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Pulp Mills Case: Argentina versus Uruguay - Case Analysis

Argentina filed a case against Uruguay at the International Court of Justice for unilaterally sanctioning the construction of two pulp mills near the river Uruguay close to the boundary between the two countries.

It was claimed that there was a potential situation of transboundary injury since the Uruguay River serves as the border between the two nations. The Uruguayan government's decision to warrant the establishment of the two pulp mills along the river goes against the 1975 Statute of the River Uruguay, an agreement that Argentina and Uruguay signed. Due to the requirement under the treaty to safeguard the biodiversity and ecosystem of the river, Uruguay was compelled to consult with and notify Argentina before beginning construction of the pulp mills.

Argentina claimed that this was not done by Uruguay along with the claims that the mills will contaminate the river, degrade its quality, and bring serious transboundary harm to the nation in addition to economic loss.

  1. Has Uruguay breached the treaty between the two countries by not giving prior notification and not consulting Argentina before approving the pulp mills construction?
  2. Should the construction of the pulp mills be stopped?

Contentions by Argentina

In order to protect and preserve the aquatic environment of the River Uruguay, Argentina submitted a request for the indication of provisional measures taken by Uruguay and to suspend the authorizations for the construction of the mills and building work on them until the Court's final decision; cooperate with Argentina by refraining from taking any further unilateral action regarding construction of the two mills that is in violation of the 1975 agreement;
  • Argentina argued that the breach of the procedural part meant breach of substantial part of the agreement.
  • Argentina contends that allowing the discharge of nutrients into the river affected the water quality and created stagnation which is a violation of Article 41-"The obligation to prevent pollution and and preserve the aquatic environment"
  • Argentina maintained that the CARU was created for specific purposes and that failing to fulfil its obligations would violate the 1975 Statute.
  • Argentina stated that by not taking action to avoid river contamination and by granting work permits in violation of the concept of equitable and reasonable use, Uruguay has failed to uphold this commitment.
  • Uruguay's eucalyptus planting and supply of raw materials, according to Argentina, have had an effect on the soil and water quality.
  • Argentina said that by deviating from protocol and failing to communicate with CARU, Uruguay had broken its commitment to abide by the CARU and prevent any alterations.
  • Argentina contended that Uruguay had not made an effort to identify another location for the building that had a negative impact on the water and soil.

Contentions by Uruguay

Uruguay contended the main allegation of Argentina about violation of procedural and substantive duties by saying that the procedural requirements were included to help people fulfil their substantive commitments and that it was up to the court to determine whether those requirements had been broken.

Uruguay maintained that the CARU is merely a commission with no independent authority. Its function is to serve as a tool for the Parties to cooperate with one another.

Uruguay contended that it had not violated this duty and that the new uses were not justified by this principle [Article 1 of the Statute deals with "The obligation to contribute to the optimum and rational utilization of the river"]

According to Uruguay, Argentina has not made an argument based on Uruguay's stewardship of the soil.

Uruguay argued that in light of the duty set forth in Article 36 [ "The obligation to co-ordinate measures to avoid changes in the ecological balance"], the parties' actions should be taken into account, and as a result, the mills satisfy the criterion.

They defended the violation of Article 41 ["The obligation to prevent pollution and preserve the aquatic environment"] by saying that they have adopted the best technology to prevent pollution

Uruguay claimed that the evaluation was finished and that the location was chosen because it was convenient for supplying workers and raw materials.

The International Court of Justice (ICJ) acknowledged that there was a breach by Uruguay as they were obliged to notify and conduct consultations with Argentina prior to the authorization given at least before the construction of the pulp mills began, as Uruguay had not informed the Administrative Commission of the River Uruguay (CARU) of the project as required by the Treaty, the Court came to this conclusion.

The Court found that Uruguay had not breached the substantive portions of the Treaty imposed obligations and held that there was no conclusive evidence showing that Uruguay did not exercise their due diligence or that the mills would lower the water quality of the river. The decision to authorize the construction of the mills did not show how the ecological balance of the river would be affected and how it would affect Argentina.

Because there was no immediate danger to Argentina's rights, the ICJ decided against using its power to recommend temporary relief against Uruguay. In fact, the Court argued that stopping construction right away wasn't required because Argentina would be able to pursue legal action if Uruguay were found to be in violation of the 1975 Statute.

Court also determined that neither Argentina nor the River Uruguay faced an immediate environmental hazard as it found that Uruguay has not passed the limits set to assess the amount of pollutants present in the water and no proof affecting the air or the biodiversity was found.

