Daily Management Review

OCP Group Vs South African Courts: A storm is brewing on international maritime trade


08/03/2017


For several months, the world’s leading producer of phosphate has been dragged into a political and legal maelstrom. Indeed, it was shaken down for a cargo load of phosphate by a South African courthouse, at the behest of the Polisario Front which claims ownership on the merchandise. The separatist movement’s main argument : the phosphate in question comes from Western Sahara, a territory over which it claims sovereignty. However, Morocco doesn’t see it that way and intends to see things through. Sabers are rattling between Rabat and Pretoria. The OCP group, on its side, has slammed the door on the courthouse and now intends to defend its rights with every legal means. Otmane Bennani Smires, OCP Group General Counsel and Executive VP in charge of legal affairs.



Port Elizabeth (Commons - Wikipedia)
Port Elizabeth (Commons - Wikipedia)

The matter is so extravagant it could be a Hollywood script. What exactly happened in South Africa?

As you say, it very well could be a Hollywood script, in the sense that the vessel was peacefully going to a lawful client in New Zealand and, at the last minute, it was re-routed to Port Elizabeth, a small port in South Africa for bunkering operations - this port is not known for bunkering operations. When it arrived in Port Elizabeth, it was met with 300 pages of political claims by the Polisario, the day after the UN Security Council, following the call from the Secretary General to resume the negotiations in good faith and without pre-conditions, had called on the international community to assist in the resolution of this matter. What we’re seeing here is that the applicants in very shady circumstances were waiting in Port Elizabeth to seize the vessel.   

Beyond the modus operandi, which can indeed raise eyebrows, this is merely sequestration. How is this decision unprecedented?

The decision is unprecedented but similar matters are not. When a local court is seized with a matter that is dealt with at the highest level of the international community, in this case the UN Security council, or when a local court is asked to provide a legal judgement on a political issue, that involves the right of a sovereign State, like Morocco in this case, then that court needs to show deference to either the international process, or to the head of State or the sovereignty of the nation not declare itself competent to hear the matter or judge the matter. In that sense, what the court in Port Elizabeth has decided to do, by deciding to go to trial, is contrary to very basic and fundamental principles of international law. This same case was brought by the Polisario and their proxies, the day of the hearing in South Africa, in Panama, where they tried to pull the same stunt, but the Panamanian judges very rightly decided they were not competent or had no jurisdiction to hear a matter that was a political matter. Also, the Polisario front had shown no evidence to the ownership of these resources.

The OCP group speaks of “acts of piracy”. Aren’t these terms a little strong?

They are totally justified. When somebody tries or attempts to take something that is not his, by using the means that have been used, and with judicial cover and the effective complicity of a court, then we think the term “political piracy under judicial cover” is warranted.

And yet the Polisario Front tells us the phosphate is extracted at the expense of local populations…

That couldn’t be more wrong. OCP is a group that has almost 100 years of history. This particular mine which represent 1.6% of our resources, but about 10% of our employee base, has been in operation since the 1960s. OCP became majority owner of this mine in 1976, and became the sole owner in 2002, and since then billions of dollars have been injected into the operations and the local economy. Phosboucraa, our subsidiary, is the largest employer in the region; I mentioned 2200 employees, 76 % of whom are from the local population. Moreover, we don’t distribute any of our profits as dividends, all of our profits are retained and reinvested locally. We are in the process of making an investment of almost 2 billion dollars, not only on the operations side, to go downstream to the fertilizer sector, and use Phosboucraa and Laayoune as a platform to contribute to Africa’s agricultural development. We’re also investing in education and socio-economic projects to provide the local populations with the means to develop its competencies and capabilities, so this myth being circulated of what is happening underground is very far from reality. People are entitled to their own opinions, but not to their own facts.

So, you slammed the door on the South African courthouse and explicitly denied its jurisdictional relevance. Does that entail your abandoning the cargo?

It entails - first of all - that we deny the court any legitimacy to send this matter to trial. It is inconceivable for us, knowing that OCP operates under the framework of Moroccan law (which is the only law applicable in the region), to be complicit in a process that effectively tries to circumvent and undermine the UN security council process that is being actively seized with this matter. Moreover, what we did when we went to South Africa, in good faith, is to present the legal arguments and the facts following the initial abusive seizure. We made an argument about the jurisdiction. Now that we have seen that the decision is biased and hostile to Morocco and to our own interests, we have no other choice than to denounce its legitimacy and refuse to participate in a trial. Let me just add that a success in South Africa would not have been a victory for us as this is not a matter that should be put in front of local courts, period. We would do all that is necessary and use any legal means available to us to make sure that we protect our ownership of the cargo, wherever that cargo ends up being.

