HL Deb 15 December 1969 vol 306 cc924-48

7.59 p.m.

LORD GIFFORD rose to ask Her Majesty's Government: Whether it is their policy to discourage, and if necessary prevent the participation by British companies in the Cabora Bassa project in Mozambique; and whether they will take international initiatives aimed at preventing such participation by companies of other countries. The noble Lord said: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. The Question calls attention to a remote corner of Southern Africa, not even a town; it is a steep ravine situated on the River Zambesi, in the province of Tete, in the Portuguese colony or Mozambique. It is a remote place—the next urban centre of any size is Salisbury, in Rhodesia—but it is a place which may have a crucial significance for the future of Southern Africa as a whole. It is called the Quebrabasa Gorge and it is the site of the proposed Cabora Bassa hydro-electric project.

Before referring to the dam itself, I think it is worth recalling a few bald facts about Portugal and Portuguese colonies. For over forty years Portugal has ruled inside European territory undemocratically and dictatorially under the Salazar and now under the Caetano régime. The power of that régime is maintained by an armoury of laws and by secret police which would do the Greek Colonels proud. As well as being a dictatorship in Europe, Portugal is the last surviving old-style colonialist Power. In Africa, it maintains hold on three territories, Angola, Mozambique and Guine-Bissau; in defiance of world opinion; in defiance of the United Nations, and in defiance of the principles which we on this side of the House would hold to be fundamental. It has no intention of abandoning that control. If Portuguese rule in Europe is authoritarian, in Africa it is worse. The African population is not only repressed politically but exploited and degraded.

Even by their own standards the Portuguese have failed in Africa. Their boast is that they have come to civilize and assimilate the African. Their record of civilisation has produced an illiteracy rate among Africans of over 95 per cent. So far as assimilation is concerned, I can do no better than quote Ronald Segal, in his book, The Race War: …the policy of assimilation clearly suffered from a congenital lassitude; after 400 years of activity, the percentage of Africans in 1950 whose civilisation had been officially acknowledged was 0.74 in Angola, 0.44 in Mozambique, and 0.29 in Portuguese Guinea. In those territories the possibility of peaceful political change and peaceful advancement to independence has never been present. When popular demonstrations in Northern Mozambique, in the town of Mueda, were held in 1960, over 500 people were killed by Portuguese troops. And so Africans of all three territories have taken up armed struggle for independence. They are waging war on the Portuguese with increasing success. In Mozambique around 60,000 Portuguese troops are trying to contain guerrilla forces of the Mozambique Liberation Front of around 10,000.

The greater part of the two Northern provinces' of Mozambique have been liberated; that is to say, while the Portuguese are holding towns and garrisons and have control of the air, in the countryside the people are under the control of Frelimo, the Mozambique Liberation Front; and there, through schools, health clinics, economic change and, above all, first-class leadership—and I have met many of the leaders—a new Mozambique is slowly being created. Since 1967 a new theatre of operations was opened in Tete Province where Cabora Bassa is situated. I have absolutely no doubt that, although the protest may be slow, as more and more people of Mozambique come to realise that the possibility of fighting for a better future and for their own independence is there for them, the movement will push further and further South and obtain its goal. I have no hesitation in saying that I wholeheartedly support that movement.

It is against this background that the Cabora Bassa project must be considered. It is a vast undertaking. It was originally costed at about £103 million and the cost now is thought to be considerably more. The output of hydro-electricity which it will generate is double that of Aswan High Dam. The lake which wilt be formed by the dam will stretch 150 miles back, as far as the Rhodesian frontier. And beyond that, when the dam is built, it will be only part of the development which is projected. I quote from the Standard Bank Review of December, 1968, which says that the dam: will be the base from which a massive development of the Tete district is planned, incorporating the settlement of a million immigrants, the planting of extensive lands to crops, the establishment of manufacturing industry and the exploitation of whatever minerals may be extracted economically.

Normally a development of such magnitude could be only beneficial to an underdeveloped region. But when one looks at Portugal's past record and future ambitions in Africa, that project can be seen only as an ambitious attempt to secure, with the assistance of massive foreign investment, what they have failed to secure by force of arms; that is, the perpetual domination of Mozambique. For, of course, the one million immigrants will be Europeans. Compare that to the number of 100,000 Europeans presently the inhabitants of Mozambique. They, and the three white supremacist Governments of Southern Africa, will be the principal beneficiaries of this plan—not the people of Mozambique. The example of South Africa shows us how a large settler population coupled with mass industry can enable a ruling minority to dominate totally the mass of the people.

It is no coincidence that South Africa is deeply involved in the project. Economically the principal partner in the Zamco Corporation, which is to build the dam, is the Anglo-American Corporation of South Africa. Politically, it is of course immeasurably to the advantage of South Africa to have a strong buffer State in Mozambique against the independent North, just as it is immeasurably more vulnerable if an independent State were to be established on South Africa's frontier. And, militarily, indeed, South African troop detachments have already been observed by Frelimo forces guarding the site of the dam.

