INTERVIEW-Argentina lobbies World Bank to halt pulp mill loan
Source: Reuters
By Gilbert Le Gras WASHINGTON, Nov 9 (Reuters) - Argentina's environment secretary said on Thursday she has been lobbying World Bank directors to halt loans due for approval next week for a pulp mill in neighboring Uruguay that critics say will harm the environment. "I don't want to presume anything but I can tell you we had very good meetings," Argentine Environment Secretary Romina Picolotti told Reuters after two days of meetings. "It's a great concern for the majority of the executive directors, practically all of them. I met with 90 percent of them," she said. Picolotti said it is inappropriate for directors to support staff recommendations at Nov. 16's board meeting and approve $170 million in loans from the International Finance Corp. and $300 million in political risk insurance from the Multilateral Investment Guarantee Agency while legal cases are pending. "This project is like a leading case," Picolotti said. "I don't understand how the bank has led itself to these circumstances...The World Bank shouldn't rush this." Argentina fears Finland's Metsa-Botnia <UPM1V.HE> <MRLBV.HE> mill, which is due to begin operating in the third quarter of 2007, will damage the environment and also hurt tourism and fishing. Botnia is building the mill on a river spliting Uruguay and Argentina that has sparked protests by Argentines and lawsuits between the two historically cordial countries at the both the International Court of Justice in The Hague and Mercosur, a trade bloc in which both countries are members. While the ICJ in The Hague refused to order a halt to the construction, officials in Buenos Aires have said a broader decision is not expected until late in 2007. Uruguayan officials, meanwhile, are also lobbying World Bank directors this week so they approve the loan and insurance on Nov. 16, two sources familiar with both efforts said. Spain's Ence <ENC.MC> had planned to build a pulp plant next to Botnia's mill, but Ence has said it would relocate it. The two mills were estimated to cost about $1.7 billion, the largest private investment in Uruguay's history. Picolotti also argued its neighbor violated a bilateral treaty on the Uruguay River by not providing sufficient information on the project. She also questioned the IFC's hiring of Vancouver-based environmental consultancy EcoMetrix in preparing last month's cumulative impact study. The same consultancy was hired to conduct the original environmental impact study. IFC spokeswoman Corrie Shanahan said: "IFC is supporting this mill because, after a careful review of the facts, we are convinced that it will generate very significant economic benefits for Uruguay and cause no environmental harm." The two sources familiar with the World Bank lobbying efforts said they were convinced of the veracity of EcoMetrix findings that there is unlikely to be long-term negative impacts from the mills which it said would run under best available techniques.
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