International conference on multilateralism and international law,
with Western Sahara as a case study

4 and 5 December 2008
Pretoria, South Africa

Erik Hagen
journalist from Norway

The role of natural resources in the Western Sahara conflict, and the interests involved

[trad. al espanol]

Some attribute the rich phosphate deposits in Western Sahara as one of the reasons why
Morocco developed claims to Western Sahara in the first place. “One Kuwait in the Arab world is enough”, King Hassan II allegedly said, justifying the 1975 invasion mineral rich Sahara.

Although there might have been several reasons to the occupation itself than only natural resources, the resources today play a central role in strengthening Morocco’s presence in the territory. The industries offer job opportunities to tens, or perhaps hundreds, of thousands of Moroccan settlers, and provide important incomes for the Moroccan government. The international commercial presence in Western Sahara furthermore offers a sign of political acceptance of the occupation.

The parts of Western Sahara under Moroccan control contain two important natural resources that are crucial to industries worldwide: fish and phosphates. In addition to that, there is a growing agriculture industry, sand and possibly oil.

After going through the industries and the international presence, while touching upon its socio-economic effects, I will look at the reasons the companies give for their presence, and the political implications of the activities.

The Western Saharan resources

The phosphate industry
Spain made the first phosphate discoveries south east of El Aaiun in the late 1940s. Up until the 70s Spain invested largely in developing infrastructure for the phosphate production. Today, one can still see the outcome of the investments: the world’s largest conveyor belt, 100 kilometers long, transporting the phosphates from the deposits in Bu Craa, out to the harbour where the phosphate rock is washed, dried, stockpiled, and later shipped over to vessels waiting to be filled up.

And it is indeed a flourishing industry nowadays. Anyone visiting El Aaiun harbour in October-November 2008 could see up to 5 bulk vessels lining up one after the other, waiting to be loaded with the cargo.

It is not that easy to see, however, how the Moroccan take-over of the phosphate industry can have been beneficial to the Sahrawis. A report by the French organisation France Libertés -Fondation Danielle Mitterrand , showed that the Sahrawis have been systematically marginalised from the phosphate industry in Bu Craa. In 1968, few years before Morocco took control over the phosphate mines, most of the 1600 workers in the industry were Sahrawis. Today, only some 200 people of the 2000 workers are reported to be of that origin, according to the Sahrawi workers themselves. The rest are Moroccans who have moved into the territory.

Every single week, discontented retired Sahrawi phosphate workers demonstrate in the streets of El Aaiun against what they say are lack of payments and rights.

With a production of around 30 million tonnes of phosphate rock annually, Morocco is the biggest exporter of phosphate rock in the world. Of that volume, about half is exported, and the last years, 3 million tonnes of that volume are of Western Sahara origin. The output from the Western Sahara mines has gradually increased from 1,5-2 million tonnes during the 90s. The volume has over the years normally been limited by lack of sufficient infrastructure, such as insufficient power and freshwater for Morocco’s state phosphate company, OCP.

With this year’s boom in prices and production, I would estimate that the production for 2008 will reach an all-time record, ending up closer to 4 million tonnes.

During the last few years, one has now uncovered which companies in the world are importing the phosphates from Western Sahara. Approximately 16 companies from 12 countries are today engaged in imports of these phosphates. Most of these firms import under long-term contracts, some up to 10 years of duration. The phosphates are used mainly for production of fertilisers for the agriculture industry.

The biggest importers are to be found in USA, New Zealand, Australia, Mexico and Lithuania. Medium importers are located in Colombia, Venezuela, Spain, Croatia, while Bulgaria, India and a few more imports on a more irregular basis.

With the increased production – and most of all due to increase of phosphate prices – it is easy to establish that OCP’s incomes in Western Sahara have truly boomed. For several years, the global phosphate rock prices were more or less stable, at around 50 dollars a tonne. Then, from 2007 till today, the price of phosphates has increased over 800%. The last weeks of October-November 2008, have seen a slight drop of prices again, and one tonne is now supposedly worth around 414 dollars.

One single cargo of phosphate, for instance the one containing the 70.000 tonnes of phosphate rock carried by a Swiss owned vessel that arrived Louisiana, USA, only two weeks ago, can thus be of the same value as the entire multilateral humanitarian aid to the refugee camps in one whole year, namely around 30 million USD.

Around 100 vessels depart from El Aaiun every year. Perhaps 150-300 shipping companies are involved in the transports annually. These companies come from practically all European, North American and Asian shipping nations.