For these reasons, my Lords, quite apart from the issue of sanctions, I am totally opposed to the building of this dam. I support Resolution No. 2395 of the General Assembly of the United Nations, passed in 1968, which deplored: the activities of the financial interests operating in the territories under Portuguese domination, which obstruct the struggle of the peoples for self-determination, freedom and independence and which strengthen the military efforts of Portugal. For those reasons alone, I wish financial interests in this country to have no part in such activity.

In addition, of course, the Cabora Bassa project presents a direct challenge to those countries which have subscribed to the imposition of sanctions against Rhodesia. I have mentioned that Salisbury is only 200 miles away. The Rhodesian frontier is 60 miles away. It is quite evident that Rhodesia will benefit substantially from this dam and from this development. It will benefit in three ways. As to the first, I can only quote a booklet which has been produced, and is actually entitled, The Way to Cabora Basso, produced by the National Export Council of Rhodesia. That booklet says: With this tremendous market situated so advantageously close to our production centres we would be foolish to let our competitors steal a march on us … Rhodesia is ideally placed as a manufacturing centre to provide all the varied needs of a large community working on the project—from foodstuffs to feed them, through the clothing they will wear and the chairs they will sit upon, up to the vast quantities of cement to be poured into the dam and the timber shuttering to close it. The value of the trade which it is hoped will accrue in this way to the Rhodesian economy has been estimated, by that same Council—perhaps exaggeratedly—at £125 million over five years.

The second benefit is of course that Rhodesia is an obvious potential customer for the electric power to be generated by the dam. We learn, again from Rhodesian sources, of a likely power shortage by the mid-1970's. And Salisbury Radio broadcast in July, 1968: If the Cabora Bassa project is going to be as economical as the Portuguese say it is going to be, then it seems likely that it is from this source that Rhodesia will draw her power rather than commit a huge sum in implementing the planned stage two of the Kariba scheme to increase that dam's productivity. Finally, the scheme will enable Rhodesia to have an immensely valuable outlet to the sea for her trade. From the lake which I mentioned earlier, through a sehies of locks by-passing the dam, down to a new port on the river delta, the Zambesi will be navigable for barges from the Rhodesian frontier to the sea.

There is more evidence which I could quote and which I will make available to my noble friend, but I have no doubt that those who participate in this project will be breaking not only the spirit but also the letter of the United Nations sanctions resolutions. So far as British law is concerned, it is an offence not merely to import goods from and export goods to Rhodesia; it is equally an offence by Section 2 of the Order. to do any act calculated to promote the exportation of any goods from Southern Rhodesia and, by Section 4, to do any act calculated to promote the supply of any goods to any person if one has reasonable cause to believe that they will be used for the purposes of Rhodesian business. I hope that that is an accurate paraphrase of part of Section 4. My Lords, the Portuguese and the Southern African Governments have already shown that they do not give a fig for the Rhodesian sanctions. They are very happy to promote the exportation of goods from Rhodesia. Therefore it is all the more incumbent upon Governments who care about the United Nations and about sanctions to do what we can to wreck their sanctions-busting operations.

I turn now more specifically to the terms of my Question. My noble friend will be aware that when the Question was put down it had been reported that the G.E.C.—English Electric Group were anxious to tender for a major share in the Zamco consortium. They were reported as wanting to fill the gap left by the Swedish company, A.S.E.A., which itself withdrew because of the risk of breaking sanctions. I would say here that I look forward very much to hearing the noble Lord, Lord Nelson of Stafford, and the noble Lord, Lord Erroll of Hale, who can say much more than I can what G.E.C.—English Electric and A.S.E.A. have been doing. The noble Lord will know that he was certainly reported as welcoming the opportunity to take part in the consortium. It was also reported that the British Government were encouraging G.E.C.—English Electric to go ahead, and I only say that I hope my noble friend will take this opportunity to make it clear that those reports were not true. Since then, G.E.C.—English Electric have announced that they now have little chance of taking part, and it seems that the supply of electrical equipment will probably be undertaken by their West German rivals, Siemens. I do not know what motivated that change; I believe that political considerations played their part, but we shall look forward to hearing from the noble Lord, Lord Nelson, what was involved.

But, my Lords, even if British interests are not going to be involved directly in this consortium, there is still much that can be done to stop this project from going forward. First, I would ask the Government and my noble friend who will reply to make it quite clear that any British company which participates in this project, whether as a member of the consortium, as a sub-contractor or as a supplier of finance, will do so at their peril. It is possible that G.E.C.—English Electric will still be seeking to play a minor role. It is certainly true that Barclays Bank D.C.O. will intend to help finance the project, and, on that question, if the builders of the dam are—as must be the case in my view—doing an act calculated to promote Rhodesian business, I cannot see how those who assist the building by supplying equipment or funds are any the less culpable.

