Business as usual Lonrho and oil

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					DRAFT UP paper: February 2010                                            andrew.cohen@up.ac.za


Business as usual? Lonrho and oil sanctions against
Rhodesia

On the 11 November 1965 at 1.15 p.m. Ian Smith, the Prime Minister of Southern
Rhodesia,1 made a nationwide radio broadcast declaring the territory independent
from British rule (henceforth UDI).2 Shortly afterwards a small crowd of
predominantly white Rhodesians who had gathered in Salisbury’s Cecil Square to
listen to the announcement quietly dispersed.3 The earlier restriction or exile of most
nationalist leaders guaranteed a muted response from the Salisbury’s African
community. The townships west of the city, in the words of one commentator,
‘seemed numb’.4 The news was greeted in a far less diffident fashion by Tiny
Rowland, the managing director of the British company Lonrho, who was found in
tears in his Salisbury office, later that afternoon, sobbing ‘I’m ruined … my business
is destroyed’.5
    One aspect of Lonrho’s business operations in Rhodesia to be affected was its oil
pipeline which ran from the Rhodesian town of Umtali to Beira on the Mozambique
coast. Existing work on Rowland and Lonrho, while rich in oral testimony, was
published before the release of archival material and considers the oil pipeline all too
briefly.6 Where oil sanctions are at the centre of scholarly attention the focus has been
on Shell and British Petroleum (BP).7 Broader studies of sanctions policy primarily

1
  The British Government never legally recognised the decision by the Southern Rhodesian government
    to rename the territory ‘Rhodesia’, after the dissolution of the Federation of Rhodesia and
    Nyasaland. Similarly, the British government referred to IDI (Illegal Declaration of Independence)
    rather than UDI (Unilateral Declaration of Independence). For clarity the terms ‘Rhodesia’ and UDI
    will be used through this paper, unless within a direct citation, or when referring to the pre-1964
    period.
2
  For events in Southern Rhodesia prior to UDI see, amongst others: James Barber, Rhodesia: The
    Road to Rebellion (London, 1967); Alois Mlambo ‘From the Second World War to UDI, 1940-
    1965’ Brian Raftopulous and Alois Mlambo (eds), Becoming Zimbabwe: A History from the pre-
    colonial period to 2008 (Johannesburg, 2009); Eshmael Mlambo, Rhodesia: The Struggle for a
    Birthright (London, 1972); Philip Murphy (ed) British Documents on the End of Empire, Series B.
    Volume 9, Central Africa: Part I, Closer Association 1945-1958 (London, 2005) and British
    Documents on the End of Empire, Series B, Volume 9, Central Africa: Part II, Crisis and
    Dissolution 1959-1965 (London, 2005); and Richard Wood, The Welensky Papers (Durban, 1983)
    and So Far and No Further! Rhodesia’s Bid for Independence during the retreat from Empire 1959-
    1965 (Johannesburg, 2005)
3
  Jorge Jardim, Sanctions Double-Cross: Oil to Rhodesia (Bulawayo, 1979), p. 22, and Robert C.
    Good, UDI: The International Politics of the Rhodesian Rebellion (London, 1973), pp. 15-17.
4
  Good, UDI, p. 17.
5
  Tom Bower, Tiny Rowland: A Rebel Tycoon (London, 1993), p. 93.
6
  See for example, Ibid.; Suzanne Cronjé, Margaret Ling and Gillian Cronjé, Lonrho: Portrait of a
    Multinational (London, 1976) and Richard Hall, My Life with Tiny: A Biography of Tiny Rowland
    (London, 1987).
7
  See for example Martin Bailey, Oilgate: The Sanctions Scandal (London, 1979) and Jardim,


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DRAFT UP paper: February 2010                                            andrew.cohen@up.ac.za


tend to assess whether they were a success.8 In what follows, I will give a brief
background of how Lonrho came to be involved with the oil pipeline before exploring
how the company reacted to oil sanctions, and detailing the British government’s
response.


Origins of the Pipeline

Tiny Rowland arrived in Southern Rhodesia during 1948 and purchased a 4,000 acre
farm.9 Over the next several years Rowland expanded his commercial interests and
embarked on a project to build a 184-mile pipeline to transport crude oil to Southern
Rhodesia.10 Rowland is alleged to have become interested in building a pipeline after
reading in Readers Digest about similar schemes in the Soviet Union and the Middle
East. A pipeline would provide a reliable and cheap way to import oil into the
landlocked country, while Rowland would gain access to a regular and secure stream
of profit. As such, he incorporated Associated Overseas Pipelines in 1957 to pursue
the idea. 11
    Several problems faced the company in taking an idea from the pages of Readers
Digest and implementing it in Central Africa. Southern Rhodesia was then united with
Northern Rhodesia and Nyasaland in the ill-fated Central African Federation.
Although this promised an enlarged market, if the pipeline could be built, it doubled
the chances of bureaucratic obstacles as both the Federal and Southern Rhodesian
governments would have to grant their consent. Furthermore, agreement also needed
to be reached with the Mozambique and Portuguese governments; the major oil
companies and an acceptable level of compensation settled with the railway concerns
who held the monopoly on oil transport.12


    Sanctions Double-Cross.
8
  As sanctions did not end UDI in ‘weeks rather than months’ it has been argued they failed, see:
    Margaret Doxey, Economic Sanctions and International Enforcement (London, 1980); Harry
    Strack, Sanctions: The Case of Rhodesia (Syracuse, 1978) and Robin Renwick, Economic Sanctions
    (Cambridge, MA, 1981). More recently arguments have been advanced that sanctions did in fact
    work as they dissipated calls for stronger action in the United Nations, and placed Rhodesia under
    unsustainable economic pressure after the fall of Mozambique in 1975, see: William Minter and
    Elizabeth Schmidt, ‘When Sanctions Worked: The Case of Rhodesia Reexamined’, African Affairs,
    Vol. 87, No. 347 (April, 1988), pp.207-238; and Alois Mlambo, ‘Prelude to the 1979 Lancaster
    House Constitutional Conference on Rhodesia: The Role of Economic Sanctions Reconsidered’,
    Historia, Vol. 50, No. 1 (May, 2005), pp. 147-172.
9
  For a rich description of Rowland’s life prior to emigrating see Bower, Tiny Rowland, pp. 1-31.
10
   Ibid., pp. 26-55.
11
   Ibid., p. 55.
12
   Ibid., p. 55.


