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URUGUAY
Controversial pulping industry expands
José Elosegui*
2/10/2011
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Lands for pine and eucalyptus trees increase as country grows cellulose business.

The diplomatic dispute between Uruguay and its neighbor Argentina over a large paper pulping plant along the shared border not only did not derail the business, but Uruguay is taking steps to expand the controversial cellulose industry, a move that could put in jeopardy one of the country´s main resources: land.

On Jan. 18, Montes del Plata de Uruguay, a consortium of forestry companies Arauco of Chile and the Swedish-Finnish Stora Enso, signed a US$1.9 billion — the largest single private investment in Uruguay´s history — contract to build a pulping complex in Conchillas in the southeastern Colonia department.

The project, which includes a pulping mill and a port for cellulose exports, would produce 1.3 million metric tons a year from its estimated start date in 2013.

According to the consortium, the complex´s construction will create an estimated 3,200 jobs. But once in operation, the company says it will provide direct employment to only 500 people.

Passed conflict
Uruguay´s cellulose industry was thrust into the international spotlight when its other plant that straddles the Uruguay-Argentina border began to operate in late 2007. The plant, owned by Finnish company UPM-Kymmene, which purchased it from another Finland-based company, Botnia, in 2009, sits on the Uruguay River in the town of Fray Bentos. An outcry from environmentalists and the government of Argentina sparked a diplomatic dispute between both countries and massive protests over the pollution the plant poised to cause.

The Argentine government lodged a case against its neighbor in the International Court of Justice, which gave Uruguay a moral conviction for not respecting the treaty on the river the two countries share, but did not order the plant to close.

The $1 billion-plant in Fray Bentos was also touted by the government as a job creator, but it currently employs just several hundred people. The Rio Negro department has one of the highest unemployment rates in the country.

Monoculture
Uruguay has around a million hectares of eucalyptus and pine forests, most of it destined for the cellulose industry and largely in the hands of multinational companies. The Montes del Plata consortium is the single-largest owner of the land with almost 240,000 hectares, and UPM-Kymmene holds around 225,000 hectares. US company Weyerhaeuser owns more than 140,000 hectares.

Most of Uruguay´s farmland is dedicated to transgenic soy cultivation. The industry, mainly controlled by large Argentine farming companies, takes up around 1 million hectares, meaning that the forestry and soy industries together hold one-eighth of Uruguay´s arable land.

These industries are exhausting key water sources for many rural communities, and leading to soil degradation, displacement of small-scale farmers, the loss of food sovereignty and safety and the loss of control of land to foreign companies.

Critics raise their voices
Some criticism of this system has emerged from the government itself. President José Mujica has expressed his worry for the increased concentration of Uruguayan lands in foreign hands. He has called on lawmakers from the ruling Broad Front party to evaluate possible alternatives. Lawmakers from his party concurred, and following the Montes del Plata announcement, said this type of industry is not ideal.

Sen. Eduardo Lorier, of the Communist Party, one of the member parties of the Broad Front, was quoted in a Jan. 20 article in La Diaria as saying that the two cellulose plants “create very few resources for the country” because they operate — or will operate in the case of Montes del Plata — in duty-free zones.

Lorier added that the forestry and soy industries are a step backward for Uruguay, since it means it simply exports more raw materials, and more of its land is concentrated in the hands of a few, foreign companies.

For its part, Grupo Guayubira de Uruguay, an umbrella group of environmental organizations, has harshly criticized the Montes del Plata project. The group has long warned against the social, cultural and political implications of monoculture.

One of the group´s members, activist Elizabeth Díaz, told Latinamerica Press that the entire “global model” should be reconsidered.

“We´re talking about a factory and a number of hectares destined for plantations, instead of talking about using them for food production or other types of traditional products,” she said. “Montes del Plata holds some 250,000 hectares of land, five times the area of the Montevideo department. That´s ridiculous for Uruguay and I think any other country on earth.”
—Latinamerica Press.


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Another cellulose plant is set to become the largest single private investment in Uruguay´s history. (Photo: José Elosegui)
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