The second question I would raise with the Government is that this country has been scrupulous in its adherence to the United Nations sanctions resolution, and with that we have influence which we can bring to bear on other Western countries. I do not know whether the topic of Cabora Bassa has been referred to the United Nations Advisory Sanctions Committee, but it certainly should be. The extent to which Rhodesia will benefit, and as the project develops is benefiting, from it should be subjected to the closest possible scrutiny. Outside South Africa the companies which are taking part in the consortium are French and West German. West Germany is not a member of the United Nations, but that is no reason why representations cannot be made to the West German Government to observe, as it would do as a member of the United Nations, the sanctions resolution. I am not saying that we should be doing this merely to go moralising about Europe, but if we are losing exports, as we should be, in a just cause we can at least try to stop our rivals from snatching them up.

Finally, it is high time that we took considerably more effective action against the principal beneficiaries of this scheme—the Portuguese Government. We must end the farce by which Rhodesian goods pass freely from Rhodesia through Lourenco Marques. We must expose that other charade whereby arms supplied for NATO purposes for the defence of freedom are used against the people of Africa. We must acknowledge, as the Social Democratic Government of Sweden has done, that the Mozambique liberation front is a movement which deserves our support. These are wider questions than that of Cabora Bassa, but I do not see why Portugal should be allowed to get round, and abet the Rhodesians to get round, the sanctions issue, and we should be acting more effectively to ensure that they no longer do.

At Cabora Bassa one can see how the interests of the three white régimes of Southern Africa are united. They are united against the interests of the mass of the African population and against the forces of African liberation. At Cabora Bassa there will be a confrontation of those forces—an armed confrontation. The Mozambique liberation front is determined to stop that dam from being built. I believe that the three white régimes will be defeated and will fail at Cabora Bassa, just as they will ultimately fail in Southern Africa as a whole. I believe also that in this conflict, which I regret to say will be one of the most explosive conflicts to come in this world, we in this country must make it clear on which side we stand.

8.19 p.m.


My Lords, we have just listened to a most interesting speech by the noble Lord, Lord Gifford, who has demonstrated a close study of the subject matter as well as informed us with great lucidity. He was obviously concerned that the dam should be of benefit. I should like to remind him that one of the greatest developments in Africa has been the development of hydro-electric power. There has been the Volta River scheme, which was accepted by the noble Lord although instituted by that dictator Kwame Nkrumah. There was the Aswan Dam scheme—it is quite all right if the Russians build something, but not right if the Western Europeans build it. There was the Jinja River Falls scheme, which has been of inestimable benefit to the people of Uganda, including the Indians, who set up many factories only to find that subsequently they were having a very rough time of it. The Kariba Gorge has again provided inestimable benefits in the form of hydro-electric power for all races in Africa. I think it is a great mistake to assume that hydro-electric power benefits only the "white supremacists", as the noble Lord suggested. It does a great deal to benefit the people; the poorer they are, the more the benefit to them.


My Lords, the noble Lord will remember that I took pains to say that normally one would welcome hydro-electric development in Africa.


My Lords, I think the noble Lord should welcome it on this occasion, because the greatest beneficiaries will be the African people in Mozambique. With the outline of development of irrigation and other projects, the people who stand to benefit most in South Africa from cheap electricity are the African population, because they cannot afford expensive electricity but can afford cheap electricity. It would be entirely wrong to suggest that this scheme should not go ahead and give help to those people who would benefit just because there may be some white people involved in it. I would suggest that it is something of a red herring to try to tie the objections to the scheme to the Rhodesian sanctions law. I will come to that later. I remain convinced that this is a highly desirable project, and I think the Frelimos would be cutting off their noses to spite their faces if they took armed action against those men prepared to build such a great project and provide the benefit.

The noble Lord was good enough to make reference to my connection with A.S.E.A. I must declare my interest; I am Chairman of A.S.E.A.'s British subsidiary in this country, and they have discussed their possible participation in the project with me from time to time. I do not want to enter into the argument as to why they are no longer part of the Zamco consortium. I would confine myself while wearing my A.S.E.A. hat to giving one or two factual explanations which noble Lords will be glad to have.

First of all, although the scheme is within 100 or 200 miles of Salisbury, there is no question of the scheme as at present designed being able to supply electricity to Rhodesia. Indeed, it would be technologically uneconomic to have a breakpoint halfway down the transmission line. It would cost far more to do that than to run a separate AC line from the station itself. A proportion of the power generated will go to Mozambique and to all those who wish to have electricity. Another important point is that none of the supply to Johannesburg or that part of Southern Africa which will be the southern terminal can go back into Rhodesia from South Africa because there are no Escom connections between Rhodesia and South Africa. The only connection between the two countries is a very small line arranged by the local mining company across the Beit River bridge to provide lighting for the Rhodesian customs post. Apart from that, there is no supply by South Africa to Rhodesia.

Then, on the controversial question of whether one should give help to Rhodesian exports, I think the report the noble Lord read out was very optimistic. I know he was only quoting, but I think that to say that one cannot proceed with a project because the construction workers might buy chairs and tables made in Rhodesia is to stand the whole thing on its head. Certainly the company I have the honour to represent made careful investigations and was completely satisfied that it could avoid any such help to Rhodesian exports.

