that the plant has complied with all applicable
regulatory standards for its effluent, i.e., the concentration and load of chemicals in
the water discharged from the plant into the river. Further, Uruguay shows how the
plant’s performance is in complete accord with the predictions of the IFC’s technical
experts in the Final CIS regarding the effluent’s characteristics.Second, Uruguay
that the Final CIS was prepared assuming that tw o plants would be constructed, and that some
of the points were selected specifically to m onitor discharges from the now cancelled ENCE
plant. Final CIS, op. cit., p. 1.1. UCM, Vol. III, Annex 173.
512
Final CIS, Annex D, op. cit., pp. D7.7-7.9. UCM, Vol. VIII, Annex 176.
513Argentina’s assertion that effluent monitoring for the plant should include studies of effluent
plume dispersion fares no better. AR, para. 3.220. A plume dispersion study is included in the
ESAP, Pre-Commissioning Review, op. cit., p. 10.6, UR, Vol. III, Annex R50, and Botnia is
undertaking such a study. The IFC’s technicexperts accordingly found that “Botnia will
conduct an effluent plume delineation study following start-up of the mill”. Ibid.
514See infra, paras. 4.73-4.74.
- 242 -proves that the Botnia plant has had no a ppreciable impact on the Uruguay River by
comprehensively reviewing all relevant water quality characteristics and
demonstrating that operation of the plan t has left each unchanged, exactly as
predicted by the IFC’s technical experts. As noted above, this is all the more
impressive since the performance of a cellu lose plant for cert ain parameters is
expected to improve over time after the “start-up” phase 51.
4.81 Any doubt as to the Botnia’s plan t’s environmental suitability was
dispelled on 10 July 2008, when the IFC published a report entitled Orion Pulp Mill,
Uruguay Independent Performance Monitori ng as required by the International
Finance Corporation, Phase 2: 6-Mont h Environmental Pe rformance Review
(“Environmental Performance Review ”). This report, which was authored by
EcoMetrix -- the same technical experts who drafted the Final CIS -- was prepared
as part of the IFC’s ongoing oversight of the project, and was a requirement of the
ESAP. It serves two purposes : First, it gives the IFC an independent evaluation of
the Botnia plant’s environmental performance by assessing the extensive operational
data collected from the plant’s discharges; thus, the report states that it is intended
“to provide an independent review and analysis of the data on air and water
emissions based on actual performance of the mill during the initial six month
516
period” . Second, it confirms whether, as pr edicted by the Final CIS, the Botnia
plant will not detrimentally impact the river’s environmental quality; as the report
515Environmental Performance Review, op. cit., pp. ES.i-ES.ii. UR, Vol. IV, Annex R98.
516Ibid., p. ES.i.
- 243 -makes clear, its task is “to assess the actual environmental effects as compared to
those predicted in the CIS” 517.
4.82 The IFC’s technical experts who authored the Environmental Performance
Review drew upon the extensive database of monitoring data that had been collected
by Botnia, DINAMA and OSE, as well as other independent laboratories 51. These
experts expressly found that th e data were sufficient to achieve a robust evaluation,
concluding that the “monitoring data provide a direct measure of the emissions from
519
the mill and the associated effects, if any, on the ambient environment” . They
likewise found that the data “provide a basi s to confirm that the authorization limits
for air and water emissions from the mill are protective of human health and the
environment” and a “basis to confirm that the various predictions of environmental
effect are valid” .20
4.83 As shown below, the IFC’s technical e xperts verified (a) that the plant is
not harming the environment; (b) that it is operating in compliance with all
applicable regulations, permits and authorisations; and (c ) that its performance is
consistent with the IFC’s predictions in the Final CIS.
1. The Plant Effluent Complies with Applicable Regulations, Standards and
Predictions
4.84 Both Uruguay and the IFC concur that the effluent of the Botnia plant
complies with all applicable regulatory standards, without exception, and further that
its characteristics are consistent with, or better than, predicted by the IFC’s technical
517
Ibid.
518Ibid., pp. ES.ii & 4.3-4.19.
519Ibid., p. ES.ii.
520Ibid., p. 1.2.
- 244 -experts in the Final CIS. The IFC’s inde pendent experts were categorical in this
regard.
4.85 With respect to the regulatory obligat ions concerning the concentration of
potential pollutants in its effluent, the IFC’s Environmental Performance Review
found that “[t]he mill has complied with the maximum concentration limits specified
by DINAMA for 5-day biochemical oxygen demand (BOD ), total phosphorus, total
5
nitrogen, adsorbable organic halogens (AOX), pH, ammonia, nitrate, fecal coliform,
sulphide, oil and grease, mercury, arsenic, cadmium, copper, chromium, nickel, lead,
521
zinc and dioxin and furan” . The Environmental Performance Review likewise
concluded that the Botnia plant had satisfied the requirements with respect to
monthly maximum loading, finding that “[t]he mill has complied with the allowable
monthly maximum load limit as specified by DINAMA for all regulated parameters,
which are chemical oxygen demand, BOD 5, TSS, total phosphorus, total nitrogen
522
and AOX” .
4.86 The IFC’s technical experts likewise concluded that their predictions in the
Final CIS regarding the plant’s anticipa ted environmental performance were borne
out by its actual performance and, indeed , for many parameters, that performance
exceeded expectations. The Environmental Performance Review found that “[o]n a
production basis, the monthly maximum lo ad for COD, TSS, ammonia, total
nitrogen and total phosphorus was below the expected load as predic ted in the CIS.
The monthly load for BOD was consistently below the expected load following the
5
521Ibid., p. ES.ii. The only exception was a brief, two-hour exceed ance of TSS on one
occasion, for which corrective action was taken and a contingency repor t prepared and filed
with DINAMA. Ibid., p. 3.1.
522Ibid., p. 3.1.
- 245 -first month of operation and after the requi red period to initialize the biological
treatment system.” 523 In sum, the IFC’s experts found: “After six months of
operation, all indications are that the mill is performing to the high environmental
standards predicted in the EIA and CIS, and in compliance with Uruguayan and IFC
standards.” 524
4.87 Uruguay will now describe in de tail the post-operational findings
regarding each of the relevant parameters.
(a) Phosphorus
(i) The Botnia Plant’s Superior Performance Regarding Phosphorus
4.88 Argentina has identified phosphorus as the most important parameter in
the Botnia plant’s effluent. As set forth in Chapter 6, Uruguay believes that
Argentina has vastly overestimated the theoretical impacts of phosphorus discharges
from the Botnia plant. Indeed, the abse nce of a phosphorus standard in CARU, and
more importantly Argentina’s own failure to establish any standard for phosphorus
under its own laws, further undermines th e credibility of Argentina’s attack 525.
Nevertheless, Uruguay is plea sed to report that the Botnia plant’s emissions of
phosphorus is far below its regulatory li mits. Uruguayan Decree 253/79 establishes
526
a maximum discharge limit of 5 milligrams per liter . As the Environmental
Performance Review confirms, the average discharge of 0.58 mg/L is a little more
523Ibid.
524Ibid. This conclusion renders moot Argentina’s insinuation in the Reply, e.g., AR, para. 3.9,
that the IFC’s consultants should have used a different loading calculation when they modelled
the impact of the plant.
525UCM, paras. 4.38 & 4.40.
526Decree No. 253/79, op. cit., Art. 11(2). UCM, Vol. II, Annex 6.
- 246 -than one tenth of that regulatory limit, a nd at no time did the discharge exceed 1.34
mg/L 527.
4.89 Indeed, the Botnia plant’s perfo rmance with respect to phosphorus
concentrations is better even than the artificially low discharge standard of 1 mg/L
528
that Argentina asserted should apply . Argentina asserts that “in cases where the
population is equal to more than 10,000 people and the receiving environment is
subject to eutrophication -- these two c onditions are satisfied for Orion -- the
European directive on urban wastewater treatment requires that the phosphorous
529
concentration in the effluent not exceed 1 mg/l” . Leaving aside the fact that the
receiving environment is not subject to eutrophication as a result of the Botnia
plant’s phosphorus discharge 530and that EU law does not apply in this case -- and
531
that even if it did, the law would not apply to cellulose plants -- the phosphorus
concentration in Botnia’s effluent is on average more than 40% lower than that
referenced in the European directive.
527
Environmental Performance Review, op. cit., p. 3.4. UR Vol. IV, Annex R98. Argentina’s
observation that the phosphorus concentration in the plant’s effluent is five to eight times the
concentration in the river, AR, para. 3.9, betr ays the weakness of its argument, because it fails
to note that the discharge, which constitutes le ss than 0.02% of the total river flow, becomes
indistinguishable from the river mere meters from the discharge point. UCM, para. 5.62; Final
CIS, op. cit., p. 4.47. UCM, Vol. VIII, Annex 173. Its attack on the phosphorus removal
efficiency predicted in the Final CIS, AR, pa ra. 3.82 & 3.115, also comes to naught, since the
performance of the plant predicted by the IFC’s experts has been substantiated by the plant’s
actual performance.
528
See, e.g., Second Wheater Report, op. cit., p. 25. AR, Vol. III, Annex 44. AR, para. 3.175.
Of course, because Argentina itself has no enforceable standards for phosphorus, the
“standard” urged in the Reply would apparently apply only to facilities constructed in Uruguay,
but not in Argentina.
529Second Wheater Report, op. cit., p. 25. AR, Vol. III, Annex 44.
530See UR, paras. 6.14-6.24.
531See UR, para. 6.67.
- 247 -4.90 The Botnia plant also emits far below the maximum monthly average
loading requirements for phosphorus established in the plant’s Wastewater
Treatment Plant Authorization. Although the plant has a limit of 0.074 tons per day,
its maximum monthly average discharge is about half that, or 0.046 tons/day. The
efficiency of the plant, measured in kilograms of phosphorus per ton of pulp
produced has been consistent with the prediction by the IFC’s independent experts in
the Final CIS. The Final CIS estimated th e plant would produce at a rate of 0.03
kg/ADt; in the first months of operation, it has averaged 0.026 kg/ADt 532.
(ii) Uruguay’s Efforts to Reduce Phosphorus in the Uruguay River
4.91 Argentina repeatedly stresses the presence of elevated phosphorus levels in
the Uruguay River and the potential envi ronmental impacts th at this condition
533
poses . Although Argentina grossly exaggerate s the potential impacts, it is true
that concentrations of phosphorus in the Uruguay River at various locations exceed
the water quality standard establishe d in Uruguay’s Decree 253/79. As the
Environmental Performance Review noted, the phosphorus levels “are attributed to
natural and anthropogenic sources derive d throughout the watershed of the Río
Uruguay, which extends over approximately 365,000 km 2 through portions of
Uruguay, Argentina and Brazil. The presen t and past levels of total phosphorus are
not attributed to the mill effluent discharge.” 534 In other words, the river receives a
significant influx of phosphorus not from th e Botnia plant but from Argentina and
Brazil upstream from the plant. Of course , Uruguay has no authority to control or
532
Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
533AR, paras. 3.26 & 4.161.
534Environmental Performance Review, op. cit., p 4.2. UR, Vol. IV, Annex R98.
- 248 -prevent discharges of phosphorus from Argentina or Brazil. Unfortunately,
Argentina makes no effort to regulate or limit phosphorus discharges into the
Uruguay River from industrial, agricultural or municipal sources within its own
territory. It has not adopted any regula tions in this regard. Nor has CARU
promulgated regulations on phosphorus. Only Uruguay regulates or limits
phosphorus discharge into the river. T hus, the prominent position phosphorus plays
in Argentina’s Reply can be charitably characterised as ironic.
4.92 Although Uruguay is not the sole or even primary cause of the phosphorus
in the river, it has, consistent with its Decree 253/79, made significant efforts to
reduce contributions of phosphorus from its territory to the Uruguay River.
Uruguay’s unilateral efforts will improve the quality of water and, once fully
implemented, will more than offset the total phosphorus discharged from the Botnia
plant. These comprehensive efforts address contributions both from discrete effluent
discharges, such as those of municipal wastewater, and from diffuse or “nonpoint”
sources, such as agricultural and other land-use activities.
4.93 Of most importance, Uruguay’s State Waterworks Agency ( Obras
Sanitarias del Estado or “OSE”) and Botnia have entered into an agreement
pursuant to which the Botnia plant will treat the municipal wastewater of the city of
Fray Bentos 535. This will dramatically reduce nutrients like phosphorus and other
contaminants discharged into the Uruguay River in the immediate vicinity of Fray
Bentos and the Botnia plant 53. Construction is projected to be complete by 2010 537.
535
See Agreement between OSE and Botnia Regarding Treatment of the Municipal Wastewater
of Fray Bentos (29 April 2008). UR, Vol. III, Annex R71.
536
OSE, Discharge of Residual Liquids in the Uruguay River Basin (hereinafter “OSE,
Discharge of Residual Liquids in the Uruguay River Basin”). UR, Vol. II, Annex R13.
- 249 -Once operational, OSE and Botnia will jointly monitor the influent municipal
wastewater to the Botnia plant to ensu re the efficacy of this innovative and
538
collaborative pollution control effort . The Final CIS specifically recommended
that Botnia and the Uruguayan regulatory authorities undertake this effort as a means
to further reduce the plant’s already ac ceptable contribution of phosphorus to the
539
Uruguay River . Specifically, the Final CIS found that the treatment of the Fray
Bentos municipal wastewater by the Botn ia plant “reduces the total loading of
organics and nutrients, in par ticular phosphorus, to the Rio Uruguay” 540 and
“virtually off-sets the net loading of organics and nutrients from the Botnia
mill[.]”541 By OSE’s calculations, this process should reduce phosphorus discharges
in the immediate vicinity of the plant by 8.8 tons, which is nearly three quarters of
542
the Botnia plant’s estimated annual discharge of 12 tons .
4.94 OSE is also engaged in a multi-phase d effort to expand and update the
quality of other municipal wastewater systems across Uruguay, including systems
543
that discharge to the Uruguay River . These efforts began long before this
litigation and years before the issuance of the Botnia plant’s AAP. The first phase of
537Ibid.
538
Agreement between OSE and Botnia Regarding Treatment of the Municipal Wastewater of
Fray Bentos, Section 9, op. cit. UR, Vol. III, Annex R71.
539Final CIS, Annex D, op. cit., p. D4.5-4.6. UCM, Vol. VIII, Annex 176.
540Ibid., p. D4.5.
541Ibid., p. D4.6 (emphasis added).
542OSE, Discharge of Residual Liquids in the Uruguay River Basin, op. cit. UR, Vol. II,
Annex R13. See also Final CIS, Annex D, op. cit., p. D4.6. UCM, Vol. VIII, Annex 176.
543World Bank, Press Release, “World Bank Approves US$50 Million to Expand and Upgrade
Water and Sanitation Services,” available at http://web.worldbank.or g/external/projects/
main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P10
1432 (28 June 2007) (last visited on 9 July 2008). UR, Vol. III, Annex R69.
- 250 -this work, primarily devoted to evalua ting the current conditions of water and
544
sanitation services, was supported by a World Bank loan approved in June 2000 .
On 28 June 2007, the World Bank approved a second loan of US$50,000,000 to
support the second phase of the project, which will include upgrading and
rehabilitating existing wate r and sewage treatment plants throughout Uruguay,
including those cities whose municipal di scharges are likely to affect phosphorus
levels in the Uruguay River 545. Among the actions bei ng undertaken, OSE will
install an advanced wastewater treatment system with special chemical treatment for
nutrients, including phosphorus, for a majori ty of Salto, a city of approximately
100,000 people. This system will remove approximately 85% of the phosphorus
from the sewage 546, thus providing a significant reduction in Uruguay’s phosphorus
547
contribution to the river . In fact, OSE estimates indica te that this installation will
reduce phosphorus discharges to the Ur uguay River by approximately 25 tons
annually, or more than twice the anticipated discharge from the Botnia plant 548.
Construction is projected to be completed by 2010. This and other related efforts
will further improve the quality of water in the river and further offset any
incremental contribution of phosphorus from Botnia.
54Ibid.
54Ibid.
546OSE, Discharge of Residual Liquids in the Uruguay River Basin, op. cit. UR, Vol. II,
Annex R13.
547OSE also plans to upgrade the municipal wast ewater system for other cities, including
Artigas and Mercedes; the improvements at those cities will result in 85% phosphorus removal
capacity. Ibid. Neither city discharges directly to the Uruguay River, but these efforts reflect
Uruguay’s overall commitment to reduce phosphorus.
548
Ibid.
- 251 -4.95 Finally, Uruguay, through its Ministry of Livestock, Agriculture and
Fishing, is developing a comprehensive c onservation and control plan to reduce
549
phosphorus and other nutrient contributions from land-use activities . The primary
activities targeted by the plan will be farming and livestock practices, both of which
contribute phosphorus and other nutrients to water bodies as a result of soil erosion
and run-off containing fertilizer and manure 550. The plan creates a team of experts
from the public and private sectors to identify and implement strategies for soil
conservation and reduction of nutrient discharges. It requires an evaluation of the
sources of nutrient discharges, the implementation of best management practices and
the development of education and enforcement programs.
4.96 In short, the comprehensive effo rts to reduce phosphorus by Uruguay
target the significant sources of contribut ion from Uruguay’s territory. When fully
implemented, they will more than offset the small discharge of phosphorus from the
Botnia plant. The efforts will render the conclusions of the Final CIS all the more
conservative as its analysis did not take into account these changes, including the
treatment of the Fray Bentos municipal wastewater by the Botnia plant. These
efforts conclusively refute Argentina’s claim that Uruguay has not made appropriate
efforts to reduce phosphorus levels. Urugua y’s efforts stand in stark contrast to
Argentina’s historic neglect of phosphorus emissions from its territory, including its
complete failure to regulate the discharge of phosphorus.
549Affidavit of Eng. Andrés Berterreche, Unders ecretary of Livestock, Agriculture and Fishing
of Uruguay (11 July 2008) UR, Vol. IV, Annex R95.
550Ibid.
- 252 - (b) Nitrogen
4.97 Like phosphorus, the Botnia plant has exhibited superior performance with
respect to nitrogen. The concentration of nitrogen in the effluent is far below the
regulatory limit. The Botnia plant must maintain an annual nitrogen concentration
of no more than 8 mg/L 551. In contrast, if the Botnia plant were located on the
Argentine side of the river in Entre Ríos , its discharges of nitrogen would not be
552
subject to any limit . The annualized performance to date is below this limit, and
on average has been less than half the limit. Moreover, Argentina concedes that a
well run cellulose plant should have an effluent concentration of nitrogen of 2-4
553
mg/L . The average concentration of nitrogen for the first six months of operations
is 3.4 mg/L, well within the range identified by Argentina 554.
4.98 The Botnia plant is also compliant with the nitrogen requirements in its
Wastewater Treatment System Approval, which establishes a maximum monthly
555
average loading requirement of 0.74 tons per day . In fact, in the month with the
highest load, December 2007, the monthly load was less than half the maximum
monthly average, and the loadings for all of the other months have been significantly
556
less . Similarly, the average discharge of nitrogen has been well within the Final
551
In the Initial Environmental Authorisation, DINAMA established an annual concentration
limit for total nitrogen. Botnia AAP, op. cit., Art. 2(z). UCM, Vol. II, Annex 21
552
Regulatory Decree No. 5837, Government of Entre Ríos, Exhibit 1 (26 December 1991).
UCM, Vol. III, Annex 42.
553
AR, para. 3.111.
554
Environmental Performance Review, op. cit., p. 3.4. UR Vol. IV, Annex R98.
555
Wastewater Treatment System Approval, op. cit., Table 1. UCM, Vol. X, Annex 225.
556
Environmental Performance Review, op. cit., at 3.9. UR, Vol. IV, Annex R98.
- 253 -CIS estimate of 0.26 kg/ADt 557. In that regard, the IFC’s technical experts noted that
“[o]n a production basis, the maximum m onthly load was 0.22. kg/ADt during the
initial month of operation, and reduced to the range of 0.06 to 0.14 kg/ADt
thereafter. In comparison, the expected maximum monthly load predicted in the CIS
558
was 0.26 kg/ADt.”
(c) Biological Oxygen Demand
4.99 The Botnia plant’s performance regarding biological oxygen demand
(BOD) has been equally ex ceptional. Decree 253/ 79 establishes a maximum
559
effluent concentration for BOD of 60 mg/L . Botnia has always remained below
this limit. The effluent concentration of BOD has decreased since the plant began
operations 56, and over the first six months of operation averaged 12 mg/L 561, about
20% of the applicable standard. The IFC’ s technical experts confirmed this finding,
concluding that the “mill effluent” is “well below the daily maximum permit
562
limit” . In addition, DINAMA has estab lished a maximum monthly loading
average for BOD of 2.6 tons/day. The plant has performed far better, with a
maximum load of 1.2 tons/day during November and loads ranging between 0.5 and
563
0.9 tons per day thereafter . As the IFC’s technical e xperts concluded, the plant’s
557Ibid., p. 3.4.
558Ibid.
559Decree 253/79, op. cit., Art. 11(2). UCM, Vol. II, Annex 6.
560Environmental Performance Review, op. cit., p. 3.7. UR, Vol. IV, Annex R98.
561Ibid., p. 3.3.
562Ibid.
563Ibid.
- 254 -“loads are well below the permit limit” 564. Regarding the IFC’s performance
projections, the Environmental Performance Review found that “[t]he monthly load
for BOD wa5 consistently below the expected load following the first month of
operation and after the required period to initialize the biological treatment system”.
4.100 Tellingly, if the plant were located across the river in Entre Rios Province
in Argentina, it would be subject to the much less stringent standard for BOD of 250
mg/L -- that is more than four times higher than the Uruguayan standard and 20
times higher than Botnia’s actual performance 565. One can only express surprise at
Argentina’s questioning of Uruguay’s commitment to the environment when
Argentina itself has established much less stringent environmental standards -- and,
as discussed above, in the case of phosphorus and nitrogen, no standards at all.
(d) Chemical Oxygen Demand
4.101 The Botnia plant’s performance regarding chemical oxygen demand
(COD) has been no less exceptional. It is fully compliant with the regulatory limit
for COD. Botnia’s Wastewater Treatment System Approval obligates the plant to
maintain a maximum monthly average loadi ng limit of 56 tons per day. The plant
566
has averaged less than 50% of the limit . Similarly, the plant’s average COD
discharge of 9.6 kg/ADt is well below the monthly Final CIS estimate of 15
567
kg/ADt . The IFC’s technical experts confir med the plant’s superior performance
regarding COD, finding that its “maximum monthly load” was “well below the
564Ibid.
565Regulatory Decree No. 5837, Government of Entre Ríos, Exhibit 1, op. cit. UCM, Vol. III,
Annex 42.
566Environmental Performance Review, op. cit., p. 3.3. UR, Vol. IV, Annex R98.
567Ibid.
- 255 -permit limit” and that on a “production ba sis” the plant’s performance was better
568
than “predicted in the CIS” .
(e) Total Suspended Solids
4.102 The evidence establishes the Botnia plant’s excellent performance
regarding total suspended solids (TSS). Decree 253/79 sets a maximum discharge
569
limit of 150 mg/L for TSS . Concentrations of TSS in the effluent are far below
this limit, averaging only 24 mg/L 570. The Botnia plant has also performed well
within the 3.7 tons per day maximum monthl y average load limit established in the
571
Wastewater Treatment System Approval . Moreover, as the IFC’s independent
experts found, the plant’s average TSS discharge of 0.92 kg/ADt “is below the
572
expected load of 1.3 kg/ADt predicted in the CIS” .
(f) AOX
4.103 Also first-rate is the plant’s performance regarding AOX. The Wastewater
Treatment System Approval established a maximum monthly average of 0.56 tons
573
per day for AOX. The aver age monthly load per day of 0.13 tons per day is less
than one quarter of this limit. The plant’s performance is also better than anticipated
by the IFC, whose independent experts noted that the load of 0.05 kg/ADt was “well
574
below the expected value predicted [in] the CIS of 0.15 kg/ADt” .
568
Ibid.
569
Decree 253/79, op. cit., Art. 11(2). UCM, Vol. II, Annex 6.
570
Environmental Performance Review, op. cit., p. 3.3. UR, Vol. IV, Annex R98.
571
Ibid.
572
Ibid.
573
Ibid., p. 3.4.
574
Ibid.
- 256 - (g) Dioxins and Furans
4.104 The results for dioxins and furans are equally outstanding. As required by
its Wastewater Treatment System Approval, Botnia has monitored dioxin and furan
concentrations in its effluent, includi ng the key congeners of 2,3,7,8-TCDD for
dioxins and 2,3,7,8-TCDF for furans 57. Even using sophisticated methodology
capable of detecting the extremely low concentration of one part of dioxin per
quadrillion of water, these key congeners are below detection levels 576. As the IFC’s
technical experts found:
Dioxins and furans are generally not associated with modern
pulp mills. As reported in the CIS, experience at other modern
ECF mills throughout the world has shown that the most toxic
congeners of dioxins and furans are not produced in the
bleaching process at detectable levels, and that the less toxic
congeners, although potentially detectable, are generally not
elevated above ambient levels.
This statement that dioxins and furans are not associated with
modern mills is also true for the Orion mill. The most toxic
congeners 2,3,7,8-TCDD and 2,3,7,8-TCDF were non-detectable
at the 1pg/L (as TEQ) level based on three separate analyses 577.
4.105 Accordingly, Argentina’s concerns regarding dioxins and furans,
misleading as they were to begin with in light of modern pulp mill technology, have
been proven completely unfounded by the Botnia plant’s operating performance.
(h) Metals
4.106 Nor has the Uruguay River been harmed in any manner by the discharge of
metals. Decree 253/79 establishes maximu m effluent discharge limits for various
575See (Second) Torres. Aff., op. cit. , Annex C. Environmental Performance Review, op. cit.,
p. 3.4. UR, Vol. IV, Annex R98.
576Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
577
Ibid., p. 3.4.
- 257 -metals, including arsenic, cadmium, copper, chromium, mercury, nickel, lead and
578
zinc . No exceedances of the Uruguayan regul atory limits have been detected in
579
the Botnia plant’s effluent . Indeed, as expected for an industrial process where
metals are very sparingly used 580, the presence of metals in the effluent is so low that
it is generally not detectable 581. The IFC’s technical experts explain: “Metals are
582
generally not of concern in modern pulp mills.” Unsurprisingly, therefore, they
found that concentrations of arsenic, ca dmium, copper, chrome, iron, mercury,
nickel, lead and zinc “in the final effluent are below the respective detection limits
and well below the respective permit limits” 583. Thus, the metals that Argentina
identified as a concern (iron, copper, chrome, zinc, cadmium, nickel and arsenic) in
584
its Reply simply have nothing to do with the Botnia plant.
4.107 The absence of metals in Botnia’s discharge renders irrelevant Argentina’s
assertions about the potential detrimental environmental effects of metals in the
environment . Even if those arguments had meri t, they simply have no relevance
to the operation of the Botnia plant.
578Decree 253/79, op. cit., Art. 11(2). UCM, Vol. II, Annex 6.
579Environmental Performance Review , op. cit., p. 3.4. UR, Vol. IV, Annex R98. See also
(Second) Torres Aff., op. cit., Annex C. UR, Vol. IV, Annex R92.
580
See Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
581
Ibid.; (Second) Torres Aff., op. cit., Annex C. UR, Vol. IV, Annex R92.
582
Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
583
Ibid.
584
AR, para. 3.26, 3.73 & 3.96.
585
See, e.g., AR, paras. 3.8, 3.26, 3.30, 3.52-3.53, 3.96, 3.167 & 3.223; Rabinovich Report, op.
cit., pp. 25-27. AR, Vol. III, Annex 43.
- 258 - (i) Acute Toxicity
4.108 As required by its Wastewater Tr eatment System Approval, Botnia
conducts monthly acute toxi city tests for its effluent, using three biological
586
organisms . The tests have revealed no acute toxicity from mill effluent
587
whatsoever . The IFC’s technical experts conc luded that “[m]onthly testing has
been completed following standard protocols using three separate test procedures”
588
and “[t]oxicity analysis shows no lethal response” .
(j) Flow
4.109 With respect to water intake and effluent flow, the plant has also
demonstrated exceptional performance. Compared to a discharge limit of 1 cubic
3 589
meter per second, the plant on average has discharged 0.86 m /s . This is
consistent with the expected discharge rate of 0.83 m /s predicted in the CIS 590.
(k) Other Aquatic Parameters
4.110 Monitoring of the Botnia plant also reveals the outstanding performance of
the plant for other parameters not featured in Argentina’s Reply. The temperature of
the effluent discharge has averaged below the permit limit; the few exceedances
have been brief in duration, and have been found by the IFC not to have any adverse
591
effects . The pH (acidity) of the discharge has been well within permit limits.
586Environmental Performance Review, op. cit., p. 3.6. UR, Vol. IV, Annex R98.
587Ibid. UR, Vol. IV, Annex R98.
588Ibid., p. 3.5. UR, Vol. IV, Annex R98.
589Ibid.
590Ibid., p. 3.2. UR, Vol. IV, Annex R98.
591Ibid. In fact, the exceed ances of the temperature limit corresponded with factors beyond
Botnia’s control such as elevated temperatures in the Uruguay River. Ibid.
- 259 -According to the IFC’s technical experts, th e pH “is within the typical range for the
ambient waters of the Río Uruguay and within the permit limits of 6.0 to 9.0. The
expected pH from the CIS was also within the range of 6.0 to 9.0.” 592 The maximum
colour of the discharge exceeded IFC expectations but the IFC determined that the
difference between the estimate and the initial performance was insignificant and
“within the natural variability” 59.
(l) Air
4.111 Although the plant’s impacts on ai r quality are plainly beyond the
jurisdiction of the 1975 Statute, Uruguay is pleased to report that the Botnia plant
has exhibited exceptional performance in this regard as well. The IFC’s technical
experts found that the “air emissions from the mill have remained well within the
allowable limits specified in the permit issued by DINAMA” 594. Although one
parameter -- NOx -- was somewhat higher than initially anticipated in the Final CIS,
the IFC’s experts attributed this minor va riance to start-up instability, and expected
emissions to decline in the future 595. In any event, NOx emissions are within
DINAMA’s permitted limits, and the IFC’s report indicates that regional monitoring
596
shows no adverse impacts on air quality from the NOx emissions .
592Ibid.
593Ibid., pp. 3.2-3.3.
594Ibid., p. 5.1.
595Ibid., p. 5.1-5.3.
596Ibid., pp. 5.2 & 6.2. The IFC’s experts found that “[t]he concentration of NO x has been
below the threshold concentration of 300 mg/NM 3, approximately 96% of the time (on an
annualized basis), well below the permi ssible 10% frequency of exceedance”. Ibid., p. 5.2.
This is in accordance with the emissions limit se t in Article 2(t) of the Botnia AAP. Botnia
AAP, op. cit., Art. 2(t). UCM, Vol. II, Annex 21. Argentina grossly mischaracterizes the
nature of certain events that occurred at the Botnia plant prior to the submission of the Reply in
- 260 -4.112 Further confirming the Botnia plant’s environmental sustainability with
respect to air emissions, the plant is implementing a Clean Development Mechanism
project under the United Nations Framewor k Convention on Climate Change and,
thus, receives Certified Emission Reducti ons for greenhouse gas emissions avoided
597 598
by the project . Indeed, as anticipated in the Final CIS , the plant will be a
significant source of renewable energy that displaces the combustion of fossil
fuels 599.
2. The Botnia Plant Has Not Caused Any Change to Ambient Water Quality in the
Uruguay River
4.113 As explained above, the characteristics of the Botnia plant’s effluent are,
without exception, within its strict regulato ry limits and entirely consistent with the
January 2008. Although Argentina asserts that “[ d]ès les dernières étapes de sa construction
Orion a été à l’origine d’événements divers qui ont eu un impact négatif sur l’écosystème du
fleuve Uruguay et de ses zones d’ influence, notamment la santé des habitants, ainsi que celle
des ouvriers et des autres employés de Botnia, dans les régions voisines” (“[s]ince the final
stages of its construction, Orion [Botnia] ha s caused various events having a negative impact
on the ecosystem of the Uruguay River and its infl uence zones, especially the health of its
inhabitants as well as that of the workers and other Botnia employees in the neighboring
regions”) (AR, para. 0.10) the sole evidence it cites are industrial accidents that Argentina does
not even claim to have had an impact on the external environment, and odours. As for the
latter, apart from stronger odours detected twice during the first three weeks of operation,
EcoMetrix identified only four reported occas ions of “mild” odours associated with plant
operations. Environmental Performance Review, op. cit. , p. 6.1. UR, Vol. IV, Annex R98.
Neither justifies Argentina’s sweeping conclusi on that these events have had a “un impact
négatif sur l’ecosysteme du fleuve Uruguay et de ses zones d’influence” (“a negative impact on
the ecosystem of the Uruguay River and its zones of influence”).
597
Botnia Web Site, “CDM Project,” available at http://www.botnia.com/en/default.asp?
path=204,1490,1494,1373 (last visited on 2 July 2008). UR, Vol. III, Annex R76.
598
Final CIS, op. cit., pp. 4.98-4.99. UCM, Vol. VIII, Annex 173.
599
CDM Project, op. cit. UR, Vol. III, Annex R76. As e xplained on Botnia’s Web Site, “[t]he
proposed CDM project consists of about 32 MW biomass-based surplus electricity generations.
Electricity will be generated in the power plant that is part of a pulp mill and will be situated in
the mill site. While the conventional eucalyptu s/hardwood pulp mill with a power plant
produces the electricity required for its own pro cesses, this project is designed to generate
surplus electricity which can be used outside th e mill site. The amount of surplus electricity is
according to preliminary design values about 270 GWh annually. This would be enough to
supply all the electricity consumed by 150,000 Uruguayan homes”. Ibid.
- 261 -projections made by the IFC’s technical experts in the Final CIS. These limits were
designed in order to prevent any harm to th e river from the plant’s effluent. It will
thus come as no surprise that the emissions from the Botnia plant, which comply
with its effluent limits, have not caused any exceedance of the applicable Uruguayan
and CARU water quality standards. Nor ha ve they changed the water quality of the
river. The monitoring results that establis h this conclusion, endorsed by the IFC’s
independent experts and by Uruguay’s, are detailed below.
4.114 As an initial matter, operation of the Botnia plant has not caused any
parameter to exceed the applicable Uruguayan and CARU water quality standard. In
that regard, the IFC’s Environmental Performance Review observed that DINAMA
and CARU have promulgated water quality standards “to protect aquatic life and to
600
permit domestic water use” , and that review of the extensive post-operational
water quality monitoring data showed that operation of the Botnia plant had caused
no exceedances of these limits 60. The Environmental Performance Review thus
found that the Uruguay River’s water quality, after operation of the plant, was of
high quality 60. It found that concentrations of most indicator parameters are well
below the most restrictive Uruguayan and CARU standards. These parameters
include: pH, dissolved oxygen, BOD , nitr5te, turbidity, fluoride, chloride, sulphate,
R.A.S., cyanide, arsenic, bor on, copper, chromium, mercur y, nickel, zinc and total
603
phenols .
600
Environmental Performance Review, op. cit., p. 4.2. UR, Vol. IV, Annex R98.
601Ibid.
602Ibid.