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DRAFT UP paper: February 2010                                               andrew.cohen@up.ac.za


     Rowland began by making generous donations to charities favoured by the Bishop
of Beira and the Bishop of Lourenço Marques. This ensured he gained access to the
governor and Jorge Jardim, a businessman in Mozambique who was a close friend of
the Portuguese dictator Antonio Salazar. By 1960 Rowland was able to inform the
Federal government that he had negotiated compensation with Mozambique Railways
for their loss of revenue.13
     Soon after this, Rowland was approached by Angus Ogilvy on behalf of the
London and Rhodesia Mining Company to see if he would consider a proposition to
become involved with Lonrho and arrest its decline.14 The company had been
incorporated in 1909 and by 1945 had grown into Southern Rhodesia’s biggest
commercial concern. However, during the 1950s its fortunes fell and it became
‘virtually moribund’ by the end of the decade.15 Rowland previously came to the
attention of Lonrho when he brokered the sale of one of the company’s most
profitable concerns to Rio Tinto Zinc.16 To achieve this he offered Lonrho’s
management team, composed of Sir Joseph Ball and his son Alan, £35,000 if they
accepted a deal contrary to the best interests of their shareholders. They did, and
Rowland collected £100,000 for securing the purchase.17 Ogilvy agreed a contract
whereby Rowland’s assets were exchanged for shares in Lonrho, and he became the
company’s managing director. Rowland eventually received forty three percent of
Lonrho and Associated Overseas Pipelines became a subsidiary of the company.18
     Despite Rowland’s success with the Portuguese authorities, the pipeline still
needed to overcome opposition within the Federation. A plan to nationalise the
project was mooted in some quarters, and Rowland was personally distrusted by the
more parochial members of the Southern Rhodesia government.19 Ian Smith, while
Minster of the Treasury, noted that Southern Rhodesian legislation lacked any
provision to supervise or control the operation of pipeline transportation.20


13
   Ibid., pp. 56-57.
14
   The London and Rhodesia Mining Company officially changed its name to Lonrho on 6 May 1963,
    see [B]oard of [T]rade 299/38 for a copy of the change of name certificate. File references are to the
    National Archives, Kew, United Kingdom.
15
   Cronjé, Ling and Cronjé, Lonrho, p. 17.
16
   The Cam and Motor Goldmine.
17
   Bower, Tiny Rowland, p. 53.
18
   Ibid., pp. 57-59.
19
   Ibid., p. 57.
20
   [S]mith [P]apers 2/003, S.R.C (F) (63) 466, Customs and Excise Act: Proposed Amendments, (I.D.
    Smith) 27 December 1963. File reference to the Cory Library, Rhodes University, Grahamstown,
    Republic of South Africa.


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DRAFT UP paper: February 2010                                           andrew.cohen@up.ac.za


Significantly Rowland had courted favour with the Federal Prime Minister, Sir Roy
Welensky, who later informed the Salisbury Institute of Directors that Rowland ‘made
a very good impression on Cabinet Ministers’.21 In order to secure this support,
Rowland made significant donations towards the ‘Build a Nation’ campaign, which
was an attempt to register African voters during 1961.22 Furthermore, it was rumoured
that Frank Owen, the Federal Transport Minister was given £30,000 by Rowland to
guarantee that the scheme passed.23 Welensky later stated that he supported the
project as Rowland was ‘a man of drive and tries to get things done’.24 When the
Southern Rhodesia government attempted to resist his advances, Rowland threatened
to sue for £5 million damages on the basis that they had reneged on the Federal
government’s agreement.25 They duly backed down and on the 3 April 1963, a bottle
of champagne was broken on the front of a bulldozer and construction began.26 The
first oil was pumped through the pipeline during December 1964, and it was officially
opened on 27 April 1965.27 Time magazine mused: ‘Just when many companies are
thinking of pulling out of troubled Africa one is busy building a business empire as
big as any since the heyday of Cecil Rhodes’s British South Africa Company … the
new African giant is Lonrho Ltd’.28
     Under the terms of Rowland’s agreement with the Portuguese government, the
pipeline was to be managed by the Companhia do Pipeline Moçambique-Rodesia
(CPMR). Lonrho possessed a sixty-two percent holding in the share capital of CPMR.
However, its head office was located in Beira, and five out of its nine directors,
including its chairman, were Portuguese. If at any time the pipeline ceased operation
without the permission of the Mozambique government, it could be immediately
seized and publically administered.29 Despite these conditions, Lonrho’s contract with


21
   [W]elensky [P]apers, 352/3, Minutes of a Meeting, 2 February 1961. File references are to Rhodes
    House Library, Oxford, United Kingdom.
22
   Rowland donated £20,000 under the proviso that it was only to be used in Southern and Northern
    Rhodesia (not Nyasaland where he was supporting Dr Hastings Banda) to gain African support. See
    WP 527/8, Letter from A. T. Adams to V. Sharpe, 18 September 1961.
23
   [F]oreign and [C]ommonwealth [O]ffice 45/1075, Report on Lonrho, 22 August 1972. File
    references are to the National Archives, Kew, United Kingdom.
24
   WP 669/7, Letter from Welensky to Zoe Shearer, 25 June 1962.
25
   In his memoirs Ian Smith would later describe Rowland as ‘not exactly one of our friends’. See Ian
    Smith, Bitter Harvest: The Great Betrayal and the Dreadful Aftermath (Johannesburg, 1997), p.
    238.
26
   Hall, My Life with Tiny (London 1987), p. 15.
27
   FCO 45/1075, Report on Lonrho, 22 August 1972.
28
   Time, 22 January 1965.
29
   Cronjé, Ling and Cronjé, Lonrho, p. 23.


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DRAFT UP paper: February 2010                                      andrew.cohen@up.ac.za


Shell and BP not to deliver oil to Rhodesia by any other route promised a quick and
profitable return on its investment in the project.30


UDI and sanctions

The British government passed the Southern Rhodesia Act through the House of
Commons on the 16 November 1965 in response to UDI. This created a legal basis for
pressure to be applied on the errant colony by the introduction of economic sanctions.
Initial measures included an end of arms sales; removal from the Sterling Area, a bar
on raising capital on the London market and a ban on tobacco and sugar imports,
which constituted seventy-one percent (by value) of Rhodesian exports to Britain.31
However, this failed to satisfy international opinion and the United Nations (UN)
Security Council voted for voluntary oil sanctions against the colony on 20 November
1965. This was swiftly followed by a demand for Britain to impose stringent oil
sanctions on Rhodesia within ten days. When this failed, thirteen African states
cancelled their diplomatic relations with Britain. Pressure further increased on the 16
December when over one hundred delegates walked out of the UN General Assembly
when Harold Wilson, the British Prime Minister, rose to speak.32 In response, the
British introduced a second round of measures against Rhodesia on 17 December
1965 which included a complete ban on petroleum imports. The rebel colony was
entirely reliant on imported petroleum products which theoretically made it acutely
vulnerable to an embargo. Furthermore, of the five major oil companies – Shell,
British Petroleum, Mobil, Caltex and Total – four were headquartered in either Britain
or the United States, which ought to have ensured that sanctions were easy to
enforce.33
     A successful oil embargo may well have led to the Rhodesian rebellion being over
in ‘weeks rather than months’ as Harold Wilson was to prematurely predict.34
Certainly, several British newspapers echoed his initial optimism over the potential
success of oil sanctions. In January 1966, The Times appeared so confident of success


30
   Bower, Tiny Rowland, p. 89.
31
   Strack, Sanctions, p. 17.
32
   David M. Rowe, Manipulating the Market: Understanding Economic Sanctions, Institutional
    Change and the Political Unity of White Rhodesia (Ann Arbor, 2001), p. 140.
33
   Ibid., p. 133.
34
   Final Communiqué of the Commonwealth Prime Ministers’ Conference Lagos, 12 January 1966,
    cited in Elaine Windrich, The Rhodesian Problem (London, 1975), p. 248.


