CASO RELATIVO A PLANTAS DE CELULOSA SOBRE EL RÍO URUGUAY

CHRONOLOGY OF THE PROCEDURE 1-24

I. LEGAL FRAMEWORK AND FACTS OF THE CASE 25-47
A. Legal framework 26-27
B. CMB (ENCE) Project 28-36
C. Orion (Botnia) mill 37-47

II. SCOPE OF THE COURT’S JURISDICTION 48-66

III. THE ALLEGED BREACH OF PROCEDURAL OBLIGATIONS 67-158

A. The links between the procedural obligations and the substantive
obligations 71-79
B. The procedural obligations and their interrelation 80-122

1. The nature and role of CARU 84-93
2. Uruguay’s obligation to inform CARU 94-111
3. Uruguay’s obligation to notify the plans to the other party 112-122

C. Whether the Parties agreed to derogate from the procedural
obligations set out in the 1975 Statute 123-150

1. The “understanding” of 2 March 2004 between Argentina
and Uruguay 125-131
2. The agreement setting up the High-Level Technical Group
(the GTAN) 132-150
D. Uruguay’s obligations following the end of the negotiation period 151-158

IV. SUBSTANTIVE OBLIGATIONS 159-266

A. Burden of proof and expert evidence 160-168
B. Alleged violations of substantive obligations 169-266

1. The obligation to contribute to the optimum and rational
utilization of the river (Article 1) 170-177
2. The obligation to ensure that the management of the soil and
woodland does not impair the régime of the river or the
quality of its waters (Article 35) 178-180
3. The obligation to co-ordinate measures to avoid changes in
the ecological balance (Article 36) 181-189
4. The obligation to prevent pollution and preserve the aquatic
environment (Article 41) 190-202
(a) Environmental Impact Assessment 203-219
(i) The siting of the Orion (Botnia) mill at Fray Bentos 207-214
(ii) Consultation of the affected populations 215-219
(b) Question of the production technology used in the
Orion (Botnia) mill 220-228
(c) Impact of the discharges on the quality of the waters of the river 229-259
(i) Dissolved oxygen 238-239
(ii) Phosphorus 240-250
(iii) Phenolic substances 251-254
(iv) Presence of nonylphenols in the river environment 255-257
(v) Dioxins and furans 258-259
(d) Effects on biodiversity 260-262
(e) Air pollution 263-264
(f) Conclusions on Article 41 265
(g) Continuing obligations: monitoring 266

V. THE CLAIMS MADE BY THE PARTIES IN THEIR FINAL SUBMISSIONS 267-281

OPERATIVE CLAUSE 282
___________


ABBREVIATIONS AND ACRONYMS



AAP

“Autorización Ambiental Previa” (Initial environmental authorization)

ADCP

Acoustic Doppler Current Profiler

AOX

Adsorbable Organic Halogens

BAT

Best Available Techniques (or Technology)

Botnia

“Botnia S.A.” and “Botnia Fray Bentos S.A.” (two companies formed under
Uruguayan law by the Finnish company Oy Metsä-Botnia AB)

CARU

“Comisión Administradora del Río Uruguay” (Administrative Commission of
the River Uruguay)

CIS

Cumulative Impact Study (prepared in September 2006 at the request of the
International Finance Corporation)

CMB

“Celulosas de M’Bopicuá S.A.” (a company formed under Uruguayan law by the Spanish company ENCE)CMB (ENCE)
Pulp mill planned at Fray Bentos by the Spanish company ENCE, which formed
the Uruguayan company CMB for that purpose

DINAMA
“Dirección Nacional de Medio Ambiente” (National Directorate for the
Environment of the Uruguayan Government)
ECF
Elemental-Chlorine-Free
EIA
Environmental Impact Assessment
ENCE
“Empresa Nacional de Celulosas de España” (Spanish company which formed
the company CMB under Uruguayan law)
ESAP
Environmental and Social Action Plan
GTAN
“Grupo Técnico de Alto Nivel” (High-Level Technical Group established in
2005 by Argentina and Uruguay to resolve their dispute over the CMB (ENCE)
and Orion (Botnia) mills)
IFC
International Finance Corporation
IPPC-BAT
Integrated Pollution Prevention and Control Reference Document on Best
Available Techniques in the Pulp and Paper Industry
MVOTMA
“Ministerio de Vivienda, Ordenamiento Territorial y Medio Ambiente”
(Uruguayan Ministry of Housing, Land Use Planning and Environmental
Affairs)

Orion (Botnia)
Pulp mill built at Fray Bentos by the Finnish company Oy Metsä-Botnia AB,
which formed the Uruguayan companies Botnia S.A. and Botnia Fray
Bentos S.A. for that purpose
OSE
“Obras Sanitarias del Estado” (Uruguay’s State Agency for Sanitary Works)
POPs
Persistent Organic Pollutants
PROCEL
“Plan de Monitoreo de la Calidad Ambiental en el Río Uruguay en Áreas de
Plantas Celulósicas” (Plan for monitoring water quality in the area of the pulp
mills set up under CARU)
PROCON
“Programa de Calidad de Aguas y Control de la Contaminación del Río
Uruguay” (Water quality and pollution control programme set up under CARU)
__________



INTERNATIONAL COURT OF JUSTICE YEAR 2010
2010 20 April
General List No. 135

20 April 2010
CASE CONCERNING PULP MILLS ON THE RIVER URUGUAY
(ARGENTINA v. URUGUAY)

Legal framework and facts of the case.

1961 Treaty of Montevideo — 1975 Statute of the River Uruguay . Establishment of the Administrative Commission of the River Uruguay (CARU) . CMB (ENCE) pulp mill project. Orion (Botnia) pulp mill project . Port terminal at Nueva Palmira — Subject of the dispute.

* Scope of the Court’s jurisdiction.

Compromissory clause (Article 60 of the 1975 Statute) — Provisions of the 1975 Statute and
jurisdiction ratione materiae — Lack of jurisdiction for the Court to consider allegations
concerning noise and visual pollution or bad odours (Article 36 of the 1975 Statute) — Air
pollution and impact on the quality of the waters of the river addressed under substantive
obligations.

Article 1 of the 1975 Statute — Definition of the purpose of the 1975 Statute — Joint
machinery necessary for the optimum and rational utilization of the river — Significance of the
reference to the “rights and obligations arising from treaties and other international agreements in
force for each of the parties” — Original Spanish text — Statute adopted by the parties in
observance of their respective international commitments.


Article 41 (a) of the 1975 Statute — Original Spanish text — Absence of a “referral clause”
having the effect of incorporating within the ambit of the Statute the obligations of the parties
under international agreements and other norms envisaged in the Statute — Obligation for the
parties to exercise their regulatory powers, in conformity with applicable international
agreements, for the protection and preservation of the aquatic environment of the
River Uruguay — Rules for interpreting the 1975 Statute — Article 31 of the Vienna Convention on
the Law of Treaties — Distinction between taking account of other international rules in the
interpretation of the 1975 Statute and the scope of the jurisdiction of the Court under Article 60 of
the latter.

*

Alleged breach of procedural obligations.

Question of links between the procedural obligations and the substantive obligations —
Object and purpose of the 1975 Statute — Optimum and rational utilization of the
River Uruguay — Sustainable development — Co-operation between the parties in jointly
managing the risks of damage to the environment — Existence of a functional link, in regard to
prevention, between the procedural obligations and the substantive obligations — Responsibility in
the event of breaches of either category.

Interrelation of the various procedural obligations laid down by Articles 7 to 12 of the 1975
Statute — Original Spanish text of Article 7 — Obligation to inform, notify and negotiate as an
appropriate means of achieving the objective of optimum and rational utilization of the river as a
shared resource — Legal personality of CARU — Central role of CARU in the joint management of
the river and obligation of the parties to co-operate.

Obligation to inform CARU (Article 7, first paragraph, of the 1975 Statute) — Works subject
to this obligation — Link between the obligation to inform CARU, co-operation between the parties
and the obligation of prevention — Determination by CARU on a preliminary basis of whether
there is a risk of significant damage to the other party — Content of the information to be
transmitted to CARU — Obligation to inform CARU before issuing of the initial environmental
authorization — Provision of information to CARU by private operators cannot substitute for the
obligation to inform laid down by the 1975 Statute — Breach by Uruguay of the obligation to
inform CARU.

Obligation to notify the plans to the other party (Article 7, second and third paragraphs, of
the 1975 Statute) — Need for a full environmental impact assessment (EIA) — Notification of the
EIA to the other party, through CARU, before any decision on the environmental viability of the
plan — Breach by Uruguay of the obligation to notify the plans to Argentina.

Question of whether the Parties agreed to derogate from the procedural obligations —
“Understanding” of 2 March 2004 — Content and scope — Since Uruguay did not comply with it,
the “understanding” cannot be regarded as having had the effect of exempting Uruguay from
compliance with the procedural obligations — Agreement setting up the High-Level Technical



Group (GTAN) — Referral to the Court on the basis of Article 12 or Article 60 of the 1975 Statute:
no practical distinction — The agreement to set up the GTAN had the aim of enabling the
negotiations provided for in Article 12 of the 1975 Statute to take place, but did not derogate from
other procedural obligations — In accepting the creation of the GTAN, Argentina did not give up
the procedural rights belonging to it by virtue of the Statute, nor the possibility of invoking
Uruguay’s responsibility; nor did Argentina consent to suspending the operation of the procedural
provisions of the Statute (Article 57 of the Vienna Convention on the Law of Treaties) —
Obligation to negotiate in good faith — “No construction obligation” during the negotiation
period — Preliminary work approved by Uruguay — Breach by Uruguay of the obligation to
negotiate laid down by Article 12 of the 1975 Statute.

Obligations of Uruguay following the end of the negotiation period — Scope of Article 12 of
the 1975 Statute — Absence of a “no construction obligation” following the end of the negotiation
period and during the judicial settlement phase.

*

Alleged breaches of substantive obligations.

Burden of proof — Precautionary approach without reversal of the burden of proof —
Expert evidence — Reports commissioned by the Parties — Independence of experts —
Consideration of the facts by the Court — Experts appearing as counsel at the hearings —
Question of witnesses, experts and expert witnesses.

Optimum and rational utilization of the River Uruguay — Article 1 of the 1975 Statute sets
out the purpose of the instrument and does not lay down specific rights and obligations —
Obligation to comply with the obligations prescribed by the Statute for the protection of the
environment and the joint management of the river — Regulatory function of CARU —
Interconnectedness between equitable and reasonable utilization of the river as a shared resource
and the balance between economic development and environmental protection that is the essence
of sustainable development (Article 27 of the 1975 Statute).

Obligation to ensure that the management of the soil and woodland does not impair the
régime of the river or the quality of its waters (Article 35 of the 1975 Statute) — Contentions of
Argentina not established.

Obligation to co-ordinate measures to avoid changes to the ecological balance (Article 36 of
the 1975 Statute) — Requirement of individual action by each party and co-ordination through
CARU — Obligation of due diligence — Argentina has not convincingly demonstrated that
Uruguay has refused to engage in the co-ordination envisaged by Article 36 of the 1975 Statute.

Obligation to prevent pollution and preserve the aquatic environment — Normative content
of Article 41 of the 1975 Statute — Obligation for each party to adopt rules and measures to
protect and preserve the aquatic environment and, in particular, to prevent pollution — The rules
and measures prescribed by each party must be in accordance with applicable international
agreements and in keeping, where relevant, with the guidelines and recommendations of



international technical bodies — Due diligence obligation to prescribe rules and measures and to
apply them — Definition of pollution given in Article 40 of the 1975 Statute — Regulatory action of
CARU (Article 56 of the 1975 Statute), complementing that of each party — CARU Digest — Rules
by which the existence of any harmful effects is to be determined: 1975 Statute, CARU Digest,
domestic law of each party within the limits prescribed by the 1975 Statute.

Environmental impact assessment (EIA) — Obligation to conduct an EIA — Scope and
content of the EIA — Referral to domestic law — Question of the choice of mill site as part of the
EIA — The Court is not convinced by Argentina’s argument that an assessment of possible sites
was not carried out — Receiving capacity of the river at Fray Bentos and reverse flows — The
CARU water quality standards take account of the geomorphological and hydrological
characteristics of the river and the receiving capacity of its waters — Question of consultation of
the affected populations as part of the EIA — No legal obligation to consult the affected
populations arises from the instruments invoked by Argentina — Consultation by Uruguay of the
affected populations did indeed take place.

Production technology used in the Orion (Botnia) mill — No evidence to support Argentina’s
claim that the Orion (Botnia) mill is not BAT-compliant in terms of the discharges of effluent for
each tonne of pulp produced — From the data collected after the start-up of the Orion (Botnia)
mill, it does not appear that the discharges from it have exceeded the prescribed limits.

Impact of the discharges on the quality of the waters of the river — Post-operational
monitoring — Dissolved oxygen — Phosphorus — Algal blooms — Phenolic substances —
Presence of nonylphenols in the river environment — Dioxins and furans — Alleged breaches not
established.

Effects on biodiversity — Insufficient evidence to conclude that Uruguay breached the
obligation to protect the aquatic environment, including its fauna and flora.

Air pollution — Indirect pollution from deposits into the aquatic environment — Insufficient
evidence.

On the basis of the evidence submitted, no breach by Uruguay of Article 41 of the
1975 Statute.

Continuing obligations: monitoring — Obligation of the Parties to enable CARU to exercise
on a continuous basis the powers conferred on it by the 1975 Statute — Obligation of Uruguay to
continue monitoring the operation of the Orion (Botnia) plant — Obligation of the Parties to
continue their co-operation through CARU.

*


Claims made by the Parties in their final submissions.

Claims of Argentina — Breach of procedural obligations — Finding of wrongful conduct
and satisfaction — Forms of reparation other than compensation not excluded by the
1975 Statute — Restitution as a form of reparation for injury — Definition — Limits — Form of
reparation appropriate to the injury suffered, taking into account the nature of the wrongful act —
Restitution in the form of the dismantling of the Orion (Botnia) mill not appropriate where only
breaches of procedural obligations have occurred — No breach of substantive obligations and
rejection of Argentina’s other claims — No special circumstances requiring the ordering of
assurances and guarantees of non-repetition.

Uruguay’s request for confirmation of its right to continue operating the Orion (Botnia)
plant — No practical significance.

*

Obligation of the Parties to co-operate with each other, on the terms set out in the
1975 Statute, to ensure the achievement of its object and purpose — Joint action of the Parties
through CARU and establishment of a real community of interests and rights in the management of
the River Uruguay and in the protection of its environment.





JUDGMENT

Present: Vice-President TOMKA, Acting President; Judges KOROMA, AL-KHASAWNEH,
SIMMA, ABRAHAM, KEITH, SEPÚLVEDA-AMOR, BENNOUNA, SKOTNIKOV,
CANÇADO TRINDADE, YUSUF, GREENWOOD; Judges ad hoc TORRES BERNÁRDEZ,
VINUESA; Registrar COUVREUR.

In the case concerning pulp mills on the River Uruguay,

between

the Argentine Republic,

represented by

H.E. Ms Susana Ruiz Cerutti, Ambassador, Legal Adviser to the Ministry of Foreign Affairs,
International Trade and Worship,

as Agent;


H.E. Mr. Horacio A. Basabe, Ambassador, Director of the Argentine Institute for Foreign
Service, former Legal Adviser to the Ministry of Foreign Affairs, International Trade and
Worship, Member of the Permanent Court of Arbitration,

H.E. Mr. Santos Goñi Marenco, Ambassador of the Argentine Republic to the Kingdom of
the Netherlands,

as Co-Agents;

Mr. Alain Pellet, Professor at the University of Paris Ouest, Nanterre-La Défense, member
and former Chairman of the International Law Commission, associate member of the
Institut de droit international,

Mr. Philippe Sands, Q.C., Professor of International Law at University College London,
Barrister at Matrix Chambers, London,

Mr. Marcelo Kohen, Professor of International Law at the Graduate Institute of International
and Development Studies, Geneva, associate member of the Institut de droit international,

Ms Laurence Boisson de Chazournes, Professor of International Law at the University of
Geneva,

Mr. Alan Béraud, Minister at the Embassy of the Argentine Republic to the European Union,
former Legal Adviser to the Ministry of Foreign Affairs, International Trade and
Worship,

Mr. Daniel Müller, Researcher at the Centre de droit international de Nanterre (CEDIN),
University of Paris Ouest, Nanterre-La Défense,

as Counsel and Advocates;

Mr. Homero Bibiloni, Federal Secretary for the Environment and Sustainable Development,

as Governmental Authority;

Mr. Esteban Lyons, National Director of Environmental Control, Secretariat of the
Environment and Sustainable Development,

Mr. Howard Wheater, Ph.D. in Hydrology from Bristol University, Professor of Hydrology
at Imperial College and Director of the Imperial College Environment Forum,

Mr. Juan Carlos Colombo, Ph.D. in Oceanography from the University of Quebec, Professor
at the Faculty of Sciences and Museum of the National University of La Plata, Director of
the Laboratory of Environmental Chemistry and Biogeochemistry at the National
University of La Plata,

Mr. Neil McIntyre, Ph.D. in Environmental Engineering, Senior Lecturer in Hydrology at
Imperial College London,


Ms Inés Camilloni, Ph.D. in Atmospheric Sciences, Professor of Atmospheric Sciences in
the Faculty of Sciences of the University of Buenos Aires, Senior Researcher at the
National Research Council (CONICET),

Mr. Gabriel Raggio, Doctor in Technical Sciences of the Swiss Federal Institute of
Technology Zurich (ETHZ) (Switzerland), Independent Consultant,

as Scientific Advisers and Experts;

Mr. Holger Martinsen, Minister at the Office of the Legal Adviser, Ministry of Foreign
Affairs, International Trade and Worship,

Mr. Mario Oyarzábal, Embassy Counsellor, member of the Office of the Legal Adviser,
Ministry of Foreign Affairs, International Trade and Worship,

Mr. Fernando Marani, Second Secretary, Embassy of the Argentine Republic in the
Kingdom of the Netherlands,

Mr. Gabriel Herrera, Embassy Secretary, member of the Office of the Legal Adviser,
Ministry of Foreign Affairs, International Trade and Worship,

Ms Cynthia Mulville, Embassy Secretary, member of the Office of the Legal Adviser,
Ministry of Foreign Affairs, International Trade and Worship,

Ms Kate Cook, Barrister at Matrix Chambers, London, specializing in environmental law
and law relating to development,

Ms Mara Tignino, Ph.D. in Law, Researcher at the University of Geneva,

Mr. Magnus Jesko Langer, teaching and research assistant, Graduate Institute of
International and Development Studies, Geneva,

as Legal Advisers,

and

the Eastern Republic of Uruguay,

represented by

H.E. Mr. Carlos Gianelli, Ambassador of the Eastern Republic of Uruguay to the United
States of America,

as Agent;

H.E. Mr. Carlos Mora Medero, Ambassador of the Eastern Republic of Uruguay to the
Kingdom of the Netherlands,

as Co-Agent;


Mr. Alan Boyle, Professor of International Law at the University of Edinburgh, Member of
the English Bar,

Mr. Luigi Condorelli, Professor at the Faculty of Law, University of Florence,

Mr. Lawrence H. Martin, Foley Hoag LLP, Member of the Bars of the United States
Supreme Court, the District of Columbia and the Commonwealth of Massachusetts,

Mr. Stephen C. McCaffrey, Professor at the McGeorge School of Law, University of the
Pacific, California, former Chairman of the International Law Commission and Special
Rapporteur for the Commission’s work on the law of non-navigational uses of
international watercourses,

Mr. Alberto Pérez Pérez, Professor in the Faculty of Law, University of the Republic,
Montevideo,

Mr. Paul S. Reichler, Foley Hoag LLP, Member of the Bars of the United States Supreme
Court and the District of Columbia,

as Counsel and Advocates;

Mr. Marcelo Cousillas, Legal Counsel at the National Directorate for the Environment,
Ministry of Housing, Land Use Planning and Environmental Affairs,

Mr. César Rodriguez Zavalla, Chief of Cabinet, Ministry of Foreign Affairs,

Mr. Carlos Mata, Deputy Director of Legal Affairs, Ministry of Foreign Affairs,

Mr. Marcelo Gerona, Counsellor at the Embassy of the Eastern Republic of Uruguay in the
Kingdom of the Netherlands,

Mr. Eduardo Jiménez de Aréchaga, Attorney at law, admitted to the Bar of the Eastern
Republic of Uruguay and Member of the Bar of New York,

Mr. Adam Kahn, Foley Hoag LLP, Member of the Bar of the Commonwealth of
Massachusetts,

Mr. Andrew Loewenstein, Foley Hoag LLP, Member of the Bar of the Commonwealth of
Massachusetts,

Ms Analia Gonzalez, LL.M., Foley Hoag LLP, admitted to the Bar of the Eastern Republic
of Uruguay,

Ms Clara E. Brillembourg, Foley Hoag LLP, Member of the Bars of the District of Columbia
and New York,

Ms Cicely Parseghian, Foley Hoag LLP, Member of the Bar of the Commonwealth of
Massachusetts,

Mr. Pierre Harcourt, Ph.D. candidate, University of Edinburgh,


Mr. Paolo Palchetti, Associate Professor at the School of Law, University of Macerata,

Ms Maria E. Milanes-Murcia, M.A., LL.M., J.S.D. Candidate at the McGeorge School of
Law, University of the Pacific, California, Ph.D. Candidate, University of Murcia,
admitted to the Bar of Spain,

as Assistant Counsel;

Ms Alicia Torres, National Director for the Environment at the Ministry of Housing, Land Use
Planning and Environmental Affairs

Mr. Eugenio Lorenzo, Technical Consultant for the National Directorate for the Environment,
Ministry of Housing, Land Use Planning and Environmental Affairs,

Mr. Cyro Croce, Technical Consultant for the National Directorate for the Environment,
Ministry of Housing, Land Use Planning and Environmental Affairs,

Ms Raquel Piaggio, State Agency for Sanitary Works (OSE), Technical Consultant for the
National Directorate for the Environment, Ministry of Housing, Land Use Planning and
Environmental Affairs,

Mr. Charles A. Menzie, Ph.D., Principal Scientist and Director of the EcoSciences Practice at
Exponent, Inc., Alexandria, Virginia,

Mr. Neil McCubbin, Eng., B.Sc. (Eng.), 1st Class Honours, Glasgow, Associate of the Royal
College of Science and Technology, Glasgow,

as Scientific Advisers and Experts,

THE COURT,

composed as above,

after deliberation,

delivers the following Judgment:

1. On 4 May 2006, the Argentine Republic (hereinafter “Argentina”) filed in the Registry of
the Court an Application instituting proceedings against the Eastern Republic of Uruguay
(hereinafter “Uruguay”) in respect of a dispute concerning the breach, allegedly committed by
Uruguay, of obligations under the Statute of the River Uruguay (United Nations, Treaty Series
(UNTS), Vol. 1295, No. I-21425, p. 340), a treaty signed by Argentina and Uruguay at Salto
(Uruguay) on 26 February 1975 and having entered into force on 18 September 1976 (hereinafter
the “1975 Statute”); in the Application, Argentina stated that this breach arose out of “the
authorization, construction and future commissioning of two pulp mills on the River Uruguay”,
with reference in particular to “the effects of such activities on the quality of the waters of the River
Uruguay and on the areas affected by the river”.

In its Application, Argentina, referring to Article 36, paragraph 1, of the Statute of the Court,
seeks to found the jurisdiction of the Court on Article 60, paragraph 1, of the 1975 Statute.


2. Pursuant to Article 40, paragraph 2, of the Statute of the Court, the Registrar
communicated the Application forthwith to the Government of Uruguay. In accordance with
paragraph 3 of that Article, the Secretary-General of the United Nations was notified of the filing
of the Application.

3. On 4 May 2006, immediately after the filing of the Application, Argentina also submitted
a request for the indication of provisional measures based on Article 41 of the Statute and
Article 73 of the Rules of Court. In accordance with Article 73, paragraph 2, of the Rules of Court,
the Registrar transmitted a certified copy of this request forthwith to the Government of Uruguay.

4. On 2 June 2006, Uruguay transmitted to the Court a CD-ROM containing the electronic
version of two volumes of documents relating to the Argentine request for the indication of
provisional measures, entitled “Observations of Uruguay” (of which paper copies were
subsequently received); a copy of these documents was immediately sent to Argentina.

5. On 2 June 2006, Argentina transmitted to the Court various documents, including a video
recording, and, on 6 June 2006, it transmitted further documents; copies of each series of
documents were immediately sent to Uruguay.

6. On 6 and 7 June 2006, various communications were received from the Parties, whereby
each Party presented the Court with certain observations on the documents submitted by the other
Party. Uruguay objected to the production of the video recording submitted by Argentina. The
Court decided not to authorize the production of that recording at the hearings.

7. Since the Court included upon the Bench no judge of the nationality of the Parties, each of
them exercised its right under Article 31, paragraph 3, of the Statute to choose a judge
ad hoc to sit in the case. Argentina chose Mr. Raúl Emilio Vinuesa, and Uruguay chose
Mr. Santiago Torres Bernárdez.

