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Pressure mounts on fertiliser co-ops after US company stops Western Sahara phosphate imports

Pressure is mounting on fertiliser companies to stop importing phosphate from the Western Sahara after the withdrawal of a major United States company involved in the controversial trade.

Lobby group Western Sahara Resource Watch says from the beginning of next year the number of importers will have fallen to only three – New Zealand co-operatives Ballance Agri-Nutrients and Ravensdown, and Paradip of India.

It said US company Innophos would probably stop the imports at the end of this year. Paradip is a subsidiary of the Moroccan government agency OCP, which is in charge of the phosphate mining operation.

Since 1975 countries have been squabbling over who should control the Western Sahara, which contains about 70 per cent of the world’s phosphate reserves.

After Spain gave up control of the territory in 1975, Morocco annexed the region, which is about the size of New Zealand, and has a population of about 500,000.

Many of the Sahrawi tribesmen of mixed Arab, Moor, Berber and Taureg heritage live in refugee camps in Algeria.

Ballance Agri-Nutrients and Ravensdown import about $30 million a year of phosphate from the region.

Last year a vessel bound for Ballance’s home port of Tauranga with a $5m cargo of phosphate was seized in South Africa, where a court found it legally belonged to the Saharawi government, and not OCP.

In another development which could pose more trouble for Ballance and Ravensdown, Danish shipping company Maersk has announced it will no longer transport the phosphate.

Maersk recently bought the company Furness Withy which had previously managed the exports. Danish non-government organisation Afrika Kontakt estimated the year-long detention of the ship may have cost Furness Withy $5.2m.

Afrika Kontakt welcomed Maersk’s decision, saying the shipments were in violation of principles of human rights and international law.

However a spokesman for Ballance said the co-op saw no immediate risk to the imports.

“We have been shipping phosphate for 30 years, we have a current contract with them [OCP].”

Western Sahara Resource Watch spokesman Erik Hagen said the falling away of companies involved in importing phosphate was “remarkable”.

In 2012 there were 15 importers in 13 countries, today there are four, but Innophos will withdraw from the trade at the end of the year, citing “risks stemming from local social and political conditions in those jurisdictions where the phosphate rock that supports our operations is sourced”.

Hagen said New Zealand importers could well find other companies to carry out the shipments, such as Danish company Ultrabulk.

“I think it is more likely that New Zealand companies have to partner with companies from other undemocratic regimes to find shipping companies, or smaller post-box-registered companies that are not public in the same way as Ultrabulk.”

He said all eyes were now directed to the New Zealand trade. It was a paradox that large multinational companies were pulling out of importing phosphate from the Western Sahara, but farmer-owned cooperatives from New Zealand continued.

“It is probably due to the resources available to the companies involved. The larger companies have large staff that assess well the situation, and understand the risk involved for their reputation and the risk for possible legal consequences.

“New Zealand farmers seem to not understand these aspects. They seem poorly advised,” Hagen said.

In recent years management from the co-ops have visited the region and pronounced themselves satisfied with what is happening. OCP employs Sahrawis in the mining operation, and schools have been set up.

The co-ops have said in the past they had opted for the Western Sahara phosphate because it suited the superphosphate recipe they had created.

Hagen said that they could adapt their machinery to cope with taking phosphate from other regions.