603Ibid. The only exceptions noted by the Environmental Performance Review were “bacteria,
total phosphorus and iron”, which it observed had prior to the commencement of operations of
- 262 -4.115 The IFC’s experts specifically found that the Botnia plant had not caused
an exceedance of Uruguay’s phosphorus standard 604 (as noted above, neither
Argentina nor CARU has adopted a standard for phosphorus.) In that regard, they
noted that the data for total phosphorus collected during post-operational monitoring
showed that the level of phosphorus in the river was “comparable to the baseline
605
levels previously reported for the Río Uruguay” . Their conclusion with respect to
the role of the Botnia plant was categorical: “The present and past levels of total
phosphorus are not attributed to the mill effluent discharge.” 606 Uruguay’s experts
607
concur with the IFC’s assessment .
(i) The IFC’s technical experts thus f ound that “[a] comparison of the
monitoring data pre- and post-commissioning of the mill shows that the water
608
quality of the Río Uruguay has not changed as a result of the mill” . They came to
this unambiguous conclusion after conducting a detailed review to compare water
quality in the river both before and after the plant began to operate 609. Indeed, these
impartial experts concluded that, with respect to phosphorus, “[t]otal phosphorus
levels were generally lower post-start-up as compared to” the pre-operational
the Botnia plant, already “exceeded the most restrictive standard prior to commissioning of the
mill due to natural and anthropogenic sources throughout the watershed”. Ibid.
604Ibid.
605Ibid.
606Ibid.
607Exponent Report, op. cit., pp. 3-10-3-11. UR, Vol. IV, Annex R83 (“[E]ven during start-up,
the facility … was not impacting nutrient levels within the receiving waters of the river”).
608Environmental Performance Review, op. cit., p. 4.1 (emphasis added). UR, Vol. IV, Annex
R98.
609See, e.g., ibid.
- 263 - 610
baseline . Their conclusion was confirmed by a “statistical analysis”, which
demonstrated that “the concentration of most parameters is not significantly different
between upstream and downstr eam monitoring stations at the 95% confidence
level” 611. In sum, the IFC’s experts concluded, just as they had predicted in the
Final CIS, that “[t]he water quality between the mill and Fray Bentos is comparable
to the water quality further upstream beyond the influence of the mill indicating that
the mill has not affected water quality within the Río Uruguay” 61.
4.116 Uruguay’s experts fully concur with the IFC’s experts regarding the
613
Botnia plant’s lack of impact on water quality . So do independent Argentine
experts. As one Argentine news outlet concluded in an article entitled Eight Months
After Start-Up, Expert s Agree that Botnia Does Not Contaminate , based on
interviews with numerous scientists in Ar gentina, there are “no reports that show
that the plant contaminates the environment.” 614 Another Argentine publication
reported: “Almost eight months after starting up, the Botn ia plant is passing one of
610Ibid., p. 4.3 (emphasis added).
611Ibid., p. 4.4. This statistical analysis include d all parameters that Argentina has indicated
are of concern, plus many others: temperature, conductivity, pH. sechi depth, dissolved oxygen,
bacteria, BOD 5,TSS, phosphate, total phosphorus, organic nitrogen, total nitrogen, nitrite,
nitrate, ammonia, AOX, colour, turbidity, alka linity, calcium, hardness, magnesium, sodium,
potassium, fluoride, chloride, sulphate, silica, silicon, R.A.S., total cy anide, arsenic, boron,
cadmium, copper, chromium, iron, mercury, nick el, lead, selenium, zinc and total phenols.
Ibid.
612
Ibid., p. 4.1 (emphasis added).
613Exponent Report, op. cit., pp. 3-10-3-11. UR, Vol. IV, Annex R83.
614Infobae.com, “Eight Months After Start-up, Experts Agree that Botnia Does Not
Contaminate” (3 July 2008). UR, Vol. IV, Annex R93.
- 264 -its most difficult tests: the scrutiny of Argentine experts who are starting to
acknowledge that the cellulose production is not polluting the Uruguay River.”
4.117 In sum, there is no evidence to support Argentina’s predictions of harm to
the river. To the contrary, the evidence conclusively demonstrates that the Botnia
plant has had no detrimental impact.
Section III.
Uruguay’s Continuing Commitment to Protect the River
4.118 As should now be readily apparent, Uruguay has undertaken extraordinary
measures to ensure that the Botnia plan t does not degrade the Uruguay River or its
biota. This has included insisting upon a pre-operational monitoring program to
establish a comprehensive baseline against which to measure any potential impacts,
and an equally far-reaching post-operati onal monitoring regime to compare the
river’s environmental quality against the hi storical record. The previous Section
proved that, to date, the Botnia plant has performed precisely as anticipated, namely,
with world-class environmental performance that has resulted in no perceptible
impact on the river. In this Section, Uruguay demonstrates its commitment to
remaining vigilant for any impacts, and its equal commitment to taking whatever
measures are necessary to ensure that the Botnia plant continues to operate in an
environmentally responsible manner.
A. CONTINUED P OST-O PERATIONAL M ONITORING
4.119 Uruguay is itself continuing to c onduct and to receive from Botnia
comprehensive effluent and environmental quality data that allows it to exercise
615El País Digital, “Argentine Experts Confirm that Botnia Does Not Pollute the River” (4 July
2008). UR, Vol. IV, Annex R94.
- 265 -strong oversight over Botnia, and will do so th roughout the life of the plant. In that
regard, Botnia’s Wastewater Treatment System Approval requ ires it to submit
detailed reports that allow the Uruguayan re gulatory authorities to evaluate the
environmental performance of the plant’s effluent treatment system and its
optimization of water use 616. Botnia is also obligated to submit to DINAMA
617
bimonthly reports on the effluent treatment plant’s performance . Further, Botnia
must provide to DINAMA the comprehens ive environmental quality data it is
obligated to collect. In combination with DINAMA’s own monitoring (discussed in
Section 1), these reports ensure that Ur uguay is fully apprised of the plant’s
environmental performance and potential impacts so that it can take timely, and if
necessary, immediate corrective action in the unlikely event the plant’s discharge
exceeds its regulatory limits or impacts unexpectedly materialise.
B. C ONTINUED IFCO VERSIGHT
4.120 The IFC is also committed to overseeing the environmental performance
of the Botnia plant through the work of its independent technical experts, at least
through 2009. In that regard, the Indepe ndent Monitoring of Environmental and
Social Performance requirement of the ESAP requires that the IFC’s experts conduct
two further reviews of the Botnia plant’s environmental, health and safety
monitoring data, the first to be comple ted in November 2008, and the second in
November 2009. Each evalua tion must assess the actual environmental effects as
compared to those predicted in the Final CIS, and must identify any variances with
616
Wastewater Treatment System Approval, op. cit. , Sec. 2. UCM, Vol. X, Annex 225.
(Second) Torres Aff., op. cit., Secs. 5-6. UR, Vol. IV, Annex R92.
617
Wastewater Treatment System Approval, op. cit., Sec. 2(a). UCM, Vol. X, Annex 225.
(Second) Torres Aff., op. cit., Secs. 5-6. UR, Vol. IV, Annex R92.
- 266 -respect to the limits described in the Final CIS, including with respect to the
requirements of IPPC BREF, DINAMA, and the World Bank and IFC. The IFC’s
technical experts are also required to review social monitoring data to assess the
plant’s impacts on housing, policing, health care, education, employment, tourism,
fishery resources, farming resources and bee-keeping. These evaluations must
confirm whether Botnia has met all commitments detailed in the ESAP 618.
C. U RUGUAY S O NGOING R EGULATORY O VERSIGHT AND COMMITMENT TO P REVENT
U NACCEPTABLE IMPACTS TO THE RIVER
4.121 The regulatory process is a continuing one. In addition to Uruguay’s
regular scrutiny of monitoring and effluent data, and its authority and commitment to
take action in the event of unacceptable impacts, Botnia must obtain a renewal of its
AAO every three years 619. This renewal requirement ensures that operating
procedures will continue to be state-of-t he-art, and that the plant continues to
620
provide the highest standard of environmental protection . The renewal process
includes revision and updating of the proj ect’s environmental management plans,
and the need for the plant to obtain new approvals with respect to emissions,
including effluent discharges2.
4.122 Uruguay is fully confident that the Botnia plant will continue to exhibit
superior environmental performance; and to ensure that it does, Uruguay has
mandated a detailed legal regime that gives its regulatory authorities the
unquestioned ability to take whatever actions are necessary to enforce compliance.
618Pre-Commissioning Review, op. cit., p. 10.1. UR, Vol. III, Annex R50.
619UCM, para. 1.16.
620UCM, para. 1.16.
621UCM, para. 1.16.
- 267 -4.123 Botnia is required as a matter of ge neral Uruguayan law and as a specific
obligation of its AAO to operate in compliance with Uruguay’s environmental laws
and CARU standards. As Uruguay show ed in the Counter-Memorial (and which
Argentina has not disputed), Uruguayan law prohibits actions or activities that cause
unacceptable environmental impacts, and MVOTMA has an affirmative duty to deny
authorisation for any activities that will cause prohibited impacts to the
environment 622. Should Botnia’s performance fall short of this mark, Uruguay has
the regulatory authority to take action, up to and including the authority to order that
Botnia implement additional protective measures or that it cease operation
623
altogether . Although Uruguay has every expectation that the Botnia plant will
continue to be environmentally responsible, Uruguay hereby repeats its commitment
to the Court to use all available legal measures to enforce compliance.
4.124 In sum, Uruguay has both the will and the legal authority to regulate the
Botnia plant appropriately. It has constr ucted a regulatory regime that ensures it
receives comprehensive and timely information about th e plant and its potential
impacts, and it will not shirk from implementing all necessary measures. The Court
can thus have full confidence that the Uruguay River will continue to be fully
protected.
Conclusion
4.125 This Chapter has demonstrated why the Botnia plant continues to receive
accolades from the independent experts at the IFC. As demonstrated by intense
monitoring during the first six months of operation, the plant has performed as
622UCM, para. 7.45.
623UCM, paras. 7.46-7.47.
- 268 -Uruguay and the IFC expected, and there have been no incidents or reports of harm
to the river. To the contrary, operati on of the Botnia plant has left the river
unaffected. These facts prove correct Urugua y’s prior submission to the Court, and
show that Argentina’s forecasts of environmental disaster have come to naught.
4.126 The next Chapter of the Rejoinder, Chapter 5, examines the applicable
substantive law and demonstrates why Urugua y’s authorisation of the Botnia plant
and Botnia’s subsequent operation have fully comported with all applicable
substantive environmental standards in the 1975 Statute and general international
law. Chapter 6 reviews and responds to the claims of Argentina’s hired experts
presented in the Reply. Just as the first six months after start- up have discredited
Argentina’s claims of imminent disaster , Chapter 6 shows why Argentina’s Reply
utterly fails to rebut Uruguay’s proof that th e plant is state-of-the-art and that long-
term operation will damage neither the river nor the surrounding environment.
Chapter 7 responds to the portions of Argentina’s Reply pertaining to the question of
remedies.
- 269 - CHAPTER 5.
THE APPLICABLE LAW REGARDING ENVIRONMENTAL ISSUES5.1 It has already been demonstrated in Chapter 4 that emissions from the
Botnia plant comply with all applicable regulatory standards imposed by Uruguay
and CARU; that there have been no adverse environmen tal impacts since
commencing operation; and that Argentin a has produced no evidence to rebut the
conclusions of the Final CIS that there will be no violation of applicable standards in
the future. Argentina does not seriously dispute these points. However, it continues
to argue that the plant is nevertheless opera ting in violation of Articles 1, 36, and 41
of the 1975 Statute. For this purpose it relies on a very broad and loose interpretation
of the Statute, which, it claims, diffe rs significantly from the 1997 UN Convention
on International Watercourses relied on by Uruguay as an aid to interpretation.
Chapter 2 of this Rejoinder has already set out in detail why Argentina is wrong in
its reading of the Watercourses Convention, and the arguments made there are of
equal relevance to this Chapter. In the following sections, Uruguay will recapitulate
its already comprehensive treatment of the law applicable to the environmental
elements of this dispute 624, and will respond to those poi nts on which there appears
to be continuing disagreement between the Parties. In so doing, there will inevitably
be some points stated in the Reply that ar e not addressed in this Rejoinder. This
should not, however, be taken as an ad mission of the validity of Argentina’s
arguments in any respect. To the contrary, Uruguay stands by the analysis presented
in Chapter 4 of the Counter-Memorial in its entirety.
5.2 Uruguay will show once again that Arge ntina’s arguments with respect to
interpretation of Articles 1, 36 and 41 are misguided. They do not reflect the
624
UCM, Chap. 4.
- 273 -ordinary meaning of those provisions taken in context. Nor are they consistent with
what Uruguay believes th eir object and purpose to be. Under the guise of
evolutionary interpretation Argentina is as king the Court to revise the 1975 Statute
and decide questions of detail that the Statute empowers the Parties to determine
jointly or through CARU, including which substances are to be regarded as
“pollution”, when water quality standa rds should be adopted, and what an
environmental impact assessment is required to assess.
Section I.
The Risk Prevention Regime Created by the 1975 Statute Requires Joint and
Equitable Measures to Promote the Optimum and Rational Use of the River
5.3 Argentina argues that the regime established by the 1975 Statute is
uniquely different from other international instruments. It sees the Statute as
providing specific obligations with respec t to protection of water quality and the
625
river ecosystem . These specific obligations, in its view, give content to the
principle of optimum and rational utilisation of the river set out in Article 1. In
particular it reiterates its claim that an y pollution of the Uruguay River is prohibited
by Articles 36 and 41 626. It also contends again that Articles 1 and 41 of the Statute
require Uruguay to comply with the Convention on Biological Diversity, the
625AR, para. 4.18 (“le Statut de 1975 est un ré gime de protection globale qui énonce des
obligations spécifiques en matière de protection de la qualité des eaux et de l’écosystème du
fleuve”) (“the 1975 Statute is a legal regime involving global protecti on, which sets specific
obligations in terms of the protection of water quality and the river ecosystem”).
626
AR, paras. 4.19-4.20 (“Est interdite toute pollu tion qui porterait atteinte à la protection et à
la préservation du milieu aquatique ou qui m odifierait l’équilibre écologique du fleuve
Uruguay.”) (“Any pollution that would threaten the protection and preservation of the aquatic
environment or that would change the ecological balance of the Uruguay River is prohibited.”).
- 274 - 627
RAMSAR Convention, and the POPS Convention . Finally it argues that “[l]e
principe de l’effet utile des traités internationaux … implique de donner un effet
utile à chacune des dispositions du statut de 1975”, and it invites the Court to take
account of various principles of international environmental law in order to interpret
the Statute in accordance with Article 31(3)(c) of the Vienna Convention on the Law
628
of Treaties . It accuses Uruguay of not acting in good faith, and claims that
Uruguay’s interpretation of Articles 1, 36, and 41 of the 1975 Statute “équivaut à
dénaturer la substance et la fonction des ob ligations prévues par le Statut au mépris
629
du principe pacta sunt servanda” .
5.4 Uruguay has a different view of the object and purpose of the 1975
Statute. Argentina’s attempt to unilaterally impose -- for the first time and in the
context of this litigation -- its own definition of what concentrations of particular
substances constitute “pollution” prohibited by the Statute has no basis in either the
text of the Statute or its object and purpose. As the text demonstrates, the Statute
serves as a basis for co-operation through CARU and for co-ordination of national
policies and regulations in pursuit of the shared goal of equitable and sustainable use
of the waters and biological resources of the Uruguay River. The importance of co-
627AR, para. 4.26 (“Lorsque des clauses de renvoi font mention explicite de la necessité de
prendre en compte d’autres instruments aux fins de l’application et de l’interprétation d’un
traité international, comme c’est le cas des artic les 1 et 41a) du Statut de 1975, les Etats parties
audit traité doivent s’y conformer.”) (“When the referral clauses explicitly mention the need to
take into consideration other instruments for purposes of applying and interpreting an
international treaty, as is the case with Articles 1 and 41 a) of the 1975 Statute, the States party
to that treaty must comply with it.”).
628AR, para. 4.31 (“[t]he principle of useful eff ect of international treaties … implies giving
useful effect to each of the provisions of the 1975 Statute”).
629AR, para. 4.13 (“equivalent to distorting th e substance and function of the obligations
provided for by the Statute despite the principle of pacta sunt servanda”).
- 275 -operation can be observed throughout the Statute. Article 1 refers to the
establishment of “the joint machinery necessary for the optimum and rational
utilization of the River Uruguay”. Article 4 requires the Parties to “agree on
provisions governing safety on the river…”. Article 36 requires them to “co-ordinate
… the necessary measures” to avoid changes in the ecological balance and to control
pests. Articles 37 and 38 require them to “agree on rules governing fishing
activities” and on “maximum catches per species”. Article 41 requires them to
prevent pollution “by prescribing appropr iate rules and measures”. CARU is
specifically empowered by Article 56 to draw up rules governing, inter alia , safety
of navigation, conservation and preservati on of living resources and prevention of
pollution.
5.5 In Uruguay’s view these provisions ar e characteristic of many river
treaties and environmental agreements. They provide a framework for further
agreement and the adoption of more speci fic and detailed rules, which can be
updated as necessary by the Parties, acting either through CARU or in a co-ordinated
manner. In particular, the 1975 Statute identifies the detailed content of its
environmental provisions by reference to ot her instruments, and allows for further
measures to be adopted. It s provisions cannot be seen as a complete code in
themselves. If the Statute itself already provided, as Argentina argues, a complete
and specific regime (“un regime de protection globale”) for the regulation of such
matters, it would scarcely be necessary either to empower CARU to adopt
regulations or to require the Parties to co-ordinate or agree on the necessary
measures.
- 276 -5.6 In its Counter-Memorial, Uruguay did not deny that Articles 1 and 41 of
the 1975 Statute can be read as a referral to other treaties in force between the
Parties. However, for reasons already made clear in the Counter-Memorial and set
out again below, the other treaties relied on are of no assistance to Argentina’s case
because Uruguay is not in breach of any of them.
5.7 Uruguay does not deny that “rational and optimal use” of the waters of the
Uruguay River is “l’objet même du Statut” 630. However, in the words of the
International Law Commission, “the attainme nt of optimal utiliz ation and benefits
entails cooperation between watercourse States through their participation in the
protection and development of the watercourse. Thus watercourse States have a right
to the co-operation of other watercourse Stat es with regard to such matters as flood-
control measures, pollution-abatement programs, dr ought-mitigation planning,
erosion control, disease vector control, river regulation (training), the safeguarding
of hydraulic works and environmental protection, as appropriate under the
circumstances. Of course, for greatest effectiveness, the details of such co-operative
efforts should be provided for in one or more watercourse agreements” 63. That is
precisely how Uruguay sees the object and purpose of the 1975 Statute.
5.8 Uruguay therefore finds no justification for resorting to the principle of
“useful effect” relied on by Argentina in support of its otherwise implausible attempt
to persuade the Court to amend or rewrite the 1975 Statute in accordance with
Argentina’s priorities. The following paragraphs make clear that Uruguay’s
interpretation of Articles 1, 36 and 41 of the Statute finds useful effect for all three
630AR, para. 4.18 (“the very purpose of the Statute”).
631II YbILC (1994) pt. 2, p. 97, para. (5) (emphasis added).
- 277 -articles. The fundamental difference between it and Argentina is that Argentina will
not accept the need for implementation measures to be agreed by both Parties rather
than imposed through unilateral interpretation of the Statute.
5.9 First and foremost a treaty must be interpreted “in accordance with the
ordinary meaning to be given to the terms of the treaty in their context and in the
632
light of its object and purpose” . Uruguay ratified the Vienna Convention in 1982
and accepts that, consistently with the juri sprudence of international tribunals, the
633
Convention’s provisions on interpretation reflect customary international law , and
in that form they govern interpretation of the 1975 Statute.
5.10 Under the principles of interpretation reflected in the Vienna Convention,
the plain wording of Article 36 of the 1975 Statute, taken in context, cannot bear the
meaning attributed to it by Argentina. Article 36 provides: “The Parties shall co-
ordinate, through the Commission, the necessa ry measures to avoid any change in
the ecological balance and to control pests and other harmful factors in the river and
the areas affected by it.” The ILC commentary on the UN Watercourses Convention
refers specifically to Article 36 of the 1975 Statute as a preceden t for Article 20 of
the Watercourses Convention. It points out th at: “The requirement of article 20 that
watercourse States act ‘individually or jo intly’ is therefore to be understood as
meaning that joint, cooperative action is to be taken where appropriate, and that such
action is to be taken on an equitable basi s. For example, joint action would usually
632
Vienna Convention on the Law of Treaties, Art. 31(1).
633
Iron Rhine Arbitration , PCA (2005) para. 45 (“There is no case after the adoption of the
Vienna Convention in 1969 in which the International Court of Justice or any other leading
tribunal has failed so to act.”).
- 278 -be appropriate in the case of contiguous watercourses or those being managed and
634
developed as a unit.”
5.11 The ILC thus confirms that the strai ghtforward purpose of Article 36 is to
affirm the joint responsibility of the Parties, acting through CARU, for co-ordinating
the measures necessary to avoid changes in the river’s ecological balance. It cannot
be understood in isolation from the broade r context of the Statute’s framework for
co-operative action through CARU. Article 36 must be read in conjunction with the
powers over conservation and preservation of living resources and prevention of
pollution conferred on CARU by Article 56 . It can be seen that Article 36
empowers, indeed it requires, the Parties to co-ordinate action they deem necessary
to protect the ecosystem of the river. It is plainly for the Parties to determine –
jointly – when such action is necessary and what action to take in order to protect the
“ecological balance”. It requires co-operati on. It sets an objective. It prohibits
nothing. Emissions from the Botnia plant cannot violate Article 36, but may entail an
obligation to co-ordinate the necessary measures if these do not already exist. On
that basis it is plainly an obligation of conduct, not of result.
5.12 Insofar as phosphorus levels in the river have not so far been the subject of
co-ordinated action by the Parties, the res ponsibility is as much Argentina’s as it is
Uruguay’s. Phosphorus levels are not regulated by CARU, the Parties have not taken
co-ordinated action to control phosphorus levels, and Argentina has never once
suggested that they should. Argentina ad mits that sources discharging into the
Gualeguaychú River (in Argentina itself) cause high concentrations of phosphorus
634
II YbILC (1994) pt. 2, p. 119, para. (4).
- 279 - 635
and organic matter in Ñandubaysal Bay . Implementation of Article 36 in regard to
phosphorus would thus require significant action by Argentina as well as by
Uruguay. In these circumstances it cannot equitably or in good faith be asserted that
phosphorus emissions from the Botnia plant per se violate Article 36 of the 1975
Statute or that this Article prohibits phosphorus emissions. Nevertheless, as shown in
Chapter 4 of this Rejoinder, the IFC’s i ndependent experts have confirmed that the
small discharges of phosphorus from the Bo tnia plant cause no impact to the river,
and Uruguay’s steps to further reduce its own input of phosphorus more than offset
636
those discharges .
5.13 Argentina has also advanced an inte rpretation of Article 41 far removed
from its ordinary meaning. Article 41 provides:
Without prejudice to the functions assigned to the Commission
in this respect, the Parties undertake:
(a) To protect and preserve the aquatic environment and,
in particular, to prevent its pollu tion, 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 bodies.
5.14 Argentina appears to think that Article 41(a) creates an absolute
637
prohibition on pollution . It does not. As Uruguay has pointed out in its Counter-
Memorial, Article 41 creates an oblig ation of due diligence – to prescribe
appropriate rules and measures in order to “protect and preserve the aquatic
635AM, para. 6.32.
636UR, paras. 4.91-4.96 (discussing the connection of Fray Bentos’ municipal discharges to
Botnia’s advanced wastewater treatment fac ility, construction of new wastewater treatment
plants for other cities that discharge into the Uruguay River, and Uruguay’s phosphorus
reduction plan).
637AR, para. 5.159.
- 280 - 638
environment” – not an obligation of result (no pollution) . Moreover, even if
Article 41 does prohibit “pollution,” not a ll emissions into the river constitute
“pollution.” In accordance with the definition of “pollution” under Article 40 of the
1975 Statute, the introduction of substances or energy into the aquatic environment
will constitute prohibited pollution only if they can be shown to have “harmful
effects.”
5.15 In this respect Article 41(a) establishes a precedent followed in other
watercourse treaties and adopted by the International Law Commission in Articles 7
639
and 21 of the UN Convention on International Watercourses . The ILC
638UCM, paras. 4.9-4.13 & 4.69-4.70; see also II YbILC (1994) pt. 2, p. 103, para. (4) (“[t]he
State may be responsible . . . for not enacting n ecessary legislation, for not enforcing its laws
… or for not preventing or terminating an illegal activity, or for not punishing the person
responsible for it”).
639
Article 21 of the UN Convention provides:
Prevention, reduction and control of pollution
1. For the purpose of this article, “pollution of an international watercourse”
means any detrimental alteration in the composition or quality of the waters of
an international watercourse which results directly or indirectly from human
conduct.
2. Watercourse States shall, individually and, where appropriate, jointly,
prevent, reduce and control the pollution of an international watercourse that
may cause significant harm to other watercourse States or to their
environment, including harm to human h ealth or safety, to the use of the
waters for any beneficial purpose or to the living resources of the watercourse.
Watercourse States shall take steps to harmonize their policies in this
connection.
3. Watercourse States shall, at the reque st of any of them, consult with a view
to arriving at mutually agreeable measures and methods to prevent, reduce and
control pollution of an international watercourse, such as:
(a) Setting joint water quality objectives and criteria;
(b) Establishing techniques and practices to address pollution from point and
non-point sources;
(c) Establishing lists of substances the introduction of which into the waters of
an international watercourse is to be prohibited, limited, investigated or
monitored.
- 281 -commentary and learned commentators agre e on viewing Articles 7 and 21 of the
640
UN Convention as obligations of due diligence, not of result . The ILC notes that
the practice of states “indicates a general willingness to tolerate even significant
pollution harm, provided that the watercourse state of origin is making its best
641
efforts to reduce the pollution to a mutually acceptable level” .
5.16 Chapter 4 of this Rejoinder explains in considerable detail how Uruguay
has prescribed appropriate rules in conformity with Article 41 and taken additional
measures to further strengthen contro l of phosphorus emissions from Uruguayan
642
sources . Decree 253/79 on the regulation of water quality sets maximum
643
discharge limits and water quality standards for phosphorus . The permits granted
644
to the Botnia plant require it to comply with these regulations . Monitoring records
to date show that its emissions are well below the required level 645. Argentina has no
such legislation on phosphorus.
640See II YbILC (1994) pt. 2, p. 103 & 124; McCaffrey and Sinjela, 92 AmJIL (1998) 100;
Bourne, 35 CanYbIL (1997) 223-5. An explicit requirement to “exercise due diligence” in the
ILC's 1994 draft of Article 7 was altered to read “take all appropriate measures” in the 1997
Convention text, but no change in meaning results. The same phraseology is used in many
other environmental treaties, including the 1992 UNECE Transboundary Watercourses
Convention, Article 2(1). Other variants include “all measures necessary”. See Part 12 of the
1982 United Nations Convention on the Law of the Sea. Compare the ILC's 1991 draft Article
7, which reads: “Watercourse states shall utilise an international watercourse in such a way as
not to cause appreciable harm to other watercourse states.”
641II YbILC (1994) pt. 2, p. 122, para. 4, and ILC Report (1990) GAOR, A/45/10, 161. See also
1992 UNECE Transboundary Watercourses Convention, Arts. 2(2) and 3. The same point is
evident in Article 5(4)(b) of the 1999 Rhine Convention, which commits the parties only to a
gradual reduction in discharges of hazardous substances.
642UR, paras. 4.91-4.96.
643UCM, paras. 4.19 & 4.39.
644UCM, para. 4.33.
645UR, paras. 4.84-4.110.
- 282 -5.17 Moreover, it is certainly the case that the small amount of phosphorus
introduced into the river by the Botnia pl ant cannot be considered “pollution” under
with Article 40 in light of Argentina’s failure to show that it has “harmful effects”.
This point is developed further in the next section of this Chapter; but for present
purposes, the practice of CARU in allowing phosphorus at present levels shows that
the Parties have not until now treated phosphorus as “pollution” within the terms of
this Article. If these emissions do have ha rmful effects, then why has Argentina not
adopted its own regulations on phosphorus em issions or proposed that co-ordinated
measures be adopted through CARU? 646 Its own conduct belies the proposition that
there is “pollution” of the river within the terms of Article 40. On the contrary, it
shows that phosphorus emissions to the rive r are not prohibited by the Statute, and
will not be until CARU agrees on an appropriate water quality standard. Contrary to
Argentina’s assertions, therefore, Article 41 of the Statute does not prohibit the
introduction of phosphorus into the river.
5.18 As the evidence from independent expe rts has made clear, Uruguay does
not accept that phosphorus emissions from the Botnia plant will cause eutrophication
or result in widespread and persistent changes in overall phosphorus concentrations
in the river 64. However, assuming solely for the purposes of argument that
Argentina is correct in suggesting that the addition of phosphorus emissions from the
Botnia plant will reduce water quality to a level which threatens the aquatic
646
UCM, paras. 4.38-4.40.
647Evaluation of the Final Cumulative Impact Study for the Botnia S.A.’s Bleached Kraft Pulp
Mill (Fray Bentos, Uruguay) with Respect to Im pacts on Water Quality and Aquatic Resources
and with Respect to Commetns and Issues Raised by the Government of Argentina. Dr. Charles
A. Menzie (Exponent, Inc.), p. 26 (July 2007). UCM, Vol. X, Annex 213.
- 283 -environment of the river, it still does not follow that Uruguay would then be in
breach of Article 41, for two reasons.
5.19 First, consistently with the objec t and purpose of the Statute as a
framework for co-operative action, it would plainly be the joint responsibility of
both Parties to take the necessary measur es to reduce phosphorus inputs and restore
648
the quality of the river’s water. The obligation of notification in Article 41(c)
makes clear that the purpose of Article 41 is to enable the parties to “establish
equivalent rules in their respective legal systems”. Far from this being a matter for
unilateral action by Uruguay, as Argentina claims, it is evident that co-operation and
negotiation are required in order to implem ent Article 41 effectively. Both States
must agree on what level of protection is necessary.
5.20 Second, any measures necessary to improve protection of the river from
phosphorus must respect the “equal and corre lative right” of both Parties to make
equitable and reasonable use of the river 64. Uruguay has already drawn attention to
the ILC’s conclusion that where joint action is required “such action is to be on an
equitable basis” 650. It would not be equitable or reasonable to focus solely, as
Argentina appears to suggest, on emissi ons from the Botnia plant. Botnia’s
contribution to phosphorus in the river is insignificant, and it is nothing compared to
648
Article 41 requires that “the Parties undertak e … (c) To inform one another of any rules
which they plan to prescribe with regard to water pollution in order to establish equivalent rules
in their respective legal systems.”
649Territorial Jurisdiction of the Interna tional Commission of the River Oder Case , PCIJ Ser.
A No. 23 (1929); Diversion of Water from the Meuse Case, PCIJ Ser. A/B No. 70 (1937); Lac
Lanoux Arbitration 24 ILR (1957) 101.
650UCM, para. 4.65.
- 284 -total inputs of phosphorus from all sources to the river 651. Achieving an equitable
allocation of phosphorus loading at levels which are not harmful to the river would
concentrate on reducing inputs elsewhere, including those made by Argentina and
possibly Brazil. Such reductions would again require a co-operative solution agreed
by all three riparian States.
5.21 Moreover, if phosphorus emissions do constitute prohibited pollution, then
Argentina’s phosphorus inputs in the Ñandubaysal Bay and Gualeguaychú area
represent a far greater share of prohibited pollution than those from the Botnia plant.
If in these circumstances Argentina wish es to ask the Court to hold Uruguay
responsible for pollution of the river, it is apt to recall the wise words of Judge
Hudson in the Diversion of the Water from the Meuse Case:
It would seem to be an important principle of equity that where
two parties have assumed an identical or a reciprocal obligation,
one party which is engaged in a continuing non-performance of
that obligation should not be permitted to take advantage of a
similar non-performance of that obligation by the other party 65.
5.22 Nor does the concept of “optimum and rational utilization” of the waters
of the river alter the ordinary meaning of Article 41 of the Statute or its object and
purpose. Articles 40 and 41 have to be unde rstood in conjunction with Article 27,
which recognizes the right of each Part y to make use of the river for domestic,
sanitary, industrial and agricultural purposes. Those uses are an essential part of the
context within which Article 41 has to be in terpreted. It is precisely the use of the
river for all these purposes by both Part ies which has resulted in the present
651International Finance Corporation (hereina fter “IFC”), Cumulative Impact Study, Uruguay
Pulp Mills (hereinafter “Final CIS”), pp. 4.47-4.64 (September 2006). UCM, Vol. VIII, Annex
173.
652PCIJ, Series A/B No. 70, p.77.
- 285 -permitted level of phosphorus in the river, and which explains the absence of any
regulation by CARU or Argentina.
5.23 This in no way precludes the applicati on of other relevant international
instruments. Uruguay accepts that Article 41 contains a referral to other “applicable
international agreements”. The Conventi on on Biological Diversity, the RAMSAR
Convention on International Wetlands a nd the Convention on Persistent Organic
Pollutants (“POPS”) all fall within this category insofar as they relate to the Uruguay
River. Measures taken under Article 41 must therefore be “in accordance with” these
653
treaties. As Uruguay has already pointed out in its Counter-Memorial, however,
the measures it has taken fully conform to their requirements.
5.24 Uruguay does not doubt that conservation of biological diversity should be
included in any measures which the Parties may conclude are necessary to protect
the river pursuant to Articles 36 and 41 of the Statute. Beyond that it is not clear
what case Argentina is trying to make. It simply asserts in the most general terms
that Uruguay has not taken the necessary measures, without identifying what these
might be. It has not claimed that Uruguay is in violation of Article 3 of the
Convention on Biological Diversity, no doubt because emissions from the Botnia
plant at a level which is not harmful to the ecological balance of the river will not
result in “damage to the environment of other states” within the terms of that article.
Nor has it sought to argue that Uruguay has failed to implement Articles 8 or 10 of
the Convention within its own territory. It is plain that Uruguay has already taken the
653
UCM, paras. 4.71-4.78.
- 286 -necessary measures “as far as possible and as appropriate” to implement those
articles654.
5.25 If there is a risk to biological diversity in the river from phosphorus
emissions, then two other articles are mo re pertinent. Consistent with the 1975
Statute, Article 5 requires Parties to co-operate on matters of mutual interest through
international organisations – which for th is purpose means CARU, in the view of
Uruguay. Article 7 requires Parties to monitor biological diversity, “paying
particular attention to those [biological resources] requiring urgent conservation”.
Uruguay has already undertaken or proposed such monitoring schemes 65. Even if
the entire Convention on Biological Diversity is imported into Article 41 of the 1975
Statute, Argentina has neither developed a case under the Convention nor has it
begun to show non-compliance by Uruguay.
5.26 The RAMSAR Convention on Internationa l Wetlands is irrelevant to the
present proceedings because the RAMSAR wetland at Esteros de Farrapos is 16 km
upstream and will not be affected by the operation of the Botnia plant. It is simply
too far away. Even if Argentina’s evidence regarding flow reversal of the river were
correct, it has still presented no evidence that such reversals have ever reached or
could ever reach or affect Esteros de Farrapos 656. As of 12 May 2008, Esteros de
Farrapos was not included in the list of RAMSAR sites whose ecological character is
threatened by pollution, nor had Argentina made any proposal to the RAMSAR
654See UR, paras. 5.44-5.48.