8. By an Order of 13 July 2006, the Court, having heard the Parties, found “that the
circumstances, as they [then] present[ed] themselves to [it], [we]re not such as to require the
exercise of its power under Article 41 of the Statute to indicate provisional measures”.

9. By another Order of the same date, the Court, taking account of the views of the Parties,
fixed 15 January 2007 and 20 July 2007, respectively, as the time-limits for the filing of a
Memorial by Argentina and a Counter-Memorial by Uruguay; those pleadings were duly filed
within the time-limits so prescribed.

10. On 29 November 2006, Uruguay, invoking Article 41 of the Statute and Article 73 of the
Rules of Court, in turn submitted a request for the indication of provisional measures. In
accordance with Article 73, paragraph 2, of the Rules of Court, the Registrar transmitted a certified
copy of this request forthwith to the Argentine Government.


11. On 14 December 2006, Uruguay transmitted to the Court a volume of documents
concerning the request for the indication of provisional measures, entitled “Observations of
Uruguay”; a copy of these documents was immediately sent to Argentina.

12. On 18 December 2006, before the opening of the oral proceedings, Argentina transmitted
to the Court a volume of documents concerning Uruguay’s request for the indication of provisional
measures; the Registrar immediately sent a copy of these documents to the Government of
Uruguay.

13. By an Order of 23 January 2007, the Court, having heard the Parties, found “that the
circumstances, as they [then] present[ed] themselves to [it], [we]re not such as to require the
exercise of its power under Article 41 of the Statute to indicate provisional measures”.

14. By an Order of 14 September 2007, the Court, taking account of the agreement of the
Parties and of the circumstances of the case, authorized the submission of a Reply by Argentina
and a Rejoinder by Uruguay, and fixed 29 January 2008 and 29 July 2008 as the respective
time-limits for the filing of those pleadings. The Reply of Argentina and the Rejoinder of Uruguay
were duly filed within the time-limits so prescribed.

15. By letters dated 16 June 2009 and 17 June 2009 respectively, the Governments of
Uruguay and Argentina notified the Court that they had come to an agreement for the purpose of
producing new documents pursuant to Article 56 of the Rules of Court. By letters of 23 June 2009,
the Registrar informed the Parties that the Court had decided to authorize them to proceed as they
had agreed. The new documents were duly filed within the agreed time-limit.

16. On 15 July 2009, each of the Parties, as provided for in the agreement between them and
with the authorization of the Court, submitted comments on the new documents produced by the
other Party. Each Party also filed documents in support of these comments.

17. In accordance with Article 53, paragraph 2, of the Rules of Court, the Court decided,
after ascertaining the views of the Parties, that copies of the pleadings and documents annexed
would be made available to the public as from the opening of the oral proceedings.

18. By letter of 15 September 2009, Uruguay, referring to Article 56, paragraph 4, of the
Rules of Court and to Practice Direction IXbis, communicated documents to the Court, forming
part of publications readily available, on which it intended to rely during the oral proceedings.
Argentina made no objection with regard to these documents.

19. By letter of 25 September 2009, the Argentine Government, referring to Article 56 of the
Rules of Court and to Practice Direction IX, paragraph 2, sent new documents to the Registry
which it wished to produce. By letter of 28 September 2009, the Government of Uruguay informed
the Court that it was opposed to the production of these documents. It further indicated that if,



nevertheless, the Court decided to admit the documents in question into the record of the case, it
would present comments on them and submit documents in support of those comments. By letters
dated 28 September 2009, the Registrar informed the Parties that the Court did not consider the
production of the new documents submitted by the Argentine Government to be necessary within
the meaning of Article 56, paragraph 2, of the Rules of Court, and that it had not moreover
identified any exceptional circumstance (Practice Direction IX, paragraph 3) which justified their
production at that stage of the proceedings.

20. Public hearings were held between 14 September 2009 and 2 October 2009, at which the
Court heard the oral arguments and replies of:

For Argentina: H.E. Ms Susana Ruiz Cerutti,
Mr. Alain Pellet,
Mr. Philippe Sands,
Mr. Howard Wheater,
Ms Laurence Boisson de Chazournes,
Mr. Marcelo Kohen,
Mr. Alan Béraud,
Mr. Juan Carlos Colombo,
Mr. Daniel Müller.

For Uruguay: H.E. Mr. Carlos Gianelli,
Mr. Alan Boyle,
Mr. Paul S. Reichler,
Mr. Neil McCubbin,
Mr. Stephen C. McCaffrey,
Mr. Lawrence H. Martin,
Mr. Luigi Condorelli.

21. At the hearings, Members of the Court put questions to the Parties, to which replies were
given orally and in writing, in accordance with Article 61, paragraph 4, of the Rules of Court.
Pursuant to Article 72 of the Rules of Court, one of the Parties submitted written comments on a
written reply provided by the other and received after the closure of the oral proceedings.

*

22. In its Application, the following claims were made by Argentina:

“On the basis of the foregoing statement of facts and law, Argentina, while
reserving the right to supplement, amend or modify the present Application in the
course of the subsequent procedure, requests the Court to adjudge and declare:

1. that Uruguay has breached the obligations incumbent upon it under the
1975 Statute and the other rules of international law to which that instrument
refers, including but not limited to:


(a) the obligation to take all necessary measures for the optimum and rational
utilization of the River Uruguay;

(b) the obligation of prior notification to CARU and to Argentina;

(c) the obligation to comply with the procedures prescribed in Chapter II of the
1975 Statute;

(d) the obligation to take all necessary measures to preserve the aquatic
environment and prevent pollution and the obligation to protect biodiversity
and fisheries, including the obligation to prepare a full and objective
environmental impact study;

(e) the obligation to co-operate in the prevention of pollution and the protection of
biodiversity and of fisheries; and

2. that, by its conduct, Uruguay has engaged its international responsibility to
Argentina;

3. that Uruguay shall cease its wrongful conduct and comply scrupulously in future
with the obligations incumbent upon it; and

4. that Uruguay shall make full reparation for the injury caused by its breach of the
obligations incumbent upon it.

Argentina reserves the right to amplify or amend these requests at a subsequent
stage of the proceedings.”

23. In the written proceedings, the following submissions were presented by the Parties:

On behalf of the Government of Argentina,

in the Memorial:

“For all the reasons described in this Memorial, the Argentine Republic requests
the International Court of Justice:

1. to find that by unilaterally authorizing the construction of the CMB and Orion pulp
mills and the facilities associated with the latter on the left bank of the River
Uruguay, in breach of the obligations resulting from the Statute of
26 February 1975, the Eastern Republic of Uruguay has committed the
internationally wrongful acts set out in Chapters IV and V of this Memorial, which
entail its international responsibility;

2. to adjudge and declare that, as a result, the Eastern Republic of Uruguay must:

(i) cease immediately the internationally wrongful acts referred to above;

(ii) resume strict compliance with its obligations under the Statute of the River
Uruguay of 1975;


(iii) re-establish on the ground and in legal terms the situation that existed before
the internationally wrongful acts referred to above were committed;

(iv) pay compensation to the Argentine Republic for the damage caused by these
internationally wrongful acts that would not be remedied by that situation
being restored, of an amount to be determined by the Court at a subsequent
stage of these proceedings;

(v) provide adequate guarantees that it will refrain in future from preventing the
Statute of the River Uruguay of 1975 from being applied, in particular the
consultation procedure established by Chapter II of that Treaty.

The Argentine Republic reserves the right to supplement or amend these
submissions should the need arise, in the light of the development of the situation.
This would in particular apply if Uruguay were to aggravate the dispute1, for example
if the Orion mill were to be commissioned before the end of these proceedings.”

___________

1See the Order of the Court of 13 July 2006 on Argentina’s request for the indication of
provisional measures, para. 82.



in the Reply:

“For all the reasons described in its Memorial, which it fully stands by, and in
the present Reply, the Argentine Republic requests the International Court of Justice:

1. to find that by authorizing

. the construction of the CMB mill;
. the construction and commissioning of the Orion mill and its associated
facilities on the left bank of the River Uruguay,


the Eastern Republic of Uruguay has violated the obligations incumbent on it under
the Statute of the River Uruguay of 26 February 1975 and has engaged its
international responsibility;

2. to adjudge and declare that, as a result, the Eastern Republic of Uruguay must:

(i) resume strict compliance with its obligations under the Statute of the River
Uruguay of 1975;

(ii) cease immediately the internationally wrongful acts by which it has engaged
its responsibility;

(iii) re-establish on the ground and in legal terms the situation that existed before
these internationally wrongful acts were committed;

(iv) pay compensation to the Argentine Republic for the damage caused by these
internationally wrongful acts that would not be remedied by that situation
being restored, of an amount to be determined by the Court at a subsequent
stage of these proceedings;


(v) provide adequate guarantees that it will refrain in future from preventing the
Statute of the River Uruguay of 1975 from being applied, in particular the
consultation procedure established by Chapter II of that Treaty.

The Argentine Republic reserves the right to supplement or amend these
submissions should the need arise, in the light of subsequent developments in the
case.”

On behalf of the Government of Uruguay,

in the Counter-Memorial:

“On the basis of the facts and arguments set out above, and reserving its right to
supplement or amend these Submissions, Uruguay requests that the Court adjudge and
declare that the claims of Argentina are rejected.”



In the Rejoinder:

“Based on all the above, it can be concluded that:

(a) Argentina has not demonstrated any harm, or risk of harm, to the river or its
ecosystem resulting from Uruguay’s alleged violations of its substantive
obligations under the 1975 Statute that would be sufficient to warrant the
dismantling of the Botnia plant;

(b) the harm to the Uruguayan economy in terms of lost jobs and revenue would be
substantial;

(c) in light of points (a) and (b), the remedy of tearing the plant down would therefore
be disproportionately onerous, and should not be granted;

(d) if the Court finds, notwithstanding all the evidence to the contrary, that Uruguay
has violated its procedural obligations to Argentina, it can issue a declaratory
judgment to that effect, which would constitute an adequate form of satisfaction;

(e) if the Court finds, notwithstanding all the evidence to the contrary, that the plant is
not in complete compliance with Uruguay’s obligation to protect the river or its
aquatic environment, the Court can order Uruguay to take whatever additional
protective measures are necessary to ensure that the plant conforms to the Statute’s
substantive requirements;

(f) if the Court finds, notwithstanding all the evidence to the contrary, that Uruguay
has actually caused damage to the river or to Argentina, it can order Uruguay to
pay Argentina monetary compensation under Articles 42 and 43 of the Statute;
and

(g) the Court should issue a declaration making clear the Parties are obligated to
ensure full respect for all the rights in dispute in this case, including Uruguay’s
right to continue operating the Botnia plant in conformity with the provisions of
the 1975 Statute.


Submissions

On the basis of the facts and arguments set out above, and reserving its right to
supplement or amend these Submissions, Uruguay requests that the Court adjudge and
declare that the claims of Argentina are rejected, and Uruguay’s right to continue
operating the Botnia plant in conformity with the provisions of the 1975 Statute is
affirmed.”

24. At the oral proceedings, the following final submissions were presented by the Parties:

On behalf of the Government of Argentina,

at the hearing of 29 September 2009:

“For all the reasons described in its Memorial, in its Reply and in the oral
proceedings, which it fully stands by, the Argentine Republic requests the
International Court of Justice:

1. to find that by authorizing

. the construction of the ENCE mill;
. the construction and commissioning of the Botnia mill and its associated facilities
on the left bank of the River Uruguay,


the Eastern Republic of Uruguay has violated the obligations incumbent on it under
the Statute of the River Uruguay of 26 February 1975 and has engaged its
international responsibility;

2. to adjudge and declare that, as a result, the Eastern Republic of Uruguay must:

(i) resume strict compliance with its obligations under the Statute of the River
Uruguay of 1975;

(ii) cease immediately the internationally wrongful acts by which it has engaged
its responsibility;

(iii) re-establish on the ground and in legal terms the situation that existed before
these internationally wrongful acts were committed;

(iv) pay compensation to the Argentine Republic for the damage caused by these
internationally wrongful acts that would not be remedied by that situation
being restored, of an amount to be determined by the Court at a subsequent
stage of these proceedings;

(v) provide adequate guarantees that it will refrain in future from preventing the
Statute of the River Uruguay of 1975 from being applied, in particular the
consultation procedure established by Chapter II of that Treaty.”


On behalf of the Government of Uruguay,

at the hearing of 2 October 2009:

“On the basis of the facts and arguments set out in Uruguay’s
Counter-Memorial, Rejoinder and during the oral proceedings, Uruguay requests that
the Court adjudge and declare that the claims of Argentina are rejected, and Uruguay’s
right to continue operating the Botnia plant in conformity with the provisions of the
1975 Statute is affirmed.”

*

* *

I. LEGAL FRAMEWORK AND FACTS OF THE CASE

25. The dispute before the Court has arisen in connection with the planned construction
authorized by Uruguay of one pulp mill and the construction and commissioning of another, also
authorized by Uruguay, on the River Uruguay (see sketch-map No. 1 for the general geographical
context). After identifying the legal instruments concerning the River Uruguay by which the
Parties are bound, the Court will set out the main facts of the case.

A. Legal framework

26. The boundary between Argentina and Uruguay in the River Uruguay is defined by the
bilateral Treaty entered into for that purpose at Montevideo on 7 April 1961 (UNTS, Vol. 635,
No. 9074, p. 98). Articles 1 to 4 of the Treaty delimit the boundary between the Contracting States
in the river and attribute certain islands and islets in it to them. Articles 5 and 6 concern the régime
for navigation on the river. Article 7 provides for the establishment by the parties of a “régime for
the use of the river” covering various subjects, including the conservation of living resources and
the prevention of water pollution of the river. Articles 8 to 10 lay down certain obligations
concerning the islands and islets and their inhabitants.

27. The “régime for the use of the river” contemplated in Article 7 of the 1961 Treaty was
established through the 1975 Statute (see paragraph 1 above). Article 1 of the 1975 Statute states
that the parties adopted it “in order to establish the joint machinery necessary for the optimum and
rational utilization of the River Uruguay, in strict observance of the rights and obligations arising
from treaties and other international agreements in force for each of the parties”. After having thus
defined its purpose (Article 1) and having also made clear the meaning of certain terms used
therein (Article 2), the 1975 Statute lays down rules governing navigation and works on the river
(Chapter II, Articles 3 to 13), pilotage (Chapter III, Articles 14 to 16), port facilities, unloading and
additional loading (Chapter IV, Articles 17 to 18), the safeguarding of human life (Chapter V,
Articles 19 to 23) and the salvaging of property (Chapter VI, Articles 24 to 26), use of the waters of
the river (Chapter VII, Articles 27 to 29), resources of the bed and subsoil (Chapter VIII,
Articles 30 to 34), the conservation, utilization and development of other natural resources



(Chapter IX, Articles 35 to 39), pollution (Chapter X, Articles 40 to 43), scientific research
(Chapter XI, Articles 44 to 45), and various powers of the parties over the river and vessels sailing
on it (Chapter XII, Articles 46 to 48). The 1975 Statute sets up the Administrative Commission of
the River Uruguay (hereinafter “CARU”, from the Spanish acronym for “Comisión Administradora
del Río Uruguay”) (Chapter XIII, Articles 49 to 57), and then establishes procedures for
conciliation (Chap. XIV, Articles 58 to 59) and judicial settlement of disputes (Chapter XV,
Article 60). Lastly, the 1975 Statute contains transitional (Chapter XVI, Articles 61 to 62) and
final (Chapter XVII, Article 63) provisions.

B. CMB (ENCE) Project

28. The first pulp mill at the root of the dispute was planned by “Celulosas de M’Bopicuá
S.A.” (hereinafter “CMB”), a company formed by the Spanish company ENCE (from the Spanish
acronym for “Empresa Nacional de Celulosas de España”, hereinafter “ENCE”). This mill,
hereinafter referred to as the “CMB (ENCE)” mill, was to have been built on the left bank of the
River Uruguay in the Uruguayan department of Río Negro opposite the Argentine region of
Gualeguaychú, more specifically to the east of the city of Fray Bentos, near the “General San
Martín” international bridge (see sketch-map No. 2).

29. On 22 July 2002, the promoters of this industrial project approached the Uruguayan
authorities and submitted an environmental impact assessment (“EIA” according to the
abbreviation used by the Parties) of the plan to Uruguay’s National Directorate for the Environment
(hereinafter “DINAMA”, from the Spanish acronym for “Dirección Nacional de Medio
Ambiente”). During the same period, representatives of CMB, which had been specially formed to
build the CMB (ENCE) mill, informed the President of CARU of the project. The President of
CARU wrote to the Uruguayan Minister of the Environment on 17 October 2002 seeking a copy of
the environmental impact assessment of the CMB (ENCE) project submitted by the promoters of
this industrial project. This request was reiterated on 21 April 2003. On 14 May 2003, Uruguay
submitted to CARU a document entitled “Environmental Impact Study, Celulosas de M’Bopicuá.
Summary for public release”. One month later, the CARU Subcommittee on Water Quality and
Pollution Control took notice of the document transmitted by Uruguay and suggested that a copy
thereof be sent to its technical advisers for their opinions. Copies were also provided to the Parties’
delegations.

30. A public hearing, attended by CARU’s Legal Adviser and its technical secretary, was
held on 21 July 2003 in the city of Fray Bentos concerning CMB’s application for an
environmental authorization. On 15 August 2003, CARU asked Uruguay for further information
on various points concerning the planned CMB (ENCE) mill. This request was reiterated on
12 September 2003. On 2 October 2003, DINAMA submitted its assessment report to the
Uruguayan Ministry of Housing, Land Use Planning and Environmental Affairs (hereinafter
“MVOTMA”, from the Spanish abbreviation for “Ministerio de Vivienda Ordenamiento Territorial
y Medio Ambiente”), recommending that CMB be granted an initial environmental authorization
(“AAP” according to the Spanish abbreviation for “autorización ambiental previa”) subject to
certain conditions. On 8 October 2003, CARU was informed by the Uruguayan delegation that
DINAMA would very shortly send CARU a report on the CMB (ENCE) project.


31. On 9 October 2003, MVOTMA issued an initial environmental authorization to CMB for
the construction of the CMB (ENCE) mill. On the same date the Presidents of Argentina and
Uruguay met at Anchorena (Colonia, Uruguay). Argentina maintains that the President of
Uruguay, Jorge Battle, then promised his Argentine counterpart, Néstor Kirchner, that no
authorization would be issued before Argentina’s environmental concerns had been addressed.
Uruguay challenges this version of the facts and contends that the Parties agreed at that meeting to
deal with the CMB (ENCE) project otherwise than through the procedure under Articles 7 to 12 of
the 1975 Statute and that Argentina let it be known that it was not opposed to the project per se.
Argentina disputes these assertions.

32. The day after the meeting between the Heads of State of Argentina and Uruguay, CARU
declared its willingness to resume the technical analyses of the CMB (ENCE) project as soon as
Uruguay transmitted the awaited documents. On 17 October 2003, CARU held an extraordinary
plenary meeting at the request of Argentina, at which Argentina complained of Uruguay’s granting
on 9 October 2003 of the initial environmental authorization. Following the extraordinary meeting
CARU suspended work for more than six months, as the Parties could not agree on how to
implement the consultation mechanism established by the 1975 Statute.

33. On 27 October 2003, Uruguay transmitted to Argentina copies of the environmental
impact assessment submitted by ENCE on 22 July 2002, of DINAMA’s final assessment report
dated 2 October 2003 and of the initial environmental authorization of 9 October 2003. Argentina
reacted by expressing its view that Article 7 of the 1975 Statute had not been observed and that the
transmitted documents did not appear adequate to allow for a technical opinion to be expressed on
the environmental impact of the project. On 7 November 2003, further to a request from the
Ministry of Foreign Affairs of Argentina, Uruguay provided Argentina with a copy of the
Uruguayan Ministry of the Environment’s entire file on the CMB (ENCE) project. On
23 February 2004, Argentina forwarded all of this documentation received from Uruguay to
CARU.

34. On 2 March 2004, the Parties’ Ministers for Foreign Affairs met in Buenos Aires. On
15 May 2004, CARU resumed its work at an extraordinary plenary meeting during which it took
note of the ministerial “understanding” which was reached on 2 March 2004. The Parties are at
odds over the content of this “understanding”. The Court will return to this when it considers
Argentina’s claims as to Uruguay’s breach of its procedural obligations under the 1975 Statute (see
paragraphs 67 to 158).

35. Following up on CARU’s extraordinary meeting of 15 May 2004, the CARU
Subcommittee on Water Quality and Pollution Control prepared a plan for monitoring water quality
in the area of the pulp mills (hereinafter the “PROCEL” plan from the Spanish acronym for “Plan
de Monitoreo de la Calidad Ambiental en el Río Uruguay en Áreas de Plantas Celulósicas”).
CARU approved the plan on 12 November 2004.


36. On 28 November 2005, Uruguay authorized preparatory work to begin for the
construction of the CMB (ENCE) mill (ground clearing). On 28 March 2006, the project’s
promoters decided to halt the work for 90 days. On 21 September 2006, they announced their
intention not to build the mill at the planned site on the bank of the River Uruguay.

C. Orion (Botnia) mill

37. The second industrial project at the root of the dispute before the Court was undertaken
by “Botnia S.A.” and “Botnia Fray Bentos S.A.” (hereinafter “Botnia”), companies formed under
Uruguayan law in 2003 specially for the purpose by Oy Metsä-Botnia AB, a Finnish company.
This second pulp mill, called “Orion” (hereinafter the “Orion (Botnia)” mill), has been built on the
left bank of the River Uruguay, a few kilometres downstream of the site planned for the CMB
(ENCE) mill, and also near the city of Fray Bentos (see sketch-map No. 2). It has been operational
and functioning since 9 November 2007.

38. After informing the Uruguayan authorities of this industrial project in late 2003, the
project promoters submitted an application to them for an initial environmental authorization on
31 March 2004 and supplemented it on 7 April 2004. Several weeks later, on 29 and
30 April 2004, CARU members and Botnia representatives met informally. Following that
meeting, CARU’s Subcommittee on Water Quality and Pollution Control suggested on
18 June 2004 that Botnia expand on the information provided at the meeting. On 19 October 2004,
CARU held another meeting with Botnia representatives and again expressed the need for further
information on Botnia’s application to DINAMA for an initial environmental authorization. On
12 November 2004, when approving the water quality monitoring plan put forward by the CARU
Subcommittee on Water Quality and Pollution Control (see paragraph 35 above), CARU decided,
on the proposal of that subcommittee, to ask Uruguay to provide further information on the
application for an initial environmental authorization. CARU transmitted this request for further
information to Uruguay by note dated 16 November 2004.

39. On 21 December 2004 DINAMA held a public hearing, attended by a CARU adviser, on
the Orion (Botnia) project in Fray Bentos. DINAMA adopted its environmental impact study of
the planned Orion (Botnia) mill on 11 February 2005 and recommended that the initial
environmental authorization be granted, subject to certain conditions. MVOTMA issued the initial
authorization to Botnia on 14 February 2005 for the construction of the Orion (Botnia) mill and an
adjacent port terminal. At a CARU meeting on 11 March 2005, Argentina questioned whether the
granting of the initial environmental authorization was well-founded in view of the procedural
obligations laid down in the 1975 Statute. Argentina reiterated this position at the CARU meeting
on 6 May 2005. On 12 April 2005, Uruguay had in the meantime authorized the clearance of the
future mill site and the associated groundworks.


40. On 31 May 2005, in pursuance of an agreement made on 5 May 2005 by the Presidents
of the two Parties, their Ministers for Foreign Affairs created a High-Level Technical Group
(hereinafter the “GTAN”, from the Spanish abbreviation for “Grupo Técnico de Alto Nivel”),
which was given responsibility for resolving the disputes over the CMB (ENCE) and Orion
(Botnia) mills within 180 days. The GTAN held 12 meetings between 3 August 2005 and
30 January 2006, with the Parties exchanging various documents in the context of this bilateral
process. On 31 January 2006, Uruguay determined that the negotiations undertaken within the
GTAN had failed; Argentina did likewise on 3 February 2006. The Court will return later to the
significance of this process agreed on by the Parties (see paragraphs 132 to 149).

41. On 26 June 2005, Argentina wrote to the President of the International Bank for
Reconstruction and Development to express its concern at the possibility of the International
Finance Corporation (hereinafter the “IFC”) contributing to the financing of the planned pulp mills.
The IFC nevertheless decided to provide financial support for the Orion (Botnia) mill, but did
commission EcoMetrix, a consultancy specializing in environmental and industrial matters, to
prepare various technical reports on the planned mill and an environmental impact assessment of it.
EcoMetrix was also engaged by the IFC to carry out environmental monitoring on the IFC’s behalf
of the plant once it had been placed in service.

42. On 5 July 2005, Uruguay authorized Botnia to build a port adjacent to the Orion (Botnia)
mill. This authorization was transmitted to CARU on 15 August 2005. On 22 August 2005,
Uruguay authorized the construction of a chimney and concrete foundations for the Orion (Botnia)
mill. Further authorizations were granted as the construction of this mill proceeded, for example in
respect of the waste treatment installations. On 13 October 2005, Uruguay transmitted additional
documentation to CARU concerning the port terminal adjacent to the Orion (Botnia) mill.