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DRAFT UP paper: February 2010                                            andrew.cohen@up.ac.za


that it began to speculate on post-UDI security arrangements in the territory.35
Similarly, The Economist trumpeted that ‘everything now points to the ultimate defeat
of the Rhodesian rebellion’, however a prophetic glimpse of foresight saw the
disclaimer ‘Mr. Smith cannot survive without an assured flow of oil and he cannot get
it unless Portugal and South Africa deliver the goods’.36 Scepticism was voiced,
however, by Sir Edgar Whitehead, the former Southern Rhodesia Prime Minister, in
The Spectator who opined: ‘Sanctions are no more likely to produce a change of
government in Rhodesia than in Cuba’.37
     Lonrho’s reaction to UDI – following Rowland’s melodramatic tears – was to
quickly assess its position. The Lonrho board was reluctant to sacrifice their major
assets, as the sanctions legislation introduced in Britain did not formally outlaw the
continuation of British-owned businesses in Rhodesia. Furthermore, they too believed
that UDI would be a short-term affair and convinced CPMR’s Portuguese directors
that it would be in their best long-term interests to temporarily cease pumping oil into
Rhodesia.38 The Beira storage tanks of the pipeline ran dry on the 31 December 1965,
leaving approximately 14,000 tons of crude oil stranded in the pipeline. The
Rhodesian government attempted to get CPMR to flush it through using seawater;
however they refused, using the excuse that this would cause serious corrosion.
Consequently, Rhodesia processed its last supplies of crude oil at the Feruka refinery
on the 15 January 1966.39
     As Wilson’s weeks turned into months, the British government faced a very public
challenge to its sanctions policy. In March 1966, the oil tanker Joanna V approached
Beira carrying 16,000 tons of crude oil destined for the pipeline.40 ‘Not since the
Marie Celeste has a mystery ship drawn so much attention as the tanker whose
reported approach to Beira began to make headlines on March 3rd,’41 The Economist
observed. Britain’s response was crafted ‘in the best nineteenth century style, they


35
   The Times, 13 January 1966.
36
   The Economist, 8 January 1966. South Africa’s economic support for Rhodesia has recently received
    scholarly attention. See Alois Mlambo, ‘We have Blood Relations Over the Border’: South Africa
    and Rhodesian Sanctions, 1965-1975’, African Historical Review, Vol. 40, No. 1 (July 2008), pp. 1-
    29.
37
   The Spectator, 28 January 1966.
38
   Bower, Tiny Rowland, p. 95.
39
   Rowe, Manipulating the Market, p. 144.
40
   For a more detailed account of the Joanna V affair see: Jardim, Sanctions Double-Cross, pp. 71-75;
    and Good, UDI, pp. 137-144.
41
   The Economist, 12 March 1966.


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DRAFT UP paper: February 2010                                            andrew.cohen@up.ac.za


sent in the gunboats.’42 The H.M.S Plymouth, duly intercepted the Joanna V on 4
April 1966, however, it was unable to prevent the tanker reaching Beira. CPMR’s
response was rather more ambiguous. Despite the previous decision by their board to
cease operation of the pipeline, local representatives of the company confirmed that
arrangements had been made to pump the oil once they received authorization from
Lisbon.43 The ship sailed into Beira harbour on 5 April, however failed to discharge
its consignment.44 Britain swiftly tabled a UN Security Council Resolution which
called upon the Portuguese government not to receive at Beira – crucially no mention
of Lourenço Marques was made – oil destined for Rhodesia, and allowed the Royal
Navy to ‘prevent by force’, if necessary, any vessels believed to be heading to Beira
for this purpose.45
     As the Joanna V had approached Beira, the British government began negotiations
with Lonrho to keep the pipeline closed. It was announced on 7 April, with the vessel
still in port that the British would provide payments of £54,000 per month, for a
minimum of three months, to help cover expenses incurred in the maintenance of the
pipeline while it was out of use. These would be made to Lonrho rather than CPMR to
‘avoid difficulty with the Portuguese government’.46 The payments, while ostensibly
for ‘maintenance’ were closer to a bribe to ensure the pipeline remained closed.47
Tellingly, they ceased in October 1966 immediately after the Beira naval patrol took
up its duties off the Mozambique coast.48


Negotiations

The Portuguese directors of CPMR ‘were known to be angry’ at the British
government’s cancellation of monthly payments according to The Financial Times.


42
   Kenneth Young, Rhodesia and Independence (London, 1967), p. 400.
43
   Jardim, Sanctions Double-Cross, pp. 71-72.
44
   Jardim, who was director of Sociedade Nacional de Petroleos de Moçambique at that time claims
    that ‘work was still going on to connect the pipe from the wharf but we left a small section
    unfinished for want of which the transfer of crude could not be made…’ [emphasis in original]. See
    Ibid., p.73.
45
   Good, UDI, pp. 139-140.
46
   [T]reasury 317/870, Request by Lonrho Ltd for H.M.G. Assistance for the construction of an oil
    refinery in Zambia and a pipeline from Zambia to Tanzania, 1966, Report on Mr. Ogilvy’s visit to
    the Chancellor on the 18th May, 1966. File references relate to the National Archives, Kew, United
    Kingdom.
47
   FCO 35/80, Background note on the history of payments made by HMG to the Pipeline Undertaking,
    21 April 1967.
48
   Bower, Tiny Rowland, p. 95.


