A landmark ruling by the Court of Justice of the European Union (CJEU) in favour of the Polisario Front on 10 December has ordered the annulment of a trade agreement between Morocco and the European Union (EU) because it includes the territory of Western Sahara.

The March 2012 trade agreement, which failed to explicitly refer to Western Sahara, left open the possibility that the accord would apply in the disputed region, as both Morocco and the EU clearly intended.

As Sahara Focus reports, the ruling has potentially widespread implications for current and future oil, gas, and mineral exploration and production agreements relating to Western Sahara, both onshore and offshore, as well as fishing rights, agricultural and horticultural production, animal husbandry, and all trade agreements with Morocco that involve produce or items originating from the Western Sahara territory.

Not all European countries are at fault. Both Sweden and the Netherlands have been very clear that in their interpretation the free trade agreement with Morocco cannot apply. Some of Norway’s leading institutions have taken the same position.

In the opinion of the European Association of Lawyers for Democracy and World Human Rights (ELDH), the CJEU ruling marks an important step in the global efforts aimed at ensuring that the natural resources of Western Sahara, as a non-self-governing territory, are protected for the benefit of its own people. The African Union has repeatedly called on all concerned to halt the exploration and the exploitation of Western Saharan resources and desist from entering into any agreements that would violate the Sahrawi people’s permanent sovereignty over their natural resources.

 The world's longest conveyor belt system has been operating in Western Sahara for more than 30 years. It conveys phosphate from the Bu Craa mine to the coast at El Aaiún.

The world’s longest conveyor belt system has been operating in Western Sahara for more than 30 years. It conveys phosphate from the Bu Craa mine to the coast at El Aaiún.

The implications of the ruling are still feeding through the system. Nevertheless, there are now signs and reports, mostly unconfirmed, that firms importing phosphate from the disputed territory of Western Sahara are coming under pressure to stop trading with Morocco’s Office Chérifien des Phosphates (OCP). OCP is the world’s leading producer of phosphate rock and phosphoric acid, as well as one of the leading global fertiliser producers.

The problem for OCP is that much of its phosphate comes from Western Sahara. Although Morocco itself has massive phosphate deposits and is the world’s largest phosphate exporter, Western Sahara, if it were an independent country, would be the second largest. The deposits played a large role in triggering a Moroccan invasion and annexation of the territory in 1976.

Importers of phosphate from the Bou Craa mine have spent much of the holiday season weighing the consequences of the CJEU ruling. While some analysts point out that the agreement the CJEU annulled dealt only with agriculture and fisheries, others think it could set a precedent in safeguarding what the Polisario Front considers its rights to natural resources in the disputed territory, including phosphates.

As one regional commentator remarked, ‘The court’s finding did not address the question of the Polisario Front’s legal status. But it concluded that it could be compared to an organisation with a right to ask a court to take action. In other words, it recognised the Front’s right to bring an action and cancel a decision by the European Council. The mere possibility the Front can henceforth launch such an action increases the risk to companies buying Western Sahara’s phosphates.’

In fact, companies that buy Sahrawi phosphate, such as PCS or Australia’s Incitec Pivot, are already under pressure. They have been blacklisted by dozens of pension funds in Denmark and elsewhere, such as the Swedish government pension fund, which inevitably tarnishes their reputation.

Another example is the trader Glencore. Norway’s biggest pension fund, KLP, sold off all of its 85 million shares in Glencore, worth NOK211 million (US$24 million) in early December. KLP is apparently threatening to suspend other investments, too. The fund’s guidelines say it cannot invest in any activity involving the exploitation of mineral resources in Western Sahara without the approval of local inhabitants.