Argentina repeatedly asked, including at CARU meetings, that the initial work connected
with the Orion (Botnia) mill and the CMB (ENCE) mill should be suspended. At a meeting
between the Heads of State of the Parties at Santiago de Chile on 11 March 2006, Uruguay’s
President asked ENCE and Botnia to suspend construction of the mills. ENCE suspended work for
90 days (see paragraph 36 above), Botnia for ten.

43. Argentina referred the present dispute to the Court by Application dated 4 May 2006.
On 24 August 2006, Uruguay authorized the commissioning of the port terminal adjacent to the
Orion (Botnia) mill and gave CARU notice of this on 4 September 2006. On 12 September 2006,
Uruguay authorized Botnia to extract and use water from the river for industrial purposes and
formally notified CARU of its authorization on 17 October 2006. At the summit of Heads of State
and Government of the Ibero-American countries held in Montevideo in November 2006, the King
of Spain was asked to endeavour to reconcile the positions of the Parties; a negotiated resolution of
the dispute did not however result. On 8 November 2007, Uruguay authorized the commissioning
of the Orion (Botnia) mill and it began operating the next day. In December 2009, Oy
Metsä-Botnia AB transferred its interest in the Orion (Botnia) mill to UPM, another Finnish
company.

*


44. In addition, Uruguay authorized Ontur International S.A. to build and operate a port
terminal at Nueva Palmira. The terminal was inaugurated in August 2007 and, on
16 November 2007, Uruguay transmitted to CARU a copy of the authorization for its
commissioning.

45. In their written pleadings the Parties have debated whether, in light of the procedural
obligations laid down in the 1975 Statute, the authorizations for the port terminal were properly
issued by Uruguay. The Court deems it unnecessary to review the detailed facts leading up to the
construction of the Nueva Palmira terminal, being of the view that these port facilities do not fall
within the scope of the subject of the dispute before it. Indeed, nowhere in the claims asserted in
its Application or in the submissions in its Memorial or Reply (see paragraphs 22 and 23 above)
did Argentina explicitly refer to the port terminal at Nueva Palmira. In its final submissions
presented at the hearing on 29 September 2009, Argentina again limited the subject-matter of its
claims to the authorization of the construction of the CMB (ENCE) mill and the authorization of
the construction and commissioning of “the Botnia mill and its associated facilities on the left bank
of the River Uruguay”. The Court does not consider the port terminal at Nueva Palmira, which lies
some 100 km south of Fray Bentos, downstream of the Orion (Botnia) mill (see sketch-map No. 1),
and is used by other economic operators as well, to be a facility “associated” with the mill.

46. The dispute submitted to the Court concerns the interpretation and application of the
1975 Statute, namely, on the one hand whether Uruguay complied with its procedural obligations
under the 1975 Statute in issuing authorizations for the construction of the CMB (ENCE) mill as
well as for the construction and the commissioning of the Orion (Botnia) mill and its adjacent port;
and on the other hand whether Uruguay has complied with its substantive obligations under the
1975 Statute since the commissioning of the Orion (Botnia) mill in November 2007.

* *

47. Having thus related the circumstances surrounding the dispute between the Parties, the
Court will consider the basis and scope of its jurisdiction, including questions relating to the law
applicable to the present dispute (see paragraphs 48 to 66). It will then examine Argentina’s
allegations of breaches by Uruguay of procedural obligations (see paragraphs 67 to 158) and
substantive obligations (see paragraphs 159 to 266) laid down in the 1975 Statute. Lastly, the
Court will respond to the claims presented by the Parties in their final submissions (see
paragraphs 267 to 280).

* *


II. SCOPE OF THE COURT’S JURISDICTION

48. The Parties are in agreement that the Court’s jurisdiction is based on Article 36,
paragraph 1, of the Statute of the Court and Article 60, paragraph 1, of the 1975 Statute. The latter
reads: “Any dispute concerning the interpretation or application of the Treaty1 and the Statute
which cannot be settled by direct negotiations may be submitted by either party to the International
Court of Justice.” The Parties differ as to whether all the claims advanced by Argentina fall within
the ambit of the compromissory clause.

49. Uruguay acknowledges that the Court’s jurisdiction under the compromissory clause
extends to claims concerning any pollution or type of harm caused to the River Uruguay, or to
organisms living there, in violation of the 1975 Statute. Uruguay also acknowledges that claims
concerning the alleged impact of the operation of the pulp mill on the quality of the waters of the
river fall within the compromissory clause. On the other hand, Uruguay takes the position that
Argentina cannot rely on the compromissory clause to submit claims regarding every type of
environmental damage. Uruguay further argues that Argentina’s contentions concerning air
pollution, noise, visual and general nuisance, as well as the specific impact on the tourism sector,
allegedly caused by the Orion (Botnia) mill, do not concern the interpretation or the application of
the 1975 Statute, and the Court therefore lacks jurisdiction over them.

Uruguay nevertheless does concede that air pollution which has harmful effects on the
quality of the waters of the river or on the aquatic environment would fall within the jurisdiction of
the Court.

50. Argentina maintains that Uruguay’s position on the scope of the Court’s jurisdiction is
too narrow. It contends that the 1975 Statute was entered into with a view to protect not only the
quality of the waters of the river but more generally its “régime” and the areas affected by it.
Relying on Article 36 of the 1975 Statute, which lays out the obligation of the parties to co-ordinate
measures to avoid any change in the ecological balance and to control harmful factors in the river
and the areas affected by it, Argentina asserts that the Court has jurisdiction also with respect to
claims concerning air pollution and even noise and “visual” pollution. Moreover, Argentina
contends that bad odours caused by the Orion (Botnia) mill negatively affect the use of the river for
recreational purposes, particularly in the Gualeguaychú resort on its bank of the river. This claim,
according to Argentina, also falls within the Court’s jurisdiction.

51. The Court, when addressing various allegations or claims advanced by Argentina, will
have to determine whether they concern “the interpretation or application” of the 1975 Statute, as
its jurisdiction under Article 60 thereof covers “[a]ny dispute concerning the interpretation or
application of the [1961] Treaty and the [1975] Statute”. Argentina has made no claim to the effect
that Uruguay violated obligations under the 1961 Treaty.

1The Montevideo Treaty of 7 April 1961, concerning the boundary constituted by the River Uruguay (UNTS,
Vol. 635, No. 9074, p. 98; footnote added).


52. In order to determine whether Uruguay has breached its obligations under the
1975 Statute, as alleged by Argentina, the Court will have to interpret its provisions and to
determine their scope ratione materiae.

Only those claims advanced by Argentina which are based on the provisions of the
1975 Statute fall within the Court’s jurisdiction ratione materiae under the compromissory clause
contained in Article 60. Although Argentina, when making claims concerning noise and “visual”
pollution allegedly caused by the pulp mill, invokes the provision of Article 36 of the 1975 Statute,
the Court sees no basis in it for such claims. The plain language of Article 36, which provides that
“[t]he parties shall co-ordinate, through the Commission, the necessary measures to avoid any
change in the ecological balance and to control pests and other harmful factors in the river and the
areas affected by it”, leaves no doubt that it does not address the alleged noise and visual pollution
as claimed by Argentina. Nor does the Court see any other basis in the 1975 Statute for such
claims; therefore, the claims relating to noise and visual pollution are manifestly outside the
jurisdiction of the Court conferred upon it under Article 60.

Similarly, no provision of the 1975 Statute addresses the issue of “bad odours” complained
of by Argentina. Consequently, for the same reason, the claim regarding the impact of bad odours
on tourism in Argentina also falls outside the Court’s jurisdiction. Even if bad odours were to be
subsumed under the issue of air pollution, which will be addressed in paragraphs 263 and 264
below, the Court notes that Argentina has submitted no evidence as to any relationship between the
alleged bad odours and the aquatic environment of the river.

53. Characterizing the provisions of Articles 1 and 41 of the 1975 Statute as “referral
clauses”, Argentina ascribes to them the effect of incorporating into the Statute the obligations of
the Parties under general international law and a number of multilateral conventions pertaining to
the protection of the environment. Consequently, in the view of Argentina, the Court has
jurisdiction to determine whether Uruguay has complied with its obligations under certain
international conventions.

54. The Court now therefore turns its attention to the issue whether its jurisdiction under
Article 60 of the 1975 Statute also encompasses obligations of the Parties under international
agreements and general international law invoked by Argentina and to the role of such agreements
and general international law in the context of the present case.

55. Argentina asserts that the 1975 Statute constitutes the law applicable to the dispute
before the Court, as supplemented so far as its application and interpretation are concerned, by
various customary principles and treaties in force between the Parties and referred to in the Statute.
Relying on the rule of treaty interpretation set out in Article 31, paragraph 3 (c) of the Vienna
Convention on the Law of Treaties, Argentina contends notably that the 1975 Statute must be
interpreted in the light of principles governing the law of international watercourses and principles
of international law ensuring protection of the environment. It asserts that the 1975 Statute must be
interpreted so as to take account of all “relevant rules” of international law applicable in the
relations between the Parties, so that the Statute’s interpretation remains current and evolves in
accordance with changes in environmental standards. In this connection Argentina refers to the



principles of equitable, reasonable and non-injurious use of international watercourses, the
principles of sustainable development, prevention, precaution and the need to carry out an
environmental impact assessment. It contends that these rules and principles are applicable in
giving the 1975 Statute a dynamic interpretation, although they neither replace it nor restrict its
scope.

56. Argentina further considers that the Court must require compliance with the Parties’
treaty obligations referred to in Articles 1 and 41 (a) of the 1975 Statute. Argentina maintains that
the “referral clauses” contained in these articles make it possible to incorporate and apply
obligations arising from other treaties and international agreements binding on the Parties. To this
end, Argentina refers to the 1973 Convention on International Trade in Endangered Species of
Wild Fauna and Flora (hereinafter the “CITES Convention”), the 1971 Ramsar Convention on
Wetlands of International Importance (hereinafter the “Ramsar Convention”), the 1992 United
Nations Convention on Biological Diversity (hereinafter the “Biodiversity Convention”), and the
2001 Stockholm Convention on Persistent Organic Pollutants (hereinafter the “POPs Convention”).
It asserts that these conventional obligations are in addition to the obligations arising under the
1975 Statute, and observance of them should be ensured when application of the Statute is being
considered. Argentina maintains that it is only where “more specific rules of the [1975] Statute
(lex specialis)” derogate from them that the instruments to which the Statute refers should not be
applied.

57. Uruguay likewise considers that the 1975 Statute must be interpreted in the light of
general international law and it observes that the Parties concur on this point. It maintains however
that its interpretation of the 1975 Statute accords with the various general principles of the law of
international watercourses and of international environmental law, even if its understanding of
these principles does not entirely correspond to that of Argentina. Uruguay considers that whether
Articles 1 and 41 (a) of the 1975 Statute can be read as a referral to other treaties in force between
the Parties has no bearing in the present case, because conventions relied on by Argentina are either
irrelevant, or Uruguay cannot be found to have violated any other conventional obligations. In any
event, the Court would lack jurisdiction to rule on alleged breaches of international obligations
which are not contained in the 1975 Statute.

58. The Court will first address the issue whether Articles 1 and 41 (a) can be read as
incorporating into the 1975 Statute the obligations of the Parties under the various multilateral
conventions relied upon by Argentina.

59. Article 1 of the 1975 Statute reads as follows:

“The parties agree on this Statute, in implementation of the provisions of
Article 7 of the Treaty concerning the Boundary Constituted by the River Uruguay of
7 April 1961, in order to establish the joint machinery necessary for the optimum and
rational utilization of the River Uruguay, in strict observance of the rights and
obligations arising from treaties and other international agreements in force for each of
the parties.” (UNTS, Vol. 1295, No. I-21425, p. 340; footnote omitted.)


Article 1 sets out the purpose of the 1975 Statute. The Parties concluded it in order to
establish the joint machinery necessary for the rational and optimum utilization of the River
Uruguay. It is true that this article contains a reference to “the rights and obligations arising from
treaties and other international agreements in force for each of the parties”. This reference,
however, does not suggest that the Parties sought to make compliance with their obligations under
other treaties one of their duties under the 1975 Statute; rather, the reference to other treaties
emphasizes that the agreement of the Parties on the Statute is reached in implementation of the
provisions of Article 7 of the 1961 Treaty and “in strict observance of the rights and obligations
arising from treaties and other international agreements in force for each of the parties” (emphasis
added). While the conjunction “and” is missing from the English and French translations of the
1975 Statute, as published in the United Nations Treaty Series (Vol. 1295, p. 340 and p. 348), it is
contained in the Spanish text of the Statute, which is the authentic text and reads as follows:

“Las partes acuerdan el presente Estatuto, en cumplimiento de lo dispuesto en el
Artículo 7 del Tratado de Límites en el Río Uruguay, de 7 de Abril de 1961 con el fin
de establecer los mecanismos comunes necesarios para el óptimo y racional
aprovechamiento del Río Uruguay, y en estricta observancia de los derechos y
obligaciones emergentes de los tratados y demás compromisos internacionales
vigentes para cualquiera de las partes.” (UNTS, Vol. 1295, p. 332; emphasis added.)

The presence of the conjunction in the Spanish text suggests that the clause “in strict
observance of the rights and obligations arising from treaties and other international agreements in
force for each of the parties” is linked to and is to be read with the first part of Article 1, i.e., “[t]he
parties agree on this Statute, in implementation of the provisions of Article 7 of the Treaty
concerning the Boundary Constituted by the River Uruguay”.

60. There is one additional element in the language of Article 1 of the 1975 Statute which
should be noted. It mentions “treaties and other international agreements in force for each of the
parties” (in Spanish original “tratados y demás compromisos internacionales vigentes para
cualquiera de las partes”; emphasis added). In the French translation, this part of Article 1 reads
“traités et autres engagements internationaux en vigueur à l’égard de l’une ou l’autre des parties”
(emphasis added).

The fact that Article 1 does not require that the “treaties and other international agreements”
should be in force between the two parties thus clearly indicates that the 1975 Statute takes account
of the prior commitments of each of the parties which have a bearing on it.

61. Article 41 of the 1975 Statute, paragraph (a) of which Argentina considers as
constituting another “referral clause” incorporating the obligations under international agreements
into the Statute, reads as follows:

“Without prejudice to the functions assigned to the Commission in this respect,
the parties undertake:

(a) to protect and preserve the aquatic environment and, in particular, to prevent its
pollution, by prescribing appropriate rules and [adopting appropriate] measures
in accordance with applicable international agreements and in keeping, where
relevant, with the guidelines and recommendations of international technical
bodies;


(b) not to reduce in their respective legal systems:

1. the technical requirements in force for preventing water pollution, and

2. the severity of the penalties established for violations;

(c) to inform one another of any rules which they plan to prescribe with regard to
water pollution in order to establish equivalent rules in their respective legal
systems.” (Emphasis added.)

62. The Court observes that the words “adopting appropriate” do not appear in the English
translation while they appear in the original Spanish text (“dictando las normas y adoptando las
medidas apropiadas”). Basing itself on the original Spanish text, it is difficult for the Court to see
how this provision could be construed as a “referral clause” having the effect of incorporating the
obligations of the parties under international agreements and other norms envisaged within the
ambit of the 1975 Statute.

The purpose of the provision in Article 41 (a) is to protect and preserve the aquatic
environment by requiring each of the parties to enact rules and to adopt appropriate measures.
Article 41 (a) distinguishes between applicable international agreements and the guidelines and
recommendations of international technical bodies. While the former are legally binding and
therefore the domestic rules and regulations enacted and the measures adopted by the State have to
comply with them, the latter, not being formally binding, are, to the extent they are relevant, to be
taken into account by the State so that the domestic rules and regulations and the measures it adopts
are compatible (“con adecuación”) with those guidelines and recommendations. However,
Article 41 does not incorporate international agreements as such into the 1975 Statute but rather
sets obligations for the parties to exercise their regulatory powers, in conformity with applicable
international agreements, for the protection and preservation of the aquatic environment of the
River Uruguay. Under Article 41 (b) the existing requirements for preventing water pollution and
the severity of the penalties are not to be reduced. Finally, paragraph (c) of Article 41 concerns the
obligation to inform the other party of plans to prescribe rules on water pollution.

63. The Court concludes that there is no basis in the text of Article 41 of the 1975 Statute for
the contention that it constitutes a “referral clause”. Consequently, the various multilateral
conventions relied on by Argentina are not, as such, incorporated in the 1975 Statute. For that
reason, they do not fall within the scope of the compromissory clause and therefore the Court has
no jurisdiction to rule whether Uruguay has complied with its obligations thereunder.

64. The Court next briefly turns to the issue of how the 1975 Statute is to be interpreted. The
Parties concur as to the 1975 Statute’s origin and historical context, although they differ as to the
nature and general tenor of the Statute and the procedural and substantive obligations therein.

The Parties nevertheless are in agreement that the 1975 Statute is to be interpreted in
accordance with rules of customary international law on treaty interpretation, as codified in
Article 31 of the Vienna Convention on the Law of Treaties.


65. The Court has had recourse to these rules when it has had to interpret the provisions of
treaties and international agreements concluded before the entry into force of the Vienna
Convention on the Law of Treaties in 1980 (see, e.g., Territorial Dispute (Libyan Arab
Jamahiriya/Chad), Judgment, I.C.J. Reports 1994, p. 21, para. 41; Kasikili/Sedudu Island
(Botswana/Namibia), Judgment, I.C.J. Reports 1999 (II), p. 1059, para. 18).

The 1975 Statute is also a treaty which predates the entry into force of the Vienna
Convention on the Law of Treaties. In interpreting the terms of the 1975 Statute, the Court will
have recourse to the customary rules on treaty interpretation as reflected in Article 31 of the Vienna
Convention. Accordingly the 1975 Statute is to be “interpreted in good faith in accordance with
the ordinary meaning to be given to the terms of the [Statute] in their context and in light of its
object and purpose”. That interpretation will also take into account, together with the context, “any
relevant rules of international law applicable in the relations between the parties”.

66. In the interpretation of the 1975 Statute, taking account of relevant rules of international
law applicable in the relations between the Parties, whether these are rules of general international
law or contained in multilateral conventions to which the two States are parties, nevertheless has no
bearing on the scope of the jurisdiction conferred on the Court under Article 60 of the 1975 Statute,
which remains confined to disputes concerning the interpretation or application of the Statute.

* *

III. THE ALLEGED BREACH OF PROCEDURAL OBLIGATIONS

67. The Application filed by Argentina on 4 May 2006 concerns the alleged breach by
Uruguay of both procedural and substantive obligations laid down in the 1975 Statute. The Court
will start by considering the alleged breach of procedural obligations under Articles 7 to 12 of the
1975 Statute, in relation to the (CMB) ENCE and Orion (Botnia) mill projects and the facilities
associated with the latter, on the left bank of the River Uruguay near the city of Fray Bentos.

68. Argentina takes the view that the procedural obligations were intrinsically linked to the
substantive obligations laid down by the 1975 Statute, and that a breach of the former entailed a
breach of the latter.

With regard to the procedural obligations, these are said by Argentina to constitute an
integrated and indivisible whole in which CARU, as an organization, plays an essential role.

Consequently, according to Argentina, Uruguay could not invoke other procedural
arrangements so as to derogate from the procedural obligations laid down by the 1975 Statute,
except by mutual consent.


69. Argentina argues that, at the end of the procedural mechanism provided for by the
1975 Statute, and in the absence of agreement between the Parties, the latter have no choice but to
submit the matter to the Court under the terms of Articles 12 and 60 of the Statute, with Uruguay
being unable to proceed with the construction of the planned mills until the Court has delivered its
Judgment.

70. Following the lines of the argument put forward by the Applicant, the Court will examine
in turn the following four points: The links between the procedural obligations and the substantive
obligations (A); the procedural obligations and their interrelation with each other (B); whether the
Parties agreed to derogate from the procedural obligations set out in the 1975 Statute (C); and
Uruguay’s obligations at the end of the negotiation period (D).

A. The links between the procedural obligations
and the substantive obligations

71. Argentina maintains that the procedural provisions laid down in Articles 7 to 12 of the
1975 Statute are aimed at ensuring “the optimum and rational utilization of the [r]iver” (Article 1),
just as are the provisions concerning use of water, the conservation, utilization and development of
other natural resources, pollution and research. The aim is also said to be to prevent the Parties
from acting unilaterally and without regard for earlier or current uses of the river. According to
Argentina, any disregarding of this machinery would therefore undermine the object and purpose of
the 1975 Statute; indeed the “optimum and rational utilization of the [r]iver” would not be ensured,
as this could only be achieved in accordance with the procedures laid down under the Statute.

72. It follows, according to Argentina, that a breach of the procedural obligations
automatically entails a breach of the substantive obligations, since the two categories of obligations
are indivisible. Such a position is said to be supported by the Order of the Court of 13 July 2006,
according to which the 1975 Statute created “a comprehensive régime”.

73. Uruguay similarly takes the view that the procedural obligations are intended to facilitate
the performance of the substantive obligations, the former being a means rather than an end. It too
points out that Article 1 of the 1975 Statute defines its object and purpose.

74. However, Uruguay rejects Argentina’s argument as artificial, since it appears to mix
procedural and substantive questions with the aim of creating the belief that the breach of
procedural obligations necessarily entails the breach of substantive ones. According to Uruguay, it
is for the Court to determine the breach, in itself, of each of these categories of obligations, and to
draw the necessary conclusions in each case in terms of responsibility and reparation.

75. The Court notes that the object and purpose of the 1975 Statute, set forth in Article 1, is
for the Parties to achieve “the optimum and rational utilization of the River Uruguay” by means of
the “joint machinery” for co-operation, which consists of both CARU and the procedural
provisions contained in Articles 7 to 12 of the Statute.


The Court has observed in this respect, in its Order of 13 July 2006, that such use should
allow for sustainable development which takes account of “the need to safeguard the continued
conservation of the river environment and the rights of economic development of the riparian
States” (Pulp Mills on the River Uruguay (Argentina v. Uruguay), Provisional Measures, Order of
13 July 2006, I.C.J. Reports 2006, p. 133, para. 80).

76. In the Gabcikovo-Nagymaros case, the Court, after recalling that “[t]his need to reconcile
economic development with protection of the environment is aptly expressed in the concept of
sustainable development”, added that “[i]t is for the Parties themselves to find an agreed solution
that takes account of the objectives of the Treaty” (Gabcíkovo-Nagymaros Project
(Hungary/Slovakia), Judgment, I.C.J. Reports 1997, p. 78, paras. 140-141).

77. The Court observes that it is by co-operating that the States concerned can jointly
manage the risks of damage to the environment that might be created by the plans initiated by one
or other of them, so as to prevent the damage in question, through the performance of both the
procedural and the substantive obligations laid down by the 1975 Statute. However, whereas the
substantive obligations are frequently worded in broad terms, the procedural obligations are
narrower and more specific, so as to facilitate the implementation of the 1975 Statute through a
process of continuous consultation between the parties concerned. The Court has described the
régime put in place by the 1975 Statute as a “comprehensive and progressive régime” (Pulp Mills
on the River Uruguay (Argentina v. Uruguay), Provisional Measures, Order of 13 July 2006,
I.C.J. Reports 2006, p. 133, para. 81), since the two categories of obligations mentioned above
complement one another perfectly, enabling the parties to achieve the object of the Statute which
they set themselves in Article 1.

78. The Court notes that the 1975 Statute created CARU and established procedures in
connection with that institution, so as to enable the parties to fulfil their substantive obligations.
However, nowhere does the 1975 Statute indicate that a party may fulfil its substantive obligations
by complying solely with its procedural obligations, nor that a breach of procedural obligations
automatically entails the breach of substantive ones.

Likewise, the fact that the parties have complied with their substantive obligations does not
mean that they are deemed to have complied ipso facto with their procedural obligations, or are
excused from doing so. Moreover, the link between these two categories of obligations can also be
broken, in fact, when a party which has not complied with its procedural obligations subsequently
abandons the implementation of its planned activity.

79. The Court considers, as a result of the above, that there is indeed a functional link, in
regard to prevention, between the two categories of obligations laid down by the 1975 Statute, but
that link does not prevent the States parties from being required to answer for those obligations
separately, according to their specific content, and to assume, if necessary, the responsibility
resulting from the breach of them, according to the circumstances.

B. The procedural obligations and their interrelation

80. The 1975 Statute imposes on a party which is planning certain activities, set out in
Article 7, first paragraph, procedural obligations whose content, interrelation and time-limits are
specified as follows in Articles 7 to 12:


“Article 7

If one party plans to construct new channels, substantially modify or alter
existing ones or carry out any other works which are liable to affect navigation, the
régime of the river or the quality of its waters, it shall notify the Commission, which
shall determine on a preliminary basis and within a maximum period of 30 days
whether the plan might cause significant damage to the other party.

If the Commission finds this to be the case or if a decision cannot be reached in
that regard, the party concerned shall notify the other party of the plan through the said
Commission.

Such notification shall describe the main aspects of the work and, where
appropriate, how it is to be carried out and shall include any other technical data that
will enable the notified party to assess the probable impact of such works on
navigation, the régime of the river or the quality of its waters.

Article 8

The notified party shall have a period of 180 days in which to respond in
connection with the plan, starting from the date on which its delegation to the
Commission receives the notification.

