Mixing Occuption and Oil in Western Sahara

"We preferred that occupation," Salim says, pointing to the
Spanish news channel on his television, "to this one," he says
gesturing toward Moroccan settlers walking past his West Saharan shop window.

Western Sahara is
a disputed territory sandwiched between Mauritania and Morocco, on the north
African coast of the Atlantic ocean. The current struggle for control began in
1975 when Spain ended its colonial occupation and rule of Western Sahara and
hastily handed over administration of its former colony to Morocco. Refugees
fleeing the homes in Western Sahara, joined the nascent independence movement
named Polisario, and declared the region a sovereign republic, setting off a
guerrilla war.

Today, if the
Oklahoma City-based Kerr-McGee Corporation gets its way and begins extracting
oil and gas in contested Western Sahara, another volatile element will be added
to the region's long-standing dispute.

On the dusty streets of the sleepy Western Saharan capital, Al-'Ayun, where I
met Salim, and around the world, Morocco finds little open support for its
continued occupation. Not one country or international organization recognizes
Moroccan sovereignty over the Western Sahara. The United Nations defines the
largely uninhabited Colorado-sized area as Africa's last remaining colony.

But Morocco has found allies in its claim of sovereignty over Western Sahara in
the corporate world. One of its more recent friends is Kerr-McGee. In
2001, the company signed a hydrocarbon "reconnaissance permit" with
the Moroccan government to explore areas off the coast of the Western Sahara.
Since inking the deal, Kerr-McGee has been assessing the results of a
"large 2D seismic grid" of the region and a 2004 "drop core
survey." Kerr-McGee has renewed its contract several times, with the
current agreement set to expire this October.



A Fortune 500 company founded in 1929, with more than $5 billion in revenue in
2004 and over $14 billion in global assets, Kerr-McGee "is one of the
largest U.S.-based independent oil and natural gas exploration and production
companies, with proved reserves of more than 1.2 billion barrels of oil,"
according to its website.



The area of Kerr-McGee's
interest, the Boujdour Block, is a 27 million acre expanse claimed by Western
Sahara. The Block stretches from the Sahara's cliff-lined shores to depths of
more than 10,000 feet in the Atlantic Ocean.



Are there significant quantities of oil and gas off the shore of the Western
Sahara? No one knows for sure. In neighboring Mauritania, Woodside Petroleum,
Australia's second-biggest oil and gas company is expected to start pumping in
2006. The Chinese government is also heavily involved in offshore Mauritanian
petroleum prospects. From the middle of the Sahara to all along the coast, West
Africa is fast becoming an importance source of oil and gas for the United
States.



But in Western Sahara, with uncertainty about ownership adding to the risk, oil
companies are reluctant to commit resources. French oil "supermajor"
Total, which also contracted with the Moroccan government in 2001 to explore
off the Saharan shores, withdrew in 2004 for "business" reasons.



The Norwegian geological survey firm TGS-Nopec has also abandoned its interests
in the area. Contracted to carry out the research for Total and Kerr-McGee, and
with 85 percent of its survey completed, TGS bowed to intense grassroots
pressure in 2003. After dozens of shareholders divested, TGS issued a public
statement announcing that it "has decided not to undertake any new
projects in Western Sahara without a change in political
developments." The subsequent withdrawal of two minor companies for
similar reasons left Kerr-McGee as the only foreign company working with
Moroccan oil interests in the area.

For now, Kerr-McGee is holding firm and keeping quiet about its Saharan
prospects. "[U]ntil we have completed the analysis and evaluation we
cannot speculate on future activities," external communications specialist
John Christiansen told Corpwatch.



Kerr-McGee's stockholders may also be less than fully informed about the risks
of investing in a contested territory. In its 2004 report and a letter to
shareholders, Morocco-but not Western Sahara--appears under a map titled
"Targeting World Class Prospects." And although the words
"Western Sahara" appeared in Kerr-McGee's 2003 report, the reference
was omitted in the 2004 version.



Western Sahara is far more visible at the United Nations where its fate is
under the management of the Security Council. That body is torn between
Morocco's close relations with several permanent members, especially France and
the United States, and the Western Saharans' right of self-determination under
customary international law.



The right goes back to 1974 when Spain promised the Western Saharans a chance
to hold a popular referendum on whether they wanted to join with Morocco or
become independent. Before the vote could be held, Morocco invaded, claiming
the Western Sahara as a historical part of Morocco. Since 1991 the United
Nations has been promising the Western Saharans another chance to vote, but
fearing it might lead to independence, Morocco has rejected any proposal that
challenges its "territorial integrity."



"This issue is really not unlike the Arab-Israeli dispute: two different
peoples claiming the same land," said James Baker, former U.S. secretary
of state and key UN mediator in the dispute between 1997 and 2004 . "One
is very strong, one has won the war, one is in occupation and the other is very
weak," he told Wide Angle, a New York television show produced for the
national Public Broadcasting Service (PBS.)



With the discovery of significant hydrocarbon deposits in the Western Sahara,
the power equation has grown more complex. The potential wealth provides the Moroccan
government with strong motivation to hold onto the contested territory and to
shun the peace process.