The noble Lord was good enough to point out that a third competitor is now on the scene. There was my own company and the company headed by the noble Lord, Lord Nelson of Stafford, who has managed to stay for the debate despite personal inconvenience. In the last 15 years there have been only ten high-voltage DC schemes, so it is not a very big or frequent market. The effect of all this clamour has been to deprive A.S.E.A. and the noble Lord's company of participation. A third competitor has arrived on the scene, a German firm. We have now three competitors where only two existed before in a field where the opportunities for genuine competition are limited. The arguments have not been satisfactory, nor in this case has the sanctions policy proved in the best interest of Britain or her EFTA partner.

I should like now to discard my A.S.E.A. hat and make a few observations on the situation generally, and I would stress that these are entirely my own observations and not in any way coloured by my association with an important electrical mannifacturing company. The first point to be made is that the United Nations resolutions are interpreted differently by different sovereign countries, and in a matter of large contracts such as this it has led to considerable difficulty. In what I would call a descending order of severity, the most severe is the United States of America which has a very rigorous law operating against enemy countries such as North Vietnam, North Korea, Cuba and China, and to which they have now added Rhodesia; rather than draft a separate law they have tacked Rhodesia on to the schedule, so to speak.

More or less by accident, the most severe country in the operation of sanctions policy is the United States, and I think Canada is very much the same. Next, I believe, comes Sweden, particularly with its latest law, which is one of considerable complexity, and as it has not been before the courts there is a good deal of scope for interpretation. Then comes the United Kingdom, somewhere in the middle, where a lot of things can be done by United Kingdom companies which would not be permitted under Swedish law. Next come France, Italy and Japan; and, although Germany is not a member of the United Nations, I agree with the noble Lord that Germany would do well to support the general policy.

Those four, grouped together, are more or less at the bottom of the list in terms of severity. For example, French and Japanese cars are now being manufactured in Rhodesia, actually in factories owned by British companies. So those British companies have the galling sight of seeing their capital investment being used by their competitors to reinforce the competitors' position in a territory which we hope will one day be free of sanctions and to which we may hope to return. This is indeed my main point to the noble Lord. He assumes that sand ions will go on for ever. Let us look ahead to a settlement. Would it not be a tragedy if as a result of what he has said to-night this scheme were to be held up for ten years and, though the sanctions policy were to come to an end, the Rhodesians, in a new mood, were to be unable to participate in the benefits and the Africans in Portuguese East Africa and South Africa were to have a standard of living that much lower than it would otherwise have been?

I therefore suggest to Her Majesty's Government that as the United Nations resolution—I am compressing it a little—was the result of British initiative, Her Majesty's Government have a duty to try to secure uniformity of interpretation. I know it is not easy, but if we are to have a sanctions policy—and I am not debating to-night whether we should or not—I think Her Majesty's Government should take the lead in trying to secure uniformity of interpretation as far as possible.

Secondly, in the case of large projects such as the one we are discussing—it may be a harbour or a railway next time—where the operation is fairly close to Rhodesia, the Government should be prepared to give some sort of ruling in advance, if necessary by an Amending Order, so that British manufacturers may know whether they are in the clear or not. I think that British manufacturers have a fine reputation for following the Government's sanctions policy. The one or two cases that have been before the courts only serve to show how the great majority have faithfully followed the Government's sanctions policy, often at great loss and inconvenience to themselves, while struggling to keep their factories full—not an easy matter these days, in face of international competition. I submit that before the House rises to-night we expect from the Minister who is to reply some indication of action and leadership by Her Majesty's Government.

8.29 p.m.


My Lords, I should like to thank the noble Lord, Lord Gifford, for introducing this subject to-night and putting this Question. As the noble Lord, Lord Erroll, has said, sanctions is not the issue to-night. We on these Benches have often accused Her Majesty's Government of dilatoriness in imposing sanctions on Rhodesia, and we have sometimes thought that their desire to make peace with Rhodesia has led them to imperil the Six Principles. But we accept that it is their desire to impose and enforce sanctions as they stand at the moment.

It is not my intention to follow the noble Lord, Lord Gifford, into the whole question of Portuguese colonial policy, but the fact that I do not do so should not be taken to mean that I do not support almost everything that he said in this matter. But it seems to me that to-night we are asked to discuss what is, in point of fact, a very narrow and a very clear matter. It seems to me that it is indeed very odd that we should have to ask this question at all, since the answer appears to be so clear.

The noble Lord, Lord Gifford, has said what the law is, what Article 2 of the Southern Rhodesia United Nations Sanction Order 1968 says, and I do not propose to repeat that; it appears to be not in the least difficult to interpret. The noble Lord, Lord Gifford, has produced the evidence that participation in the dam will do exactly a number of things which are forbidden by that Order, and I listened with great care to the remarks which the noble Lord, Lord Erroll of Hale, had to make on this matter. It seemed to me, if I may say so with great respect, that this was the least satisfactory part of the noble Lord's contribution to the debate, because it did not seem to me that he had managed to refute the evidence that there is going to be very considerable gain to Rhodesia.