Should the documentation referred to in Article 7 be incomplete, the notified
party shall have 30 days in which to so inform, through the Commission, the party
which plans to carry out the work.

The period of 180 days mentioned above shall begin on the date on which the
delegation of the notified party receives the full documentation.

This period may be extended at the discretion of the Commission if the
complexity of the plan so requires.

Article 9

If the notified party raises no objections or does not respond within the period
established in Article 8, the other party may carry out or authorize the work planned.

Article 10

The notified party shall have the right to inspect the works being carried out in
order to determine whether they conform to the plan submitted.

Article 11

Should the notified party come to the conclusion that the execution of the work
or the programme of operations might significantly impair navigation, the régime of
the river or the quality of its waters, it shall so notify the other party, through the
Commission, within the period of 180 days established in Article 8.

Such notification shall specify which aspects of the work or the programme of
operations might significantly impair navigation, the régime of the river or the quality
of its waters, the technical reasons on which this conclusion is based and the changes
suggested to the plan or programme of operations.


Article 12

Should the parties fail to reach agreement within 180 days following the
notification referred to in Article 11, the procedure indicated in Chapter XV shall be
followed.”

81. The original Spanish text of Article 7 of the 1975 Statute reads as follows:

“La parte que proyecte la construcción de nuevos canales, la modificación o
alteración significativa de los ya existentes o la realización de cualesquiera otras obras
de entidad suficiente para afectar la navegación, el régimen del Río o la calidad de sus
aguas, deberá comunicarlo a la Comisión, la cual determinará sumariamente, y en un
plazo máximo de treinta días, si el proyecto puede producir perjuicio sensible a la otra
parte.

Si así se resolviere o no se llegare a una decisión al respecto, la parte interesada
deberá notificar el proyecto a la otra parte a través de la misma Comisión.

En la notificación deberán figurar los aspectos esenciales de la obra y, si fuere
el caso, el modo de su operación y los demás datos técnicos que permitan a la parte
notificada hacer una evaluación del efecto probable que la obra ocasionará a la
navegación, al régimen del Río o a la calidad de sus aguas.”

The Court notes that, just as the original Spanish text, the French translation of this article
(see paragraph 80 above) distinguishes between the obligation to inform (“comunicar”) CARU of
any plan falling within its purview (first paragraph) and the obligation to notify (“notificar”) the
other party (second paragraph). By contrast, the English translation uses the same verb “notify” in
respect of both obligations. In order to conform to the original Spanish text, the Court will use in
both linguistic versions of this Judgment the verb “inform” for the obligation set out in the first
paragraph of Article 7 and the verb “notify” for the obligation set out in the second and third
paragraphs.

The Court considers that the procedural obligations of informing, notifying and negotiating
constitute an appropriate means, accepted by the Parties, of achieving the objective which they set
themselves in Article 1 of the 1975 Statute. These obligations are all the more vital when a shared
resource is at issue, as in the case of the River Uruguay, which can only be protected through close
and continuous co-operation between the riparian States.

82. According to Argentina, by failing to comply with the initial obligation (Article 7, first
paragraph, of the 1975 Statute) to refer the matter to CARU, Uruguay frustrated all the procedures
laid down in Articles 7 to 12 of the Statute. In addition, by failing to notify Argentina of the plans
for the CMB (ENCE) and Orion (Botnia) mills, through CARU, with all the necessary
documentation, Uruguay is said not to have complied with Article 7, second and third paragraphs.
Argentina adds that informal contacts which it or CARU may have had with the companies in
question cannot serve as a substitute for Uruguay referring the matter to CARU and notifying
Argentina of the projects through the Commission. Argentina concludes that Uruguay has
breached all of its procedural obligations under the terms of Articles 7 to 12 of the 1975 Statute.


Uruguay, for its part, considers that referring the matter to CARU does not impose so great a
constraint as Argentina contends and that the parties may agree, by mutual consent, to use different
channels by employing other procedural arrangements in order to engage in co-operation. It
concludes from this that it has not breached the procedural obligations laid down by the
1975 Statute, even if it has performed them without following to the letter the formal process set
out therein.

83. The Court will first examine the nature and role of CARU, and then consider whether
Uruguay has complied with its obligations to inform CARU and to notify Argentina of its plans.

1. The nature and role of CARU

84. Uruguay takes the view that CARU, like other river commissions, is not a body with
autonomous powers, but rather a mechanism established to facilitate co-operation between the
Parties. It adds that the States which have created these river commissions are free to go outside
the joint mechanism when it suits their purposes, and that they often do so. According to Uruguay,
since CARU is not empowered to act outside the will of the Parties, the latter are free to do directly
what they have decided to do through the Commission, and in particular may agree not to inform it
in the manner provided for in Article 7 of the 1975 Statute. Uruguay maintains that that is
precisely what happened in the present case: the two States agreed to dispense with the preliminary
review by CARU and to proceed immediately to direct negotiations.

85. For Argentina, on the other hand, the 1975 Statute is not merely a bilateral treaty
imposing reciprocal obligations on the parties; it establishes an institutional framework for close
and ongoing co-operation, the core and essence of which is CARU. For Argentina, CARU is the
key body for co-ordination between the parties in virtually all areas covered by the 1975 Statute.
By failing to fulfil its obligations in this respect, Uruguay is said to be calling the 1975 Statute
fundamentally into question.

86. The Court recalls that it has already described CARU as

“a joint mechanism with regulatory, executive, administrative, technical and
conciliatory functions, entrusted with the proper implementation of the rules contained
in the 1975 Statute governing the management of the shared river resource; . . . [a]
mechanism [which] constitutes a very important part of that treaty régime” (Pulp Mills
on the River Uruguay (Argentina v. Uruguay), Provisional Measures, Order of
13 July 2006, I.C.J. Reports 2006, pp. 133-134, para. 81).

87. The Court notes, first, that CARU, in accordance with Article 50 of the 1975 Statute, was
endowed with legal personality “in order to perform its functions” and that the parties to the
1975 Statute undertook to provide it with “the necessary resources and all the information and
facilities essential to its operations”. Consequently, far from being merely a transmission
mechanism between the parties, CARU has a permanent existence of its own; it exercises rights
and also bears duties in carrying out the functions attributed to it by the 1975 Statute.


88. While the decisions of the Commission must be adopted by common accord between the
riparian States (Article 55), these are prepared and implemented by a secretariat whose staff enjoy
privileges and immunities. Moreover, CARU is able to decentralize its various functions by setting
up whatever subsidiary bodies it deems necessary (Article 52).

89. The Court observes that, like any international organization with legal personality,
CARU is entitled to exercise the powers assigned to it by the 1975 Statute and which are necessary
to achieve the object and purpose of the latter, namely, “the optimum and rational utilization of the
River Uruguay” (Article 1). As the Court has pointed out, “[i]nternational organizations are
governed by the ‘principle of speciality’, that is to say, they are invested by the States which create
them with powers, the limits of which are a function of the common interests whose promotion
those States entrust to them” (Legality of the Use by a State of Nuclear Weapons in Armed Conflict,
Advisory Opinion, I.C.J. Reports 1996 (I), p. 78, para. 25). This also applies of course to
organizations, which like CARU, only have two member States.

90. Since CARU serves as a framework for consultation between the parties, particularly in
the case of the planned works contemplated in Article 7, first paragraph, of the 1975 Statute,
neither of them may depart from that framework unilaterally, as they see fit, and put other channels
of communication in its place. By creating CARU and investing it with all the resources necessary
for its operation, the parties have sought to provide the best possible guarantees of stability,
continuity and effectiveness for their desire to co-operate in ensuring “the optimum and rational
utilization of the River Uruguay”.

91. That is why CARU plays a central role in the 1975 Statute and cannot be reduced to
merely an optional mechanism available to the parties which each may use or not, as it pleases.
CARU operates at all levels of utilization of the river, whether concerning the prevention of
transboundary harm that may result from planned activities; the use of water, on which it receives
reports from the parties and verifies whether the developments taken together are liable to cause
significant damage (Articles 27 and 28); the avoidance of any change in the ecological balance
(Article 36); scientific studies and research carried out by one party within the jurisdiction of the
other (Article 44); the exercise of the right of law enforcement (Article 46); or the right of
navigation (Article 48).

92. Furthermore, CARU has been given the function of drawing up rules in many areas
associated with the joint management of the river and listed in Article 56 of the 1975 Statute.
Lastly, at the proposal of either party, the Commission can act as a conciliation body in any dispute
which may arise between the parties (Article 58).

93. Consequently, the Court considers that, because of the scale and diversity of the
functions they have assigned to CARU, the Parties intended to make that international organization
a central component in the fulfilment of their obligations to co-operate as laid down by the
1975 Statute.

2. Uruguay’s obligation to inform CARU

94. The Court notes that the obligation of the State initiating the planned activity to inform
CARU constitutes the first stage in the procedural mechanism as a whole which allows the two
parties to achieve the object of the 1975 Statute, namely, the optimum and rational utilization of



the River Uruguay”. This stage, provided for in Article 7, first paragraph, involves the State which
is initiating the planned activity informing CARU thereof, so that the latter can determine “on a
preliminary basis” and within a maximum period of 30 days whether the plan might cause
significant damage to the other party.

95. To enable the remainder of the procedure to take its course, the parties have included
alternative conditions in the 1975 Statute: either that the activity planned by one party should be
liable, in CARU’s opinion, to cause significant damage to the other, creating an obligation of
prevention for the first party to eliminate or minimize the risk, in consultation with the other party;
or that CARU, having been duly informed, should not have reached a decision in that regard within
the prescribed period.

96. The Court notes that the Parties are agreed in considering that the two planned mills were
works of sufficient importance to fall within the scope of Article 7 of the 1975 Statute, and thus for
CARU to have been informed of them. The same applies to the plan to construct a port terminal at
Fray Bentos for the exclusive use of the Orion (Botnia) mill, which included dredging work and
use of the river bed.

97. However, the Court observes that the Parties disagree on whether there is an obligation to
inform CARU in respect of the extraction and use of water from the river for industrial purposes by
the Orion (Botnia) mill. Argentina takes the view that the authorization granted by the Uruguayan
Ministry of Transport and Public Works on 12 September 2006 concerns an activity of sufficient
importance (“entidad suficiente”) to affect the régime of the river or the quality of its waters and
that, in this matter, Uruguay should have followed the procedure laid down in Articles 7 to 12 of
the 1975 Statute. For its part, Uruguay maintains that this activity forms an integral part of the
Orion (Botnia) mill project as a whole, and that the 1975 Statute does not require CARU to be
informed of each step in furtherance of the planned works.

98. The Court points out that while the Parties are agreed in recognizing that CARU should
have been informed of the two planned mills and the plan to construct the port terminal at Fray
Bentos, they nonetheless differ as regards the content of the information which should be provided
to CARU and as to when this should take place.

99. Argentina has argued that the content of the obligation to inform must be determined in
the light of its objective, which is to prevent threats to navigation, the régime of the river or the
quality of the waters. According to Argentina, the plan which CARU must be informed of may be
at a very early stage, since it is simply a matter of allowing the Commission to “determine on a
preliminary basis”, within a very short period of 30 days, whether the plan “might cause significant
damage to the other party”. It is only in the following phase of the procedure that the substance of
the obligation to inform is said to become more extensive. In Argentina’s view, however, CARU
must be informed prior to the authorization or implementation of a project on the River Uruguay.

100. Citing the terms of Article 7, first paragraph, of the 1975 Statute, Uruguay gives a
different interpretation of it, taking the view that the requirement to inform CARU specified by this
provision cannot occur in the very early stages of planning, because there could not be sufficient
information available to the Commission for it to determine whether or not the plan might cause



significant damage to the other State. For that, according to Uruguay, the project would have to
have reached a stage where all the technical data on it are available. As the Court will consider
further below, Uruguay seeks to link the content of the information to the time when it should be
provided, which may even be after the State concerned has granted an initial environmental
authorization.

101. The Court points out that the principle of prevention, as a customary rule, has its origins
in the due diligence that is required of a State in its territory. It is “every State’s obligation not to
allow knowingly its territory to be used for acts contrary to the rights of other States” (Corfu
Channel (United Kingdom v. Albania), Merits, Judgment, I.C.J. Reports 1949, p. 22). A State is
thus obliged to use all the means at its disposal in order to avoid activities which take place in its
territory, or in any area under its jurisdiction, causing significant damage to the environment of
another State. This Court has established that this obligation “is now part of the corpus of
international law relating to the environment” (Legality of the Threat or Use of Nuclear Weapons,
Advisory Opinion, I.C.J. Reports 1996 (I), p. 242, para. 29).

102. In the view of the Court, the obligation to inform CARU allows for the initiation of
co-operation between the Parties which is necessary in order to fulfil the obligation of prevention.
This first procedural stage results in the 1975 Statute not being applied to activities which would
appear to cause damage only to the State in whose territory they are carried out.

103. The Court observes that with regard to the River Uruguay, which constitutes a shared
resource, “significant damage to the other party” (Article 7, first paragraph, of the 1975 Statute)
may result from impairment of navigation, the régime of the river or the quality of its waters.
Moreover, Article 27 of the 1975 Statute stipulates that:

“[t]he right of each party to use the waters of the river, within its jurisdiction, for
domestic, sanitary, industrial and agricultural purposes shall be exercised without
prejudice to the application of the procedure laid down in Articles 7 to 12 when the
use is liable to affect the régime of the river or the quality of its waters”.

104. The Court notes that, in accordance with the terms of Article 7, first paragraph, the
information which must be provided to CARU, at this initial stage of the procedure, has to enable it
to determine swiftly and on a preliminary basis whether the plan might cause significant damage to
the other party. For CARU, at this stage, it is a question of deciding whether or not the plan falls
under the co-operation procedure laid down by the 1975 Statute, and not of pronouncing on its
actual impact on the river and the quality of its waters. This explains, in the opinion of the Court,
the difference between the terminology of the first paragraph of Article 7, concerning the
requirement to inform CARU, and that of the third paragraph, concerning the content of the
notification to be addressed to the other party at a later stage, enabling it “to assess the probable
impact of such works on navigation, the régime of the river or the quality of its waters”.

105. The Court considers that the State planning activities referred to in Article 7 of the
Statute is required to inform CARU as soon as it is in possession of a plan which is sufficiently
developed to enable CARU to make the preliminary assessment (required by paragraph 1 of that



provision) of whether the proposed works might cause significant damage to the other party. At
that stage, the information provided will not necessarily consist of a full assessment of the
environmental impact of the project, which will often require further time and resources, although,
where more complete information is available, this should, of course, be transmitted to CARU to
give it the best possible basis on which to make its preliminary assessment. In any event, the duty
to inform CARU will become applicable at the stage when the relevant authority has had the
project referred to it with the aim of obtaining initial environmental authorization and before the
granting of that authorization.

106. The Court observes that, in the present case, Uruguay did not transmit to CARU the
information required by Article 7, first paragraph, in respect of the CMB (ENCE) and Orion
(Botnia) mills, despite the requests made to it by the Commission to that effect on several
occasions, in particular on 17 October 2002 and 21 April 2003 with regard to the CMB (ENCE)
mill, and on 16 November 2004 with regard to the Orion (Botnia) mill. Uruguay merely sent
CARU, on 14 May 2003, a summary for public release of the environmental impact assessment for
the CMB (ENCE) mill. CARU considered this document to be inadequate and again requested
further information from Uruguay on 15 August 2003 and 12 September 2003. Moreover, Uruguay
did not transmit any document to CARU regarding the Orion (Botnia) mill. Consequently, Uruguay
issued the initial environmental authorizations to CMB on 9 October 2003 and to Botnia on
14 February 2005 without complying with the procedure laid down in Article 7, first paragraph.
Uruguay therefore came to a decision on the environmental impact of the projects without
involving CARU, thereby simply giving effect to Article 17, third paragraph, of Uruguayan Decree
No. 435/994 of 21 September 1994, Environmental Impact Assessment Regulation, according to
which the Ministry of Housing, Land Use Planning and Environmental Affairs may grant the initial
environmental authorization provided that the adverse environmental impacts of the project remain
within acceptable limits.

107. The Court further notes that on 12 April 2005 Uruguay granted an authorization to
Botnia for the first phase of the construction of the Orion (Botnia) mill and, on 5 July 2005, an
authorization to construct a port terminal for its exclusive use and to utilize the river bed for
industrial purposes, without informing CARU of these projects in advance.

108. With regard to the extraction and use of water from the river, of which CARU should
have first been informed, according to Argentina, the Court takes the view that this is an activity
which forms an integral part of the commissioning of the Orion (Botnia) mill and therefore did not
require a separate referral to CARU.

109. However, Uruguay maintains that CARU was made aware of the plans for the mills by
representatives of ENCE on 8 July 2002, and no later than 29 April 2004 by representatives of
Botnia, before the initial environmental authorizations were issued. Argentina, for its part,
considers that these so-called private dealings, whatever form they may have taken, do not
constitute performance of the obligation imposed on the Parties by Article 7, first paragraph.

110. The Court considers that the information on the plans for the mills which reached
CARU via the companies concerned or from other non-governmental sources cannot substitute for
the obligation to inform laid down in Article 7, first paragraph, of the 1975 Statute, which is borne
by the party planning to construct the works referred to in that provision. Similarly, in the case
concerning Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v. France), the
Court observed that


“[i]f the information eventually came to Djibouti through the press, the information
disseminated in this way could not be taken into account for the purposes of the
application of Article 17 [of the Convention on Mutual Assistance in Criminal Matters
between the two countries, providing that ‘[r]easons shall be given for any refusal of
mutual assistance’]” (Judgment of 4 June 2008, para. 150).

111. Consequently, the Court concludes from the above that Uruguay, by not informing
CARU of the planned works before the issuing of the initial environmental authorizations for each
of the mills and for the port terminal adjacent to the Orion (Botnia) mill, has failed to comply with
the obligation imposed on it by Article 7, first paragraph, of the 1975 Statute.

3. Uruguay’s obligation to notify the plans to the other party

112. The Court notes that, under the terms of Article 7, second paragraph, of the
1975 Statute, if CARU decides that the plan might cause significant damage to the other party or if
a decision cannot be reached in that regard, “the party concerned shall notify the other party of this
plan through the said Commission”.

Article 7, third paragraph, of the 1975 Statute sets out in detail the content of this
notification, which

“shall describe the main aspects of the work and . . . any other technical data that will
enable the notified party to assess the probable impact of such works on navigation,
the régime of the river or the quality of its waters”.

113. In the opinion of the Court, the obligation to notify is intended to create the conditions
for successful co-operation between the parties, enabling them to assess the plan’s impact on the
river on the basis of the fullest possible information and, if necessary, to negotiate the adjustments
needed to avoid the potential damage that it might cause.

114. Article 8 stipulates a period of 180 days, which may be extended by the Commission,
for the notified party to respond in connection with the plan, subject to it requesting the other party,
through the Commission, to supplement as necessary the documentation it has provided.

If the notified party raises no objections, the other party may carry out or authorize the work
(Article 9). Otherwise, the former must notify the latter of those aspects of the work which may
cause it damage and of the suggested changes (Article 11), thereby opening a further 180-day
period of negotiation in which to reach an agreement (Article 12).

115. The obligation to notify is therefore an essential part of the process leading the parties
to consult in order to assess the risks of the plan and to negotiate possible changes which may
eliminate those risks or minimize their effects.

116. The Parties agree on the need for a full environmental impact assessment in order to
assess any significant damage which might be caused by a plan.


117. Uruguay takes the view that such assessments were carried out in accordance with its
legislation (Decree No. 435/994 of 21 September 1994, Environmental Impact Assessment
Regulation), submitted to DINAMA for consideration and transmitted to Argentina on
7 November 2003 in the case of the CMB (ENCE) project and on 19 August 2005 for the Orion
(Botnia) project. According to Uruguay, DINAMA asked the companies concerned for all the
additional information that was required to supplement the original environmental impact
assessments submitted to it, and only when it was satisfied did it propose to the Ministry of the
Environment that the initial environmental authorizations requested should be issued, which they
were to CMB on 9 October 2003 and to Botnia on 14 February 2005.

Uruguay maintains that it was not required to transmit the environmental impact assessments
to Argentina before issuing the initial environmental authorizations to the companies, these
authorizations having been adopted on the basis of its legislation on the subject.

118. Argentina, for its part, first points out that the environmental impact assessments
transmitted to it by Uruguay were incomplete, particularly in that they made no provision for
alternative sites for the mills and failed to include any consultation of the affected populations. The
Court will return later in the Judgment to the substantive conditions which must be met by
environmental impact assessments (see paragraphs 203 to 219).

Furthermore, in procedural terms, Argentina considers that the initial environmental
authorizations should not have been granted to the companies before it had received the complete
environmental impact assessments, and that it was unable to exercise its rights in this context under
Articles 7 to 11 of the 1975 Statute.

119. The Court notes that the environmental impact assessments which are necessary to
reach a decision on any plan that is liable to cause significant transboundary harm to another State
must be notified by the party concerned to the other party, through CARU, pursuant to Article 7,
second and third paragraphs, of the 1975 Statute. This notification is intended to enable the
notified party to participate in the process of ensuring that the assessment is complete, so that it can
then consider the plan and its effects with a full knowledge of the facts (Article 8 of the
1975 Statute).

120. The Court observes that this notification must take place before the State concerned
decides on the environmental viability of the plan, taking due account of the environmental impact
assessment submitted to it.

121. In the present case, the Court observes that the notification to Argentina of the
environmental impact assessments for the CMB (ENCE) and Orion (Botnia) mills did not take
place through CARU, and that Uruguay only transmitted those assessments to Argentina after
having issued the initial environmental authorizations for the two mills in question. Thus in the
case of CMB (ENCE), the matter was notified to Argentina on 27 October and 7 November 2003,
whereas the initial environmental authorization had already been issued on 9 October 2003. In the
case of Orion (Botnia), the file was transmitted to Argentina between August 2005 and
January 2006, whereas the initial environmental authorization had been granted on
14 February 2005. Uruguay ought not, prior to notification, to have issued the initial
environmental authorizations and the authorizations for construction on the basis of the
environmental impact assessments submitted to DINAMA. Indeed by doing so, Uruguay gave
priority to its own legislation over its procedural obligations under the 1975 Statute and disregarded


the well-established customary rule reflected in Article 27 of the Vienna Convention on the Law of
Treaties, according to which “[a] party may not invoke the provisions of its internal law as
justification for its failure to perform a treaty”.

122. The Court concludes from the above that Uruguay failed to comply with its obligation
to notify the plans to Argentina through CARU under Article 7, second and third paragraphs, of the
1975 Statute.

C. Whether the Parties agreed to derogate from the procedural
obligations set out in the 1975 Statute

123. Having thus examined the procedural obligations laid down by the 1975 Statute, the
Court now turns to the question of whether the Parties agreed, by mutual consent, to derogate from
them, as alleged by Uruguay.

124. In this respect the Parties refer to two “agreements” reached on 2 March 2004 and
5 May 2005; however, they hold divergent views regarding their scope and content.

1. The “understanding” of 2 March 2004 between Argentina and Uruguay

125. The Court recalls that, after the issuing of the initial environmental authorization to
CMB by Uruguay, without CARU having been able to carry out the functions assigned to it in this
context by the 1975 Statute, the Foreign Ministers of the Parties agreed on 2 March 2004 on the
procedure to be followed, as described in the minutes of the extraordinary meeting of CARU of
15 May 2004. The relevant extract from those minutes reads as follows in Spanish:

“II) En fecha 2 de marzo de 2004 los Cancilleres de Argentina y Uruguay
llegaron a un entendimiento con relación al curso de acción que se dará al tema, esto
es, facilitar por parte del gobierno uruguayo, la información relativa a la construcción
de la planta y, en relación a la fase operativa, proceder a realizar el monitoreo, por
parte de CARU, de la calidad de las aguas conforme a su Estatuto.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I) Ambas delegaciones reafirmaron el compromiso de los Ministros de
Relaciones Exteriores de la República Argentina y de la República
Oriental del Uruguay de fecha 2 de marzo de 2004 por el cual el
Uruguay comunicará la información relativa a la construcción de la
planta incluyendo el Plan de Gestión Ambiental. En tal sentido, la
CARU recibirá los Planes de Gestión Ambiental para la construcción y
operación de la planta que presente la empresa al gobierno uruguayo
una vez que le sean remitidos por la delegación uruguaya.” (Emphasis
in the original.)




Argentina and Uruguay have provided the Court, respectively, with French and English
translations of these minutes. In view of the discrepancies between those two translations, the
Court will use the following translation:

“(II) On 2 March 2004, the Foreign Ministers of Argentina and Uruguay
reached an understanding on how to proceed in the matter, namely, that the
Uruguayan Government would provide information on the construction of the mill and


that, in terms of the operational phase, CARU would carry out monitoring of water
quality in accordance with its Statute.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(I) Both delegations reaffirmed the arrangement which had been come to by the
Foreign Ministers of the Republic of Argentina and the Eastern Republic of Uruguay
on 2 March 2004, whereby Uruguay would communicate information on the
construction of the mill, including the environmental management plan. As a result,
CARU would receive the environmental management plans for the construction and
operation of the mill provided by the company to the Uruguayan Government, when
these were forwarded to it by the Uruguayan delegation.” (Emphasis in the original.)
[Translation by the Court.]

