Pulp Mill Dispute - March/April 2010

March/April 2010

The internal compliance/ombudsman (i.e. the CAO) of the World Bank in Washington, D.C. carried out an appraisal of the Orion Pulp Mill to determine whether internal guidance had been followed and whether the plant was being monitored according to IFC requirements. The conclusions, published on 15 March 2010, of the independent consultant were that:

"• Emissions to air and water have been thoroughly addressed by IFC during the assessment phase, and the monitoring and reporting demonstrate that IFC assured itself of the Project's performance against applicable requirements.

• There is no indication that IFC did not assure itself that the independent verification of the monitoring fulfills the applicable IFC requirement.

• There are no indications that IFC failed to assure itself of the applicability of the World Bank's safeguarding policy OP 7.50 for Waterways (2001).

• This case does not fulfill the criteria for further investigation in the form of an audit.

CAO has closed appraisal of this case with no further action."

Argentina filed suit in 2006 at the International Court of Justice in The Hague, a court that adjudicates disputes between States, claiming that pollution from the mills will cause serious environmental damage and that they were being erected in breach of the 1975 border treaty known as the Statute of the River Uruguay

On April 2010, the ICJ ruled the pulp mill in Uruguay can keep operating. Its also stated that Uruguay failed to negotiate with Argentina over the plant, but said it would not be appropriate to make Uruguay pay damages or dismantle the operation. Argentine Foreign Minister Jorge Taiana calls Gualeguaychú activists to reconsider their hard position and lift pickets. Presidents Cristina Fernández and José Mujica will meet at Quinta de Olivos in Buenos Aires to analyze the result

In December 2009 Finnish UPM-Kymmene Oyj became the sole owner of the pulp mill.