655
UR, paras. 4.70-4.71.
656
UCM, para. 4.75; Jorge Rabinovich & Luis Tournier, “Scientific Report to the Argentine
Ministry of Foreign Affairs with replies to Uruguay’s Counter-Memorial concerning aspects of
the Botnia Pulp Mill near Fray Bentos, Uruguay” (hereinafter “Rabinov ich Report”), p. 46.
AR, Vol. III, Annex 43.
- 287 -Bureau in accordance with Ar ticle 8 that it should be so listed for the purposes of
Article 3 of the Convention. In these circum stances it is not credible to allege the
likelihood of any breach of the RAMSAR Convention. If any evidence of such a
threat were subsequently to emerge, then it would be far more appropriate and in
keeping with Articles 2-5 of the RAMSAR Convention to deal with the matter at
that point through the mechanisms provided by the Convention, or through CARU.
5.27 The POPS Convention is similarly irre levant to any discussion of Article
41 of the 1975 Statute. Phosphorus is not a persistent organic pollutant and is not
covered by the POPS Convention. Argent ina makes no allegation that the Botnia
plant either produces or consumes POPS listed in Annex A of the Convention.
Annex B, which deals with DDT, is irrele vant. Annex C could be relevant if the
plant incidentally emitted dioxins or furans as by-products of its combustion process.
Argentina has presented no evidence that the Botnia plant is likely to do so. The
Second Wheater Report, prepared by Arge ntina’s consultant and annexed to the
Reply, simply asserts that “the accumulation of persistent organic pollutants in the
sediments, and their impact on ecosystems, are international concerns which have
not been addressed significantly in the EIA process” 65. It does not explain how the
operation of the Botnia plant could in an y way violate the POPS Convention or emit
persistent organic pollutants at levels that are likely to pose a risk of harm.
Monitoring data confirm that dioxins and furans are simply not an issue in emissions
from the Botnia plant 658.
657AR, para. 4.176.
658UR, paras. 4.104-4.105.
- 288 -5.28 Anthropogenic releases of POPS listed in Annex C must be minimized and
eventually eliminated “where feasible” through action plans, substitute materials and
processes, and other practical measures that can “expeditiously achieve a realistic
and meaningful level of release reduction or source elimination” 659. For this purpose
parties must “promote” the use of best available techniques (BAT) and best
environmental practices (BEP) for existi ng sources, and they must require new
sources to use them within four years fro m entry into force. The Convention defines
BAT and BEP (Article 5) and gives detailed guidance in Annex C. This aspect of the
Convention represents a considered co mpromise between those who sought
complete elimination and other States that regarded this as unrealistic in the short-
term. Initial proposals to set targets and a timetable for reducing and eliminating
emissions were not pursued, and Article 5 emerged as an oblig ation of conduct (to
take the specified measures) – rather than one of result (reducing/eliminating
emissions).
5.29 Both in its choice of technology and in its regulation of the Botnia plant
Uruguay has done everything necessary to comply with Annex C of the POPS
Convention, and this is confirmed by the IFC’s independent experts 66. Argentina
has developed no case to the contrary. It is also worth recalling the 2,110 g of dioxin
which Argentina emits every year accord ing to its own National Inventory on the
Discharge of Dioxins and Furans, dated 2001 and available on the website of the
659POPS Convention, Art. 5(b).
660UCM, para. 4.78.
- 289 -POPS Convention 66. By comparison, in 2002 the w hole of Uruguay emitted a total
of 55 g according to its National Inventory, also available on the same website.
5.30 Uruguay therefore readil y accepts Argentina’s argument that its
compliance with Articles 36 and 41 of the 1975 Statute should be judged by
reference to the Convention on Biological Diversity, the RAMSAR Convention on
International Wetlands and the POPS C onvention. None of these Conventions
prohibits emissions to the Uruguay River. As indicated above, all of them set
standards of conduct in the regulation of pollution and the protection of the aquatic
environment with which Uruguay is in full compliance.
Section II.
CARU Standards Define the Content of Articles 36 and 41 of the Statute
5.31 Remarkably, in its Memorial, Argentina failed to allege any breach of
CARU standards. Uruguay took note of this in its Counter-Memorial, at paragraph
4.36. In its Reply, Argentina now makes very general allegations about emissions of
substances which could violate CARU water quality standa rds, but nowhere does it
identify any specific violation caused by emissions from the Botnia plant, or provide
662
any evidence of such a violation . In fact, there is no such evidence.
5.32 Equally remarkable, while alleging potential harm to the living resources
and ecosystem of the Uruguay River in violation of Article 36 of the Statute,
Argentina makes no reference -- either in the Memorial or the Reply -- to any
663
violation of the CARU standards that implement Article 36 .
661
POPS Convention website at www.pops.int/documents/guidance.
662
AR, paras. 4.152-4.166.
663
The standards are summarized in UCM, paras. 4.48-4.54.
- 290 -5.33 Uruguay reiterates its earlier argument that compliance with Articles 36
and 41 of the 1975 Statute must be judged by reference to CARU standards. As it
has already explained, Articles 36 and 41 in themselves set no specific standard for
environmental protection and pollution contro l: both Articles require the Parties to
adopt further regulations and to make judgments about what measures are
“necessary” or “appropriate”. For this purpos e the CARU standards, set forth in the
CARU Digest, serve as an important medium for co-ordinating the regulations
applicable in both jurisdictions.
5.34 Uruguay does not argue that CARU st andards form a complete code for
implementing the Statute. But two points are important to the present dispute. First,
it cannot realistically be argued that emissions which comply with jointly-agreed
CARU standards are nevertheless in viola tion of the Statute. Apart from depriving
CARU standards of any purpose if full compliance is no defence, the argument casts
doubt on the good faith of any State making such a claim. It also ignores the obvious
objection that adoption of regulations in tended to implement a treaty creates a
legitimate expectation and quite possibly also an estoppel that compliance will not
constitute a breach of the treaty. Whatever the character of the regime created by the
1975 Statute, it is simply untenable to suggest as Argentina does that emissions
complying with CARU standards may nevertheless violate the Statute. If such
emissions are deemed to be harmful to the ecology of the river, or to legitimate uses
thereof, the appropriate remedy open to Argentina is to propose a revision of the
applicable standards pursuant to Article 56 of the Statute.
5.35 Second, CARU water quality standa rds also serve to define what
constitutes pollution for the purpose of Article 40. That Article provides: “For the
- 291 -purposes of this Statute, po llution shall mean the direct or indirect introduction by
man into the aquatic environment of subs tances or energy which have harmful
effects.” This wording is not self-explan atory. In order to make sense of it a
judgment has to be made about what substances have potentially harmful effects and
at what concentrations. That judgment is for CARU to make. Plainly, once CARU
specifies a water quality standard for a particular substance it can be presumed that
water which does not meet that standard is polluted. As already noted, CARU does
not set standards for phosphorus levels in the river, nor does Argentina. Only
Uruguay has done so, and it therefore cannot be blamed for the absence of any
CARU regulation on the matter.
5.36 Where CARU has not agreed to a specific water quality standard,
emissions of the relevant substances will not constitute pollution unless they can be
proved to have significant harmful effects in accordance with Article 40. Argentina
helpfully draws attention to the definition of “harmful effects” given in the CARU
Digest 664. The burden of proof is thus on Argentina to show that phosphorus
emissions not regulated by CARU are harmful in any of the ways listed in the Digest
and therefore capable of constituting pollution. On this issue the Parties are in
dispute. According to Argentina’s Re ply, the volume of phosphorus emissions
constitutes a massive and harmful increase in already high levels, which will
adversely affect tourism and fishing. The independent experts consulted by the IFC
disagree. They have concluded that the increase in phosphorus emissions is
664AR, para. 4.79 (“any change in water quality th at impedes or makes difficult any legitimate
use of the waters, producing deleterious or harmful effects to living resources, risks to human
health, a threat to aquatic activities, including fishing, or a reduction in recreational activities”)
(quoting Digest of the Administrative Commission of the Uruguay River, E3, Chap. 1, Title 1,
Art. 1).
- 292 -extremely modest, will not lead to eutrophi cation, and will have no impact on water
quality, tourism or fishing. That view is expressed by the Final CIS assessment 665,
and by the results of actual operation of the plant 666.
5.37 In Chapter 4 Uruguay also sets out in fuller detail additional steps it has
taken to further reduce Uruguay’s over all discharge of phosphorus and other
nutrients to the river. These include treatm ent of Fray Bentos municipal sewage in
Botnia’s advanced wastewater treatment plant, major World Bank-backed
investments to improve the sewage tr eatment of other ci ties along the Uruguay
River, and a far-reaching program to minimize nutrient discharge from non-point
sources. Indeed, the improvements to muni cipal sewage treatment undertaken by
Uruguay will more than offset the phosphorus emissions of the Botnia plant. 667
5.38 Even in the hypothetical and extremely unlikely eventuality that
eutrophication does occur and causes signifi cant losses in tourism and fishing,
Article 42 of the Statute provides an ade quate and sufficient remedy agreed upon by
the Parties. It makes the Parties liable. Compensation would thus be payable for any
damage resulting from failure by Uruguay to regulate the Botnia plant adequately, or
668
from a failure by Botnia to comply with regulations or permit limits . Of course,
Argentina would also be jointly responsible for any damage caused by
eutrophication, since effluents from agricu ltural activities, the Gualeguaychú
665UCM, paras. 4.42-4.44.
666UR, paras. 4.88-4.90.
667UR, paras. 4.91-4.96.
668
Article 42 provides: “Each party shall be liable to the other for damage inflicted as a result
of pollution caused by its own activities or by those carried out on its territory by individuals or
legal entities.”
- 293 -Industrial Park and sewage from the City of Gualeguaychú on the Argentine side of
the river contribute significantly (and many times more than the Botnia plant) to the
present phosphorus loading 66. Any compensation that Uruguay might be required to
pay in such circumstances would thus be subject to an equitable adjustment that
would reflect its proporti onate share of any damage on the Argentine side 670.
Argentina would likewise be liable for its contribution to any damage on the
Uruguayan side. Argentina cannot reasonably expect to hold Uruguay wholly liable
for pollution to which Argentina is the prime contributor.
5.39 As noted earlier, if such a scenario were to occur or to become likely, it
would be for both States to co-ordinat e the necessary measures for reducing
phosphorus levels on an equitable basis and preventing further damage. CARU
provides an entirely adequate mechanism for doing so. Indeed, it is the mechanism
stipulated in the 1975 Statute.
Section III.
General Principles of International Environmental Law Do Not Alter the
Terms of the Statute
5.40 Argentina invokes Article 31(3)(c) of the Vienna Convention on the Law
of Treaties and invites the Court to interpret the 1975 Statute in accordance with four
principles of international environmental law:
- Sustainable utilisation
- Equitable and reasonable use
- Prevention of transboundary damage
669
Argentine National Directorate for Public Investment and Project Finance, Report on
Gualeguaychú River Basin Cleanup, Gualeguaychú River Basin Cleanup (August 1997).
UCM, Vol. III, Annex 44.
670
UCM, para. 4.65.
- 294 - - The precautionary principle
5.41 One objective of the 1975 Statute is to give effect to some of these rules or
principles through the medium of CARU and further co-operation by the Parties. To
that extent they are already an inherent element of the Statute. It should be noted,
however, that the legal character of these various “principles” is diverse. Some are
rules of international law, others are general principles endorsed by States in
multilateral treaties or non-binding soft-law instruments. Nevertheless, for the
purposes of argument Uruguay is happy to a ccept that all are relevant within the
terms of Article 31(3)(c). What it does not accept is the argument that any of them
adds to or alters the existing provisions of the 1975 Statute in a manner that assists
Argentina’s case.
A. SUSTAINABLE U TILISATION
5.42 Sustainable use of the components of biological diversity is one of the
objectives of the 1992 Convention on Biologica l Diversity, and va rious articles of
the Convention require parties to take measures to promote it 671. Because Article 41
of the Statute entails “prescribing appropr iate rules and measures in accordance
with” the Convention on Biological Diversity, Uruguay does not dispute the
relevance of the principle of sustainable use referred to in the Convention. What it
does dispute is the argument that the operation of the Botnia plant will in some way
lead to unsustainable use of the components of biological diversity as defined in
Article 2 of the Convention on Biological Diversity.
671
Arts. 1, 6 & 10.
- 295 -5.43 Argentina is wrong to claim that Article 2 of the Convention on Biological
Diversity obliges States to cause no long-te rm depletion of biological resources and
672
natural ecosystems . Article 2 simply defines the term: “ Sustainable use means the
use of components of biological diversity in a way and at a rate that does not lead to
the long-term decline of biological diversity, thereby threatening its potential to meet
the needs and aspirations of present and future generations.”
5.44 More pertinently, Article 8 prescribes measures intended to promote in-
situ conservation of biological diversity. Argentina makes no complaint about
Uruguay’s compliance with Article 8. Paragraphs (a), (c) and (d) are the most
relevant provisions of this article. The full article provides that: “Each Contracting
Party shall, as far as possible and as appropriate:
(a) Establish a system of protected areas or areas where special
measures need to be taken to conserve biological diversity;
(b) Develop, where necessary, guidelines for the selection,
establishment and management of protected areas or areas where
special measures need to be taken to conserve biological
diversity;
(c) Regulate or manage biological resources important for the
conservation of biological divers ity whether within or outside
protected areas, with a view to ensuring their conservation and
sustainable use;
(d) Promote the protection of ecos ystems, natural habitats and
the maintenance of viable populations of species in natural
surroundings;
(e) Promote environmentally sound and sustainable development
in areas adjacent to protected areas with a view to furthering
protection of these areas;
672
AR, para. 4.34.
- 296 - (f) Rehabilitate and restore degraded ecosystems and promote
the recovery of threatened species, inter alia, through the
development and implementation of plans or other management
strategies;
(g) Establish or maintain means to regulate, manage or control
the risks associated with the use and release of living modified
organisms resulting from biotechnology which are likely to have
adverse environmental impacts that could affect the conservation
and sustainable use of biological diversity, taking also into
account the risks to human health;
(h) Prevent the introduction of, control or eradicate those alien
species which threaten ecosystems, habitats or species;
(i) Endeavour to provide the conditions needed for compatibility
between present uses and the conservation of biological diversity
and the sustainable use of its components;
(j) Subject to its national legislation, respect, preserve and
maintain knowledge, innovations and practices of indigenous
and local communities embodying traditional lifestyles relevant
for the conservation and sustainable use of biological diversity
and promote their wider appli cation with the approval and
involvement of the holders of such knowledge, innovations and
practices and encourage the equitable sharing of the benefits
arising from the utilization of such knowledge, innovations and
practices;
(k) Develop or maintain necessa ry legislation and/or other
regulatory provisions for the protection of threatened species and
populations;
(l) Where a significant adverse e ffect on biological diversity has
been determined pursuant to Article 7, regulate or manage the
relevant processes and categories of activities; and
(m) Cooperate in providing financial and other support for in-
situ conservation outlined in s ubparagraphs (a) to (l) above,
particularly to developing countries.
5.45 Article 8 of the Convention on Bi ological Diversity does not require
parties to avoid anything that might at some point have an impact on biological
resources of the river. Conserving biodi versity does not mean preserving every
- 297 -living thing. Nor does it require parties to preserve the natural environment in an
unchanged and unchanging state. It means maintaining the “variability among living
organisms” and the “diversity within species, between species and of
ecosystems” 673. Article 8 is carefully worded in terms which envisage the
progressive adoption of conservation measures when “possible”, and insofar as they
are “appropriate”. It is deliberately drafted in such a way as to leave considerable
discretion to individual States in deciding wh at action to take, when to take it, and
which resources are sufficiently “important” to merit action.
5.46 Nor does Argentina allege a violation of Article 10 of the Convention,
dealing with sustainable use of the compone nts of biological diversity. With respect
to the Botnia plant, Uruguay has taken all appropriate measures to implement Article
10. Like Article 8, this article envisage s the progressive adoption of measures. The
most relevant paragraphs are (a) and (b). The full text provides that:
Each contracting party shall, as far as possible and as
appropriate:
a) Integrate consideration of the conservation and sustainable
use of biological resources into national decision-making;
(b) Adopt measures relating to the use of biological resources to
avoid or minimize adverse impacts on biological diversity;
(c) Protect and encourage custom ary use of biological resources
in accordance with traditional cultural practices that are
compatible with conservation or sustainable use requirements;
(d) Support local populations to develop and implement
remedial action in degraded areas where biological diversity has
been reduced; and
673
Art. 2.
- 298 - (e) Encourage cooperation between its governmental authorities
and its private sector in develo ping methods for sustainable use
of biological resources.
5.47 More importantly, the provisions on conservation and sustainable use
found in the Convention on Biological Di versity can only realistically be
implemented with respect to an international river through measures co-ordinated by
the riparians. In this case that means through CARU standards implementing Article
36 of the Statute. Argentina does not alle ge any violation of those standards and
674
Uruguay reiterates its full compliance .
5.48 Uruguay therefore believes that it ha s taken all appropriate measures
required by the Convention on Biological Di versity with a view to ensuring that
there will be no significant harmful eff ects on important components of biological
diversity in the river. The Botnia plant is not adjacent to any protected area. The
location chosen ensures that the protected wetland at Esteros de Farrapos will not be
affected in any way, even under conditions of flow reversal downstream. The
technology employed by Botnia does not i nvolve the emission or use of persistent
organic pollutants covered by the POPS Convention. Even though the Parties
disagree about the level of phosphorus emissions and their potential impact on the
river, as shown in Chapter 4, the IFC’s independent experts ha ve concluded, based
on the first six months of the plaint’s ope ration, that its emissions of phosphorus are
insignificant and will have no impact on the river. If, arguendo, additional measures
were required to reduce phosphorus levels in the river, they should be taken jointly
by both Parties on an equitable basis negotiated through CARU.
674
UCM, paras. 4.48-4.58.
- 299 - B. E QUITABLE AND R EASONABLE U SE
5.49 Successive rapporteurs of the In ternational Law Commission have
endorsed the equitable and reasonable use of international watercourses as an
675 676
established rule of international law . This view has been supported by States ,
677
by the Court , and by Article 5(1) of the UN Convention on International
Watercourses.
5.50 Argentina argues that Uruguay is require d to take into consideration the
obligations contained in the 1975 Statute when making use of the Uruguay River for
purposes permitted by Article 27. Uruguay ag rees and has done so, as previously
678
explained at length in its Counter-Memorial .
5.51 Argentina also argues that Uruguay has not taken into account “les
utilisations préalables et légitimes” 67, and has thereby violated the Statute. This is
plainly not so. Uruguay has indeed taken appropriate measures which are detailed in
its Counter-Memorial, 680to mitigate the impact of th e Botnia plant on existing uses.
But existing uses of an international watercourse, such as tourism or fishing, have no
priority over new legitimate uses; as reflected in Article 10 of the 1997 UN
Watercourses Convention which recognizes this point by providing that no category
of use has inherent preference over any others. Judicial decisions, commentators and
675McCaffrey, II YbILC (1986) pt. 1, p. 103-5, 110 ff; Schwebel, II YbILC (1982) pt. 1, 75 ff.
676ILC Report (1987) GAOR A/42/10, p. 70; Evensen, II YbILC (1984) pt. 1, 110; Schwebel,
II YbILC (1982) pt. 1, 75.
677Gabčíkovo-Nagymaros Case, ICJ Reports (1997) 7, para. 55.
678UCM, Chap. 4.
679AR, para. 4.53 (“the prior and legitimate uses”).
680UCM, Chap. 4.
- 300 -the views of codification bodies suggest that an equitable balance of interests may
681
displace or limit earlier established uses . European and North American practice
682
confirms this conclusion, which the Lac Lanoux case implicitly supports . Thus
tourism and fishing must compete with ot her equitable claims, including industrial
and domestic uses resulting in higher levels of phosphorus in the river. If such uses
are inequitable then Argentina must explain why it has so far refrained from
regulating levels of phosphorus in the river.
C. P REVENTION OF T RANSBOUNDARY DAMAGE
683
5.52 As Uruguay has already noted in its Counter-Memorial , the obligation
to ensure that activities within a State’s jurisdiction or control do not cause harm to
the environment of other States (i.e., tran sboundary damage) is also an established
rule of international law. It is reiterated, inter alia, in Principle 21 of the 1972
Stockholm Declaration on the Human Environment, in Principle 2 of the 1992 Rio
Declaration on Environment and Development, in Article 3 of the Convention on
Biological Diversity, and in the ILC’ s Articles on Prevention of Transboundary
684
Harm adopted in 2001 . Articles 7 and 21 of the 1997 UN Watercourses
685
Convention restate the general principle , which successive rapporteurs and the
681
See ILA 1966 Helsinki Rules, Arts. V(d), VI, VII, VIII, and commentary at 493; ILA 2004
Berlin Rules, Art. 14; Lipper, in Garretsoet al., The Law of International Drainage Basins
(New York, 1967), 50-8, 60 ff; McCaffrey, The Law of International Watercourses (2ndedn.,
Oxford, 2007), 386-8; Nebraska v. Wyoming, 325 U.S. 589 (1945); Colorado v. New Mexico,
459 U.S. 176 (1982).
682
Bourne, 3 CanYbIL (1965) 187, 234-253.
683
UCM, paras. 4.66-4.72.
684
Article 3 provides that “the State of origishall take all appropriate measures to prevent
significant transboundary harm or at any event to minimize the risk thereof.”
685
UCM, Vol. I, paras. 4.67-4.69.
- 301 -ILC have regarded as a codification of es tablished customary law for all forms of
damage to other States 686. In the Nuclear Weapons Advisory Opinion the Court also
held that the terms of Principle 2 of the Ri o Declaration are “now part of the corpus
687
of international law relating to the environment” .
5.53 The object and purpose of including Articles 36, 41, 42 and 56(a)(4) in the
1975 Statute was to give effect to the obligation to prevent transboundary damage in
the Uruguay River. Contrary to Argentina’s argument, it is not plausible to suggest
that anything more can be read into the Statute than was subseq uently codified by
the ILC in the Watercourses Convention. In both cases the essential character of the
obligation is one of due diligence – to take appropriate measures in accordance with
any applicable or relevant international standards. That is precisely what Article 41
envisages, and why Argentina seeks to differentiate it from the Watercourses
Convention is a mystery.
5.54 Argentina also cites a passa ge from the award of the Iron Rhine
Arbitration for the proposition that “Environmental law and the law of development
stand not as alternatives but as mutually reinforcing, integral concepts, which require
that where development may cause significant harm to the environment there is a
duty to prevent, or at least mitigate, such harm…” 688 Uruguay agrees. This passage
shows, however, that Uruguay is required to mitigate harm, not to prevent all harm.
686
Schwebel, II YbILC (1992) Pt. 1, 91, para. 111; Evensen, II YbILC (1983) pt. 1, 172;
McCaffey, II YbILC (1986) pt.1, 133; ILC Report (1988) GAOR, A/43/10, at 60, para. 148
(draft Article 16(2)) and 88ff. See generally McCaffrey, The Law of International
Watercourses, Ch. 11.
687ICJ Reports (1996) 226, at para. 29. See also Iron Rhine Arbitration, PCA (2005) paras. 222-
223.
688PCA (2005), pp. 28-29, para. 59.
- 302 -Nor is some harm to the natural resources of the river incompatible with the
protection of biodiversity. The actions Uruguay has taken to regulate river pollution,
protect biodiversity, comply with CARU st andards, and assess, monitor and control
the possible effects of the Botnia plant, are intended to implement its legal
obligations in a manner that avoids signifi cant harm and promot es environmentally
sound and sustainable development. The success of these measures in preventing
pollution of the river is fully set out in Chapter 4 of this Rejoinder 689. The scientific
evidence establishes that Uruguay has guaranteed, to use Argentina’s words,
“[l]’équilibre entre considérations économiques environnementales et sociales … de
690
manière effective…” .
5.55 Argentina sees the prevention of transboundary harm as an element of the
principle of optimum a nd rational utilisation 691. Since Uruguayan law and the
permits granted to the Botnia plant comply with the obligations under Article 41 of
the 1975 Statute, including CARU standard s, there can be no basis for suggesting
that Uruguay has in some unidentified sense failed to comply with the principle of
optimum and rational utilisation. Uruguay has already set out the steps it has taken in
its national law to comply with the Statute. Uruguay regulates phosphorus
emissions 692, while Argentina does not. It give s effect to CARU standards and
Argentina has not demonstrated otherwise. Argentina has not identified in what
ways Uruguay’s legislation or the permits granted to the Botnia plant might be
689UR, paras. 4.80-4.117.
690AR, para. 4.40 (“[t]he balance between economic, environmental, and social considerations
… in an effective manner”).
691AR, para. 4.45.
692See UR, para. 5.13 above.
- 303 -deficient in the exercise of due diligence. Its case rests wholly on hypotheses and
vague assertions about possi ble transboundary harm. In contrast, Chapter 4 of this
Rejoinder shows that recent technical reviews of the actual operation of the Botnia
plant by the IFC’s independent experts “confirm that the Orion pulp mill will
generate major economic benefits for Uruguay and will not cause harm to the
environment” 693. Plainly the independent experts regard the Botnia plant as a good
example of optimum and rational utilisation of the river.
D. T HE P RECAUTIONARY PRINCIPLE
5.56 Unable to present the Court with any evidence of actual or likely harm,
Argentina continues to rely on the precauti onary approach to sustain its threadbare
case. Uruguay accepts that the precautionary approach has potential relevance to the
management of activities where there is signi ficant scientific uncertainty and a risk
of serious or irreversible damage, in accordance with Principle 15 of the Rio
Declaration on Environment and Development. The precautionary approach has
been incorporated into Uruguayan law and DINAMA must give effect to it when
694
performing its regulatory duties .
5.57 The 2001 POPS Convention adopts a precautionary approach to the listing
and control of hazardous chemicals and Article 1 refers expressly to Principle 15 of
the Rio Declaration on Environment and Development. 695Uruguay has already
demonstrated that it fully complies with its obligations under the POPS
693IFC Web Site, Latin American & the Caribbean, “Orion Pulp Mill-Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/content/Uruguay-Pulp-Mills (upda ted on 10 July 2008) (last
visited on 11 July 2008). UR, Vol. IV, Annex R96.
694Law 17.283 of 2000 follows Rio Principle 15.
695UCM, para 4.78.
- 304 -convention 696. The Convention on Biological Diversity notes that “[w]here there is a
threat of significant reduction or loss of biological diversity, lack of full scientific
certainty should not be used as a r eason for postponing measures to avoid or
minimize such a threat.” Again, Uruguay has shown that it has taken necessary and
sufficient measures to protect biodiversity and ensure not just that the threat is
minimized but that there is no threat of “significant reduction or loss of
biodiversity”. In neither case has Argentina demonstrated the “threats of serious or
irreversible damage” to the river required for Principle 15 of the Rio Declaration to
be applicable in the present case – a th reshold standard which Argentina itself
697
advances in its Memorial .
5.58 Nor are there such gaps or uncertainties in the evidence available to the
Parties, or to the Court, as would ju stify Argentina’s attempt to invoke the
precautionary approach in the present di spute. Pulp mills are a well-understood
technology. The Botnia plant has been desi gned with the benefit of many years of
experience of such installati ons. It operates to the highest standards. Effluents have
been minimized and strictly controlled. Risks associated with the operation of the
plant are monitored comprehensively and can be empirically tested. In all these ways
any uncertainties have been eliminated or dealt with 69.
5.59 On the evidence set out in Chapters 4 to 7 of the Counter-Memorial, in
Chapters 4 and 6 of the present Rejoinder, and in the report of the IFC’s independent
696UR, para 5.29.
697AM, para 5.14 (“risque de dommage graves ou irreversibles”).
698
UR, paras. 6.60-6.65.
- 305 -experts 69, Uruguay believes that it has esta blished that the construction and
operation of the Botnia plant (a) have caused no harm and no significant risk of harm
to Argentina, (b) caused no harm and no significant risk of harm to the water quality
of the Uruguay River or its ecological in tegrity, and (c) caused no harm and no
significant risk of harm to biological dive rsity or protected sites. The evidence for
these conclusions is substantial, it is st rong, and it is based on actual monitoring
results and on the judgment and research of independent scientific experts.
Argentina has presented no significant or credible evidence to the contrary. The
evidence points overwhelmingly to the conclusion that there will be no unacceptable
effects from the operation of the plant – and certainly nothing that amounts to
serious or irreversible damage.
5.60 Nor has Argentina demonstrated any current connection between climate
change and the operation of the Botnia plant. The regulatory and monitoring systems
which govern the plant’s future operation are sufficiently robust to enable Uruguay
to identify any future changes in climatic conditions affecting river flow and to deal
with them appropriately, if necessary through CARU and in co-operation with
Argentina. This is not a matter that Urugua y takes lightly: if climate change posed a
serious threat to Argentina’s use of the river then it would necessarily threaten
Uruguay at the same time. But at presen t there is no basis for suggesting that
699
International Finance Corporation, Orion Pulp Mill, Uruguay, Independent Performance
Monitoring as Required by the International Finance Corporation (Phase 1: Pre-
Commissioning Review) (hereinafter “Pre-Commissioning Review” ) (November 2007) at
ES.iv. UR, Vol. III, Annex R50; AMEC Forestry Industry Consulting, Orion BKP Mill Pre-
Startup Audit (hereinafter “Pre-Startup Audit” ) (September 2007), pp. 2-6. UR, Vol. III,
Annex R48. IFC, Orion Pu lp Mill, Uruguay Independent Performance Monitoring as
Required by the International Finance Corpor ation (Phase 2: Six-Month Environmental
Performance Review), pp. ES.ii-ES.v (July 2008). UR, Vol. IV, Annex 98.
- 306 -Uruguay has in some unidentified way failed to deal in a precautionary fashion with
the potential risks of climatic change.
5.61 Argentina also misunderstands the role of the precautionary principle in
relation to uncertainty and risk. Argentina appears to think that the more unlikely a
risk the more uncertain it becomes and thus the greater the role for the precautionary
principle. Precedents show, however, that when applying the precautionary principle
it is not necessary to take “a purely hypothetical approach to risk, founded on mere
conjecture which has not been scientifically verified” 700. The point about the
precautionary principle as articulated in Principal 15 of the Rio Declaration is that it
applies where some evidence of risk exists but there is a “lack of full scientific
certainty” about the probability that it wi ll occur or how serious the consequences
701
may be . It bears reiterating once again that Rio Principle 15 and the precautionary
approach come into play only where it can first be shown that there are “threats of
serious or irreversible damage”. In other words, it must first be shown that this kind
702
of damage is likely to some degree. Whether such threats do exist has to be
assessed in the light of all the evidence, including evidence concerning the measures
that Uruguay has taken to counter potential threats and ensure that the Botnia plant
700Pfizer Animal Health v. Council of the EU (2002) II ECR 3305, para. 143. See also EC
Measures Concerning Meat and Meat Products , WTO Appellate Body, WT/DS26/AB/R (1998)
paras. 179-186 (“not only risk ascertainable in a science laboratory operating under strictly
controlled conditions, but also risk in human societies as they actually exist, in other words, the
actual potential for adverse effects on human health in the real world where people live and
work and die”).
701
MOX Plant Case (Provisional Measures) ITLOS No. 10 (2001) paras. 71-81.
702
UCM, para. 4.86. See also European Commission, Communication on the Precautionary
Principle, COM(2000)1, p. 4 (“Recourse to the precationary principle presupposes that potentially
dangerous effects deriving from a phenomenon, product or process have been identified, and that
scientific evaluation does not allow the risk to be determined with sufficient certainty”).
- 307 -operates in a safe, reliable and environm entally responsible manner, conforming to
the best international standards. If, as the IFC evidence conclusively shows,
Uruguay has taken all the measures that ar e reasonable and necessary to counter the
Botnia plant’s actual potential – however small – for serious adverse effects on the
river in the real world, then there remains no basis for suggesting that the
precautionary principle has any further role to play.
5.62 Argentina makes two additional arguments about the precautionary
principle, both of them wrong. First, it continues to assert that the principle shifts the
703
burden of proof from the Applicant State to the Respondent . For reasons already
set out in Uruguay’s Counter-Memorial this is incorrect 704. Uruguay does not agree
that it must prove that there is no risk of harm in order to conform to a precautionary
approach. Proving a negative of this kind is inherently difficult if not impossible 705–
risk cannot be eliminated entirely from hum an activities – and the elimination of all
risk is not what the precautionary approach is seeking to achieve. If it were, the
operation of oil tankers, nuclear power plants, hazardous waste disposal facilities,
chemical plants, oil refineries, and similar activities presently regulated by
706
international and national law would be illegal – which of course they are not . The
real issue is not whether environmental risk has been eliminated, but whether it has
703AR, para. 4.55.
704UCM, paras. 4.84-4.86.
705UR, paras. 6.60-6.61
706But contrast commercial whaling, which is cu rrently illegal by decision of the International
Whaling Commission unless it can be shown th at it will be sustainable under the Revised
Management Procedure. Similarly, trade in endangered species listed under Annex I of the
CITES is banned unless the parties can be persuaded that a species is no longer endangered and
can be de-listed. Both are examples of reversing the burden of proof.
- 308 -been properly managed and minimized to the fullest extent possible using cost-
effective measures – a poin t well understood by Argentina’s own experts, Professor
707
Wheater and Dr McIntyre .
5.63 In international law, who bears the burden of proving that a risk exists cannot
be answered dogmatically, but depends on the context in which the question arises.
International courts have generally required the party alleging a risk of serious
environmental harm to adduce enough evidence to establish its case 708. They have not
taken the view that the precautionary principle necessarily shifts the burden of proof to
the respondent State. Provisional measures were thus refused in the MOX Plant Case
and in this very case because the applicants failed to prove a serious risk of harm,
despite their reliance on the precautionary principle; by contrast, provisional measures
were granted in Land Reclamationand Southern Bluefin Tuna because the applicants
were able to satisfy their evidentiary burden .09
5.64 In the absence of express treaty language to the contrary, the precautionary
principle does not reverse the burden of proof applicable to claims of environmental
harm. For example, a reversal of th e burden of proof was quite deliberately not
adopted when a precautionary approach to fisheries conservation was elaborated in
some detail by Article 6 of the 1995 UN Fi sh Stocks Agreement; nor does Article 1
707Professor Wheater and Dr. McIntyre, “Tec hnical Commentary on the Counter-Memorial of
Uruguay in the Case Concerning Pulp Mills on the River Uruguay” (hereinafter “Second
Wheater Report”), pp. 5-6. AR, Vol. III, Annex 44.
708
The European Court has taken the same view. See Pfizer Animal Health v. Council of the
EU (2002) II ECR 3305, paras. 136-148, 164-173. So has the WTO. See Beef Hormones Case
(1998) WTO Appellate Body, paras. 97-109.
709MOX Plant Arbitration (Jurisdiction and Provisional Measures), PCA (2002) paras. 53-55;
Pulp Mills Case (Provisional Measures ) ICJ Reports (2006) paras. 73-77; Southern Bluefin
Tuna Cases (Provisional Measures) , ITLOS Nos. 3&4 (1999) para. 79; Land Reclamation
Case (Provisional Measures), ITLOS No.12 (2003) para. 96.