126. Uruguay considers that, under the terms of this “understanding”, the Parties agreed on
the approach to be followed in respect of the CMB (ENCE) project, outside CARU, and that there
was no reason in law or logic to prevent them derogating from the procedures outlined in the
1975 Statute pursuant to an appropriate bilateral agreement.

The said “understanding”, according to Uruguay, only covered the transmission to CARU of
the Environmental Management Plans for the construction and operation of the (CMB) ENCE mill.
It supposedly thereby puts an end to any dispute with Argentina regarding the procedure laid down
in Article 7 of the 1975 Statute. Lastly, Uruguay maintains that the “understanding” of
2 March 2004 on the (CMB) ENCE project was later extended to include the Orion (Botnia)
project, since the PROCEL water quality monitoring plan put in place by CARU’s Subcommittee
on Water Quality to implement that “understanding” related to the activity of “both plants”, the
CMB (ENCE) and Orion (Botnia) mills, the plural having been used in the title and text of the
Subcommittee’s report.

127. Argentina, for its part, maintains that the “understanding” between the two Ministers of
2 March 2004 was intended to ensure compliance with the procedure laid down by the 1975 Statute
and thus to reintroduce the CMB (ENCE) project within CARU, ending the dispute on CARU’s
jurisdiction to deal with the project. Argentina claims that it reiterated to the organs within CARU
that it had not given up its rights under Article 7, although it accepted that the dispute between
itself and Uruguay in this respect could have been resolved if the procedure contemplated in the
“understanding” of 2 March 2004 had been brought to a conclusion.

According to Argentina, however, Uruguay never transmitted the required information to
CARU as it undertook to do in the “understanding” of 2 March 2004. Argentina also denies that
the “understanding” of 2 March 2004 was extended to the Orion (Botnia) mill; the reference to
both future plants in the PROCEL plan does not in any way signify, in its view, the renunciation of
the procedure laid down by the 1975 Statute.

128. The Court first notes that while the existence of the “understanding” of 2 March 2004,
as minuted by CARU, has not been contested by the Parties, they differ as to its content and scope.
Whatever its specific designation and in whatever instrument it may have been recorded (the
CARU minutes), this “understanding” is binding on the Parties, to the extent that they have
consented to it and must be observed by them in good faith. They are entitled to depart from the
procedures laid down by the 1975 Statute, in respect of a given project pursuant to an appropriate
bilateral agreement. The Court recalls that the Parties disagree on whether the procedure for
communicating information provided for by the “understanding” would, if applied, replace that
provided for by the 1975 Statute. Be that as it may, such replacement was dependent on Uruguay
complying with the procedure laid down in the “understanding”.


129. The Court finds that the information which Uruguay agreed to transmit to CARU in the
“understanding” of 2 March 2004 was never transmitted. Consequently, the Court cannot accept
Uruguay’s contention that the “understanding” put an end to its dispute with Argentina in respect
of the CMB (ENCE) mill, concerning implementation of the procedure laid down by Article 7 of
the 1975 Statute.

130. Further, the Court observes that, when this “understanding” was reached, only the CMB
(ENCE) project was in question, and that it therefore cannot be extended to the Orion (Botnia)
project, as Uruguay claims. The reference to both mills is made only as from July 2004, in the
context of the PROCEL plan. However, this plan only concerns the measures to monitor and
control the environmental quality of the river waters in the areas of the pulp mills, and not the
procedures under Article 7 of the 1975 Statute.

131. The Court concludes that the “understanding” of 2 March 2004 would have had the
effect of relieving Uruguay of its obligations under Article 7 of the 1975 Statute, if that was the
purpose of the “understanding”, only if Uruguay had complied with the terms of the
“understanding”. In the view of the Court, it did not do so. Therefore the “understanding” cannot
be regarded as having had the effect of exempting Uruguay from compliance with the procedural
obligations laid down by the 1975 Statute.

2. The agreement setting up the High-Level Technical Group (the GTAN)

132. The Court notes that, in furtherance of the agreement reached on 5 May 2005 between
the Presidents of Argentina and Uruguay (see paragraph 40 above), the Foreign Ministries of the
two States issued a press release on 31 May 2005 announcing the creation of the High-Level
Technical Group, referred to by the Parties as the GTAN. According to this communiqué:

“In conformity with what was agreed to by the Presidents of Argentina and
Uruguay, the Foreign Ministries of both of our countries constitute, under their
supervision, a Group of Technical Experts for complementary studies and analysis,
exchange of information and follow-up on the effects that the operation of the
cellulose plants that are being constructed in the Eastern Republic of Uruguay will
have on the ecosystem of the shared Uruguay River.

This Group . . . is to produce an initial report within a period of 180 days.”

133. Uruguay regards this press release as an agreement that binds the two States, whereby
they decided to make the GTAN the body within which the direct negotiations between the Parties
provided for by Article 12 of the 1975 Statute would take place, since its purpose was to analyse
the effects on the environment of the “operation of the cellulose plants that are being constructed in
the Eastern Republic of Uruguay”. Uruguay infers from this that the Parties were agreed on the
construction of the mills and that they had limited the extent of the dispute between them to the
environmental risks caused by their operation. Uruguay sees proof of this in the referral to the
Court on the basis of Article 12 of the 1975 Statute, which allows either Party to apply to the Court
in the event of the negotiations failing to produce an agreement within the period of 180 days.


According to Uruguay, therefore, the agreement contained in the press release of
31 May 2005, by paving the way for the direct negotiations provided for in Article 12, covered any
possible procedural irregularities in relation to Articles 7 et seq. of the 1975 Statute. Uruguay
points out that it communicated all the necessary information to Argentina during the 12 meetings
held by the GTAN and that it transmitted the Orion (Botnia) port project to CARU, as agreed by
the Parties at the first meeting of the GTAN.

134. Uruguay further notes that the 1975 Statute is silent as to whether the notifying State
may or may not implement a project while negotiations are ongoing. It acknowledges that, under
international law, the initiating State must refrain from doing so during the period of negotiation,
but takes the view that this does not apply to all work and, in particular, that preparatory work is
permitted. Uruguay acknowledges that it carried out such work, for example construction of the
foundations for the Orion (Botnia) mill, but in its view this did not involve faits accomplis which
prevented the negotiations from reaching a conclusion. Uruguay also considers that it had no legal
obligation to suspend any and all work on the port.

135. Argentina considers that no acceptance on its part of the construction of the disputed
mills can be inferred from the terms of the press release of 31 May 2005. It submits that in creating
the GTAN, the Parties did not decide to substitute it for CARU, but regarded it as a means of
negotiation that would co-exist with the latter.

Contrary to Uruguay, Argentina takes the view that this matter has been submitted to the
Court on the basis of Article 60 of the 1975 Statute and not of Article 12, since Uruguay, by its
conduct, has prevented the latter from being used as a basis, having allegedly disregarded the entire
procedure laid down in Chapter II of the Statute. Argentina therefore sees it as for the Court to
pronounce on all the breaches of the 1975 Statute, including and not limited to the authorization for
the construction of the disputed mills.

136. Argentina submits that Uruguay, by its conduct, frustrated the procedures laid down in
Articles 7 to 9 of the 1975 Statute and that, during the period of negotiation within the GTAN,
Uruguay continued the construction work on the Orion (Botnia) mill and began building the port
terminal. During that same period, Argentina reiterated, within CARU, the need for Uruguay to
comply with its procedural obligations under Articles 7 to 12 of the 1975 Statute and to suspend the
works.

Lastly, Argentina rejects Uruguay’s claim that the work on the foundations of the Orion
(Botnia) mill, its chimney and the port was merely preliminary in nature and cannot be regarded as
the beginning of construction work as such. For Argentina, such a distinction is groundless and
cannot be justified by the nature of the work carried out.

137. The Court first points out that there is no reason to distinguish, as Uruguay and
Argentina have both done for the purpose of their respective cases, between referral on the basis of
Article 12 and of Article 60 of the 1975 Statute. While it is true that Article 12 provides for
recourse to the procedure indicated in Chapter XV, should the negotiations fail to produce an
agreement within the 180-day period, its purpose ends there. Article 60 then takes over, in
particular its first paragraph, which enables either Party to submit to the Court any dispute
concerning the interpretation or application of the Statute which cannot be settled by direct
negotiations. This wording also covers a dispute relating to the interpretation or application of
Article 12, like any other provision of the 1975 Statute.


138. The Court notes that the press release of 31 May 2005 sets out an agreement between
the two States to create a negotiating framework, the GTAN, in order to study, analyse and
exchange information on the effects that the operation of the cellulose plants that were being
constructed in the Eastern Republic of Uruguay could have on the ecosystem of the shared
Uruguay River, with “the group [having] to produce an initial report within a period of 180 days”.

139. The Court recognizes that the GTAN was created with the aim of enabling the
negotiations provided for in Article 12 of the 1975 Statute, also for a 180-day period, to take place.
Under Article 11, these negotiations between the parties with a view to reaching an agreement are
to be held once the notified party has sent a communication to the other party, through the
Commission, specifying

“which aspects of the work or the programme of operations might significantly impair
navigation, the régime of the river or the quality of its waters, the technical reasons on
which this conclusion is based and the changes suggested to the plan or programme of
operations”.

The Court is aware that the negotiation provided for in Article 12 of the 1975 Statute forms
part of the overall procedure laid down in Articles 7 to 12, which is structured in such a way that
the parties, in association with CARU, are able, at the end of the process, to fulfil their obligation to
prevent any significant transboundary harm which might be caused by potentially harmful activities
planned by either one of them.

140. The Court therefore considers that the agreement to set up the GTAN, while indeed
creating a negotiating body capable of enabling the Parties to pursue the same objective as that laid
down in Article 12 of the 1975 Statute, cannot be interpreted as expressing the agreement of the
Parties to derogate from other procedural obligations laid down by the Statute.

141. Consequently, the Court finds that Argentina, in accepting the creation of the GTAN,
did not give up, as Uruguay claims, the other procedural rights belonging to it by virtue of the
1975 Statute, nor the possibility of invoking Uruguay’s responsibility for any breach of those
rights. Argentina did not, in the agreement to set up the GTAN, “effect a clear and unequivocal
waiver” of its rights under the 1975 Statute (Certain Phosphate Lands in Nauru (Nauru v.
Australia), Preliminary Objections, Judgment, I.C.J. Reports 1992, p. 247, para. 13). Nor did it
consent to suspending the operation of the procedural provisions of the 1975 Statute. Indeed, under
Article 57 of the Vienna Convention on the Law of Treaties of 23 May 1969, concerning
“[s]uspension of the operation of a treaty”, including, according to the International Law
Commission’s commentary, suspension of “the operation of . . . some of its provisions” (Yearbook
of the International Law Commission, 1966, Vol. II, p. 251), suspension is only possible “in
conformity with the provisions of the treaty” or “by consent of all the parties”.

142. The Court further observes that the agreement to set up the GTAN, in referring to “the
cellulose plants that are being constructed in the Eastern Republic of Uruguay”, is stating a simple
fact and cannot be interpreted, as Uruguay claims, as an acceptance of their construction by
Argentina.


143. The Court finds that Uruguay was not entitled, for the duration of the period of
consultation and negotiation provided for in Articles 7 to 12 of the 1975 Statute, either to construct
or to authorize the construction of the planned mills and the port terminal. It would be contrary to
the object and purpose of the 1975 Statute to embark on disputed activities before having applied
the procedures laid down by the “joint machinery necessary for the optimum and rational
utilization of the [r]iver” (Article 1). However, Article 9 provides that: “[i]f the notified party
raises no objections or does not respond within the period established in Article 8 [180 days], the
other party may carry out or authorize the work planned”.

144. Consequently, in the opinion of the Court, as long as the procedural mechanism for
co-operation between the parties to prevent significant damage to one of them is taking its course,
the State initiating the planned activity is obliged not to authorize such work and, a fortiori, not to
carry it out.

145. The Court notes, moreover, that the 1975 Statute is perfectly in keeping with the
requirements of international law on the subject, since the mechanism for co-operation between
States is governed by the principle of good faith. Indeed, according to customary international law,
as reflected in Article 26 of the 1969 Vienna Convention on the Law of Treaties, “[e]very treaty in
force is binding upon the parties to it and must be performed by them in good faith”. That applies
to all obligations established by a treaty, including procedural obligations which are essential to
co-operation between States. The Court recalled in the cases concerning Nuclear Tests
(Australia v. France) and Nuclear Tests (New Zealand v. France):

“One of the basic principles governing the creation and performance of legal
obligations, whatever their source, is the principle of good faith. Trust and confidence
are inherent in international co-operation …” (Judgments, I.C.J. Reports 1974, p. 268,
para. 46, and p. 473, para. 49; see also Border and Transborder Armed Actions
(Nicaragua v. Honduras), Jurisdiction and Admissibility, Judgment, I.C.J. Reports
1988, p. 105, para. 94.)

146. The Court has also had occasion to draw attention to the characteristics of the obligation
to negotiate and to the conduct which this imposes on the States concerned: “[the Parties] are
under an obligation so to conduct themselves that the negotiations are meaningful” (North Sea
Continental Shelf (Federal Republic of Germany/Denmark; Federal Republic of
Germany/Netherlands), Judgment, I.C.J. Reports 1969, p. 47, para. 85).

147. In the view of the Court, there would be no point to the co-operation mechanism
provided for by Articles 7 to 12 of the 1975 Statute if the party initiating the planned activity were
to authorize or implement it without waiting for that mechanism to be brought to a conclusion.
Indeed, if that were the case, the negotiations between the parties would no longer have any
purpose.

148. In this respect, contrary to what Uruguay claims, the preliminary work on the pulp mills
on sites approved by Uruguay alone does not constitute an exception. This work does in fact form
an integral part of the construction of the planned mills (see paragraphs 39 and 42 above).


149. The Court concludes from the above that the agreement to set up the GTAN did not
permit Uruguay to derogate from its obligations of information and notification under Article 7 of
the 1975 Statute, and that by authorizing the construction of the mills and the port terminal at
Fray Bentos before the expiration of the period of negotiation, Uruguay failed to comply with the
obligation to negotiate laid down by Article 12 of the Statute. Consequently, Uruguay disregarded
the whole of the co-operation mechanism provided for in Articles 7 to 12 of the 1975 Statute.

150. Given that “an obligation to negotiate does not imply an obligation to reach an
agreement” (Railway Traffic between Lithuania and Poland, Advisory Opinion, 1931, P.C.I.J.,
Series A/B, No. 42, p. 116), it remains for the Court to examine whether the State initiating the plan
is under certain obligations following the end of the negotiation period provided for in Article 12.

D. Uruguay’s obligations following the end of the negotiation period

151. Article 12 refers the Parties, should they fail to reach an agreement within 180 days, to
the procedure indicated in Chapter XV.

Chapter XV contains a single article, Article 60, according to which:

“Any dispute concerning the interpretation or application of the Treaty and the
Statute which cannot be settled by direct negotiations may be submitted by either
party to the International Court of Justice.

In the cases referred to in Articles 58 and 59, either party may submit any
dispute concerning the interpretation or application of the Treaty and the Statute to the
International Court of Justice, when it has not been possible to settle the dispute within
180 days following the notification referred to in Article 59.”

152. According to Uruguay, the 1975 Statute does not give one party a “right of veto” over
the projects initiated by the other. It does not consider there to be a “no construction obligation”
borne by the State initiating the projects until such time as the Court has ruled on the dispute.
Uruguay points out that the existence of such an obligation would enable one party to block a
project that was essential for the sustainable development of the other, something that would be
incompatible with the “optimum and rational utilization of the [r]iver”. On the contrary, for
Uruguay, in the absence of any specific provision in the 1975 Statute, reference should be made to
general international law, as reflected in the 2001 draft Articles of the International Law
Commission on Prevention of Transboundary Harm from Hazardous Activities (Yearbook of the
International Law Commission, 2001, Vol. II, Part Two); in particular, draft Article 9, paragraph 3,
concerning “Consultations on preventive measures”, states that “[i]f the consultations . . . fail to
produce an agreed solution, the State of origin shall nevertheless take into account the interests of
the State likely to be affected in case it decides to authorize the activity to be pursued . . .”.

153. Argentina, on the other hand, maintains that Article 12 of the 1975 Statute makes the
Court the final decision-maker where the parties have failed to reach agreement within 180 days
following the notification referred to in Article 11. It is said to follow from Article 9 of the Statute,
interpreted in the light of Articles 11 and 12 and taking account of its object and purpose, that if the



notified party raises an objection, the other party may neither carry out nor authorize the work in
question until the procedure laid down in Articles 7 to 12 has been completed and the Court has
ruled on the project. Argentina therefore considers that, during the dispute settlement proceedings
before the Court, the State which is envisaging carrying out the work cannot confront the other
Party with the fait accompli of having carried it out.

Argentina argues that the question of the “veto” raised by Uruguay is inappropriate, since
neither of the parties can impose its position in respect of the construction works and it will
ultimately be for the Court to settle the dispute, if the parties disagree, by a decision that will have
the force of res judicata. It could be said, according to Argentina, that Uruguay has no choice but
to come to an agreement with it or to await the settlement of the dispute. Argentina contends that,
by pursuing the construction and commissioning of the Orion (Botnia) mill and port, Uruguay has
committed a continuing violation of the procedural obligations under Chapter II of the
1975 Statute.

154. The Court observes that the “no construction obligation”, said to be borne by Uruguay
between the end of the negotiation period and the decision of the Court, is not expressly laid down
by the 1975 Statute and does not follow from its provisions. Article 9 only provides for such an
obligation during the performance of the procedure laid down in Articles 7 to 12 of the Statute.

Furthermore, in the event of disagreement between the parties on the planned activity
persisting at the end of the negotiation period, the Statute does not provide for the Court, to which
the matter would be submitted by the State concerned, according to Argentina, to decide whether or
not to authorize the activity in question. The Court points out that, while the 1975 Statute gives it
jurisdiction to settle any dispute concerning its interpretation or application, it does not however
confer on it the role of deciding in the last resort whether or not to authorize the planned activities.
Consequently, the State initiating the plan may, at the end of the negotiation period, proceed with
construction at its own risk.

The Court cannot uphold the interpretation of Article 9 according to which any construction
is prohibited until the Court has given its ruling pursuant to Articles 12 and 60.

155. Article 12 does not impose an obligation on the parties to submit a matter to the Court,
but gives them the possibility of doing so, following the end of the negotiation period.
Consequently, Article 12 can do nothing to alter the rights and obligations of the party concerned
as long as the Court has not ruled finally on them. The Court considers that those rights include
that of implementing the project, on the sole responsibility of that party, since the period for
negotiation has expired.

156. In its Order of 13 July 2006, the Court took the view that the “construction [of the
mills] at the current site cannot be deemed to create a fait accompli” (Pulp Mills on the River
Uruguay (Argentina v. Uruguay), Provisional Measures, Order of 13 July 2006,
I.C.J. Reports 2006, p. 133, para. 78). Thus, in pronouncing on the merits in the dispute between
the Parties, the Court is the ultimate guarantor of their compliance with the 1975 Statute.


157. The Court concludes from the above that Uruguay did not bear any “no construction
obligation” after the negotiation period provided for in Article 12 expired on 3 February 2006, the
Parties having determined at that date that the negotiations undertaken within the GTAN had failed
(see paragraph 40). Consequently the wrongful conduct of Uruguay (established in paragraph 149
above) could not extend beyond that period.

158. Having established that Uruguay breached its procedural obligations to inform, notify
and negotiate to the extent and for the reasons given above, the Court will now turn to the question
of the compliance of that State with the substantive obligations laid down by the 1975 Statute.

* *

IV. SUBSTANTIVE OBLIGATIONS

159. Before taking up the examination of the alleged violations of substantive obligations
under the 1975 Statute, the Court will address two preliminary issues, namely, the burden of proof
and expert evidence.

A. Burden of proof and expert evidence

160. Argentina contends that the 1975 Statute adopts an approach in terms of precaution
whereby “the burden of proof will be placed on Uruguay for it to establish that the Orion (Botnia)
mill will not cause significant damage to the environment”. It also argues that the burden of proof
should not be placed on Argentina alone as the Applicant, because, in its view, the 1975 Statute
imposes an equal onus to persuade . for the one that the plant is innocuous and for the other that it
is harmful.

161. Uruguay, on the other hand, asserts that the burden of proof is on Argentina, as the
Applicant, in accordance with the Court’s long-standing case law, although it considers that, even
if the Argentine position about transferring the burden of proof to Uruguay were correct, it would
make no difference given the manifest weakness of Argentina’s case and the extensive independent
evidence put before the Court by Uruguay. Uruguay also strongly contests Argentina’s argument
that the precautionary approach of the 1975 Statute would imply a reversal of the burden of proof,
in the absence of an explicit treaty provision prescribing it as well as Argentina’s proposition that
the Statute places the burden of proof equally on both Parties.

162. To begin with, the Court considers that, in accordance with the well-established
principle of onus probandi incumbit actori, it is the duty of the party which asserts certain facts to
establish the existence of such facts. This principle which has been consistently upheld by the
Court (Maritime delimitation in the Black Sea (Romania v. Ukraine), Judgment of
3 February 2009, para. 68; Sovereignty over Pedra Branca/Pulau Batu Puteh, Middle Rocks and
South Ledge (Malaysia/ Singapore), Judgment of 23 May 2008, para. 45; Application of the
Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and



Herzegovina v. Serbia and Montenegro), Judgment, I.C.J. Reports 2007, p. 128, para. 204;
Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of
America), Jurisdiction and Admissibility, Judgment, I.C.J. Reports 1984, p. 437, para. 101) applies
to the assertions of fact both by the Applicant and the Respondent.

163. It is of course to be expected that the Applicant should, in the first instance, submit the
relevant evidence to substantiate its claims. This does not, however, mean that the Respondent
should not co-operate in the provision of such evidence as may be in its possession that could assist
the Court in resolving the dispute submitted to it.

164. Regarding the arguments put forward by Argentina on the reversal of the burden of
proof and on the existence, vis-à-vis each Party, of an equal onus to prove under the 1975 Statute,
the Court considers that while a precautionary approach may be relevant in the interpretation and
application of the provisions of the Statute, it does not follow that it operates as a reversal of the
burden of proof. The Court is also of the view that there is nothing in the 1975 Statute itself to
indicate that it places the burden of proof equally on both Parties.

*

165. The Court now turns to the issue of expert evidence. Both Argentina and Uruguay have
placed before the Court a vast amount of factual and scientific material in support of their
respective claims. They have also submitted reports and studies prepared by the experts and
consultants commissioned by each of them, as well as others commissioned by the International
Finance Corporation in its quality as lender to the project. Some of these experts have also
appeared before the Court as counsel for one or the other of the Parties to provide evidence.

166. The Parties, however, disagree on the authority and reliability of the studies and reports
submitted as part of the record and prepared, on the one hand, by their respective experts and
consultants, and on the other, by the experts of the IFC, which contain, in many instances,
conflicting claims and conclusions. In reply to a question put by a judge, Argentina stated that the
weight to be given to such documents should be determined by reference not only to the
“independence” of the author, who must have no personal interest in the outcome of the dispute
and must not be an employee of the Government, but also by reference to the characteristics of the
report itself, in particular the care with which its analysis was conducted, its completeness, the
accuracy of the data used, and the clarity and coherence of the conclusions drawn from such data.
In its reply to the same question, Uruguay suggested that reports prepared by retained experts for
the purposes of the proceedings and submitted as part of the record should not be regarded as
independent and should be treated with caution; while expert statements and evaluations issued by
a competent international organization, such as the IFC, or those issued by the consultants engaged
by that organization should be regarded as independent and given “special weight”.


167. The Court has given most careful attention to the material submitted to it by the Parties,
as will be shown in its consideration of the evidence below with respect to alleged violations of
substantive obligations. Regarding those experts who appeared before it as counsel at the hearings,
the Court would have found it more useful had they been presented by the Parties as expert
witnesses under Articles 57 and 64 of the Rules of Court, instead of being included as counsel in
their respective delegations. The Court indeed considers that those persons who provide evidence
before the Court based on their scientific or technical knowledge and on their personal experience
should testify before the Court as experts, witnesses or in some cases in both capacities, rather than
counsel, so that they may be submitted to questioning by the other party as well as by the Court.

168. As for the independence of such experts, the Court does not find it necessary in order to
adjudicate the present case to enter into a general discussion on the relative merits, reliability and
authority of the documents and studies prepared by the experts and consultants of the Parties. It
needs only to be mindful of the fact that, despite the volume and complexity of the factual
information submitted to it, it is the responsibility of the Court, after having given careful
consideration to all the evidence placed before it by the Parties, to determine which facts must be
considered relevant, to assess their probative value, and to draw conclusions from them as
appropriate. Thus, in keeping with its practice, the Court will make its own determination of the
facts, on the basis of the evidence presented to it, and then it will apply the relevant rules of
international law to those facts which it has found to have existed.

