Saharawi conflict phosphates and the Australian dinner table

Abstract

This article describes how the investor community has intervened vis-à-vis the global fertilizer companies sourcing phosphate rock from occupied Western Sahara. The territory holds large phosphates deposits, and the export of such rock constitutes the biggest source of income for the Moroccan government in the territory it has annexed. Due to the particular nature of the conflict in that territory, such practice is associated with concerns of human rights breaches, international law violations and political controversy. A dozen companies purchase these phosphates from the Moroccan government, while their traditional and legal owners are increasingly active in trying to stop the practice. Investor engagement and company improvement are discussed with a particular focus on Australia. By the end of the 1980s, 39% of all phosphate rock in Western Sahara ended up in Australia. After a massive shareholder campaign directed at the Australian importers, the country has basically ended its dependence on such phosphate rock. The article also looks at import cases in North America. The article outlines the different arguments and strategies of investors, based on public statements and on internal dialogues between international investors and the civil society organization Western Sahara Resource Watch over the last decade.

Keywords:

• Western Sahara
• natural resources
• conflict
• Australia
• phosphate

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Erik Hagen is board member of Western Sahara Resource Watch and director of the Norwegian Support Committee for Western Sahara. He has followed the issue of the plundering of Western Sahara's resources since 2002, as both an investigative journalist and a civil society activist.

Notes

1 United Nations, ‘Letter dated 29 January 2002 from the Under-Secretary-General for Legal Affairs, the Legal Counsel, addressed to the President of the Security Council', S/2002/161, 2002.

2 OCP SA, ‘Prospectus', April 17, 2014, http://www.ise.ie/debt_documents/Base%20Prospectus_b81be83f-8e8f-43ef-85d9-cc5a4ae0277a.PDF?v=402015.

3 WSRW, ‘Morocco Admits to Using Saharawi Resources for Political Gain’, November 25, 2014, http://www.wsrw.org/a105x3070.

4 Mohamed Boudarham, ‘Accord de pêche: naufrage polisarien’, Aujourd'hui Le Maroc, May 24, 2006, http://www.aujourdhui.ma/maroc/societe/accord-de-peche-naufrage-polisarien-41767.

5 Al Hayat, وزير الاتصال المغربي لـ « الحياة »: الجزائر و « بوليساريو » يمنعان إحصاء اللاجئين في مخيمات تيندوف , January 14, 2013, http://www.alhayat.com/Details/472155.

6 WSRW, P for Plunder 2014 (2015), http://www.wsrw.org/a105x3185.

7 Index Mundi, http://www.indexmundi.com/.

8 http://www.businessofaustralia.com/c/b/australian-phosphate-corporation-limited/005788072 (accessed August 10, 2015).

9 http://www.iama.org.au/sites/default/files/Australian%20Fertilizer%20Industry%20Value%20and%20Issues%20August%202010.pdf (accessed August 10, 2015).

10 Ibid.

11 Australian Department of Foreign Affairs and Trade, ‘Important Information on Western Sahara', http://www.dfat.gov.au/geo/morocco/Pages/important-information-on-western-sahara.aspx.

12 Australian Department of Foreign Affairs and Trade, various declassified files and correspondence, 2007–10: 238–45, http://www.wsrw.org/files/dated/2015-05-04/dfat_australia_docs_2007-2010.pdf.

13 Ibid.

14 FIFA, ‘Phosphate Rock imports from the Western Sahara’, December 12, 2007, http://www.wsrw.org/files/dated/2015-05-03/fifa_13.12.2007.pdf.

15 Incitec Pivot to WSRW, February 13, 2015, http://www.wsrw.org/a240x3172.

16 Incitec Pivot, Sustainability Report 2013 (2014), http://www.incitecpivot.com.au/~/media/Files/IPL/Sustainability/2013%20Sustainability%20Report.pdf.

17 WSRW letter to Incitec Pivot, February 6, 2015, http://www.wsrw.org/a240x3171.

18 WSRW, ‘8 Swiss Parliamentarians Protest Ethics of Tasmanian Company’, September 9, 2010, http://www.wsrw.org/a105x1585.

