07 December 2011 22:25 [Source: ICIS news]
HOUSTON (ICIS)--Canada-based fertilizer producer PotashCorp said on Wednesday it is comfortable buying phosphate sourced from the disputed Western Sahara territory after Norway's finance ministry announced it would exclude the company from investments as a result of ethicals concerns.
Norway's Ministry of Finance said in a 6 December statement that it has excluded PotashCorp from its investment fund for ethical reasons because the company purchases phosphate from Morocco-based Office Cherifien des Phosphates (OCP), which extracts the rock in Western Sahara.
Western Sahara is a former Spanish colony occupied by Morocco. However, Morocco's sovereignty over the area is contested by the Frente Popular para la Liberacion de Saguia el-Hamra y de Rio de Oro (Frente Polisario)
The UN considers Western Sahara a non-governing territory, and maintains that mineral extraction in such regions is acceptable only if it benefits the local population.
Norway has taken the view that OCP's phosphate mining operations do not serve the local population and are therefore an unacceptable breach of ethical standards.
At the end of 2010, Norway's sovereign wealth fund held shares in PotashCorp valued at $273m (€205m).
PotashCorp, through its US subsidiary, imports phosphate rock sourced by OCP from the Boucraa area of Western Sahara.
While mindful of the dispute, PotashCorp said "there has been no determination by the UN or any other competent legal authority that the production and use of phosphate from Western Sahara is in violation of the Geneva Convention or any applicable law".
"As an ethical but non-political company, we have thoughtfully studied the issues surrounding Western Sahara and we appreciate the concerns that have been expressed, but also recognise that this issue is highly charged and political in nature," PotashCorp said.
"As a company, we continue to assess OCP's social responsibility and the risks associated with sourcing this rock, but are comfortable that this practice is in accordance with applicable trade and customs laws and that the interests of the people of the Boucraa region are being met," PotashCorp said.
Norway's Ministry of Finance has also excluded FMC from its investment fund for the same reasons. At the end of 2010, Norway's sovereign wealth fund held shares in FMC valued at $87m.
In a statement, FMC said, "We are surprised and disappointed by the action of the Norway wealth fund given the fact that FMC exited its Spanish-based Foret phosphate business in December 2010."
It added, "FMC no longer purchases phosphate rock from OCP, and has not done so since late 2010. We maintain a strict commitment to ethics and corporate governance and will work with the Norway wealth fund officials to resolve this issue.”
While Foret was in operation, its phosphate purchases fell under strict compliance with both Spanish and international law, FMC said.
($1 = €0.75)
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