Sustainable Development Law & Policy Volume 7 Article 24 Issue 1 Fall 2006: Ocean & Fisheries Law The rU uguay Paper Pulp Mill Dispute: Highlighting the Growing Importance of NGOs and Public Protest in the Enforcement of International Environmental Law Michael K. Lee Follow this and additional works at: http://digitalcommons.wcl.american.edu/sdlp Part of the Environmental Law Commons, International Law Commons, Law of the Sea Commons, and the Litigation Commons Recommended Citation Lee, Michael K. “The rU uguay Paper Pulp Mill Dispute: Highlighting the Growing Importance of NGOs and Public Protest in the Enforcement of International Environmental Law.” Sustainable Development Law & Policy, Fall 2006, 71-73. This Litigation Update is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in Sustainable Development Law & Policy by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. LITIGATION UPDATE THE URUGUAY PAPER PULP MILL DISPUTE: HIGHLIGHTING THE GROWING IMPORTANCE OF NGOS AND PUBLIC PROTEST IN THE ENFORCEMENT OF INTERNATIONAL ENVIRONMENTAL LAW by Michael K. Lee* INTRODUCTION 1975 Statute of the River Uruguay. Argentina further argued that or the past two years the governments and the affected the two mills were being built in the “worst imaginable” place in peoples of Argentina and Uruguay have been in conflict terms of protection of the river, that there is “a very serious prob- over the potential environmental hazards that the con- ability” of environmental damage, and that the damage would be F 1 struction of two mega paper pulp mills would bring to the “irreparable.” Uruguay replied that the mills will apply the Uruguay River and neighboring area. Pursuant to a jurisdiction “highest and the most appropriate international standards of pol- provision in a treaty bearing on the matter, Argentina filed suit in lution control” and will meet its obligations under the 1975 2 the International Court of Justice (“ICJ”) to resolve the dispute Statute. and requested that the construction of the mills be enjoined On July 13, 2006, the ICJ denied Argentina’s request for until a decision was rendered. provisionary measures without prejudice on the merits. In its On July 13, 2006, the ICJ denied decision, the Court focused on Argentina’s request for provi- the fact that provisional meas- sionary measures without preju- ures may be granted only if dice to the decision on the Argentina claims that both Argentina can prove that “the merits. construction of the mills poses Nonetheless, with construc- mills were authorized an imminent threat of irrepara- tion on one mill abandoned and ble damage to the aquatic envi- the other mill temporarily sus- without complying with ronment of the River Uruguay pended, Argentina may get its or to the economic and social way regardless of the outcome the procedure prescribed interest of the riparian inhabi- on the merits of the ICJ case tants of the Argentine side of by the 1975 Statute of the 3 because of heavy public protests, the river,” [emphasis added]. political pressure, and the tena- River Uruguay. The Court then reasoned that cious public-interest litigation of Argentina did not persuade the a non-government organization Court that mere construction of (“NGO”) called Center for the mills would cause imminent Human Rights and Environment (“CEDHA” by its Spanish or irreparable harm the environment. None of the prior ICJ cases acronym). involved a request to shut down or halt the construction of an industrial project.4 LEGAL BRIEF:INTERNATIONAL While a decision on the merits is scheduled to be rendered COURT OF JUSTICE CASE in August 2007 for the Botnia mill and June 2008 for the ENCE According to Argentina, Uruguay authorized the Spanish mill,5 the combination of protests, roadblocks, diplomatic pres- company ENCE to construct a pulp mill project near the city of sure, and legal action may make the decision on the merits moot. Fray Bentos in October of 2003. In February of 2005, Uruguay sanctioned yet another paper pulp mill, this time to be operated by a Finnish company Oy Metsä-Botnia AB (“Botnia”), also near Fray Bentos. Argentina claims that both mills were author- * Michael K. Lee is an LLM candidate, 2006, at American University, Washington ized without complying with the procedure prescribed by the College of Law. 71 SUSTAINABLE DEVELOPMENT LAW & POLICY On September 21, 2006, ENCE’s president, Juan Luis Arrigui, CEDHA’S PUBLIC-INTEREST LITIGATION announced that construction would not continue, explaining that While the effectiveness of the public protests, roadblocks, 6 “there cannot be two [cellulose] plants in Fray Bentos.” Mr. and diplomacy should not