- 309 -of the 2001 Convention on Persistent Organic Pollutants reverse the burden of proof,
notwithstanding that both treaties are expressly based on the precautionary approach
set out in Principle 15 of the Rio Declara tion. Addressing the same argument in the
Beef Hormones Case, the WTO Appellate Body examined the applicable treaty for
wording that might reverse the burden of proof 710. It could find none and thus
rejected the argument. In the present case, neither the Convention on Biological
Diversity nor the 1975 Statute contains any wording that could justify the conclusion
that the burden of proof has been shifted to the party proposing to undertake
711
activities potentially harmful to the river in disputes under either treaty.
5.65 Article 7 of the 1975 Statute shows quite clearly that once notified of
proposed works, it is for the notified part y to “assess the probable impact of such
works” and then to respond with its own observations. CARU may determine that
there is a risk of significant damage, and so might Argentina, but the Statute in no
sense requires Uruguay to demonstrate to CA RU, to Argentina or to the Court that
its actions do not entail a risk of harm to the river, the ecosystem or biodiversity. The
burden of proving such a risk remains with Argentina as the Applicant State in the
present litigation. The precautionary principle cannot override or amend the terms of
the Statute in the way that Argentina suggests . Argentina must prove its case.
710
Beef Hormones Case(1998) WTO Appellate Body, paras. 971-09.
711
Some treaties do reverse the burden of pr oof, but this is an exceptional rule.E.g. 1996
Protocol to the London Dumping Convention; 1992 OSPAR Convention, Art. 4. EC
Communication on the Precautionary Principle(2000) at 5, notes that there is no general rule to
this effect, but that requirements of prio r approval for products deemed dangerous “ a priori
reverse the burden of proving injury, by treating them as dangerous unless and until businesses
do the scientific work necessary to demonstrate that they are safe”.
712
Beef Hormones Case, op. cit., paras. 124-125.
- 310 -5.66 Argentina argues that the precautionary principle is a rule of customary
international law. Certainly, the precautionary approach is a “soft law” principle
which must be taken into account when interpreting treaties in accordance with
Article 31(3)(c) of the Vienna Convention. But it is doubtful whether it can be any
more than this. Distinguished commentator s agree that the precautionary principle
has an uncertain legal status and that its specific normative implications remain
unclear: “le principe de précaution a été repris par la suite dans un grand nonmbre
d’instruments conventionnels qui en préci sent la portée et en tirent certaines
conséquences concrètes, don t il serait cependant aventureux de prétendre qu’elles
sont d’ores et déjà consolidees en norms coutumières obligatoires pour tous les États
ne serait-ce que du fait de leur fréquente imprécision” 713. It does not appear to meet
the requirements of customary international law laid down by the Court in the North
714
Sea Continental Shelf Case . No international court or tribunal has treated the
precautionary principle as an obligatory rule of customary law, although the point
715
has been argued . There is no consensus among scholars or governments about its
meaning, or even on the correct terminology; Principle 15 of the Rio Declaration and
713P. Daillier and A. Pellet, Droit International Public (7 edn., Paris, 2002), p. 1308.
714
ICJ Reports (1969) 3, para. 72 (“It would in the first place be necessary that the provision
concerned should, at all events potentially, be of a fundamentally norm-creating character such
as could be regarded as forming the basis of a general rule of law”.).
715In Measures Concerning Meat and Meat Products , WTO Appellate Body WT/DS26/AB/R
(1998), at paras. 120-125, the WTO Appellate Body concluded that the applicable agreement
already incorporated precautionary elements, but it found the legal status of the precautionary
principle in general international law uncertain. In the Southern Bluefin Tuna Cases (Provisional
Measures,)ITLOS Nos. 3 & 4 (1999) at paras. 77-79, the International Tribunal for the Law of the
Sea relied on scientific uncertainty to justify ordering provisional measures to protect tuna stocks,
but it said nothing about the precautionaprinciple in generalinternational law.
- 311 - 716
UN treaties prefer the term “precautionary approach” while the “precautionary
principle” is essentially a European concept 717.
5.67 But even if Uruguay is wrong about the status of the precautionary
principle in international law, it makes no difference to the manifest weakness of
Argentina’s case. It has still failed to identify any significant risk in respect of which
necessary and reasonable meas ures have not been taken, and in relation to the
precautionary principle or approach that is the only conclusion that matters.
Section IV.
Uruguay Has Carried Out the Required Environmental Impact Assessment
5.68 Argentina’s Reply adds nothing to its case on environmental impact
assessment. It reiterates the arguments from the Memorial with the same
misconceptions. It has not answered Uruguay’s arguments in the Counter-Memorial
with regard to the sufficiency of the assessments that were carried out or the nature
718
of the process. The Wheater-McIntyre Report continues to claim, quite wrongly,
that the Botnia EIA was inadequate and did not sufficiently address the concerns of
potentially affected local people. It also asserts that the Final CIS is seriously flawed
716See,e.g.,1992 Convention on Climate Chan ge, Art. 3; 1992 Convention on Biological Diversity,
Preamble and 2000 Protocol on Biosafety; 1994 Sulphur Protocol, 1998 Heavy Metals Protocol,
and 1998 Persistent Organic Pollutants Protocol to the 1979 Convention on Long Range
Transboundary Air Pollution; 1996 Protocol to the London Dumping Convention, Art. 3; 2001
POPS Convention, Art. 1.
717See, e.g., 1992 Paris Convention for the Protection ofthe Marine Environment of the Northeast
Atlantic, Art. 2; 1992 UNECE Convention for the Protection of Transboundary Watercourses and
Lakes, Art. 2(5); 1992 MaastrichtTreaty on European Union, Art. 174; 1994 Danube Convention,
Art. 2(4); 1999 Rhine Convention, Art. 4.
718
Second Wheater Report, op. cit. AR, Vol. III, Annex 44.
- 312 -insofar as it fails to demonstrate “the ne cessary assurance of lack of unacceptable
environmental impact” 719.
5.69 Most of these claims disappear once tested against the reality of the actual
operation and impact of the Botnia plant. Both the Botnia EIA and the Final CIS
assessed the potential environmental impact and found that it was minimal. In that
respect they have been proved right: it ca nnot be said with any credibility that the
EIA “fails to provide the necessary assurance of lack of unacceptable environmental
720
impact.” The Uruguay River is not a sensitive environment, nor will the Botnia
plant cause “massive nutrient contamination” 721. These questions are fully
considered in Chapter 6 of this Rejoinder, but there is no basis for suggesting that
the EIA process was mistaken in either re spect. The same can be said about the
performance of the plant itself: the Final CIS assessment is sound and supported by
the evidence. Wheater and McIntyre’s remaining concerns are also fully addressed
in Chapter 6. None of their criticisms is shared by the IFC’s independent experts.
5.70 Environmental impact assessment is simply “a procedure for evaluating
the likely impact of a propos ed activity on the environment” 722. The role played by
an EIA is well expressed in the 1991 Convention on EIA in a Transboundary
Context: “The Parties shall ensure that, in the final decision on the proposed activity,
due account is taken of the outcome of th e environmental impact assessment
documentation, as well as the comments thereon received pursuant to Article 3,
719Ibid., p. 5.
720Ibid.
721Ibid., p. 6.
722See 1991 Convention on Environmental Impact Assessment in a Transboundary Context, Art.
1(vi).
- 313 -paragraph 8 and Article 4, paragraph 2, and the outcome of the consultations as
723
referred to in Article 5.” Typically, and as this wording suggests, while
governments must take account of an EIA, they are not bound to adopt every
recommendation or finding therein. It is thus an aid to governmental decision-
making, whose conclusions will necessarily inform th e terms and conditions on
which any permits or licences are granted, but which will not always be reflected in
them.
5.71 In the present case Argentina’s principa l interest in EIA is to use it as a
mechanism for obstructing Uruguay’s legitimate exercise of its right to sustainable
development. Its insistence that every conceivable risk must be assessed, however
small or insignificant, and that all aspect s of an EIA must be completed before
Botnia has even acquired the necessary land, before notifying CARU, and long
before authorisation of construction or operation of the plant, not only has no textual
basis, but is also illogical and unrealistic. As Uruguay has already pointed out, this
approach leaves no room for taking into account representations from Argentina or
724
for subsequently revisiting any aspect of the proposal at a later stage . Argentina’s
reading elevates form over substance and turns the whole EIA process into a
mechanistic event that has little to do with protecting the environment.
5.72 Uruguay has conducted an EIA of the Bo tnia plant in accordance with its
own law and with customary international law 72. That EIA was entirely sufficient
for the purpose of evaluating the likely impact of the plant on the Uruguay River and
723Ibid., at Art. 6(1) (emphasis added).
724UCM, para. 4.95.
725
UCM, paras. 4.108-4.116.
- 314 -on Argentina, as required by customary in ternational law; it was extensive and
726
contained a great wealth of technica l information and environmental data . It was
as complete as possible and necessary at the time.
5.73 It is entirely legitimate in customary international law to confine the scope
of the EIA to “significant adverse impact s” and to address only those transboundary
risks that are objectively significant or likely. Uruguay cited as authority on this
point both the International Law Commission and the WTO Appellate Body decision
in Japan-Measures Affecting Import of Apples 727. Argentina does not attempt to
dispute the relevance or authoritative status of either precedent. Many of the “risks”
identified by Argentina are neither significant nor likely within the terms of those
precedents. If, contrary to all expectations, they become likely or significant at a
later date, then it would be appropriate to consider further measures at that stage.
5.74 Uruguay reiterates its argument that the sufficiency of the EIA process
must be judged as a whole, taking all th e evidence into account, including the IFC’s
Final CIS. Viewed against the totality of the documentation, it can be seen that the
possible transboundary impact of the Botn ia plant has been subject to the most
elaborate review by the company, by DINAMA and by several groups of
independent experts on behalf of the IFC, which reinforce the well-founded
conclusions reached by each individually. The process equals or exceeds in its scope
and depth any other EIA that has been subject to international litigation 728.
726
UCM, paras. 4.117-4.139.
727
UCM, para. 4.105.
728
Compare the MOX Plant Arbitration, PCA (2002).
- 315 -5.75 Argentina persists in its wholly fall acious argument that the Botnia EIA
was not completed prior to authorisation of construction. This is simply not so. The
initial authorisation (which did not approve commencement of construction or
operation) was granted on 14 Fe bruary 2005 – some 11 months after Botnia
submitted its initial EIA on 31 March 2004, and one month after Botnia provided
sufficient additional information to DINAMA) 729. To sustain its argument on timing,
Argentina relies instead on the claim that the EIA was inadequate, that it cannot be
rectified by later assessments carried out for the IFC, and that the whole EIA process
must, therefore, be disregarded as defec tive from the outset. This not only lacks a
legal basis; it defies common sense.
5.76 It must be remembered that there is no specific article on EIA in the 1975
Statute. CARU has not adopted guidelines on EIA procedures. Article 7 of the
Statute merely provides that any notificati on given to the other party “shall describe
the main aspects of the work and, where a ppropriate, how it is to be carried out and
shall 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”. Article 8 provides for the notified party to request additional
information if the information supplied is incomplete.
5.77 Neither Argentina nor Uruguay is a party to the 1991 UNECE Convention
on EIA in a Transboundary Context. Since it is not an applicable international
agreement between the Parties, and is not applicable law in the present dispute, it
cannot be taken into account as an aid to interpretation for the purposes of Article
729
UCM, paras. 4.117-4.133.
- 316 -31(3)(a) or (c) of the Vienna Convention on the Law of Treaties 730; nor does it come
within the terms of Article 41(a) of the 1975 Statute.
5.78 Insofar as Article 41(a) of the Stat ute may require the Parties to adopt
national laws and practices on environmental impact a ssessment on subjects within
the ambit of the 1975 Statute, it leaves them free to determine and define the specific
elements. Uruguay does not dispute that an EIA was required for the Botnia project
in accordance with customary international law. What it does dispute is the argument
that specific requirements for an EIA should be imported into the 1975 Statute from
ENECE treaties or that the very detailed provisions of these treaties represent
customary international law. If such detailed rules are necessary to protect the river
they should be negotiated by the parties in the same way that other rules have been
adopted in implementation of Articles 36 and 41. They should not be imposed by the
Court, for four reasons.
5.79 First, based on its assessment of State practice, the ILC’s 2001 Articles on
Prevention of Transboundary Harm require only that an EIA should include an
evaluation of the possible impact on persons , property and the environment of other
States, but otherwise they leave the detailed content for individual States to
determine 731. Uruguay has indisputably conducted an EIA that meets the
732
requirements envisaged by the ILC .
5.80 Second, national case law emphasizes th at an EIA need not address every
aspect of a project in depth, and that it s purpose is to assist the decision-maker and
730
OSPAR Arbitration, PCA (2003), paras. 101-105.
731
Article 7 and commentary in ILC Report (2001) 405, paras. (7) & (8).
732
UCM, paras. 4.107-4.144.
- 317 -alert the public, not to test every possible hy pothesis or provide detailed solutions to
733
theoretical problems that have been identified . Argentina’s own EIA laws do not
conform to the very exacting standard it seeks to apply to Uruguay. For example,
Decree 5837 of 26 December 1991 regulates environmental impact assessment in
Entre Rios Province and thus applies to i ndustrial plants in Gualeguaychú. Article 4
provides only that: “Persons intending to install a new industry, and persons wishing
to make changes or relocations in existing industries must commence the
administrative procedures before the Directorate of Industries and Industrial
Promotion. It shall evaluate the aspects relating to its function and shall then send
the file to the Environmental Sanitation Directorate so it may do the same” 734. That
is all. There are no requirements on the contents or details of the EIA.
5.81 Third, Article 14 of the Convention on Biological Diversity also requires
EIA, but only in very general terms and without specifying detailed rules on content.
It provides that:
1. Each Contracting Party, as far as possible and as appropriate,
shall:
(a) Introduce appropriate proce dures requiring environmental
impact assessment of its proposed projects that are likely to
have significant adverse effects on biological diversity with
a view to avoiding or minimizi ng such effects and, where
appropriate, allow for public participation in such
procedures.
733See Prineas v. Forestry Commission of New South Wales (1983) 49 LGRA 402; The Belize
Alliance of Conservation Non-Governmental Organisations v. The Department of the
Environment(2003) Judicial Committee of the Privy Council (from Belize Ct. App.), UR, Vol.
IV, Annex R84; Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989); Robertson v.
Methow Valley Citizens Counci,l490 U.S. 332 (1989).
734Regulatory Decree No. 5837, Government of Entre Ríos (26 December 1991). UCM, Vol.
III, Annex 42.
- 318 -Uruguay’s EIA procedures fully comply with this requirement 735.
5.82 Fourth, Uruguay is entitled to expect some degree of stability and certainty
in its treaty relations with Argentina. It should not be required to comply with a
revision of the 1975 Statute that has neit her been negotiated nor agreed by the
Parties. Any reliance on Article 31(3) of the Vienna Convention must take account
of the principle pacta sunt servanda. States can only be required to comply with the
provisions of treaties they have negotiate d and by which they are bound, not with
some completely different text.
5.83 The practice of the World Bank relating to EIA is not relevant to the
present dispute. The Bank’s practices are not law and do not constitute an
“applicable international agreement”. Even if the Bank could be viewed as “an
international technical body” for the purposes of Article 41, its practices on EIA are
designed to serve its own needs as a res ponsible lender, not to set standards for
national legislation. The Court should be wary of importing into the 1975 Statute
detailed rules adopted by other bodies for en tirely different purposes. In any event,
the environmental impact assessment process has fully met the elaborate standards
set forth by the International Finance Corporation, a part of the World Bank
Group 736. The IFC’s independent experts confirm this 737.
5.84 Argentina cites several precedents relating to “strategic environmental
assessment” – which address the potential impact of policies, plans or programs,
735
UCM, paras. 4.108-4.116.
736UCM, paras. 5.3-5.52.
737IFC, Press Release, “IFC and MiGA Board Approves Orion Pulp Mill in Uruguay, 2,500
Jobs to be Created, No Environmental Harm,” p. 1 (21 November 2007). UCM, Vol. IX,
Annex 206.
- 319 -rather than specific projects such as the Botnia plant. Precisely because they are
intended for a wholly different purpose, these precedents are irrelevant to the present
dispute.
5.85 Argentina makes one additional argument with regard to EIA: that there
738
was inadequate provision for public participation in the process . By this,
Argentina means that Uruguay did not provide for participation by the Argentine
public. As detailed below, there is no dis pute that the Uruguayan public participated
in the process. Argentina once again asse rts that Uruguay should have complied in
this respect with the most advanced requirements of UNECE treaties and World
Bank practices that are inapplicable to this dispute. For reasons already explained
this is an untenable argument. The Arhus Convention on which Argentina relies has
a far broader purpose unconnected to EIA procedures, and there is no basis for
importing its requirements into the 1975 Statute. Neither Uruguay nor Argentina is a
party. Moreover Argentina again makes no comparable provision in its own law 739.
It cannot expect more of Uruguay than it is willing to require of itself.
5.86 There is no other basis for interpreting the 1975 Statute to require some
form of transboundary public participati on in the EIA process. Other relevant
instruments supported by both Uruguay and Argentina do not sustain Argentina’s
case on public participation. Principle 17 of the Rio Declaration does not refer to
public participation in EIA procedures. Principle 10 merely says that “[a]t the
national level, each individual shall have appropriate access to information
738AM, paras. 3.206-3.209; AR, paras. 4.101-4.105.
739
See Regulatory Decree No. 5837, Government of Entre Ríos, op. cit. UCM, Vol. III, Annex
42.
- 320 -concerning the environment that is held by public authorities, including information
on hazardous materials and activities in their communities, and the opportunity to
participate in decision-making processes.” This does not appear to envisage
transboundary participation in EIA processes. Nor do the 1987 UNEP EIA
Principles. Principle 7 says only that “[b]efore a decision is made on an activity,
government agencies, members of the public , experts in relevant disciplines and
interested groups should be allowed a ppropriate opportunity to comment on the
EIA.” It is easy to see why Argentina di d not refer to this provision. It is not
mandatory, it limits participation to the opportunity to comment, and it is not
intended to have transboundary effect . Principle 12, which does deal with
transboundary impacts, makes no reference to communication to the public of the
affected State or to their participation in a national EIA.
5.87 Assuming for the purposes of argument that a requirement of
transboundary public participation can be r ead into the Statute, then it has been
complied with by Uruguay. The EIA process undertaken by Uruguay included
consultation with the public likely to be affected in Argentina as required by
740
Uruguayan law . Inhabitants of Fray Bentos and nearby regions of Uruguay and
Argentina participated, including repres entatives from Argentine towns in Entre
Rios Province. All of these representa tions were taken into account by DINAMA
when deciding whether to approve the DINAMA/Botnia EIA and recommend the
740
Decree No. 435/994, Environmental Impact A ssessment Regulation (21September 1994)
UCM, Vol. II, Annex 9. Decree No. 349/005, E nvironmental Impact Assessment Regulation
revision (21 September 2005). UCM, Vol. II, Annex 24. MVOTMA Initial Environmental
Authorisation for the Botnia Plant, paras. XI -XIII (14 February 2005). UCM, Vol. II, Annex
21.
- 321 -grant of an AAP 74. Indeed, the matters raised at the hearing are extensively referred
742
to in the AAP itself . It is clear on this evidence that participation by the potentially
affected public in Argentina was provided for and did, in fact, take place. Even if
Article 2 of the 1991 Convention on EIA were applicable, it would require Uruguay
to do no more than this. It only provides for “an opportunity to the public in the
areas likely to be affected to participate in relevant environmental impact assessment
743
procedures…” .
5.88 Uruguay has manifestly complied with all the requirements of
international law concerning EIA. Argentina has no basis for suggesting that in this
respect Uruguay has violated any provision of the 1975 Statute.
Section V.
Uruguay is Not Required to Assess the Suitability of Alternative Sites
5.89 Argentina asserts that the location of the Botnia plant is a central aspect of
744
the dispute (“C’est un asp ect central du différend”) . In Annex 43 of its Reply it
purports to rank various possible sites on a basis which makes Fray Bentos appear
the worst possible location. But the criteria used to reach this conclusion are wholly
self-serving and without any legal basis. In conducting the analysis, the Rabinovich
Report (created by Argentina for this litigation) ranked each site based on four
factors, none of which have anything to do with effect on water quality. As tangible
evidence of the Report’s lack of transparency, the rankings make clear that distance
741Information supplied to the Inter-American Commission on Human Rights, request No. 3.
742MVOTMA Initial Environmental Authorisation for the Botnia Plant, paras. XIII (14
February 2005). UCM, Vol. II, Annex 21.
743Art. 2(6).
744AR, para. 4.126 (“This is a central aspect of the dispute.”).
- 322 -from Argentine population centres was the most important, indeed the only factor
745
that could affect the outcome of its analysis . On this wholly spurious basis --
which entirely disregards the river itself -- it is of course inevitable that Fray Bentos
will come out badly.
5.90 The choice of the Fray Bentos site may be understood by reference to five
key factors:
(1) Accessibility: on a navigable rive r and near a major bridge over
that river;
(2) Raw materials: proximity to existing plantations of eucalyptus;
(3) Manpower: ready availability of labour in Fray Bentos;
(4) Availability of water: it can be extracted and returned to the river
without risk to drinking water supply or pollution; and
(5) Suitability: no likelihood of significant harm to the river
environment or Argentina.
Argentina ignores all but the last of th ese considerations a nd takes an extreme
position, which discounts Uruguay’s right to pursue sustainable development. In
contrast, as detailed in the Counter-Memorial, the site selection process undertaken
by Botnia was careful and considered each of those factors 74. On that basis, Botnia
determined that Fray Bentos was a suitable location where unacceptable impacts to
the river were not likely to occur -- a conclusion that was confirmed first by
747
Uruguay, then by IFC’s technical experts in the Final CIS and again in the July
745Rabinovich Report, op. cit., para. 1.6.6, Tables 1 and 2. AR, Vol. III, Annex 43.
746UCM, para. 4.118.
747UCM, para. 4.118.
- 323 -2008 Environmental Performance Review , which found no impacts on the river
during the first six months of the plant’s operation.
5.91 All the evidence now available – whether from monitoring reports or from
the IFC’s most recent evaluations of the plant’s operation – confirms in the clearest
possible way that Botnia was correct in its choice of site and that Uruguay was right
to approve that choice. Whether other site s might hypothetically have been better
from an Argentine perspective is irrelevant . The actual site at Fray Bentos is
demonstrably unproblematic, and the locati on poses no risk of significant harm to
Argentina, while maximising the economic, social and environmental benefits to
Uruguay.
5.92 Argentina seems to believe that Uruguay should have carried out an EIA
for a range of possible alternative sites. This is neither practical nor obligatory. It is
not practical because applicants can only carry out an EIA in relation to sites they
already own or control. To assess other hypothetical locations which might not in
practice be available would be futile. It would also be prohibitively expensive and
time-consuming. Even the precautionary principle only requires states to take “cost-
effective” measures to prevent environmental degradation 748.
5.93 It is not obligatory to assess alternative sites because there is nothing to
that effect in the 1975 St atute or in the 1991 Espoo Convention on EIA in a
749
Transboundary Context, or in international law . Article 3 of the Espoo Convention
requires notification to potentially affected States of information about the proposed
7481992 Rio Declaration on Environment and Development, Principle 15.
749
Principle 4(c) of the UNEP EIA Principles provides in heavily qualified terms for an EIA to
include “A description of practical alternatives, as appropriate.” Appendix II (b) of the Espoo
Convention uses similarly qualified language.
- 324 -activity and its possible transboundary im pact. It makes no me ntion of assessing
alternative sites. Article 5(a) of the Convention provides for consultations between
the States concerned regarding “alternati ves to the proposed activity, including the
no-action alternative and possible measures to mitigate significant adverse
transboundary impact and to monitor the effects of such measures at the expense of
the Party of origin”. It is clear from the wo rding and context of this article that it
does not envisage or require assessment of alternative sites in the EIA. What it
requires are “consultations between the States concerned”, and it is indisputable that
these in fact took place, as described in Chapter 3 of the Counter-Memorial, and in
Chapter 3 of this Rejoinder.
5.94 In any event, when Botnia carried out an initial assessment of the site it did
look at other options. The EIA reviewed the suitability of the site and identified no
reason for not locating the plant there. Th e no-action option is only relevant if the
EIA had revealed a risk of serious harm sufficiently high that the costs of the project
would outweigh the benefits. That is not the case here. The EIA revealed a very
limited potential impact on the river and none on Argentina. The measures taken by
Uruguay have minimized the impact of the plant to the fullest possible extent. There
is simply no basis for suggesting that other sites would have been better.
Conclusion
5.95 This Chapter has shown that the Parties do not dispute that the applicable
law on the environmental aspects of the present case will be found in Article 36 and
41 of the Statute of the Uruguay River, together with such provisions of the
Conventions on Biological Diversity and on Persistent Organic Pollutants as are
relevant. It has also shown that Uruguay is not in breach of either of those
- 325 -Conventions, or of Articles 36 and 41. The fact that Argentina makes no allegation
that CARU standards on water quality have been violated is a very good indication
that the Botnia plant is not a threat to the quality of water or the biological diversity
of the Uruguay River, since it is only by altering water quality that pollution can
occur.
5.96 Whatever the merit of Argentina’s reliance on the principles of sustainable
utilisation, equitable and reasonable use, prevention of transboundary damage and
the precautionary principle, what is clear is that Uruguay has done all that is
necessary to comply with them. No violation of the Statute can be attributed to
Uruguay in this respect. Nor has Argentin a made out a case for questioning the
sufficiency or legality of any element of the environmental impact process. The
actual operation of the Botnia plant -- showing no significant harm to the river --
amply demonstrates the correctness and adequacy of the EIAs undertaken by Botnia
and by the IFC, and of the choice of site.
- 326 - CHAPTER 6.
RESPONSE TO ARGENTINA’S TECHNICAL CRITICISMS Introduction
6.1 This Chapter responds to the technical criticisms of the Botnia plant made
by Argentina’s hired experts. For the sake of brevity, Uruguay does not repeat the
proofs provided in its Counter-Memorial, nor does it attempt to respond to each
paragraph or subparagraph in the Reply or the reports in Annexes 43 and 44; but lest
there be any confusion, it should be noted that Argentina’s Reply raises no new
arguments of substance, and Uruguay fully stands by its positions stated in the
Counter-Memorial.
6.2 This Chapter is divided into three sections. Section 1 rebuts the only
actual attempt by Argentina’s experts to show, through scientific modelling, that the
operation of the Botnia plant will have an a dverse impact on the river, specifically a
single claim that after 15 years (that is , in the year 2023) nutrient discharges
(including phosphorus) from the plant will increase the level of algae in
Ñandubaysal Bay to the point where eutrophication will occur in that location. This
Section shows that Argentina’s “model” to support its claim is riddled with errors
and is of no scientific value. After demonstrating that the nutrient discharges from
the Botnia plant will not harm the river, Section 1 then demonstrates that Uruguay’s
other efforts elsewhere in the river, some begun years before the plant was ever
conceived, will more than offset the gene ration of nutrients from Botnia. It further
demonstrates that Argentina, not Uruguay, and certainly not Botnia, has the greatest
opportunity to address the issue of nutrients in the river because Argentina is by far
the largest source of nutrients in the parts of the river on which Argentina focused in
its Reply. Simply put, Argentina’s complaints about phosphorus amount to nothing:
- 329 -despite strenuous efforts, Argentina fails to show any risk of eutrophication from the
operation of the Botnia plant.
6.3 Section 2 provides a further rebuttal to Argentina’s claims that the Botnia
plant fails to meet state-of-the-art tec hnology standards, including the European
Union’s BAT guidelines. Argentina’s argum ents in the Reply do nothing to refute
the international consensus that the Botnia plant is among the best in the world.
6.4 Section 3 responds to the potpourri of remaining claims made by
Argentina’s witnesses, none of which demonstrates any meaningful failure in the
permitting process or the design of the plant, or any meaningful risk to the affected
environment in the river or the aquatic environment.
Section I.
The Evidence Shows that the Botnia Plant Will Not Cause Eutrophication or
Otherwise Harm the Uruguay River
6.5 As demonstrated in Chapter 4, despite all its dire predictions in both the
Memorial and the Reply, Argentina has failed to identify any present adverse
impacts to the river from the operation of the Botnia plant. The independent experts
retained by the IFC have concluded that there are none. In this Section, Uruguay
will demonstrate that Argentina’s equally strident warnings that there will be adverse
impacts in the future are also without merit. As set forth in the Counter-Memorial,
neither Argentina’s Memorial nor the thousa nds of pages of annexes attached to it,
provided any credible proof of likely harm. Although Argentina argued that there
was inadequacy in evaluation, testing and de sign of the plant, it never presented a
valid scientific basis to demonstrate that the plant will or is likely to harm the river.
Argentina’s Reply largely suffers from the same omission as the Memorial – it
attacks details, but never shows how its att acks, even if they were correct (which
- 330 -they are not), translate to a real risk of environmental damage. In short, Argentina
has failed again to show any reasonable likelihood of damage to the river from the
operation of the plant.
6.6 Argentina’s Reply makes but one attempt to show an actual or likely
impact, namely an increased risk of eutrophication (algae gr owth) in Ñandubaysal
Bay from phosphorus discharges, which Argentina expects to occur, if at all, fifteen
years in the future. This prediction is unworthy of serious attention because the lone
report on which Argentina relies is simply of no scientific value. This is
750
demonstrated by the following: First, Argentina’s so-called “indépendant”
experts are, in fact, employees of Arge ntina and can in no way be considered
independent. Second, Argentina’s experts conclude that phosphorus is not the cause
of eutrophication, rendering the extende d discussion of phosphorus in Argentina’s
Reply all but meaningless. Third, Argentina’s experts erroneously assume
Ñandubaysal Bay is a lake, not a bay, and th en assume that any nutrient that flows
into the bay never flows out, in contraventio n of the laws of chemistry and physics.
Fourth, the calculations of Argentina’s experts wrongly assume that the Uruguay
River flows backwards 100% of the time. Fifth, by virtue of these errors Argentina
exaggerated the annual phosphorus contribution of the Botnia plant to the bay by
over 38,000%. Sixth, after these errors are corrected, the very methodology
developed by Argentina’s experts to predict that the Botnia plant would cause
eutrophication demonstrates precisely the opposite. Seventh, as set forth in Section
1.B. of this Chapter, the contribution of phosphorus by Argentina to the bay is
750
See, e.g., AR, paras. 3.12 & 3.14.
- 331 -thousands of times the contribution of Botnia. Eighth, Uruguay’s nationwide
program of phosphorus reduction will further reduce its contribution to the river. In
short, if Argentina is truly concerned about eutrophication in Ñandubaysal Bay, it
should look to its own contribution to that phenomenon, not to the Botnia plant, for a
solution. These points will be set out in more detail below.
A. ARGENTINA CANNOT SHOW A NY R ISK OFNCREASED EUTROPHICATION IN
Ñ ANDUBAYSAL B AY FROM THE O PERATION OF THEB OTNIA PLANT
6.7 The conclusion in the Reply that Botnia-related eutrophication in
Ñandubaysal Bay may be an issue fifteen years hence relies solely on a report
entitled “Scientific Report to the Argentine Minister of Foreign Affairs in response
to Uruguay’s Counter-Memorial,” prepared by Jorge Rabinovich and Luis Tournier
(the “Rabinovich Report” or “Rabinovich”)5. A brief discussion of the identity of
these experts is in order.
6.8 As Uruguay described in its Counter-M emorial, the IFC’s endorsement of
the Botnia plant is entitled to particular weight, given that “[i]ndependent fact-
finding reports prepared by disinterested in ternational organizations are often found
752
to be particularly credible. Despite all of the (groundl ess) arguments Argentina
makes with respect to the IFC’s findings, Argentina has not put forth any argument
to refute the fact that special defereshould be paid to the independent experts
retained by the IFC since both their independence and their expertise are
unchallenged in the Reply.
751
Jorge Rabinovich & Luis Tournier, “Scientific Report to the Argentine Ministry of Foreign
Affairs with replies to Uruguay’s Counter-Memor ial concerning aspects of the Botnia Pulp
Mill near Fray Bentos, Uruguay” (hereinafter “Rabinovich Report”). AR, Vol. III, Annex 43.
752
See UCM, para. 5.5 (internal citations omitted).
- 332 -6.9 In stark contrast to the IFC’s experts, Drs. Rabinovich and Tournier cannot
be considered “independent”. Argentina states that its Reply is based on “expertises
753
scientifiques indépendantes” , and that the “rapports de ses experts indépendants”,
specifically referring to the Rabinovich Re port, confirm the claims made in the
Memorial . It further asserts that “[l]e rapport Rabinovich est également un
755
rapport indépendant sur lequel se fonde l’Argentine au soutien de sa thèse….” .
However, the authors of Argentina’s reports are in no sense of the word
“independent”. Indeed, Argentina’s curious failure to provide a C.V. or indeed any
background about them may be explained by the fact that these “experts” are, in fact,
employees of Argentina.
6.10 Dr. Jorge Rabinovich has been a Principal Investigator of Argentina’s
National Council for Scientific a nd Technical Research (“CONICET” 756) since
1986 75. CONICET, as described on its own website, is an Argentine “governmental
entity, under the jurisdiction of the Secretary of Science, Technology and Productive
758
Innovation, dependent upon the Ministry of Education, Science and Technology” .
As a government agency dedicated to the promotion of science and technology in
753
AR, para. 3.233 (“independent scientific analyses”).
754
AR, para. 4.169 (“reports of its independent experts”).
755
AR, para. 3.14 (“[t]he Rabinovich Report is also an independent report used by Argentina to
support its theses…”); see also AR, para. 3.7.
756
“Consejo Nacional de Investigaciones Científicas y Técnicas”.
757
See Initiative on Science and Technology for Sustainability Workshop, available at
http://www.hks.harvard.edu/sustsci/ists/TWAS_0202/participants/Rabinovi… (last
visited on 2 July 2008). UR, Vol. III, Annex R77.
758See National Council for Scientif ic and Technical Research (hereinafter “CONICET”) Web
Site, “About CONICET,” available at http://www.conicet.gov.ar/cdofertatec/ingles/index.htm
(last visited on 30 May 2008). UR, Vol. III, Annex R73.
- 333 -Argentina, CONICET specifically notes that its objectives are to be carried out in
759
consideration of the guidelines established by the Argentine government . Dr.
Rabinovich’s role as Principal Investigator 760to CONICET eviscerates any claim
that the Rabinovich Report can be considered “ independent”. Furthermore,
Argentine media sources confirm that Dr. Rabinovich’s ties to the government are
much stronger than even his service to CONICET suggests. As of July 2007, Dr.
Rabinovich served as a scientific advi sor to the National Secretary of the
Environment 76, and was a member of the Argent ine delegation to the negotiations
762
facilitated with Uruguay by the King of Spain . It also appears that Dr. Rabinovich
may lack the subject matter expertise relevant to this dispute: his primary expertise
763
appears to be insect damage to crops .
6.11 Similarly, Dr. Luis Alberto Tournier , co-author of the Rabinovich Report,
was among the group of government scientists selected to monitor the activities of
764
the Botnia plant . And, more significantly, Dr. Tournier was listed on the
759 See CONICET Web Site, “Objectives,” available at http://www.conicet.gov.ar/
INSTITUCIONAL/Descripcion/objetivos.php (las t visited on 30 May 2008). UR, Vol. III,
Annex R74.
760
CONICET Web Site, Resume of Jorge Eduardo Rabinovich, available at
http://www.conicet.gov.ar/php/datos_rrhh.php?n=3059 (last visited on 30 May 2008). UR,
Vol. III, Annex R75.