To quote one particular example, this question of there being no supply of electricity from South Africa back to Rhodesia rests entirely on the fact that there is none at the moment. Although obviously it is not up to people, in interpreting the law, to consider what other countries and other States may do in particular circumstances, it does appear in the light of present circumstances to be highly likely that when the Rhodesians run short of electricity supply in the mid-1970s they will turn to South Africa, and they will receive substantial help through this dam.

It seems to me, on the evidence that has been presented to us and from what we have managed to find out in other areas, that any British firm helping to build the dam would quite clearly be in breach of the British law on this matter. But if there should be any doubt, it also seems clear to me that the British Government should be seen to be coming down on the side of the enforcement of sanctions. It is our responsibility to the people of Rhodesia, first and foremost, to be the most adamant country in sanction enforcing. If anyone should say, as has been said on other subjects and other matters, that if we do not do it somebody else will, my reply would be that I regard this as an argument that is totally unethical and totally unacceptable.

However, I sympathise very much with the noble Lord, Lord Erroll of Hale, and I would support the plea that he made towards the end of his speech, first of all, that we should make a very strong effort to try to secure uniformity of interpretation of the law—and indeed uniformity of the law in those countries which are enforcing sanctions. And I think that people who are in the position of our industrialists, who are trying to get greater exports for this country, which we all want, would be much helped if that were to happen. Secondly, although I do not know the facts of the case in this particular instance (and I hope the noble Lord who is to reply will touch on this), I think that the request for a ruling in advance on many questions like this is obviously a very reasonable one, and a ruling would be very helpful.

Be that as it may, we cannot afford in any way to drag our feet and we should not in any way be seen to be dragging our feet, on sanctions. Many countries think, rightly or wrongly—I think rightly—that we mishandled the whole matter of sanctions. Many countries think, rightly or wrongly—and I think wrongly—that we did it on purpose; that we are more interested in the rich white man's club than in the people of Rhodesia and the concept of justice. I hope that what the Minister says tonight will reassure us all.

8.35 p.m.


My Lords, in rising to-night to speak to the Question tabled by the noble Lord, Lord Gifford, I must immediately declare my interest—although the noble Lord has already referred to it—as chairman of G.E.C.-English Electric. We have heard with interest the noble Lord's views on the Portuguese methods of Government and colonial policy, but as an industrialist I must point out to your Lordships that it is our job to get business overseas within the laws of this country. That is what we are doing, and that is how we proceed.

In the case of Cabora Bassa, the facts are not entirely correct. I think your Lordships should realise that this large scheme, which is the construction of a dam across the Zambesi to generate a large amount of power, 1,200 megawatts, at an approximate value of £120 million, would bring into the country some £60 or £65 million worth of equipment. The site is 150 miles inside Portuguese East Africa namely, Mozambique, and my company received an inquiry for this project in January, 1966, from an authority formed for the purpose by the Portuguese Government. Therefore, the customer is the Portuguese Government, and, so far as my company is concerned, so far as this country is concerned, we have many satisfactory trading relations with the Portuguese.

My information on the power station is that the financing of the project, which is international financing, is entirely based on a contract to sell the whole of the power to South Africa, with the exception of a very small fraction for local consumption in the area of the dam. This power will be supplied to South Africa over 1,000 miles of transmission line, all of which is on Portuguese East African territory, and fed into the South African system. The South African system is very short of power. The South Africans are not going to use their credit to put up a scheme of this magnitude to meet other than their own power needs. I think that is a very sound assurance, if one did not need any more. But on top of that, it is technically not feasible to do it. You cannot transmit this power for 1,000 miles down to South Africa and bring it 1,000 miles back again. Anyone who would do that sort of thing would have to be a lunatic. I think I must make it clear that this is the basis of the contract.

My company tendered as a part of a United Kingdom /Italian consortium, and in presenting our offer we made sure, so far as we were able, that we did not offend any of the Rhodesian sanctions. There was no Rhodesian equipment in it; there was no use of Rhodesian cement, which has been referred to in some places; there was no use of anything coming from Rhodesia. We were in competition with a United States consortium, who presented an offer, and a European consortium in which all the major industrialists in Europe were included, including Germany, Switzerland, France and Sweden. This consortium was later awarded the contract provisionally in July, 1968, and this was confirmed in September, 1969.

At that point the Swedish company—a specialist company engaged, as my noble friend Lord Erroll of Hale has already explained, in long-line high-power transmission lines—withdrew. We were specialists in this type of equipment too, and it was natural, seeking export business, to see whether there was a possibility that we might be invited by the European consortium to supply them with equipment for the line from Portuguese East Africa to South Africa—nothing to do with Rhodesia at all. In the event, in fact, we did not get the inquiry; they did not send us the inquiry, and the problem did not arise. There was nothing political in this; it was highly commercial, and they decided to do it themselves, for the very good reason that my noble friend has mentioned, that they wanted to get into this business. This was a heaven sent opportunity, and they are now in it.