be underestimated, the NGOs, partic- Arrigui did add, however, that there are plans to move the plant ularly CEDHA were just as critical to the campaign against the 7 to another part of Uruguay. And, as for Botnia mill project, pulp mills in Uruguay. Founded in 1999, CEDHA has a perma- while the project is in more advanced stages and employs nent staff of just ten persons. However, its founder Romina approximately 4,500 workers, the management decided to tem- Picolottii not only served as the legal advisor to the Gualeguay- porarily suspend construction “due to lack of guarantees… and chú Citizens’ Assembly17 but lead CEDHA on a tenacious cut- until the conditions required for the development of this project ting-edge public-interest litigation campaign against the paper are re-established.”8 pulp mills.18 PROTESTS,ROADBLOCKS,& POLITICS A large measure of the nearly two billion in financing was to Large-scale protests were essential in speeding diplomatic come from the World Bank Group and through its members, the and litigation efforts surrounding the paper mills. On April 30, International Finance Corporation (“IFC”) and the Multilateral 2005, a protest rally of forty thousand participants, mostly Investment Guarantee Agency (“MIGA”).19 CEDHA petitioned residents of the Argentine city of Gualeguaychú, blocked the the Compliance Advisor Ombudsman (“CAO”), the organiza- Libertador General San Martín Bridge, the main bridge between tion responsible for compliance review of IFC/MIGA, and the 9 Gualeguaychú and Uruguayan city of Fray Bentos. On February CAO agreed to conduct a “compliance audit” of the IFC’s stud- 3, 2006, members of an environmentalist group called ies.20 Eventually, the IFC decided to conduct another Cumula- Gualeguaychú Environmental Assembly led a long-term tive Impact Study (“CIS”) in June of 2006 an act which tacitly blockade of Route 136. On February 16, 2006, the Colón Envi- acknowledges the deficiency of prior studies.21 At present, the ronmental Assembly started a long term blockade of Route 135 IFC is still processing the loan and the bridge that links Colón requests for the mills with a (which lies approximately one decision scheduled for October hundred miles north of 2006,22 making the mill owners Gualeguaychú) to the Uruguayan Large-scale protests were nervous.23 10 city of Paysandú. Nearly con- Concurrently, CEDHA also tinuous road blocks persisted on essential in speeding launched a campaign against the Route 135 and 136 until May of co-financiers of the mills by fil- 2006. On April 30, 2006, nearly diplomatic and litigation ing what CEDHA calls “Equator 100,000 people participated in a Principles Compliance Com- protest on the Libertador Gen- efforts surrounding the plaints.” The Equator Principles 11 eral San Martín Bridge. After are a voluntary initiative pro- nearly a four-month lull, large paper mills. moted worldwide by the IFC.24 public protests stirred again on By adopting the Principles, September 11, 2006 and Sep- financial institutions undertake 13 tember 25, 2006. to finance only those projects whose environmental and social Uruguay felt the economic impact of the roadblocks. As risk comply with the criteria.25 These Principles, however, are early as December 26, 2005, the Uruguayan Chancellor publicly not legally binding restraints on financial institutions, rather they announced that the blockades were a violation of the Mercosur are a species of “soft law” that is prevalent in the area of interna- Trade Agreement and brought a formal complaint against tional environmental law. Soft law is based on international Argentina on August 9, 2006 to the Ad Hoc Tribunal created diplomacy, customs, and principles such as those espoused in the 14 through Mercosur. Uruguay requested an award of U.S. $400 1992 Rio Declaration. It is dependent on moral suasion or fear of million for Argentina’s failure to remove citizen roadblocks, but diplomatic retribution rather than legal action. Because govern- on September 7, 2006, the Ad Hoc Tribunal rejected Uruguay’s ments and corporations dislike negative publicity, one soft law claim because it found Argentina acted in good faith to dissuade stratagem favored by activists is the so-called “name and shame 15 road blocks. game.” For instance, CEDHA used the Equator Principles to The protest soon moved politicians into action and escalated send detailed and technical complaint letters that read like a civil diplomatic efforts. From May of 2005, the governor of Entre complaints to finance companies ING Group of the Netherlands Rios, the province in which the proposed mills are to be located, and BBVA of Spain. Subsequently,