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DRAFT UP paper: February 2010                                        andrew.cohen@up.ac.za


The pipeline had been financed by a £2.5 million loan from the South African
parastatal the Industrial Development Corporation (IDC), repayable in twice yearly
sums of £200,000. If CPMR defaulted, the pipeline would pass into the hands of the
South Africans.49 Alan Ball, Lonrho’s chairman, revealed to the Commonwealth
Office that the Portuguese directors of CPMR were considering selling the pipeline to
their creditors as British payments had ceased. Failing this, they had alluded to a
possible sale to Rhodesian interests.50 According to Ball, Lonrho opposed this move
and had asked for a delay until the British government had been consulted.51
Consequently, he requested to meet with Sir Leslie Monson, Deputy Under-Secretary
in the Commonwealth Office.52
     Monson had just returned from serving as High Commissioner to Zambia and was
briefed on the situation by Robert Clinton-Thomas, Head of the Rhodesia Economic
Department. Clinton-Thomas believed that it was Ball’s intention to ask for the
government’s monthly payments of £54,000 to restart, and judged his claims of an
impending sale to South African or Rhodesian interest as an ‘idle threat’. Rowland
had previously implied that Lonrho would meet CPMR’s financial obligations if
required. Therefore, he suggested that Monson made it clear that the British
government was not prepared to reconsider resuming payments.53
     Ball arrived at the Commonwealth Office on the 19 January 1967 with Rowland,
Andrew Caldecott, Lonrho’s solicitor, and Sir Peter Youens, a former British colonial
official in Nyasaland who had joined the Lonrho board as a non-executive director in
1966.54 Ball requested an arrangement whereby the British Government would meet
the monthly repayments to the IDC and any other ‘out-of-pocket-expenses’ incurred.
Lonrho proposed to repay the money in six monthly instalments, beginning eight
weeks after the pipeline resumed operation. Rowland then repeated Ball’s previous
claim of an impending sale. Monson could not agree to the proposal and suggested
that Lonrho should try to renegotiate their Bills with the IDC. They were unable to do
this, replied Rowland, as they did not want to damage their credit. They were in
discussions with the IDC to finance an iron-ore concession in Swaziland and sugar

49
   Financial Times, 13 October 1966.
50
   FCO 25/525 & FCO 35/80, Letter from Dias da Cunha to Alan Ball, 6 January 1967.
51
   Ibid. Letter from Ball to Dais da Cunha, 12 January 1967.
52
   Ibid., Letter from Ball to Monson, 12 January 1967.
53
   FCO 35/80, Letter from Clinton Thomas to Monson and Steel, 13 January 1967.
54
   Following Malawian independence Youens had served as President Hastings Banda’s Private
    Secretary.


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DRAFT UP paper: February 2010                                       andrew.cohen@up.ac.za


developments in Malawi. Rowland again made clear that Lonrho would prefer to meet
the payments themselves rather than go down this route. The meeting adjourned with
a commitment from Monson to investigate the possibility of a resumption of
payments, while Ball agreed to write to CPMR’s Portuguese directors and ask them to
hold any further moves towards a sale.55
     Monson later reflected that the predominant argument in favour of resuming
payments was as a conciliatory gift for the Portuguese. Consequently, he mused as to
whether it would be ‘sufficient to secure from them an undertaking to keep the
pipeline closed and to cut off the flow of oil from Lourenço Marques?’56. By the end
of 1966 it was an open secret that both South Africa and Portugal were supplying
Rhodesia with oil. The Economist reported that despite the introduction of rationing
Rhodesians were able to obtain supplementary petrol allowances to take their children
to school or to visit the doctor.57 The Rhodesia Herald went as far as report that Ian
Smith ‘was worried that Rhodesians might become a little overconfident, even a little
arrogant as things were going so well’.58 Figures later released confirm that from June
to December 1966, refined petroleum products totalling 73,960 tons left Lourenço
Marques destined for Rhodesia in 2417 railway tankcars.59 Prior to UDI,
transportation of goods to Rhodesia yielded Portugal revenue of over £18 million in
foreign currency.60 Mozambique’s economy was strained due to the spiralling cost of
its low-level, but protracted, fight against African nationalists infiltrating from
Tanzania, and it failed to rigorously enforce sanctions.61
     A resumption of payments provided Monson with a particular worry: whether it
would create a precedent for other firms affected by sanctions to exploit.62 A Foreign
Office representative at the earlier meeting suggested Lonrho’s aim was to sell the
pipeline rather than obtain funds from the British government. He did not anticipate
Rhodesia using the pipeline to import oil now that the Beira patrol was in place.
However, he did foresee difficulties for Britain in the United Nations, a point also



55
   FCO 25/525 & FCO 35/80, Minutes of a meeting in the Commonwealth Office with representatives
    of Lonrho, 19 January 1967.
56
   FCO 35/80, Memorandum from Monson to Clinton-Thomas, 20 January 1967.
57
   The Economist, 19 February 1966.
58
   The Rhodesia Herald, 7 April 1966.
59
   Figures taken from Jardim, Sanctions Double-Cross, p. 93.
60
   Ibid., p. 14.
61
   Good, UDI, p. 133.
62
   FCO 35/80, Memorandum from Monson to Clinton-Thomas, 20 January 1967.


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DRAFT UP paper: February 2010                                           andrew.cohen@up.ac.za


raised by the British Embassy in Lisbon,63 especially if Rhodesian purchasers were
involved, and cautioned that Britain’s long-term oil interests in the area could be
compromised if the pipeline were to be sold.64 A Ministry of Power official concurred,
and saw the only advantage in ‘retaining Lonrho’s interest would be if we
contemplated compensating the local railway line for not [emphasis in original]
running oil up to Rhodesia in the South. We then might use Lonrho as the channel of
payment, with presumably some small sweetener for themselves and the CPMR’.65
Following these discussions, Ball was informed that his request had been rejected.66
Furthermore, it was reiterated that the decision would only be reconsidered if
‘satisfactory assurances’ were given that oil shipments from Lourenço Marques would
cease.67
     Ball was ‘dismayed’ at the decision and forwarded Dias da Cunha, the Portuguese
chairman of CPMR’s, response to Monson.68 It claimed that a meeting had been
scheduled with potential purchasers in Johannesburg during March.69 Monson
contended that the Dias da Cunha’s letter ‘had most certainly been drafted by Mr.
Rowlands [sic]’ and, ‘all the indications now were that it was Lonrho rather than its
Portuguese partners who wished to sell the pipeline’. In subsequent Commonwealth
Office discussions it was suggested that an Order of Council should be obtained to
render any sale illegal.70
     These conclusions were delivered to Lonrho on the 24 February 1967, and Ball
offered to consult with CPMR’s board and consider whether they could make any
counter-proposals.71 The following day The Financial Times ran a brief article which
alleged that the sale of the pipeline to SONAREP [The Mozambique state oil
company] had been agreed. Dais da Cunha refused to comment, but admitted that
CPMR faced ‘immediate problems’ if a temporary source of funds could not be
secured from any other source.72 Monson contacted Lonrho to reiterate that a sale to


63
   FCO 25/525, Telegram from British Embassy, Lisbon to Foreign Office, 9 February 1967.
64
   FCO 35/80, Letter from R.A. Farquharson to Mr. Rose, 23 January 1967.
65
   FCO 25/525 & FCO 35/80, Letter from Powell to Clinton-Thomas, 30 January 1967.
66
   FCO 35/80, Letter from Monson to Ball, 15 February 1967.
67
   Ibid., Note by the Commonwealth Office for the Cabinet, 27 January 1967.
68
   FCO 25/525, Letter from Alan Ball to Sir Leslie Monson, 20 February 1967.
69
   Ibid., Telex from J.M. Dias da Cunha to Alan Ball, 18 February 1967.
70
   Ibid., & FCO 35/80, Minutes of a meeting held by Sir L Monson to consider Mr. Ball’s letter of 20
    February and its enclosure, 22 February 1967.
71
   FCO 35/80, Minutes of a meeting held in the Commonwealth Office on the morning of 24 February
    1967.
72
   The Financial Times, 25 February 1967.


