THE HAGUE, Netherlands (AP) -- Uruguay denied Argentina's claims at the United Nations' highest court that a pulp mill on a river separating the two countries is polluting the air and water, saying Monday it meets environmental protection standards.
Argentina argued last week at the World Court that Uruguay breached a 1975 treaty by authorizing construction of the mill on the River Uruguay without consulting its neighbor.
It wants the court to order Uruguay to pay unspecified compensation.
Uruguay lawyer Prof. Alan Boyle said that the Finnish-built Botnia mill -- Uruguay's largest ever foreign investment project -- has "caused no harmful pollution to the river."
He said the $1.2 billion mill meets strict World Bank standards as well as those applicable to pulp mills built in Europe.
"It has not put at risk the ecology or the ecosystem of the river," Boyle told judges, citing an independent report prepared for the World Bank's International Finance Corp.
Last week lawyers for Argentina said the mill is already pumping pollution into the water and air leading to a toxic algal bloom in February and sending foul smelling gases drifting over nearby towns.
The dispute has soured friendly relations between the South American neighbors and led to long-standing blockades on key bridges over the river by Argentine protesters. Uruguay argues that the blockades have cost it hundreds of millions of dollars in lost trade.
"This is a sad episode in the historically close relations between Argentina and Uruguay," lamented Uruguay's delegation leader Carlos Gianelli.
"The situation is compounded by the excessive language that Argentina used throughout last week's presentations in with it portrayed Uruguay as nothing short of an international outlaw," Gianelli added.
Argentina's chief representative in the case, Susana Ruiz Cerutti, last week called the Botnia plant, which turns eucalyptus trees into raw material for paper, "a bad mill in a bad place."
Boyle on Monday turned her comment on its head.
"It is the right mill in the right place on a river more than capable of sustaining this type of economic development," he said.
The court will likely take months to issue a ruling. It earlier refused to order a halt to construction of the mills and turned down a Uruguayan request to order Argentina to end the bridge blockades.
Its decision in this case will boil down to whether or not Uruguay breached the 1975 treaty on the river's management by authorizing the construction of pulp mills.
World court rulings are final and binding, though they are not always obeyed. The court, which is the highest judicial body of the United Nations, adjudicates disputes between nations.