The Court concluded by stating that the parties must behave in good faith in accordance with the law and that its decision not to order provisional measures against Uruguay would not affect its determination to rule on the merits of Argentina's case in the future.

The Court is unable to uphold Argentina's demand for compensation for purported harms incurred in several economic sectors, especially tourism and agriculture, because Uruguay has not violated substantive responsibilities originating under the 1975 Statute.

The Court concludes by pointing out that the 1975 Statute imposes a duty on the Parties to cooperate with one another in accordance with the terms set down via CARU by working jointly, in order to ensure the accomplishment of its object and purpose. Thus all the claims by Argentina were rejected.

The Statute of the River Uruguay ("1975 Statute") was signed by Argentina and Uruguay on February 26, 1975. The objective of this agreement was to regulate all resource related activities along the river Uruguay river dividing the two countries.

In order to control and coordinate any activities that may have an impact on the River Uruguay, the 1975 Statute also established the Administrative Commission of the River Uruguay (or "CARU"). Under this if any dispute cannot be settled under CARU, either party can approach the ICJ. CARU was created by the 1975 statute to establish procedures that maybe followed by the parties to fulfil their substantive obligations.

The contentions by Argentina that Uruguay did violated the procedural obligations did not stand as nowhere in the 1975 Statute which created the CARU which laid down procedures for the parties to fulfil their substantive obligations, the ICJ rightly said said that the breach of the procedural obligations does not indicate the breach of the substantive obligations as the statue has not laid down that the substantial obligations laid down in the agreement would be fulfilled only by following the procedural obligations laid down in it or that violation of a procedural obligation becomes an automatic breach of substantive obligations.

The parties' compliance with their substantive responsibilities does not automatically imply that they have complied with their procedural requirements or that they are exempt from doing so. When a party who has disregarded its procedural obligations later abandons the execution of its planned activity, the connection between these two kinds of obligations might also be severed.

The Court found that there is a functional link between the procedural and substantial part though this does not mean the parties are not answerable for their individual actions and choice to follow certain procedure as the 1975 statute gives the parties leeway to do so.

It has been established by the trail smelter case that the injury must be established with clear and convincing evidence which Argentina here failed to do so.

Procedural obligations if laid down specifically in an agreement signed by two sovereign States, should it not be followed too. The ICJ's verdict on how as long as one did not breach the substantial part of the agreement is something which has a chance of setting a wrong precedent as it can be cited by other countries in the future where such a breach of procedural obligation takes place. The Court should have made an observation on the consequences of such a breach and maybe excused their own stand on not holding Uruguay liable here as there was no proper evidence which could prove that the Uruguay's actions were wrong and could have an unwelcome effect.

The fact that the ICJ could have set a standard for international environmental impact assessment instead of saying that it should have been done according to either Countries' domestic legislation of that country or a bilateral agreement which covers such a topic, the court has missed out a chance on setting the precedence for countries who are not members to the convention on environmental impact assessment in a transboundary context.

The court in this case accepted that there was no International Law that regulates the Environmental Impact Assessment (EIA) and that it is up to the parties to conduct one in accordance with their domestic legislation specifying the content required in such an assessment. The EIA should take in the nature and size of the projects and the likely effect it will have on its surroundings. The court had considered that even after the project has begun its operations there must be continuous monitoring.

The trail smelter case had held that there was obligation on parties to prevent trans boundary harm under international law principles, no State has the right to permit the use of its territory in a manner that would cause harm to other territories by way of fumes especially when the injury is established by clear and convincing evidence.

Under the obligation of transboundary harm, the party is obligated to conduct due diligence of the project by ascertaining the nature, location of the project, state of science, precaution and level of development. Uruguay in this case had conducted its due diligence by conduction location studies on the river and other locations were studied before determining that the chosen place would be the optimum location. Therefore, they cannot be held liable for not doing their due diligence.

Most environmental assessment have a phase where the public participation is required and feedback from the people are welcomed, even though Uruguay had no legal obligation of taking such public consultations under the treaty they still conducted a public consultation this shows their bonafide intention.

After the mills started their operations, it was found that they complied with every legal obligation set on them and any decrease in water quality deterioration cannot be solely pinned on the pulp mills, this contention must have been supported by clear and convincing evidence.

Reading all these facts it is thought to establish a case against Uruguay the only fault which the court too rightly identified is that they did not inform Argentina regarding the establishment and running of such two pulp mills on the river according to their 1975 statute which was entered into by the two countries to govern such industrial activities.

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