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DRAFT UP paper: February 2010                                           andrew.cohen@up.ac.za


SONAREP ‘would be just the sort of purchaser which would attract the maximum
amount of controversy … [and] would certainly put the cat amongst the pigeons’.73
     Rowland visited the Commonwealth Office again on the 3 March and made clear
that it would be ‘extremely difficult’ for Lonrho to prevent the sale of the pipeline.
He went on to suggest that Lonrho should be advanced £500,000, to be repayable in
two years irrespective of whether the flow of oil had resumed. This amount would be
sufficient to ensure that the pipeline’s ownership would remain unchanged. Monson
suggested that an arrangement along these lines would run into difficulties in
Parliament and again stated that no financial commitment could be made without ‘a
quid pro quo which would contribute significantly to the success of sanctions. In
response, Rowland ‘made a show of indignation … and said he would have no
alternative but to go ahead with the sale of the pipeline’.74 It is possible that
Rowland’s reticence to approach the Portuguese government with Monson’s
suggestion is indicative of the poor relationship he held with Lisbon. Jorge Jardim
would later posit that Rowland ‘never enjoyed the esteem of the Portuguese
Government, which followed with concern his activities in Mozambique and
neighbouring countries’.75
     Following Rowland’s visit to Whitehall, Dias da Cunha made representations to
the IDC asking for a moratorium on repayments on CPMR’s loan. There was no
mention of any possible sale, merely a plea that sanctions had placed the company in
an impossible position.76 However, with Rowland apparently set on engineering a
sale, the Commonwealth Office set about frustrating the scheme. A telegram was sent
to the British High Commissioner in Zambia to inform him of developments: ‘in case
we should wish him to get the Zambians to warn Mr Rowland against selling the
pipeline without our consent’.77 However, he was urged to proceed with caution
‘because of the possible repercussions this might have should other more important
British firms with interests in Zambia be alleged at a later date not to be supporting
the sanctions policy’.78 Rowland had previously scoffed at the idea that President


73
   FCO 25/525, Minute from W.B.L. Monson to Mr. Clinton-Thomas, 2 March 1967.
74
   Ibid., Minutes of a meeting held in the Commonwealth Office on 3 March 1967.
75
   Jardim, Sanctions Double-Cross, p. 34.
76
   BTS 1/156/1/18 vol. 1, Aide Memoire, South African Embassy Lisbon to Dept of Foreign Affairs,
    Cape Town, 7 March 1967. All file references to the South African Foreign Affairs Archives, O.R.
    Tambo building, Soutpansberg Road, Rietondale, Pretoria, Republic of South Africa.
77
   FCO 35/80, note from Clinton-Thomas to Monson, 2 March 1967.
78
   FCO 35/80, Letter from Monson to J.L. Pumphrey, 3 March 1967.


                                                                                                  11
DRAFT UP paper: February 2010                                              andrew.cohen@up.ac.za


Kaunda would exert pressure on him at the behest of the British, due to his close
relationship with the Zambian leader.79 The High Commission in Lusaka, while not
confident of achieving the ‘desired reaction’ believed it was ‘worth having a go at the
Zambians’.80 Secondly, the Royal Courts of Justice were consulted over legal
measures to halt the sale. A quick response was requested as CPMR ‘already had their
lines out to a possible purchaser and the transaction may be more advanced than they
have admitted’.81 However, as a later memorandum noted: ‘it would be unsatisfactory
for our order to be aimed specifically at Lonrho and the pipeline. This would give the
impression of pursuing a campaign against a particular company and would provide
Lonrho with the basis for a moral, though not a legal claim for compensation’.82
Lonrho’s plight did elicit a modicum of sympathy in the Foreign Office which
expressed reservations over the issue of an Order of Council. Instead they favoured
paying ‘concealed compensation’ to Lonrho along the lines of the previous
‘maintenance grants’.83


Worsening relations

The Order of Council84 was granted on the 15 March 1967, and Ball was notified that
the British Government felt ‘obliged to take all measures open to prevent the sale’.85
Rowland was apoplectic with a section of this letter which suggested that Lonrho
implied they would support the sale of the pipeline if the company did not receive
assistance from public funds.86 The Economist believed that the Order left Lonrho
with only one option: to sell the pipeline to a British concern. It concluded by
summarising that Lonrho’s position was not enviable, ‘unless one of the big oil

79
   FCO 25/525, Minutes of a meeting held in the Commonwealth Office on 3 March 1967.
80
   FCO 35/80, Telegram from Pumphrey to Commonwealth Office, 13 March 1967.
81
   Ibid., Letter from Steel to Hetherington, 3 March 1967.
82
   FCO 25/525 & FCO 35/80, Rhodesia: Ministerial Committee on Economic Sanctions, Memorandum
    by the Minister of State for Commonwealth Affairs, 8 March 1967.
83
   FCO 25/525, memorandum from Rose to Permanent Under Secretary, 8 March 1967.
84
   The Order affected Lonrho in four main areas: |firstly, they were not allowed to transfer to any other
    person their share of the pipeline undertaking, or their concession to transport oil. Secondly, they
    were not to ‘do anything or to cause or permit anything to be done whereby the ownership of the
    pipeline may be transferred from CPMR to any other person; thirdly, they were forbidden to transfer
    their shares in CMPR to any other person or interest, and finally ‘not to do anything to or cause to
    permit anything to be done whereby the control now exercisable by Lonrho Limited over the
    activities of CPMR in relation to the pipeline is diminished. See, FCO 35/80, Directions to Lonrho
    Limited under Article *A of the Southern Rhodesia (Prohibited Trade and Dealings) Order 1966, as
    amended, 15 March 1967.
85
   FCO 35/80, Letter from Monson to Ball, 15 March 1967.
86
   FCO 35/80, Telegram from Rowland to Youens., 17 March 1967.


