A/AC.131/GSY/CRP.3

UNITED NATIONS COUNCIL FOR NAMIBIA REGIONAL SYMPOSIUM ON INTERNATIONAL EFFORTS TO IMPLEMENT DECREE NO.1 FOR THE PROTECTION OF THE NATURAL RESOURCES OF NAMIBIA Geneva, 27-31 August 1984

27 July 1984 "'

ORIGINAL:

ENGLISH

IIIÿ I '" ÿi I¸¸ ,'ÿ ,i I ,

VIOLATIONS OF DECREE No°l FOR THE PROTECTION OF THE NATURAL RESOURCES OF NAMIBIA

By Andrew Lyallÿ

The views expressed in this paper are those of the author and do not necessarily reflect the views of the Secretariat of the United Nations.

GEo 84=65096

VIOLATIONS OF DECREE No I FOR THE PROTECTION OF THE NATURAL RESOURCES OF NAMIBIA.

j

The Decree

I

Decree No 1

of the U.N. Council for Namibia prohibits inter alia

the extraction, processing and export of any of the natural resources

of Namibia without the consent of the Council and authorises the seizure and forfeiture by or on behalf of the Council of any resource exported from Namibia without such consent. Any concession or licence granted without such authority is declared to be void.

It also authorised

the seizure and forfeiture of any vehicle, ship or container found to be carrying any such resource and provides that a future government of an independent Namibia may hold persons or corporations liable in damages. The Decree may give rise to two forms of violation from a legal point of view, reflecting the dual effect of the Decree. First, to the extent that the Decree has legal effect in international law, breaches of it constitute violations of international lawo

Secondly, since the Decree constituted the

domestic law of Namibia, breaches of it constitute violations of Namibian Law and actions taken to enforce it by the Council or by a person or body lawfully authorised by the Council are in accordance with Namibian municipal law.

The binding effect of Decree No 1 has been considered in earlier papers on the subject.2 Briefly, it derives from the powers conferred on mandatories •

I

of territories originally mandated by the League of Natlons, and the supervisory powers retained by the League where such a mandate had been granted. The supervisory powers devolved on the General Assembly of the United Nations3 with theÿ demise of the League and included, as the International Court of

Justice held in the 1970 Advisory Opinion,4 the power to terminate South Africa's mandate.

The General Assembly exercised the power to terminate

in 1966 by Resolution 2145 (XX,I) owing to material breaches of the terms of the Mandate perpetrated by South Africa.

5

On doing so it resumed the powers

conferred by the Mandate Agreement including, under Article 2, "full power of administration and legislation over the territory." It was entitled so to assume the role of administering authority under Article 81 of the U.N. Charter.

This was confirmed by Resolution 2248 (S-V) of 1967 by which the General Assembly took the further step of establishing the Council for Namibia under the authority of Article 22 of the Charter. Article l(b) of Resolution 2248 authorises the Council to "promulgate all necessary laws, decrees and

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administrative regulations for the territory." Decree No i being an exercise of this power is binding as domestic law on persons and legal

entities within the territorial limits of Namibia irrespective of their consent.

It also has effect in other jurisdictions through the principles

of conflict of laws.

As to the effect of the Decree in international law,

the competence of the Council for Namibia, as a subsidiary organ of the General Assembly, to pass a resolution with legal implications for member states is conferred on it by Article 22 of the Covenant of the League of Nations, the Mandate Agreement and Resolution 2248.6 Furthermore, Security Council

Resolutions passed before the Decree had anticipated the thinking behind it and endorsed the principle inherent in the Decree that not only is South Africa's continued occupation of Namibia illegal under international law, but also that specific acts performed not only by the illegal occupying power but also by other states, companies and individuals in relation to the

natural resources of Namibia are tainted by illegality and that this has legal implications for States. Resolution 276 of 30th January 1970, for example,

declares illegal all acts taken by South Africa in relation to Namibia after the termination of the Mandate and'calls on States, particularly those with economic and other interests in Namibia to refrain from dealings with South

Africa. Resolution 283 of 29th July 1970 calls on States to ensure that commercial enterprises owned by or under the control of the State cease dealings with respect to commercial or industrial enterprises or concessions in Namibia, and as to enterprises not under the control of States, calls on states to withhold loans or credit guarantees and other financial support

that would facilitate commerce with Namibia. Resolution 301 of 20th October 1971, passed after the Advisory Opinion of the International Court of Justice declares that franchises, rights, titles or contracts relating to Namibia

granted to individuals or companies by South Africa after the termination of the Mandate by the U.N. in 1966 are not subject to protection or espousal by their states against claims by a future lawful government of Namibia.

