Botnia Pulp Mills – International Court of Justice rules against the suspension of construction works

This decision can be expected to reassure those Financial Institutions that are considering financing the Paper Mills. The ICJ has clearly scrutinised the evidence and does not consider that there is a sufficiently robust basis to stop the construction of the mills. This project may yet benefit from the advice and guidance that is generally provided when an Equator Principles Institution finances a project.

The ICJ certainly recognises the value in reserving judgement on the environmental and social performance of a project and thereby allowing the opportunity for improvements, should they be needed. The Court stated that it “is not at present convinced that, if it should later be shown that Uruguay had failed, prior to the present proceedings or at some later stage, fully to adhere to these provisions, any such violations would not be capable of being remedied at the merits stage of the proceedings”.

In the ongoing papermill conflict between Argentina and Uruguay, the International Court of Justice (ICJ) ruled 14 votes to 1 that “the circumstances of the case are not such as to require the indication of a provisional measure ordering the suspension by Uruguay of the authorization to construct the pulp mills of the suspension of the actual construction work”. The Court argued in its 21 page verdict published today, that Argentina failed to offer substantial evidence to prove that during construction of the papermills, contamination and danger to local citizens was imminent and irreversible.

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