State Department defends Pakistani firm blocked in Indiana over IED concerns

The Obama administration is standing by a Pakistani firm blocked from opening a fertilizer plant in rural Indiana over concerns its chemicals are being used to kill Americans in Afghanistan.

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The Indiana Finance Authority issued $1.3 billion in tax-exempt bonds on Dec. 1 for Pakistan's Fatima Group to build a nitrogen fertilizer plant in Posey County. But Gov. Mike Pence (R) has put the project on hold amid concerns that Pakistan — and Fatima — hasn't done enough to prevent fertilizer from ending up in the hands of the Taliban and other Islamist militants on the other side of the border. 

“Economic development is important, but the safety and security of our troops in harm's way is more important,” Pence said in a Feb. 1 statement. “We're in the process of making a careful evaluation of the appropriateness of Indiana's involvement in this project with those priorities in mind.”

The hold was sparked by congressional testimony from the Pentagon's top expert on Afghan Improvised Explosive Devices, who called Fatima “less than cooperative” in the fight against IEDs, which accounted for almost 1,900 U.S. casualties last year. 

Lt. Gen. Michael Barbero, director of the Joint Improvised Explosive Device Defeat Organization, made the remarks on Dec. 13.

“Despite making minor packaging, tracking and marketing changes, they have not implemented any effective product security or stewardship efforts,” Barbero said. 

“Pakistani-based [calcium ammonium nitrate] producers can and must do more. Frustratingly, all direct communication and engagement with the leaders of Fatima Group was halted by the government of Pakistan.”

Since then, Fatima has gone on the offensive to improve its reputation, responding to the government's concerns and using PR agency Levick to get the word out. The administration has taken note.

“While I stand by my testimony, in recent weeks I’ve seen positive developments in discussions with the Fatima Group, the Pakistan-based producers of calcium ammonium nitrate,” Barbero said in a Feb. 22 statement. 

“Fatima confirmed to me in writing that it has suspended sales of CAN fertilizer products in the border provinces of Balochistan and Khyber Pakhtunkhwa, affecting 228 dealers in those areas. I’m encouraged by their actions and remain hopeful this step will have positive and significant near-term impacts with respect to diminishing the IED threat not only to U.S. and coalition forces on the ground in Afghanistan, but to Pakistan’s civilians and security forces as well.”

Barbero said he was also encouraged by the company's attempts to reformulate its fertilizer to render it more inert and less explosive.

“If successful,” he said, “this development would represent a significant step forward in curbing the use of homemade explosives and preventing the misuse of ammonium nitrate-based fertilizers.”

The State Department tells The Hill it agrees with Barbero's assessment, but won't weigh in on the Posey County plant either way because it's a state decision.

“We have been clear that Pakistan, both government and industry, must do more to prevent the flow of Calcium Ammonium Nitrate into Afghanistan,” a State Department spokeswoman told The Hill. “We agree with DOD that there has been some recent progress with Fatima and greater cooperation with the Government of Pakistan in this regard, and we will continue to work toward measurable progress.”

Sen. Bob Casey (D-Pa.), who called December's hearing as chairman of the Senate Foreign Relations Committee's panel on South Asia, said he's also seen positive signs.

“In recent weeks, I have received commitments from the owners of the Pakistani factories that produce and distribute this fertilizer, the Fatima Group, that they have voluntarily halted distribution of CAN in the Pakistani provinces of Khyber Pakhtunkhwa and Baluchistan, which border Afghanistan,” Casey said last month. “I also understand that they are instituting a CAN buy-back program in these provinces. These are very positive developments which should diminish the amount of this fertilizer available for diversion and smuggling.

“Fatima has also announced that it has been working on a new version of CAN that has significantly diminished explosive properties. I appreciate Fatima’s continuing cooperation, their initiative in developing this new compound, and their willingness to conduct joint testing and evaluation with U.S. officials.”

Not everyone on Capitol Hill is convinced Pakistan can be trusted, however.

“The Fatima organization was willing to work with our U.S. military to curtail the cross-border transaction of calcium ammonium nitrate until (the) Pakistani government told them 'no, you aren't going to curtail it, stop talking with Americans, we are going to keep shipping across the border the way that we have been,' ” Rep. Duncan Hunter (R-Calif.) told Fox News last month. 

And Rep. Pete King (R-N.Y.) has asked the Treasury and Homeland Security departments to review the company's Indiana application for any national security implications.