The United States is the biggest importer. For more than a decade, the US has received 99% of its imports from Morocco/Western Sahara. US importers could have imported a total of roughly 10 million tonnes of Saharan phosphates over the last 20 years. With today’s phosphate price, if these 10 million tonnes of phosphates had remained untouched awaiting a settlement of the conflict, its value would today have been around 4 billion USD – or 138 times as much as what the international community gives to the refugee camps in Algeria through multilateral aid every year.

Morocco’s annual incomes from Bu Craa could for 2008 amount to around 1,7 billion dollars. That equals around 10000 dollars per Sahrawi refugee per year. Multilateral aid to the refugee camps for 2007 equals 1,7 percent of the estimated income from Bu Craa for 2008, given that price is 414 dollars and production is 4 million tonnes.

It is hard to come with a good explanation to the increased phosphate prices. One factor can be attributed to the increased volume of biofuel production, which has triggered a high demand for fertilisers. This is rather ironic, because biofuel is normally considered a renewable replacement of hydrocarbons, something which it is clearly not. Its expansion is rather dependent on another non-renewable resource, namely phosphorous.

The diminishing phosphate rock deposits globally means that other leading phosphate producing states, such as the US and China, are reluctant to export their own phosphate rock.

It is estimated that the deposits in Bu Craa will be depleted by 2040-2050. That time period corresponds with what researchers estimate to be the global peak for phosphorous production. With increased food and biofuel production, changed diets for a large part of the world population, and an intensified scramble over the global phosphate reserves, it is very likely that we will observe a continued price increase for phosphate rock the coming decades, and thus unprecedented income for OCP’s operations inside Western Sahara.

“With US and China tightening its grip around their own mined phosphates, and as the phosphate prices will continue to grow, the mines in Morocco and occupied Western Sahara will become increasingly important for world phosphate importers and for the global agriculture industry. Western Sahara’s phosphate reserves will become a real gold mine for Morocco in the future”, says one of the few researchers on global phosphate industry, Dana Cordell, at the Global Phosphorus Research Initiative .

The Fisheries
Only a small minority of the Sahrawis, mostly from the Dakhla region in the south, have traditionally been engaged in fishing activities. With very few exceptions, the industry today remains under Moroccan, not Sahrawi, control. 

The fisheries industry has a crucial effect on the demography in the region, and thus probably also on the possibilities on finding a solution to the conflict. With incentives such as reduced taxes and subsidies, housing programmes and social projects, the Moroccan government has succeeded to attract tens of thousands of unemployed people from cities such as Agadir and Casablanca to settle in Western Sahara. And these people to a large extent find their jobs related to the growing fisheries industry.

With the fish stocks diminishing after overfishing offshore Morocco proper, particularly offshore the Mediterranean coast, Western Saharan fisheries have become increasingly important for Morocco. The main species are types of cephalopods and sardines. Some estimates suggest up to 70-90 percent of the Moroccan catches are being landed in the harbour of Western Sahara. This has been facilitated by big investments in the ports of Dakhla, El Aaiun and Boujdour.

I would estimate a few hundred foreign companies have been identified in these industries by now, both fishing companies, manufacturers, exporters and importers/distributors. This has been built up around a flourishing industry of processing, canning and freezing plants that have popped up along the coast. The last decade has also seen developing an industry of fishmeal and fish oil exports, used for production of animal foods and health products in Europe. The fish and fish products are exported mainly to the Middle East, Europe and East Asia.

The fisheries itself offshore Western Sahara is taking place on three levels.
a) EU or foreign states (such as Russia, Japan) having agreements with Morocco. These bilateral or multilateral agreements with Morocco do never mention Western Sahara itself, but they are de facto applied for the waters adjacent to that territory.
b) private commercial fishing under Moroccan flag.
c) small-scale fishermen, living in settlements along the Western Sahara coast.

I will now quickly go through these three levels.

The best-known foreign fisheries agreement is the EU-Morocco Fisheries Partnership. Although the Russian agreement might be just as important on the fisheries sector, I will only look into the EU agreement here.

There have been long traditions for foreign fishing in Western Sahara waters. For centuries, fishermen from the Canary Islands and from the Spanish mainland have been chasing the resources off the Western Saharan coast. Just as Spain did with maintaining rights in the phosphate industry when leaving Western Sahara, so they did with the fisheries. When Spain signed the Madrid Accords with Morocco and Mauritania, they made sure that they maintained rights to licences offshore the territory. These rights have been more or less kept ever since, interrupted only in shorter periods. This has been very detrimental for the Sahrawis. When Spain became member of the EU, Spain brought this tradition into the EU cooperation. Still, today, Spain has controlled the process of the negotiation with Morocco, as well as most of the licences. 100 of the 114 licences under the current 144.4 million euro EU-Moroccan Fisheries Partnership Agreement fell to Spain.

