Germany thumbs down OCP credit in Western Sahara
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Germany's state-owned development bank will not finance projects in Western Sahara.

Published 11 May 20

"The existing contracts for the above-mentioned development credit explicitly exclude the financing of economic activities in Western Sahara.“ That is the clear answer of the German Federal Ministry for Economic Cooperation and Development of 7 May 2020 in response to questions raised by Member of Parliament Eva-Maria Schreiber (die LINKE) on the geographic spending of a credit accorded to Morocco’s state-owned phosphate company OCP SA.

The German state-owned development bank KfW (Kreditanstalt für Wiederaufbau) had granted a credit of €200.147 million for a water investment programme to OCP. OCP operates the phosphate reserves of Morocco, but also illegally exploits the Bou Craa phosphate mine in occupied Western Sahara – a Non-Self-Governing Territory over which Morocco has no sovereignty or international mandate. Eva-Maria Schreiber had requested the Federal Government to clarify how it would ensure that OCP's development credit would not be used in the territory.

"It is commendable that KfW takes measures to avoid supporting the occupation of Western Sahara. It is worth to remind that OCP's entire operation on occupied land is facilitated by Continental and Siemens. It is regrettable that German private industry is acting to uphold Morocco's military occupation", Tim Sauer of WSRW Germany stated. 

Continental is maintaining OCP's conveyor belt system under a contract that is expiring in June 2020. WSRW urges Continental not to renew the support for Morocco's illegal phosphate industry on the territory. 

In recent years, many international companies have stopped importing phosphate rock from Western Sahara, following increasing pressure from investors concerned about the legality of the operation and related human rights violations. In 2019, only a handful of importers were still involved in the trade, and Morocco’s export figures from the territory it militarily occupied had fallen to their lowest level in years. Read more about these developments in the 2020 edition of P for Plunder, our annual overview report documenting Morocco's trade in Western Sahara's conflict mineral in 2019.

The statement that the German Government has now issued, is a confirmation of the bank’s position on Western Sahara. In July 2016, KfW wrote to WSRW that “we are not financing projects in Western Sahara and we are not planning to do so in the future”. The bank was at the time being mentioned by Moroccan media as co-financing renewable energy projects in the occupied territory. KfW was clear that those allegations were misleading, as it did support such projects in Morocco proper, but not in Western Sahara. 

In November 2016, Moroccan media reported that KfW had supported energy projects in the occupied territories [or download]. That coverage was "misleading", according to a mail sent by KfW to WSRW on 3 March 2017. "KfW is co-financing only NOOR IV in Ouarzazate / Morocco and not NOOR Laayoune and NOOR Boujdour", KfW wrote in an email. 

KfW's position is also in line with that of the German Government. In 2017, the State Secretary at the Federal Ministry for Economic Affairs and Energy clarified to the German Parliament that “The Federal Government does not support the economic activities of German companies in Western Sahara and does not secure business through export credit and investment guarantees”.

A 2019 analyis of the Bundestag's research department concluded that Morocco is to be considered an occupying power in Western Sahara, and that its settlement policy - described as the transfer of its own civilians into the territory as well as indirect measures in promotion thereof - substantiates a violation of the fourth Geneva Convention. 

It remains to be clarified by KfW where exactly the mentioned water investment programme of OCP is located.

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