B. Alleged violations of substantive obligations

169. The Court now turns to the examination of the alleged violations by Uruguay of its
substantive obligations under the 1975 Statute by authorizing the construction and operation of the
Orion (Botnia) mill. In particular, Argentina contends that Uruguay has breached its obligations
under Articles 1, 27, 35, 36 and 41 (a) of the 1975 Statute and “other obligations deriving from . . .
general, conventional and customary international law which are necessary for the application of
the 1975 Statute”. Uruguay rejects these allegations. Uruguay considers furthermore that
Article 27 of the 1975 Statute allows the parties to use the waters of the river for domestic, sanitary,
industrial and agricultural purposes.

1. The obligation to contribute to the optimum and rational utilization of the river (Article 1)

170. According to Argentina, Uruguay has breached its obligation to contribute to the
“optimum and rational utilization of the river” by failing to co-ordinate with Argentina on measures
necessary to avoid ecological change, and by failing to take the measures necessary to prevent
pollution. Argentina also maintains that, in interpreting the 1975 Statute (in particular Articles 27,
35, and 36 thereof) according to the principle of equitable and reasonable use, account must be
taken of all pre-existing legitimate uses of the river, including in particular its use for recreational
and tourist purposes.

171. For Uruguay, the object and purpose of the 1975 Statute is to establish a structure for
co-operation between the Parties through CARU in pursuit of the shared goal of equitable and
sustainable use of the water and biological resources of the river. Uruguay contends that it has in
no way breached the principle of equitable and reasonable use of the river and that this principle
provides no basis for favouring pre-existing uses of the river, such as tourism or fishing, over other,
new uses.


172. The Parties also disagree on the scope and implications of Article 27 of the 1975 Statute
on the right of each Party to use the waters of the river, within its jurisdiction, for domestic,
sanitary, industrial and agricultural purposes.

173. The Court observes that Article 1, as stated in the title to Chapter I of the 1975 Statute,
sets out the purpose of the Statute. As such, it informs the interpretation of the substantive
obligations, but does not by itself lay down specific rights and obligations for the parties. Optimum
and rational utilization is to be achieved through compliance with the obligations prescribed by the
1975 Statute for the protection of the environment and the joint management of this shared
resource. This objective must also be ensured through CARU, which constitutes “the joint
machinery” necessary for its achievement, and through the regulations adopted by it as well as the
regulations and measures adopted by the Parties.

174. The Court recalls that the Parties concluded the treaty embodying the 1975 Statute, in
implementation of Article 7 of the 1961 Treaty, requiring the Parties jointly to establish a régime
for the use of the river covering, inter alia, provisions for preventing pollution and protecting and
preserving the aquatic environment. Thus, optimum and rational utilization may be viewed as the
cornerstone of the system of co-operation established in the 1975 Statute and the joint machinery
set up to implement this co-operation.

175. The Court considers that the attainment of optimum and rational utilization requires a
balance between the Parties’ rights and needs to use the river for economic and commercial
activities on the one hand, and the obligation to protect it from any damage to the environment that
may be caused by such activities, on the other. The need for this balance is reflected in various
provisions of the 1975 Statute establishing rights and obligations for the Parties, such as
Articles 27, 36, and 41. The Court will therefore assess the conduct of Uruguay in authorizing the
construction and operation of the Orion (Botnia) mill in the light of those provisions of the
1975 Statute, and the rights and obligations prescribed therein.

176. The Court has already addressed in paragraphs 84 to 93 above the role of CARU with
respect to the procedural obligations laid down in the 1975 Statute. In addition to its role in that
context, the functions of CARU relate to almost all aspects of the implementation of the substantive
provisions of the 1975 Statute. Of particular relevance in the present case are its functions relating
to rule-making in respect of conservation and preservation of living resources, the prevention of
pollution and its monitoring, and the co-ordination of actions of the Parties. These functions will
be examined by the Court in its analysis of the positions of the Parties with respect to the
interpretation and application of Articles 36 and 41 of the 1975 Statute.

177. Regarding Article 27, it is the view of the Court that its formulation reflects not only the
need to reconcile the varied interests of riparian States in a transboundary context and in particular
in the use of a shared natural resource, but also the need to strike a balance between the use of the
waters and the protection of the river consistent with the objective of sustainable development. The
Court has already dealt with the obligations arising from Articles 7 to 12 of the 1975 Statute which



have to be observed, according to Article 27, by any Party wishing to exercise its right to use the
waters of the river for any of the purposes mentioned therein insofar as such use may be liable to
affect the régime of the river or the quality of its waters. The Court wishes to add that such
utilization could not be considered to be equitable and reasonable if the interests of the other
riparian State in the shared resource and the environmental protection of the latter were not taken
into account. Consequently, it is the opinion of the Court that Article 27 embodies this
interconnectedness between equitable and reasonable utilization of a shared resource and the
balance between economic development and environmental protection that is the essence of
sustainable development.

2. The obligation to ensure that the management of the soil and woodland does not impair the
régime of the river or the quality of its waters (Article 35)

178. Article 35 of the 1975 Statute provides that the parties:

“undertake to adopt the necessary measures to ensure that the management of the soil
and woodland and the use of groundwater and the waters of the tributaries of the river
do not cause changes which may significantly impair the régime of the river or the
quality of its waters”.

179. Argentina contends that Uruguay’s decision to carry out major eucalyptus planting
operations to supply the raw material for the Orion (Botnia) mill has an impact on management of
the soil and Uruguayan woodland, but also on the quality of the waters of the river. For its part,
Uruguay states that Argentina does not make any arguments that are based on Uruguay’s
management of soil or woodland . “nor has it made any allegations concerning the waters of
tributaries”.

180. The Court observes that Argentina has not provided any evidence to support its
contention. Moreover, Article 35 concerns the management of the soil and woodland as well as the
use of groundwater and the water of tributaries, and there is nothing to suggest, in the evidentiary
material submitted by Argentina, a direct relationship between Uruguay’s management of the soil
and woodland, or its use of ground water and water of tributaries and the alleged changes in the
quality of the waters of the River Uruguay which had been attributed by Argentina to the Orion
(Botnia) mill. Indeed, while Argentina made lengthy arguments about the effects of the pulp mill
discharges on the quality of the waters of the river, no similar arguments have been presented to the
Court regarding a deleterious relationship between the quality of the waters of the river and the
eucalyptus-planting operations by Uruguay. The Court concludes that Argentina has not
established its contention on this matter.

3. The obligation to co-ordinate measures to avoid changes in the ecological balance
(Article 36)

181. Argentina contends that Uruguay has breached Article 36 of the 1975 Statute, which
places the Parties under an obligation to co-ordinate through CARU the necessary measures to
avoid changing the ecological balance of the river. Argentina asserts that the discharges from the
Orion (Botnia) mill altered the ecological balance of the river, and cites as examples the
4 February 2009 algal bloom, which, according to it, provides graphic evidence of a change in the
ecological balance, as well as the discharge of toxins, which gave rise, in its view, to the
malformed rotifers whose pictures were shown to the Court.


182. Uruguay considers that any assessment of the Parties’ conduct in relation to Article 36
of the 1975 Statute must take account of the rules adopted by CARU, because this Article, creating
an obligation of co-operation, refers to such rules and does not by itself prohibit any specific
conduct. Uruguay takes the position that the mill fully meets CARU requirements concerning the
ecological balance of the river, and concludes that it has not acted in breach of Article 36 of the
1975 Statute.

183. It is recalled that Article 36 provides that “[t]he parties shall co-ordinate, through the
Commission, the necessary measures to avoid any change in the ecological balance and to control
pests and other harmful factors in the river and the areas affected by it”.

184. It is the opinion of the Court that compliance with this obligation cannot be expected to
come through the individual action of either Party, acting on its own. Its implementation requires
co-ordination through the Commission. It reflects the common interest dimension of the
1975 Statute and expresses one of the purposes for the establishment of the joint machinery which
is to co-ordinate the actions and measures taken by the Parties for the sustainable management and
environmental protection of the river. The Parties have indeed adopted such measures through the
promulgation of standards by CARU. These standards are to be found in Sections E3 and E4 of the
CARU Digest. One of the purposes of Section E3 is “[t]o protect and preserve the water and its
ecological balance”. Similarly, it is stated in Section E4 that the section was developed “in
accordance with . . . Articles 36, 37, 38, and 39”.

185. In the view of the Court, the purpose of Article 36 of the 1975 Statute is to prevent any
transboundary pollution liable to change the ecological balance of the river by co-ordinating,
through CARU, the adoption of the necessary measures. It thus imposes an obligation on both
States to take positive steps to avoid changes in the ecological balance. These steps consist not
only in the adoption of a regulatory framework, as has been done by the Parties through CARU, but
also in the observance as well as enforcement by both Parties of the measures adopted. As the
Court emphasized in the Gabcíkovo-Nagymaros case:

“in the field of environmental protection, vigilance and prevention are required on
account of the often irreversible character of damage to the environment and of the
limitations inherent in the very mechanism of reparation of this type of damage”
(Gabcíkovo-Nagymaros Project (Hungary/Slovakia), Judgment, I.C.J. Reports 1997,
p. 78, para. 140).

186. The Parties also disagree with respect to the nature of the obligation laid down in
Article 36, and in particular whether it is an obligation of conduct or of result. Argentina submits
that, on a plain meaning, both Articles 36 and 41 of the 1975 Statute establish an obligation of
result.

187. The Court considers that the obligation laid down in Article 36 is addressed to both
Parties and prescribes the specific conduct of co-ordinating the necessary measures through the
Commission to avoid changes to the ecological balance. An obligation to adopt regulatory or



administrative measures either individually or jointly and to enforce them is an obligation of
conduct. Both Parties are therefore called upon, under Article 36, to exercise due diligence in
acting through the Commission for the necessary measures to preserve the ecological balance of the
river.

188. This vigilance and prevention is all the more important in the preservation of the
ecological balance, since the negative impact of human activities on the waters of the river may
affect other components of the ecosystem of the watercourse such as its flora, fauna, and soil. The
obligation to co-ordinate, through the Commission, the adoption of the necessary measures, as well
as their enforcement and observance, assumes, in this context, a central role in the overall system
of protection of the River Uruguay established by the 1975 Statute. It is therefore of crucial
importance that the Parties respect this obligation.

189. In light of the above, the Court is of the view that Argentina has not convincingly
demonstrated that Uruguay has refused to engage in such co-ordination as envisaged by Article 36,
in breach of that provision.

4. The obligation to prevent pollution and preserve the aquatic environment (Article 41)

190. Article 41 provides that:

“Without prejudice to the functions assigned to the Commission in this respect,
the parties undertake:

(a) to protect and preserve the aquatic environment and, in particular, to prevent its
pollution, by prescribing appropriate rules and [adopting appropriate] measures in
accordance with applicable international agreements and in keeping, where
relevant, with the guidelines and recommendations of international technical
bodies;

(b) not to reduce in their respective legal systems:

1. the technical requirements in force for preventing water pollution, and

2. the severity of the penalties established for violations;

(c) to inform one another of any rules which they plan to prescribe with regard to
water pollution in order to establish equivalent rules in their respective legal
systems.”

191. Argentina claims that by allowing the discharge of additional nutrients into a river that
is eutrophic and suffers from reverse flow and stagnation, Uruguay violated the obligation to
prevent pollution, as it failed to prescribe appropriate measures in relation to the Orion (Botnia)
mill, and failed to meet applicable international environmental agreements, including the
Biodiversity Convention and the Ramsar Convention. It maintains that the 1975 Statute prohibits
any pollution which is prejudicial to the protection and preservation of the aquatic environment or



which alters the ecological balance of the river. Argentina further argues that the obligation to
prevent pollution of the river is an obligation of result and extends not only to protecting the
aquatic environment proper, but also to any reasonable and legitimate use of the river, including
tourism and other recreational uses.

192. Uruguay contends that the obligation laid down in Article 41 (a) of the 1975 Statute to
“prevent . . . pollution” does not involve a prohibition on all discharges into the river. It is only
those that exceed the standards jointly agreed by the Parties within CARU in accordance with their
international obligations, and that therefore have harmful effects, which can be characterized as
“pollution” under Article 40 of the 1975 Statute. Uruguay also maintains that Article 41 creates an
obligation of conduct, and not of result, but that it actually matters little since Uruguay has
complied with its duty to prevent pollution by requiring the plant to meet best available technology
(“BAT”) standards.

193. Before turning to the analysis of Article 41, the Court recalls that:

“The existence of the general obligation of States to ensure that activities within
their jurisdiction and control respect the environment of other States or of areas
beyond national control is now part of the corpus of international law relating to the
environment.” (Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion,
I.C.J. Reports 1996 (I), pp. 241-242, para. 29.)

194. The Court moreover had occasion to stress, in the Gabcíkovo-Nagymaros Project case,
that “the Parties together should look afresh at the effects on the environment of the operation of
the Gabcíkovo power plant” (Gabcíkovo-Nagymaros Project (Hungary/Slovakia), Judgment, I.C.J.
Reports 1997, p. 78, para. 140). The Court is mindful of these statements in taking up now the
examination of Article 41 of the 1975 Statute.

195. In view of the central role of this provision in the dispute between the Parties in the
present case and their profound differences as to its interpretation and application, the Court will
make a few remarks of a general character on the normative content of Article 41 before addressing
the specific arguments of the Parties. First, in the view of the Court, Article 41 makes a clear
distinction between regulatory functions entrusted to CARU under the 1975 Statute, which are
dealt with in Article 56 of the Statute, and the obligation it imposes on the Parties to adopt rules
and measures individually to “protect and preserve the aquatic environment and, in particular, to
prevent its pollution”. Thus, the obligation assumed by the Parties under Article 41, which is
distinct from those under Articles 36 and 56 of the 1975 Statute, is to adopt appropriate rules and
measures within the framework of their respective domestic legal systems to protect and preserve
the aquatic environment and to prevent pollution. This conclusion is supported by the wording of
paragraphs (b) and (c) of Article 41, which refer to the need not to reduce the technical
requirements and severity of the penalties already in force in the respective legislation of the
Parties as well as the need to inform each other of the rules to be promulgated so as to establish
equivalent rules in their legal systems.


196. Secondly, it is the opinion of the Court that a simple reading of the text of Article 41
indicates that it is the rules and measures that are to be prescribed by the Parties in their respective
legal systems which must be “in accordance with applicable international agreements” and “in
keeping, where relevant, with the guidelines and recommendations of international technical
bodies”.

197. Thirdly, the obligation to “preserve the aquatic environment, and in particular to
prevent pollution by prescribing appropriate rules and measures” is an obligation to act with due
diligence in respect of all activities which take place under the jurisdiction and control of each
party. It is an obligation which entails not only the adoption of appropriate rules and measures, but
also a certain level of vigilance in their enforcement and the exercise of administrative control
applicable to public and private operators, such as the monitoring of activities undertaken by such
operators, to safeguard the rights of the other party. The responsibility of a party to the
1975 Statute would therefore be engaged if it was shown that it had failed to act diligently and thus
take all appropriate measures to enforce its relevant regulations on a public or private operator
under its jurisdiction. The obligation of due diligence under Article 41 (a) in the adoption and
enforcement of appropriate rules and measures is further reinforced by the requirement that such
rules and measures must be “in accordance with applicable international agreements” and “in
keeping, where relevant, with the guidelines and recommendations of international technical
bodies”. This requirement has the advantage of ensuring that the rules and measures adopted by
the parties both have to conform to applicable international agreements and to take account of
internationally agreed technical standards.

198. Finally, the scope of the obligation to prevent pollution must be determined in light of
the definition of pollution given in Article 40 of the 1975 Statute. Article 40 provides that: “For
the purposes of this Statute, pollution shall mean the direct or indirect introduction by man into the
aquatic environment of substances or energy which have harmful effects.” The term “harmful
effects” is defined in the CARU Digest as:

“any alteration of the water quality that prevents or hinders any legitimate use of the
water, that causes deleterious effects or harm to living resources, risks to human
health, or a threat to water activities including fishing or reduction of recreational
activities” (Title I, Chapter I, Section. 2, Article 1 (c) of the Digest (E3)).

199. The Digest expresses the will of the Parties and their interpretation of the provisions of
the 1975 Statute. Article 41, not unlike many other provisions of the 1975 Statute, lays down broad
obligations agreed to by the Parties to regulate and limit their use of the river and to protect its
environment. These broad obligations are given more specific content through the co-ordinated
rule-making action of CARU as established under Article 56 of the 1975 Statute or through the
regulatory action of each of the parties, or by both means. The two regulatory actions are meant to
complement each other. As discussed below (see paragraphs 201 to 202, and 214), CARU
standards concern mainly water quality. The CARU Digest sets only general limits on certain



discharges or effluents from industrial plants such as: “hydrocarbons”, “sedimentable solids”, and
“oils and greases”. As the Digest makes explicit, those matters are left to each party to regulate.
The Digest provides that, as regards effluents within its jurisdiction, each party shall take the
appropriate “corrective measures” in order to assure compliance with water quality standards
(CARU Digest, Sec. E3: Pollution, Title 2, Chap. 5, Sec. 1, Art. 3). Uruguay has taken that action
in its Regulation on Water Quality (Decree No. 253/79) and in relation to the Orion (Botnia) mill in
the conditions stipulated in the authorization issued by MVOTMA. In Argentina, the Entre Ríos
Province, which borders the river opposite the plant, has regulated industrial discharges in a decree
that also recognizes the binding effect of the CARU Digest (Regulatory Decree No. 5837,
Government of Entre Ríos, 26 December 1991, and Regulatory Decree No. 5394, Government of
Entre Ríos, 7 April 1997).

200. The Court considers it appropriate to now address the question of the rules by which
any allegations of breach are to be measured and, more specifically, by which the existence of
“harmful effects” is to be determined. It is the view of the Court that these rules are to be found in
the 1975 Statute, in the co-ordinated position of the Parties established through CARU (as the
introductory phrases to Article 41 and Article 56 of the Statute contemplate) and in the regulations
adopted by each Party within the limits prescribed by the 1975 Statute (as paragraphs (a), (b) and
(c) of Article 41 contemplate).

201. The functions of CARU under Article 56 (a) include making rules governing the
prevention of pollution and the conservation and preservation of living resources. In the exercise
of its rule-making power, the Commission adopted in 1984 the Digest on the uses of the waters of
the River Uruguay and has amended it since. In 1990, when Section E3 of the Digest was adopted,
the Parties recognized that it was drawn up under Article 7 (f) of the 1961 Treaty and Articles 35,
36, 41 to 45 and 56 (a) (4) of the 1975 Statute. As stated in the Digest, the “basic purposes” of
Section E3 of the Digest are to be as follows:

“(a) to protect and preserve the water and its ecological balance;

(b) to ensure any legitimate use of the water considering long term needs and
particularly human consumption needs;

(c) to prevent all new forms of pollution and to achieve its reduction in case the
standard values adopted for the different legitimate uses of the River’s water are
exceeded;

(d) to promote scientific research on pollution.” (Title I, Chap. 2, Sec. 1, Art. 1.)

202. The standards laid down in the Digest are not, however, exhaustive. As pointed out
earlier, they are to be complemented by the rules and measures to be adopted by each of the Parties
within their domestic laws.

The Court will apply, in addition to the 1975 Statute, these two sets of rules to determine
whether the obligations undertaken by the Parties have been breached in terms of the discharge of
effluent by the mill as well as in respect of the impact of those discharges on the quality of the
waters of the river, on its ecological balance and on its biodiversity.


(a) Environmental Impact Assessment

203. The Court will now turn to the relationship between the need for an environmental
impact assessment, where the planned activity is liable to cause harm to a shared resource and
transboundary harm, and the obligations of the Parties under Article 41 (a) and (b) of the
1975 Statute. The Parties agree on the necessity of conducting an environmental impact
assessment. Argentina maintains that the obligations under the 1975 Statute viewed together
impose an obligation to conduct an environmental impact assessment prior to authorizing Botnia to
construct the plant. Uruguay also accepts that it is under such an obligation. The Parties disagree,
however, with regard to the scope and content of the environmental impact assessment that
Uruguay should have carried out with respect to the Orion (Botnia) mill project. Argentina
maintains in the first place that Uruguay failed to ensure that “full environmental assessments [had
been] produced, prior to its decision to authorize the construction . . .”; and in the second place that
“Uruguay’s decisions [were] . . . based on unsatisfactory environmental assessments”, in particular
because Uruguay failed to take account of all potential impacts from the mill, even though
international law and practice require it, and refers in this context to the 1991 Convention on
Environmental Impact Assessment in a Transboundary Context of the United Nations Economic
Commission for Europe (hereinafter the “Espoo Convention”) (UNTS, Vol. 1989, p. 309), and the
1987 Goals and Principles of Environmental Impact Assessment of the United Nations
Environment Programme (hereinafter the “UNEP Goals and Principles”) (UNEP/WG.152/4 Annex
(1987), document adopted by UNEP Governing Council at its 14th Session (Dec. 14/25 (1987)).
Uruguay accepts that, in accordance with international practice, an environmental impact
assessment of the Orion (Botnia) mill was necessary, but argues that international law does not
impose any conditions upon the content of such an assessment, the preparation of which being a
national, not international, procedure, at least where the project in question is not one common to
several States. According to Uruguay, the only requirements international law imposes on it are
that there must be assessments of the project’s potential harmful transboundary effects on people,
property and the environment of other States, as required by State practice and the International
Law Commission 2001 draft Articles on Prevention of Transboundary Harm from Hazardous
Activities, without there being any need to assess remote or purely speculative risks.

204. It is the opinion of the Court that in order for the Parties properly to comply with their
obligations under Article 41 (a) and (b) of the 1975 Statute, they must, for the purposes of
protecting and preserving the aquatic environment with respect to activities which may be liable to
cause transboundary harm, carry out an environmental impact assessment. As the Court has
observed in the case concerning the Dispute Regarding Navigational and Related Rights,

“there are situations in which the parties’ intent upon conclusion of the treaty was, or
may be presumed to have been, to give the terms used . or some of them . a
meaning or content capable of evolving, not one fixed once and for all, so as to make
allowance for, among other things, developments in international law” (Dispute
Regarding Navigational and Related Rights (Costa Rica v. Nicaragua), Judgment of
13 July 2009, para. 64).

In this sense, the obligation to protect and preserve, under Article 41 (a) of the Statute, has to be
interpreted in accordance with a practice, which in recent years has gained so much acceptance
among States that it may now be considered a requirement under general international law to



undertake an environmental impact assessment where there is a risk that the proposed industrial
activity may have a significant adverse impact in a transboundary context, in particular, on a shared
resource. Moreover, due diligence, and the duty of vigilance and prevention which it implies,
would not be considered to have been exercised, if a party planning works liable to affect the
régime of the river or the quality of its waters did not undertake an environmental impact
assessment on the potential effects of such works.

205. The Court observes that neither the 1975 Statute nor general international law specify
the scope and content of an environmental impact assessment. It points out moreover that
Argentina and Uruguay are not parties to the Espoo Convention. Finally, the Court notes that the
other instrument to which Argentina refers in support of its arguments, namely, the UNEP Goals
and Principles, is not binding on the Parties, but, as guidelines issued by an international technical
body, has to be taken into account by each Party in accordance with Article 41 (a) in adopting
measures within its domestic regulatory framework. Moreover, this instrument provides only that
the “environmental effects in an EIA should be assessed with a degree of detail commensurate with
their likely environmental significance” (Principle 5) without giving any indication of minimum
core components of the assessment. Consequently, it is the view of the Court that it is for each
State to determine in its domestic legislation or in the authorization process for the project, the
specific content of the environmental impact assessment required in each case, having regard to the
nature and magnitude of the proposed development and its likely adverse impact on the
environment as well as to the need to exercise due diligence in conducting such an assessment.
The Court also considers that an environmental impact assessment must be conducted prior to the
implementation of a project. Moreover, once operations have started and, where necessary,
throughout the life of the project, continuous monitoring of its effects on the environment shall be
undertaken.

206. The Court has already considered the role of the environmental impact assessment in
the context of the procedural obligations of the Parties under the 1975 Statute (paragraphs 119 and
120). It will now deal with the specific points in dispute with regard to the role of this type of
assessment in the fulfilment of the substantive obligations of the Parties, that is to say, first,
whether such an assessment should have, as a matter of method, necessarily considered possible
alternative sites, taking into account the receiving capacity of the river in the area where the plant
was to be built and, secondly, whether the populations likely to be affected, in this case both the
Uruguayan and Argentine riparian populations, should have, or have in fact, been consulted in the
context of the environmental impact assessment.

(i) The siting of the Orion (Botnia) mill at Fray Bentos

207. According to Argentina, one reason why Uruguay’s environmental impact assessment is
inadequate is that it contains no analysis of alternatives for the choice of the mill site, whereas the
study of alternative sites is required under international law (UNEP Goals and Principles, Espoo
Convention, IFC Operational Policy 4.01). Argentina contends that the chosen site is particularly
sensitive from an ecological point of view and unconducive to the dispersion of pollutants
“[b]ecause of the nature of the waters which will receive the pollution, the propensity of the site to
sedimentation and eutrophication, the phenomenon of reverse flow and the proximity of the largest
settlement on the River Uruguay”.