761Clarin, “Argentina and Uruguay Resume ‘Direc t Dialog’ about the Pulp Mills Today” (30
July 2007). UR, Vol. III, Annex R57.
762ZonaColon.com, “After the Crossroads of Statements About the Paper Mill” (26 May 2007).
UR, Vol. III, Annex R56.
763
See CEPAVE Web Site, “Ecology of Pests,” available at http://www.cepave.edu.ar/
ecologia_ing.htm (last visited on 2 July 2008). UR, Vol. III, Annex R79.
764See ZonaColon.com, “After the Crossroads of Statements About the Paper Mill,” op. cit.
UR, Vol. III, Annex R56.
- 334 - 765
government’s official payroll for 2007 and employed as a scientific and technical
766
advisor to the Secretary of the Environment and Sustainable Development .
6.12 In sum, neither Dr. Rabinovich nor Dr. Tournier can be considered a
disinterested, or independent, party — “one who is not a party to the proceedings
767
and stands to gain or lose nothing from its outcome” . Given the lack of
independence of these two experts, their predictions regarding the impacts of the
Botnia plant and any conclusions derive d from their modelling activities should be
treated with caution 768. As the Court has observed in similar circumstances, “a
member of the government of a State engaged in litigation before this Court” will
“‘probably tend to identify himself with the interests of his country.’”
Consequently, “‘while in no way impugni ng the honour or veracity’ of such a
person, the Court should ‘treat such evidence with great reserve’” 769.
765 See Office of the Head of the Cabinet, U ndersecretary of Public Management and
Employment of the Office of the Secretary of Public Management, Nati onal Office of Public
Employment, Central Registry of Contract Personnel, Payroll for Personnel with Current
Contracts in 12/2007 Employed in the Agency, available at
http://www.sgp.gov.ar/sitio/empleo/regimenes/contratados/listadocontrat…
_12/41078_rcpc_6.html (last visited on 30 May 2008). UR, Vol. II, Annex R18.
766
See Stockholm Convention on Persistent Organic Pollutants - Report of the Toolkit Expert
Meeting, Annex II, available at http://www.pops.int/documents/meetings/toolkit/
Toolkit_rpt_Dec07.pdf (last visited on 30 May 2008). UR, Vol. III, Annex R72.
767
UCM, para. 5.5 ( quoting Case Concerning Military and Paramilitary Activities in and
against Nicaragua (Nicaragua v. United States of America) , I.C.J. Reports 1986, p. 43, para.
69).
768Professor Wheater and Dr. McIntyre, authors of the report entitled “Technical Commentary
on the Counter-Memorial of Uruguay in the case Concerning Pulp Mills on the River Uruguay”
(hereinafter “Second Wheater Report”), AR, Vol. III, Annex 44, also self-describe their report
as “independent”. Ibid. , p. 5. AR, Vol. III, Annex 44. As hired experts, their opinions carry
none of the weight of the experts of the IFC. Their findings are not addressed in detail in this
section because they did not attempt to make an affirmative showing that the operation of the
Botnia plant will cause harm.
769
Case Concerning Armed Activity on the Territory of the Congo (Democratic Republic of the
Congo v. Uganda), I.C.J. Reports 2005, p. 36, para. 65 (quoting Nicaragua v. United States of
America, op. cit., p. 43, para. 70).
- 335 -6.13 Notwithstanding their partisanship, Drs. Rabinovich and Tournier fail to
show that the Botnia plant has any reason able likelihood of causing future harm to
the river. It is difficult to decide where to begin listing the errors that permeate the
Rabinovich Report, utterly invalidate the an alysis and, indeed, prove the contrary
conclusion that the Botnia plant will not cause eutrophication.
6.14 Part 4 of the Rabinovich Report is entitled “Argentina’s demonstration that
there is a real risk of serious harm” 77. Covering a scant four pages plus some short
sub-annexes, the Rabinovich Report asserts that “ecological mathematical models . .
. show that the operation of the pulp mill . . . poses a serious and real hazard to the
Argentine coast, both to the ecological sy stem and to the health of the human
population in the proximity, especially the tourists that visit the river beach facilities
on such [Ñandubaysal] Bay” 77. The serious and real “hazard” identified by
Rabinovich is “associated with the signi ficant amount of phosphorus and nitrogen
contained in the effluent of the pulp mill . . . that increase the production of algal
772
blooms that include toxic microalgae” . However, Rabinovich predicts that algae
growth of concern would not be seen until fully 15 years after operations
773
commence . Thus, even Argentina’s hired expert is unable to predict any short-
term effects -- that is, before the year 2023 -- requiring immediate or short-term
intervention. As will be shown below, the Rabinovich Report is so plagued by
errors that even the far-into-the-future effects that it predicts are groundless.
770
Rabinovich Report, op. cit., pp. 48-52 . AR, Vol. III, Annex 43.
771Ibid., para. 4.4.2.
772Ibid., para. 4.4.3.
773Ibid., para. 4.4.8 & Annex 1, p. 71.
- 336 -6.15 Before delving into the errors in the Rabinovich Report, it is worth
highlighting that Rabinovich, despite the constant refrain from Argentina that
phosphorus from the plant is the effluent of most serious concern 774, states plainly
that phosphorus is not the cause of the eutrophication it forecasts for 2023 and
beyond. Thus, the repeated references to phosphorus throughout Argentina’s Reply
appear now to be largely irrelevant, because Rabinovich states without ambiguity or
hesitation that “for all possible scenarios N [nitrogen] was the constraining nutrient”,
775
i.e., the purported cause of the alleged future eutrophication . By its reliance on
Rabinovich, Argentina has effectively adopted the view that phosphorus will not be
the cause of future eutrophication in the river. It is puzzling, therefore, that
Argentina devoted such substantial attention in the Reply to phosphorus discharges
from the Botnia plant when its own experts -- who also serve as technical advisors to
Argentina’s Secretary of the Environment -- do not believe that phosphorus
emissions will cause the harm to the river!
6.16 Now the errors. Rabinovich’s first erro r was to assume for the purpose of
predicting the effects of discharges from the Botnia plant that Ñandubaysal Bay, a
776
part of the Uruguay River, is neither a ri ver nor even a bay, but instead is a lake .
This assumption is wrong. And, as Urugua y’s experts confirm, this “seriously
774See, e.g., AR, paras. 3.177-3.178, 3.180, 4.20, 4.140, 4.160 & 4.163.
775
Rabinovich Report, op. cit., para. 4.4.7. AR, Vol. III, Annex 43. Exponent, Inc., Response
to the Government of Argentina’s Reply - Facility Design Technology and Environmental
Issues Associated with the Orion Pulp Mill, Fray Bentos, Uruguay River, Uruguay (hereinafter
“Exponent Report”), p. 4-22 (July 2008). UR, Vol. IV, Annex R83.
776Rabinovich Report, op. cit., Annex 1, p. 54. AR, Vol. III, Annex 43.
- 337 - 777
flawed” and contra-factual assumption dram atically exaggerates the modelled
impact of the Botnia plant. They note that Ñandubaysal Bay:
is an open system within which water mixes and leaves. This
open system receives water from the Gualeguaychú and
Uruguay Rivers and water is exchanged between the Bay and the
Uruguay River. The net flow of water is out of the Bay and the
residence time indicates the time it takes the Bay to flush.
Rabinovich and Tounier (2008) ignore these processes and 778
instead treat the Bay as a closed system, equivalent to a lake .
6.17 Compounding the error in incorrectly treating Ñandubaysal Bay as a lake,
Rabinovich then incorrectly assumes (contrary to the laws of physics and chemistry)
that any nitrogen or phosphorus that enters the bay is trapped and never flows out of
779
it . There is no water body in the world -- and certainly not a river or a bay -- that
functions as Rabinovich has assumed, where water and nutrients flow in, but
nutrients never flow out 780. The error is apparent from the Rabinovich Report itself,
which in other places confirms that water (and nutrients) regularly flow in and out of
the bay 781. Specifically, Rabinovich lists the “residence time” of water (and
nutrients) in the bay as 7-8 days, meaning that water (and dissolved nutrients) reside
782
in the bay an average of 7-8 days before flushing out . Despite explicitly
recognizing this basic principle, Rabinovich astonishingly fails to include this
residence time in its mathematical model. The effects of this error are significant.
777Exponent Report, op. cit., Attachment B, p. 1. UR, Vol. IV, Annex R83.
778Ibid., p. 4-29.
779Rabinovich Report, op. cit., Annex 1, p. 63. AR, Vol. III, Annex 43.
780Exponent Report, op. cit., pp. 4-29. UR, Vol. IV, Annex R83.
781Rabinovich Report, op. cit., Annex I, p. 54. AR, Vol. III, Annex 43 (stating that water in the
bay has a residence time of 7-8 days).
782Ibid., Annex I, p. 54.
- 338 -Simply using Rabinovich’s own figures of residence time (i.e., 7- 8 days) results in
nitrogen and phosphorus concentrations 40 times lower than were projected by
783
Rabinovich for the first year of Botnia’s operation . This error -- in assuming that
the nitrogen and phosphorous emitted by the Botnia plant never leave Ñandubaysal
Bay, despite having an admitted reside nce time of 7-8 days -- is compounded and
exaggerated when it is applied over th e 60-year time period modeled in the
Report 78.
6.18 If this were not enough, Rabinovich makes a second, equally egregious
error: the Report grossly exaggerates th e amount of phosphorus and other nutrients
generated by the Botnia plant that enter the bay in the first place. How did
Rabinovich make this error? Simply pu t, Rabinovich’s model assumes that the
Uruguay River flows backwards 100% of the time 785.
6.19 Rabinovich calculates th e amount of nutrients entering the bay from the
Botnia plant by extrapolating from the fraction of Botnia’s total effluents that enter
the bay. Normally, this fraction is extr emely small, resulting in immeasurable
contributions of nitrogen and phosphorus to the bay; this is the conclusion of the
783Exponent Report, op. cit., Attachment B, p. 1. UR, Vol. IV, Annex R83. (“Using R&T’s
own assumption of water ‘residence time’ in the Bay this error results in an exaggeration of
average nutrient concentrations by a factor of approximately 40 on an annual basis.”).
784Had Rabinovich applied its model to the phosp horus discharges from Argentina, the errors
in the model would cause it to predict that the discharges from Argentina alone would
eventually turn the bay into solid phosphorus and nitrogen. Ibid., p. 4-14.
785
Ibid., Attachment B, pp. 2 & 5-6. (“This error dramatically overstates the effect of flow
reversal, essentially by assuming that the ri ver is always flowing net backwards into
Ñandubaysal Bay.”). Exponent notes that Rabinovich presents two mutually inconsistent
calculations of the impact of the Botnia plant on the bay, one 25 times the other. Ibid., p. 3. In
one calculation, Rabinovich merely assume the ri ver flows backwards twice as often as their
own data show. In another, they simply assume the river flows backwards continuously.
- 339 - 786
IFC’s independent experts, whom Argen tina has not seriously challenged.
Argentina’s Latinoconsult report, cited in its Memorial, reaches the same
conclusion . However, Rabinovich argues that during certain periods of extended
flow reversal the contribution of nutrien ts from the Botnia plant is higher.
Rabinovich begins by identifying four se vere flow reversals from a model covering
the past two decades, isolating r oughly 20 days from the past 20 years 788; these are
the times when contributions from the Botnia plant to the bay would be expected to
be the greatest. By Rabinovich’s own calculation, these 20 days include some of the
most severe and extended flow reversal s, representing the most severe 1% of
reversals. Not content to extrapolate base d on a scenario that occurs only 1% of the
time, Rabinovich selects the la st 12-hour period in each of those periods, which is
789
the period when the reversal is at its greatest . This creates a scenario where
Rabinovich’s daily model is based entirely on severe conditions selected from only
48 hours over the past 20 years 790and treating them as if they persist 24 hours per
day, 365 days per year for a period of 60 years 79.
786 See International Finance Corporation, Cu mulative Impact Study, Uruguay Pulp Mills,
Annex D (hereinafter “Final CIS, Annex D”), p. D6.16 (September 2006) (finding that under
both average and low flow conditions the calculate d dilution of the effluent will be 1000:1 and
693:1 under rare occasions of flow reversal). UCM, Vol. VIII, Annex 176.
787
AM, paras. 7.19 & 7.37.
788Rabinovich Report, op. cit., Annex 1, pp. 63-64. AR, Vol. III, Annex 43. Exponent Report,
op. cit. , Attachment B, p. 5 (“By definition, the selected time periods cannot be
representative.”). UR, Vol. IV, Annex R83.
789Rabinovich Report, op. cit., p. 6. AR, Vol. III, Annex 43.
790Exponent Report, op. cit., Attachment B, p. 3. UR, Vol. IV, Annex R83.
791Rabinovich Report, op. cit., Annex 2, p. 78. AR, Vol. III, Annex 43.
- 340 -6.20 The magnitude of this error on an annual average impact is huge. Since by
792
Rabinovich’s own calculations, flow reverses on average only 10% of the time , by
definition Rabinovich’s figures are exaggerated for at least the 90% of the time that
the river flows in its usual direction; and, in fact, the figures are exaggerated far
more than that, since it is undisputed that most flow reversals are much less extreme
793
and shorter in time than the ones selected for the model . And, because
Rabinovich’s model assumes that nutrients continuously accumulate from year to
year, the longer the time period evaluated, the greater the error 79.
6.21 Interestingly, if two of Rabinovich’s own assumptions stated in its Report
are actually plugged into its model, i.e., that (1) the water and nutrients in
Ñandubaysal Bay have a residence time of 7-8 days (as opposed to never leaving it);
and (2) flow reversal in the Uruguay River occurs approximately 10% (not 100%) of
the time, they show that the predicted a nnual contribution of nutrients (including
phosphorus) from the Botnia plant in the Report -- and on which Argentina places
great reliance in its Reply -- have been ex aggerated by a factor of 381, or more than
795 796
38,000% . Over time, the exaggeration becomes even more extreme .
792
Ibid., op. cit., Annex 4, p. 96 (predicting flow reversal of 964 hours/year, or 10.8%).
793
Contrary to the assertion in Rabinovich Report, op. cit., paras. 3.8.6 & 2.20.9, AR, Vol. III,
Annex 43, Uruguay and the IFC’s models have alwa ys included the effects of flow reversals.
International Finance Corporation, Cumulative Impact Study, Uruguay Pulp Mills (hereinafter
“Final CIS”), p. 4.47 (September 2006). UCM, Vol. VIII, Annex 173. See also UCM, para.
5.58.
794
Exponent Report, op. cit., p. 4-25. UR, Vol. IV, Annex R83.
795
Ibid., Attachment B, p. 7. The other calculation presented by Rabinovich is off by a factor
of 83. Ibid., Attachment B, p. 4.
796
Ibid., Attachment B, p. 4.
- 341 -6.22 Indeed, using the same methodology for predicting increases in
eutrophication adopted in the Rabinovich Report, and the values as corrected to
reflect those determined by Rabinovich itsel f, it is readily de monstrable that the
Botnia plant will not cause eutrophicati on in Ñandubaysal Bay: not now, not in
797
fifteen years, not ever . Uruguay’s experts have made such a demonstration --
using Rabinovich’s own model and values, but without the obvious errors discussed
798
above . This additional analysis confirms th at the Botnia plant will not cause any
meaningful increase in algae growth in Ñandubaysal Bay, which is the only area
identified by Argentina as likely to suffer such a consequence as a result of
799
discharges from the Botnia plant .
6.23 The Exponent Report supplied by Uruguay confirms the conclusions of the
Menzie Report, as set forth in the Count er-Memorial: the e xpected increase in
phosphorus from the Botnia plant’s discharge will have no adverse effect on the
water quality of Ñandubaysal Bay 800. In contrast to the well-supported conclusions
of the Menzie Report as confirmed, using Rabinovich’s own methodology for
predicting eutrophication, by the Exponent Report, neither Argentina nor the reports
on which it relies provide any valid results. The criticism of the Menzie Report by
801
the Second Wheater Report (which Argentina submitted with its Reply) are
unsubstantiated and limited to the assertion that “[t]he addition of nutrients to a
797Ibid., pp. 4-12 - 4-35. UR, Vol. IV, Annex R83.
798Ibid.
799
Ibid.
800
UCM, para. 6.93.
801
Second Wheater Report, op. cit., p. 29. AR, Vol. III, Annex 44.
- 342 -water body is a complex process” and hence evaluation of impacts involves
uncertainties. The conclusions reached by Uruguay’s experts cannot be undermined
by such general platitudes, especially when Uruguay’s experts used the same
802
methodology employed by Argentina’s experts in the Reply and, after correcting
the errors discussed above, confirmed that the conclusions expressed in the Counter-
Memorial were correct.
6.24 Those conclusions, reached by Uruguay’s experts and the independent
experts of the IFC are: the calculated incremental concentration from the Botnia
plant during worst-case low flow conditions , 0.001 mg/L, is insignificant under any
circumstances and especially when compared to the average concentrations of
phosphorus in the river. That contribution is well within the natural variation of
the river and, thus, has essentially no effect on the natural environment. Argentina’s
Reply, and especially the Rabinovich Re port, once corrected, fully corroborate the
conclusions in the Final CIS that the im pact on Ñandubaysal Bay or other areas in
Argentina of phosphorus and nitrogen discharges from the Botnia plant is
insignificant.
B. ARGENTINA IS THEM AJOR SOURCE OF PHOSPHORUS IN Ñ ANDUBAYSAL BAY ,AND
ANY P ROBLEMS WITH N UTRIENTS IN THB AY CANNOT BE ATTRIBUTED TO URUGUAY
OR THEB OTNIA PLANT.
6.25 Beyond its utter failure to demonstrate any connection between operations
of the Botnia plant and possible futu re eutrophication in Ñandubaysal Bay,
802
Rabinovich Report, op. cit., p. 83. AR, Vol. III, Annex 43.
803
UCM, para. 4.43. Using the figures of 0.04 to 0.24 mg/L in the Final CIS, as cited in the
Second Wheater Report, op. cit., p. 25, AR, Vol. III, Annex 44, the average concentration in
the river is 40 to 240 times the conof Botnia under worst case conditions; using the
figures specified in para. 2.16.2. binovich Report, the concentration is 140 to 220
times the maximum incremental contribution of Botnia under worst case conditions.
- 343 -Rabinovich makes another fundamental error: the Report makes no mention
whatsoever of other contributors of nutrients to the river. Although Argentina has
spent hundreds of pages in its pleadings and annexes complaining about nutrient
loads from the Botnia plant, it virtually i gnores a far larger source of nutrients --
itself. In any nutrient model, it is impera tive to consider all impacts, since there is
no physical way to distinguish one mo lecule of phosphorus (or nitrogen) from
another. As Uruguay’s experts confirm, Rabinovich’s model improperly ignores the
effects of other sources of nutrients in the river 80. From a tactical perspective, this
is hardly surprising because by far th e largest contributor of phosphorus to
Ñandubaysal Bay is Argentina. If the disc harge of nutrients tr uly poses a health
hazard to the residents of Argentina, that State would be far better served by
reducing the phosphorus entering the bay from its own sources rather than
expending all of its efforts attacking the de minimis contribution from the Botnia
plant.
6.26 Rabinovich’s grossly inflated estim ate of the Botnia plant’s annual
contribution of phosphorus to the bay was variously presented as 98kg/yr or 990
805
kg/yr . Uruguay’s experts demonstrate that Argentina’s contribution is thousands
of times more than the contribution of Botnia.
804Exponent Report, op. cit., Attachment B, p. 3 (“R&T … ignore the other nutrient loads, a
serious error…that renders the model virtually meaningless.”). UR, Vol. IV, Annex R83. As
the Exponent Report notes, had Rabinovich app lied the same methodology to the Argentine
phosphorus discharge as it did to the Botnia plants, it would have predicted concentrations of
phosphorus in the Bay hundreds of times higher than what is currently seen. Ibid., pp. 4-14.
805Rabinovich Report , op. cit. , Annex 2, pp. 63 & 78. AR, Vol. III, Annex 43. Exponent
Report, op. cit., Attachment B, pp. 4 & 7. UR, Vol. IV, Annex R83.
- 344 -6.27 A principal source of nutrients in the bay is the Gualeguaychú River,
which discharges directly into the bay. Simply multiplying the concentration of
phosphorus in the Gualeguaychú River reported in the Rabinovich Report, 0.130
806
mg/L , and the average annual flow of the Gualeguaychú River reported by
Argentina, 120 m /s 3 807, yields an annual Argentine phosphorus discharge from that
808
river alone directly into the bay of over 491,000 kg/yr . This is almost 5,000 times
more than Rabinovich’s lower estimate and 500 times more than Rabinovich’s
discredited higher estimate of phosphorus emitted from the Botnia plant. Because
considerable phosphorus enters the bay fro m Argentina in locations other than the
Gualeguaychú River, the total Argentine contribution is actually far higher.
6.28 Other studies confirm that Argentina’s contribution of nutrients to the bay
is dramatically greater than Botnia’s. Uruguay’s experts performed an analysis of
the estimated discharge of nitrogen and phosphorus from Argentine sources to the
Gualeguaychú River, which deposits them into Ñandubaysal Bay on a continuous
basis. This river drains an extensive agricultural area and also receives treated
sewage input from the city of Gualeguaychú. Uruguay’s experts have estimated that
loadings from the Gualeguaychú River watershed are conservatively estimated to be
809
over 350,000 kg/yr for phosphorus . Even using the highest figure in Ravinovich’s
806
Rabinovich Report, op. cit., para. 2.16.2. AR, Vol. III, Annex 43.
807
Piedracueva, Ismael - “Proy ecto Botnia - Estudios de la Pluma del Emisario y Estudios
Sedimentológicos”, [“Botnia Project-Studies of the Effluent Flow and Sedimentology Studies”]
available at http://www.ifc.org/ifcex t/lac.nsf/AttachmentsByTitle/Uruguay_PulpMills_
AnnexD_A/$FILE/CIS_AnnexD_partA-pdf.
808Using a refined evaluation of phosphorus con centrations in the river (0.116 mg/L), but the
same basic methodology, Exponent calculated th e discharge as approximately 439,272 kg/yr.
Exponent Report, op. cit., pp. 4-5. UR, Vol. IV, Annex R83.
809Ibid. The conservative estimate for nitrogen is over 3,400,000 kg. Ibid., Annex D.
- 345 -discredited analysis, which implausibl y concluded that a full 990 kg/yr of
phosphorus would be contributed to the Ñandubaysal Bay by the Botnia plant in a
year, and Exponent’s lowest estimate of the discharge from the Gualeguaychú River,
Argentina contributes over 350 times more phosphorus to the bay than Botnia.
When Rabinovich’s erroneous assumptions are corrected, Argentina contributes
more than 3,200 times the phosphorus contributed by Botnia to the bay on an annual
810
basis .
6.29 In short, if Argentina is truly con cerned about levels of phosphorus in
811
Ñandubaysal Bay, it need look no farther than itself for a solution . It could begin
by emulating Uruguay’s example of adop ting regulations -- for the first time 812--
that place limits on discharges of phosphorus into the Uruguay River, or into
tributaries such as the Gualeguaychú Rive r, by Argentine sources. Or, it could
collaborate in good faith with Uruguay to incorporate limits on phosphorus
emissions into CARU regulations pertaining to water quality and pollution. Until
Argentina manifests a willingness to undertake either of these self-evident protective
measures, it is difficult to respond to its hand-wringing over phosphorus levels in
Ñandubaysal Bay with anything other than suspicion.
810Ibid., p. 4-2.
811Professor Wheater noted the construction of a new wastewater plant in Gualeguaychú,
Second Wheater Report, op. cit., p. 72; AR, Vol. III, Annex 44; AR, para. 3.68, but neither
Annex 47 nor the remainder of the Reply c ontain any information about phosphorus
discharges. Apparently, outside of this litigati on, Argentina considers the issue of phosphorus
too insignificant to mention.
812
Argentina does not currently regulate its phosphorus discharges. UCM, para. 4.40. See also
Regulatory Decree No. 5837, Gove rnment of Entre Ríos, Exhibit 1 (26 December 1991).
UCM, Vol. III, Annex 42.
- 346 -6.30 Argentina’s inaction is all the more striking when it is contrasted with
Uruguay’s proactive efforts to minimize phos phorus discharges. As set forth in
Chapter 4, Section 2 of this Reply, Urugua y has undertaken several initiatives that,
once complete, will more th an completely offset the contribution of phosphorus
from the Botnia plant. Connecting the Fr ay Bentos municipal discharge to the
Botnia plant will reduce phosphorus discha rge to the river by 8.8 tons annually,
813
approximately three-quarters of the phosphorus discharge from the Botnia plant .
Constructing new wastewater treatment pl ants elsewhere on the river, which had
been planned before the Botnia pl ant was proposed, will reduce phosphorus
discharges further. The construction of the improved plant at Salto, for example,
will reduce phosphorus discharges by an es timated 25 tons annually, or more than
814
twice the expected discharge from the Botnia plant . And, although the precise
benefit cannot be calculat ed, Uruguay’s plan to reduce non-point source nutrient
pollution will result in still further reductions.
Section II.
The Evidence Shows that the Botnia Plant Complies with BAT and Is Among
the Best Cellulose Plants in the World
6.31 As Chapter 4 of this Rejoinder demons trates, the actual operational results
from the Botnia plant confirm that its effluent discharges comply with the IPPC
BAT requirements in all respects, as well as with all applicable regulations and
813
OSE, Discharge of Residual Liquids in th e Uruguay River Basin (hereinafter “OSE,
Discharge of Residual Liquids in the Uruguay Ri ver Basin”) (undated). UR, Vol. II, Annex
R13. Final CIS, Annex D, op. cit., p. D4.6. UCM, Vol. VIII, Annex 176.
814OSE, Discharge of Residual Liqui ds in the Uruguay River Basin, op. cit. UR, Vol. II,
Annex R13. (51 tons of phosphorus produced currently; the new project will reduce
phosphorus discharges for the 59% of the population connected to the sewer by 85%, yielding a
25 ton phosphorus reduction).
- 347 -standards of Uruguay and CARU. Furthe rmore, the IFC’s independent technical
experts remain steadfast in their conclusion that the plant’s technology is fully
815
compliant with BAT . On these bases alone, Argentina’s challenges to the
environmental performance of the plant and its compliance with BAT should be
rejected. Nevertheless, Argentina persists in its attempts to challenge the plant’s
compliance with BAT by making a smörgås bord of assertions about the technology
employed in the plant and its asso ciated chemical production facilities 81. This
Section demonstrates that each of Argentina’s assertions is without merit.
A. E FFLUENT T REATMENT T ECHNOLOGY
6.32 In its Reply, Argentina continues to assert that the plant should be
obligated to construct a tertiary treatment system 81. Argentina bases this claim on
the allegation that the Uruguay River is environmentally sensitive to nutrient
discharges and subject to eutrophication 818. However, as demonstrated in Section 1
of this Chapter, the impact on eutrophicatio n of discharges from the Botnia plant is
inconsequential, and as will be demonstrated below, the Parties agree that tertiary
treatment is very rarely used in pulp mills -- even for the most modern, and even for
those situated on much smaller water bodies. Tellingly, tertiary treatment has not
been required or implemented for any pulp mi ll in Argentina. This is yet another
815See AMEC Forestry Industry Consulting, Orion BKP Mill Pre-Startup Audit (hereinafter
“Pre-Startup Audit”) (September 2007). UR Vol. III, Annex R48. See UR, paras. 4.19-4.23.
816Notably, Argentina’s Reply retreats from the argument that the bleaching technology to be
employed at the Botnia plant -- elemental chlorine free light technology -- is inadequate.
Therefore, the arguments contained in the Counte r-Memorial with respect to this issue can be
taken as accepted and admitted by Argentina. UCM, paras. 6.43-6.46.
817
AR, paras. 3.15, 3.83 & 3.108-3.116.
818
AR, para. 3.110.
- 348 -example of Argentina’s penchant for doubl e standards, one for itself and a much
higher one for Uruguay -- in this case a sta ndard far exceeding the “state-of-the-art”
and far more than is necessary to protect the Uruguay River.
6.33 Although Uruguay will not burden the Court by repeating the arguments of
the Counter-Memorial, it bears emphasisi ng those facts in the Counter-Memorial
regarding tertiary treatment that Argentina does not dispute in its Reply and, hence,
effectively concedes. In this regard, Argentina does not dispute that tertiary
treatment is very rarely used in pulp mills, and even then only in highly unusual
819
circumstances . Further, Argentina does not dis pute the finding of the Final CIS
that tertiary treatment may result in harmful effects by increasing the chemical load
820
of the effluent and needlessly complicating the wastewater treatment system . Nor
does Argentina contest that its own recently-adopted program for modernising its
pulp mills, whose guidelines are expressly based on BAT standards, does not require
821
the use of tertiary treatment for phosphorus removal .
6.34 Botnia’s actual operational data confirm that tertiary treatment is not
required, because the phosphorus emissions ar e well within the range prescribed by
BAT even in the early stages of operation, and the monitoring data show no increase
of phosphorus levels in the river as a result of the plant’s operations 822. As the
819UCM, paras. 6.33-6.34. Argentina also has no t identified other facilities elsewhere in the
world that employ this treatment, including the new state-of-the-art Stendal Mill located in
Germany.
820UCM, para. 6.33 (citing Final CIS, op. cit., p. 2.23. UCM, Vol. III, Annex 173).
821UCM, para. 6.35.
822See supra Chapter 4; International Finance Corporation, Orion Pulp Mill, Uruguay
Independent Performance Monitoring As Requi red by the International Finance Corporation
(Phase 2: Six-Month Environmental Performance Review) (hereinafter “ Environmental
Performance Review”), pp. 4.3-4.4 (July 2008). UR, Vol. IV, Annex R98.
- 349 -EcoMetrix report demonstrates, current phos phorus loadings are already within the
823
range of BAT . In addition, the nutrient concentrations achieved by Botnia, even
824
in the first months of operation (average 0.58 mg/L ), are well below the standard
that Argentina asserts should apply, whic h is the (inapplicable) European Union
standard of 1 mg/L that is suggested by Wheater as the reason for needing tertiary
825
treatment .
6.35 Finally, Argentina suggests that the decision to forego the installation of
tertiary treatment was cost-driven on the part of Botnia, even though such costs
826
would have been relatively modest . Uruguay agrees that the installation and
operating costs associated with tertiary treatment are not onerous. That is why those
costs played no role in the wastewater treatment technology chosen for the plant. As
discussed in the Counter-Memorial, there ar e also negative impacts associated with
827
tertiary treatment -- including an increase in chemical load to the environment .
Moreover, the operational data from the pl ant have confirmed the predictions of
Botnia and the Final CIS that tertiary treatment is not necessary to achieve the
828
required phosphorus discharge levels . Rather than cost, it was these
considerations relating to environmental impacts that were conclusive in the decision
not to install tertiary treatment.
823
Ibid., p. 3.4.
824
Ibid.
825
Second Wheater Report, op. cit., p. 25. AR, Vol. III, Annex 44.
826
AR, para. 3.83.
827
See, e.g., AR, para. 3.26. UCM, para. 6.33; see also Final CIS, op. cit., p. 2.23. UCM, Vol.
VIII, Annex 173.
828
See supra Chapter 4.
- 350 -6.36 Argentina’s argument that Botnia s hould have considered the installation
of an artificial wetland as additional nut rient control technology is baseless.
Argentina purports to base its argument on the Rabinovich Report’s unfounded
assertion that the results of such a pilot wetland at the Valdivia pulp mill in Chile
have been “prometteurs” 82. Rabinovich’s failure to provide any support for this
conclusion is unsurprising, since the pilot project in Chile has been abandoned. The
Environmental Director for the Valdivia mill recently stated: “Our experimental
wetland study, implemented several months ago at the Valdivia pulp mill, did not
obtain good results on reducing phosphorous a nd other parameters. For that reason
830
we finished the trial.”
6.37 In sum, Argentina’s Reply does nothing to undermine the conclusions of
EcoMetrix and Hatfield (the IFC’s independent experts), and Uruguay’s experts that
tertiary treatment is not required for compliance with BAT or to avoid unacceptable
impacts to the environment. Argentina’s argument that an artificial wetland should
have been constructed to provide additi onal nutrient removal is scientifically
unsound and devoid of factual support. And, the data obtained from operation of the
plant since November 2007 confirm that the discharge from the plant (an average of
0.58 mg/L 831) more than meets the standard of 1 mg/L suggested by Argentina in the
Second Wheater Report.
829AR, para. 3.84 (“promising”).
830Exponent Report, op. cit. , Attachment A, p. A.31 (Osses, M. Environmental Director,
Arauco Celulosa Valdivia M ill, e-mail correspondence, 28 April 2008). UR, Vol. IV, Annex
R83.
831Environmental Performance Review, op. cit., p. 3.4. UR, Vol. IV, Annex R98.
- 351 - B. E MERGENCY B ASINS
6.38 The Reply fails to rebut the conclusion of the Final CIS and the Counter-
Memorial that the emergency basins of the Botnia plant are adequate. In its
Memorial, Argentina argued that an em ergency basin should have a retention
capacity of 24 hours 832. Uruguay’s Counter-Memorial demonstrated that the Botnia
833
plant’s emergency spill basin has a 24 hour capacity . Neither the Reply nor its
accompanying expert reports attempt to refute that fact. Indeed, the Second Wheater
Report specifically declined to comment on the analysis 834, and the Rabinovich
Report limited itself to making the unsupporte d statement that the Botnia plant does
835
not have a retention capacity of 24 hours . In so doing, Rabinovich ignores the
detailed analysis in the Counter-Memorial documenting the ability of the plant to
retain 24 hours of flow. Given Argentina’ s failure to address this argument, the
sufficiency of the retention capacity of the plant’s emergency spill basins, as
described in the Counter-Memorial, is unimpeached.
832Argentina’s Reply reaffirmed that an emergency spill basin capacity of 24 hours is sufficient
for the Botnia plant. It specifically cites the Latinoconsult analysis that retention capacity
should be at least 18 to 24 hours. Moreover, Dr. Rabinovich reaffirms the conclusion of
Latinoconsult:
Consequently, taking into account the complexities of this type of pulp
mills and the time required to solve emergency situations, the usual
provision is to try to withhold for a time as long as possible, being the
goal of at least 24 hours a normal consideration.
AR, para. 3.121 (citing to Rabinovich Report, op. cit., para. 2.13.8. AR, Vol. III, Annex 43).
833UCM, para. 6.50; Dr. Thomas L. Deardorff & Mr. Douglas Charles Pryke, Available
Technologies and Best Environmental Management Practices for Botnia S.A.'s Bleached Kraft
Pulp Mill, Fray Bentos Urugua y, pp. 33-34 (Exponent, Inc.) (8 July 2007). UCM, Vol. X,
Annex 215.
834
Second Wheater Report, op. cit., p. 118. AR, Vol. III, Annex 44.
835
Rabinovich Report , op. cit., para. 2.13.8. AR, Vol. III, Annex 43. “The Botnia pulp mill
does not have such a capacity [of 24 hours].” AR, para. 3.121.
- 352 - C. C HEMICAL SYNTHESIS
6.39 Chapter 6 of Uruguay’s Counter-Memorial discussed the production of
836
chemicals at the Botnia plant for use in the environmentally sensitive ECF-light
bleaching technology employed at the plant 837. Like the Memorial, Argentina’s
Reply raises unfounded objections to these chemical sy nthesis facilities 838.
