Canadian firms dominate phosphate imports from Western Sahara

Published by MAC on 2016-08-21
Source: WSRW, Financial Post, The Catholic Register

PotashCorp ignores its owners and buys massive cargo from occupied territory

WSRW concerned over increased Agrium imports

Western Sahara Resource Watch has requested further clarifications from the Canadian company Agrium, which is importing phosphate rock from occupied Western Sahara.

http://www.wsrw.org/a105x3537

11 July, 2016

Western Sahara Resource Watch today sent a letter to Agrium Inc, the Canadian large-scale importer of phosphate rock from occupied Western Sahara. Since Agrium first imported from the territory in 2013, it has been the largest importer of phosphates from Western Sahara,

Prelimilary analyses from WSRW show that Agrium so far in 2016 has most probably increased its imports in relation to 2015. In none of Agrium's letters to WSRW, has the company responded to questions relating to the Saharawi people's right to manage their own resources. This is most clear in a letter from Agrium to WSRW on 19 February 2016 as a response to a letter WSRW sent the company on 26 January 2016.

"The available evidence suggests that Agrium has failed to seek the consent of the people of the territory, something underscored by Agrium’s lack of will to respond to questions relating to the seeking of such consent and to questions relating to the legal nature of the territory", WSRW wrote to Agrium today.

The letter also repeats questions that the company has so far failed to respond to:

(1) Would Agrium agree that the people of Western Sahara have a right to self-determination as defined by international law and the 1990-91 referendum agreement of the UN, Morocco and the Frente Polisario?
(2) Does Agrium agree with the conclusion of the International Court of Justice that there are no ties to sovereignty between the kingdom of Morocco and the territory of Western Sahara?
(3) Does Agrium accept the 2015 conclusion of the UN Committee on Economic, Social and Cultural Rights (CESCR) about the principle of the prior, free and informed consent of the Saharawis in relation to the exploitation of Western Sahara’s natural resources?
(4) How will the company assure itself of a credible consent of the Saharawi people prior to any more imports from Western Sahara?
(5) Does Agrium accept the 2015 conclusion of the Court of Justice of the European Union that Morocco has no mandate to administer Western Sahara?
(6) What does Agrium say in reply to the 2015 legal opinion of the African Union about the exploitation of occupied Western Sahara’s natural resources?

WSRW also urges the company "to immediately and unconditionally stop the purchases of phosphates from occupied Western Sahara."

Since the previous correspondence between Agrium and WSRW in January-February 2016, the company has purchased four vessels with a combined volume of about 230.000 tonnes of phosphates. A fifth vessel, Navios Vega, is currently in Rio de Janeiro carrying Western Sahara phosphates, also possibly on the way to Vancouver, around the south tip of South America. This fifth vessel is so far not confirmed for Agrium. With such a trend, the Agrium imports for 2016 will surpass its 2015 purchases.

Read about Agrium's 2015 imports, and the controversies surrounding the trade, in our report P for Plunder. In 2014 and 2015 combined, Agrium imported around 40% more than the second biggest importer from Western Sahara, PotashCorp.

The trend is that fewer and fewer companies registered on international stock-exchanges take part in the trade. Only three such companies are today active: Agrium Inc, PotashCorp and Incitec Pivot. The exports of phosphates is Morocco's biggest source of income from the part of the territory of Western Sahara which it has held under foreign occupation since 1975.

Half the people of the territory live as refugees in camps in Algeria, following the invasion. They see their national wealth disappear while in exile.

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PotashCorp ignores its owners, buys massive cargo from Western Sahara

Only three weeks after nearly a third of its shareholders had requested a human rights review of its imports from occupied Western Sahara, the Canadian fertilizer firm PotashCorp is expecting a giant shipment of phosphate rock from the occupied territory.

http://www.wsrw.org/a105x3493

3 June, 2016

On 30 May, a giant vessel carrying 70.000 tonnes of phosphate rock departed from Western Sahara and set sail for PotashCorp's plant in Louisiana, United States. The vessel, ‘Marto’  is a Marshall Islands flagged bulk carrier that arrived in the occupied territories on 9 May.