So much for the facts. In conclusion, I should just like to put two points to your Lordships. My company has always obeyed, and always will obey, the laws of this country. In pursuing this valuable export order for a Portuguese customer. there is no intention whatsoever to flout the laws of our land. Our intention is solely to obtain, if we can, and within the law, valuable work for our factories which in this field, as your Lordships will know, are particularly underloaded at the present time. It is also to obtain valuable business for export, and thereby to contribute to the balance of payments. Finally—and this is where I find the argument put by the noble Lord rather difficult to understand—in all these schemes we are contributing to the development of the underdeveloped countries. Our objective in world finance, wherever finance comes in, is to raise the standard of living in those countries. One cannot do that without power, and that is what we have in mind.

Finally, may I draw you Lordships' attention to the dangers inherent in debating individual overseas contracts in your Lordships' House or in any other House? It can do great damage to our reputation. Many people overseas do not understand our political system. They read the reports of statements and debates; and it is our constant endeavour to try to put right misunderstandings which arise from matters of this sort. And I would make it quite clear that our competitors do not in any way diminish their efforts in trying to present a misleading position if they can. So it seems to me, at least, that the law must be, and should at all times be, subject to scrutiny and amendment through debate; but, surely, in the meantime, to avoid dangerous misunderstanding it must be left to the custodians of the law to see that the law is properly observed. My Lords, we are an exporting nation and my company is an exporting company. Can we afford to turn down business which, under our laws, is available to us? I agree with my noble friend Lord Erroll that if that is the case, the Government should clarify the law.

8.43 p.m.


My Lords, the value of this discussions has been much increased by the contribution of my noble friend Lord Nelson, who has given us the advantage of his wide knowledge and great experience in this matter. I am sure we must be grateful to him for that help. I think this is the most destructive, ill-advised and mischievous Question that I have seen on the Order Paper in this House for a long time. I came particularly to hear a proper denunciation of it by my noble friend Lord Erroll. He, speaking with great moderation, gave us the advantage of an effective examination of the angles that were raised by the noble Lord in asking his Question—and none of us will doubt the sincerity of the noble Lord's motives in bringing it up, however misguided we may feel it will be in its result. I was also shocked to hear the support for this Question which we have just heard from Lord Beaumont on the Liberal Benches, because it was of a character which one would not have expected.

I have no interest to declare except that of British industry; and as I see it this is a suggestion that there should be a limitation of the participation by British firms in activities in countries with whose internal policies we may disagree. The House does not need any reminding that the prestige of British engineering is very much benefited by the prosecution of its activities abroad, and a good record of achievements brings in more business. It is to denounce the suggestion that there should be a limitation of British trade that I rise; and I hope that we shall hear from Lord Shepherd, when he replies, a proper upholding of such activities by British industry. He himself, with his long business experience, I am sure must be well impressed by the danger of letting the challenge of this Question go unanswered.

I have never actually been on the site of the darn but I have had many talks over the past several years with Dr. Vaneck, who was the originator of this scheme; I have read a great deal of the literature about it; and I have digested all the benefits that can come to the African population from it—and they, of course, when the scheme comes to fruition, must be the biggest beneficiaries from it. As I think has already been explained, when it is completed this dam will bring the cheapest power, it is alleged, anywhere in the world; and it will be one of the big illustrations of an attempt to develop a settlement by irrigation to the benefit of the Africans in Mozambique. It will benefit the development of industry all over South Africa—and do not let us forget that the South African Republic, with only 6 per cent. of the population, consumes more than 50 per cent. of the total electricity on the African Continent.

But that is not the point on which I intend to spend any time. Lord Erroll has already emphasised the danger of this Question. I most emphatically support what he has said. It is because I support the development of this scheme that i deplore any suggestion of further criticism of the South African Government, or of the Portuguese Government, for that matter, particularly in the present atmosphere, which is creating enough dissatisfaction in South Africa with regard to attitudes in Britain. It is for that reason that I hope we shall hear—and, indeed, I look forward to hearing it—from the noble Lord, Lord Shepherd, with his great experience of business, a proper encouragement of British industry and a reply to any attack on its participation in any part of the world in anything that may bring trade to this country.


My Lords, before the noble Lord sits down I wonder whether he would answer one question. He said, I think, of the Question asked by the noble Lord, Lord Gifford, that it was destructive, irresponsible and ill-informed. This question was asked, more or less, in the Economist of November 15—a paper which is usually held by most of us to be constructive, responsible and informed. Would the noble Lord apply those adjectives to the Economist?


My Lords, my interest in speaking was merely in defence of British industry and to make a plea that we should not further antagonise South Africa.

8.48 p.m.


My Lords, I had not intended to take part in this debate but I am impelled to do so by the speeches which have been delivered. I am a little sorry that the noble Lord, Lord Erroll, has now left his place on the Opposition Front Bench, because I particularly wanted to make a comment upon his speech. We have this dilemma. I recognise at once that these great engineering schemes for the distribution of electrical power can contribute immensely to the economic development of Africa and to the livelihood of its peoples. The noble Lord referred particularly to two of these projects: one the Volta project in Ghana and the other the Aswan Dam in the United Arab Republic, the Egyptian side. He also made reference to the dictator Kwame Nkrumah, under whom the Volta project took place. I quarrelled with Kwame Nkrumah when he repressed opposition and imprisoned leaders of other Parties, and, face to face, I expressed my criticism of that.

