Maersk drops transports of conflict rock from occupied Western Sahara

For decades, a small office in London shipped phosphate rock from occupied Western Sahara to Australia/New Zealand. After one of the world's biggest shipping companies took over the office, the controversial operation will now be closed.
Published: 23.06 - 2018 21:02Printer version    
Above: NM Cherry Blossom observed in the Gibraltar Strait with an empty hold, on its way to Western Sahara in the spring of 2017. For one year, the vessel was detained in South Africa for carrying conflict minerals from the occupied territory. After at least a decade of such involvement, the time-charterer will now stop such transports.

For 370 days, the vessel NM Cherry Blossom was detained in the port of Port Elizabeth, South Africa, under an order from a local court. The vessel was carrying phosphate rock from Western Sahara to New Zealand. The rock had been exported by the Goverment of Morocco, which illegally occupies Western Sahara and its lucrative phosphate mine.

One important, but little known, company got entangled in the saga of the detained vessel: the London based company Furness Withy,  responsible for the time-chartering of the vessel. According to Western Sahara Resource Watch's mapping, Furtness Withy has been a key player in the trade, involved in shipments of the phosphate rock to Oceania for a number of years, at least since the early 2000s.

However, now this practice will come to a complete stop. The decision was announced by the new owner of the London firm: Danish company Maersk, one of the world's largest shipping companies.

"The contract expires in 2018, and there are no plans for further contracts after that", a representative of Maersk wrote in an email to the Danish NGO Afrika Kontakt on 22 June 2018. Maersk confirmed in the correspondence that Maersk via its newly acquired subsidiary Hamburg Süd owns Furtness Withy, and that the latter held "a contract on transport of phosphates from El Aaiún".

Afrika Kontakt welcomed the decision.

"Maersk has acted responsibly following the takeover of Furness Withy's mother company. By making sure that it does not take part in the future exports of phophate rock, it assures itself not to be a player in the occupation of the territory. It also minimises the obvious financial risk, by not neededing to see further vessels detained for transporting goods that are exploited in violation of principles of human rights and international law", Morten Nielsen of Afrika Kontakt stated.

Nielsen underlined that when a large company aquires another, it happens that it takes over smaller operations that are not in line with one's business standards.

"By assuring that the contract is not renewed, Maersk has done what it could after the take-over. We congratulate Maersk for a good call", Nielsen said.

According to documents that Furness Withy submitted to the court in South Africa, the company lost 10.300 USD daily due to the detention of the controversial shipment. Considering that Furness Withy recceived a 1,15 million USD advance payment of the shipment to New Zealand, and that the vessel could have lost approximately six assigments during the one-year detention (conservatively at 250.000 USD each), it is resonable to estimate that Maersk's new subsdiary thus lost an estimated 3.5 million USD from the year long detention. The detention of the vessel was made half a year before Maersk officially closed the take-over deal at 30 November 2017.

The South African court concluded that the company had no right to ship phosphates from Western Sahara on behalf of the Moroccan government, as the cargo belonged to the people of the territory.

WSRW first wrote about the Maersk takeover of Furness Withy in the report "Carriers of Conflict" in June 2017. In a mail to WSRW on 13 June 2017, Maersk wrote to WSRW that "Until the final agreement has been concluded (which we expect to take place at fourth quarter in 2017), Hamburg Süd runs as a totally independent company. This means that there is no way for us to exchange sensitive information or in any way influence the business until the transaction is completed”.

Since last summer, both before and after the completion of the take-over, it is believed that several institutional investors have asked Maersk what it intends to do with the subsidiary that it bought. Maersk acquired Furness Withy's mother company Hamburg Süd from the large German company Dr. Oetker.

The history of Furness Withy in chartering vessels from Western Sahara is seemingly long, probably via a subsidiary in Australia, which deals in Australia-Europe bulk cargoes. WSRW has identified around 20 probable – but not confirmed - Furness shipments over the last decade:

Furness Australia (To Napier, New Zealand, September 2007, to Geelong/Newcastle, Australia, June 2008)
Furness Hartlepool (To Fremantle, Australia, January 2008, to Australia October 2008, to Lyttleton, New Zealand in March 2010, to Perth, Australia, March 2010, to Geelong/Portland, Australia, Oct 2010)
Furness Karumba (To Perth, Australia, July 2005 and August 2008)
Furness Melboune (To Portland/Geelong, Australia, Dec 2008)
Furness Timika (To Australia, Sept 2005)
Triton Stork (To Lyttleton, New Zaland, January 2008)
Santa Anna (To Lyttleton, New Zaland, March 2007)
Santa Isabella (To Geelong, Australia, June 2006)
Doric Victory (To Australia, October 2014)

The vessel Furness Karumba caught particular attention in Australian media as she arrived Perth harbour on 8 November 2005, as the cargo ship was found to contain two dead stowaways that had boarded the ship in El Aaiun harbour, a month earlier. A third stowaway was seriously ill. Upon the arrival of the same vessel Furness Karumba in Australia in 2008, representatives of The Maritime Union of Australia boarded the vessel to hand over a letter to the captain, protesting the trade in Saharawi phosphate rock. The letter was also sent to the companies involved in the transport, as well as to the local importer.

It is not clear to WSRW how Furness Withy's exit will affect the trade to New Zealand, one of only four countries today importing such conflict rock. The rock that Morocco exports from the occupied territory to New Zealand now thus needs to be shipped via other operating companies. The number of importing countries of the rock has been reduced drastically. Following the NM Cherry Blossom incident, all exports to Latin America and Australia stopped, so that the only importers are today New Zealand, US, Canada and India. When WSRW started mapping such trade in 2011, there were 13 importing countries.

Even after the new development of Maersk's announcement, the most heavily involved shipping company in the transportation of the illegally exploited phosphate rock remains from Denmark. The Copenhagen shipping firm Ultrabulk A/S is responsible for chartering vessels to Canada. No companies international are responsible for more shipmnts annually out of Western Sahara than Danish company Ultrabulk. An overview of the operatorship of vessels from Western Sahara are to be found in WSRW's report P for Plunder 2017 (containing data from 1 January 2017 to 31 January 2018) and the report Carriers of Conflict (containing such data from 1 January 2016 to 9 June 2017)

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Morocco occupies the major part of its neighbouring country, Western Sahara. Entering into business deals with Moroccan companies or authorities in the occupied territories gives an impression of political legitimacy to the occupation. It also gives job opportunities to Moroccan settlers and income to the Moroccan government. Western Sahara Resource Watch demands foreign companies leave Western Sahara until a solution to the conflict is found.
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