The EU-Moroccan Fisheries Partnership Agreement itself identifies that it is applicable to “the waters falling within the sovereignty or jurisdiction of the Kingdom of Morocco”. The four years Agreement entered into force on March 1st, 2006.

When it was asked to have Western Saharan waters specifically excluded from the Agreement, the EU Commission replied it was not necessary. “The Commission proposal is in conformity with the legal opinion of the United Nations issued in January 2002”, it stated , clearly misinterpreting the UN advice, and the Sahrawi people’s wishes. 

The EU chief negotiator of the Agreement, César Deben, stated in fact that that the EU Commission considers Western Sahara waters to be Moroccan, according to the Madrid Accords from 1975, an agreement that the same UN opinion in practice considers invalid. Even more contradictory, most of the fisheries are taking place offshore the southern parts Western Sahara – in the territory that the Madrid Accords ceded to Mauritania, not to Morocco.

After 7 different written questions to the EU Commission, it finally succeeded Members of the European Parliament to get an official statement from the Commission in April 2008, that in fact fisheries have been going on inside Western Sahara under the current agreement .

The second category of fisheries is based on commercial licences to private companies under Moroccan flag, normally to owners of trawlers. Generally, for a private company to enter fishing grounds outside of the governmental or EU fisheries partnerships, they must obtain Moroccan flag. Foreign firms mostly get that through joint-ventures with Moroccan enterprises. Companies from countries such as Norway, Denmark, New Zealand and probably also Namibia/South Africa seem to have been using this strategy to get access.

The last category of fisheries, is the one constituted by the small-scale Moroccan fishermen. They are either living in the towns of El Aaiun, Boujdour or Dakhla, but also in separate, smaller fishing communities along the coast.

The small-scale fisheries often end up competing with the other two levels of fisheries over fishing rights. It is interesting to notice that even the community of small-scale Moroccan fishermen are not necessarily satisfied with the Moroccan government’s issuing of licences to foreign governments or private firms. There have been incidents of demonstrations carried out by the Moroccan fisheries communities against their own government, demanding increased quotas.

There are also often reports of poor Moroccan control over the fishing, both the national and international commercial fleet, and there are occasionally reports of foreign companies exceeding their quota, or using wrong fishing nets.

The possibilities of petroleum
To the contrary of their neighbour country to the east, Morocco produces no hydrocarbons. Completely dependent on imports, and with increasing oil prices, the Moroccan government has been eager to make their own findings, both onshore and offshore its own territory.

From 2001, they continued earlier efforts from the mid-80s, and extended the petroleum searches also into Western Sahara, by granting petroleum reconnaissance licences to the French firm TotalFinaElf (later Total) and to the American energy company Kerr-McGee. The awards sparked immediate protests from Polisario Front, leading up to the much mentioned legal opinion from the UN secretariat in 2002 .

Although the UN opinion stated that "if further exploration and exploitation activities were to proceed in disregard of the interests and wishes of the people of Western Sahara, they would be in violation of the principles of international law", that is exactly what is going on today on the oil sector.

Total and Kerr-McGee withdrew from the territory few years after the UN opinion, claiming that there were low prospects of finding oil on their allotted blocks. But another company has picked up where Kerr-McGee left.

Immediately after Kerr-McGee’s departure in 2006, their Texas based partner Kosmos Energy signed a contract for continuation of the activities together with the Moroccan state oil company ONHYM. There are indications that there could indeed be located petroleum offshore the so-called Boujdour block in Western Sahara. Production is currently going on offshore North Mauritania, in what are supposedly the same geological layers. According to Kosmos Energy’s own reports, they plan to drill in the Boujdour block in 2009.

The other current petroleum project in Western Sahara, consists of a joint venture headed by the small Irish oil company Island Oil and Gas. They have a reconnaissance contract for a block onshore Western Sahara, overlapping the city of Smara, and actually covering both territories under Moroccan and Polisario control. It is not clear whether they have actually carried out exploration on the ground yet. The zone is highly militarised, and a place with frequent demonstrations by the Sahrawi organisations.

There are no sign that these oil companies have consulted the Sahrawi people prior to signing their contracts with the Moroccan government.

More industries developing
In addition to the fish and phosphates, and possibly oil, a few more key businesses have emerged over the years.

Western Sahara has for decades been an important exporter of sand. A majority of the sand purchasers have now been identified, being mostly on the Canary Island and Madeira. The importers use the sand for construction industry purposes, and for maintenance of the constructed tourist beaches.