                                                                                                      12
DRAFT UP paper: February 2010                                     andrew.cohen@up.ac.za


companies decides to make a very long-term investment’.87 The idea that Lonrho
could broker a deal with the Portuguese had still not been shelved by the Ministry of
Power, despite Rowland’s objections. The Foreign Office dismissed any chance of
success in the wake of the Order of Council, but saw no harm in another approach
being made. A Ministry of Power official suggested that Lonrho should be told the
Order would be withdrawn if ‘we could get a deal to stop the oil flow in the south’.88
     James Bottomley replaced Sir Leslie Monson in dealing with the pipeline in March
1967, and, on the 5 April, asked Lonrho for details of their legal problems under the
Order of Council.89 Lonrho had previously suggested that a change of ownership
could be allowed if the company went into liquidation. Henry Steel, a Commonwealth
Office official working on the pipeline problem, believed that approaching the
company was a mistake and mused: ‘the more we ask … [Lonrho] to supply the
information in order to help us understand … [their] company’s problems, the more
difficult it will be for us to use the information to be beastly to … [their] company’.90
Bottomley later judged that it would be legally possible for the British government to
‘direct Lonrho to pay off CPMR’s creditors and thus prevent any possibility of
foreclosure or winding-up proceedings. But action on these lines would only be
defensible politically if we were prepared to make available to Lonrho the necessary
funds for the purpose’.91 Officials at the Ministry of Power believed Lonrho’s threat
was hollow, as a takeover over the pipeline by the IDC in this way would ‘embarrass’
the South African government. Furthermore, CMPR would make a far greater profit
by selling the pipeline if they could escape foreclosure. Even if the pipeline was to go
into liquidation any political trouble at the UN:
         would be directed at the Portuguese, not H.M.G., who have ordered Lonrho
         not to sell. We should still have the naval patrol to stop the arrival of oil for
         pumping, and it must be pretty doubtful anyhow if the Portuguese Government
         would allow pumping at this stage of the Rhodesian affair. To renew payments
         to Lonrho would not therefore secure us any possible advantage.92

     Further discussions between the Commonwealth Office and Lonrho continued on
the 13 April with Dias da Cunha present. Rowland confirmed the Portuguese had been
approached to see if they would be prepared to curtail oil shipments to Rhodesia,
87
   The Economist, 18 March 1967.
88
   FCO 25/525 & FCO 35/80, Letter from Powell to Rose, 21 March 1967.
89
   FCO 25/525 & FCO 35/80, Letter form Bottomley to Caldecott, 5 April 1967.
90
   FCO 35/80, Memorandum from Steel to Bottomley, 4 April 1967
91
   FCO 25/525 & FCO 35/80, Memorandum from Bottomley to James, 6 April 1967.
92
   FCO 25/525, Letter from Powell to Clinton-Thomas 12 April 1967.


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DRAFT UP paper: February 2010                                        andrew.cohen@up.ac.za


however, they had ‘turned down out-of-hand any idea of such an arrangement. They
were not prepared to consider what in fact amounted to a bribe’. Dias da Cunha
added that if the payments of £54,000 per month were not resumed, he would have no
choice but to seek a buyer for his shares. Bottomley replied that he doubted Ministers
would consider resuming payments ‘unless they could be shown in some way to
advancing further our sanctions policy’. In response, Dias da Cunha contended that it
would be impossible for the Portuguese government to ‘openly’ [underlined in
original] approve of any undertaking which CPMR might make not to pump oil as it
would be ‘run counter to its obligations as a common carrier’. The Portuguese
government would be within its rights to revoke CPMR’s concession, however, if it
was not cancelled ‘it could be inferred that they had been consulted in advance and
were prepared to go along with CPMR’s assurance that they would not pump oil
while the rebellion in Rhodesia continued’. Rowland then added that if the payments
were resumed to CPMR, and Dais da Cunha’s suggestion was followed, the British
would be able to withdraw their naval patrol off Beira ‘the cost of which must surely
be greater than the payment of £54,000 a month to CPMR’. Bottomley, believed this
new suggestion would ‘present a number of difficulties for Ministers,’ however he
agreed to consult with the departments concerned.93
     One Commonwealth Office official judged the proposal fell ‘far short of meeting
our conditions’ and suggested that Lonrho should be told that it was being considered
‘largely to keep the ball in play a little longer’.94 A further official agreed that:
         Even if the Portuguese government did play and we could withdraw the patrol,
         it would focus world attention again on the whole question of supplies of oil to
         Rhodesia and would probably result in renewed pressure on the much more
         difficult issue of the oil which reaches Rhodesia over the Mozambique
         railway.95

Lonrho’s suggestion was eventually turned down as the cost of the Beira patrol was
£34,000 per month and its removal would attract ‘unfavourable criticism in view of
the publicity given to CPMR’s threat to sell’.96
     A week later news reached the Central African Department that the Portuguese
government believed that Britain was ‘playing a double game over Rhodesia’ and that

93
   Ibid., & FCO 35/80, Minutes of meeting between the Commonwealth Office and Lonrho, 13 April
    1967.
94
   FCO 25/525, Minute from Macgregor, 14 April 1967.
95
   FCO 25/525, Letter from Rose to Bottomley, 21 April 1967.
96
   Ibid., Memorandum from Rhodesia Economic Department to Minister of State, 8 May 1967.


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DRAFT UP paper: February 2010                                        andrew.cohen@up.ac.za


refined oil products were reaching Rhodesia via Lourenço Marques: ‘whilst the
complaints are directed against themselves [the Portuguese], the real perpetrators are
the big oil companies, including Shell and B.P’. Therefore, ‘the Portuguese
considered that we had cast them in the role of scapegoat and that our complaints
against them in the context of Rhodesian trade were a cover for our own much more
extensive activities’.97 This revelation was followed by further information which
claimed that the Portuguese government had ‘positive proof that during the first three
months of 1967 85% of Rhodesia’s requirements were being supplied by British and
American companies, mainly Shell’. It was suggested that the Portuguese would
produce this evidence ‘in their own defence if they were again accused at the United
Nations of supporting the Smith regime’.98 The Foreign Office countered that the
Portuguese allegations were ‘absurd’ and furthermore, ‘Shell whom we have
informed, are completely unmoved. The Portuguese must see that Shell are not going
to prejudice their international reputation by engaging in a disreputable deal in which
the rewards would be slight’.99
     During May 1967 the CPMR voted to negotiate the sale of the pipeline, despite the
public opposition of Rowland, Ball, Ogilvy, the three Lonrho representatives on the
         100
board.         The Lonrho directors’ arrival in Lisbon drew attention in the British press.
The Daily Telegraph quoted Ball’s comment that they ‘certainly had to find a solution
otherwise we are going towards bankruptcy’.101 The Daily Mail, Daily Express and
Financial Times all focussed on the possible legal implications for the British
directors if a sale went through.102 While in Lisbon, Angus Ogilvy contacted the
British Embassy. A report of his discussion was subsequently forwarded to London.
Ogilvy, the report began, ‘usually keeps in touch with us on these occasions and is as
helpful as he possibly can be’ informed the official that the Portuguese directors of
CPMR claimed to be in possession of a document which ‘showed clearly that the
British Government were in bad faith in continuing to blockade Beira’. Ogilvy said
that ‘from his own knowledge he was sure that the allegation about Shell and BP were
only too true’. He added that the Portuguese believed Britain was ‘blockading Beira
as a face-saver. They did not want to blockade Lourenço Marques because the next
97
   FCO 35/81, Letter form British Embassy Lisbon to Foreign Office, 27 April 1967.
98
   FCO 35/82, Telegram from British Embassy, Lisbon to Foreign Office, 2 May 1967.
99
   FCO 35/81, Telegram from Foreign Office to British Embassy, Lisbon, 3 May 1967.
100
    FCO 25/525, Minute from C.J. Audland, 1 May 1967.
101
    Daily Telegraph, 1 May 1967.
102
    Daily Express, Daily Mail and Financial Times, 1 May 1967.