19 Impact Fertilisers to WSRW, May 12, 2008, http://www.wsrw.org/a128x718.

20 Ibid.

21 Wesfarmers to Norwegian Support Committee for Western Sahara, February 15, 2012, http://www.wsrw.org/files/dated/2012-10-05/wesfarmers-skvs_15.02.2012.pdf.

22 Vancity, 2014 Shareholder Engagement Report (2015), https://www.vcim.ca/pdfs/2014ShareholderReport.pdf.

23 Norwegian Ministry of Finance, ‘Government Pension Fund Global: Two Companies Excluded from the Fund's Investment Universe’, news release, June 12, 2011, https://www.regjeringen.no/en/aktuelt/government-pension-fund-global-two-compa/id665637/.

24 United Nations, ‘Letter dated 29 January 2002 from the Under-Secretary-General for Legal Affairs, the Legal Counsel, addressed to the President of the Security Council’, S/2002/161, 2002.

25 Human Rights Watch, World Report 2015: Morocco/Western Sahara (2015), http://www.hrw.org/world-report/2015/country-chapters/morocco/western-sahara.

26 WSRW, ‘Swedish Government Pension Fund Blacklists Sahara Importers', September 30, 2013, http://www.wsrw.org/a217x2664.

27 WSRW, ‘Swedish Government Fund Excludes Agrium over Western Sahara Imports', April 10, 2013, http://www.wsrw.org/a105x3208.

28 KLP, Responsible Investments, SRI Report June 2010, June 1, 2010, https://www.klp.no/polopoly_fs/1.10504.1359544017!/menu/standard/file/sri_report_june_2010.pdf.

29 Danica Pension, ‘Ekskluderte selskaper’, http://wsrw.org/files/dated/2010-12-18/danica_webpage_17.12.2010.pdf.

30 WSRW, ‘European Banks Divest from Unethical Sahara Fertiliser Industry’, November 30, 2010, http://www.wsrw.org/a159x1704.

31 KLP, ‘Exclusion from Investment Portfolios', news release, December 1, 2014, http://english.klp.no/polopoly_fs/1.29227.1417436404!/menu/standard/file/Agrium%20decision%20to%20exclude%2001122014%20ENGLISH.pdf.

32 BrownAdvisory, ‘October 2014 Factsheet', http://www.brownadvisory.com/LinkClick.aspx?fileticket=iobRki8gxSc%3D&tabid=383.

33 WSRW, ‘Luxembourg Pension Fund Blacklists Six Firms over Saharan Imports', November 19, 2014, http://www.wsrw.org/a106x3065.

34 WSRW, ‘Investors Calling on Company Responsibility’, June 20, 2012, http://www.wsrw.org/a214x2343.

35 Ibid.

36 United Nations, ‘Letter dated 29 January 2002 from the Under-Secretary-General for Legal Affairs; Morocco World News, ‘Full Text of King Mohammed VI's Speech on 39th Anniversary of Green March', November 6, 2014, http://www.moroccoworldnews.com/2014/11/143369/full-text-of-king-mohammed-vis-speech-on-39th-anniversary-of-green-march/.

37 Interview with investor, 2014. None of the investors that the author and WSRW have been in contact with have ever received an answer from Innophos. WSRW letters remain unanswered. An example of the lack of response can be seen in Council of Ethics for the Norwegian Government Pension Fund Global, ‘Recommendation 26 September 2014 to Exclude Innophos Holdings Inc’, September 26, 2014, http://www.etikkradet.no/en/recommendation-26-september-2014-to-exclude-innophos-holdings-inc/.

38 Kempen Capital Management, Annual Report 2012, Sustainability Report (2013), http://www.kempen.nl/uploadedFiles/Kempen/01_Asset_Management/Specialismen/Duurzaam_beleggen/Annual%20report%202012%20sustainability.pdf.

