A major battle is underway in the Cono Sur of South America over the explosive growth of the pulp and cellulose industry. The fight finds it current focus in a dispute over the construction of a huge pulp and cellulose mill by the Finnish multi-national Botnia on the banks of the Uruguay River that divides Uruguay and Argentina. Activists and citizens, particularly on the Argentinean side of the river, have blockaded bridges and closed traffic between the two countries on and off over the past 6 months. Many local residents fear the economic, social, and environmental consequences of the new plant.
The dispute has also driven a wedge between the Uruguayan government, which has supported and subsidized the plant, and the local and national Argentinean authorities that oppose the plant. Both countries belong to Mercosur—the “common market of the South” but that has not been enough to solve the dispute. Attempts to use international legal venues and arbitration have also so far failed to resolve the matter.
The battle is often portrayed as a classic “jobs vs. environment” struggle only on a transnational scale. Uruguay needs jobs. Proponents argue that the direct and indirect jobs promised by the pulp and cellulose industry could help re-vitalize the region’s economy. Opponents argue that the industry’s effect on local agriculture and tourism will offset any job gains. A new wrinkle in the dispute emerged recently when Botnia began employing large numbers of workers from as far away as Eastern Europe to build the plant. Plant managers and supervisory personnel are also being sent from Europe. As a result many in Uruguay feel that the promised jobs may never materialize. And the Uruguayan unions are up in arms. But the construction goes on.
But there is a major back story to the fight over the pulp mills. Over the last decade or so the “northern” pulp/cellulose industry has migrated south to the Cono Sur where none of the necessary in-puts are naturally present. What is present is good land, a climate for fast growing trees, and an aquifer to tap for water. A whole group of global companies from around Europe: Finnish, Austrian, Spanish, Norwegian, and Dutch looking for lower labor and production costs set up shop. The companies have planted hundreds of square miles of tree plantations in fast growing species like Eucalyptus—a tree native to Australia—needed to produce pulp and cellulose. These plantations have been financed in part by international agencies like the World Bank and by government subsidies. The new mills will put the production of pulp and cellulose closer to the trees needed to produce them to cut transportation costs and to take advantage of lower wages.
The growth of the industry is transforming the region. One result of this land grab by global corporations has been rapidly escalating land values in places like Espirito Santo, Rio Grande de Sul, and Uruguay. This has made it nearly impossible for the landless movements and governments to buy land to settle small farmers on—something that has been promised for years. In addition indigenous people have seen their traditional land rights undermined by the spreading plantations, causing repeated clashes.
Environmentally, the industry creates an inappropriate monoculture of fast growing Eucalyptus trees on the land where they are not native. And many fear that the water needed to grow the trees will suck down the area’s aquifer. This has already happened in some communities near the plantations where wells have run dry. The water and air pollution that the mills will produce are well known to anyone who has ever been near a pulp or paper mill.
Politically, the impact of the pulp and cellulose industry’s growth has been almost entirely negative. The dispute has divided communities in Argentina and Uruguay that should be natural allies. As is often the case, the paper companies have effectively used strategies that pit town against country, workers against workers and communities against communities, and, in this case, country against country. Tax subsidies have fueled the industry’s growth. The paper companies have poured huge amounts of money into local universities, the local press, the political process and other opinion shapers to promote their interests and distort democratic discourse. While the original agreements with the paper industry were made by the previous Uruguayan government, the current government continues to support them.
But the situation is far from hopeless. A major movement of citizen and activists is rapidly growing to confront the paper and pulp companies. The demonstrations and the blockades have drawn attention not just to the mills but to the growth of the industry as a whole. One result: last Thursday, the Spanish company ENCE which had plans to build another mill near-by announced that it was halting work on the facility. It’s unclear whether the company will relocate or abandon the planned mill but it’s clear that popular pressure contributed to its decision to halt work at the current site.
We will keep you posted as events unfold.
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