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DRAFT UP paper: February 2010                                       andrew.cohen@up.ac.za


step was South Africa’. Ogilvy doubted whether the Portuguese had a buyer for the
pipeline, although they ‘were inclined to encourage the suspicion that they had’. The
report concluded:’ Ogilvy was speaking … in the strictest confidence, which I am
sure you will fully respect; and secondly that he was in a somewhat agitated state and
appeared at times rather confused’.103
      Ogilvy, was married to H.R.H Princess Alexandra, and in a difficult position as he
could not afford to be found implicated in any activities which could embarrass the
Royal family. His involvement led to Sir Burke Trend, the Cabinet Secretary to ask
‘to be kept in touch with any developments which might make it appropriate … to
advise Mr. A. Ogilvy to resign from the pipeline board’.104 One such development
took place in May 1967 when Lonrho consulted their solicitors to see if they could
sue the British government for damages and loss of earnings due to the pipeline
closure.105 Foreign Office officials believed that Lonrho had a slight chance of
success during the period when British sanctions were not covered by the UN
measures.106 Rowland was reportedly ‘going to take legal action against Her
Majesty’s Government for discrimination against Lonrho by inhibiting the use of the
pipeline while winking at Shell/BP’s operations in conjunction with Total in
supplying      petroleum   to   Rhodesia      through    Lourenço      Marques’.107     Lonrho
representatives met with Bottomley in the Commonwealth Office on the 22 May.
Rowland claimed Rhodesia was ‘swimming in petroleum products’, and sixty percent
of their supplies were shipped by Shell and BP from Lourenço Marques. He continued
by declaring it was ‘gross discrimination’ against his company that Beira had been
blockaded while Lourenço Marques remained open. Rowland’s apparent confidence
in his assertions led Bottomley to call for his officials to ‘re-check our investigations
to make sure there are no weak points in what we have been told’.108 By the 7 June
the Rhodesia Sanctions Unit believed ‘we are now on firm ground for denying …
allegations of British involvement in the supply of oil to Rhodesia through Lourenco
Marques’.109 Meanwhile, Shell’s management in London told the Foreign Office that
they ‘would be glad to consider the possibility of taking legal action against Lonrho

103
    FCO 35/82, Letter from Welbore Ker, Lisbon to Davidson, Foreign Office, 2 May 1967.
104
    Ibid., Letter from Bottomley to James, 1 June 1967.
105
    FCO 35/81, Record of Telephone Conversation between Bottomley and Caldecott, 15 May 1967.
106
    Ibid., Memorandum, from Steel to Bottomley, 16 May 1967.
107
    Ibid., Telegram from Salisbury to Commonwealth Office, 17 May 1967.
108
    Ibid., Memorandum from Bottomley on Meeting with Lonrho, 22 May 1967.
109
    FCO 25/526, Minute from D. March, Rhodesia Sanctions Unit, 7 June 1967.


                                                                                                16
DRAFT UP paper: February 2010                                         andrew.cohen@up.ac.za


on the basis of [their] allegations’.110 Despite this bravado, two executives from BP
and Shell later informed the Commonwealth Secretary, George Thompson, that they
had been supplying Rhodesia with oil on 21 February 1968.111
      On the 25 May 1967 the Commonwealth Office received formal notification from
Lonrho’s solicitors that the company was considering seeking compensation through
the courts.112 As the news of a possible claim for compensation spread, Sir Burke
Trend made clear to Bottomley that ‘the Prime Minister was taking a personal interest
in the matter, and that Mr. Wilson assumed that the Attorney General had given it his
personal consideration.113 Fearful of a scandal, Ogilvy sought the advice of the
Queen’s Private Secretary, Sir Michael Adeane, who counselled that if a court case
was brought Ogilvy would be expected to resign from Lonrho.114 On the 12 July,
Ogilvy informed Burke Trend that Lonrho had reconsidered their position and would
not be taking legal action, as his resignation ‘would do more harm to the value of the
shares’. Ogilvy assured the Cabinet Secretary that he had written a letter of
resignation which would come into immediate effect if Lonrho embarked upon any
legal action against the government.115
      The Conservative party victory in June 1970 General Election held the possibility
of a change of fortunes for Lonrho. The pretence that sanctions were working had
clearly evaporated and Rowland had senior Conservative party members, Duncan
Sandys and Edward du Cann on the Lonrho board.116 However, there was no
alteration to government policy regarding oil sanctions. In fact, their relationship with
the British Government reached a new low in 1973 as the company underwent a very
public boardroom dispute. This led to the sitting Conservative Prime Minster, Edward
Heath, to refer to Lonrho as ‘the unpleasant and unacceptable face of capitalism’,117
and a Department of Trade and Industry (DTI) investigation of the company. Any
hope that the pipeline would fair any better under a Conservative government proved
false.



110
    Ibid., & FCO 35/82, Minute from Farquarhson to McQuillian, 7 June 1967.
111
    Jardim, Sanctions Double-Cross, pp. 115-120
112
    FCO 35/82, Letter from Druces & Attlee to Bottomley, 25 May 1967.
113
    Ibid. Letter from Burke Trend to Bottomley, 29 June 1967.
114
    Bower, Tiny Rowland, p. 119.
115
    PREM 13/1926, Memorandum from Reid to Burke Trend, 12 July 1967. File references relate to the
    National Archives, Kew, United Kingdom.
116
    Bower, Tiny Rowland, p. 252
117
    Hansard Debates, [vol 856] col. 1243, 15 May 1973.


