World Bank Group President Paul Wolfowitz meets Tabaré Vázquez, President of Uruguay

WASHINGTON, D.C., May 3, 2006 — The President of Uruguay, Mr. Tabaré Vázquez met today with World Bank Group President Paul Wolfowitz to discuss the development priorities for the country. This was the first time that the two presidents have met. The primary topic of discussion was the World Bank Group’s possible support for two pulp mills on the Uruguay River.

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is evaluating whether to provide financing of the proposed Orion and CMB plants. In addition, the Multilateral Investment Guarantee Agency (MIGA), also an arm of the World Bank Group, is evaluating whether to provide political risk insurance to investors in the Orion plant.

Mr. Wolfowitz was accompanied by Mr. Lars Thunell, IFC’s Executive Vice President Ms. Yukiko Omura, MIGA’s Executive Vice President, and by Ms. Pamela Cox, the World Bank’s Vice-President for the Latin America and Caribbean Region.

During the meeting, Mr. Wolfowitz emphasized the World Bank Group’s ongoing support for the development of Uruguay and complimented President Vazquez and his team on the strong economic management and continued recovery of the Uruguayan economy.   He also highlighted the Bank Group’s strong commitment to support productive private investments that foster economic growth and development in its member countries, while being undertaken with the appropriate environmental and social due diligence.  

Mr. Wolfowitz noted that IFC is beginning the final phase of its environmental due diligence process for the pulp mill projects to confirm compliance with World Bank Group’s environmental policies.  Upon completion of the environmental review, IFC and MIGA will decide whether they will seek Board approval for the financing and guarantees for the pulp mills.

“These two projects are important for the development of Uruguay,” said Mr. Wolfowitz.  “The Bank Group is interested, in principle, in supporting the projects financially, provided they meet the highest environmental and social standards.  Before we make a decision on financing the mills we must complete our evaluation process. Our goal is to ensure that the projects are in compliance with our very strict and internationally recognized standards."

Regarding the diplomatic standoff between Argentina and Uruguay over the construction of the mills, Mr. Wolfowitz encouraged both Argentina and Uruguay to renew the good faith effort initiated between the presidents of both countries to find a negotiated and fair solution that reassures stakeholders that shared environmental resources will be protected.  “I firmly believe this is possible if the will is there to find a solution,” Wolfowitz added.  

Timeline of Evaluation of Pulp Mill Projects

On April 11, IFC released the report of a panel of independent experts commissioned to review comments provided by stakeholders on the draft cumulative impact study (CIS)  of the two pulp mill plants.  IFC’s objective in retaining the panel was to engage an independent, third party review of stakeholder concerns and help determine what further environmental assessment might be needed.  In addition, the entire process has provided the interested public with a fact-based review of the environmental impacts of the plants.

IFC will shortly announce an action plan to address the panel’s recommendations.  

• April-June 2005: Bank Group public release of Environmental and Social Impact Studies(EIAs) for each proposed plant
• June-December 2005: Preparation of draft Cumulative Impact Study (CIS)
• December 19, 2005: IFC and MIGA release draft CIS opening a consultation period of 60 days
• January/February, 2006:  Stakeholder consultations on draft CIS in Uruguay and Argentina
• End of February, 2006: End of consultation period. Stakeholder input, draft CIS and EIAs delivered to independent expert panel
• April 11, 2006: independent expert panel’s report is made public by IFC.
• May  2006: IFC  to unveil action plan in response to  experts’ findings and recommendations and approach to revision of  CIS.

For more details in English and Spanish, including the Expert’s report, the Action Plan and the Consultation Process please visit:
http://www.ifc.org/ifcext/lac.nsf/content/Uruguay_Pulp_Mills

Contacts:

In Washington D.C.

World Bank
Alejandra Viveros
Phone: (202) 473-4306
Email: aviveros@worldbank.org

IFC
Adriana Gómez/ Karina Manasseh
Phone: (202) 458-5204
Email:  Agomez@ifc.org

MIGA
Ángela Gentile
Phone: (202) 473-3509
Email: Agentile@worldbank.org