WASHINGTON, D.C., Dec. 19, 2005 – Officials
of the World Bank Group on Monday released a cumulative environmental and
social impact study on two proposed pulp mill processing plants in Uruguay,
opening a consultation period to receive feedback from the general public
and technical specialists on the study’s methodology and findings.
“This report provides a detailed and factual analysis of the combined
impacts of the Orion plant of Oy-Metsa Botnia and the Celulosa de M’Bopicua
(CMB) plant of Grupo Empresarial ENCE,” said Dimitris Tsitsiragos, director
of the International Finance Corporation’s Global Manufacturing Department.
“It will provide a foundation for the consultations ahead, and we welcome
additional feedback on the consultation process and the study’s findings
in the coming weeks.”
The International Finance Corporation (IFC), the private sector financing
arm of the World Bank Group, is currently evaluating whether to provide
financing to both the Orion and CMB plants. In addition, the Multilateral
Investment Guarantee Agency (MIGA), also of the World Bank Group, is evaluating
whether to provide political risk insurance to the Orion plant. Both plants
are located on the Rio Uruguay in western Uruguay.
Neither IFC nor MIGA will make a decision on whether to proceed with funding
until the consultation period of the cumulative impact study is completed.
“We want to have a full review of the facts and an open dialogue surrounding
the combined impact of the two pulp mills,” Tsitsiragos said. “We are
hoping to get a high level of engagement from local communities so we can
be assured that there is a clear understanding of the environmental and
social impacts of these mills.”
The Cumulative Impact Study
Each of the pulp companies has prepared comprehensive Environmental
Impact Assessments of their projects in accordance with Uruguayan and World
Bank Group requirements. Oy-Metsa Botnia examined cumulative impacts in
its environmental impact assessment. However, the World Bank Group required
an additional study of the cumulative impact of the two plants.
The cumulative impact study addresses more than 30 issues, ranging from
social and economic issues, such as the effects on traffic, labor supply,
and tourism in the region, to issues such as air quality, water quality,
and biodiversity. Among the issues highlighted by the study are:
- Air Quality. On rare occasions
during the initial three to four-month-long commissioning of the plants,
odorous gases might be detected at a range of 5-10 kilometers from the
plants, depending upon wind conditions. The prevailing winds in the region
are from the north to northeast. During routine operations of the mills,
odor emissions would occasionally be detectable 1-2 kilometers from the
mills for periods of less than 1 hour. Air emissions from the plants, whether
for particulate matter, nitrogen oxides, or sulfur dioxide, will meet World
Bank Group standards.
- Water Quality. Detailed computer
modeling of treated wastewater discharges from the plants shows that the
discharges into the Rio Uruguay will be undetectable within a short distance
of the plants and will not impact aquatic life or recreational use of the
- Tourism. Both mills will be constructed
using the best available pollution control technology, and the plants will
meet World Bank Group and European Union standards. Thus, air and water
quality impacts on tourism will be limited. The visual impact of the mills
on tourist areas will be low.
- Labor. The combined labor requirements
of the two plants during construction could peak at more than 7,000 workers,
resulting in an influx of workers, most of whom will be younger and male,
into the Fray Bentos region. This labor demand will increase employment,
primarily in Uruguay, but also increase the demand for housing and public
services such as health, public safety, education, and transportation;
- Traffic. The two roads leading
to the plants will witness a marked increase in traffic levels and could
reach a level of 580 trucks per day;
- Forestry Plantations. The development
of the two pulp mills is expected to result in an additional plantation
of 65,000 hectares of eucalyptus in western Uruguay. The current stock
of plantation forestry in the western Uruguayan region is 172,000 hectares.
The Consultation Process
With the release of the cumulative impact study (CIS) on Monday, the
World Bank Group proposed a process for consultation on the document:
- The draft CIS will be available for
public review, comment and possible modification for a minimum of 60 days
prior to any decisions by World Bank Group institutions.
- Starting in mid-January, the World Bank
Group will convene four review sessions/meetings to enable stakeholders
to provide comments and concerns on the draft CIS. These meetings
will be held in Montevideo, Fray Bentos, Gualeyguaychu, and Buenos Aires.
IFC and MIGA experts and representatives of the teams working on the projects,
as well as company representatives, will be on hand to hear comments and
concerns. These meetings will be facilitated by an independent third
party who will define the structure and format to ensure a focused dialogue
and a fair process.
- During the initial disclosure period
through January, the Governments of Uruguay and Argentina will each be
invited to nominate a technical expert to participate in the review process
as indicated below. A third expert will also be drawn from among
a pool of technically qualified nominees.
- The experts will have an advisory rather
than decision-making role. They will assess the validity of challenges
to the content and technical analysis provided in the CIS and then provide
the World Bank Group with their findings and advice. The experts’
findings and advice will be made available to the public. The terms
of reference for the role of the experts will be publicly released.
- At any time following release of the
draft CIS through February 17, written commentary and alternative data
or findings provided by stakeholders can be submitted to the World Bank
Group, which will share this information with the technical experts.
- The experts will have until February
24 to review and assess the validity of the written commentary and alternative
data or findings provided by stakeholders. They will then provide the World
Bank Group with their findings and advice.
- Once the experts have submitted their
findings and advice, IFC and MIGA will review and respond to these findings
and advice, indicating any specific actions that have been agreed to be
undertaken by the companies or other stakeholders. At this time,
IFC and MIGA will also indicate whether or not their respective managements
will seek Board approval to provide financing to the mills.
Electronic copies of this press release
and the Cumulative Impact Study, in English and in Spanish, can be obtained
from the website of the International Finance Corporation, at: http://www.ifc.org/lac.