                                                                                               17
DRAFT UP paper: February 2010                                  andrew.cohen@up.ac.za


      Labour was returned to power during April 1976 and the findings of the DTI report
were published in July. The most damaging sections to Lonrho were contained in the
chapter entitled ‘Lonrho’s Activities in the Republic of South Africa and Rhodesia’
which accused the company of sanctions-busting. As with the Beira blockade a
decade earlier, Rowland believed Lonrho was being unfairly persecuted especially as,
compared to the actions of BP and Shell, their misdemeanours were relatively minor.
Consequently, at the beginning of 1977 Rowland began to exert pressure on the DTI
to consider the role of other companies involved in Rhodesia, and demanded to know
why Lonrho had undergone a government investigation while the oil companies were
left alone to continue their business unimpeded.118
      On 10 May 1977, David Owen, the Foreign Secretary, announced that an official
enquiry, headed by Thomas Bingham QC, would be established to examine oil
supplies to Rhodesia.119 Rowland thought the investigation would fail to expose the
duplicity of the oil companies and, despite being one of the most vociferous critics of
Shell and BP, was the only witness who had to be subpoenaed to give evidence.120
Ogilvy had resigned from the Lonrho board during 1973, so Rowland was free to
pursue his claims in Court. A writ was filed at the High Court at the end of May
which accused the oil companies of breaking their agreement to only export oil to
Rhodesia via the pipeline. The claim was also made that the oil companies’ decision
to break oil sanctions had kept the illegal regime in Rhodesia in power and ensured
that Lonrho had lost over a decade’s worth of revenue from the pipeline venture.121
However, the ruling was given on the 31 January 1978 in favour of BP and Shell and
determined that the allegations of breach of contract should be settled by
arbitration.122 The Bingham report was published on 19 September 1978 and clearly
demonstrated that, as Rowland had claimed all along, Shell and BP had violated
international oil sanctions with the knowledge of key government figures.


Conclusion

In his 1979 account of Shell and BP’s breach of oil sanctions against Rhodesia,
Martin Bailey entitled one chapter ‘Business as Usual’. As this paper has suggested,
118
    Bailey, Oilgate, p. 58.
119
    Ibid., pp. 67-71.
120
    Ibid., pp. 77-78.
121
    Ibid., p. 78.
122
    Ibid., p. 96.


                                                                                    18
DRAFT UP paper: February 2010                                             andrew.cohen@up.ac.za


the same claim cannot be made for Lonrho’s pipeline enterprise. The company was
quite prepared to circumvent other sanctions imposed on the rebel colony, however,
Britain, under pressure from the UN, could not allow such a symbolic lifeline to
remain operational even though they were prepared to overlook oil sanctions breaches
elsewhere. The Joanna V incident marked the last serious chance for the pipeline to
break the ban as the introduction of the Beira patrol in October 1966 prevented crude
oil reaching the port. The arrival of the British navy also marked an end of British
‘maintenance’ payments to the company. In the wake of this decision, Lonrho and its
Portuguese partners in CPMR embarked on a campaign to pressure the British
government to re-introduce monthly payments, or failing this advance the company a
loan to offset their losses. The British were only prepared to concede any such
arrangement on a quid pro quo basis if CPMR could broker an agreement with the
Portuguese government to restrict oil traffic reaching Rhodesia by rail from Lourenço
Marques. Lonrho initially resisted this suggestion, but eventually conceded and
contacted the Portuguese government through CPMR in April 1967. Their approach,
however, was rebuffed, perhaps due to Lonrho’s poor reputation with the Portuguese
government, and no further compensation from the British was forthcoming.
      Following this disappointment, Lonrho was forced to pursue other courses. Firstly,
it attempted to bring the sanctions violations of the major British oil companies to the
attention of the Commonwealth Office. Rhodesia could not survive without oil
imports and if the sanctions were rigorously enforced, the rebellion would soon end
and the pipeline could resume operation. When this move failed, the company
threatened to take legal action, however, this proved hollow as proceedings were
cancelled at the last minute. The reason given by Lonrho was Angus Ogilvy’s
connection to the Royal Family, however it seems probable that Rowland did not wish
to draw any unnecessary attention to Lonrho’s other business enterprises in the area
which were violating sanctions.123 By the early 1970s Lonrho had run out of options
to pressure the government on this issue. This changed following Ogilvy’s resignation
and the revelations of Lonrho’s activities made in the DTI report. Rowland had the
opportunity, and motive, to embarrass the government and the oil companies.
123
      Ogilvy was a part owner of the Shamrock copper mine in Rhodesia despite the fact that it
      contravened British sanctions regulations. He was also involved in raising finance in Canada to
      develop the mine against in spite of sanctions regulations. Furthermore, he was a board member of
      Lonrho while they were shipping copper from the Inyati mine in Rhodesia across the border to the
      Edmundian mine in Mozambique where it was resold as produce of Mozambique. See Bower, Rebel
      Tycoon, pp. 142-147.


                                                                                                    19
DRAFT UP paper: February 2010                                     andrew.cohen@up.ac.za


Lonrho’s action continued, despite an investigation into the oil companies and
Rhodesia headed by Thomas Bingham, however it was ultimately unsuccessful.
      More broadly, this paper has suggested that British government policy towards
Rhodesia scarcely altered in the wake of UDI. It was as impotent in its approach to
enforcing sanctions as it was in negotiating with the Rhodesians prior to November
1965. Underpinning this failure was the fear of the spectre of UN condemnation.
Britain could not overtly pressure Portugal to halt the shipment of petroleum products
through Lourenço Marques, as it would be tantamount to an admission that oil
sanctions had failed. Any such revelation would provide a clarion call for those in the
UN who wished for more stringent measures to be taken. Therefore, this paper adds
weight to the claim first proposed by Minter and Schmidt that sanctions were
primarily imposed to disperse international calls for a more forceful response to the
Rhodesian rebellion.124 Any effective sanctions programme would need to encompass
Lourenço Marques, and would therefore run the risk of extending sanctions be default
to cover South Africa. This was a risk that the British government wished to avoid at
almost all costs.
      Finally, this paper has revealed the comparative weakness of Lonrho’s position as
a relative ‘newcomer’ in Southern Africa, when viewed in comparison to the major
international oil companies. ‘Tiny’ Rowland could not rely on the same level of
support in Whitehall as enjoyed by the directors of Shell and BP. The British
government was willing to turn a blind eye towards, and even defend, the
indiscretions of two major British concerns until they were forced to face the
consequences by press revelations. Lonrho, on the other hand, was widely distrusted,
perhaps due to the colourful background of its chairman and the apparent ease by
which the company was willing to bend the rules. With no major institutional
shareholders Lonrho, under Tiny Rowland, was a little too cavalier in its approach
towards its business in Africa and it suffered in London as a consequence.


                                                   Andrew Cohen (University of Pretoria)




124
      Minter and Schmidt, ‘When Sanctions Worked’, pp.207-238


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