7

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Foreign Corporations:

Mining

Mining still constitutes by far the largest sector of the Namibian economy in value terms, amounting to 30% of the GDP in 1981.8 As a proportion

of the GDP mining sector production has dropped since 1980 due in part to increasing involvement by multinational corporations, mainly American, in the wholesale and retail trades and also to greatly increased government

expenditure, a large part of which goes to military spending.9 The three most important mining companies in Namibia are Consolidated Diamond Mines (CDM), Tsumeb Corporation and Rossing Uranium.

The operations

of all these corporations and the export of resources mined by them is in clear violation of Decree No I.

CDM is a South African subsidiary of De Beers which itself is part of the Anglo=American corporation.I0

Namibian diamond deposits include the

largest source of gem diamonds ever discovered.II In 1982 it was estimated that CDM's alluvial reserves would last only another I0 years, but they hold

mineral rights up to the Orange River which have yet to be investigated.12 Diamond exports have been the largest single source of government revenue,

accounting for about RlSOm of the total revenue of R46Om in the 1980/81 budget.13 Tsumeb Corporation was the first American company to go into mining

production in Namibia and is engaged in mining copper, lead, zinc, silver anÿ cadmium.14 large companies.

It is in fact a syndicate whose shares are owned by other In 1965 the shareholders were reported as Newmont Mining

Corporation (US: 29.6%), American Metal Climax (AMAX) (US: 29.6%), Selection Trust Lid (UK: 14.2%), O'OKiep Copper Co (US: 9.5%), Union Corporation (South Africa: 9.4%), South West Africa Co. Ltd (U-K: 2.4%), De Beers (SA: 2.4%).15 In 1975 American Metal Climax was reported as having begun "to take steps towards

getting rid of its holdings in Namibia" and this was also reported as being a direct result of "the threat of action by the United Nations.''16 Uranium has been the most significant development in mining in recent years and now constitutes the most serious violation of Deree No I, given the strategic importance of the mineral in the nuclear power and military fields and the consequent involvement of governments in its production and export.

In

1979 the Rossing Mine, the largest uranium mine in the world, reached its target output of 5000 metric tons of uranium oxide a year.17 The ore provides about 17% of the non-communist world's uranium.18

Export earnings from the

uranium were estimated at R 15Om in 1977.19 Production of ore began in early 1976 and increased to a peak yield of 5,200 tons of uranium oxide in 1980,

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worth an estimated R 28Om, but has declined since due to the fall in

20

uranium prices.

21

In 1981 it was 4,900 tons.

estimated at i00,OOO tons.

Total reserves have been

22

The Rossing Mine is owned by Rossing Uranium the major shareholder in which is the British transnational company, Rio Tinto-Zinc (RTZ), and also

23

included Canadian and French participation.

RTZ holds 46.5% of the equity

shares, Industrial Development Corporation (SA) itself 100% owned by the South African government, owns 13.2%, Rio Algom Mines Lid, a Canadian subsidiary of RTZ owns 10%, Total of France, 10%, and General Mining Finance Corporation of South Africa, 6.8%.28 A smaller mine Langer Heinrich, owned by General Mining

25

and situated about 80 km south of Rossing is awaiting development.

Its

smaller deposits are said to be of higher quality. RTZ's profits from the Rossing mine reached E32m in 1982, but fell to £14m in 1983, again due to the fall in the price of uranium°

26

1983 was the first

year in which the company had to pay company tax to South Africa and it paid an estimated R28m in that year.27 RTZ has supplied uranium to the United Kingdom under contracts, the first of which was signed in March 196828 and which are in clear breach of internationa! law. Theseagreements will be referred to later. RTZ itself has shown arrogant contempt for the United Nations authority over NamiSiao

In response to questions at RTZ's Annual General Meeting in 1975, the

late Sir Val Duncan, the former chairman and chief executive, said: "I question

the authority of the United Nations to decide the future of all (Namibia's) people above their heads.''29 Asked whether the company had taken lega! advice on the question of Decree No I, he replied:

"I am not prepared to fail to

deliver to the United Kingdom and others under a contract solemnly entered into for the provision of uranium from South West Africa.