39 Ibid.

40 WSRW contact with all investors confirms this trend. An indication of the content of the analysis is to be found in a statement by the importer PotashCorp: ‘Phosphate Rock from Western Sahara’, August 2014, http://www.wsrw.org/files/dated/2015-07-26/potashcorp_rock_position_aug2014.pdf.

41 WSRW, ‘US Law Firm Continues Pro-occupation Lobby’, December 8, 2013, http://www.wsrw.org/a204x2181.

42 WSRW, P for Plunder 2014 .

43 WSRW, ‘OCP Refuses to Respond to Saharawi Refugee’, March 4, 2015, http://www.wsrw.org/a105x3169.

44 WSRW, ‘This Video is Too Tough for OCP, Tries to Stop Youtube Stunt’, November 16, 2013, http://www.wsrw.org/a217x2704.

45 Norwegian Government Pension Fund, Council on Ethics, ‘Recommendation’, October 15, 2010, https://www.regjeringen.no/globalassets/upload/fin/etikk/2011/rec_phospahte.pdf.

46 WSRW, ‘European Banks Divest from Unethical Sahara Fertiliser Industry'.

47 Christopher Donville, ‘Agrium Was No. 1 Buyer of Phosphate From Western Sahara’, Bloomberg, March 13, 2015, http://www.bloomberg.com/news/articles/2015-03-13/agrium-was-no-1-buyer-of-phosphate-from-western-sahara.

48 WSRW, ‘No More Mosaic Phosphate Imports from Western Sahara’, August 26, 2010, http://www.wsrw.org/a159x1568.

49 Sparinvest, ‘Sparinvest Responsible Investment Review’, July 2014, http://www.sparinvest.co.uk/~/media/international/downloads/ri/jul2014_sparinvest%20responsible%20investment%20review.ashx.

50 WSRW., ‘The Jinhui Decision to Stop Shipping Western Sahara Phosphate Rock’, April 24, 2015, http://www.wsrw.org/a128x3216.

51 Gerald Hayes, ‘Conquering the World or Baby Steps? SRI's Puzzling Progress', Global Capital, September 9, 2013, http://www.globalcapital.com/article/jbxq1jtctxz6/conquering-the-world-or-baby-steps-sris-puzzling-progress.

52 Ivan Broadhead, ‘A Line in the Sand’, South China Morning Post, May 11, 2008, http://www.scmp.com/article/637220/line-sand.

53 UNPRI, Report on Progress 2010 (2011), http://2xjmlj8428u1a2k5o34l1m71.wpengine.netdna-cdn.com/wp-content/uploads/2010_Report-on-Progress.pdf.

54 Rachel Alembakis, ‘Christian Super Engaging with Companies on African Assets', The Sustainability Report, October 12, 2014, http://www.thesustainabilityreport.com.au/christian-super-engaging-with-companies-on-african-assets/.

55 UNPRI, ‘PRI Reporting and Assessment Survey 2010, Full Responses', Your Organisation: Folksam, http://unpri.org/report10/2010_PDFs/PRI%202010%20-%20Full%20Responses%20for%20publication%20-%20Folksam%20%280017000000N7cw1%29.pdf.

56 Northward Capital, ‘Environmental Social and Governance News', February 2012, http://www.northwardcapital.com/sites/default/files/ESG%20Update%20Feb%202012%20FINAL_1.pdf.

57 Ibid.

58 This is the formal name of the company, rather than being the company's initials.

59 Wesfarmers to Norwegian Support Committee for Western Sahara, February 15, 2012, http://www.wsrw.org/files/dated/2012-10-05/wesfarmers-skvs_15.02.2012.pdf.

60 Ibid.

61 Rachel Alembakis, ‘Christian Super Engaging with Companies on African Assets'.

62 F&C Investments, ‘F&C Portfolios Fund Interim Period ending 31 March 2013', www.fandc.com/documents/portfolios-fund-reo-report-q1-2013/.