Nevertheless—and I think that what the noble Lord, Lord Erroll, said would indicate his recognition of this—the Volta project was a tremendous enterprise in Ghana for the economic development and the lifting of the standard of its people. I have been there. I have never in my life seen such a natural dam. It had the great quality of being built already between vast natural rocks with, behind it, that great lake, with enormous fishing possibilities and the extension of its electrical power all over Ghana, the effect of which will be immense. Therefore I accept the view of the noble Lord, Lord Erroll, that these schemes are going to be of enormous importance to the development of Africa and the livelihood of its peoples.

I thought the noble Lord was a little unjust in his reference to the Aswan Dam. If I heard him aright, he suggested that some of us were supporting it because it was Russian-aided. My Lords, I think that one of the great tragic mistakes in all policy in Africa in recent years was the decision of the United States of America to withdraw its contribution to the Aswan Dam scheme, and I regret tremendously the fact that our British Government followed the initiative which the American Government took upon that issue. The consequence has been—and we may not yet be able to judge the effects of this—to drive Egypt into the hands of the Soviet Union, which has stepped in and financed this great project.

The noble Lord, Lord Erroll, is perfectly correct when he says that these dams and the distribution of electrical power are of enormous influence in lifting the standard of life of the African people. Go into the neighbourhood of the Aswan Dam: you will see deserts converted into fertile land; thousands of peasants able to earn a livelihood which they could not have before, and the development among them of cooperative systems of society which may be the pattern of Africa in its development in its rural spheres. In all those respects I endorse what the noble Lord has said.

Then we come to this dilemma—and this is the real dilemma before this House to-night. The Volta scheme, in Ghana, was done by the African people for themselves; the Aswan Dam system in the U.A.R. was done by the Egyptian people for themselves. Whatever financial support they got from other countries—from America in the case of the Ghana dam; from the Soviet Union in the case of the Egyptian dam—loans which will be repaid in time, they are projects of the people for the people; for the development of the people and not for exploitation from outside. In the case of this dam in Mozambique, which again is going to have tremendous economic effects, it may lead to the expansion of the livelihood of thousands of people who are there, but it is not being done by the people for the people: it is done by a colonial Power, in the interests of the financiers of that colonial Power, and in the interests of the citizens of that colonial Power.

Has the noble Lord, Lord Erroll, seen the proposals of the Portuguese Government in this respect? They propose to introduce into Mozambique one million Europeans. It is not Africans who, in co-operative peasant communities, are going to benefit from the dam. One million Europeans are to be brought into an African country which is colonially controlled, with the Africans demanding the right to govern themselves. This project is not similar to Volta; this is not similar to the Aswan Dam; it is the exploitation by a colonial Power in the interests of its own financiers and its own one million Europeans, at the expense of the Africans who are living there. This is the real dilemma which faces us in Southern Africa. It faces us in Rhodesia, where a minority of 230,000 Europeans are trained to dominate nearly 5 million Africans; in Angola and Mozambique, under Portuguese control, where the African people are demanding the right to govern themselves; in South-West Africa where the United Nations has declared that the mandates should be transferred to the United Nations and away from the apartheid control in South Africa.


My Lords, if I may interrupt for a moment, does the noble Lord propose that in South-West Africa there should be any alternative government to the present government, which controls the ports and the rolling stock, and no other form of government is possible?


My Lords, in reply to the noble Lord's interruption to what I have said, I want to be quite honest and answer that question. I think it is somewhat futile for the United Nations to carry these resolutions when it has no power to implement them. I want to see the United Nations given the power to implement its resolutions and to secure that the government of South-West Africa shall be in the interests of the African people, instead of the apartheid system which is dominated by the Republic of South Africa.

I was going to conclude by saying that this is a problem of the whole of Southern Africa; a problem of the Republic of South Africa itself. And if there are to be Volta projects, if there are to be Aswan dams, if there are to be these dams in Mozambique, then they must be for the benefit of the African people who live in those territories. They must not be imposed by colonialist Governments, they must not be applied by British Governments who have contracts for that purpose. They must not deny to the peoples of those territories the right to decide their own destinies, not only politically but economically as well.

9.0 p.m.


We have on the Order Paper a rather narrow Question, but the debate has been wide-ranging and I am not quite certain whom I should blame, my noble friends behind me or the noble Lord, Lord Erroll of Hale, who discussed reform—I would not say deliberately, but certainly it does tend to enlarge the area of debate. I think the House will agree that my noble friend Lord Gifford put his point of view in the most cogent and sincere form possible.

My Lords, If I may, I will deal first with Her Majesty's Government attitude with regard to self-determination of the people of Mozambique. It is this. While we recognise their right to self-determination, we maintain, as we must maintain, that the question of carrying out the principle of self-determination rests, not in principle but in timing, with the administering Power. I would hope that the Portuguese authorities themselves would take note of world public opinion. We would wish to see the situation there evolve peacefully in the direction of Mozambique becoming independent, with rule by the majority. That is what we ourselves seek in Rhodesia.