How are the ship owners, and your clients, reacting to this matter?

We have their total support since they are used to the same harassment by the Polisario and their proxies. They were sent several threatening letters from these groups, and understand that these groups are using propaganda to advance their own political agenda and that they do not care about the development of the region, the population, or the inhabitants of the territory. And they acknowledge what we do in the region in our contribution to a thriving local economy, but also in terms of CSR which is world class, and they have seen with their own eyes, how we abide by the framework of the United Nations. Insofar as they’re concerned, they are in full support of us and they fully understand our position to refuse to lend a legitimacy to a process that has none.

The dispute took a political turn when the Moroccan government denounced an “arbitrary political decision”. Are we headed towards a legal and political struggle between Morocco and South Africa?

I can’t speak for the government of Morocco but we have seen a chain of events recently where South Africa was one of the minority States which was very vocal against Morocco. Coming back to its regional family, the African Union. We have seen their ministry of foreign affairs denouncing the exploitation of natural resources in the region, even though the company as a whole in the region is fully compliant with the UN framework and fully benefits the local population. One thing to keep in mind is that, whenever there is a political dispute over a regional territory, the fact that there is a UN framework is precisely because of the fundamental right of the population to development that prevails over any other political consideration. To get back to your question, there is notorious hostility from South Africa against Morocco. The spokesperson of the Moroccan government was very clear in his remarks, and denounced this for what it is: a political decision under judicial cover. Now as to what South Africa’s role in this matter is, exactly, I of course cannot venture to say, but the pattern is there, and the rest is public record.

An analyst from the American Enterprise Institute*, who also uses the term piracy, openly criticized the active complicity of South Africa with a marxist movement, whose acts of violence it condemns. How do you explain South Africa’s role in this matter?

It is puzzling because the decision from the Port Elizabeth court is contrary to even the most basic principles of international law. The tone of the decision and the historical background presented as facts in the decision are merely historical hearsay. We also have the ministry of foreign affairs that was involved in this matter, but I cannot explain South Africa’s role in this matter, at all. When you have the Security Council calling on all member states to assist in the process it is currently being seized on, and you have the court of another State that basically puts aside fundamental principles of international law to advance another party’s purely biased and political allegations and agenda, one is right to question that role. We are where we are, OCP is doing tremendous things on the continent of Africa. We believe we have a major role to play as one of the largest fertilizer companies in the world to contribute to Africa’s agricultural development, and if you know anything about Africa’s agriculture, the potential is huge. Africa is definitely the solution for food security because 60% or 70% of available arable land today is in Africa. So instead of supporting a company that is trying to do the right thing and to contribute to Africa’s development as a whole, we have a local court being used by an armed separatist group to advance their political agenda. I’m as puzzled as is the analyst from the American enterprise institute.

The Cape of Good Hope is one of the world’s busiest sea lanes, and you mention a new “threat” looming over international maritime trade. What would these dramatic consequences be?

International maritime trade, today, is clearly under a threat: that is a fact. If local jurisdictions can be used as pawns in political disputes and seize vessels or cargoes without any legitimacy, then this would certainly impact international trade. Recently, Philippe Delebecque, who is a world-renowned expert in maritime law and president of the Chamber of maritime arbitration in Paris clearly affirmed that the professionals of maritime commerce can thank the OCP group and the Panama court because we have put legal issues and legal questions above political questions and we refuse to participate in a political trial because we want the world to see this for what it is: it’s an act of political piracy with a judicial cover. If I were a ship owner or a company involved in international commerce, I would be very worried of going through the cape of Good Hope in the future.

When does this stop?

We refuse to participate in this process, so South Africa is behind us. But as I mentioned earlier, this will be over when we go after our cargo, wherever it ends up, and by using all legal means necessary. We’ll definitely keep you posted on the next steps, but we consider this cargo to be a stolen property, and we will recover it wherever it ends up.

 
* Michael Rubin, Why does South Africa embrace piracy and reward terror?, American Enterprise Institute, July 13th 2017
** Philippe Delebecque, No place for political piracy in maritime commerce, TradeWinds, July 27th 2017







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