By Felipe Llambias
MONTEVIDEO, Oct 2 (Reuters) - Uruguay on Wednesday allowedthe world's top graphic paper maker, Finland's UPM-Kymmene, to increase pulp production at a local plant,raising tensions with neighboring Argentina over accusations ofenvironmental damages.
The plant, located in Uruguay close to the Argentine border,will be allowed to produce up to 1.2 million tonnes of pulp peryear, up from the previously permitted 1.1 million tonnes.
Argentine Foreign Minister Hector Timerman denounced the"unilateral" decision by Uruguay, and said Argentina would takeits case to the International Court of Justice in The Hague.
"It is lamentable that the interests of UPM are so powerfulthat they have turned into the factor that determines therelationship between Uruguay and Argentina," he said.
Argentina has said the pulp mill pollutes the Uruguay River,which separates the two countries. Officials from Uruguay andArgentina met over the years-old dispute this week but failed toreach an agreement on the plant's output.
UPM-Kymmene had requested permission to increase pulpproduction to 1.3 million tonnes.
"We have authorized an increase of half of what they askedfor," Uruguayan President Jose Mujica said, adding that hisdecision was "provisional" and subject to UPM-Kymmene'scompliance with environmental standards.
"The permanence of this decision depends on the level ofcompliance," Mujica said. "We are conscious that we have to carefor the environment."
Environmentalists have protested by blocking the bridge thatprovides access to the plant from Argentina, but Mujica said theinstallation meets international environmental standards.
He suggested that Argentina's position may be influenced bythe country's October mid-term election, which will determinehow much clout President Cristina Fernandez will have inCongress during her final two years in power.
"Argentina is immersed in an electoral campaign at themoment," he said. "The political climate during a campaign isnot the best climate for reasonable debate."
- Uruguay River