63 UNPRI, ‘PRI Reporting and Assessment Survey 2010, Full Responses'.

64 Folksam, ‘Företag i vilka vi inte placerar' [Companies in which we do not invest], http://omoss.folksam.se/varthallbarhetsarbete/varaplaceringskriterier/uteslutnaforetag (accessed July 20, 2015).

65 WSRW, P for Plunder. Morocco's Exports of Phosphates from Occupied Western Sahara, 2012 & 2013 (2014), http://www.wsrw.org/a228x2905.

66 Ibid.

67 PotashCorp, ‘PotashCorp Confirms Friendly Proposal to K+S', news release, June 25, 2015, http://www.potashcorp.com/news/2034/.

68 Novethic, Entreprises controversées, Les listes noires d'investisseurs changent-elles la donne? (2013), http://www.novethic.fr/fileadmin/user_upload/tx_ausynovethicetudes/pdf_complets/Entreprises_controversees_2013_Etude.pdf.

69 Dutch Association of Investors for Sustainable Development (VBDO), ‘Responsible Investment, Human Rights and the Extractive Industry’, May 2013, http://www.profundo.nl/files/download/VBDO1305.pdf.

70 See for example, Triodos Bank, ‘Disputed Territories', April 8, 2014, https://www.triodos.com/en/investment-management/who-we-are/news/newsletter-research/disputed-territories/. See also Armina Ligaya, ‘Desert Storm: Why Canadian Fertilizer Firms' Phosphate from Western Sahara is Causing Controversy’, Financial Post Magazine, February 11, 2014, http://business.financialpost.com/financial-post-magazine/desert-storm-why-canadian-fertilizer-firms-phosphate-from-western-sahara-is-causing-controversy; Meritas, Shareholder Engagement Activity Report, Q1/2013, January 1–March 31, 2013, http://www.standardlife.ca/sri/pdf/Engagement_Report-2013Q1.pdf.

71 PotashCorp, ‘Phosphate Rock from Western Sahara’, August 2014, http://www.wsrw.org/files/dated/2015-07-26/potashcorp_rock_position_aug2014.pdf; PotashCorp, ‘Phosphate Rock from Western Sahara’, April 2013, http://www.wsrw.org/files/dated/2014-03-25/potashcorp_rock-position_apr2013.pdf; PotashCorp, ‘Phosphate Rock from Western Sahara', April 2012, http://www.wsrw.org/files/dated/2013-04-08/potashcorp_rock-position_apr2012.pdf; PotashCorp, ‘Phosphate Rock from the Western Sahara', April 2011, http://www.wsrw.org/files/dated/2011-05-15/potashcorp_statement_apr2011.pdf.

72 Desjardins Funds, ‘Bulletin', 3, no. 3 (September 2012), http://www.fondsdesjardins.com/information/bulletin-monde-en-action-2012-t3-en.pdf; SHARE, Shareholder Association for Research & Education, Shareholder Engagement Activity Report, Q1/2013, January 1–March 31, 2013, http://www.share.ca/files/Q1_2013_Shareholder_Engagement_Activity_Report_PUBLIC_1.pdf.

73 NEI Investments, ‘Ethical Investments, Corporate Engagement Focus List, Update, July 2014’, http://www.neiinvestments.com/documents/FocusList/Focus%20List%202014%20July%20Update%20EN.pdf.

74 United Church of Canada, Responsible Investment Update: June 2014’, http://www.noodls.com/view/B3629ABB578776679E12989AEEDFACD1D2ED8B42?1793xxx1404476090.

75 WSRW, ‘Swedish Government Pension Fund Blacklists Sahara Importers', September 30, 2013, http://www.wsrw.org/a217x2664.

76 AP-Fonden, Annual Report 2014 (2015), http://www.ap2.se/Global/Etikr%C3%A5det/Arsrapport%202014%20Etikr%C3%A5det%20150409%20SE.pdf;Folksam, Sustainability Report 2013 (2014), http://media.folksam.se/en/files/2014/05/Folksam-Sustainability-report-2013.pdf.