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