Argentina claimed on Monday that Uruguay was ignoring "irreversible" environmental damage to the Uruguay River, at an International Criminal Court hearing in The Hague, the Netherlands.
Argentina sued Uruguay in the international court in May 2006 for not seeking its agreement to establish the Botnia factory near the Uruguay River, which the countries share.
During the first public hearing, Argentine expert Philippe Sand said Uruguay had "not fulfilled its obligation of protecting the environment of the Uruguay River."
Sand said the Uruguay River could not support the pollution levels of the factory.
According to Argentina, Uruguay's decision to establish the factory violated the Uruguay River Statute, signed in 1975.
The Argentine delegation led by ambassador Susana Ruiz Cerutti began presenting its evidence on Monday. The process will last till Thursday, when Uruguay will respond.
Ruiz said the Botnia factory was causing "irreparable damage" to Argentina and its establishment "was a real violation of the obligations set in Uruguay River Statute."
"Each day, the factory deposits a large amount of polluting agents in the river and air. There will be irreversible damage for the river's ecosystem," Ruiz said.
"We are worried about the Argentine inhabitants near the area, who have expressed their rejection of the factory due to the disgusting smells it produces," Ruiz said.
Under to the court's procedure, after both countries present their cases, each will have two days to refute the other's arguments. The court will then make its decision, which is expected to be next year.
The Botnia factory was reportedly the largest foreign investment in Uruguay, totaling nearly 1 billion U.S. dollars.
"We know the Botnia plant pollutes, it does not have the best technology and it would have been prohibited in Europe," Ruiz said.
Last week, some 15,000 inhabitants from Gualeguaychu city, some226 km north to Buenos Aires, marched to protest against Botnia's activities.
The protestors demanded the international court "not to give priority to multinational profits over the dignity and health of people."
The international bridge linking Gualeguaychu and Fray Bentos in Uruguay has been blocked by people protesting against the factory since November 2006.