South African bank no longer funding WS oil explorer
The South African bank RMB has written to WSRW that they do no longer finance the operations of Island Oil and Gas. The Irish oil company Island has an agreement for oil exploration in occupied Western Sahara in violation of international law.
WSRW has since the end of March tried to get a guarantee from RMB that their money will not be used for Island’s exploration plans in Western Sahara, occupied by Morocco. Island entered into the controversial deal in 2006 despite the fact that UN has said such oil hunt will be illegal.
On 27th of March this letter was sent from WSRW to Island's South African funder, RMB. The letter underlines that Island Oil and Gas not only has entered into an unethical, politically controversial and illegal deal, but also points to the fact that the South African government is one of the strongest supporters for the Sahrawi people’s right to self-determination and independence. South Africa has even recognised the Sahrawi Arab Democratic Republic (SADR).
Taking into account Island’s lack of Corporate Social Responsibility and their desire to explore for oil in occupied Western Sahara on behalf of an illegal occupying power, WSRW did not take Island’s assurances as a sufficient guarantee. Island's statement was particularly weak, having mentioned that the controversial block was within Morocco, while half of the licences actually covers the territory of Western Sahara. WSRW on 20th of April 2008 sent a letter to RMB saying that the guarantee from Island Oil and Gas was insufficient, and that RMB themselves had to make sure their funds were not used for this purpose.
"What we asked from RMB in our previous letter, was 'a guarantee from your bank that your capital not be used for the illegal oil exploration in the occupied country'. In the mail you sent to us, we believe that RMB did not give such a guarantee.", WSRW wrote to RMB on 20th of April.
Now that Island seems to have repaid the entire RMB loan, the controversy for the South African bank seems to have been settled. But the main problem persists: Island Oil still has the unethical deal for illegal oil hunt in occupied Western Sahara.
See full correspondence between WSRW and RMB below.
9 July 2008 -RMB to WSRW Dear Mr Lachica Island Oil and Gas repaid the facility in full at the end of May 2008. Please see their announcement http://www.islandoilandgas.com/default.asp?docId=12442&newsItem=12878. Kind regards Michael Schonfeld
9 July 2008 -WSRW to RMB Dear Mr. Michael Schonfeld On April 20th this year, we sent you the mail below, where we were asking RMB to guarantee that none of your funds will be used by Island Oil & Gas in Western Sahara . In the answer given by you up to date, we don’t see any evidence that shows that RMB’s funds will not be used for any activity in Western Sahara . We cannot see having received a reply to the mail. We keep waiting for your reply and look forward to hearing from you. Best regards. Javier García Lachica
20 April 2008 -WRSW to RMB Dear Mr. Michael Schonfeld We would like to thank you for your reply dated April 1st, 2008 and for sending to us a copy of the letter from Island Oil & Gas to you, dated August 7th 2007. We sincerely appreciate Rand Merchant Bank’s contact with Island Oil & Gas over this issue. We do believe, however, that the question we asked to you remains unanswered. It remains for us absolutely imperative that Island Oil & Gas does not proceed with petroleum exploration activities in occupied Western Sahara . This is necessary for protecting the rights of the Sahrawi people, and to prevent that the parties in the Western Sahara conflict return to open war. As you remember, Western Sahara Resource Watch requested a guarantee from RMB that your bank’s money is not to be spent in the occupied country. What you say in your answer to us is basically that you trust Island Oil & Gas when they tell you that they would not do it: “We sought and obtained a firm undertaking from them that they would not use any of the funding which we had provided to them on that asset”. As long as Island Oil & Gas insists on maintaining their highly unethical petroleum agreement and as long as Island has neither responded to our communication nor to our demands, we simply have no reason to believe that what they tell you would be true. We have over the years been in contact with a number of shareholders and financial backers of businesses holding interests in the resource rich Western Sahara. Our experience is that the companies in question do not convey to their financial partners the correct information about their operations. In the letter Island Oil & Gas sent you, and which RMB views as a sufficient statement, Island shows the very same lack of will to understand the ethical dilemmas of their agreement, underlining their political support to the illegal Moroccan presence in Western Sahara. They maintain the exact same wording as they do with media and to shareholders. They claim in the letter that the Zag Basin (the area in which they have a reconnaissance agreement) is situated within Morocco , something which is absolutely untrue. As we have pointed out, no country in the world, including Ireland and South Africa , recognises the area as Moroccan. What we asked from RMB in our previous letter, was “a guarantee from your bank that your capital not be used for the illegal oil exploration in the occupied country”. In the mail you sent to us, we believe that RMB did not give such a guarantee. Again, we thank you for your will to stay in contact with Island over this matter, and ask you to send us a new letter, which clearly states RMB’s clear guarantee that none of your funds will be used by Island Oil & Gas in Western Sahara. Yours sincerely, Javier García Lachica
1 April 2008 -RMB to WSRW Dear Sir In Michael Pfaff ’s absence I have been forwarded your letter, as the person responsible for the Island Oil and Gas account. The subject of your letter is a matter which was brought to our attention some months ago. I also had constructive discussions on this matter with the Ambassador of the Saharawi Republic in South Africa at that time. It is a matter which we took very seriously and which we raised with our client, pointing out the implications of Island ’s involvement. Our client confirmed to us that they have a carried interest in the asset in question and are not in fact spending any money on it. In addition, we sought and obtained a firm undertaking from them that they would not use any of the funding which we had provided to them on that asset. Please see attached letter for your information. Please be assured that we will continue to monitor the situation to ensure compliance with the undertaking given to us. Kind regards Michael Schonfeld RMB Resources Limited
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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