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Total could face Norwegian investor boycott over Western Sahara after KLP pulls €53m in assets

Norwegian life and pensions company says prospecting could violate international law.

Total, the French oil giant, faces the embarrassing prospect of being blacklisted for investment by some of Norway’s largest investors after KLP, the NOK 341bn (€45bn), Norwegian life and pension company pulled NOK400m (€53m) in assets alleging that the company’s prospecting for oil in the disputed Western Sahara territory was in breach of international law. Occupied by Morocco since 1975, Western Sahara is formally classified by the UN as a “Non-Self-Governing Territory”, a country that according to the UN still is non-decolonised. Link to RI Op-ed on Western Sahara
KLP said it had been engaging with Total because of “reconnaissance and evaluation work” the oil company has been carrying out off the coast of Western Sahara. It said it finally decided to pull its assets after legal advice that UN conventions, including the law of the sea, meant that the rights of exploitation of the resources did not belong to Morocco. Total E & P Maroc, a local subsidiary of the oil major, is carrying out the reconnaissance work. Morocco granted Total E & P Maroc an Authorization of Reconnaissance covering the Anzarane Offshore area in December 2011. Jeanett Bergan, Head of Responsible Investment at KLP said: “KLP believes that Total’s activities on the continental shelf off WesternSahara’s coast may be linked to breaches of fundamental ethical norms.” Total says its activities are neither an exploration nor an exploitation contract and that a 2002 opinion of the UN Legal Counsel states that such contracts for oil reconnaissance and evaluation are not illegal. The oil company said any further exploration and exploitation would be conducted in compliance with “the principles of international law applicable to mineral resources activities in the Non-Self-Governing Territories” and not “in disregard of the interests and wishes of the people of Western Sahara”. However, there is the possibility that the oil firm could face a further blacklisting by the $740bn Norwegian Government Pension Fund (NGPF), the world’s largest sovereign wealth fund, and itself funded by Norway’s oil receipts. KLP uses the same ethical and legal framework as the NGPF in making its exclusion decisions. In 2005, the NGPF divested from US energy company Kerr-McGee, which is understood to have been working in the same Western Sahara waters as Total. At the time, NGPF said Kerr-McGee’s activities contributed to legitimising Morocco’s sovereignty claims and undermining the UN peace process.
The NGPF has already excluded mining companies FMC Corp. and Canada’s Potash Corp. of Saskatchewan over their involvement in Western Sahara.