The Western Sahara liberation movement has taken New Zealand’s superannuation fund to the country’s highest court over its investments in farms that use phosphate illegally mined in the occupied territory.

New Zealand is one of the few remaining countries – and last western nation – that accepts imports from the contested territory in West Africa, forcibly occupied by Morocco since 1975. Morocco’s claims to the territory are largely unrecognised internationally.

The Polisario Front – the political arm of the Western Saharan independence movement – has lodged documents in the New Zealand high court saying the New Zealand Superannuation Fund, with $45bn under management, is exposed to unlawful practices through its investments in farms that use Western Saharan phosphate, and interests in companies operating in the occupied territory.

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Fertiliser companies Ravensdown and Ballance Agri-Nutrients in New Zealand are the only companies in the western world that import phosphate from Western Sahara, spread on New Zealand farms.

The phosphate rock mined in Western Sahara has low levels of cadmium suitable for New Zealand soil conditions, although alternatives are available from other sources.

In 2017, the Polisario Front won a South African court action, seizing a load of fertiliser in port in Port Elizabeth, ordered by Ballance Agri-Nutrients, and bound for New Zealand. The court ruled Morocco had no legal claim to the phosphate, and could not sell it to a third party.

“The Sahrawi people are determined to protect their natural resources with all available means,” the Polisario Front’s representative of the Sahrawi Arab Democratic Republic to Australia and New Zealand, Kamal Fadel, said.

“This legal action is a message to all who are involved in the exploitation of Sahrawi natural resources that they face legal action, reputational risks and investor withdrawal.”

The movement’s claim to the high court said the NZ Super Fund’s involvement in Western Saharan phosphate trade was inconsistent with statutory obligations to manage and administer the fund in a manner “consistent with avoiding prejudice to New Zealand’s reputation as a responsible member of the world community”.

Fadel said the court action was determined to stop the extraction of Western Saharan resources and said the NZ Super Fund must “put an end to their illegal involvement in the exploitation of the natural resources of our country”.

“New Zealand companies have plundered our phosphate for decades. The blood phosphate illegal trade must end.”

A spokesman for the Guardians of the NZ Super Fund said the fund was invested in several farms that used Western Sahara-sourced phosphate, and had a limited equity exposure through passive index funds to international companies that operated in the territory.

He said the allegations made by the Polisario Front about the fund’s investments were not accepted by the fund.

“We take our obligations as a responsible investor very seriously. These obligations are integrated into the Guardians’ investment activities through its responsible investment framework.

“The Guardians believes it has appropriately applied its responsible investment framework in a manner that meets its legislative obligations to manage the fund in a manner consistent with best practice portfolio management and avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.

The spokesman said NZ Super Fund’s position was supported by independent third party assessments including the UN.

“The framework and the Guardians’ wider work programme are closely aligned to the United Nations-backed principles for responsible investment, which graded the Guardians’ activities as A or A+ in its annual assessment of governance and strategy for responsible investment.”

Internal NZ Super Fund documents reveal the issue of Western Sahara has concerned fund investment managers for years.

“New Zealand Super Fund says we need to understand alternatives to Western Sahara phosphate rock,” a 2019 internal briefing document, revealed under the official information act, argues.

“[The] ministry of foreign affairs and trade says there are alternative sources. New Zealand only started getting phosphate from the Western Sahara in the 1980s.”

The document also says New Zealand Super Fund is directly exposed because it owns 25 farms.

“New Zealand Super Funds’ farms are continuing to be supplied by Ballance. NZSF has, however, asked its farm manager FarmRight and Ballance to explore whether or not, going forward, there are commercially-feasible alternatives to obtaining phosphate from the Western Sahara.”

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Ballance Agri-Nutrients and Ravensdown are the only two members of the Fertiliser Association of NZ. They supply 98% of all fertiliser used in NZ.

“The Fertiliser Association continues to believe that the local inhabitants of Western Sahara should benefit from the resources of their territory, and that any activities involving these resources should be undertaken in their best interests and for their benefit, however also consider that the United Nations is the most appropriate organisation to make judgements on situations like this,” the internal briefing document argues.

Western Sahara is regarded by the United Nations as a “non-self-governing territory”, but international proposals for referenda and autonomy plans have failed to break the four-decade impasse.

Since 2012, international funds, including the Norwegian Government Pension Fund, National Employment Savings Trust in the UK, the Netherlands’ APG, AP Funds in Sweden, and FDC (Luxembourg) have divested from companies that extract resources from Western Sahara for ethical reasons.

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