§ 2. Mr. T. Reidasked the Secretary of State for Foreign Affairs what contractual relations were entered into as a result of negotiations conducted by his Department between British oil and teak interests in Burma and the Government of Burma after the war, and with what results.
§ Mr. NuttingAll British commercial interests in Burma are affected by the contractual relations established by the Treaty regarding the Recognition of Burmese Independence of 17th October, 1947, and the Notes annexed to it (Cmd. 7360, 1948). Under Article 7 of that Treaty all contracts, other than those for personal service, made by the pre-Independence Government of Burma with United Kingdom subjects and companies were transferred to the Provisional Government of Burma. Under the Notes, each Government agreed to take no action prejudicially affecting the existing business interests of the other without prior consultation with a view to reaching a mutually satisfactory settlement. The Government of Burma also undertook to provide equitable compensation in the event of expropriation or acquisition, in whole or in part, of existing United Kingdom interests in Burma.
In March, 1949, His late Majesty's Government invited the Burmah Oil Company and Associated Companies to continue the work of rehabilitation for a period after 7th March, 1949, and agreed to guarantee the Company against any losses incurred during this period and attributable to their response to His late Majesty's Government's request. These arrangements terminated on 31st January, 1950, and have been discharged by the payment of £800,000 to the Company.
In September, 1951, His late Majesty's Government informed the Government of Burma in reply to their request for a loan of £5 million to finance their share in the proposed oil joint venture, that they were ready to assist the Government of Burma to raise the £5 million required for this purpose by a loan of £2½ million, provided the Government of Burma and the oil companies were able in other respects to reach mutually satisfactory 160W arrangements. The Government of Burma and the companies have reached agreement on the terms of this scheme under which the oil industry in Burma would be operated by a new company in which both the Government of Burma and the oil companies would participate, but the scheme has not yet been finalised.
The contracts under which the United Kingdom firms worked teak forests in Burma expired, for the most part, in the early years of the war. After the war, the forests were kept in operation by a special joint working arrangement involving the participation of the Government of Burma and the lessees. After Independence, the Government of Burma, on 1st June, 1948, took over the teak forests for exploitation by the State, and at the same time acquired the assets of the firms which had previously enjoyed rights under contract. The amount to be paid for these assets has been the subject of negotiating between these firms and the Government of Burma and of legal action by the firms. No specific contractual relations negotiated by Her Majesty's Government are involved in this matter.