The noble Lord, Lord Nelson, said that in business we must operate within the law. I am the first to say that his company have always shown that respect. Our sanctions legislation is directed only against Southern Rhodesia and not against Portugal or any other country. Therefore, it is not Her Majesty's Government's policy to discourage or prevent British companies from engaging in legitimate trade or dealings in Mozambique. There is nothing in our sanctions legislation which makes it an offence to supply goods from this country to Mozambique unless the supplier knows, or has reasonable cause to believe, that they will be supplied or delivered to, or to the order of, a person in Southern Rhodesia or that they will be used for the purpose of any business carried out or operated from Southern Rhodesia. In short, the mere supply of equipment to Mozambique does not fall within the ambit of our sanctions legislation. Similarly, there is nothing in our sanctions legislation which makes it an offence for a British bank, or the South African branch of a British bank, to finance the operation of a South African company constructing a dam and power project in Mozambique.

My Lords, I was asked to what extent this dam would affect the economic future of Rhodesia. As my honourable friend the Parliamentary Under-Secretary of State said in another place on October 20, it is far too early to know how this dam will affect the economy of Rhodesia. So far as I can see, it is very much in line with what the noble Lord, Lord Nelson, himself said: the supply of power to Mozambique, the development of Mozambique and also the supply of power into South Africa. But I think I should make it clear, since I was asked about the legal position—clear in terms of sanctions to those British companies who might participate in this dam—that if British firms were to participate either as contractors for the construction of a power station or for the supply of machinery, they could not be held to be responsible for any decision the owners of the power station might take in 1974 or later to supply power to Southern Rhodesia. They would not be accessories to the breach of sanctions by virtue of their participation as constructors or contractors.

However, the location of the dam site is such that Southern Rhodesia might well be the most convenient and competitive source of supply for construction material such as sand, cement, structural steel, reinforcing rods and the like, and for other ancillary services including the supply of foodstuffs for the labour force. Participation by a British company in the construction of the installations at Cabora Bassa (or by a British bank or by the South African branch of a British bank in the financing of such construction) may therefore carry with it a risk of possible involvement in dealings in, or financing of dealings in, goods of Rhodesian origin. Any such company or bank should bear this in mind. They should also bear in mind that the Southern Rhodesian United Nations Sanctions (No. 2) Order prohibited dealings in any goods exported from Southern Rhodesia.

Having said that, everything depends on the nature of the involvement and on the facts of each case. A contravention of our legislation would only arise if there was evidence of the use of Rhodesian goods and the involvement of a British institution in their export from Rhodesia. The noble Lord, Lord Barnby, was, I thought, rather in the position of the pot calling the kettle black when he referred to the speech of my noble friend Lord Gifford as "mischievous". From my own point of view, he has made some of the most mischievous and damaging speeches in this House. But I say to him that the British Government will do all they can to help those companies that act within the law in their export trade.

Perhaps I should give this information so far as the Cabora Bassa business is concerned. E.C.G.D. would not cover any of this project unless it had consulted with Government Departments. We gave our support to what is referred to as the Anglo-Italian consortium and we took the view that the support we gave was implicit in the financial terms that were supported by E.C.G.D. I would make clear that giving that support did not in any way imply that British members of the consortium, if successful, would not have been subject to the provisions of our sanctions legislation.

My Lords, the noble Lord, Lord Gifford, asked whether we gave encouragement to G.E.C.-English Electric to take over from the Swedish company. We did not encourage them to seek to fill this gap. We had already drawn the company's attention to the sanctions legislation and pointed out the risks involved by a British firm in participating in any contract for the supply or installation of equipment in Cabora Bassa. The noble Lord, Lord Erroll of Hale, asked whether I could spell out in clear terms the position of British companies in like circumstances. I have sought to set it out in terms of the Sanction Order. If any company wish to go into any of these contracts they will be advised to consult the Board of Trade, and we will give them the best information we can. In the end, it depends entirely upon the particular circumstances of the operation.

As regards the possibility of Her Majesty's Government taking any international initiative aimed at preventing, on sanctions grounds, such participation by foreign companies, it is for the United Nations Security Council, acting on the advice of the United Nations Sanctions Supervisory Committee, to determine whether any individual member of the United Nations is in breach of its obligations under the Security Council Resolution No. 253. If we were to receive information that, for instance, Rhodesian minerals had been used, or were likely to be used, by a company participating in this project, we could bring the matter to the attention of the United Nations Sanctions Supervisory Committee; and it would be for that Committee, on which we are represented, to decide what action it should take on our information. Any other United Nations member could take similar action.

My Lords, in this case there is no legal requirement for us to take action against any companies which wish to develop in Mozambique. Whether one should take action or not is a matter of belief. I would only say to my noble friends that if we stopped trading with all the countries in the world with which we disagreed we should be in a very parlous state. We have to make our judgments on the facts, and particularly on what we are being asked to supply and how the article will be used. In general, it is not possible, I think, to lay down a firm rule on this. We would support business to Mozambique but, I would add: if it infringes the Sanctions Regulations, then let those companies beware!

House adjourned at twelve minutes past nine o'clock.