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Open letter to the International Finance Corporation on Pulp Mill in Uruguay To: All Executive Directors
of the World Bank and IFC The undersigned wish to convey to you our serious concern over the possible installation of two pulp mills on the Uruguay River in the vicinity of Fray Bentos, Uruguay. One of the projects has been submitted by the Finnish company, Metsa Botnia, that has requested a loan from the International Finance Corporation amounting to 100 million dollars (under project number 23817, project name: Orion). At the same time, the IFC would be also facilitating a syndicated B loan of up to $100 million for the same project. We consider it very important that our reasons for concern should be taken into account when examining this loan request. . In the first place it is important to highlight the scale of these undertakings and their possible accumulated impacts in the event that they are effectively implemented. The Spanish company Ence’s project is a plant with an output of 500,000 tons of pulp per year, while that of Metsa Botnia would have an output of 1,000,000 tons per year. Astonishingly, both projects have been analyzed separately and the environmental impact assessment of the Metsa Botnia plant (the second one to be approved by the National Environmental Office), did not take into account the accumulated impacts of the two pulp mills together. Secondly, the Metsa Botnia environmental report has been criticised in detail by a group of experts linked to the Uruguayan environmental group, Guayubira. In short, they highlight that the report: - does not comply with the basic rules of the scientific method: it is vague in its statements, it contains internal contradictions and does not present bibliographic sources that make it possible to check the veracity of such statements. - does not include in a clear way, information on possible physical, biological, social or health impacts. - lacks an assessment of the risks involved and their management or if they can be prevented or avoided, and who are those potentially affected. - the Summarized Environmental Report is the letter of presentation, both of the project and of the company that would implement it. The report is the background information that we have at our disposal to judge both the project and the company, which we assume BOTNIA and its technicians know in depth and have approved. In this context and on the basis of the report’s lack of scientific and technical clarity, it may be deduced that it is too risky for the health of our environment to allow this company to build and put into operation the mill in question. We consider it essential for the International Finance Corporation to analyze the full technical report, which is available (in Spanish) at: http://www.guayubira.org.uy/celulosa/criticas.html Thirdly, neither Metsa Botnia nor Ence carried out any serious studies on the possible negative social impacts of their projects, either in the matter of foreseeable loss of jobs related to the liquid effluents and to gaseous emissions (with a strong and disagreeable smell) of the pulp mills, or of the possible impacts on the health of the local population. At no time has it been considered that some 1,300 people in Fray Bentos (out of an economically active population of 8,500) obtain employment from local tourist activities, linked to the Las Cañas resort (http://www.guayubira.org.uy/celulosa/Ciesu.html) in particular, which would be seriously threatened by the presence of two enormous pulp mills a few kilometres upriver from the tourist zone. To them are added a non-quantifiable number of fisher-people and honey producers who might also loose their means of livelihood if these plants are installed. The possible negative social impacts on the Argentine side have not been considered either, where they also depend on tourist activities as a generator of employment. Furthermore, both companies have exaggerated the number of “indirect” jobs that they will generate, handling figures of 8,000 jobs (Metsa Botnia) and 15,000 jobs (Ence) that are unfounded. As an example, Metsa Botnia includes as “indirect” employment linked to the installation of its plant between 1,300 and 2,200 people working in the plantations and between 300 and 700 people who carry out tasks in timber transportation. However, it is clear that these jobs already exist, independently of whether the Metsa Botnia plant is installed or not, as the timber has to be cut and transported, either for export as logs or chips or for industrialization on the domestic timber market. In the fourth place, it has been observed that the timber requirements to supply the Metsa Botnia mill (and the Ence mill in the event it is also installed) are very much higher than local supply, even if it were also to come from neighbouring Argentina. In fact, Metsa Botnia will require 3.5 million cubic metres of eucalyptus timber, while Ence requires 1.7 million cubic metres. Assuming an average annual growth of 25m3/hectare/year, this implies an annual felling of 140,000 hectares for Metsa Botnia alone and 210,000 hectares per year for both plants. In turn, assuming an 8 year felling cycle, the total number of hectares needed by Botnia would be 1,120,000 hectares while if Ence were also established, the figure would rise to 1,880,000 hectares. Presently, the eucalyptus plantations in the whole country amount to a total of some 500.000 hectares, while in the neighbouring Argentinian province of Entre Rios they are estimated in some 150,000 hectares. That is to say, the installation of one or of both plants would imply tripling the present area under plantation. It must be noted in relation to the above, that serious environmental and social impacts are already evident in the existing eucalyptus plantations, that would be worsened in the event that the area planted were to be increased to reach the levels necessary to supply one or both pulp mills. From the social standpoint, it has been proven (based on official information) that monoculture tree plantations generate fewer jobs than any other agricultural or cattle-raising activity and that the working conditions are worse than those of extensive cattle-raising itself (which are poor). That is to say, increasing the area of plantation will imply a net loss of jobs in the rural environment, that would be greater or lesser, according to whether they substitute agricultural or cattle-raising activities, but at all events the net balance of jobs would be negative. The research findings on this subject is available at: http://www.guayubira.org.uy/trabajo/ciesu.doc From the environmental standpoint, serious impacts on soils, water and biodiversity have been documented (see: http://www.guayubira.org.uy/plantaciones/index.html) To the above is added the fact that the area under certified plantation is limited to 75,278 hectares under the Forest Stewardship Council (FSC) system and the main companies with certified eucalyptus plantations are COFOSA (Metsa Botnia/UPM/Kymmene) with 31,754 hectares and COFUSA (25,210 hectares). The remaining companies certified under the FSC have plantations of other species that are not suitable for the projected pulp mills. Two other important companies are certified under the ISO 14001 system but one of them has only got pine plantations (Weyerhaeuser), while Eufores (of the Ence group), has some 40,000 hectares of certified eucalyptus. It is also important to point out the impacts that one or both plants would have on the use of the country’s highway facilities due to the traffic of hundreds of trucks with 40 ton loads or more. Serious impacts have already been noted, both on rural roads and on departmental and national routes that are constantly in repair at the expense of public funds. Such impacts would be enhanced in the whole country in the case that the area under plantation is increased to supply the projected plants. At the same time, such impacts would be even more serious in the accesses to the pulp mills, causing even more traffic congestion and increasing the possibility of serious accidents. Furthermore, there are other, unresolved problems regarding the installation of both plants: 1) An international conflict that has not yet been formalized with Argentina (but that has implied questions by the Argentine President, his Minister of Foreign Affairs and by the Governor of the Province of Entre Rios to the President of Uruguay), linked to the possible contamination of the Uruguay River, shared by both countries. 2) Questions on the legality of granting a free trade zone to each of the two companies that intend to install pulp mills. 3) Questions regarding the legality of using enormous volumes of water and its possible contamination following the adoption of a constitutional reform on water at the last elections. Finally, the growing social opposition to these projects should be noted, both regarding the eucalyptus plantations and the pulp mills. This opposition was evident on 30 April when some 20,000 people from Argentina and Uruguay met in the middle of the international bridge joining both countries near Fray Bentos to express their opposition to the pulp mills (see http://www.guayubira.org.uy/celulosa/abrazo.html). For the above reasons, we consider that the International Finance Corporation should not be involved in the Metsa Botnia project nor grant it any loans, given the fact that the installation of one or two pulp mills will result in serious environmental and social impacts that will do nothing to solve the problems of the country and its people, but only contribute to make them more serious. Yours sincerely, Grupo Guayubira |
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