Just three weeks ago, at PotashCorp's Annual General Meeting on 10 May, 31,6 percent of the company's shareholders requested an independent human rights assessment to report on the risks of its operations in Western Sahara.

The phosphate mine in Western Sahara is located in the part of Western Sahara that has been illegally occupied by Morocco since 1975 and is being exploited by Morocco's state-owned phosphate company OCP (Office Chérifien des Phosphates). In 2002, the UN Security Counsel's legal counsel concluded that the exploitation or exploration of Western Sahara's natural resources is in violation of international law if undertaken in disrespect of the wishes and the interests of the Saharawi people. The Saharawis, living under Moroccan occupation or displaced into Algerian refugee camps, have consistently spoken out against the trade in phosphates.

PotashCorp ranked in 2015 as the largest importer of phosphates from Western Sahara. The WSRW report P for Plunder 2015, published in April this year, revealed that the company had imported an estimated 474,000 tonnes, worth approximately US $ 56,5 million. The company maintains that it cannot stop importing because doing so would involve a "political judgment" on their side.

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Newfoundland's Sisters of Mercy challenge Potash Corp in board room

Michael Swan

The Catholic Register - http://www.catholicregister.org/item/22381-newfoundland-s-sisters-of-mercy-challenge-potash-corp-in-board-room

May 25, 2016

The Sisters of Mercy of Newfoundland lost a vote at the May 11 Annual General Meeting of Potash Corporation of Saskatchewan, Inc., but they won attention from the mining giant’s management.

The community of 95 Catholic sisters were asking the company, currently valued at $14.7 billion on the Toronto Stock Exchange, to undertake a human rights study of its operations in the Western Sahara. The proposal garnered just 6.7 per cent of the votes at the 2015 AGM, but it attracted support from 31.6 per cent of the outstanding shares — including the votes of major institutional investors this year.

The sisters’ motion was backed by the British Columbia Investment Management Corporation, which handles pension funds for BC public servants, the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan among others — totalling 159,593,972 shares voting for the motion, versus 344,850,348 shares against.

As soon as the vote came in, senior PotashCorp managers came down onto the floor of the meeting to speak with the sisters and their supporters. The Sisters of Mercy had co-ordinated their efforts with mutual fund manager Oceanrock Investments and its Meritas Janzti Social Index funds. The campaign to bring in votes in favour was co-ordinated by SHARE, a labour-backed responsible investor and pension fund organization.

There have been very few investor-sponsored motions at annual general meetings that have outright won a vote for any motion that lacks management backing. But whenever a motion wins votes from more than 10 per cent of outstanding shares, boards of directors and senior executives sit up and take notice, said Sisters of Mercy general superior Elizabeth Davis.

The sisters already have the attention of PotashCorp’s major rival in the agricultural minerals business with a similar motion put to Calgary’s Agrium Inc.’s annual general meeting last year.

“A victory would be if both Agrium and Potash actually had the public, independent assessment of their human rights responsibilities with respect to sourcing phosphate rock in the Western Sahara,” Davis told The Catholic Register.

The Western Sahara has been on the United Nation’s list of “non-selfgoverning territories” since 1963, shortly after Generalissimo Franco’s Spain gave up on playing the colonial power in the region. Morocco filled in the gap when Spain left and currently exercises control over most of the towns and the stretch of Atlantic coast attributable to the region. But the Polisario Front has been seeking independence for the area and its administration. It’s claim is recognized by the African Union. Morocco , which has the backing of most of the Arab League, recently expelled 80 UN peacekeepers as tension are on the rise. Thousands of Western Sahara families live in refugee camps on the borders of the territory.

“I will be honest — I don’t think a human rights impact assessment is going to tell us much we don’t already know,” said Mining Watch Canada outreach co-ordinator Jamie Kneen. “If the UN has a whole string of resolutions on the situation, I don’t think we need to do more research.”

Rather than conduct another study — a process that may take years — Mining Watch would like Potash to simply withdraw until there is a recognized, stable government in the Western Sahara.

“Don’t buy from occupying military forces,” said Kneen.

But Davis doesn’t think the situation is quite so black and white.