208. Uruguay counters that the Fray Bentos site was initially chosen because of the
particularly large volume of water in the river at that location, which would serve to promote
effluent dilution. Uruguay adds that the site is moreover easily accessible for river navigation,
which facilitates delivery of raw materials, and local manpower is available there. Uruguay
considers that, if there is an obligation to consider alternative sites, the instruments invoked for that
purpose by Argentina do not require alternative locations to be considered as part of an
environmental impact assessment unless it is necessary in the circumstances to do so. Finally,
Uruguay affirms that in any case it did so and that the suitability of the Orion (Botnia) site was
comprehensively assessed.

209. The Court will now consider, first, whether Uruguay failed to exercise due diligence in
conducting the environmental impact assessment, particularly with respect to the choice of the
location of the plant and, secondly, whether the particular location chosen for the siting of the
plant, in this case Fray Bentos, was unsuitable for the construction of a plant discharging industrial
effluent of this nature and on this scale, or could have a harmful impact on the river.

210. Regarding the first point, the Court has already indicated that the Espoo Convention is
not applicable to the present case (see paragraph 205 above); while with respect to the UNEP
Goals and Principles to which Argentina has referred, whose legal character has been described in
paragraph 205 above, the Court recalls that Principle 4 (c) simply provides that an environmental
impact assessment should include, at a minimum, “[a] description of practical alternatives, as
appropriate”. It is also to be recalled that Uruguay has repeatedly indicated that the suitability of
the Fray Bentos location was comprehensively assessed and that other possible sites were
considered. The Court further notes that the IFC’s Final Cumulative Impact Study of
September 2006 (hereinafter “CIS”) shows that in 2003 Botnia evaluated four locations in total at
La Paloma, at Paso de los Toros, at Nueva Palmira, and at Fray Bentos, before choosing Fray
Bentos. The evaluations concluded that the limited amount of fresh water in La Paloma and its
importance as a habitat for birds rendered it unsuitable, while for Nueva Palmira its consideration
was discouraged by its proximity to residential, recreational, and culturally important areas, and
with respect to Paso de los Toros insufficient flow of water during the dry season and potential
conflict with competing water uses, as well as a lack of infrastructure, led to its exclusion.
Consequently, the Court is not convinced by Argentina’s argument that an assessment of possible
sites was not carried out prior to the determination of the final site.

211. Regarding the second point, the Court cannot fail to note that any decision on the actual
location of such a plant along the River Uruguay should take into account the capacity of the
waters of the river to receive, dilute and disperse discharges of effluent from a plant of this nature
and scale.

212. The Court notes, with regard to the receiving capacity of the river at the location of the
mill, that the Parties disagree on the geomorphological and hydrodynamic characteristics of the
river in the relevant area, particularly as they relate to river flow, and how the flow of the river,
including its direction and its velocity, in turn determines the dispersal and dilution of pollutants.
The differing views put forward by the Parties with regard to the river flow may be due to the



different modelling systems which each has employed to analyse the hydrodynamic features of the
River Uruguay at the Fray Bentos location. Argentina implemented a three-dimensional modelling
that measured speed and direction at ten different depths of the river and used a sonar . an
Acoustic Doppler Current Profiler (hereafter “ADCP”) . to record water flow velocities for a
range of depths for about a year. The three-dimensional system generated a large number of data
later introduced in a numerical hydrodynamic model. On the other hand, Botnia based its
environmental impact assessment on a bi-dimensional modelling . the RMA2. The EcoMetrix
CIS implemented both three-dimensional and bi-dimensional models. However, it is not
mentioned whether an ADCP sonar was used at different depths.

213. The Court sees no need to go into a detailed examination of the scientific and technical
validity of the different kinds of modelling, calibration and validation undertaken by the Parties to
characterize the rate and direction of flow of the waters of the river in the relevant area. The Court
notes however that both Parties agree that reverse flows occur frequently and that phenomena of
low flow and stagnation may be observed in the concerned area, but that they disagree on the
implications of this for the discharges from the Orion (Botnia) mill into this area of the river.

214. The Court considers that in establishing its water quality standards in accordance with
Articles 36 and 56 of the 1975 Statute, CARU must have taken into account the receiving capacity
and sensitivity of the waters of the river, including in the areas of the river adjacent to Fray Bentos.
Consequently, in so far as it is not established that the discharges of effluent of the Orion (Botnia)
mill have exceeded the limits set by those standards, in terms of the level of concentrations, the
Court finds itself unable to conclude that Uruguay has violated its obligations under the
1975 Statute. Moreover, neither of the Parties has argued before the Court that the water quality
standards established by CARU have not adequately taken into consideration the geomorphological
and hydrological characteristics of the river and the capacity of its waters to disperse and dilute
different types of discharges. The Court is of the opinion that, should such inadequacy be detected,
particularly with respect to certain areas of the river such as at Fray Bentos, the Parties should
initiate a review of the water quality standards set by CARU and ensure that such standards clearly
reflect the characteristics of the river and are capable of protecting its waters and its ecosystem.

(ii) Consultation of the affected populations

215. The Parties disagree on the extent to which the populations likely to be affected by the
construction of the Orion (Botnia) mill, particularly on the Argentine side of the river, were
consulted in the course of the environmental impact assessment. While both Parties agree that
consultation of the affected populations should form part of an environmental impact assessment,
Argentina asserts that international law imposes specific obligations on States in this regard. In
support of this argument, Argentina points to Articles 2.6 and 3.8 of the Espoo Convention,
Article 13 of the 2001 International Law Commission draft Articles on Prevention of
Transboundary Harm from Hazardous Activities, and Principles 7 and 8 of the UNEP Goals and
Principles. Uruguay considers that the provisions invoked by Argentina cannot serve as a legal
basis for an obligation to consult the affected populations and adds that in any event the affected
populations had indeed been consulted.


216. The Court is of the view that no legal obligation to consult the affected populations
arises for the Parties from the instruments invoked by Argentina.

217. Regarding the facts, the Court notes that both before and after the granting of the initial
environmental authorization, Uruguay did undertake activities aimed at consulting the affected
populations, both on the Argentine and the Uruguayan sides of the river. These activities included
meetings on 2 December 2003 in Río Negro, and on 26 May 2004 in Fray Bentos, with
participation of Argentine non-governmental organizations. In addition, on 21 December 2004, a
public hearing was convened in Fray Bentos which, according to Uruguay, addressed among other
subjects, the

“handling of chemical products in the plant and in the port; the appearance of acid
rain, dioxins, furans and other polychlorates of high toxicity that could affect the
environment; compliance with the Stockholm Convention; atmospheric emissions of
the plant; electromagnetic and electrostatic emissions; [and] liquid discharges into
the river”.



Inhabitants of Fray Bentos and nearby regions of Uruguay and Argentina participated in the
meeting and submitted 138 documents containing questions or concerns.

218. Further, the Court notes that between June and November 2005 more than 80 interviews
were conducted by the Consensus Building Institute, a non-profit organization specializing in
facilitated dialogues, mediation, and negotiation, contracted by the IFC. Such interviews were
conducted inter alia in Fray Bentos, Gualeguaychú, Montevideo, and Buenos Aires, with
interviewees including civil society groups, non-governmental organizations, business associations,
public officials, tourism operators, local business owners, fishermen, farmers and plantation owners
on both sides of the river. In December 2005, the draft CIS and the report prepared by the
Consensus Building Institute were released, and the IFC opened a period of consultation to receive
additional feedback from stakeholders in Argentina and Uruguay.

219. In the light of the above, the Court finds that consultation by Uruguay of the affected
populations did indeed take place.

(b) Question of the production technology used in the Orion (Botnia) mill

220. Argentina maintains that Uruguay has failed to take all measures to prevent pollution by
not requiring the mill to employ the “best available techniques”, even though this is required under
Article 5 (d) of the POPs Convention, the provisions of which are incorporated by virtue of the
“referral clause” in Article 41 (a) of the 1975 Statute. According to Argentina, the experts’ reports
it cites establish that the mill does not use best available techniques and that its performance is not
up to international standards, in the light of the various techniques available for producing pulp.
Uruguay contests these claims. Relying on the CIS, the second Hatfield report and the audit
conducted by AMEC at the IFC’s request, Uruguay asserts that the Orion (Botnia) mill is, by virtue
of the technology employed there, one of the best pulp mills in the world, applying best available
techniques and complying with European Union standards, among others, in the area.


221. Argentina, however, specifically criticizes the absence of any “tertiary treatment of
effluent” (i.e., a third round of processing production waste before discharge into the natural
environment), which is necessary to reduce the quantity of nutrients, including phosphorus, since
the effluent is discharged into a highly sensitive environment. The mill also lacks, according to
Argentina, an empty emergency basin, designed to contain effluent spills. Answering a question
asked by a judge, Argentina considers that a tertiary treatment would be possible, but that Uruguay
failed to conduct an adequate assessment of tertiary treatment options for the Orion (Botnia) mill.

222. Uruguay observes that “the experts did not consider it necessary to equip the mill with a
tertiary treatment phase”. Answering the same question, Uruguay argued that, though feasible, the
addition of a tertiary treatment facility would not be environmentally advantageous overall, as it
would significantly increase the energy consumption of the plant, its carbon emissions, together
with sludge generation and chemical use. Uruguay has consistently maintained that the bleaching
technology used is acceptable, that the emergency basins in place are adequate, that the mill’s
production of synthetic chemical compounds meets technological requirements and that the
potential risk from this production was indeed assessed.

223. To begin with, the Court observes that the obligation to prevent pollution and protect
and preserve the aquatic environment of the River Uruguay, laid down in Article 41 (a), and the
exercise of due diligence implied in it, entail a careful consideration of the technology to be used
by the industrial plant to be established, particularly in a sector such as pulp manufacturing, which
often involves the use or production of substances which have an impact on the environment. This
is all the more important in view of the fact that Article 41 (a) provides that the regulatory
framework to be adopted by the Parties has to be in keeping with the guidelines and
recommendations of international technical bodies.

224. The Court notes that the Orion (Botnia) mill uses the bleached Kraft pulping process.
According to the December 2001 Integrated Pollution Prevention and Control Reference Document
on Best Available Techniques in the Pulp and Paper Industry of the European Commission
(hereinafter “IPPC-BAT”), which the Parties referred to as the industry standard in this sector, the
Kraft process already accounted at that time for about 80 per cent of world’s pulp production and is
therefore the most applied production method of chemical pulping processes. The plant employs
an ECF-light (Elemental-chlorine-free) bleaching process and a primary and secondary wastewater
treatment involving activated sludge treatment.

225. The Court finds that, from the point of view of the technology employed, and based on
the documents submitted to it by the Parties, particularly the IPPC-BAT, there is no evidence to
support the claim of Argentina that the Orion (Botnia) mill is not BAT-compliant in terms of the
discharges of effluent for each tonne of pulp produced. This finding is supported by the fact that,
as shown below, no clear evidence has been presented by Argentina establishing that the Orion
(Botnia) mill is not in compliance with the 1975 Statute, the CARU Digest and applicable
regulations of the Parties in terms of the concentration of effluents per litre of wastewater
discharged from the plant and the absolute amount of effluents that can be discharged in a day.


226. The Court recalls that Uruguay has submitted extensive data regarding the monitoring
of effluent from the Orion (Botnia) mill, as contained in the various reports by EcoMetrix and
DINAMA (EcoMetrix, Independent Performance Monitoring as required by the IFC Phase 2:
Six Month Environmental Performance Review (July 2008); EcoMetrix, Independent Performance
Monitoring as required by the IFC, Phase 3: Environmental Performance Review
(2008 Monitoring Year) (hereinafter “EcoMetrix Third Monitoring Report”); DINAMA,
Performance Report for the First Year of Operation of the Botnia Plant and the Environmental
Quality of the Area of Influence, May 2009; DINAMA, Six Month Report on the Botnia Emission
Control and Environmental Performance Plan), and that Argentina expressed the view, in this
regard, that Uruguay had on this matter, much greater, if not exclusive, access to the factual
evidence. However, the Court notes that Argentina has itself generated much factual information
and that the materials which Uruguay produced have been available to Argentina at various stages
of the proceedings or have been available in the public domain. Therefore the Court does not
consider that Argentina has been at a disadvantage with regard to the production of evidence
relating to the discharges of effluent of the mill.

227. To determine whether the concentrations of pollutants discharged by the Orion (Botnia)
mill are within the regulatory limits, the Court will have to assess them against the effluent
discharge limits . both in terms of the concentration of effluents in each litre of wastewater
discharged and the absolute amount of effluents that can be discharged in a day . prescribed by
the applicable regulatory standards of the Parties, as characterized by the Court in paragraph 200
above, and the permits issued for the plant by the Uruguayan authorities, since the Digest only sets
general limits on “hydrocarbons”, “sedimentable solids”, and “oils and greases”, but does not
establish specific ones for the substances in contention between the Parties. Argentina did not
allege any non-compliance of the Orion (Botnia) mill with CARU’s effluent standards (CARU
Digest, Sec. E3 (1984, as amended)).

228. Taking into account the data collected after the start-up of the mill as contained in the
various reports by DINAMA and EcoMetrix, it does not appear that the discharges from the Orion
(Botnia) mill have exceeded the limits set by the effluent standards prescribed by the relevant
Uruguayan regulation as characterized by the Court in paragraph 200 above, or the initial
environmental authorization issued by MVOTMA (MVOTMA, Initial Environmental
Authorization for the Botnia Plant (14 February 2005)), except for a few instances in which the
concentrations have exceeded the limits. The only parameters for which a recorded measurement
exceeded the standards set by Decree No. 253/79 or the initial environmental authorization by
MVOTMA are: nitrogen, nitrates, and AOX (Adsorbable Organic Halogens). In those cases,
measurements taken on one day exceeded the threshold. However, the initial environmental
authorization of 14 February 2005 specifically allows yearly averaging for the parameters. The
most notable of these cases in which the limits were exceeded is the one relating to AOX, which is
the parameter used internationally to monitor pulp mill effluent, sometimes including persistent
organic pollutants (POPs). According to the IPPC-BAT reference document submitted by the



Parties, and considered by them as the industry standard in this sector, “the environmental control
authorities in many countries have set severe restrictions on the discharges of chlorinated organics
measured as AOX into the aquatic environment”. Concentrations of AOX reached at one point on
9 January 2008, after the mill began operations, as high a level as 13 mg/L, whereas the maximum
limit used in the environmental impact assessment and subsequently prescribed by MVOTMA was
6 mg/L. However, in the absence of convincing evidence that this is not an isolated episode but
rather a more enduring problem, the Court is not in a position to conclude that Uruguay has
breached the provisions of the 1975 Statute.

(c) Impact of the discharges on the quality of the waters of the river

229. As pointed out earlier (see paragraph 165), the Parties have over the last three years
presented to the Court a vast amount of factual and scientific material containing data and analysis
of the baseline levels of contaminants already present in the river prior to the commissioning of the
plant and the results of measurements of its water and air emissions after the plant started its
production activities and, in some cases, until mid-2009.

230. Regarding the baseline data, the studies and reports submitted by the Parties contained
data and analysis relating, inter alia, to water quality, air quality, phytoplankton and zooplankton of
the river, health indicators and biomarkers of pollution in fish from the river, monitoring of
fish fauna in the area around the Orion (Botnia) mill, fish community and species diversity in the
river, concentrations of resin acids, chlorinated phenols and plant sterols in fish from the river,
survey of species belonging to the genus Tillandsia, the Orion (Botnia) mill pre-start-up audit, and
analysis of mercury and lead in fish muscle.

231. Argentina contends that Uruguay’s baseline data were both inadequate and incomplete
in many aspects. Uruguay rejects this allegation, and argues that Argentina has actually relied on
Uruguay’s baseline data to give its own assessment of water quality. According to Uruguay,
contrary to Argentina’s assertions, collection of baseline data by Uruguay started in August 2006,
when DINAMA started to conduct for a period of 15 months pre-operational water quality
monitoring prior to the commissioning of the plant in November 2007, which served to
complement almost 15 years of more general monitoring that had been carried out within CARU
under the PROCON programme (River Uruguay Water Quality and Pollution Control Programme,
from the Spanish acronym for “Programa de Calidad de Aguas y Control de la Contaminación del
Río Uruguay”). Argentina did not challenge counsel for Uruguay’s statement during the oral
proceedings that it used Uruguay’s baseline data for the assessment of water quality.

232. The data presented by the Parties on the post-operation monitoring of the actual
performance of the plant in terms of the impact of its emissions on the river includes data obtained
through different testing programmes conducted, inter alia, by an Argentine scientific team from



two national universities, contracted by the National Secretariat of Environment and Sustainable
Development of Argentina (ten sites), the OSE (Uruguay’s State Agency for Sanitary Works, from
the Spanish acronym for “Obras Sanitarias del Estado”), DINAMA, independently of Botnia
(16 sites), and Botnia, reporting to DINAMA and the IFC (four sites; and testing the effluent).

233. The monitoring sites maintained by Argentina are located on the Argentine side of the
river; with the most upstream position located 10 km from the plant and the furthest downstream
one at about 16 km from the plant. Nevertheless, three of the sites (U0, U2 and U3) are near the
plant; while another three are in Ñandubaysal Bay and Inés Lagoon, the data from which,
according to Argentina’s counsel, “enabled the scientists to clearly set the bay apart, as it acts as an
ecosystem that is relatively detached from the Uruguay river” (Scientific and Technical Report,
Chap. 3, appendix: “Background Biogeochemical Studies”, para. 4.1.2; see also ibid,
para. 4.3.1.2).

234. The monitoring sites maintained by Uruguay (DINAMA) and by Botnia are located on
the Uruguayan side. The OSE monitoring point is located at the drinking water supply intake pipe
for Fray Bentos, at or near DINAMA station 11.

235. Argentina’s team gathered data from November 2007 until April 2009 with many of the
results being obtained from October 2008. Uruguay, through DINAMA, has been carrying out its
monitoring of the site since March 2006. Its most recent data cover the period up to June 2009.
The OSE, in terms of its overall responsibility for Uruguayan water quality, has been gathering
relevant data which has been used in the periodic reports on the operation of the plant.

236. The Court also has before it interpretations of the data provided by experts appointed by
the Parties, and provided by the Parties themselves and their counsel. However, in assessing the
probative value of the evidence placed before it, the Court will principally weigh and evaluate the
data, rather than the conflicting interpretations given to it by the Parties or their experts and
consultants, in order to determine whether Uruguay breached its obligations under Articles 36 and
41 of the 1975 Statute in authorizing the construction and operation of the Orion (Botnia) mill.

237. The particular parameters and substances that are subject to controversy between the
Parties in terms of the impact of the discharges of effluent from the Orion (Botnia) mill on the
quality of the waters of the river are: dissolved oxygen; total phosphorus (and the related matter of
eutrophication due to phosphate); phenolic substances; nonylphenols and nonylphenolethoxylates;
and dioxins and furans. The Court now turns to the assessment of the evidence presented to it by
the Parties with respect to these parameters and substances.

(i) Dissolved oxygen

238. Argentina raised for the first time during the oral proceedings the alleged negative
impact of the Orion (Botnia) mill on dissolved oxygen in the river referring to data contained in the
report of the Uruguayan OSE. According to Argentina, since dissolved oxygen is environmentally



beneficial and there is a CARU standard which sets a minimum level of dissolved oxygen for the
river waters (5.6 mg/L), the introduction by the Orion (Botnia) mill into the aquatic environment of
substances or energy which caused the dissolved oxygen level to fall below that minimum
constitutes a breach of the obligation to prevent pollution and to preserve the aquatic environment.
Uruguay argues that Argentina’s figures taken from the measurements of the OSE were for
“oxidabilidad”, which refers to the “demand for oxygen” and not for “oxígeno disuelto” . i.e.,
dissolved oxygen. Uruguay also claims that a drop in the level of demand for oxygen shows an
improvement in the quality of the water, since the level of demand should be kept as low as
possible.

239. The Court observes that a post-operational average value of 3.8 mg/L for dissolved
oxygen would indeed, if proven, constitute a violation of CARU standards, since it is below the
minimum value of 5.6 mg of dissolved oxygen per litre required according to the CARU Digest
(E3, title 2, Chap. 4, Sec. 2). However, the Court finds that the allegation made by Argentina
remains unproven. First, the figures on which Argentina bases itself do not correspond to the ones
for dissolved oxygen that appear in the EcoMetrix Third Monitoring Report, where the samples
taken between February and October 2008 were all above the CARU minimum standard for
dissolved oxygen. Secondly, DINAMA’s Surface Water and Sediment Quality Data Report of
July 2009 (Six Month Report: January-June) (hereinafter “DINAMA’s Water Quality Report”)
(see p. 7, fig. 4.5: average of 9.4 mg/L) displays concentrations of dissolved oxygen that are well
above the minimum level required under the CARU Digest. Thirdly, Argentina’s 30 June 2009
report says in its summary that the records of water quality parameters over the period were
“normal for the river with typical seasonal patterns of temperature and associated dissolved
oxygen”. The hundreds of measurements presented in the figures in that chapter of the “Colombo
Report” support that conclusion even taking account of some slightly lower figures. Fourthly, the
figures relating to dissolved oxygen contained in DINAMA’s Water Quality Report have
essentially the same characteristics as those gathered by Argentina . they are above the CARU
minimum and are the same upstream and downstream. Thus, the Court concludes that there
appears to be no significant difference between the sets of data over time and that there is no
evidence to support the contention that the reference to “oxidabilidad” in the OSE report referred to
by Argentina should be interpreted to mean “dissolved oxygen”.

(ii) Phosphorus

240. There is agreement between the Parties that total phosphorus levels in the River
Uruguay are high. According to Uruguay, the total amount of (natural and anthropogenic)
phosphorus emitted into the river per year is approximately 19,000 tonnes, of which the Orion
(Botnia) mill has a share of some 15 tonnes (in 2008) or even less, as was expected for 2009.
These figures have not been disputed by Argentina during the proceedings. Uruguay contends
further that no violation of the provisions of the 1975 Statute can be alleged since the high
concentration cannot be clearly attributed to the Orion (Botnia) mill as the source, and since no
standard is set by CARU for phosphorus. Uruguay maintains also that based on data provided by
DINAMA as compared to baseline data also compiled by DINAMA, it can be demonstrated that
“[t]otal phosphorus levels were generally lower post-start-up as compared to the 2005-2006
baseline” (EcoMetrix Third Monitoring Report, March 2009).


241. A major disagreement between the Parties relates to the relationship between the higher
concentration of phosphorus in the waters of the river and the algal bloom of February 2009 and
whether operation of the Orion (Botnia) mill has caused the eutrophication of the river. Argentina
claims that the Orion (Botnia) mill is the cause of the eutrophication and higher concentration of
phosphates, while Uruguay denies the attributability of these concentrations as well as the
eutrophication to the operation of the plant in Fray Bentos.

242. The Court notes that CARU has not adopted a water quality standard relating to levels
of total phosphorus and phosphates in the river. Similarly, Argentina has no water quality
standards for total phosphorus. The Court will therefore have to use the water quality and effluent
limits for total phosphorus enacted by Uruguay under its domestic legislation, as characterized by
the Court in paragraph 200 above, to assess whether the concentration levels of total phosphorus
have exceeded the limits laid down in the regulations of the Parties adopted in accordance with
Article 41 (a) of the 1975 Statute. The water quality standard for total phosphorus under the
Uruguayan Regulation is 0.025 mg/L for certain purposes such as drinking water, irrigation of
crops for human consumption and water used for recreational purposes which involve direct human
contact with the water (Decree No. 253/79, Regulation of Water Quality). The Uruguayan Decree
also establishes a total phosphorus discharge standard of 5 mg/L (ibid., Art. 11(2)). The Orion
(Botnia) mill must comply with both standards.

243. The Court finds that based on the evidence before it, the Orion (Botnia) mill has so far
complied with the standard for total phosphorus in effluent discharge. In this context, the Court
notes that, for 2008 according to the EcoMetrix Third Monitoring Report, the Uruguayan data
recorded an average of 0.59 mg/L total phosphorus in effluent discharge from the plant. Moreover,
according to the DINAMA 2009 Emissions Report, the effluent figures for November 2008 to
May 2009 were between 0.053 mg/L and 0.41 mg/L (e.g., DINAMA, “Six Month Report on the
Botnia Emission Control and Environmental Performance Plan November 11, 2008 to May 31,
2009” (22 July 2009) p. 5; see also pp. 25 and 26). Argentina does not contest these figures which
clearly show values much below the standard established under the Uruguayan Decree.

244. The Court observes in this connection that as early as 11 February 2005 DINAMA, in
its environmental impact assessment for the Orion (Botnia) mill, noted the heavy load of nutrients
(phosphorus and nitrogen) in the river and stated that:

“This situation has generated the frequent proliferation of algae, in some cases
with an important degree of toxicity as a result of the proliferation of cyanobacteria.
These proliferations, which in recent years have shown an increase in both frequency
and intensity, constitute a health risk and result in important economic losses since
they interfere with some uses of water, such as recreational activities and the public
supply of drinking water. To this already existing situation it must be added that, in
the future, the effluent in the plant will emit a total of 200 t/a of N[itrogen] and
20 t/a of P[hosphorus], values that are the approximate equivalent of the emission of
the untreated sewage of a city of 65,000 people.” (P. 20, para. 6.1.)