Furthermore, since the Spanish times, various metals and minerals have been explored in the territory, such as zirconium and iron.

A French company has recently entered into some kind of agreement for retreiving uranium from the phosphate mines in Western Sahara.

In the southern parts of Western Sahara, in the Dakhla area, a big fruit and vegetable industry has developed since around 2004, based on usage of underground fresh water reservoirs. Several thousand new Moroccan settlers are employed in this industry – one Moroccan source mentions 5000 people. The exports are mainly to the close European markets.

Linked to all these businesses, a number of foreign companies work on infrastructure projects in Western Sahara, such as energy projects, port/harbour works, desalination programmes, water drilling, and lately also on tourism.

From the companies’ point of view

Sometimes you find that companies had good intentions when they decide to invest and settle in Western Sahara. Some companies have even been supported by foreign aid money, especially certain projects related to building of infrastructure or other projects with a social purpose.

Although many of them are in close contact with their own governments or multinational institutions, they do not necessarily, regrettably, encounter any form of criticism or political advice when starting upon such adventures in occupied Western Sahara.

Take a fisheries company, for example. They would normally seek some kind of advice (e.g. regarding financial support, regulations, registration) from their own authorities when they decide to go abroad. They would then normally make contact with their own fisheries ministry – and not with their ministries of foreign affairs, where the knowledge of Western Sahara issue would normally be located.

For the EU countries involved in the EU-Moroccan Fisheries Partnership Agreement, the fisheries ministries would then consult their companies on licences, catches and reporting. At times, it could actually be the ministry itself that promoted the companies to look for the opportunities in Western Sahara.

The companies are completely surrounded with other interests without knowledge of the conflict. They meet Moroccan trade partners in Fairs in Europe or in Morocco, and deal loans with banks unfamiliar with the issue. Their boards or shareholders might have never heard of the conflict.

And the information they get on the fish stocks, could be coming for instance from UN’s Food and Agriculture Organisation (FAO), which explores the occupied waters in cooperation with Moroccan research institutions, and with Moroccans on board its research vessels.

And once their operations in Western Sahara start, they hand in their catches to factories that are even certified by the European Union. When they label their products for export to the EU, the name of the certified production unit is then inserted in the certificates of origin, which accompany the product on its journey abroad. And the importer in Europe is obliged to report on which country it comes from, namely “Morocco”. There are dozens, or hundreds, of EU certified companies within Western Sahara. This is very unlike how the EU treats producers located on Israeli-occupied land.

The natural resources as politics

Taken into account that companies could avoid ever having discussed the Western Sahara issue with national governments, financial institutions, owners, industry organisations, it is perhaps not strange that some companies themselves are surprised when they suddenly come in the spotlight of campaigns from Sahrawis or from the Western Sahara solidarity movement. Some companies actually state that they have never heard of the conflict when they are approached the first time. The only source of information they ever got on the conflict, was obtained form the Moroccan trading partners in Western Sahara, or Moroccan authorities or media.

“We have been here for years, and this is the first time we hear of this issue”, one company stated in 2002. “I have been explained that the Sahrawis don’t want to take part in our project”, the CEO of another company stated in 2005.

The companies themselves often underline that they do not themselves engage in politics, only business. But that does not seem to prevent the very same companies from coming with strong political statements, in support of the Moroccan position. In that way, they become tools of the Moroccan strategy for colonising Western Sahara.
“There is no conflict. And the UN has by the way given Western Sahara to Morocco a long time ago”, said TotalFinaElf’s ethics director in 2001, after getting one of the oil reconnaissance licences offshore the territory.

“The acreage is disputed with (sic) Western Sahara, but Kosmos believes it has made the right bet as to which party will prevail”, the US oil company Kosmos Energy wrote in a recent report.

The strongest private defenders of the legality of the industry, and of the Moroccan position, are naturally those who are most dependent on the natural resources in Western Sahara, or those who have invested most money in the territory. The phosphate importers have been among most active.

For a long time, a number of the phosphate importers have claimed that their imports are in line with international law, and positive to the development of the region. This contrasts other reports by Sahrawis themselves. Only recently, has it been revealed that the phosphate companies that defend their involvement are relying on a legal analysis made by a Washington based law firm called Covington & Burling, which is supposedly proving that the phosphate industry on the ground in Western Sahara is both good for development, and in line with international law. The problem is that neither the importers, nor the US law firm wishes to disclose the legal analysis. It thus remains unknown for the public, even for the Sahrawis themselves, how the industry has come to the conclusion that the people of Western Sahara is benefiting from the industry.