Argentina does not identify any actual environmental risks that these facilities
839
pose . Rather, Argentina asserts that the chemical processing facilities were
inadequately assessed.
6.40 As an initial matter, as stated above, Argentina has not identified a single
potential risk to the river posed by the chemical synthesis facilities. This is
unsurprising since they generate no regular liquid effluent discharge whatsoever 840,
and any unplanned discharges of liquids from the chemical synthesis facilities are
841
routed through the overall wastewater treatment system .
6.41 DINAMA and Botnia have always c onsidered the chemical production
facilities to be part of the Botnia plant. Accordingly, contrary to Argentina’s
allegations, assessments of these facilities were included in the regulatory approval
836UCM, para. 6.52.
837
UCM, para. 6.52.
838
AR, paras. 3.105-3.107.
839
The Rabinovich Report states that these fac ilities are of “serious environmental concern”,
Rabinovich Report, op. cit., p. 16, AR, Vol. III, Annex 43, but never identifies exactly what
types of risks the facilities might pose, in particular to the Uruguay River.
840Botnia Environmental Impact Assessment, Chap ter 4: Description of Cellulose Pulp Plant
Operations (Submitted to DINAMA), pp. 21, 90 & 134 (undated). UR, Vol. III, Annex R54.
Botnia Environmental Management Plan fo r Operations, Appendix 6 (Contingency Plan)
(hereinafter “Botnia Contingency Plan”), p. 35 (20 September 2007). UR, Vol. II, Annex R44.
841
Botnia Contingency Plan, op. cit., pp. 10 & 21. UR, Vol. II, Annex R44.
- 353 - 842
processes to which the Botnia plant itself was subject . Argentina fails to
acknowledge the extensive environmental submissions regarding these facilities that
were part of the Botnia EIA submitted in 2004, as described in Uruguay’s Counter-
843
Memorial .
6.42 Argentina contends that the envir onmental assessment of the chemical
synthesis facilities was improper because it did not contain a BAT conformity
analysis 844. But the IPPC BREF document setting the BAT guidelines for these
845
types of facilities was not finalized until August of 2007 , only three months prior
to the commencement of plant operations and more than two years after the AAP
was issued 846. Nonetheless, Argentina has presented no information to the contrary
to suggest that the chemical synthesis facility does not meet IPPC BAT.
6.43 Argentina is also incorrect in asserting that there are no contingency or
847
emergency plans for the ch emical producti on facilities . As demonstrated in
Uruguay’s Counter-Memorial, the AAP requi red Botnia to submit environmental
management and response plans for all asp ects of the plant, including the chemical
848
synthesis facilities . Botnia submitted these plans, and DINAMA approved them,
842
UCM, para. 6.52.
843
UCM, para. 6.52.
844
AR, para. 3.106.
845
European Commission, Integrated Pollution Prevention and Control Reference Document
on Best Available Techniques for Large Volume Inorganic Chemicals – Solids and Others
Industry, available at http://eippcb.jrc.es/pages/FActivities.htm (last visited on 11 June 2008).
846MVOTMA Initial Environmental Authorization for the Botnia Plant (hereinafter “Botnia
AAP”) (14 February 2005). UCM, Vol. II, Annex 21.
847AR, para. 3.107.
848See Botnia AAP, op. cit., Art. 2(h). UCM, Vol. II, Annex 21.
- 354 - 849
on 31 October 2007 . The plans are described in paragraphs 4.24 to 4.39 of this
Rejoinder.
6.44 The Rabinovich Report suggests that emergency management may be
deficient on the basis that the United Stat es Environmental Protection Agency’s so-
850
called “Program 3” would apply to the chemical synthesis facilities . This
comment is inapposite for two reasons. First, the regulations of the United States are
irrelevant because they are not incorporated into the 1975 Statute by reference, and,
thus, are not binding on facilities located in Uruguay. Second, the Botnia
Environmental Management Plan offers pr otections similar to those required by
“Program 3” 851, and Rabinovich does not state othe rwise. As shown in paragraphs
6.70 to 6.75 below, Botnia has de veloped, and DINAMA has approved, a
comprehensive environmental management plan that includes risk management,
emergency response, and employee supervision and training provisions 852. The fact
that the form of Botnia’s Environmental Management Plan may not be identical to
849See DINAMA Resolution Approving the Environm ental Management Plan for Operations
(Final Consolidated Text) (31 October 2007). UR, Vol. II, Annex R4.
850Rabinovich Report, op. cit., p. 17. AR, Vol. III, Annex 43.
851A summary of the requirements of U.S. EPA Program 3 may be found at U.S. EPA,
Document No. 550-F-96-002, Risk Management Planning: Accidental Release Prevention,
Final Rule: Clean Air Act section 112(r) - Factsheet (May 1996), available at
http://www.epa.gov/OEM/docs/chem/rmprule.txt (last visited on 11 June 2008). These
requirements include an emergency response pr ogram, an overall management system, and a
risk management plan (RMP). Ibid.
852Botnia Environmental Management Plan for Operations, Appendix 5 (Analysis of
Environmental Risks) (hereinafter “Botnia Anal ysis of Environmental Risks”), pp. 13-17 (30
June 2007). UR, Vol. II, Annex R43. Botnia Environmental Management Plan for Operations,
Appendix 9 (Accident Prevention Plan) (30 June 2007), pp. 47-50 and Botnia Instruction sheets
attached. UR, Vol. II, Annex R45.
- 355 -the submissions required in the United Stat es is of no moment -- the protections
offered are comprehensive and meet the requirements of that program 853.
6.45 Finally, Uruguay does not dispute that a portion of the production output
854
of the chemical synthesis facilities will be sold to buyers other than Botnia .
Uruguay does contest, however, Argentina’ s insinuation that this is somehow
environmentally unsound. Indeed, the opposit e is true. The availability of the
chemical plant’s production wi ll greatly facilitate the a doption of environmentally
friendly pulp plant technology at other lo cations, including in Argentina. As the
IFC’s technical experts stated in the Second Hatfield Report:
The Botnia project includes installation of a plant to manufacture
sodium chlorate, which will also become available on the
regional market. This will greatly facilitate conversion of the
existing Uruguayan and Argentinean bleached kraft mills from
the current systems that use only chlorine to bleach pulp to
modern ECF bleaching. Based on the UNEP emission factors,
such a conversion would reduce dioxin discharges from these
existing mills from the current level of about 1.7 g/year to about
0.02 g/year (TEQ basis) 855.
D. U SE OF W ATER R ESOURCES
6.46 Argentina contends that the Botnia plant will not comply with BAT, and
does not function as one of the best mills in the world, because it uses water from the
Uruguay River to “dilute” the effluent to ach ieve certain required effluent discharge
853
Argentina’s Reply points out that the Final CIS did not discuss this risk management
program for the chemical synthesis facility. AR, para. 3.107. However, the Final CIS
explicitly indicated that such risk managemenplans would be developed as the permitting
process continued. See Final CIS, op. cit., pp. 1.6 & 4.104. UCM, Vol. VIII, Annex 173.
854AR, para. 3.107.
855Hatfield Consultants, Report of Expert Panel on the Final Cumulative Impact Study for the
Uruguay Pulp Mills, p.10 (14 October 2006). UCM, Vol. VIII, Annex 178.
- 356 - 856
concentrations . This is demonstrably false. Effluent sampling is conducted prior
857
to addition of water from the river , and Argentina has presented no evidence to the
contrary.
6.47 Argentina also incorrectly asserts that the allowable extraction rate of 1.9
cubic meters per second exceeds the allowa ble average 1.0 cubic metres per second
consumption limit approved by DINAMA during the regulatory approval process,
and, therefore, increases the allowable discharges to the river 858. As Uruguay has
previously explained, the higher extraction ra te allows for short-term variability in
discharge and for the use of river water for cooling purposes, but it does nothing to
increase the previously authorized annua l industrial consumption limit of 1.0 cubic
859
metres per second. Uruguay specifica lly confirmed this to Argentina . And, the
amount of water extracted is a tiny fraction of total flow, 0.03% of the median flow
of the river 860.
856AR, paras. 3.15 & 3.92; Rabinovich Report, para . 2.29. AR, Vol. III, Annex 43. Professor
Wheater’s claims are substantially more limited then suggested in Argentina’s Reply; he claims
only that effluent is diluted to comply with temperature and does not argu e that dilution is used
to address any other characteristic of the effluent. Second Wheater Report, op. cit., p. 38. AR,
Vol. III, Annex 44. Uruguay’s experts confirm that this practice is widely accepted and
increases the effectiveness of wastewater treatment operations. Exponent Report, op. cit. ,
Attachment A, pp. A.19-A.20. UR, Vol. IV, Annex R83.
857Botnia, Figure Demonstrating Effluent Cool ing and Monitoring Locations of the Botnia
Effluent Treatment Plant (undated). UR, Vol. III, Annex R82.
858
Rabinovich Report, op. cit., para. 2.29.6. AR, Vol. III, Annex 43.
859
Diplomatic Note No. 604/06, sent from th e Uruguayan Minister of Foreign Affairs,
Reinaldo Gargano, to the Argentine Minister of Foreign Affairs, International Trade and
Culture, Jorge Taiana (10 November 2006). UR, Vol. II, Annex R2.
860Ibid.
- 357 -6.48 Moreover, there is no dispute that the effluent discharge limit is and has
861
remained at 1.0 cubic meters per second measured on an annual average . The
IFC’s consultants confirm that operational data show the Botnia plant has met that
limit862.
6.49 Contrary to Argentina’s unsupported assertions 863, extracted river water
used in addition to the plant process water is employed for the cooling of the effluent
864
temperature , and is added after the compliance monitoring sampling point for all
865
other parameters . Therefore, the loading and compliance monitoring for all other
physical parameters, including BOD, COD, AOX, phosphorus, nitrogen and TSS,
are unaffected by the cooling water despite Argentina’s suggestion to the contrary 866.
Use of river water to cool the effluent to meet the temperature limitations established
867
by DINAMA was anticipated and evaluated in the Final CIS . Cooling of effluent
temperature is necessary because the optimal temperature for biological waste
861
See DINAMA Environmental Impact Assessment Report, p. 4 (11 February 2005). UCM,
Vol. II, Annex 20.
862 3
Environmental Performance Review, op. cit., pp. 3.1-3.2 (average discharge is 0.86 m /sec).
UR, Vol. IV, Annex R98.
863AR, paras. 3.15 & 3.92.
864Exponent Report, op. cit., p. 2-3. UR, Vol. IV, Annex R83.
865Ibid. Final CIS, Annex D, op. cit. , D4.4. UCM, Vol. VIII, Annex 176. Botnia, Figure
Demonstrating Effluent Cooling and Monitoring Locations of the Botnia Effluent Treatment
Plant, op. cit. UR, Vol. III, Annex R82.
866
Exponent Report, op. cit., p. 2-3. UR, Vol. IV, Annex R83. Final CIS, Annex D, op. cit., p.
D4.4. UCM, Vol. VIII, Annex 176. In at least some places in its Reply, Argentina appears to
concede that river water will only be used to en sure that the effluents meet the temperature
requirement, to the exclusion of all other physical parameters. AR, para . 3.92. Nevertheless,
Uruguay is clarifying the point to avoid further confusion raised by other portions of the Reply.
See, e.g., AR, 3.15.
867Final CIS, Annex D, op. cit., pp. D4.5. UCM, Vol. VIII, Annex 176.
- 358 -treatment is between 35-37 degrees Celsius 86, in contrast to the discharge limitation
869
established by Uruguayan law of 30 degrees Celsius . The cooling process that
allows maximum treatment of wastewater while ensuring the required temperature
of the discharge does not adversely affect the river environment. Indeed, the Final
CIS considered this cooling process to be the best and most energy efficient
alternative87. Finally, because the additional water is not used in the plant’s
wastewater treatment process, the assertion by the Rabinovich Report that the sizing
871
of the effluent treatment system is inadequate, is incorrect.
Section III.
Argentina’s Criticisms of the Botnia Plant Are Contradicted by the Facts
6.50 As shown in Section 1 and 2 of th is Chapter, Argentina’s two main
criticisms of the Botnia Plant -- that it will cause eutrophication in Ñandubaysal Bay
and that its technology does not meet BAT standards -- are unfounded and refuted
by the evidence. This Sec tion responds to Argentina’s other arguments against the
plant and shows that they, too, are without merit or evidentiary support.
A. THE URUGUAY R IVER ISN OT A “U NIQUELY SENSITIVE E NVIRONMENT ”
6.51 To support its twin claims that the Botnia plant will cause unevaluated
872
impacts to the river and that tertiary treatment is required , Argentina’s Reply
asserts that the Uruguay River and its surr oundings are uniquely “sensitive” in two
868
Exponent Report, op. cit., p. 2-3. UR, Vol. IV, Annex R83.
869
Decree No. 253/79, Regulation of Water Quality(9 May 1979, as amended) (hereinafter
“Decree No. 253/79”), Art. 11(2). UCM, Vol. II, Annex 6.
870
Final CIS, Annex D, op. cit., p. D4.5. UCM, Vol. VIII, Annex 176.
871
Exponent Report, op. cit., p. 2-3. UR, Vol. IV, Annex R83.
872
AR, paras. 3.32-3.48, 3.83-3.84 & 3.108-3.116.
- 359 -principal ways: that the river is highly se nsitive to nutrient discharges (nitrogen and
phosphorus) and that rare animal species are found in the vicinity of the plant.
6.52 More specifically, Rabinovich states that “the simple fact that the Uruguay
river, and in particular its bays, a [sic] eutrophic condition (see Annex 2) invalidates
‘per se’ the Counter-Memorial’s assertion that the Uruguay river does not represent
873
a sensitive environment” . Rabinovich then extrapolat es that assertion into an
argument that the claimed eutrophic condition of the river renders tertiary treatment
mandatory: He notes that IPPC BAT indicates that tertiary treatment is “usually
only regarded as necessary when the concen trations of nutritive substances in the
effluents must be reduced, ‘i.e., if the mill discharges to very sensitive recipients
which, as shown above, is the case of the Botnia pulp mill in the Uruguay river’” 87.
6.53 The Second Wheater Report, while acknowledging the conclusion of the
Second Hatfield Report that “relative to mo st sites for pulp mills and other large
process industries, Fray Bentos in not an environmentally sensitive site”, asserts that
the area should nonetheless be considered sensitive because there are rare animal
species in the area that “may be sensitive to changes within that [eco]system,
whether or not direct connections with the most contaminated zone can be
identified” 875. The Second Wheater Report make s no affirmative attempt to show
that the rare animal species in the area are actually sensitive to changes in the
ecosystem, nor did it identify what changes to the ecosystem might occur, or what
the effect of those changes would be.
873Rabinovich Report, op. cit., p. 39. AR, Vol. III, Annex 43.
874AR, para. 3.83 & 3.109. Rabinovich Report, op. cit., p. 23. AR, Vol. III, Annex 43.
875AR, para. 3.40. Second Wheater Report, op. cit., pp. 22-23. AR, Vol. III, Annex 44.
- 360 -6.54 Both claims miss the mark. The concept of whether an environment is
“sensitive” can only be understood in relation to the activity being assessed -- any
environment would be “sensitive” to a major disaster such as a nuclear explosion,
and no environment would be “sensitive” to tiny changes such as the discharge of a
single grain of sand. Here, Argentina’s arguments about whether the river or its
associated biota is “sensitive” can only be answered in the context of whether the
particular characteristics of the Uruguay River environment would or could be
meaningfully affected by the Botnia plant.
6.55 They will not. Rabinovich’s argument that the Uruguay River is sensitive
“per se” because of intermittent eutrophi c conditions fails because exhaustive
environmental assessments and indeed Rabinovich’s own model 876 demonstrate that
the Botnia plant will not cause or contribute to eutrophication or other nutrient-
related harm in the river. Stated diffe rently, although the river certainly can be
affected by eutrophication, the cause of the eutrophication could not be the Botnia
plant.
6.56 The river in the vicinity of the Botnia plant can readily assimilate the
plant’s nutrient discharge. This has been demonstrated by models affirmed by the
877
IFC and verified by the performance of th e plant during its fi rst six months of
operation . Apart from the outstanding performance of the Botnia plant itself, the
physical characteristics of the river enable it to absorb the nutrients from the Botnia
876See Section I of this Chapter.
877See Final CIS, op. cit., pp. 4.48, 4.49 & 4.54-4.57.
878Environmental Performance Review, op. cit., p. 4.3. UR, Vol. IV, Annex R98. (concluding
no change in phosphorus levels as a result of the plant’s operation); Exponent Report, op. ci,.
p. 5-4. UR, Vol. IV, Annex R83.
- 361 -plant without adverse effect. The most im portant characteristic of the river that
renders it relatively insensitive to nutrient or other discharge-related effects is the
magnitude of its flow, which averages over 6,230 m 3/s879. This flow is high, and
considerably larger than many rivers in Europe that host pulp mills 880. This natural
feature of the river provides an important benefit in this case as it results in a rapid
881
and substantial dilution of the effluent . Furthermore, an analysis of incremental
increases of phosphorus in Ñandubaysal Bay demonstrates that phosphorus
associated with the plant w ill not have any measurable effect on the trophic status
882
within the bay . In addition, as set forth in th e Exponent Report, the large natural
variability of phosphorus in the river dw arfs any incremental contribution from the
883
Botnia plant, thus rendering its contribution ecologi cally undetectable .
Rabinovich has indicated that phosphorus is not the cause of eutrophication in the
Uruguay River, making his claim that the river is “sensitive” to phosphorus
884
meaningless .
6.57 Finally, the Final CIS and the Exponent Report both demonstrate that were
any effects from the Botnia discharge to occu r, they would be tightly limited to the
879
Final CIS, Annex D, op. cit., p. 3.1. UCM, Vol. VIII, Annex 176.
880 3 3 3
E.g., the Sei3e (410 m /sec), the Vistula (1,000 m /sec), the Mur (139 m /sec), and the
Vuoksi (470 m /sec). See Exponent Report, op. cit., p. 5-9. UR, Vol. IV, Annex R83.
881
See Final CIS, op. cit., pp. 4.48, 4.49 & 4.54-4.57.
882
See Section I of this Chapter. See also Exponent Report, op. cit., pp. 4-12 - 4-19. UR, Vol.
IV, Annex R83.
883Exponent Report, op. cit., pp. 5-13 - 5-14. UR, Vol. IV, Annex R83.
884See Section I of this Chapter.
- 362 -immediate vicinity of the discharge 885, and exclusively within Uruguay’s part of the
river. Uruguay explained in the Counte r-Memorial that Canada ’s experience with
pulp mills has demonstrated that a mill’s effluent is only expected to have
measurable impacts where the dilution ratio is less than 1:100, and that in the case of
the Botnia plant this area extends only a matter of metres from the plant’s diffuser
under normal conditions and no more than 35 metres under very rare low flow
conditions. As the Exponent Report explains , this zone represents only 0.006% of
the river in the vicinity of the plant, and a much smaller percentage of the river as a
whole and is “too small to influence populations of fish and wildlife species
(including those that are rare) that utilize the river and its embayments” 886. Neither
Argentina’s Reply nor its associated expe rt reports have disproved that, in the
unlikely event there are any impacts in this zone, they would be too circumscribed to
have any wider effects. Uruguay has demonstrated, again based on the Canadian
experience, that impacts where the dilu tion ratio falls between 1:100 and 1:1000 are
also unlikely. In the case of the Botnia plant, this zone is also too small to have any
wider impact on the river. Indeed, the vast majority of the Uruguay River falls
outside the 1:1000 dilution zone, including those areas that may be legitimately
described as environmentally sensitive (such as Uruguay’s RAMSAR site at Esteros
de Farrapos).
6.58 Turning to the claims in the Second Wheater Report: Argentina makes no
affirmative case that any animals will be affected by the discharge. At most, it
885Final CIS, op. cit., p. 4.48. UCM, Vol. VIII, Annex 173. Exponent Report, op. cit., p. 5-20.
UR, Vol. IV, Annex R83.
886Exponent Report, op. cit., p. 5-4. UR Vol. IV, Annex R83.
- 363 - claims that there is some quantum of risk to rare species because ecosystems are
“complex” and there is, accord ingly, not absolute certainty about the impacts of the
plant. In fact, the Exponent Report dem onstrates that the species identified by
Argentina have limited or no contact with th e receiving waters and, thus, will not be
affected by the operation of the plant. The Exponent Report demonstrates that there
are no species whose populations reside oforage wholly or even to a significant
degree within the immediate vicinity of the discharge. It furt her demonstrates that
the impacts to the “food web” that thSecond Wheater Report hypothesizes could
come from Botnia’s nutrient discharges are so small that indirect effects are remote
887
at best . In any event, as set forth in Section III of Chapter 4, if there are any
effects, they will be detected through monitoring, and una cceptable impacts will be
addressed immediately.
6.59 Uruguay does not dispute that the river is a significant ecological resource.
Indeed, if Uruguay did not value the river as a resource, it would not have required
such an extended environmental review or imposed such detailed conditions on the
operation of the Botnia plant. It is precisely these efforts that enables Uruguay to
conclude that the Botnia plant will not disturb the ecological balance of the river or
the animals that inhabit it.
B. RISK ASSOCIATED WITH THE B OTNIA PLANT H AS BEEN A SSESSED AND M INIMIZED
6.60 Argentina persists in espousing viewsregarding the role of risk in the
development of industrial projects that have no grounding in reality. In particular,
Argentina’s expert asserts that a project “must be investigated until there is no doubt
88Ibid., op. cit., pp. 5-21 - 5-22.
- 364 -as to the possible effects” 888 -- in other words, until all risk has been eliminated. As
explained below, this assertion simply does not comport with the requirements of the
1975 Statute or international law, much less real-world practice, and for good
reason: it is inherently unworkable.
6.61 As demonstrated in Chapter 5, international law does not prohibit a project
from moving forward until all theoretical risks have been eliminated. In so claiming,
Argentina sets a standard that can never be met. It is impossible to eliminate to a
mathematical certainty all risk associated with a project. However, Uruguay has
properly assessed risks, and taken feasible and practicable measures to reduce them.
It has certainly done all that the law requires.
6.62 The first step to minimize risk was the elaborate environmental review,
which has been endorsed not only by Urugu ay and its experts, but also by the
889
impartial experts of the IFC . Although Argentina’s Reply is replete with
suggestions that the assessment might ha ve been conducted differently, it never
shows how different conclusions would have been reached. If Argentina could have
shown a meaningful risk of significant harm, the Court would have seen that proof at
the provisional measures hearing, in the Memorial, or certainly in the Reply.
Argentina has not. All it has presented is a model of nutrient impacts so flawed, that
890
when only its most obvious errors are corrected , it supports Uruguay’s conclusion
that the plant will not cause harm.
888
Rabinovich Report, op. cit., p 37. AR, Vol. III, Annex 43.
889
See Final CIS, op. cit. UCM, Vol. VIII, Annex 173.
890
See Section 1 of this Chapter.
- 365 -6.63 In fact, there are multiple, mutual ly reinforcing lines of evidence
demonstrating that the plant will not have unacceptable impacts. The evidence
includes: (1) use of establishe d and tested plant designs that have been shown to be
state-of-the-art in other applications; this generates reliable information about the
emissions from the plant; (2) use of accepted scientific models to determine that the
emissions will not unacceptably change the conditions in the Uruguay River; and
(3) a comprehensive monitoring program to confirm the predicted emissions and
their effects. The conclusions from the evidence have been affirmed not only by
Uruguay’s environmental agencies, but also by Uruguay’s outside technical experts
and by the IFC’s independent experts.
6.64 Collectively, these efforts serve as a means of addressing any
uncertainties. When taken together, all lines of evidence converge to support the
conclusion set forth in the Final CIS, and supported by Exponent’s independent
review, that the Botnia plant is unlikely to have adverse impacts on water quality or
the biota of the river.
6.65 Of course, the conclusions regarding risks associated with the plant’s
operation can and will be tested empirically through monitoring. As the Exponent
Report explains, “[t]he purpose of monito ring is not only to check the original
forecasts but to provide the appropriate bases for taking corrective actions should
these be needed” 891. This is precisely what Uruguay has done with respect to the
Botnia plant -- establish a comprehensive monitoring regime to ensure than the pre-
operational estimations are borne out under actual operational conditions, and that
891
Exponent Report, op. cit., p. 6-5. UR, Vol. IV, Annex R83.
- 366 -any discrepancies are fully addressed thr ough appropriate regulation. The initial
results from the IFC demonstrate that thepredictions of the Final CIS have been
borne out: the plant is meeting applicable discharge standards and is not affecting
water quality in the river. But Uruguay will continue its vigilance.
C. THE B OTNIA PLANT M EETS E UROPEAN UNION STANDARDS
6.66 Against all the evidence, Argentina asserts that the Botnia plant could not
be built in the European Union because of its phosphorus discharges89. Leaving
aside the fact that European Union law is irrelevant to this dispute since it is not
incorporated by reference into the 1975 Stat ute, and that the hypothetical relocation
of this plant to Europe adds nothing meaningful to the volumes of careful
environmental analysis conducted by Urugua y, Argentina is simply wrong: The
actual experience in Europe contradicts Ar gentina and demonstrates that the Botnia
plant would face no regulatory impediment to being built in the EU.
6.67 Argentina asserts that under the Eur opean Urban Wastewater Treatment
Directive the effluent concentrations of phosphorus in the Botnia discharge would
893
have to be less than 1 mg/L if the plant were to be located in Europe . Asan
initial legal matter, the standard cited icompletely inapplicable to industrial
facilities, even in Europe, so it certainly is irrelevant to the Botnia plant in Uruguay.
The directive applies only to domestic wastewater treatment plants and certain
industrial sectors, but not the paper and pul p industry. A copy of the Urban Waste
Water Treatment Directive is found at http://ec.europa.eu/environment/water/water-
urbanwaste/directiv.html. In any event, as a factual mater, Paragraph 4.88 of this
89AR, para. 3.97.
893
Second Wheater Report, op. cit., p. 25. AR, Vol. III, Annex 44.
- 367 -Rejoinder demonstrates that the Botnia effluent has a phosphorus concentration of
significantly less than 1 mg/L. Accordi ngly, even by Argentina’s own chosen
guidelines, the concentration of phosphorus in Botnia’s effluent is allowable under
EU law, and by a comfortable margin 89.
6.68 Equally meritless is Argentina’s allega tion that the Botnia plant’s effluent
discharge is incompatible with the European Water Framework Directive because
“phosphorus concentrations in the River Uruguay have been as high as 0.24
mg/L” 895. Leaving aside the fact that the phosphorus level in the Uruguay River is
896
0.24 mg/L in only very limited areas , actual European practice refutes Argentina’s
assertions about European practice with regard to pulp mills. The Stendal Pulp Mill
on the Elbe River was permitted by Germany in 2002 897even though the phosphorus
898
concentration in that river (0.277 mg /L) was higher than in the Uruguay River ,
and higher than the value Argentina assert ed would prohibit the construction of the
mill in Europe. Moreover, with an average flow of 220 m /s, the dilutive capacity of
the Elbe River is significant ly less than that of the Uruguay River, whose average
3 899
flow (6,230 m /s) is more than twenty times greater . Indeed, the increase in
phosphorus concentration in the Elbe River from the Stendal Pulp Mill is expected to
be much higher than the inconsequential increase resulting from operation of the
894
It should also be noted that although the EU directive discusses the need for primary and
secondary treatment of effluents, it mentions no need for tertiary treatment.
895
AR, para. 3.97. Second Wheater Report, op. cit., pp. 25 & 40. AR, Vol. III, Annex 44.
896
Final CIS, Annex D, op. cit. , p. D3.20 (Table D3.2-2) (show ing varying water quality data
from historical CARU records). UCM, Vol. VIII, Annex 176.
897
Exponent Report, op. cit., Attachment A, p. A-13. UR, Vol. IV, Annex R83.
898
Ibid.
899
Ibid.
- 368 -Botnia plant. Estimates show that th e Stendal Pulp Mill will increase ambient
900
phosphorus concentrations by 0.004 mg/L . In contrast, ambient concentrations of
phosphorus in the Uruguay River under worst case scenarios are expected to
increase by no more than 0.001 mg/L, and only in a few isolated locations 901.
Changes in phosphorus levels are not expected at all dur ing average flow
conditions 902. It is also noteworthy that despite the low flow and elevated
concentrations of phosphorus in the Elbe River, the Stendal Pulp Mill uses only
903
secondary treatment , exposing as false Argentina’ s assertion that tertiary
treatment is required by IPPC BAT 904.
6.69 In sum, against Argentina’s unsupported and irrelevant assertions that the
Botnia plant could not be built in Europe, the actual facts show the opposite: a pulp
mill was permitted under EU law in circumstances where (a) the river’s existing
phosphorus concentration was significantly hi gher than the Uruguay River; (b) the
river’s flow was less than one-twentieth of that of the Uruguay River; and (c) the
anticipated increase in the water’s phosphorus level was estimated to be four times
that of the anticipated increase, under a worst case scenario, in the Uruguay River.
900Ibid.
901Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
902
Ibid.
903
Exponent Report, op. cit., Attachment A, p. A-13. UR, Vol. IV, Annex R83.
904
AR, para. 3.83.
- 369 - D. U RUGUAY HAS C OMPREHENSIVELY R EVIEWED AND REGULATED EMERGENCY
PREPARATION AND M ANAGEMENT
6.70 Argentina’s assertion that operation of the Botnia plant under “abnormal
905
conditions” has not been evaluated is incorre. To the contrary, the Botnia plant,
including the Kemira chemical synthesis facility, has been the subject of extensive
analysis with respect to the environmenta l risks associated with emergencies and
other unusual conditions. These analyses were relied on by Uruguay in its
assessment and approval of the plant.
6.71 In this regard, the Botnia Envir onmental Management Plan, which was
required by the AAP Uruguay issued to Bo tnia in February 2005, and which was
submitted to and approved by Uruguay in 31 October 2007, identifies numerous
potential abnormal scenarios, and contains detailed assessments of the consequences
and contingency planning for them. The conditions evaluated included, among other
improbable events, spills in the mixing tank and the spill-over tank of the recovery
boiler; release of liquid effluents toward the canals if the meters (measuring
conductivity and flow) do not work or give erroneous readings; release of effluents
toward the canals if a pipe or tank valve is opened by mistake; a spill or loss in the
filtration tanks of the brown pulp area, for instance, due to corrosion, or if a truck
collides with the tank; a fuel oil spill from the pipes or in the storage area; and spill
of “black liquor” that reaches a rainwater drainage facility
6.72 As indicated, this Environmental Ma nagement Plan was required by
Uruguay as part of its review and approval of the plant, and had to be in place as a
90AR, paras. 3.123-3.124. See also AR, para. 3.147.
906
Botnia Analysis of Environmental Risks, op. cit., pp. 6-11. UR, Vol. II, Annex R43.
- 370 -condition of Botnia’s authorisation to operate. The Botnia plant’s assessments also
included consideration of circumstances involving theoretical emergencies
associated with the chemical synthesis process. The situations evaluated for the
chemical synthesis facilities included, am ong other circumstances: leaks due to a
breakdown in pumps, valves, joints or pipes, or an operating error; leaks from the
extraction feed tank to the extraction tower; overflows from the working solution
preparation tank; leaks from the palladium recovery area; leaks from the peroxide
purification area; spills of hydrogen peroxide due to a breakdown in the valve, joint
or pipe, or due to operator error outside th e containing dike area; leaks of sodium
chlorate solution due to breakdown of the pump, valve, joint or pipe, or operating
error outside the dike area; and leaks of chlorine dioxide solution due to breakdown
in the valve, joint or pipe or operating error outside the containment area 907.
6.73 The Botnia Environmental Management Plan, “[b]ased on environmental
risk analysis”, further identified “contingencies that may have an effect on the
environment”, including, among other things, those related to “liquid emissions” and
“the transport of raw materials a nd products, both by land and by river” 908. Botnia
909
formulated detailed plans for each such contingency . In addition, Botnia
developed a detailed Accident Prevention Plan “based on the requirements of the
907Ibid., pp. 13-17.
908Botnia Contingency Plan, op. cit., p. 9. UR, Vol. II, Annex R44.
909Ibid., p. 9 (contingencies related to liquid emissi ons) & p. 15 (contingencies related to river
transport).
- 371 -Seveso II directive established by the European Economic Community and on the
environmental and risk evaluations carried out for the proje.t”
6.74 DINAMA carefully reviewed the Bo tnia Environmental Management
Plan, including its consideration of abnormal operating conditions, contingency
planning and accident prevention plans, a nd ultimately approved the plan on 31
911
October 2007 . In addition, Botnia’s assessments were thoroughly reviewed by the
IFC’s independent technical experts, who approved Botnia’s evaluations and
approach in the section of their Pre-Commissioning Review devoted to Botnia’s
“Emergency Preparedness and Response Plan” 91.
6.75 In short, any assertions by Argen tina that operational circumstances under
“abnormal conditions”, including those pertaining to the chemical synthesis facilities
and risk management plans, were not ade quately developed is simply false, as
demonstrated by the comprehensive environmental management plan in effect for
the plant, which was reviewed and approved both by DINAMA and the IFC’s
independent experts.
E. THE B OTNIA PLANT W ILLNOT C AUSE OR EXACERBATE A CCUMULATION OR
C ONTAMINATION OF SEDIMENTS
6.76 Argentina alleges that the Botnia plant might increase the accumulation of
sediments in the river. Argentina does not present any evidence that any
910
Botnia Environmental Management Plan fo r Operations, Appendix 9 (Accident Prevention
Plan) (30 June 2007), p. 5. UR, Vol. II, Annex R45.
911
See DINAMA Resolution Approving the Environm ental Management Plan for Operations
(Final Consolidated Text) (31 October 2007). UR, Vol. II, Annex R4.
912
International Finance CorporatOrion Pulp Mill, Uruguay, Independent Performance
Monitoring as Required by the International Finance Corporation (Phase 1: Pre-
Commissioning Review) (hereinafter “Pre-Commissioning Review”) (November 2007), p. 3.1.
UR, Vol. III, Annex R50.
- 372 -accumulation will or might occur. Instead, the approach in the Reply is to complain
about certain alleged deficiencies in Uruguay’s assessment of this “risk” 913.
Uruguay stands by its conclusions in th e Counter-Memorial that geomorphological
change and sedimentation were adequately assessed and that operation of the Botnia
plant will not meaningfully impact those conditions 91. These conclusions are
confirmed by the operation of the plant si nce its start-up in November 2007. As
previously discussed in Chapter 4 of this Rejoinder, at paragraph 4.102, the
extremely low to non-detectable concentrations of TSS in Botnia’s discharges means
that the plant simply does not contribute to the accumulation of sediments, as
Argentina groundlessly hypothesizes.
6.77 As described in the Counter-Memorial, the Final CIS carefully considered
915
the issues of sedimentation and geomorphological change . Argentina’s assertion,
in the Second Wheater Report, that the Fi nal CIS “provided no evidence” to support
its conclusions is incorrect 91. The Final CIS noted that Yaguareté Bay (a focus of
comments in the Second Wheater Report) is “regularly flushed during high flow
periods and due to wind/wave action, as evidenced by the lack of sedimentary
features (e.g., islands)” 917. The Final CIS gave specific calculations regarding flow
918
and current rates in support of its findings . The ASA Report, submitted by
Uruguay, supported these conclusions and further confirmed that the assessment of
913
AR, paras. 3.32, 3.48, 3.159, 3.166 & 3.177.