245. The DINAMA Report then continues as follows:

“It is also understood that it is not appropriate to authorize any waste disposal
that would increase any of the parameters that present critical values, even in cases in
which the increase is considered insignificant by the company. Nevertheless,
considering that the parameters in which the quality of water is compromised are not
specific to the effluents of this project, but rather would be affected by the waste
disposal of any industrial or domestic effluent under consideration, it is understood
that the waste disposal proposed in the project may be accepted, as long as there is
compensation for any increase over and above the standard value for any of the critical
parameters.” (Ibid., p. 21.)

246. The Court further notes that the initial environmental authorization, granted on
15 February 2005, required compliance by Botnia with those conditions, with CARU standards and
with best available techniques as included in the December 2001 IPPC-BAT of the European
Commission. It also required the completion of an implementation plan for mitigation and
compensation measures. That plan was completed by the end of 2007 and the authorization to
operate was granted on 8 November 2007. On 29 April 2008, Botnia and the OSE concluded an
Agreement Regarding Treatment of the Municipal Wastewater of Fray Bentos, aimed at reducing
total phosphorus and other contaminants.

247. The Court considers that the amount of total phosphorus discharge into the river that
may be attributed to the Orion (Botnia) mill is insignificant in proportionate terms as compared to
the overall total phosphorus in the river from other sources. Consequently, the Court concludes
that the fact that the level of concentration of total phosphorus in the river exceeds the limits
established in Uruguayan legislation in respect of water quality standards cannot be considered as a
violation of Article 41 (a) of the 1975 Statute in view of the river’s relatively high total phosphorus
content prior to the commissioning of the plant, and taking into account the action being taken by
Uruguay by way of compensation.

248. The Court will now turn to the consideration of the issue of the algal bloom of
4 February 2009. Argentina claims that the algal bloom of 4 February 2009 was caused by the
Orion (Botnia) mill’s emissions of nutrients into the river. To substantiate this claim Argentina
points to the presence of effluent products in the blue-green algal bloom and to various satellite
images showing the concentration of chlorophyll in the water. Such blooms, according to
Argentina, are produced during the warm season by the explosive growth of algae, particularly
cyanobacteria, responding to nutrient enrichment, mainly phosphate, among other compounds
present in detergents and fertilizers.

249. Uruguay contends that the algal bloom of February 2009, and the high concentration of
chlorophyll, was not caused by the Orion (Botnia) mill but could have originated far upstream and
may have most likely been caused by the increase of people present in Gualeyguaychú during the
yearly carnival held in that town, and the resulting increase in sewage, and not by the mill’s
effluents. Uruguay maintains that Argentine data actually prove that the Orion (Botnia) mill has
not added to the concentration of phosphorus in the river at any time since it began operating.


250. The Parties are in agreement on several points regarding the algal bloom of
4 February 2009, including the fact that the concentrations of nutrients in the River Uruguay have
been at high levels both before and after the bloom episode, and the fact that the bloom disappeared
shortly after it had begun. The Parties also appear to agree on the interdependence between algae
growth, higher temperatures, low and reverse flows, and presence of high levels of nutrients such
as nitrogen and phosphorus in the river. It has not, however, been established to the satisfaction of
the Court that the algal bloom episode of 4 February 2009 was caused by the nutrient discharges
from the Orion (Botnia) mill.

(iii) Phenolic substances

251. With regard to phenolic substances, Argentina contends that the Orion (Botnia) mill’s
emission of pollutants have resulted in violations of the CARU standard for phenolic substances
once the plant started operating, while, according to Argentina, pre-operational baseline data did
not show that standard to have been exceeded. Uruguay on the other hand argues that there have
been numerous violations of the standard, throughout the river, long before the plant went into
operation. Uruguay substantiates its arguments by pointing to several studies including the
EcoMetrix final Cumulative Impact Study, which had concluded that phenolic substances were
found to have frequently exceeded the water quality standard of 0.001 mg/L fixed by CARU.

252. The Court also notes that Uruguayan data indicate that the water quality standard was
being exceeded from long before the plant began operating. The Cumulative Impact Study
prepared in September 2006 by EcoMetrix for the IFC states that phenolics were found frequently
to exceed the standard, with the highest values on the Argentine side of the river. The standard is
still exceeded in some of the measurements in the most recent report before the Court but most are
below it (DINAMA July 2009 Water Quality Report, p. 21, para. 4.1.11.2 and App. 1, showing
measurements from 0.0005 to 0.012 mg/L).

253. During the oral proceedings, counsel for Argentina claimed that the standard had not
previously been exceeded and that the plant has caused the limit to be exceeded. The
concentrations, he said, had increased on average by three times and the highest figure was
20 times higher. Uruguay contends that the data contained in the DINAMA 2009 Report shows
that the post-operational levels of phenolic substances were lower than the baseline levels
throughout the river including at the OSE water intake.

254. Based on the record, and the data presented by the Parties, the Court concludes that
there is insufficient evidence to attribute the alleged increase in the level of concentrations of
phenolic substances in the river to the operations of the Orion (Botnia) mill.

(iv) Presence of nonylphenols in the river environment

255. Argentina claims that the Orion (Botnia) mill emits, or has emitted, nonylphenols and
thus has caused damage to, or at least has substantially put at risk, the river environment.
According to Argentina, the most likely source of these emissions are surfactants (detergents),



nonylphenolethoxylates used to clean the wood pulp as well as the installations of the plant itself.
Argentina also contends that from 46 measurements performed in water samples the highest
concentrations, in particular those exceeding the European Union relevant standards, were
determined in front-downstream the mill and in the bloom sample collected on 4 February 2009,
with lower levels upstream and downstream, indicating that the Orion (Botnia) mill effluent is the
most probable source of these residues. In addition, according to Argentina, bottom sediments
collected in front-downstream the mill showed a rapid increase of nonylphenols from
September 2006 to February 2009, corroborating the increasing trend of these compounds in the
River Uruguay. For Argentina, the spatial distribution of sub-lethal effects detected in rotifers
(absence of spines), transplanted Asiatic clams (reduction of lipid reserves) and fish (estrogenic
effects) coincided with the distribution area of nonylphenols suggesting that these compounds may
be a significant stress factor.

256. Uruguay rejects Argentina’s claim relating to nonylphenols and
nonylphenolethoxylates, and categorically denies the use of nonylphenols and
nonylphenolethoxylates by the Orion (Botnia) mill. In particular, it provides affidavits from Botnia
officials to the effect that the mill does not use and has never used nonylphenols or
nonylphenolethoxylate derivatives in any of its processes for the production of pulp, including in
the pulp washing and cleaning stages, and that no cleaning agents containing nonylphenols are or
have been used for cleaning the plant’s equipment (Affidavit of Mr. González, 2 October 2009).

257. The Court recalls that the issue of nonylphenols was included in the record of the case
before the Court only by the Report submitted by Argentina on 30 June 2009. Although testing for
nonylphenols had been carried out since November 2008, Argentina has not however, in the view
of the Court, adduced clear evidence which establishes a link between the nonylphenols found in
the waters of the river and the Orion (Botnia) mill. Uruguay has also categorically denied before
the Court the use of nonylphenolethoxylates for production or cleaning by the Orion (Botnia) mill.
The Court therefore concludes that the evidence in the record does not substantiate the claims made
by Argentina on this matter.

(v) Dioxins and furans

258. Argentina has alleged that while the concentration of dioxins and furans in surface
sediments is generally very low, data from its studies demonstrated an increasing trend compared
to data compiled before the Orion (Botnia) mill commenced operations. Argentina does not claim
a violation of standards, but relies on a sample of sábalo fish tested by its monitoring team, which
showed that one fish presented elevated levels of dioxins and furans which, according to Argentina,
pointed to a rise in the incidence of dioxins and furans in the river after the commissioning of the
Orion (Botnia) mill. Uruguay contests this claim, arguing that such elevated levels cannot be
linked to the operation of the Orion (Botnia) mill, given the presence of so many other industries
operating along the River Uruguay and in neighbouring Ñandubaysal Bay, and the highly
migratory nature of the sábalo species which was tested. In addition, Uruguay advances that its
testing of the effluent coming from the Orion (Botnia) mill demonstrate that no dioxins and furans
could have been introduced into the mill effluent, as the levels detected in the effluent were not
measurably higher than the baseline levels in the River Uruguay.


259. The Court considers that there is no clear evidence to link the increase in the presence
of dioxins and furans in the river to the operation of the Orion (Botnia) mill.

(d) Effects on biodiversity

260. Argentina asserts that Uruguay “has failed to take all measures to protect and preserve
the biological diversity of the River Uruguay and the areas affected by it”. According to Argentina,
the treaty obligation “to protect and preserve the aquatic environment” comprises an obligation to
protect the biological diversity including “habitats as well as species of flora and fauna”. By virtue
of the “referral clause” in Article 41 (a), Argentina argues that the 1975 Statute requires Uruguay,
in respect of activities undertaken in the river and areas affected by it, to comply with the
obligations deriving from the CITES Convention, the Biodiversity Convention and the Ramsar
Convention. Argentina maintains that through its monitoring programme abnormal effects were
detected in aquatic organisms . such as malformation of rotifers and loss of fat by clams . and
the biomagnification of persistent pollutants such as dioxins and furans was detected in detritus
feeding fish (such as the sábalo fish). Argentina also contends that the operation of the mill poses a
threat, under conditions of reverse flow, to the Esteros de Farrapos site, situated “in the lower
section of the River . . . downstream from the Salto Grande dam and on the frontier with
Argentina”, a few kilometres upstream from the Orion (Botnia) mill.

261. Uruguay states that Argentina has failed to demonstrate any breach by Uruguay of the
Biodiversity Convention, while the Ramsar Convention has no bearing in the present case because
Esteros de Farrapos was not included in the list of Ramsar sites whose ecological character is
threatened. With regard to the possibility of the effluent plume from the mill reaching Esteros de
Farrapos, Uruguay in the oral proceedings acknowledged that under certain conditions that might
occur. However, Uruguay added that it would be expected that the dilution of the effluent from the
mill of 1:1000 would render the effluent quite harmless and below any concentration capable of
constituting pollution. Uruguay contends that Argentina’s claims regarding the harmful effects on
fish and rotifers as a result of the effluents from the Orion (Botnia) mill are not credible. It points
out that a recent comprehensive report of DINAMA on ichthyofauna concludes that compared to
2008 and 2009 there has been no change in species biodiversity. Uruguay adds that the July 2009
report of DINAMA, with results of its February 2009 monitoring of the sediments in the river
where some fish species feed, stated that “the quality of the sediments at the bottom of the Uruguay
River has not been altered as a consequence of the industrial activity of the Botnia plant”.

262. The Court is of the opinion that as part of their obligation to preserve the aquatic
environment, the Parties have a duty to protect the fauna and flora of the river. The rules and
measures which they have to adopt under Article 41 should also reflect their international
undertakings in respect of biodiversity and habitat protection, in addition to the other standards on
water quality and discharges of effluent. The Court has not, however, found sufficient evidence to
conclude that Uruguay breached its obligation to preserve the aquatic environment including the



protection of its fauna and flora. The record rather shows that a clear relationship has not been
established between the discharges from the Orion (Botnia) mill and the malformations of rotifers,
or the dioxin found in the sábalo fish or the loss of fat by clams reported in the findings of
the Argentine River Uruguay Environmental Surveillance (URES) programme.

(e) Air pollution

263. Argentina claims that the Orion (Botnia) mill has caused air, noise and visual pollution
which negatively impact on “the aquatic environment” in violation of Article 41 of the
1975 Statute. Argentina also argues that the 1975 Statute was concluded not only to protect the
quality of the waters, but also, more generally, the “régime” of the river and “the areas affected by
it, i.e., all the factors that affect, and are affected by the ecosystem of the river as a whole”.
Uruguay contends that the Court has no jurisdiction over those matters and that, in any event, the
claims are not established on the merits.

264. With respect to noise and visual pollution, the Court has already concluded in
paragraph 52 that it has no jurisdiction on such matters under the 1975 Statute. As regards air
pollution, the Court is of the view that if emissions from the plant’s stacks have deposited into the
aquatic environment substances with harmful effects, such indirect pollution of the river would fall
under the provisions of the 1975 Statute. Uruguay appears to agree with this conclusion.
Nevertheless, in view of the findings of the Court with respect to water quality, it is the opinion of
the Court that the record does not show any clear evidence that substances with harmful effects
have been introduced into the aquatic environment of the river through the emissions of the Orion
(Botnia) mill into the air.

(f) Conclusions on Article 41

265. It follows from the above that there is no conclusive evidence in the record to show that
Uruguay has not acted with the requisite degree of due diligence or that the discharges of effluent
from the Orion (Botnia) mill have had deleterious effects or caused harm to living resources or to
the quality of the water or the ecological balance of the river since it started its operations in
November 2007. Consequently, on the basis of the evidence submitted to it, the Court concludes
that Uruguay has not breached its obligations under Article 41.

(g) Continuing obligations: monitoring

266. The Court is of the opinion that both Parties have the obligation to enable CARU, as the
joint machinery created by the 1975 Statute, to exercise on a continuous basis the powers conferred
on it by the 1975 Statute, including its function of monitoring the quality of the waters of the river
and of assessing the impact of the operation of the Orion (Botnia) mill on the aquatic environment.
Uruguay, for its part, has the obligation to continue monitoring the operation of the plant in
accordance with Article 41 of the Statute and to ensure compliance by Botnia with Uruguayan
domestic regulations as well as the standards set by CARU. The Parties have a legal obligation
under the 1975 Statute to continue their co-operation through CARU and to enable it to devise the
necessary means to promote the equitable utilization of the river, while protecting its environment.

* *


V. THE CLAIMS MADE BY THE PARTIES IN THEIR FINAL SUBMISSIONS

267. Having concluded that Uruguay breached its procedural obligations under the
1975 Statute (see paragraphs 111, 122, 131, 149, 157 and 158 above), it is for the Court to draw the
conclusions following from these internationally wrongful acts giving rise to Uruguay’s
international responsibility and to determine what that responsibility entails.

268. Argentina first requests the Court to find that Uruguay has violated the procedural
obligations incumbent on it under the 1975 Statute and has thereby engaged its international
responsibility. Argentina further requests the Court to order that Uruguay immediately cease these
internationally wrongful acts.

269. The Court considers that its finding of wrongful conduct by Uruguay in respect of its
procedural obligations per se constitutes a measure of satisfaction for Argentina. As Uruguay’s
breaches of the procedural obligations occurred in the past and have come to an end, there is no
cause to order their cessation.

270. Argentina nevertheless argues that a finding of wrongfulness would be insufficient as
reparation, even if the Court were to find that Uruguay has not breached any substantive obligation
under the 1975 Statute but only some of its procedural obligations. Argentina maintains that the
procedural obligations and substantive obligations laid down in the 1975 Statute are closely related
and cannot be severed from one another for purposes of reparation, since undesirable effects of
breaches of the former persist even after the breaches have ceased. Accordingly, Argentina
contends that Uruguay is under an obligation to “re-establish on the ground and in legal terms the
situation that existed before [the] internationally wrongful acts were committed”. To this end, the
Orion (Botnia) mill should be dismantled. According to Argentina, restitutio in integrum is the
primary form of reparation for internationally wrongful acts. Relying on Article 35 of the
International Law Commission’s Articles on the Responsibility of States for Internationally
Wrongful Acts, Argentina maintains that restitution takes precedence over all other forms of
reparation except where it is “materially impossible” or involves “a burden out of all proportion to
the benefit deriving from restitution instead of compensation”. It asserts that dismantling the mill
is not materially impossible and would not create for the Respondent State a burden out of all
proportion, since the Respondent has

“maintained that construction of the mills would not amount to a fait accompli liable
to prejudice Argentina’s rights and that it was for Uruguay alone to decide whether to
proceed with construction and thereby assume the risk of having to dismantle the mills
in the event of an adverse decision by the Court”,

as the Court noted in its Order on Argentina’s request for the indication of provisional measures in
this case (Order of 13 July 2006, I.C.J. Reports 2006, p. 125, para. 47). Argentina adds that
whether or not restitution is disproportionate must be determined at the latest as of the filing of the
Application instituting proceedings, since as from that time Uruguay, knowing of Argentina’s
request to have the work halted and the status quo ante re-established, could not have been
unaware of the risk it ran in proceeding with construction of the disputed mill. Lastly, Argentina
considers Articles 42 and 43 of the 1975 Statute to be inapplicable in the present case, since they
establish a régime of responsibility in the absence of any wrongful act.


271. Taking the view that the procedural obligations are distinct from the substantive
obligations laid down in the 1975 Statute, and that account must be taken of the purport of the rule
breached in determining the form to be taken by the obligation of reparation deriving from its
violation, Uruguay maintains that restitution would not be an appropriate form of reparation if
Uruguay is found responsible only for breaches of procedural obligations. Uruguay argues that the
dismantling of the Orion (Botnia) mill would at any rate involve a “striking disproportion between
the gravity of the consequences of the wrongful act of which it is accused and those of the remedy
claimed”, and that whether or not a disproportionate burden would result from restitution must be
determined as of when the Court rules, not, as Argentina claims, as of the date it was seised.
Uruguay adds that the 1975 Statute constitutes a lex specialis in relation to the law of international
responsibility, as Articles 42 and 43 establish compensation, not restitution, as the appropriate form
of reparation for pollution of the river in contravention of the 1975 Statute.

272. The Court, not having before it a claim for reparation based on a régime of
responsibility in the absence of any wrongful act, deems it unnecessary to determine whether
Articles 42 and 43 of the 1975 Statute establish such a régime. But it cannot be inferred from these
articles, which specifically concern instances of pollution, that their purpose or effect is to preclude
all forms of reparation other than compensation for breaches of procedural obligations under the
1975 Statute.

273. The Court recalls that customary international law provides for restitution as one form
of reparation for injury, restitution being the re-establishment of the situation which existed before
occurrence of the wrongful act. The Court further recalls that, where restitution is materially
impossible or involves a burden out of all proportion to the benefit deriving from it, reparation
takes the form of compensation or satisfaction, or even both (see Gabcíkovo-Nagymaros Project
(Hungary/Slovakia), Judgment, I.C.J. Reports 1997, p. 81, para. 152; Legal Consequences of the
Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion,
I.C.J. Reports 2004 (I), p. 198, paras. 152-153; Application of the Convention on the Prevention
and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro),
Judgment, I.C.J. Reports 2007, p. 233, para. 460; see also Articles 34 to 37 of the International
Law Commission Articles on the Responsibility of States for Internationally Wrongful Acts).

274. Like other forms of reparation, restitution must be appropriate to the injury suffered,
taking into account the nature of the wrongful act having caused it. As the Court has made clear,

“[w]hat constitutes ‘reparation in an adequate form’ clearly varies depending upon the
concrete circumstances surrounding each case and the precise nature and scope of the
injury, since the question has to be examined from the viewpoint of what is the
‘reparation in an adequate form’ that corresponds to the injury” (Avena and Other
Mexican Nationals (Mexico v. United States of America), Judgment,
I.C.J. Reports 2004 (I), p. 59, para. 119).

275. As the Court has pointed out (see paragraphs 154 to 157 above), the procedural
obligations under the 1975 Statute did not entail any ensuing prohibition on Uruguay’s building of
the Orion (Botnia) mill, failing consent by Argentina, after the expiration of the period for



negotiation. The Court has however observed that construction of that mill began before
negotiations had come to an end, in breach of the procedural obligations laid down in the
1975 Statute. Further, as the Court has found, on the evidence submitted to it, the operation of the
Orion (Botnia) mill has not resulted in the breach of substantive obligations laid down in the
1975 Statute (paragraphs 180, 189 and 265 above). As Uruguay was not barred from proceeding
with the construction and operation of the Orion (Botnia) mill after the expiration of the period for
negotiation and as it breached no substantive obligation under the 1975 Statute, ordering the
dismantling of the mill would not, in the view of the Court, constitute an appropriate remedy for
the breach of procedural obligations.

276. As Uruguay has not breached substantive obligations arising under the 1975 Statute, the
Court is likewise unable, for the same reasons, to uphold Argentina’s claim in respect of
compensation for alleged injuries suffered in various economic sectors, specifically tourism and
agriculture.

277. Argentina further requests the Court to adjudge and declare that Uruguay must “provide
adequate guarantees that it will refrain in future from preventing the Statute of the River Uruguay
of 1975 from being applied, in particular the consultation procedure established by Chapter II of
that Treaty”.

278. The Court fails to see any special circumstances in the present case requiring the
ordering of a measure such as that sought by Argentina. As the Court has recently observed:

“[W]hile the Court may order, as it has done in the past, a State responsible for
internationally wrongful conduct to provide the injured State with assurances and
guarantees of non-repetition, it will only do so if the circumstances so warrant, which
it is for the Court to assess.

As a general rule, there is no reason to suppose that a State whose act or
conduct has been declared wrongful by the Court will repeat that act or conduct in the
future, since its good faith must be presumed (see Factory at Chorzów, Merits,
Judgment No. 13, 1928, P.C.I.J., Series A, No. 17, p. 63; Nuclear Tests (Australia v.
France), Judgment, I.C.J. Reports 1974, p. 272, para. 60; Nuclear Tests
(New Zealand v. France), Judgment, I.C.J. Reports 1974, p. 477, para. 63; and
Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United
States of America), Jurisdiction and Admissibility, Judgment, I.C.J. Reports 1984,
p. 437, para. 101). There is thus no reason, except in special circumstances . . . to
order [the provision of assurances and guarantees of non-repetition].” (Dispute
regarding Navigational and Related Rights (Costa Rica v. Nicaragua), Judgment of
13 July 2009, para. 150.)

279. Uruguay, for its part, requests the Court to confirm its right “to continue operating the
Botnia plant in conformity with the provisions of the 1975 Statute”. Argentina contends that this
claim should be rejected, in particular because it is a counter-claim first put forward in Uruguay’s
Rejoinder and, as such, is inadmissible by virtue of Article 80 of the Rules of Court.


280. There is no need for the Court to decide the admissibility of this claim; it is sufficient
to observe that Uruguay’s claim is without any practical significance, since Argentina’s claims in
relation to breaches by Uruguay of its substantive obligations and to the dismantling of the Orion
(Botnia) mill have been rejected.

*

* *

281. Lastly, the Court points out that the 1975 Statute places the Parties under a duty to
co-operate with each other, on the terms therein set out, to ensure the achievement of its object and
purpose. This obligation to co-operate encompasses ongoing monitoring of an industrial facility,
such as the Orion (Botnia) mill. In that regard the Court notes that the Parties have a long-standing
and effective tradition of co-operation and co-ordination through CARU. By acting jointly through
CARU, the Parties have established a real community of interests and rights in the management of
the River Uruguay and in the protection of its environment. They have also co-ordinated their
actions through the joint mechanism of CARU, in conformity with the provisions of the
1975 Statute, and found appropriate solutions to their differences within its framework without
feeling the need to resort to the judicial settlement of disputes provided for in Article 60 of the
Statute until the present case was brought before the Court.

*

* *

282. For these reasons,

THE COURT,

(1) By thirteen votes to one,

Finds that the Eastern Republic of Uruguay has breached its procedural obligations under
Articles 7 to 12 of the 1975 Statute of the River Uruguay and that the declaration by the Court of
this breach constitutes appropriate satisfaction;

IN FAVOUR: Vice-President Tomka, Acting President; Judges Koroma, Al-Khasawneh,
Simma, Abraham, Keith, Sepúlveda-Amor, Bennouna, Skotnikov, Cançado Trindade,
Yusuf, Greenwood; Judge ad hoc Vinuesa;

AGAINST: Judge ad hoc Torres Bernárdez;


(2) By eleven votes to three,

Finds that the Eastern Republic of Uruguay has not breached its substantive obligations
under Articles 35, 36 and 41 of the 1975 Statute of the River Uruguay;

IN FAVOUR: Vice-President Tomka, Acting President; Judges Koroma, Abraham, Keith,
Sepúlveda-Amor, Bennouna, Skotnikov, Cançado Trindade, Yusuf, Greenwood;
Judge ad hoc Torres Bernárdez;

AGAINST: Judges Al-Khasawneh, Simma; Judge ad hoc Vinuesa;

(3) Unanimously,

Rejects all other submissions by the Parties.



Done in French and in English, the French text being authoritative, at the Peace Palace,
The Hague, this twentieth day of April, two thousand and ten, in three copies, one of which will be
placed in the archives of the Court and the others transmitted to the Government of the Argentine
Republic and the Government of the Eastern Republic of Uruguay, respectively.







(Signed) Peter TOMKA,

Vice-President.







(Signed) Philippe COUVREUR,

Registrar.



Judges AL-KHASAWNEH and SIMMA append a joint dissenting opinion to the Judgment of
the Court; Judge KEITH appends a separate opinion to the Judgment of the Court;
Judge SKOTNIKOV appends a declaration to the Judgment of the Court;
Judge CANÇADO TRINDADE appends a separate opinion to the Judgment of the Court;
Judge YUSUF appends a declaration to the Judgment of the Court; Judge GREENWOOD appends a
separate opinion to the Judgment of the Court; Judge ad hoc TORRES BERNÁRDEZ appends a
separate opinion to the Judgment of the Court; Judge ad hoc VINUESA appends a dissenting
opinion to the Judgment of the Court.