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Western Sahara Conflict Re-Emerges, Threatening Regional Stability and Business Operations

March 15, 1991

The long-dormant conflict over the status of Western Sahara has reignited, casting a shadow over regional stability and business operations in the Maghreb region.

The Situation

The Polisario Front, a rebel group fighting for independence from Morocco, has called for a referendum on self-determination, which has been met with resistance from Moroccan authorities. The situation is complicated by Morocco’s recent consolidation of its presence in Western Sahara, including trade agreements involving resources from the territory. The Polisario Front has attacked these agreements in court, citing violations of UN resolutions and international law.

Business Implications

The re-emergence of the conflict poses significant risks for businesses operating in the region or trading with Morocco. Companies involved in phosphate mining, renewable energy projects, and other sectors have already faced legal challenges and reputational damage due to their ties to Western Sahara.

  • “We urge companies to exercise extreme caution when doing business in this region,” said a spokesperson for the Polisario Front. “The Moroccan occupation is illegal, and any company that supports it is complicit in colonialism.”

EU-Morocco Trade Agreements

The European Union has several trade agreements with Morocco, but these have been challenged by the Polisario Front and other NGOs. The European Court of Justice has issued judgments on two cases, finding that the EU agreements cannot include Western Sahara’s territory without the consent of its people.

The ECJ rulings have set important legal precedents for trade relations with Morocco. Companies involved in phosphate mining, such as OCP and Phosphates De Boucraa, have faced legal challenges and reputational damage due to their ties to Western Sahara.

Operational Risks

The increased hostilities also pose operational risks for businesses operating in the region. With the conflict escalating, companies may face:

  • Disruptions to supply chains
  • Restrictions on movement
  • Other logistical challenges

Recommendations for Businesses

Companies operating in the Maghreb region or trading with Morocco are advised to:

  • Monitor the situation closely and design business continuity plans accordingly
  • Enhance due diligence and adverse media screening services to identify potential risks and prevent reputational damage

In conclusion, the re-emergence of the Western Sahara conflict poses significant risks for regional stability, businesses, and investors. As the situation continues to unfold, companies must remain vigilant and adapt to changing circumstances to protect their interests.