BY CHRONICLE STAFF
Despite the election of a new president in Argentina, the conflict with Uruguay over its Botnia pulp mill is expected to continue, experts say. "Argentina's President-elect Cristina Fernandez is unlikely to compromise on the issue, and further protests are expected," London-based risk consultancy Exclusive Analysis said in an analysis last week.
U.S.-based consultancy Global Insight agrees. "The situation is likely to deteriorate further," it said in a recent analysis. "As Botnia enters into full production, Argentine environmentalists will adopt drastic measures to pressure Uruguayan authorities."
Finland-based pulp producer Botnia, the largest foreign investor in Uruguay, started production at its new $1.2 billion facility in the South American country two weeks ago following politically-motivated delays. Both the government and environmental activists in Argentina claim the mill will pollute the Uruguay River between the two countries - a claim denied by Botnia, Uruguayan authorities and the World Bank.
Thanks to continued threats of violent protests from Argentina environmental activists, Uruguay closed its border over the weekend. The border to Argentina was again opened today, except for the crossing at Fray Bentos, the key focal point for the activists.
"The opening of the Botnia pulp mill increases the risk that protesters will target the plant and associated assets in the coming year," Exclusive Analysis says. "The protests have not turned violent yet, but Uruguay's military deployment increases the risk of confrontation. Environmentalists have threatened to sabotage the plant."
The nearby Nueva Palmira terminal, the Finnish embassy in the capital and associated assets in the port of Buenos Aires, such as ferries departing for Uruguay, are also at risk, the consultancy says.
Much of the problem, Uruguay complains, is that the Argentine government has done nothing to impede the protesters. "Argentina has done little to restrain the protesters or prevent blockades of the three cross-border bridges connecting Argentina to Uruguay," Exclusive Analysis says. For example, access to the San Martin Bridge connecting to Uruguay's Fray Bentos has been impeded since 2005, while Argentina's Colon and Concordia inhabitants continue to undertake intermittent blockades of other bridges, the consultancy says.
"Such actions are likely to trigger a reaction of a legal nature from Uruguay and charges against Argentina might be brought forward in the dispute tribunal of the Common Market of the South (Mercosur)," Global Insight says.
The dispute is also damaging bilateral trade between the two countries and Uruguay estimates it has lost $800 million in revenue, particularly from tourism, Exclusive Analysis points out.
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