I am therefore not

prepared to take any notice of what the United Nations says about that ... If that involves disagreement with some of the Resolutions in the United Nations, I regret that, but that is their problem, and I say that to you quite clearly.''30 Asked if RTZ was concerned that the uranium might be seized by the U.N. in

transit, he replied: "Yes, I see. Well, you may feel that perhaps the United Nations Navy is not all that efficient."31

In 1977ÿ Sir Mark Turner, the new

chairman of RTZ was asked at tÿe Annual General Meeting whether it would not be wise to seek U.No authorisation for the company's mining work. He replied:

"I

will not give any undertaking about approaching the United Nations ..o and we have no plans to do so.''ÿ2

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ForeiÿCorporations: Oil.

South Africa's need for oil led it to sponsor a search by a number of foreign oil companies° During 1975 four American Oil companies - Getty,. Continental, Philips and Standard - abandoned exploration leases which had been granted to them by the South African governmento33 Other foreign oil companies have done likewise.34 It seems unlikely that this move was induced

by Decree No I. A more likely explanation is that the search produced no results and was abandoned by the companies to avoid further costs.

Farming

35

Farming amounted to only a little over 10% of the GDP in 1981.

It

consists almostentirely of livestock production, the most important sectors of which are beef cattle and the Karakul or Persian lamb industry.36 In

1980 beef provided 50% of agricultural revenue, Karakul pelts 33%.37 Beef cattle are exported to South Africa, while an estimated 90% of the canned meat produced in Namibia is exported to Europe.

38

Karakul sheep, introduced originally by the Germans into Namaland, are known to the settlers as "Black Diamond" because of the lucrative market for the pelts. Nearly all are sold on the London market through Hudson's Bay Company and Wood Hall Trust.39 In a written answer in January 1983 to a question in the British House of Commons, Mr Peter Rees, a minister in the Department of Trade, gave the following figures:

4O

Imports of KaraKul and Similar Raw Lamb Skins from Namibia into the United Kingdom 1979 o October 1982. Number

Value

(£ thousand cif)

1979

2,174,904

14,606

1980

2,270,641

15,726

1981

1,787,435

12,831

Jan-Oct 1982

1,367,142

....

8,099

Source: Data corresponding to SITC (R2) Item 212.09 (part) in United Kingdom Overseas Trade Statistics.

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Germany and Denmark are significant consumer markets for the Persian lamb coats. (£21m).41

Sales in both countries combined amounted in 1970 to R36m "Persian lamb" is a term which might be open to challenge under

domestic legislation dealing with the misleading description of trade goods.

42

Government involvement in violations

In January 1983 Mr John Moore, the British Under-Secretary of State for Energy announced that Britain would cease buying Namibian uranium oxide.

43

The original contract had been signed in March 1968 and had provided for the delivery of 7,500 metric tons of ore to Britain.

It was due to expire in

1982, but was extended for a further 2 years and an additional I,I00 tons.

44

The history of these contracts is well documented in a pamphlet published by

45

the British Campaign Against the Namibian Uranium Contract (CANUC).

The

original signing of the contracts and their maintenance over such a long period

was due to the success of RTZ in penetrating the higher levels of the British Civil Service concerned with energy supply and so persuading the British Government that there was at the time a world shortage of uranium and that alternative supplies could not be obtained. Both of these assertions were entirely false.

46

The United Kingdom was the only country openly importing uranium but a study prepared in January 1983 for the United States government by the energy laboratory of the Massachusetts Institute of Technology showed that at that time the other principal importers of uranium from Rossing were Japan (2,700

metric tons), France (850 tons) and West Germany (340 tons).

47

Japan imports Namibian uranium via Canada where it is processed by Eldorado Nuclear Ltd. on behalf of RTZo48 The Canadian Government allows Canadian corporations operating in Namibia to deduct as business expenses taxes

paid to the South African administration°49 This violates Security Council Resolution No 283 and facilitates companies in violating Decree No I. Other governments have responded positively in this respect. West Germany withdrew tax incentives to companies wishing to invest in Namibia.

5O

Pressure from

the Bonn government succeeded in preventing the Frankfurt company of Urangesellschaft from further involvement in the Rossing project.

51

The company

had been involved in prospecting during the early development of the mine. The United States Government adopted the official policy in 1970 of withholding export-import credit guarantees from companies trading in Namibia and indicated that it would not pay compensation to companies investing in Namibia after the

r

termination of the Mandate for losses incurred by their assets being nationalised by a future lawful Government of Namibia.52 The French and British governments, as with Canada, have failed as yet to take similar

ÿ'

action.

