Western Sahara phosphate dispute detains Agrium vessel in Panama

Author: Mark Milam

2017/05/19

(recasts, clarifying 15th paragraph)

HOUSTON (ICIS)--Canadian fertilizer producer Agrium confirmed late on Thursday that authorities in Panama have detained under a maritime court order a vessel carrying disputed phosphate rock volumes bound from Western Sahara to its Redwater Fertilizer facility in Alberta.  

Agrium said it is has been in contact with the owner of the Danish vessel identified as Ultra Innovation which is estimated to be carrying approximately 55,000 tonnes of phosphate rock from Morocco-based OCP and is making efforts to secure its release.

Agrium is aware of the detained vessel in Panama and that steps are being taken to post a bond that will allow the vessel to continue on its voyage without further delay. At this time we don’t anticipate any production interruptions at our facility in Alberta,” said Todd Coakwell, Agrium director of investor relations.

The vessel was stopped Wednesday night during transition through the Panama Canal as it found its voyage caught in the middle of a long-running dispute over Western Sahara, a region battled over since the mid-1970s that is rich with phosphate deposits.

It is controlled by Morocco but the land is claimed by the Saharawi Arab Democratic Republic, an independent faction that believes the export of the phosphate resource is a crime against their people and the group has sought court relief on the grounds the cargo has been transported and mined illegally by an occupying government.

This is the second time a vessel hauling phosphates from Western Sahara has been held up en route as earlier this month a ship bound for New Zealand was detained in South Africa carrying approximately 54,000 tonnes.

It also was stopped by a maritime court order, and the local high court is expected to rule on 19 May on the interdiction of the vessel stated to be destined for importer Ballance Agri-Nutrients Limited.

Supporting the court actions by the Saharawi Arab Democratic Republic was a ruling by a European court last year that stated that Western Sahara should not be viewed as a part of the Moroccan Kingdom in the EU.

“We are optimistic this second recourse to applying the law to bring an end to the blatant theft of a resource belonging to a people under occupation will demonstrate our resolve,” said Emhamed Khadad, senior Saharawi Arab Democratic Republic official responsible for natural resources.

“The May 1 interdiction of a cargo passing through South Africa and today’s step in Panama, are part of ongoing measures to seek justice against the illegal exploitation of the natural resources of Western Sahara and enhance the rule of law in the advancement of self-determination for the Saharawi people.”

Khadad said the republic has attempted to resolve the situation with Agrium since 2013 when shipments began.

“We could no longer tolerate the myth that the mining and export of phosphate rock was somehow a benefit to that part of our people under occupation inside Western Sahara. And our people in the refugee camps haven’t seen anything from the trade,” Khadad said.

“A high quality phosphate rock for agricultural fertilizer is sold at a profit and benefits the nutrition of children in countries such as Canada and New Zealand. Meanwhile, the rightful owners of the resource, including Saharawi children, face poor food security in refugee camps.  The injustice of this situation could not be more apparent.”

Despite the delay Agrium said it has sufficient inventory currently to continue to run manufacturing operations and it is mindful of the situation with Western Sahara.

It undertook a close review of the situation last year and concluded that transactions with the Moroccan government-owned company would not be problematic.

“The findings of the assessment included recommendations to Agrium on continued monitoring and use of leverage to address actual or potential human rights impacts associated with the supplier relationship,” Coakwell said.

“Ultimately the assessment concludes that Agrium’s supply chain relationship with OCP is not causing or contributing to potential or actual negative human rights impacts in the Western Sahara”. 

He added that Agrium has taken steps to implement the recommendations and continues to monitor the supply relationship.

Located northeast of Edmonton, the Redwater operations have a listed capacity for phosphates of 610,000 tonnes of monoammonium phosphate (MAP) and also produce nitrogen and ammonia volumes.