Governments start taking position

In other words, in addition to the offering of employment opportunities and income for Morocco, the resource plundering has an important political dimension.

The companies are, in their turn, sometimes supported by their home governments. The political support is showed either through direct political statements favouring the companies involved, or through lack of visible will to stop them.

Many of the governments that have been confronted with their companies’ involvement state that due to the absence of UN Security Council sanctions 1) the industry must be legal and 2) there is nothing they can to do to prevent their companies from being involved.

Other arguments are also used. The New Zealand case could serve as an example. Former New Zealand Minister of Trade, Phil Goff, stated this:

“I am advised that there are no legal grounds for banning the trade from Morocco. Indeed, to do so would be subject to a legal challenge from Morocco under international trade law” . Later New Zealand would precise that such a ban can be in violation of GATT regulations. This interpretation shows also lack of ability to differ the territory of Western Sahara from the neighbouring territory of Morocco: Western Sahara is not part of GATT, only Morocco is.

He also stated that they did not know whether the Sahrawis benefited or not.

Two years later, in 2008, the government admitted that such benefits are not applied to support for the exercise of the right to self-determination. They also state that the respect for self-determination over the natural resources is a matter for Morocco to consider, not for the companies that take part in it.

“I was told by Morocco that the local community is benefiting through the provision of money, jobs, infrastructure and services. Clearly, however, such benefits are not applied to support for the exercise of the right to self-determination, including independence: Morocco continues to claim sovereignty over the Western Sahara. Whatever the rights and wrongs of Morocco’s approach, the responsibility is Morocco’s. New Zealand companies breach no laws in importing phosphate extracted from Western Sahara, or marketing fish caught off its coast.”

In this way, the government of New Zealand basically rejects that they or their companies or the government itself have responsibilities in matters of international law in the case of Western Sahara.

Another grave example is how the EU Commission on one side claims to support the Sahrawis’ right to self-determination, while on the other enters into agreements with Morocco for natural resources plundering of Western Sahara, stating it is politically irrelevant.

“The Commission wants to avoid that a Fisheries Agreement, which is an act of economic cooperation, be manipulated in a political context. The Moroccan government has had a very explicit attitude on this”, the EU chief negotiator on the fisheries agreement said to Europapress 28 July 2006. 

Interestingly, even the Moroccan government seem to disagree with the EU. Trade agreements covering Western Sahara has indeed important political dimensions:
“In a recent interview with ALM, Mohamed Laenser, Minister of Agriculture, Rural Development and Fisheries, indicated that the financial aspect was not necessarily the most important with this [EU Fisheries Partnership] agreement. The political aspect is not less important, Mr. Laenser added“.

Some governments, however, do recognise that despite the absence of UN Security Council resolutions, it might still be in violation of international law, and that the industries must stop.

“The Swedish government’s position when it comes to understanding international law in this matter is clear. The area we today call Western Sahara […] is occupied by Morocco. […] Morocco has no right to exploit the natural resources in Western Sahara for its own benefit.”

As to this day, a handful of states have come with unambiguous statements to their own companies, urging them to stay away from Western Sahara. Norway and Sweden have gone farthest. The Norwegian government has issued on their homepages a statement to Norwegian companies, urging Norwegian companies to stay away from the territory , and says that the trade might be in violation of the Convention of the Law of the Sea. Also Ireland and Denmark have come with interesting statements in this regard.
Upon its divestment from the US oil company Kerr-McGee, the Norwegian government stated that Kerr-McGee’s oil exploration in Western Sahara was “a particularly serious violation of fundamental ethical norms e.g. because it may strengthen Morocco’s sovereignty claims and thus contribute to undermining the UN peace process”.

Countries like USA or Switzerland have specified that their trade cooperation with Morocco only apply to Morocco as it is internationally recognised, not including Western Sahara. In such statements, the Sahrawis today find important political support.

Several private companies have taken notice of this development. A dozen companies in fisheries, phosphates, oil and shipping industry have withdrawn from Western Sahara after pressure from Sahrawis, the civil society and national governments.

There is a clear tendency that governments and private companies look to the practice of other governments and competing firms, in establishing policy and practice in the issue of participation of natural resources plundering in Western Sahara.

Natural resources related statements from governments defending the Sahrawi people’s right to self-determination over their own natural resources, have therefore important domino effect on other states, and has an important preventive function vis-à-vis companies that consider establishing on the land before the conflict is solved.

In this context it can be noted that some governments with a strong position in defence of the Sahrawis’ right to self-determination and independence, have still not issued public statements or advice to their own companies as to how they should relate to the natural resources exploitation in Western Sahara.

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