Oslo/Melbourne 23 September 2009


PGS

Att: President and CEO, Mr. Jon Erik Reinhardsen

Regarding PGS’ cooperation with San Leon Energy – Open letter.

Dear Sir,

The Norwegian Students’ and Academics’ International Assistance Fund (SAIH) and Western Sahara Resource Watch (WSRW) were this week-end informed about PGS Venture’s purchase of shares in San Leon Energy.

As a socially responsible corporation, we believe that by becoming a part-owner of San Leon Energy, it is now of PGS’ concern to address a matter with the management of your partner, which is of major importance to the people of Western Sahara.

Western Sahara is occupied by Morocco, and the majority of the indigenous Sahrawi people has fled to Algeria since the occupation began, where they are currently living in refugee camps. The situation in the camps has for years been characterised by an acute shortage of food and medical supplies. One out of 5 children in the refugee camps are suffering from malnourishment, according to a 2008 report by Norwegian Church Aid.

At the same time, the human rights situation in the occupied Western Sahara remains severe. Organisations such as Amnesty International and Human Rights Watch repeatedly document systematic human rights violations in Western Sahara committed by Moroccan authorities. More than 500 Sahrawis have 'disappeared' in Moroccan captivity since the occupation began.

These violations of human rights today mainly take place on two locations: around the city of Smara, and the city of El Aaiun. Both these two cities, together with an important part of the Moroccan army, are located on San Leon Energy’s petroleum blocks.

No states in the world, or the International Court of Justice, recognise the Moroccan sovereignty over Western Sahara. More than 100 UN resolutions demand that the right of self-determination for the Sahrawi people be respected, but Morocco refuses to accept the referendum which the UN is demanding.

There is a fragile truce in Western Sahara at this moment. The UN is present in the territory to monitor a ceasefire from 1991. Saharawis under occupation and in exile are increasingly frustrated over the standstill. Since Morocco does not respect the referendum plans as elaborated in the peace agreements, Polisario Front is now in serious deliberations over whether to return to arms.

Polisario has also considered the Moroccan oil search beginning in 2001 as a violation of the Morocco-Polisario agreements from 1991.

The UN considers the oil search in Western Sahara a violation of international law, if they were to proceed in the disregard of the wishes and interests of the Sahrawis. Please find the 2002 UN legal opinion here: www.arso.org/Olaeng.pdf. This opinion is further explained in an address in 2008 by the former leader of the 2002 expert team, the UN ex-undersecretary general for legal affairs, Mr. Hans Corell: http://www.havc.se/res/SelectedMaterial/20081205pretoriawesternsahara1.pdf

San Leon has never presented any evidence, so far as we know, that their activities are in line with international law as elaborated by the UN opinion, i.e. that the Sahrawi people has been consulted, or that it is actually in line with their interests and wishes. The Polisario Front protested San Leon’s engagement to the UN Security Council earlier this year.

The Norwegian Ministry of Finance stated in 2005 that activity similar to the one that San Leon is now doing was "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". See the Norwegian government's opinion of the Kerr-McGee Boujdour block contract here, as they divested from Kerr-McGee of ethical reasons:
http://www.vest-sahara.no/files/pdf/kmg_analysis_norway_2005.pdf  and here:
http://www.regjeringen.no/nb/dep/fin/tema/andre/Etiske-retningslinjer/Tilradninger-og-brev-fra-Etikkradet/Recommendation-on-Exclusion-from-the-Government-Petroleum-Funds-Investment-Universe-of-the-Company-Kerr-McGee-Corporation.html?id=419582

San Leon Energy, just as did Kerr-McGee, claims on its homepages that Western Sahara is part of Morocco. Please see their homepages for further information on this matter.

The Norwegian Ministry of Foreign Affairs urges Norwegian companies to abstain from activities in Western Sahara, due to the aspects of international law. We believe you are aware of that already:
http://www.regjeringen.no/nb/dep/ud/tema/norgesfremme-og-kultursamarbeid/Norges-omdomme/Bedrifters-samfunnsansvar/Vest-Sahara.html?id=480822

To conclude, San Leon’s participation in the oil exploration is politically controversial, since it supports Morocco's unfounded claim over Western Sahara, it is contributing to undermining and violating international law, and it is, most importantly, deeply unethical, since it contributes to the continued suffering for the oppressed Sahrawi people.

With this background, the Norwegian Students’ and Academics’ International Assistance Fund (SAIH) and Western Sahara Resource Watch (WSRW) would like to recommend that PGS:

Demands from the management of San Leon that they immediately terminate their agreements with ONHYM (The Moroccan Office of Hydrocarbons and Mining) covering the territory of Western Sahara. This implies both the Zag and Tarfaya blocks.
Demands from the management of San Leon to sign no further contracts with ONHYM covering the territory of Western Sahara until the UN has been able to conclude the process of decolonisation of Western Sahara in accordance with the signed peace agreements signed between the parties to the conflict.

If San Leon refuses to respect international law and basic principles of Corporate Social Responsibility, PGS should consider terminating its business partnership with San Leon Energy. We believe it is not in your own firm’s interest to be associated with the kind of operations which are today taking place in Western Sahara.

We would also like to invite PGS to a panel debate on the issue of Western Sahara at a seminar at the University of Oslo at 8 October 8 AM. The Norwegian Ministry of Foreign Affairs and the news service Norwatch is already invited to the debate. Please respond directly to Ms. Sigrun Espe on this matter.

Looking forward to hear from you,

Sincerely yours,


Sigrun Espe
President, The Norwegian Students’ and Academics’ International Assistance Fund
sigrun.espe@saih.no
www.saih.no


Cate Lewis
International coordinator
Western Sahara Resource Watch
lewis.cate@gmail.com
www.wsrw.org


CC:
CEO Phil Thompson, San Leon Energy