"Morocco is seeking to impose a fait accompli," said Kamel Fadel, a
representative with the Western Sahara government in exile, "as well as
implicate foreign companies and interests in its illegal occupation of our
country."



Kerr-McGee contends that its interests are not biasing the peace process.
"Kerr-McGee, by its Reconnaissance Permit, has not prejudged or prejudiced
such efforts, and we hope to make a contribution to the development of this
area and its people," Christiansen told CorpWatch.

The Norwegian
government, for one, believes that Kerr-McGee's actions are indeed prejudicial.
Citing its own ethical guidelines, the Finance Ministry's advisory council
called on the national retirement fund to divest its $52 million in Kerr-McGee
stock: "The Council regarded [the exploration] as 'a particularly serious
violation of fundamental ethical norms' e.g. because it may strengthen
Morocco's sovereignty claims and thus contribute to undermining the UN peace
process."



"It actually says in the Petroleum Fund's ethical guidelines that it is
highly problematic to invest in occupied and Non-Self Governing
Territories," said Ronny Hansen, spokesperson for the Norwegian Support
Committee for Western Sahara, which helped bring the situation to his
government's attention. "The guidelines also make specific reference to
Western Sahara. So when we called for disinvestment, the fund had an easy
decision to make."



Hansen hopes that a mix of public exposure and financial divestment will drive
Kerr-McGee out of the Western Sahara. Responding to Kerr-McGee's claim that its
contract with Morocco, in its present form, is perfectly legal, Hansen argues,
"Kerr-McGee offers political legitimization to the Moroccan occupation and
contributes in escalating the conflict. This is crystal clear."



Kerr-McGee spokesperson Christiansen countered: "Again, we support the
ongoing efforts of the United Nations to find a permanent and amicable solution
to the Western Sahara issue. Kerr-McGee, by its Reconnaissance Permit,
has not prejudged or prejudiced such efforts."

Not only are there serious questions as to whether Kerr-McGee is helping Rabat
(the Moroccan capital) strengthen its hold on the Western Sahara, and thereby
undermining the peace process, but Morocco may not have a legal right to offer
oil and gas exploration contracts in the contested territory.



Given the Western Sahara's international status as a colony (i.e., a Non-Self-Governing
Territory), the United Nations called for an official legal opinion in 2001,
shortly after Morocco offered the Western Saharan concessions to Kerr-McGee and
Total.



The following February, UN Under-Secretary General for Legal Affairs, Hans Corell,
offered an opinion that gave ammunition to both sides.



"The UN under-secretary for legal affairs has confirmed that we acted
lawfully in contracting with Morocco," Christiansen told CorpWatch.
"Neither the United States nor the United Nations recognizes any other
administrative authority or government in that territory."



In Kerr-McGee's favor, Corell's opinion said, "The specific contracts are
not in themselves illegal."



But Fadel, representing the government in exile, counters that by undermining
the legitimacy of Morocco's occupation, the opinion actually confirms the
illegality of Kerr-McGee's contracts.



Another passage in Corell's opinion seems to support Fadel: "[I]f further
exploration and exploitation activities were to proceed in disregard of the
interests and wishes of the people of Western Sahara," the UN official
wrote, "they would be in violation of the principles of international law
applicable to mineral resource activities in Non-Self-Governing
Territories."



In its most simple form, the issue may boil down to the common sense
proposition that only the side with legal sovereignty can legally grant
exploration and extraction rights.



According to Corell, the 1975 Madrid Agreement "did not transfer
sovereignty over the Territory, nor did it confer upon any of the signatories
the status of an administering Power, a status which Spain alone could not have
unilaterally transferred."



"[A]s far as International Law is concerned," Spanish foreign
minister Miguel Ángel Moratinos recently told the Spanish parliament,
"Spain remains the administering power [of the Western Sahara]" and
its hand off to Morocco was never legal.



Even Morocco's allies have had to clarify their position on the status of the
Western Sahara. On the conclusion of a bilateral free trade deal with
Morocco in July 2004, U.S. Trade Representative Robert Zoellick said "The
United States and many other countries do not recognize Moroccan sovereignty
over Western Sahara and have consistently urged the parties to work with the
United Nations to resolve the conflict by peaceful means. The Free Trade
Agreement will not include Western Sahara."



Despite the Rabat's intransigence and Kerr-McGee's legal parsing, the exiled
Saharan government has remained optimistic. It has even offered its own
licenses to competing oil companies for the same areas off the Western Saharan
coast, although these deals will only come to fruition if their nation achieves
independence.



Fadel is certain that this will happen soon enough. "Most colonial powers
cling to power until the last minute and Morocco is not an exception," he
said. "The [Moroccan] regime knows deep inside that they have failed
to win the heart and minds of the Saharan people despite 30 years of occupation
and that they have to leave sooner or later. Our hope rests on our faith
in the determination and will of our people and the justice of our cause."



Jacob Mundy served as a Peace Corps volunteer in Morocco (1999-2001) and is
a member of Western Sahara Resource Watch. He is the coauthor of a
forthcoming book on the conflict with Stephen Zunes.

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