“We can’t expect a company like Potash to take any responsibility for the political situation that’s there,” she said. “But what they can take responsibility for is ensuring that their involvement is not adding any further complexity to the political situation and is actually supporting the people themselves in getting a bit closer to their own autonomy.”

The business case for undertaking a human rights assessment is “to protect the company from reputational and operational risk,” according to SHARE.

Much of Canada’s mining community recognizes those as real risks, even if they are hard to quantify, said Mining Association of Canada vice president of sustainable development Ben Chalmers. He praised the sisters for their positive engagement at the Potash AGM.

“It’s a fairly constructive avenue to take, to take a position in a company and then engage with them to get them to take action if you don’t agree with the direction they’re taking,” Chalmers said.

Human rights assessments — farmed out to third party experts and made available publicly — have become a preferred strategy for Canadian mining companies with investments in conflict zones.

An independent and transparent assessment is essential in the Potash case, said Davis.

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Canadian firms dominate phosphate imports from Western Sahara

Peter Koven

http://business.financialpost.com/news/mining/canadian-firms-dominate-phosphate-imports-from-western-sahara-report

April 8, 2016

Two Canadian fertilizer firms have become the dominant buyers of phosphate rock from the disputed territory of Western Sahara after other companies stopped the practice, according to a report.

The study, released Friday by Western Sahara Resource Watch (WSRW), found that Potash Corp. of Saskatchewan Inc. and Agrium Inc. shipped a combined 916,000 tonnes of phosphate from the territory last year. That accounted for 64.5 per cent of all purchases from Western Sahara in 2015. Potash Corp. shipped 474,000 tonnes and Agrium shipped 442,000, the report said.

“Agrium and Potash Corp. are by far the biggest importers,” Erik Hagen, a WSRW board member, said in an interview.

These shipments are controversial because of Western Sahara’s unique status. It is the last remaining colony in Africa, but is under the de facto control of Morocco, which claimed sovereignty over the area after Spain withdrew in 1975. Western Sahara’s Phosboucraa mine, which is the source of the phosphate exports, is managed by Morocco’s national phosphate company and is Morocco’s biggest source of income from the disputed territory.

Hagen said the people of Western Sahara should have the authority to decide what to do with the phosphate, rather than a neighbouring government. His organization believes the mine is being “illegally exploited” by Morocco and thinks foreign companies should stop purchasing phosphate from it.

“Morocco’s claim to Western Sahara is not recognized by any state, nor by the (United Nations),” WSRW noted in its report.

Other large fertilizer companies, including Mosaic Co. and Yara International ASA, have halted their purchases from Western Sahara in recent years due to concerns in the international community and among investors regarding the dispute.

Overall exports from Phosboucraa dropped 33 per cent in 2015 compared to 2014, according to the report. Hagen said the drop was due to operating challenges at the mine and port, in addition to importers buying less rock.

As rival companies have reduced or stopped their imports, the relative share of product being bought by Potash Corp. and Agrium has increased. They accounted for 64.5 per cent of overall Western Saharan purchases in 2015, compared to about 47 per cent in 2014, according to the report.

“The Canadian near-monopoly on this trade will increase even more in 2016,” Hagen said. He suggested that one reason Potash Corp. and Agrium have continued to buy from Western Sahara is that there isn’t much awareness of the territorial dispute in Canada, and investors are not focused on it.

Last November, Saskatoon-based Potash Corp. published a detailed note on Western Sahara. The company said it imports the Phosboucraa ore for its facility in Louisiana because a long-term customer requires a “very specific” type of phosphate rock to meet its needs. Western Saharan shipments to Louisiana have been going on for decades, and Potash Corp. said it has done nothing wrong.

“Neither the (United Nations) nor any other competent legal authority has concluded that the production and use of phosphate rock from Western Sahara is in violation of international law,” the company said in a note.

Calgary-based Agrium only began importing from Western Sahara in 2013. The company had a mine in Kapuskasing, Ont. that reached the end of its life, so it needed to find a new source of phosphate to feed its Redwater processing plant in Alberta.

In a letter to WSRW last February, Agrium said it hopes for a “mutually acceptable political solution” to the dispute.