Uruguay denies Argentine claim over pulp mill
* Uruguay says pulp mill meets environmental standards
* Tests show 'no change to water quality'
* Argentina claims Uruguay breached 1975 treaty
THE HAGUE, Sept 21 (Reuters) - Uruguay told the International Court of Justice on Monday a pulp mill it operates on a border river meets international environmental standards, denying claims by Argentina that it is polluting the region.
Uruguay and Argentina have been at loggerheads for several years over the construction of a pulp mill by Uruguay on the Uruguay river, a dispute that has led to blockades by Argentine environment protesters. [ID:nLE685000]
"(The mill) has caused no harmful pollution of the river. It has not put at risk the ecology of the ecosystem," Uruguay's lawyer Alan Boyle said. "It complies ... with water quality and environment protection standards agreed by both parties."
Boyle said tests by experts appointed by the World Bank's International Finance Corporation, which helped finance the project, have shown there has been no change in water quality since the mill started operations in February 2007.
Boyle said the quantity of effluent being discharged by the mill was far less than that being discharged by Argentine industry also situated along the river.
Uruguay said the phosphorus and nitrogen discharged by its plant is quickly washed downstream and into the Atlantic.
In a dispute lodged with the ICJ in 2006, Argentina said the $1.2-billion mill was threatening the river and that it was not properly consulted over its approval and construction.
1975 TREATY AT ISSUE
The plant, located at a spot used for fishing, leisure and tourism, pulps eucalyptus trees for paper and is operated by Finland pulp producer Metsa-Botnia (UPM1V.HE) (MRLBV.HE).
Initially two mills were planned at the site, but Spain's Ence (ENC.MC) later said it would locate its plant elsewhere.
The mill is one of the largest private investments in Uruguay's history, but Uruguay faces the prospect of either having to close it or make adjustments if the court rules in Argentina's favour. A ruling is not expected until next year.
The ICJ must decide whether Uruguay breached a 1975 bilateral treaty that stipulates that on all issues regarding the water of the Uruguay river there must be consultation and agreement by both countries.
In response to Argentina's portrayal last week of Uruguay as an "international outlaw", Uruguay's ambassador to the United States, Carlos Gianelli, denied Uruguay had breached the treaty.
He said Uruguay sent a "massive amount" of information about the plant to Argentina and environmental delegates from both countries met 12 times in 2005 and 2006 to discuss the issue.
Gianelli also dismissed Argentina's claim that the plant caused a rare algal bloom in February, stressing it appeared well upstream from the mill. Uruguay also said it had taken into account the possibility of 'reverse flows'. (Editing by Janet Lawrence)
