CARGILL BUILDING CONTROVERSIAL MEGA-PORT IN PARAGUAY

by David Vargas

(IPS) ASUNCION -- Residents, environmentalists and local and national authorities in Paraguay are at odds over the pros and cons of a port complex being built by U.S. agribusiness giant Cargill on the outskirts of the capital.

Some say it will bring economic development and jobs for the community, while others warn of the environmental risks and question the sustainability of an economic model based on the expansion of soybean cultivation, currently one of the main engines of the Paraguayan economy and the main reason for the construction of this mega-complex.

The project on the banks of the Paraguay river, called Puerto Union, is a joint venture by Cargill, the largest grain exporter in the world, and Puerto Zevallos, a local company. It will involve the construction of a soybean processing plant and a port terminal with the capacity to dry, store and process soy, for an initial investment of $25 million.

The port is expected to become operational in April 2008 and will be capable of handling 1.3 billion tons of soybeans a year. Cargill announced that this is only the first of a series of investments it plans to make in Paraguay, which will total some $180 million.

From the outset the mega-port has been the center of controversy because of its possible environmental consequences. The Citizens' Assembly for Life and Health, a coalition of social and consumer organizations, has launched a campaign to point out that this highly-touted "development pole" could pose a major threat of pollution.

The main concern is that the port is located barely 500 metres away from the water intake of the Paraguayan Sanitary Services Company (ESSAP), which provides over one million people in Asuncion with drinking water.

"The very fact that the water intake is so close makes this an extremely sensitive and important area in terms of public health, and there is no way of neutralising toxic effluents safely," the civil society coalition says.

Biologist Javiera Rully of the non-governmental organization BASE Social Research (BASE-IS) told IPS that the project will have an enormous impact. "The worst problem is that a large-scale port handling grains treated with toxic agrochemicals is going to be installed in the middle of a large city," she said.

Rully explained that soybean processing, transport and storage in silos involves exposure to phosphorus-containing agrochemicals of considerable toxicity. In addition, milling the grain will pollute the air.

"There are urban centers close by, and the ESSAP water intake is only 500 metres away. Furthermore, cultivation of 400,000 hectares is necessary to obtain a yield of one million tons of soybeans, and the repercussions of agricultural expansion in terms of deforestation has not been taken into account," Rully said.

This year, soybeans are by far Paraguay's biggest export. Central Bank statistics up to July indicate that they brought in $787 million in foreign exchange.

Soybean producers are aiming to surpass this year's record crop and increase annual production by about 10 percent next year, according to Gustav Sawatzky, head of the Federation of Production Cooperatives (FECOPROD).

The goal the sector has set itself for this season is to increase the soybean harvest of 6.2 million tons this year to 6.8 million tons in 2008.

Soybean cultivation in Paraguay began to expand in the mid-1960s and reached a peak in the late 1990s when genetically modified seeds were introduced by foreign companies like U.S. biotech corporation Monsanto.

Intensive soybean production has led to the relative neglect of traditional timber and stock-raising activities and even cotton, formerly the main agricultural export, which has declined sharply in recent years. In 1990, 509,000 hectares were devoted to cotton while in 2006 the area sown was only 160,000 hectares.

"The planned port is upstream of the water intake, so diesel oil waste from barges, stirred up river sediment, and drifting dust and agrotoxins from the grains will inevitably affect the entire drinking water supply," Sawatzky said.

"ESSAP does not have the technical expertise to purify water contaminated by chemical waste, such as fuels or pesticide residues," he said.

Even if they had the technology to purify the water, it would not make the residues vanish. "All that would happen is that the pollution would be removed further away from its source," he said.

The legal team of the Paraguayan Consumers Association (ASUCOP) announced that it is seeking a court injunction to stop construction on the port.

Activists are also critical of the speedy approval of the project's environmental impact study by the environment ministry, and the granting of planning permission by the Asuncion city government for the port complex in the absence of an in-depth study of environmental effects on the local population.

Pressure by civil society prompted Congress to take a hand in the matter and hold a public hearing to discuss the project. But despite the warnings about the hazards, there is public support for the initiative.

Neighborhood committees from Vinas Cue and the Fisherfolk Association of Zeballos Cue, two adjacent settlements on the outskirts of Asuncion, have voiced support for the construction of the mega-port.

Mauro Martinez, the head of the Fisherfolk Association, told IPS that the project would provide jobs for the community in Zevallos Cue, where nearly 50 percent of the 10,000 local residents are living below the poverty line.

According to the Permanent Household Survey 2005, 38.2 percent of Paraguay's nearly seven million people are poor.

Zevallos Cue "needs the port, to give jobs to at least 1,000 people, which will benefit 5,000 people overall" in their family units, Martinez said.

The head of the Puerto Union company, Fernando Leri Friza, said that more than 600 people are already working on the first stage of the construction of the mega-port, and that as the work progresses, more jobs will emerge.

The Puerto Union company has proposed building a defensive wall to protect the water intake and mitigate environmental impact.

"We are discussing with ESSAP the placement of two kinds of protection: a floating pontoon to prevent drifting barges from crashing into their installations, and an anti-spill barrier against solids and liquids in suspension. Both systems would provide protection," Leri Friza told IPS.

Among the community benefits they are offering are improved roads and street lighting, new water pipes, police posts, a voluntary fire brigade, and support for a school close to the port.

"We have our environmental permit and a presidential decree, and are on the same footing with other ports, except that we are going to use more technology, which will help diminish the impact on the environment," Leri Friza said.

Some local leaders, like Victor Hugo Julio, a city councillor in Asuncion, views the campaign by social organizations as a boycott of private enterprise. "Cargill wants to invest in Zeballos Cue, and it promises to meet the environmental conditions, but some people are trying to block the initiative," he told IPS.

Cargill has operated in Paraguay since 1978. (