914
UCM, paras. 6.86-6.92.
915Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
916Second Wheater Report, op. cit., p. 115. AR, Vol. VIII, Annex 44.
917Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
918Ibid.
- 373 -geomorphological conditions was conducted in accordance with generally accepted
scientific standards 919. Apart from the conclusory assertions in the Second Wheater
Report, Argentina does not attempt to critique the scientific validity of the analysis
in the Final CIS. It asserts that Urugua y should have conducted additional studies,
including collecting new bathymetric da ta, to evaluate the potential for
920
geomorphological changes, but does not suggest what such further studies would
921
achieve .
6.78 The Second Wheater Report also takes issue with the conclusions of the
Final CIS and the ASA Report regarding the impact that discharges from the Botnia
plant will have on sedimentation. The Second Wheater Report asserts that the
discharge of total suspended solids (“T SS”) from the Botnia plant will be much
higher than the baseline condition 922and, therefore, implies that the discharge could
increase rates of sedimentat ion. As discussed in the Final CIS, however, effluent
discharges of TSS will not meaningfully contribute to an increase in
923
sedimentation given their exceedingly low concentration, the fact that the effluent
discharge from the Botnia plant constitutes less than 0.02% of the total flow of the
Uruguay River , and the rapid dilution at 35 meters downstream from the discharge
919 See UCM, para. 6.88. Dr. J. Craig Swanson & Dr. Eduardo A. Yassuda, Hydrologic
Analysis for the Proposed Botnia Cellulose Pl ant on the Uruguay River (hereinafter “ASA
Report”), pp. 18-19 (Applied Science Associates, Inc.) (June 2007). UCM, Vol. X, Annex 214.
920
AR, para. 3.171.
921
AR, para. 3.171.
922
Second Wheater Report, op. cit., p. 114. AR, Vol. III, Annex 44.
923
Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173.
924
Ibid., p. 4.47.
- 374 - 925
point . Expert review of this modelli ng in the ASA Report confirmed these
conclusions . Because the analysis of the Second Wheater Report does not take
into account the rapid dilution of the e ffluent (including the TSS content), it
incorrectly asserts that the contribution of the Botnia plant will be 30 mg/L of TSS in
927
all areas of the river . In fact, the Final CIS demonstrated that contributions would
be dramatically lower (between 0.0 mg/L to 0.5 mg/L under worst-case scenarios) in
Yaguareté Bay, the part of the river Argen tina claims is most likely to experience
928
sedimentation .
6.79 The operation of the plant since November 2007 justifies the conclusion
reached in the Final CIS. In particular, the Environmental Performance Review
concluded that the plant has discharged less TSS than authorized by its permits or
929
expected in the Final CIS, aver aging 24 mg/L of TSS discharge . The
Environmental Performance Review also confirmed that no change in TSS levels
was detected in the river, including in Yaguareté Bay 930. Accordingly, it comes as
no surprise that Argentina has provided no evidence that the Botnia plant has caused
931
any increased sedimentation or geomorphological changes to the river. Nor has
925Ibid., p. 4.48.
926ASA Report, op. cit., pp. 18-19. UCM, Vol. X, Annex 214.
927
Second Wheater Report, op. cit., p. 114. AR, Vol. III, Annex 44.
928
Final CIS, op. cit., p. 4.50. UCM, Vol. VIII, Annex 173. This extensive dilution makes the
small variations in anticipated TSS concentrations immaterial. AR, para. 3.166.
929
Environmental Performance Review , op. cit. , p 3.3. UR Vol. IV, Annex R98. As
demonstrated in the ASA Report, the assessment of geomorphological conditions was
conducted in accordance with generally accepted scientific standards. ASA Report, op. cit., p.
18. UCM, Vol. X, Annex 214. Argentina has suggested nothing to impeach that conclusion.
930Environmental Performance Review, op. cit., pp 4.2-4.6. UR Vol. IV, Annex R98.
931AR, paras. 3.48-3.52, 3.159, 3.163-3.166 & 3.170.
- 375 -Argentina presented any evidence in connection with the Botnia port -- even though
it was cited by the Second Wheater Report as a particular concern932.
6.80 As Uruguay explained in the Counter-Memorial, the appropriate manner to
respond to the possibility of something as speculative as major geomorphological
change (like the formation of a new island) through long-term accumulation of
933
sediments from the Botnia discharge is to conduct long-term monitoring .
Uruguay is doing so, and it will continue to do so during the life of the plant934.
Thus far, the results confirm that since ope ration of the Botnia plant no change in
TSS has occurred 935.
6.81 In sum, Argentina’s Reply does nothing to undermine the demonstration in
the Counter-Memorial that geomorphology an d sedimentation are not likely to be
affected by operation of the Botnia pl ant, and that the risk of increased
sedimentation from the discharge is nil. Nor has the Reply identified any
deficiencies in Uruguay’s long-term m onitoring plan to detect changes in
geomorphology or sedimenta tion. Results from actual operation since November
2007 confirm that ambient concentrations of TSS have not changed since the plant
commenced functioning. The evidence thoroughly refutes Argentina’s claims.
F. ARGENTINA H ASS HOWN N O A DVERSE IMPACTS TO TOURISM
6.82 As set forth in Chapter 5 of the Count er-Memorial, impacts to tourism not
directly related to adverse impacts to water quality are outside the scope of the 1975
932
Second Wheater Report, op. cit., p. 115. AR, Vol. III, Annex 44.
933UCM, para. 6.89.
934See supra Chapter 4.
935Environmental Performance Review, op. cit., pp. 4.2-4.6. UR, Vol. IV, Annex R98.
- 376 - 936
Statute . Accordingly, they lie beyond the Court’s jurisdiction in this case.
Nevertheless, even if the Statute did regu late impacts to tourism, Argentina has
failed to show that tourism has been negatively affected by the Botnia plant.
6.83 As Uruguay detailed in its Counter-Memorial, the Final CIS concluded
that tourism on both sides of the Uruguay Ri ver will not be affected by emissions
937
from the plant, either by discharge into the water or by air emissions . Without
specifically refuting any of the conclusions of the Final CIS with respect to tourism,
Argentina’s Reply refers only to the Sec ond Wheater Report, which states merely
that the plant emits discharges that are “visibles” from the Argentine bank of the
river . No evidence is presented that the plant’s “visibility” has turned away
Argentine tourists. Indeed, all of Argentina’s arguments on the impacts to tourism
rely on mere speculation rather than objective data. For example, when citing to the
Second Wheater Report’s observations on tour ism, Argentina says that the report
refers to “différents facteurs liés à réduire le nombre de visiteurs dans cette zone”,
including “une possible diminution de la qualité de l’ eau qui affecterait les activités
939
qui ont lieu sur la plage et les activités nautiques” . The Rabinovich Report admits
936UCM, para. 5.74.
937See UCM, paras. 5.74-5.77.
938
AR, para. 3.214 (“visible”).
939
AR, para. 3.215 (emphasis added) (“differe nt factors tied to the Orion mill that could play a
role in reducing the number of visitors in this area”) (“a possible reduction in the quality of the
water that would affect the activities that take place on the beach and wa ter-based activities”).
Note that while Argentina cites the Second Wheater Report in the text of the Reply, it is
actually quoting from the Rabinovich Report, as indicated correctly by the footnotes.
- 377 -that the “scale of the Botnia related reducti on in number of visitors is difficult to
940
estimate” .
6.84 Argentina’s fear of a decline in tour ism is not only unsubstantiated, it is
also contradicted by reputable Argentin e news sources. In fact, these sources
confirm that there has actually been an increase in tourism to the region. For
example, La Nación reported an 8% increase in the number of visitors to
941
Gualeguaychú from 2006 to 2007, according to the local Secretary of Tourism .
The numbers speak for themselves: in the last twenty months, Gualeguaychú has had
over 1.5 million visitors, with nearly 500,000 visitors in the summer of 2007 alone.
As another indicator of the rise in tourism, La Nación reported that the number of
hotel reservations increased by 5% in the past year.
6.85 EcoMetrix confirmed this growth in tourism in its November 2007 Pre-
Commissioning Review prepared for the IFC. While the Review noted that the
closing of the international border betw een Gualeguaychú and Fray Bentos (by
Argentine protesters) prevented additional “benefits experienced in Gualeguaychú
and Ñandubaysal from cross border visitatio n”, it nonetheless identified an 8%
942
increase in tourism .
6.86 More recently, the President of the Joint Council of Tourism in
Gualeguaychú, Maria Luz Villagra, declared that tourism is on the upswing in the
940
Rabinovich Report, op. cit., para. 4.6.4. AR, Vol. III, Annex 43.
941
La Nación, “The Pulp Plants, an Undeniable Attraction” (30 July 2007). UR, Vol. III,
Annex R58.
942
Pre-Commissioning Review, op. cit., p. 10.16. UR, Vol. III, Annex R50.
- 378 -area of Argentina across from the Botnia plant; she stated that “[t]he expectations for
the tourist season in our city are the very best” 943.
6.87 In sum, Argentina’s Reply, like its Memorial, fails to support its allegation
that tourism will decline as a result of th e Botnia plant, and fails to bring to the
Court’s attention the contrary evidence that tourism, in fact, has been increasing
since the construction of the plant. Argentina does, however, allude to the growth of
the tourism industry by noting that “the number of facilities for housing tourists
944
increased by 39% between 2004 and the first half of 2006” . Clearly, the providers
of tourist accommodations in Argentina are optimistic about the future of tourism in
the area, notwithstanding the presence of the Botnia plant.
Conclusion
6.88 This Chapter has demonstrated that the Botnia plant cannot and will not
have the impacts claimed by Argentina. Argentina’s experts have argued that the
plant’s principal adverse effect would be to increase algae levels in Ñandubaysal
Bay a decade-and-a-half in the future. But, as shown, Argentina reaches this
conclusion only by distorti ng and misinterpreting th e most basic scientific
information; and when the technical and mathematical errors are corrected,
Argentina proves that Uruguay and the IFC’ s independent experts are right and that
the plant will not cause the harm that Ar gentina predicts. Argentina’s misguided
effort to try to show an impact on Ñandubaysal Bay from the Botnia plant’s
extremely small and insignificant discharges of phosphorus into the river ignores the
943Web Site of Gualeguaychú Municipality, “An Excellent Tourist Season is Expected” (2
January 2008). UR, Vol. III, Annex R60.
944AR, para. 3.215.
- 379 -truth: that if the concentration of phosphorus becomes a problem on its side of river,
Argentina itself will be the cause, and Argentina itself holds the key for the solution.
Argentina’s effort to hold Uruguay to a standard for phosphorus emissions that
Argentina refuses to apply to itself is unfair and inequitable. Uruguay regulates
phosphorus discharges into the river. Ar gentina does not. The Botnia plant fully
complies with Uruguay’s regulations on phosphorus, and the IFC’s independent
experts have concluded that the plant’ s phosphorus emissions will have no adverse
impact on the river. Operation of the plant thus far confirms these conclusions.
Argentina has neither grounds nor standing to complain.
6.89 Just as Argentina’s Reply fails to s how that the Botnia plant will have
unacceptable impacts, it also fails to show that the plant is anything other than state-
of-the-art. It fails to show any deficiencies, shortcomings or insufficiencies in the
plant’s technology, design, construction or component facilities. It fails to show that
the plant falls short of BAT standards, or that it could not operate in the EU. It fails
to demonstrate a lack of emergency planning, or of adequate review of the chemical
synthesis facilities. It fa ils to show any likelihood th at the plant would affect
sedimentation. Finally, despite its claims that the plant would damage tourism, the
evidence shows precisely the opposite.
6.90 In sum, Argentina has failed to ma ke any valid criticisms regarding the
Botnia plant. All of them are disproved by the evidence.
- 380 -CHAPTER 7.
REMEDIES7.1 The purpose of this Chapter is to respond to Chapter 5 of Argentina’s
Reply concerning remedies. The central th rust of all of Argentina’s arguments on
the subject of remedies is that if th e Court finds that Uruguay has committed any
violation of the 1975 Statute, no matter its scope or content, the only meaningful
remedy the Court can give is to order the dismantling of the Botnia plant. In
Uruguay’s view, such an extr eme argument effectively defeats itself. Nevertheless,
in the paragraphs that follow, Uruguay will detail the specific reasons that
Argentina’s presentation is unpersuasive both in fact and in law.
7.2 In the Reply, Argentina makes the following inter-related arguments
concerning remedies:
i) Uruguay must dismantle or re -locate the Botnia plant as a
consequence of the allegedly grav e violations of its procedural
and substantive obligations under the 1975 Statute;
ii) Such a remedy is not disproportionate under the
circumstances of this case;
iii) The fact that Uruguay has established a comprehensive
monitoring system to track the effects, if any, of the Botnia plant
on the Uruguay River is not relevant because monitoring is not a
form of remedy; and
iv) In addition to restitutio in integrum , Argentina is also
entitled to compensation for damages done in order to erase the
consequences of Uruguay’s putatively wrongful acts.
7.3 Before turning to each of these points, Uruguay notes at the outset that
Argentina’s arguments are predicated heavil y on what it alleges to be a strict link
between the Statute’s procedural and substa ntive obligations. As discussed already
in Chapter 2 of this Rejoinder, the Reply insists that “[s]ans le respect des
obligations procédurales, il ne peut point être affirmé qu’un État a objectivement mis
- 383 -en Œuvre ses obligations substantielles” 945. This same theme reappears in Chapter 5
of the Reply where Argentina asserts that:
Les dispositions procédurales du Chapitre II du Statut de 1975,
qui, on ne le répètera jamais trop, forment un tout avec les
obligations substantielles que les Parties ont acceptées en
ratifiant cet instrument, poursu ivent cet objectif fondamental.
[preventing damage to the river]. En ne décidant pas que l’usine
Orion doit être démantelée ou désaffectée (ce qui n’empêche
pas, le cas échéant, sa déloca lisation en un emplacement plus
approprié), la Cour permettrait du même coup que soit remis en
question son rôle de gardien ultime du respect de la procédure
statutaire et, par ricochet, des règles, tant procédurales que
substantielles, posées par le Stat ut. En ne tirant pas toutes les
conséquences des violations des unes et des autres, elle
remettrait en cause le Statut lui-même et, avec lui, ‘l’intégrité de
la règle pacta sunt servanda’ 946.
7.4 Chapter 2 of this Rejoinder has already addressed and disproved the
existence of the strict link between the St atute’s procedural and substantive norms.
As stated there, Argentina itself has explicitly and repeatedly acknowledged that the
Statute’s procedural rules do not exist for their own sake, but rather serve as a
mechanism for helping to ensure the observance of the substantive rights 947. Still
more, Argentina’s argument defies the most basic logic. It is not difficult to
envision situations where procedural violations exist independent of any substantive
945
AR, para. 1.28 (emphasis in original) (“[a]bsent respect for the procedural obligations, it
cannot be firmly stated that a nation has objectively implemented its substantive obligations”).
946
AR, para. 5.40 (“The procedural provisions of Chapter II of the 1975 Statute, which, it
cannot be repeated enough, form a whole together with the substantive obligations which the
Parties accepted by ratifying this instrument, pur sue this fundamental goal [preventing damage
to the river]. By not deciding that the Orion plant must be dismantled or shut down (which
does not prevent, if necessary, it being moved to a more appropriate site), the Court would at
the same time permit the ques tioning of its role as the final guardian of respecting the
procedure under the Statute and, indirectly, the rule s, both procedural and substantive, set forth
in the Statute. By not taking all of the conseque nces of the violations of the one and the other,
it would challenge the Statute itself a nd, with it, ‘the integrity of the pacta sunt servanda
rule’”).
947See supra, paras. 2.65-2.74. See also AR, para. 1.69.
- 384 -violation (and vice versa). Thus, for example, one can readily imagine a Party
notifying the other somewhat belatedly a bout a project that causes no harm to
navigation, the régime of the river or the quality of its waters. In such a case, it
would be senseless to insist that the proce dural error precludes the fulfilment of the
Party’s substantive obligations. The question of procedural and substantive
violations must be assessed separately.
7.5 Argentina’s purpose in insisting on the allegedly strict link between the
Statute’s procedural rules and its substantive obligations is clear. As detailed in both
the Counter-Memorial and again in Chapters 4 through 6 of this Rejoinder,
Argentina has no evidence that the Botnia plant causes or threatens to cause
significant harm to the Uruguay River. Knowing that it has no such evidence, and
choosing instead to focus on its procedural case, the only way Argentina can argue
for the remedy it seeks is by doing exactly what it does: claiming that a sufficiently
grave substantive violation mu st be presumed from the existence of a procedural
violation without more. On ce the fallacy of this linka ge is exposed, Argentina’s
argument for dismantling the Botnia plan t collapses with it. Analysing the
consequences to be drawn from a procedur al violation and a substantive violation
independently, it is clear that awarding the remedy of restitutio in integrum for a
purely procedural violation is disproportionate to the interests sought to be
vindicated. And analysing the issue of the appropriate remedy for a substantive
violation separately, it is also clear that an order compelling the dismantling of the
Botnia plant would only be appropriate if there were no other viable way to
eliminate the threat of significant harm to navigation, the régime of the river or the
quality of its waters.
- 385 - Section I.
Dismantling the Botnia Plant Is Not an Appropriate Remedy for a Procedural
Violation of the 1975 Statute.
7.6 In Chapter 3 of the Counter-Memoria l and again in Chapter 3 of this
Rejoinder, Uruguay demonstrated that it did not violate any of its procedural duties
under the 1975 Statute. With respect to bo th the ENCE and Botnia plants, Uruguay
and Argentina mutually agreed to dispense with CARU’s preliminary review under
Article 7 and to address both projects directly at the government-to-government
level. Indeed, in both cases, it was Argentin a that initiated the direct talks between
the States at times when it agreed that CARU was deadlocked and “paralysée” 94.
7.7 Disregarding these facts, and assuming arguendo that Uruguay’s
behaviour was somehow incompatible with the Statute’s procedural rules, the
remedy of dismantling the Botnia plant would still be wholly inappropriate in the
circumstances of this case. Several in dependent lines of analysis support this
conclusion. First, pursuant to the Foreign Ministers’ March 2004 agreement
described at length in Chapter 3, Argentina waived its procedural claims against
Uruguay. In 2004 Argentina and Uruguay negotiated directly and reached an
understanding concerning the manner in wh ich the ENCE plant would be handled.
The understanding was later extended to Botnia . Pursuant to that understanding, it
was agreed that both plants would be built and that CARU would focus its efforts on
monitoring water quality. As stated in contemporaneous Argentine government
948
AM, para. 2.29 (“paralysed”).
- 386 -reports, the agreement “put an end to th e controversy” concerning the two plants 949.
This statement -- issued by the office of the Argentine president, no less -- is clear
and unequivocal. By agreeing to “put an end to the controversy”, Argentina waived
its right to invoke Uruguay’s responsibility for the alleged breaches of its procedural
obligations occurring before that point. Exac tly as stated in Article 45 of the ILC’s
2001 Articles on State Responsibility: “The responsibility of a State may not be
invoked if: a) the injured State has validly waived the claim …” 950.
7.8 Second, quite apart from the Foreign Ministers’ 2004 agreement, by
agreeing in May 2005 to engage in Article 12 consultations under the auspices of
GTAN, the Parties cured any procedural viol ations of Articles 7-11 that might have
been committed earlier. As the circumstances of this case fully demonstrate, even if
the procedures set forth in Articles 7-11 had been followed to the letter, the Parties
would still have ended up in consultations under Article 12. And that is exactly
where they took themselves when they agreed to and carried out the GTAN
consultations. In so doing, the Partie s remedied and rende red immaterial any
procedural irregularities that might have taken place prior to that time. In other
words, even if, quod non, the Parties got “off track” in terms of their literal
compliance with the procedures set forth in the Statute, they put themselves back
“on track” when they agreed to Article 12 consultations under GTAN. The end
result was precisely the same as it would have been had no procedural violations
949
See supra, para. 3.33, citing Annual Report on the State of the Nation for 2004, Ministry of
Foreign Affairs, International Trade and Cu lture, p. 105 (1 March 2005). UCM, Vol. III,
Annex 48.
950
Draft Articles on Responsibility of States for Internationally Wrongful Acts, 2001, Art. 45,
appears in Yearbook of the International Law Commission, 2001, Vol. II (Part Two).
- 387 -occurred. No harm was done to either Pa rty or to the objects and purposes of the
Statute.
7.9 The same essential point can be made from a slightly different perspective.
As Argentina itself states, “le Statut de 1975 met en place un régime complet
d’obligations procédurales consistant en l’ échange d’informations, la notification et
la consultation” 951. The facts described in Chapter 3 are clear. With respect to both
ENCE and Botnia, Uruguay notified, exch anged information and consulted with
Argentina over an extended period of time. Even if these steps did not precisely
track the tidy, step-wise process set forth in Articles 7-12, there can be no honest
dispute that the “régime complet d’obliga tions procédurales” Argentina describes
was nonetheless fulfilled in all meaningful respects. The law can require no more.
Argentina, therefore, has no viable cl aim concerning compliance with Articles 7 et
seq.
7.10 Third, an order compelling the dismantling of the Botnia plant as a remedy
for a procedural violation is also inappropriate because it would be dramatically
disproportionate to the nature of the vi olation (again, assuming one had occurred,
which it did not). Here, it must be stre ssed that for purposes of determining the
nature of the appropriate remedy, the cont ent of the primary rule that has been
breached must be given due account. In the present case, the 1975 Statute is
designed to ensure the Parties’ mutual rights -- in Argentina’s words -- to make “une
exploitation rationnelle et respectueuse des … de la ressource partagée que constitue
951
AR, para. 1.31 (“the 1975 Statute puts into place a complete system of procedural
obligations consisting of the exchange of information, notification and consultation”).
- 388 -le fleuve Uruguay” 952. The Statute subjects the exercise of that right to the
procedural requirements set forth in Arti cles 7-12. In a situation where, by
hypothesis, only the procedural ob ligations have been breached, restitutio in
integrum is disproportionately onerous, partic ularly in the form requested by
Argentina. This point was aptly stated in the ILC commentary to the Articles on
State Responsibility:
The primary obligation breached may also play an important role
with respect to the form and extent of reparation. In particular,
in cases not involving the return of persons, property or territory
of the injured State, the notion of reverting to the status quo ante
has to be applied having regard to the respective rights and
competences of the States concerned. This may be the case, for
example, where what is involve d is a procedural obligation
conditioning the exercise of the substantive powers of a State.
Restitution in such cases should not give the injured State more
than it would have been entitled to if the obligation had been
performed 953.
7.11 The ILC Special Rapporteur on State Responsibility, Professor James
Crawford, addressed the same point just as clearly:
Whatever the theoretical standpoint, individual cases could be
settled only by taking into account the particular circumstances
of each case and especially the primary rules, as, by doing so,
the State requesting restitution was often trying to obtain
something to which it might not be entitled. Thus, in the case of
the Iran-United States Claims Tribunal, the United States was
under the obligation to discontinue certain judicial bodies, but
not to make provision to ensure that no new bodies could be set
up later as a result of a further amendment to its legislation. In
the same way, a State obliged to carry out an environmental
impact study or to provide no tification before undertaking an
activity could avoid doing so, but nevertheless had every right to
952
AR, para. 1.119 (“a rational and respectful exploitation of … the shared resource that
constitutes the Uruguay River”).
953
ILC, Report on the work of its fifty-thir d session, UN doc. A/56/10, p. 236, para. 51see
also note 518, where reference is made to the ICJ’s judgment in the LaGrand case, which, in
the ILC’s view, supports the above-mentioned observation.
- 389 - carry out the activity in question. In such cases, the link
between the violation and what one wished to obtain through
restitution was indirect and contingent, and that affected the
analysis of the court hearing the case. The reservations to which
the priority given to restitution had led resulted from the fear that
States would be requested to “undo” everything they had done
within the framework of a lawful activity954 invoking an
incidental breach of international law .
7.12 By demanding the dismantling of the Botnia plant based solely on an
alleged procedural violation, Argentina is clearly requesting “more than it [is]
entitled to if the obligation [to comply with the procedures of Articles 7-12] had
been performed”.
7.13 Argentina’s insistence that the plant be dismantled must also be rejected
given the clear disproportion between the significant costs that such a measure
would impose on Uruguay, on the one hand, and the limited benefit to Argentina, on
955
the other. As Uruguay discussed in the Counter-Memorial , Article 35 of the
Articles on State Responsibility disclaims a State’s responsibility for making
restitution when such restitution would “impose a burden out of all proportion to the
benefit deriving from restitution instead of compensation” 95. In its commentary, the
ILC explained that the proportionality analysis is “based on considerations of equity
and reasonableness” 95.
7.14 Here, there can be no question but that ordering the demolition of the
Botnia plant would be grossly disproporti onate, and inconsistent with notions of
954Yearbook of the International Law Commission, 2000, Vol. I, p. 172, para 5.
955UCM, para. 7.55.
956Draft Articles on Responsibility of States for Internationally Wrongful Acts with
commentary, Art. 35 (2001).
957Ibid., Art. 35, comment 11.
- 390 -equity and reasonableness, especially in the absence of a showing that the plant
threatens significant harm to the Uruguay Rive r. An order to di smantle the plant,
which is expected to generate over 8,000 new jobs and contribute more than US$270
million to the Uruguayan economy, would impose heavy costs on Uruguay without
any appreciable benefit to Argentina. As the Court determined in the Case
Concerning the Gab čikovo-Nagymaros Project (Hungary/Slovakia ), 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 Trea ty can be adequately served by the
existing structure” 958. Thus, rather than order the works destroyed, as Argentina
seeks in the present case, the Court in Gabčikovo refused to do so and ordered the
parties to resume co-operation instead 95. Uruguay respectfully submits that
demolition of the Botnia plant in the circumstances presented here would be
similarly “out of touch with reality”.
7.15 Uruguay first presented its argument on the issue of proportionality in the
Counter-Memorial . The response Argentina offers in the Reply is conspicuously
weak. Other than the bare contention that “la comparaison des avantages qui
résulteront du démantèlement de l’usine Or ion ou de sa reconversion avec les coûts
958
See Case Concerning the Gab čikovo-Nagymaros Project (Hungary/ Slovakia) (Judgment),
I.C.J. Reports 1997, p. 77, para. 136.
959Ibid., p. 80, para. 150.
960See UCM, paras. 7.55-7.56.
- 391 -qu’une telle opération entraînera pour l’Uruguay est difficile à établir” 961, Argentina
has nothing to say. Uruguay submits that this unelaborated and unsubstantiated
assertion constitutes a tacit recognition by Argentina that there is nothing it can
usefully say to negate the evident disproportionality of the remedy it seeks.
7.16 Even as it implicitly acknowledges the disproportion of the remedy it
requests, Argentina tries to minimize the force of the point by arguing that Uruguay
assumed the risk of authorizing the implementation of the Botnia project rather than
awaiting the Court’s resolution of the dis pute. Presumably, Argentina means to
suggest that by assuming the risk, Uruguay accepted the possibility of a
disproportionate remedy. But this argument entirely misconstrues the nature of the
risk Uruguay assumed. Although Uruguay has acknowledged that the Court has the
power to order the dismantling of the plant -- indeed, it has reiterated exactly that
point in Chapter 2 of this Rejoinder -- that does not mean that Uruguay has ever
accepted Argentina’s dubious legal argument that tearing the plant down would be
an appropriate and proportionate remedy in the event the Court determines that
Uruguay violated only its procedural ob ligations. Uruguay’s recognition of the
Court’s power relates solely to the purely hypothetical possibility that the Court
decides that it violated its substantive obligations under the 1975 Statute, and that
the plant is so irremediably incompatible with those obligations that dismantling it is
the only viable option. In that event, the Court unquestionably would have the
power, and quite possibly the duty, to order the plant torn down. On the other hand,
961AR, para. 5.32 (“the comparison of the advant ages that will result from the dismantling of
the Orion plant or its conversions with costs th at such an operation would entail for Uruguay is
difficult to calculate”).
- 392 -Uruguay remains convinced that the remedy requested by Argentina is grossly
disproportionate even if it assumed the risk in the sense just stated.
7.17 As Uruguay discussed in Chapter 2 of this Rejoinder 96, the fact that an
order compelling the dismantling of the Botnia plant would be a disproportionate
remedy for a violation of the Statute’s procedural rules does not mean that the Court
is powerless in the face of such a violation. The Court has available to it a number
of alternatives, including the standard remedy of satisfaction, or declaratory relief.
Indeed, since the nominal harms resulting from a violation of the procedural
obligations are not financially assessable, satisfaction would seem to be the most
appropriate remedy should the Court determine that Uruguay has violated its
procedural obligations under the Statute. As the ILC stated: “Material and moral
damage resulting from an internationally wrongful act will normally be financially
assessable and hence covered by the remedy of compensation. Satisfaction, on the
other hand, is the remedy for those injuries, not financially assessable, which amount
963
to an affront to the State.” As the Court very recently held in the Case
Concerning Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v.
France), a finding by the Court that a State ha s violated its treaty obligations itself
“constitutes adequate satisfaction” 964. In fact, Uruguay notes that Argentina’s
arguments that anything less than an order dismantling a project would constitute
“l’arrêt de mort du Statut” 965is disturbingly dismissive of the gravity of a finding by
962See UR, para. 2.133.
963ILC, Report on the work of its fifty-third session, UN doc. A/56/10, p. 264, para. 2.
964
Case Concerning Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v.
France) (Judgment) (4 June 2008), para. 204.
965
AR, para. 1.172 (“the death warrant of the Statute”).
- 393 -the Court that a State has violated its treat y obligations -- a matter, of course, of the
highest international significance.
Section II.
Dismantling the Botnia Plant Is Not an Appropriate Remedy for a Substantive
Violation of the 1975 Statute in the Circumstances of This Case.
7.18 In addition to complying with its procedural duties, Uruguay is also
complying with its substantive obligations under the Statute. The Botnia plant
entered operation on 9 November 2007 and, as demonstrated in Chapter 4 above, is
operating within expected and environmentally sustainable parameters. It is clearly
not causing harm, let alone significant harm, to navigation, the régime of the river or
the quality of its waters. It is equally clear that the monitoring system Uruguay has
established can and will detect any future risk of environmental pollution.
7.19 The response Argentina presents in Chapter 5 of the Reply is perhaps more
interesting for what it does not say than for what it does. Argentina conspicuously
does not argue that the Botnia plant is causing or threatens to cause such grievous
harm to the Uruguay River that it must be shut down. As already mentioned,
Argentina makes no such argument because it knows none can be made. There is no
evidence that the plant threatens significant harm to the river. Uruguay submits that
this fact is of determinative significance on the issue of remedies. As discussed in
966
Chapter 2 of this Rejoinder , the Court’s primary task when a case comes to it, as
here, by operation of Article 12 of the 1975 Statute is to decide the question the
Parties themselves were unable to: will the project cause significant harm to
navigation, the régime of the river or the qua lity of its waters? Without at least the
966
See supra, paras. 2.132-2.138.
- 394 -likelihood of such harm, there is no basis on which to impose additional technical
requirements on a project, a nd no basis for ordering it dismantled. Logically, if the
Court finds that a project will not cause significant harm, the situation should be no
different than it would have been under Article 9 if, rather than objecting, the
notified State had come to the same conclusion, i.e., that the project did not threaten
harm. In such a case, the initiating Stat e may proceed with its project without any
further procedural obligations. The mere fact that the notified State did object
should not be enough to change this result. where the Court has decided that the
objection lacks merit.
7.20 Rather than argue the unarguable, Argentina tries to turn the debate on its
head. Instead of showing why the remedy of dismantling the plant is appropriate in
the circumstances of this case, the Reply proceeds with an argument that is intended
to exclude all other remedies as possibiliti es. Argentina’s argument is premised on
the allegation that the “principal objectif” of the Statute “est de prévenir les
dommages à l’écosystème du fleuve, et non pas simplement de les guérir” 967.
According to Argentina, “[l]e mécanisme [procédural] mis en place par le Statut est
justement destiné à prévenir les conséquences de la construction de tout ouvrage
projeté à ces divers points de vue avant que celui-ci soit construit et non de tenter de
faire face ex post au ‘préjudice sensible’, une fois celui-ci survenu” 968. And,
Argentina says, since Uruguay has violated its procedural obligations, there is now
967AR, para. 5.9 (emphasis in original) (“princi pal objective”, “is to prevent damage to the
river’s ecosystem, and not merely to heal it”).
968AR, para. 5.10 (emphasis in original) (“th e [procedural] mechanism put in place by the
Statute is correctly aimed at preventing the consequences of the construction of all planned
work to these different points of view before it is built and not to attempt to deal to the
‘significant harm’, after the fact, once it has occurred”).
- 395 -no meaningful way to realize the substantive goal of preventing harm other than to
return to the status quo ante by tearing the plant down.
7.21 Uruguay respectfully submits that the fallacies in this argument are self-
evident. In the first instance, the Cour t will note that Argentina is again fusing
procedure and substance in an attempt to get the procedural elements of its argument
to do all the work for its unsupportable s ubstantive arguments. Given Argentina’s
open admission that the Statute’s procedures exist as a means to the end of ensuring
the observance of the Partie s’ substantive obligations, the primacy Argentina gives
to procedural matters is plainly inconsistent with Argentina’s own (correct)
understanding of the scheme of the Statute.
7.22 Moreover, the Reply’s argument is predicated on the erroneous
assumption that the only way to prevent harm to the river in this case is to shut the
plant down. But, of course, that is not true at all. As discussed repeatedly in this
Rejoinder, the plant is not, in fact, causing any harm to the river. Nor is there any
indication that it might do so in the future . Indeed, as discussed in Chapter 4, the
plant’s already outstanding environmental performance is only expected to improve
in the future once the initial start-up period is past. There is thus no harm that needs
preventing. Accordingly, even under Argentina’s own reasoning, there is no reason
to order the plant dismantled.
7.23 Even if there were some threat of future harm, the Court need not be
concerned that if that risk eventuates it will pass undetected. As Uruguay stated in
the Counter-Memorial, it has conducted, is conducting and will continue to conduct
frequent monitoring of the river in order to ensure compliance with all CARU and
- 396 - 969
Uruguayan water quality standards . As also stated, DINAMA has broad authority
to require Botnia to undertake whatever corrective measures might be necessary to
put an immediate stop to any violations of those standards, including but not limited
970
to ordering the suspension of operations .
7.24 In response, the Reply argues that Uruguay’s monitoring is irrelevant
because “le monitoring unilatéral ne peut, de toute manière, pas tenir lieu de
réparation pour le non-respect du Statut et des procédures qu’il institue pour la Partie
971
uruguayenne” . But this observation fails to meet the force of Uruguay’s point
concerning monitoring. Uruguay has never claimed either that monitoring can be
considered a form of remedy or that it can replace the procedures set forth in Articles
7-12. Instead, Uruguay maintains that its monitoring serves to guarantee the
observance of its substantive obligations und er the Statute, including its duty under
Article 41 “to protect and preserve the aqua tic environment and, in particular, to
prevent its pollution, by prescribi ng appropriate rules and measures” 972. Again, the
point is simply that the Court need not be concerned about the possibility that the
plant might cause harm in the future. If it shows signs that it might, it will be
detected in sufficient time for Uruguay to take corrective action.
