Human rights proposal presented at Potash AGM garners substantial support from shareholders

In May, SHARE attended the Annual General Meeting of Potash Corporation, alongside the Congregation of the Sisters of Mercy of Newfoundland, to present a shareholder proposal co-filed by the Sisters and OceanRock Investments Inc. concerning the company’s sourcing of phosphate rock from the non-self-governing territory of Western Sahara.

Potash Corporation is now the world’s largest importer of phosphate rock from Western Sahara, part of which is currently controlled by Morocco. Morocco’s claim of sovereignty over the Western Sahara is not recognized by the International Court of Justice or the United Nations, and serious human rights violations have been reported in the territory. It is sometimes called “Africa’s last colony”.

Although its political status is unresolved, and a military conflict has driven a sizeable portion of Western Sahara’s original population into refugee camps outside of the territory, a Moroccan state-owned company is mining the territory for phosphate rock, a mineral used to produce food-grade phosphoric acid. That rock is sold to international buyers like Potash Corporation.

The United Nations Under-Secretary-General for Legal Affairs determined that “if … exploration and exploitation activities were to proceed in disregard of the interests and wishes of the people of Western Sahara, they would be in violation of the principles of international law applicable to mineral resource activities in Non Self-Governing Territories.” Last year, the UN Committee on Economic, Social and Cultural Rights also called on Morocco to respect the free, prior and informed consent of the Saharan people regarding the use of their natural resources.

The shareholder proposal asked Potash to commission and make public an independent assessment of its own human rights responsibilities in relation to sourcing phosphate rock from Western Sahara, having regard to the UN Guiding Principles on Business and Human Rights and associated international human rights standards.

Our concern, as shareholders, is that the legal and reputational risks related to extraction of resources from Western Sahara have steadily grown. Conducting an assessment of the company’s actual and potential impacts would be a long-overdue first step in human rights due diligence.

Many Potash shareholders agreed with OceanRock and the Sisters of Mercy. The proposal achieved 31.6% of the vote, an almost four-fold increase from a similar proposal filed the previous year.

We take that as a strong signal that shareholders want to see increased due diligence from Potash Corporation, and will be engaging further with the company to discuss how it can respond effectively to that concern.

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