Conclusion

This brief review of violations of Decree No I has only sought to

deal with some of the more significant violations. Experience seems to show that governments are more susceptible to the bad publicity associated with breaches of international law than are the transnational corporations directly involved. Possible direct attempts to enforce the legal sanctions contained in Decree No I are beyond the scope of this paper,

Notes Iÿ

2ÿ

See Rigsÿx, "The Decree on the Natural Resources of Namibia Adoptedl on 27th September 1974 by the United Nations Council for Namibia", °ÿ paper presented at the United Nations Seminar on Legal Issues of Concerning Namibia (The Hague, 1981), McDougall, "The Council for Namibia's Decree Noo i: Enforcement Possibilities" in 1983 Volo 30 Africa Today Nos. i & 2 (double issue) p.7 and other papers in the same issue.

3.

International Status of South West Africa (1950) ICJ Reports 128, 136-137,

Q

,

5.

8

Decree No i was enacted on 27th September, 1974.

Advisory Opinion Concerning the Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) Notwithstanding Security C6uncil Resolution 276 (1970) (1971) ICJ Reports 16, 49-50 (para 103). Ibid. at p.45=47 (para 90=95).

6o

See McDougall op. cir. supra p.lO.

7.

UN Security Council 301ÿ 20th October 1971.

8.

Cooper, "American Corporate Investments in Namibia", in Africa Today, 23, 28. (hereafter Cooper).

(1983) 30

9ÿ Cooper pp.24, 29. I0. NamiBia: The Facts published by International Defence and Aid Fund. 1980, p.24 Thereafter Namibia: The Facts) II. Alun Roberts, The Rossing File: The Inside Story of Britain's Secret Contract for Namibian Uranium. (London, Campaign Against the Namibian Uranium Contract, 1980). (hereafter, the Rossing

File). 12. Ruth First and Guy Arnold, "Namibia: Economy" in Africa South of the Sahara 1983-4 (13th ed.; London, Europa). p.610 (hereafter Africa South of the Sahara.

13. Ibid. 14. Cooper p.25, Namibia: The Facts p.24.

15. Barbara Rogers, Foreign Investment in Namibia (New York, UN. Council for Namibia, 1975) p.18; Financial Mail 9th April 1965 p.102, Cooper p.25. 16. The Guardian 2nd December 1975, The Rossing File p.17. 5th May 1979.

Rand Daily Mail,

17. The Rossing File p.44,, 47; Africa South of the Sahara p.6!l a. 18. Africa South of the Sahara, ibid. 19. Ibid. 20. Ibid.

21. Ibid. 22. The Rossing File p.42.

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23.

Ibid p.45; Taskforce on The Churches and Corporate Responsibility, "Canadian and Namibian Uranium" (!983) 30 Africa Today p.33, 37 (hereafter Taskforce).; Report of the United Nations Council for Namibia, Vol. III, General Assembly Official Records: 35th Session, Supplement No° 24, 1981. p.5. (hereafter Report of UN Council).

24. 25.

ÿ File p.45,

Report of the UN Council p.5.

Africa South of the Sahara p.611a.

26. Namibia New Briefing. May 1984 No II; Guardian 12th April 1984. 27. Ibid. 28. The Rossing File pp.22-3.

29ÿ Ibid. p.40. 30. Ibid. p.41.

31. Ibid. 32. Ibid. Ibid. p.17.

The Namibians of South West Africa. Report No. 19 Rights Group, 1978) (hereafter MIIG). 35.

(London, Minority

Cooper p.28. Figures are given for Namibia's GDP in 1980 and 1981 at 1975 constant prices, the source being the Department of Finance,

Namibia. 36., Africa South of the Sahara p.611b.

37. Ibid. 38. MIIG p.29. P

39. Ibid. 40. Hansard. Commons. 25th January 1983. 41,

MRG p.29o

42. For example the UK Trade Descriptions Act, 1968. A false indication of origin under s16 of the Act might amount to an offence under customs & exise legislation, rendering the goods liable to forfeiture. 43. Hansard. Commons. 24th Januar# 1983. 44. Keesing's Contemporary Archives 32004. 45.

(hereafter Keesing).

See note II. above.

46. The Rossing File, pp. 7, 28=31; Hansard. Lords. 20th October 1975.

pp. 1226=1234. 47ÿ Keesing 32004.

48.

Taskforce p.39.

49.

Ibid. p.35.

50. The Rossing File p.18.

51. Ibid. 52.

Ibid.

pp.

17-18o