World Rainforest Movement

Uruguay: The power of the plantation and pulp company Montes del Plata

Montes del Plata is the name of the joint venture created for operations in Uruguay by two forestry, pulp and paper transnationals: Arauco of Chile and the Swedish-Finnish company Stora Enso. The two have joined forces to build and operate a pulp mill that will produce at least 1.45 million tons of pulp annually.

As a result of this merger, the Montes del Plata consortium became the largest landowner in the country. It controls 250,000 hectares of land devoted to monoculture tree plantations, which will provide the raw material needed by its mega-pulp mill.

On May 25, construction work on the mill was initiated in the town of Conchillas, in the department of Colonia, despite the fact that the company has yet to release the assessment of the social impact of its operations on the region that had been demanded by the Uruguayan government’s environmental authority, DINAMA. The construction of this mega-project, scheduled to take two years, will involve the hiring of up to 6,000 workers at peak times – most of them foreigners, according to predictions – who will descend on a town of around 500 inhabitants.

On top of this, a Uruguayan publication recently leaked excerpts from a “secret” investment contract signed between Montes del Plata and the Uruguayan government, in which both parties are prohibited from divulging any information related to the agreement by a “confidentiality” clause.

The contract establishes exceptional and considerable economic benefits for a transnational investment that would not be available to any Uruguayan company. Hidden behind phrasing such as “the parties will make every possible effort to find solutions” are hours and hours of meetings between representatives of the company and the Uruguayan government, which were clearly a great success for the company. The agreement even stipulates that in the future, the company will be compensated for “significant changes in the tax regime or with regard to permits and authorizations which negatively affect the economic conditions of the project.” To learn about some of the benefits established in the agreement see “The secret investment contract between the Uruguayan government and Montes del Plata” at: http://www.guayubira.org.uy/2011/05/montes-del-plata-secret-investment-contract/

The Uruguayan organization Grupo Guayubira, which has long opposed the expansion of monoculture tree plantations (and the pulp mills that accompany them) for their environmental and social impacts, has stated its condemnation of the manipulation and pressure exerted by this foreign company and warned that these types of negotiations threaten the country’s sovereignty: “This secret contract defines the course of the use of the country’s natural resources, its land management, its environment, essentially, the course of national development, conditioning the possibilities of intervention by Uruguayan society and the nation’s sovereign action for a very long period of time.”

Information gathered from the Grupo Guayubira press release “Montes del Plata: REPUDIO Y ALERTA”, http://www.guayubira.org.uy/2011/05/montes-del-plata-repudio-y-alerta/

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