Since opening in 2007, this billion-dollar paper-pulp plant has increased Uruguay’s GDP by 1%

Written by Tim Burford


Towards the end of the 20th century large areas of woodland were planted in Uruguay with the aim of producing biofuels. However, when it was noticed that certain varieties of eucalyptus grow at a rate of 1cm per day (3.5m per year) the multi-national forestry companies quickly took an interest.

In 2003 a subsidiary of Shell sold 80,000ha of eucalyptus plantations in Uruguay to the Finnish company Botnia, which began planning a new paper pulp plant in the area. Although they apparently looked in Argentina and elsewhere, they soon settled on a site outside Fray Bentos, near the international bridge to Gualeguaychú in Argentina’s Entre Ríos province, from where pulp would be sent downriver for shipping to Europe. In December 2005, a World Bank study concluded that the factory would have no harmful effects and a year later the WB’s International Finance Corporation approved a US$170 million loan.

Opened in November 2007, the billion-dollar Botnia plant uses the latest chlorine-free technology and produces no measurable pollution. However, the citizens of Entre Ríos, the Argentine province across the river, familiar only with their own filthy chlorine-spewing plants, refused to believe this and protested vehemently against the project, blockading the international bridge from November 2006 (although they were happy to take bribes to allow certain vehicles to cross). This was backed by the then Governor of Entre Ríos, Jorge Busti, an old-style Peronist caudillo who provided the asambleístas (pickets) with facilities such as toilets and a television room, and even paid them a wage – rumour has it that he had bought land which he presumed Botnia could be persuaded to buy for their plant, and decided to take revenge when they refused to get involved in his corrupt dealings. In 2006 Argentine president Néstor Kirchner came to a rally in Gualeguaychú to support the blockade, the day after Argentina filed a formal complaint at the International Court of Justice in The Hague, claiming that Uruguay had ignored the Uruguay River Treaty’s requirement for both countries to consult on any project that could affect the river, and that pollution would affect Argentina.

Blockades on the crossings to Paysandú and Salto, in other Argentine states, were quickly lifted after courts threatened to send in the army; but the Gualeguaychú blockade continued. The Argentine government, now led byNéstor’s wife Cristina Fernández de Kirchner, gradually distanced itself from this kind of vigilante action as an instrument of foreign policy, but still felt unable to actually reopen the bridge. Tourism in Entre Ríos was badly hit by the blockade and the state’s new governor, Sergio Urribarri, also wanted to end the blockade but seemed powerless. By January 2009, even Néstor Kirchner was calling for the blockade to be lifted, denying that he’d ever supported it. This was not enough for Uruguay, which blocked Kirchner’s appointment as chair of Unasur, the Union of South American Nations, to Argentine fury.

Since the plant opened in late 2007, environmental monitoring (including by the World Bank) has shown no evidence of pollution, but the so-called Asamblea Ambiental de Gualeguaychú (Environmental Assembly of Gualeguaychú) has refused to accept this evidence. The Uruguayan government has been firm in its support for Botnia; the protestors thought they would soon bring Uruguay’s tourist industry to its knees, but their compatriots continued to flock to Punta del Este and elsewhere.

In April 2010, the International Court of Justice ruled in favour of Uruguay (although with some sops to Argentina); new presidents José Mujica of Uruguay and Cristina Fernández de Kirchner of Argentina met several times and in June the bridge blockade was finally lifted. In July the presidents agreed to create the binational Comisión Administradora del Río Uruguay to monitor pollution. Argentines claim that Uruguay has simply sold out to big business, as Botnia and its suppliers are responsible for increasing Uruguay’s GDP by 1% and its workforce by 1½% (or 12,000 new jobs); Botnia has also created some useful nature reserves near the Río Uruguay. The Uruguayan government is unrepentant, and is keen to see another pulp plant built near Conchillas, proposed by the Spanish Grupo Ence; in 2009 this was taken over by Stora Enso of Finland and Arauco of Chile, who confirmed plans for a US$2 billion plant. This should create around 3,000 jobs and boost GDP by another 2%. Stora Enso and Arauco also became Uruguay’s largest private landowners, with 250,000ha of eucalyptus plantations.

Free visits to the UPM (Botnia) plant can be arranged on 4562 7710, including a bus transfer from Plaza Constitución in Fray Bentos.

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