Photo: Huelva, Spain, Sahrawi refugees demonstrated against the Spanish company FMC Foret, which purchases large amounts of phosphate from a Moroccan state company in occupied Western Sahara. FMC Foret is owned by the American FMC Corp., in which the Norwegian Government Pension Fund has invested. The photo shows a demonstration outside FMC's plant in southern Spain last year. The Pension Fund has invested substantially in companies that import phosphate from Western Sahara. Photo: Javier García Lachica.

By Erik Hagen
Norwatch
(published in English 6 October 2009)

Norwatch has revealed that the Norwegian Government’s Pension Fund has invested massively in the plunder of valuable natural resources in occupied Western Sahara. Calculations made by Norwatch show that eight international fertiliser companies in which the Pension Fund is part owner import a total of two-thirds of all the phosphate that Moroccan authorities export from the occupied areas through their wholly owned state phosphate company.

The value of the phosphate rock that these companies buy must, according to Norwatch's estimate, have reached at least 535 million euros last year. This income goes, more or less directly, to the Moroccan state.

While the Pension Fund is investing billions in phosphate companies, other investors in Scandinavia have divested themselves of companies that buy phosphate originating in Western Sahara.

Long-Term Agreements
Norwatch has for a long time studied the development in the export of phosphate from occupied Western Sahara and has ascertained that the Pension Fund’s total investment in stocks and bonds from companies that import phosphate from Western Sahara was a total of 290 million euros as of 31 December 2008. Most of the import companies seem to have long-term delivery agreements with the state phosphate company, and some of them have based their entire business on the purchase of phosphate.

After the occupation of Western Sahara in 1975 Morocco has made millions of euros on the controversial phosphate export. So far, 2008 has been the peak year. No official figures exist, but from what Norwatch has calculated, Morocco must have made somewhere between 800 million and 1,2 billion euros on export from the occupied areas just last year.

Morocco continues this export even though the UN's Office of Legal Affairs believes that extraction of such natural resources is in defiance of international law, unless it benefits the Sahrawis.

The Norwegian investments in the eight companies are entirely in defiance of the Advisory Council on Ethics’ earlier assessment of the Western Sahara issue.

Divested
In contrast to the Pension Fund, other investors have divested themselves of these investments.

“Extraction of natural resources in an occupied country, and especially Western Sahara, has been declared unlawful by the UN. We therefore believe that companies that, despite this, purchase phosphate from the area can be associated with breaches of international human rights,” Jeanett Bergan, Head of Responsible Investments, KLP Kapitalforvaltning, told Norwatch.

KLP sold its investments in the two Australian fertiliser companies Incitec Pivot and Wesfarmers because of the import from Western Sahara. Investors in Sweden have done the same in the past few years.

Two-Thirds of the Export
As of 31 December 2008, the Pension Fund had invested in the following fertiliser companies that import from Western Sahara:

• Potash Corp of Saskatchewan/PCS (Canada/USA)
• Mosaic Co. (USA)
• Innophos (Mexico), which is owned by American Innophos Holdings
• Tata Chemicals (India)
• Wesfarmers (Australia)
• Incitec Pivot (Australia)
• FMC Foret (Spain), which is owned by the American FMC Corp. (USA)
• Tripoliven (Venezuela), of which the American FMC Corp. (USA) owns one-third

These eight companies have during the past few years faithfully bought about two-thirds of the phosphate rock that is shipped out of occupied Western Sahara yearly - or about 2 million tonnes yearly.

These investments have been made even though the Pension Fund's Advisory Council on Ethics in 2005 made an assessment of the plunder of Western Sahara. Morocco had at that point started oil exploration in the waters off Western Sahara and had engaged the American energy company Kerr-McGee for the job. This was to be the first company to be expelled from the Pension Fund after the Norwegian Parliament passed the ethical guidelines for the Fund.

According to the Norwegian Ministry of Finance, the petroleum company's exploration in Western Sahara was a "particularly serious violation of fundamental ethical norms", since it participated in undermining the UN's peace process and supporting Morocco's sovereignty claims.

The Ministry of Finance found that it was particularly unethical to invest in a company that contributed to future oil extraction in the country. But now the Fund is contributing to another plunder - which is already in progress.

Deliberately
The fertiliser companies' involvement is at least as far-reaching as that of the American oil company:

Most of the companies have long-term contracts that extend over many years at a time. In other words, the import does not consist of occasional single purchases by unsuspecting customers. The four Pension Fund companies PCS, Incitec Pivot, Wesfarmers and FMC Foret have already been importing for at least 16 years. FMC Foret's plant in Spain has been importing ever since the occupation started. The four companies are all on the list of the six biggest importers from the Moroccan state company in Western Sahara.

Some of the companies appear to be totally dependent on phosphate from Western Sahara and import almost no raw materials from other sources than the deposits in the occupied areas.

According to the world's most important authority on the subject, such companies could support a violation of international law: “It is evident that if the phosphate trade continues without approval from the people of Western Sahara, it violates international law”, Hans Corell, former Under-Secretary-General for Legal Affairs, told Norwatch earlier.

Corell wrote the UN assessment on which the Pension Fund's Council on Ethics based their Kerr-McGee analysis in 2005.

Unethical
Cate Lewis, international coordinator of the organisation Western Sahara Resource Watch, declares that they have contacted several of the companies Norwatch now refers to. But the companies have consistently continued to import - and some of them have failed to respond to inquiries.

“It is unethical to make money on this trade. The Norwegian Ministry of Finance has pointed out that the oil industry in Western Sahara both legitimises the occupation and sabotages the UN's peace process. They can hardly claim that there is anything different in this far-reaching phosphate collaboration,” Lewis told Norwatch.

She says the phosphate export finances the extremely expensive occupation and that the business newspaper Forbes recently declared the Moroccan king one of the world's richest monarchs as a result of the phosphate trade.

This Is the Issue

• As of 31 December 2008, the Pension Fund had invested in eight fertiliser producers that purchase two-thirds of all the phosphate rock yearly exported by Moroccan authorities in Western Sahara.
• The Pension Fund's total investments in stocks and bonds from these phosphate importers were, as of 31 December 2008, 290 million euros.
• If one supposes that the eight companies in 2008 imported altogether about 2 million tonnes of phosphate and estimates that the average phosphate price last year was USD 350/tonne, then the eight Pension Fund companies' total import from Western Sahara last year amounted to USD 700 million, or about 535 million euros. This is a conservative estimate, based on relatively low production and price levels. At its peak the phosphate price last year was closer to USD 500/tonne. Calculations of the companies' import volume are made on the basis of customs registers and harbour statistics in the importing countries.
• The companies have been importing for many years. PCS - and its predecessors - in Louisiana, USA, has imported phosphate continuously at least since the end of the eighties. Incitec Pivot and Wesfarmers in Australia and Tripoliven in Venezuela have imported sine the early nineties. Mosaic Co. in Florida imported at least in the period 2006-2008. Innophos in Mexico has imported at least since 2006, possibly much longer. Tata Chemicals, India, at least since 2004. And FMC Foret in Spain, and its predecessors, has most probably imported phosphate from Western Sahara the whole time that the area has been occupied.
• Moroccan phosphate production in Western Sahara, which is carried out by the state phosphate company Office Cherifien de Phosphates (OCP), has during recent years been stable at about 3 million tonnes yearly.
• In 2006 the Pension Fund divested itself of an American company that contributed to prospective oil extraction in Western Sahara.
• Phosphate rock is an extremely expensive raw material with few large deposits in the world.