Argentine NGO files complaint against NORDEA of Sweden and encourages NORDEA to Pull-Out of Irresponsible Contaminating Papermil
CEDHA has already filed numerous complaints on the Botnia investment, on behalf of victims, including a Specific Instance Complaint filed yesterday against Botnia for violations to the OECD Guidelines for Multinational Enterprises at the National Contact Point in Helsinki, and an environmental and social policy violations complaint to the Compliance Advisory Ombudsman of the IFC (a World Bank agency which is considering co-financing the investment). The CAO published in its full compliance audit of the project, that “IFC’s due diligence to satisfy itself that the Environmental Assessments (EAs) were complete in all material respects prior to disclosure was inadequate and not in compliance with the organization’s Disclosure Policy. The CAO further states that IFC procedures were “not rigorous” enough to “sufficiently support” outcomes of environmental impact studies. The CAO states that as late as April of 2005, “the IFC was working from incomplete versions of the Environmental Assessments”, and “should have clearly signaled this to stakeholders”, which it never did. The Audit reveals that IFC already new by June of 2005, that cumulative impacts of the Botnia project was “based on obsolete technical data”, and that the IFC was aware “of concerns that communities in Argentina perceived the pulp mills as threatening to their quality of life”. A new study commissioned recently by the IFC to assess previous impact studies, also shows that the EIAs, provide insufficient and inconclusive evidence about serious environmental concerns to stakeholders.
Legal complaints have also been filed against the project in national courts both in Uruguay and in Argentina, and at the Inter-American Human Rights Commission, the first time ever that a World Bank project goes before an international human rights tribunal.
The presidents of Argentina and Uruguay met recently in Chile, to address the growing conflict caused by Botnia’s project and agreed to a 90-day truce, conditioned on the lifting of road blocks by opposing communities and the parallel halting of construction by Botnia, which is the only one of the two plants presently in construction. The local Botnia representative publicly announced that Botnia would heed the request, while local citizens opposed to the plants that had blocked traffic in protest, showed good faith in the presidential accord, and lifted the road blocks. Everything was set to advance negotiations, and the foreign ministries of each country drafted what seemed to be a consensus accord to proceed with new environmental impact studies to measure impacts that had not yet been considered, particularly on the tourist sector, which is critical to the region.
Just hours from the signing of a closing agreement to set the stage for a presidential summit between Argentina and Uruguay, Botnia announced that contrary to what it had said earlier, it would not suspend construction, presumably because of adverse stock price impacts halting construction would have in European markets. Botnia has also threatened Uruguay that it would abandon its investments if problems continue. Uruguay, meanwhile is trapped by a draconian contract signed between Uruguay and Finland, and with Botnia, that would penalize Uruguay with multimillion dollar sums should Botnia be negatively impacted by changes in the terms of the investment. Botnia’s decision to ignore the Presidents’ request, effectively collapsed the ongoing dialogue between Uruguay and Argentina and with it any hopes for moving towards a resolution in the conflict.
The Uruguayan Presidential Secretary, Gonzalo Fernandez, in one of the first signs of strain between the Government of Uruguay and the Finnish company, Botnia, confronted Botnia’s decision, in the midst of the worst ever diplomatic disputes between the countries, suggesting that the decision was “abrupt”, and lamented that this obstructs hopes for an eventual resolution to the conflict, especially considering the good will of both nations to resolve the dispute. On the Argentina side, Chief of Cabinet, Alberto Fernandez, lamented that Botnia “does not understand the real dimensions and reach of the binational conflict which has ensued.”
ING Group of Netherlands, and signatory to the Equator Principles, realizing the growing tension produced by these mills, and also having received an Equator Principles Compliance Complaint for its involvement in these projects, announced April 12th, that it chose to drop considerations to finance Botnia with US$480 million.
Botnia’s attitude is unfortunate, since for the first time, negotiations between Argentina and Uruguay seemed to get underway. Botnia and ENCE, the Spanish company constructing just upstream had both indicated that they would support the decision to halt construction in favor of the negotiating process. ENCE has not begun construction due to freezing of international finance following complaints filed to the CAO by CEDHA, stakeholders, and the government of Entre Ríos (Argentina). CEDHA is also pursing action against Spanish banks that would finance ENCE, as well as Spanish Export Credit Agencies (CESCE and ICO), that would lend key financial support and guarantee loans for the investment. Botnia’s investment in Uruguay amounts to over US$1.2 billion and is Uruguay’s largest foreign direct investment ever, and represents the largest foreign investment by any Finnish company abroad.
NORDEA’s involvement in such a controversial project, goes against its public commitments to uphold responsible investment, and places NORDEA in direct complicity with Botnia for all of the norms, regulations and legal violations which have already been cited and confirmed by the World Bank CAO and which continue to appear as these projects are scrutinized by local communities, the Argentine government, and environmental and human rights organizations.
For more information contact:
Jorge Daniel Taillant Center for Human Rights and Environment (CEDHA) Tel. 54 3541 494 162cel. 54 9 351 625 3290jdtaillant@cedha.org.ar
for more info on the case see: http://www.cedha.org.ar/en/initiatives/paper_pulp_mills/
for CAO Audit: see: http://www.cao-ombudsman.org/html-english/documents/CAOAuditofOrionandCMBPulpMillsFinalReportENGLISH.pdf