7.25 Argentina’s Reply tries to exclude monetary compensation as an
appropriate remedy in the event that some harm to the river does come to pass. It
states, for example:
969See UCM, para. 4.46.
970See UCM, para. 7.44.
971AR, para. 5.8 (“unilateral monitoring cannot, in any case, take the place of reparation for
non observance of the Statute and the procedures which it sets forth for the Uruguayan Party”).
9721975 Statute, op. cit., Art. 41. UCM, Vol. II, Annex 4.
- 397 - en ne respectant pas ces obligations procédurales, étroitement
liées à ses obligations substant ielles, l’Uruguay a engagé sa
responsabilité à l’égard de l’Argentine et il ne saurait s’en
exonérer en remplaçant un syst ème reposant sur l’exclusion ou
la limitation ex ante des risques, voulu conjointement par les
Parties et qu’elles se sont engagées à respecter en ratifiant le
Statut, par un mécanisme de réparation ex post ‘garanti’ par un
système de monitoring qui ne trouve aucune justification dans le
Statut973.
7.26 Several responses to this a ssertion recommend themselves. First, the
Court will note yet again the extent to which Argentina insists on the unbreakable tie
between procedure and substance. The fa llacy of Argentina’s argument has already
been demonstrated and need not be reiterated any further. Second, Argentina’s
argument proves too much. Risk can never be excluded a priori. Even perfect
procedural compliance in every case is no guarantee that no pollution will ever be
introduced into the aquatic environment. For reasons as diverse as life, the
unexpected happens. Third, and relatedly, the text of the Statute itself is very clearly
designed to take account of this reality. In particular, Articl es 42 and 43 directly
address the situation that Argentina now claims the Statute was designed to exclude.
They provide:
Article 42. Each Party shall be liable to the other for damage
inflicted as a result of pollution caused by its own activities or
by those carried out in its territory by individuals or legal
entities.
Article 43. The jurisdiction of each Party with regard to any
violation of pollution laws shall be exercised without prejudice
973AR, para. 5.26 (emphasis in original) (“not respecting these procedural obligations, closely
tied to its substantive obligations, Uruguay ha s undertaken its responsibility with Argentina
and will not be able to exempt itself from it by replacing a system based on the exclusion or the
limitation ex ante of risks, jointly entered into by the Parties and whic h it agreed to respect in
ratifying the Statute, by a mechanism of ex post compensation “guaranteed” by a monitoring
system which finds no justification in the Statute”).
- 398 - to the rights of the other Party to obtain compensation for the
974
losses it has suffered as a result of such violation .
The Court can thus see that the Statute expressly contemplates situations in which
damage is, in fact, caused to the river. In such situations, the Statute specifically
makes compensation a remedy. Monetary damages are therefore not, as Argentina
claims, per se inadequate under the Statute.
7.27 In light of Articles 42 and 43, it would be unreasonable to hold that
restitutio in integrum invariably takes precedence over compensation when a State
violates its substantive obligation to prot ect the environment and prevent pollution.
In fact, both provisions suggest that compensation would generally take priority over
restitutio, at least in situations where the project in question is not so irremediably
incompatible with the initiating State’s substantive obligations that dismantlement is
the only viable option. Here once more, th e principle of proportionality must come
into play. As already noted, Article 35 of the Articles on State Responsibility
specifically states that restitutio is inappropriate when it would “impose a burden out
of all proportion to the benefit deriving from restitution instead of compensation” 975.
It necessarily follows that compensation is an appropriate and adequate remedy in
cases where restitution would be disproportionate to the harm caused.
7.28 Although Argentina rejects monetary compensation as an adequate remedy
in favor of tearing the Botn ia plant down, it does argue that it should be awarded
compensation to the extent that dismantling the plant would be insufficient to wipe
974
1975 Statute, op. cit., Arts. 42-43. UCM, Vol. II, Annex 4.
975Draft Articles on Responsibility of States for Internationally Wrongful Acts with
commentary, Art. 35 (2001).
- 399 -out all the consequences of the allegedly wrongful acts committed by Uruguay 976.
Under this rubric, Argentina seeks compensation for, inter alia: losses suffered by its
tourist industry; damages resulting from the decline in property values; and
agricultural losses. According to Argentina, “[l]’ensemble de ces dommages résulte
directement de l’autorisation et de la construction … de l’usine Orion et de
l’altération de l’écosystème du fleuve Uruguay et des ses zones d’influence” 977.
7.29 Uruguay submits that none of these cate gories of damages is recoverable.
In the first instance, of course, Uruguay has committed no wrongful acts that can
form the basis for a compensation claim. Even if it did, none of the damages
Argentina claims is, in fact, directly linked to the allegedly wrongful acts in
question, as the law requires. Inasmuch as Argentina seeks to reserve questions
concerning the quantum of damages suffe red for a subsequent phase of the
proceedings, it is sufficient at this stag e to note that, should the Court find that
Uruguay has a duty of compensation, the only damages that ma y be assessed are
those incurred as a direct result of a violation by Uruguay of its substantive
obligation not to affect the quality of the river’s waters. And the burden rests
squarely on Argentina to prove the existe nce of a direct link between the actual
alteration of the quality of the waters and the damages it claims.
976See AM, paras. 8.28-8.31.
977
AM, para. 8.30 (“All these damages result direc tly from the authorisation and construction
of the Orion plant and the alteration of the ecosystem of the Uruguay river and its zones of
influence.”).
- 400 - Section III.
The Court Should Reject Argentina’s Claims and Confirm Uruguay’s Right to
Operate the Botnia Plant in Compliance with the 1975 Statute.
7.30 As demonstrated in Chapters 2 through 6 of this Rejoinder, Argentina has
failed to prove its claims against Uruguay. It has failed to prove that Uruguay
violated the procedural provisions of the 1975 Statute. And it has failed to prove
that Uruguay violated the substantive provisions of the Statute. Accordingly, as set
forth in the Submissions that conclude both Uruguay’s Counter-Memorial and this
Rejoinder, Argentina’s claims should be rejected by the Court in their entirety.
7.31 The Court’s rejection of Argentina' s claims would, of course, leave
Uruguay free to continue operating the Botnia plant in conformity with the
provisions of the 1975 Statute. Accordingl y, Uruguay respectfully requests, in
addition to a rejection of Argentina’s claims, an explicit confirmation from the Court
of Uruguay’s right to continue operating the plant in conformity with the Statute,
and of Argentina’s corresponding obligation to respect Uruguay’s right as
recognized by the Court and to refrain from any acts or omissions that would have
the effect of impeding Uruguay’s enjoyment of this right.
7.32 In its Order of 23 January 2007, the Court expressly recognized that
Uruguay’s right “to continue the construction and to begin the commissioning of the
Botnia plant in conformity with the provi sions of the 1975 Statute, pending a final
decision by the Court, effectively constitutes a claimed right in the present case
…” 97. Uruguay respectfully submits that it is entitled to have the Court adjudicate
this claimed right, and decl are whether it, in fact, ex ists. Specifically, Uruguay
978
Case Concerning Pulp Mill on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2007, para. 29 (23 January 2007).
- 401 -requests that the Court adjudge and declar e in its final decision whether it may
continue to operate the Botnia plant, in conformity with the provisions of the 1975
Statute. Given Argentina’s failure to pr ove that operation of the Botnia plant has
violated the Statute or is likely to do so in the future -- and, further, given Uruguay’s
proof that the plant has not harmed and will not harm the Uruguay River or its
aquatic environment -- Uruguay submits that the declaration to which it is entitled is
one that leaves no doubt as to its right to continue operating the plant.
7.33 A declaration by the Court in this re gard is not only necessary to address
and avoid leaving unresolved the principal right claimed by one of the Parties to
these proceedings, but also to make perfectly clear to both Parties what their
respective rights and obligations are, and thus to minimize the possibility of future
disputes between them. Among other benefits, a clear and unambiguous declaration
by the Court regarding the Parties’ rights and responsibilities would leave no doubt
as to the impermissibility of self-help measures by Argentina that would diminish
any of the rights of Uruguay formally confirmed by the Court.
7.34 Unfortunately, Argentina continues to resort to such de facto measures to
punish Uruguay for pursuing its right to operate the Botnia plant, and to compel it to
abandon this right even before the final deci sion in this case. The blockade of the
international bridges leading to Urugua y, about which Uruguay has advised the
Court at every stage of these proceedings, continues as of the date of this Rejoinder,
and the blockade continues to enjoy not only the tolerance but also the active support
- 402 - 979
of the Argentine State . The blockade has now been in effect (with only limited
980
interruptions) for more than two and a half years . Uruguay advised the Court in
its November 2006 Application for the Indi cation of Provisional Measures that the
blockade had, by that time, already caused “severe economic losses to Uruguay,
981
including lost trade, lost tourism, and lost jobs associated with these activities” .
As of July 2008, more than 18 months later, those losses are far greater.
7.35 As Uruguay stated in its Applicati on for the Indication of Provisional
Measures, Argentina’s tolerance of the blockade has already been adjudicated a
violation of Argentina’s obligations unde r the Treaty of Asunción by a unanimous
Mercosur Tribunal. Argentina has not only defied the tribunal’s judgment and
persisted in its unlawful behavior, it ha s aggravated the offense. Argentina’s
Secretary of the Environment, Romina Picolo tti, herself a former participant in the
blockade, continues publicly to voice strong support for the protestors, their agenda
982
and their actions . Still worse, the government of Argentina’s Entre Ríos Province
provides significant funding and other forms of direct assistance to the protestors to
keep the blockade in place 983.
979 See Uruguay’s Request for the Indication of Provisional Measures, paras. 8-12 (30
November 2006); see also La Nación, “How the Protesters Are Financed” (2 December 2007).
UR, Vol. IV, Annex R87.
980
See Uruguay’s Request for the Indication of Pr ovisional Measures, para. 7 (30 November
2006).
981
Ibid.
982
Perfil.com, “Picolotti: ‘The Demand of the Pr otesters is Legitimate” (2 February 2008).
UR, Vol. IV, Annex R88.
983
La Nación, “How the Protesters Are Finan ced” (2 December 2007). UR, Vol. IV, Annex
R87.
- 403 -7.36 In sharp contrast to its relevant a nd, indeed, supportive approach to the
bridge blockades for the better part of two and a half years, Argentina recently took
swift and decisive action when farmers objecting to an increase in grain export
tariffs resorted to the same means of pr otest and took to the streets to block key
internal transit routes, thereby impeding the flow of goods and people throughout
(but entirely within) Argentina. Argentine security forces were dispatched and
arrested many of the individuals involved, promptly terminating the blockades in
order to restore the internal movement of people and goods 984.
7.37 The contrast between Argentina’s actions with respect to the farmers’
blockades, on the one hand, and its actions with respect to the blockade of the
international bridges, on the other, provid es stark evidence of Argentina’s double
standard when it comes to the fulfilment of its own obligations under international
law and what it claims to be Uruguay’s. Having read the Memorial and the Reply,
the Court is familiar with Argentina’s repeated efforts to portray itself as the lone
guardian of the 1975 Statute against a scofflaw Uruguay. Yet, even as Argentina
seeks to wrap itself in the cloak of international law before the Court, its actions
outside the Court unapologetically flout its already adjudicated international
responsibilities.
7.38 Argentina’s double standard need not merely be inferred from the
evidence. It has been expressly proclaimed by Argentina’s most senior officials. At
a 16 June 2008 press conference about the fa rmers’ blockades, Argentina’s Chief of
Cabinet, Alberto Fe rnández, was asked why the farmers’ actions were treated
984
La Nación, “The San Martín Bridge has been Blocked for 19 Months” (21 June 2008). UR.
Vol. VI, Annex R91.
- 404 -differently than the blockade of the inte rnational bridges to Uruguay. His response
merits attention, precisely because it re veals so much about Argentina’s attitude
toward its international res ponsibilities. According to Mr. Fernández, the bridge
blockade was different “because what wa s being blocked was the international
crossing, but not the internal transit” 985. In other words, Argentina’s international
obligations do not merit the same respect or observance as its domestic ones.
7.39 Interesting too is Mr. Fernández’s response to another question at the same
press conference, in which he was quick to condemn the farmers involved in the
street blockades. He stated:
I am confident that as of tomorrow, sensibility will come to
those who have lost it and that we will be able to go back to
work in Argentina, that we may guarantee that food will arrive
to the tables of Argentineans, the supplies to their factories, fuel
for whoever may need it to travel in Argentina; that no
Argentinean will be subjected to a man who decides at will that
you may cross and you may not, and that no Argentinean be
subjected to loading grains if I want to and if I don’t then no.
This is the greatest exampl e of unscrupulousness, it is the
greatest example of intolerance, that someone may stand on a
road and say: you may pass and you may not; you may carry
grains and you cannot; passengers may pass but the milk cannot;
986
cars can pass but not the cows .
Uruguay submits that these sa me considerations apply with equal force to the
blockade of the international bridges. The actions Mr. Fernández describes are no
less “unscrupulous” and no less “intolerant” when they are inflicted on Uruguay and
its people. Indeed, if anything, they are more so, because they are incompatible with
985
Web Site of the President of Argentina, Press Conference with the Head of the Cabinet of
Ministers, Alberto Fernández, and the Minister of Justice, Security and Human Rights, Anibal
Fernández (16 June 2008), available at http://www.casarosada.gov.ar/index.php?
option=com_content&task=view&id=3485 (last visited on 9 July 2008). UR, Vol. IV, Annex
R90.
986
Ibid.
- 405 -the standard of conduct expected of a St ate appearing before this Court, which
demands, at the very least, the avoidance of just this type of self-help measure,
which, by its nature, cannot help but inte rfere with the proper administration of
justice.
7.40 Uruguay chose not to submit a count er-claim relating to Argentina’s
bridge blockade at the time it submitted its Counter-Memorial because it believes
that the interests of the Parties and their future amicable relations are best served by
having the Court come to a final decision concerning the Botnia plant as promptly as
possible, without the delay a counter-claim would necessarily entail. Precisely so
that the final decision can put an end to th is troublesome dispute between two States
that historically have enjoyed the closest and most harmonious of relations, Uruguay
requests that the Court issue a clear and unambiguous declaration that Uruguay has
the right to continue operating “the Botnia plant in conformity with the provisions of
the 1975 Statute” 98, and that Argentina is obligated to respect this right. Doing so
would materially advance the interests of justice, as well as good neighbourliness, by
clarifying the scope and content of the Par ties’ rights and obligations subsequent to
the Court’s final disposition of the case.
* * *
7.41 Based on all the above, it can be concluded that:
a) Argentina has not demonstrated any harm, or
risk of harm, to the river or its ecosystem resulting
from Uruguay’s alleged violations of its substantive
obligations under the 1975 St atute that would be
987
Case Concerning Pulp Mill on the River Uruguay (Order on Provisional Measures), I.C.J.
Reports 2007, para. 29 (23 January 2007).
- 406 -sufficient to warrant the dismantling of the Botnia
plant;
b) The harm to the Uruguayan economy in
terms of lost jobs and revenue would be substantial;
c) In light of points a) and b), the remedy of
tearing the plant down would therefore be
disproportionately onerous, and should not be granted;
d) If the Court finds, notwithstanding all the
evidence to the contrary, that Uruguay has violated its
procedural obligations to Argentina, it can issue a
declaratory judgment to that effect, which would
constitute an adequate form of satisfaction;
e) If the Court finds, notwithstanding all the
evidence to the contrary, that the plant is not in
complete compliance with Uruguay’s obligation to
protect the river or its aqua tic environment, the Court
can order Uruguay to take whatever additional
protective measures are necessary to ensure that the
plant conforms to the Statute’s substantive
requirements;
f) If the Court finds, notwithstanding all the
evidence to the contrary, that Uruguay has actually
caused damage to the river or to Argentina, it can
order Uruguay to pay Argentina monetary
compensation under Articles 42 and 43 of the Statute;
and
g) The Court should issue a declaration making
clear the Parties are obligated to ensure full respect for
all the rights in dispute in this case, including
Uruguay’s right to continue operating the Botnia plant
in conformity with the provisions of the 1975 Statute.
- 407 - SUBMISSIONS
On the basis of the facts and argumen ts set out above, and reserving its
right to supplement or amend these Subm issions, Uruguay requests that the Court
adjudge and declare that the claims of Argentina are rejected, and Uruguay’s right to
continue operating the Botnia plant in conformity with the provisions of the 1975
Statute is affirmed. LIST OF DOCUMENTS IN SUPPORT
VOLUME II
Annex
GOVERNMENT DOCUMENTS (URUGUAY)
Ministry of Housing, Land Use Planning and Environmental Affairs (hereinafter
“MVOTMA”) Initial Environmental Authorisation for ONTUR
(3 November 2005)........................................................................
.........................R1
Diplomatic Note No. 604/06, sent from the Uruguayan Minister of Foreign
Affairs, Reinaldo Gargano, to the Argentine Minister of Foreign
Affairs, International Trade and Culture, Jorge Taiana (10 November 2006).........R2
Department of the Environment (hereinafter “DINAMA”) Resolution
Approving the Conservation Area Proposed by Botnia, the “Mafalda”
Establishment (24 September 2007)........................................................................
R3
DINAMA Resolution Approving the Environmental Management Plan for
Operations (Final Consolidated Text) (31 October 2007).......................................R4
MVOTMA Report of the Division of Environmental Monitoring and
Performance (1 November 2007)........................................................................
.... R5
MVOTMA Authorisation to Operate for the Botnia Plant (8 November 2007)......R6
DINAMA Resolution Approving Further Works Pursuant to the Authorisation
to Operate (31 December 2007)........................................................................
...... R7
National Aquatic Resources Office (DINARA-MGAP), “Establishing
a Baseline for Monitoring Fish Fauna in the Area Around the Botnia Pulp Mill”
(Fray Bentos, Río Negro) (March 2008).................................................................R8
State Waterworks Agency (hereinafter “OSE”) Report on Wastewater
Treatment Plants that Spill into the Uruguay River and its Zones of Influence
(2 April 2008)........................................................................
.................................. R9
- i -OSE Resolution Approving Treatment of Fray Bentos Municipal Wastewater
by Botnia (23 April 2008)........................................................................
............R10
DINAMA Remarks on the Argentine Government Report on the Problem of
Phosphorus, Annex 43 (May 2008)...................................................................... R11
OSE Web Site, “Water Quality Monitoring at Fray Bentos,” available at
http://www.ose.com.uy.a_monitoreo_fray_bentos.htm
(last visited on 5 July 2008)........................................................................
......... R12
OSE, Discharge of Residual Liquids in the Uruguay River Basin (undated).......R13
GOVERNMENT DOCUMENTS (ARGENTINA)
Statement by the 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
(July 2005) (excerpts) ........................................................................
..................R14
Letter sent from the Argentine Minister of Foreign Affairs, Rafael Bielsa, to
the Uruguayan Minister of Foreign Affairs, Reinaldo Gargano (5 May 2005) ....R15
Presentation of the Argentine Minister of Foreign Affairs, Jorge Taiana,
Regarding the Controversy with Uruguay to the Foreign Affairs Commission
of the Argentine Chamber of Deputies (14 February 2006).................................R16
Secretariat of the Environment and Sustainable Development of Argentina
Web Site, “Clandestine Chemical Plant Closes in Entre Rios”
(11 January 2008), available at http://www.ambiente.gov.ar/?aplicacion=
noticias&idarticulo=5192&idseccion=12 (last visited on 3 July 2008)................R17
Office of the Head of the Cabinet, Undersecretary of Public Management and
Employment of the Office of the Secretary of Public Management, National
Office of Public Employment, Central Registry of Contract Personnel, Payroll
for Personnel with Current Contracts in 12/2007 Employed in the Agency,
available at http://www.sgp.gov.ar/sitio/empleo/regimenes/contratados
/listadocontratados/rcpc_1184/al_31_12/41078_rcpc_6.html
(last visited on 30 May 2008)........................................................................
....... R18
ii CARU DOCUMENTS
Letter SET-10413-UR sent from CARU President, Walter M. Belvisi,
to the Minister of MVOTMA, Carlos Cat (17 October 2002)..............................R19
Subcommittee on Water Quality and Prevention of Pollution Report No. 233
(18 March 2003), approved in CARU Minutes No. 03/03 (21 March 2003)
(excerpts)........................................................................
......................................R20
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).....................................R21
Subcommittee on Legal and Institutional Affairs Report No. 193 (8 November
2004), approved in CARU Minutes No. 08/04 (12 November 2004)
(excerpts)........................................................................
......................................R22
CARU Minutes No. 06/05 (15 August 2005)....................................................... R23
Letter SMAER 02/08 sent from the Secretary of the Environment of the
Province of Entre Ríos, Eng. Fernando Raffo, to the President of the Argentine
Delegation to CARU, Ambassador Hernán Darío Orduña (14 January 2008).....R24
Letter SMAER 03/08 sent from the Secretary of the Environment of the
Province of Entre Ríos, Eng. Fernando Raffo, to the President of the
Argentine Delegation to CARU, Ambassador Hernán Darío Orduña
(25 January 2008)........................................................................
......................... R25
CARU Web Site, “Uruguay River Basin,” available at
http://www.caru.org.uy/cuenca.html (last visited on 25 June 2008).....................R26
CARU Web Site, “The Uruguay River in Figures,” available at
http://www.caru.org.uy/webproteccion/rioruruguayencifras.html
(last visited on 2 July 2008)........................................................................
......... R27
iii TECHNICAL DOCUMENTS
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated
Phenols and Plant Sterols in Fish from Rio Uruguay – Part I (23 June 2005)......R28
Jukka Tana, Studies on Fish Community and Species Diversity in Rio
Uruguay prior to the Planned Botnia Pulp Mill (23 June 2005)........................... R29
Jukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated
Phenols and Plant Sterols in Fish from Rio Uruguay – Part II, December 2005
(17 February 2006)........................................................................
.......................R30
Center for Applied Limnological Studies (hereinafter “CELA”), Establishment
of a Baseline for Phytoplankton, Zooplankton and Benthic Communities in the
Uruguay River (from Nuevo Berlín to Las Cañas), Rio Negro-Uruguay
(March 2006) (excerpts)........................................................................
...............R31
Jukka Tana, Studies on Fish Community and Species Diversity in Rio
Uruguay prior to the Planned Botnia Pulp Mill, Second Test Fishing Period,
December 2005 (26 June 2006)........................................................................
....R32
Jukka Tana, Studies on Fish Community and Species Diversity in Rio Uruguay
prior to the Planned Botnia Pulp Mill, Third Test Fishing Period, May 2006
(27 June 2006)........................................................................
..............................R33
GeoAmbiente, Survey of Species Belonging to the Genus Tillandsia
(September 2006)........................................................................
......................... R34
Nablabs Laboratories, Rio Uruguay Results of Phytoplankton and
Zooplankton Analyses, 2006 (3 October 2006)....................................................R35
Nablabs Laboratories, Uruguay River Benthic Macroinvertebrate Monitoring
Results of the Spring and Autumn Sampling Periods in 2006
(28 November 2006)........................................................................
....................R36
Jukka Tana, Studies on Fish Community and Species Diversity in Rio Uruguay
prior to the Planned Botnia Pulp Mill, Fourth Test Fishing Period, November
2006 (8 February 2007)........................................................................
................R37
ivJukka Tana, A Baseline Study on Concentrations of Resin Acids, Chlorinated
Phenols and Plant Sterols in Fish from Rio Uruguay – Part III, November 2006
(20 February 2007)........................................................................
.......................R38
Jukka Tana, Studies on Fish Community and Species Diversity in Rio
Uruguay prior to the Planned Botnia Pulp Mill, Fifth Test Fishing Period,
April 2007 (June 2007) ........................................................................
................ R39
Botnia Environmental Management Plan for Operations
(June 2007) (excerpts)........................................................................
..................R40
Botnia Environmental Management Plan for Operations, Appendix 3
(Environmental Monitoring and Follow-up Plan)
(24 September 2007) (excerpts)........................................................................
... R41
Botnia Environmental Management Plan for Operations, Appendix 4
(Operation Monitoring and Follow-Up Plan) (30 June 2007) (excerpts) .............R42
Botnia Environmental Management Plan for Operations, Appendix 5
(Analysis of Environmental Risks) (30 June 2007) (excerpts)............................. R43
Botnia Environmental Management Plan for Operations, Appendix 6
(Contingency Plan) (20 September 2007) (excerpts) ...........................................R44
Botnia Environmental Management Plan for Operations, Appendix 9
(Accident Prevention Plan) (30 June 2007) (excerpts).........................................R45
VOLUME III
TECHNICAL DOCUMENTS (CONTINUED)
Annex
Jukka Tana, A Baseline Study on Concentrations of Resin Acids,
Chlorinated Phenols and Plant Sterols in Fish from Rio Uruguay – Part IV,
April 2007 (27 June 2007) ........................................................................
...........R46
vUruguay Technological Laboratory (hereinafter “LATU”), Assessment Report
No. 952512, Study of the Communities of Phytoplankton, Zooplankton and
Macrozoobenthos in the Lower Section of the Uruguay River (Nuevo Berlín,
Fray Bentos and Las Cañas) (12 July 2007) (excerpts)........................................R47
AMEC Forestry Industry Consulting, Orion BKP Mill Pre-Startup Audit
(September 2007)........................................................................
......................... R48
Jukka Tana, Analysis of Mercury (Hg) and Lead (Pb) in Fish Muscle,
Complementary Studies during the Fifth Test Fishing Period in
April 2007 (October 2007)........................................................................
...........R49
International Finance Corporation, Orion Pulp Mill, Uruguay Independent
Performance Monitoring as Required by the International Finance
Corporation (Phase I: Pre-Commissioning Review) (November 2007)..............R50
Franco Teixeira de Mello, M.Sc., Monitoring of Traditional Small-Scale
Fishing in the Uruguay River through Information Generated by Fishermen
in the Areas of Nuevo Berlin, Fray Bentos and Las Cañas, Period 2007
(January 2008)........................................................................
..............................R51
Jukka Tana, Fish Community and Species Diversity in Rio Uruguay,
Monitoring Studies in the Recipient of Botnia Pulp Mill, December 2007
(February 2008)..................................................................
.................................. R52
Jukka Tana, Concentrations of Resin Acids, Chlorinated Phenols and Plant
Sterols in Fish from Rio Uruguay, Monitoring Studies in the Recipient of
Botnia Pulp Mill, December 2007 (March 2008).................................................R53
Botnia Environmental Impact Assessment, Chapter 4: Description of Cellulose
Pulp Plant Operations (Submitted to DINAMA) (undated) (excerpts).................R54
PRESS ARTICLES
Diario El Argentino, “The National Secretary of the Environment
Recommends ECF Technology in the Country” (24 May 2007)..........................R55
viZonaColon.com, “After the Crossroads of Statements About the Paper Mill”
(26 May 2007)........................................................................
..............................R56
Clarin, “Argentina and Uruguay Resume ‘Direct Dialog’ about the Pulp Mills
Today” (30 July 2007) ........................................................................
.................R57
La Nación, “The Pulp Plants, an Undeniable Attraction” (30 July 2007) ............R58
Banite, “The Government Sends Technical Experts to Gualeguaychú to
Monitor Botnia’s Activity” (12 November 2007)................................................R59
Web Site of Gualeguaychú Municipality, “An Excellent Tourist Season is Expected”
(2 January 2008)........................................................................
........................... R60
Entre Ríos Entre Todos, “The Draft Project for the Effluent Treatment Plant
of the Gualeguaychu Industrial Park Was Sent to the [Secretariat of the
Environment of the] Nation” (10 January 2008)..................................................R61
La Nación, “Another Round at The Hague” (30 January 2008)...........................R62
El País, “Specialist: ‘Botnia is the Most Efficient and Cleanest Factory in the
World’” (31 March 2008) ........................................................................
............R63
El Heraldo, “Urribarri and Picolotti Analysed the Progress of the Environmental
Monitoring Plan and the Design of the New Effluent Treatment Plant of
Gualeguaychú” (2 July 2008)........................................................................
....... R64
MISCELLANEOUS
G. Lanza, C. Cáceres, S. Adame, S. Hernández, Dictionary of Hydrology
and Related Sciences, First Edition, Editorial Plaza y Valdés
(July 1999) (excerpts) ........................................................................
..................R65
Inter-American Development Bank, Environmental and Social Impact Report
for the M’Bopicuá Port (September 2002) (excerpts), available at
viihttp://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=423041
(last visited on 9 July 2008)........................................................................
......... R66
Royal Spanish Academy Web Site, Dictionary of the Spanish Language,
Twenty Second Edition, available at
http://buscon.rae.es/draeI/SrvltConsulta?TIPO_BUS=3&LEMA=realizar
(last visited on 9 July 2008)........................................................................
......... R67
World Bank Web Site, “OSE Modernisation & Systems Rehabilitation
Project APL-2,” available at
http://web.worldbank.org/external/projects/main?Projectid=P101432&Type
=Overview&hlPK=2810751&theSitePK=2748767&pagePK=64283627&menu
PK=2804981&piPK=64624214&enableDHL=TRUE (12 June 2007)
(last visited on 9 July 2008)........................................................................
......... R68
World Bank, Press Release, “World Bank Approves US$50 Million to
Expand and Upgrade Water and Sanitation Services,” available at
http://web.worldbank.org/external/projects/main?pagePK=64283627&
piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P101432
(28 June 2007) (last visited on 9 July 2008).........................................................R69
World Bank Web Site, “Uruguay, Obras Sanitarias del Estado (OSE)
Modernization & Systems Rehabilitation Project,” available at
http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/0,,contentMDK:
21392582~pagePK:41367~piPK:279616~theSitePK:40941,00.html
(28 June 2007) (last visited on 9 July 2008).........................................................R70
Agreement between OSE and Botnia Regarding Treatment of the Municipal
Wastewater of Fray Bentos (29 April 2008) ........................................................R71
Stockholm Convention on Persistent Organic Pollutants - Report of the
Toolkit Expert Meeting, available at
http://www.pops.int/documents/meetings/toolkit/Toolkit_rpt_Dec07.pdf
(last visited on 30 May 2008) (excerpts).............................................................. R72
National Council for Scientific and Technical Research
(hereinafter “CONICET”) Web Site, “About CONICET,” available at
http://www.conicet.gov.ar/cdofertatec/ingles/index.htm
(last visited on 30 May 2008)........................................................................
....... R73
viiiCONICET Web Site, “Objectives,” available at
http://www.conicet.gov.ar/INSTITUCIONAL/Descripcion/objetivos.php
(last visited on 30 May 2008)........................................................................
....... R74
CONICET Web Site, Resume of Jorge Eduardo Rabinovich, available at
http://www.conicet.gov.ar/php/datos_rrhh.php?n=3059
(last visited on 30 May 2008)........................................................................
....... R75
Botnia Web Site, “CDM Project,” available at
http://www.botnia.com/en/default.asp?path=204,1490,1494,1373
(last visited on 2 July 2008)........................................................................
......... R76
Initiative on Science and Technology for Sustainability Workshop,
available at http://www.hks.harvard.edu/sustsci/ists/TWAS_0202/participants/
Rabinovich_bio.htm (last visited on 2 July 2008)................................................R77
The Center for Parasitological Studies and Vectors (hereinafter “CEPAVE”)
Web Site, “Home,” available at http://www.cepave.edu.ar/index_ing.htm
(last visited on 2 July 2008)........................................................................
......... R78
CEPAVE Web Site, “Ecology of Pests,”available at
http://www.cepave.edu.ar/ecologia_ing.htm (last visited on 2 July 2008)...........R79
International Finance Corporation (hereinafter “IFC”) Web Site, Latin America
& the Caribbean, “Orion Pulp Mill - Uruguay,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills
(last visited on 2 July 2008)........................................................................
......... R80
IFC Web Site, Latin America & the Caribbean, “Audit of Readiness to
Begin Operations: Nov 2007,” available at
http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Orion_AMEC_Report
(last visited on 3 July 2008)........................................................................
......... R81
Botnia, Figure Demonstrating Effluent Cooling and Monitoring Locations
of the Botnia Effluent Treatment Plant (undated) ................................................R82
ix VOLUME IV
Annex
SUPPLEMENTAL DOCUMENTS
EXPERT REPORTS
Exponent, Inc., Response to the Government of Argentina’s Reply, Facility
Design Technology and Environmental Issues Associated with the Orion
Pulp Mill, Fray Bentos, Uruguay River, Uruguay (July 2008).............................R83
O THER SUPPLEMENTAL D OCUMENTS
The Belize Alliance of Conservation Non-Governmental Organisations v. The
Department of the Environment (2003) Judicial Committee of the Privy Council
(from Belize Ct. App.) ........................................................................
.................R84
Botnia/Forestal Oriental, Mafalda Management Plan (21 August 2007) .............R85
DINAMA Monitoring Plan for Cellulose Plant in Fray Bentos (May 2007
(Version 2)) (October 2007)........................................................................
.........R86
La Nación, “How the Protesters Are Financed” (2 December 2007)...................R87
Perfil.com, “Picolotti: ‘The Demand of the Protesters is Legitimate’”
(2 February 2008)........................................................................
.........................R88
DINAMA Monitoring Plan for Cellulose Plant in Fray Bentos (May 2007
(Version 2.1)) (June 2008)........................................................................
...........R89
Web Site of the President of Argentina, Press Conference with the Head of the
Cabinet of Ministers, Alberto Fernández, and the Minister of Justice,
Security and Human Rights, Anibal Fernández (16 June 2008), available at
http://www.casarosada.gov.ar/index.php?option=com_content&task=
view&id=3485 (last visited on 9 July 2008) ........................................................R90
La Nación, “The San Martín Bridge has been Blocked for 19 Months”
(21 June 2008)........................................................................
..............................R91
(Second) Affidavit of Eng. Alicia Torres, National Director of DINAMA
(24 June 2008)........................................................................
..............................R92
Infobae.com, “Eight Months After Start-up, Experts Agree that Botnia
Does Not Contaminate” (3 July 2008) ................................................................. R93
xEl País Digital, “Argentine Experts Confirm that Botnia Does Not Pollute
the River” (4 July 2008)........................................................................
...............R94
Affidavit of Eng. Andrés Berterreche, Undersecretary of Livestock,
Agriculture and Fishing of Uruguay (11 July 2008).............................................R95
IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill – Uruguay,”
available at http://www.ifc.org/ifcext/lac.nsf/content/Uruguay_Pulp_Mills
(updated on 10 July 2008) (last visited on 11 July 2008).....................................R96
IFC Web Site, Latin America & the Caribbean, “Orion Pulp Mill
Environmental Performance Results - EcoMetrix Report: Phase 2, Six-Month
Environmental Performance Review, July 2008,”
available at http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Orion_
EcoMetrix_Report_2008 (last visited on 11 July 2008).......................................R97
IFC, Orion Pulp Mill, Uruguay Independent Performance Monitoring as
Required by the International Finance Corporation (Phase 2: Six-Month
Environmental Performance Review) (July 2008)...............................................R98
Mario R. Féliz, Environmental Risk from the Production of Cellulose
(undated)........................................................................
......................................R99
xi INTERNATIONAL COURT OF JUSTICE
_______________________________________
REJOINDER OF URUGUAY VOLUME I 29 JULY 2008
CASE CONCERNING PULP MILLS
ON THE RIVER URUGUAY
ARGENTINA
v.
URUGUAY
REJOINDER OF URUGUAY
VOLUME I
29 JULY 2008
vomee_nd 1.iin 227-008 091343
Rejoinder of Uruguay