OIL
INTERESTS HIT A GUSHER IN CEYLONESE RUPEES
By V. Karalasingham
The Petroleum Corporation Act, passed by the Sri Lanka Freedom party LSLFP] government in 1962, vested in the state a monopoly in purchasing, distributing and marketing petroleum. This had previ-~ ously been the prerogative of three powerful cartels of western imperialism «= Shell, Caltex and Esso.
The law setting up the Corporation also provided machinery for payment of compensation, manner of assessment, mode of payment, etc., to these private enterprises, ,
In a bill now. before parliament, the United National party LunP] government which succeeded the SLFP government that was headed by Mrs. Bandaranaike, seeks to amend with retroactive effect the clauses relating to the payment of compensation.
It is well known that an important bone of contention between Ceylon and the American and British governments that back the three oil companies was the question of compensation. The law provided for compensation, but the U.S. government opposed the provisions and withdrew its aid program as an act of retaliation.
The oil companies in fact refused to cooperate in carrying out the law, for the simple reason that under its provisions they could not get the fantastic sums claimed by them, They therefore sought a political solution. They adopted dilatory tactics in hope of being able to deal with a government more to their liking. The UNP met the oil company specifications,
No sooner did the UNP take office following its victory in the elections last March, than the oil companies opened direct negotia= tions to circumvent the law. In a matter of weeks they made a deal on the amount to be paid. But the law remained a stumbling block, since the deal violated its provisions, It is to legalize this shady transaction that the UNP is now seeking to amend the law.
In the case involving an attempted coup d'état in 1962, the UNP made a tremendous noise about the retroactive legislation under which the plotters were condemned last April [see World Outlook April 30]. A few reactionary high army and police officers were involved in that case. This one is different -- the retroactive legislation involves public funds. The amendment would authorize payment of 55,000,000 rupees, which is the equivalent of 80,000,000 rupees [$16 ,800, 000] if the taxes due are taken into consideration, This would represent a considerable drain on the country's foreign exchange. ,
This sum was not fixed in relation to the market value of the
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assets but arbitrarily by the oil companies, backed by the U.S, government, in negotiation with the UNP government. It was a clear case of the UNP government meeting the dictates of Washington. This is evident both in the size of the compensation and in the failure of the UNP to invoke the provisions of the law. A self-respecting government would have referred the imperialists to the law, but the UNP government, acting as an agent of imperialism, itself nullified the law and now seeks to legalize this illegal act.
The new amendment marks an important breach in the original Petroleum Act. As yet the UNP cannot go as far as it and its patrons, the foreign imperialists, would like. They would certainly desire to give back to foreign private capital the rights which they enjoyed. But political realities in Ceylon compel imperialism to act cautiously for the present. Having made the first breach in the law, they will await a favorable turn of events to press other claims, including "freedom to sell their oil in Ceylon,
At first this may take the form of selling oil to the Petroleum Corporation, or taking a share in the proposed oil refinery, or the project might be cancelled outright.
The oil companies are interested in Ceylon. High profits are guaranteed. No one knows what the profits were in the years before the holdings of the companies were taken over, but it is now known that the Ceylon Petroleum Corporation made over 30,000,000 rupees last year. That is the bare minimum annual loss to imperialism since the Petroleum Corporation was set up. They will do everything they can to win back this market and the UNP will serve as their agency for reconquering it.
. The difference in attitudes between the UNP and the SLFP on this subject expresses the different interests which these parties serve. The UNP is the political party of that section of property owners directly and immediately dependent on imperialism -- landowners, tea and rubber plantation owners, big merchants representing foreign manufacturing interests. The SLFP represents the capitalists having interests, not mainly in land and plantations, but in the development of a native industry. This necessitates the SLFP playing an oppositional role to imperialism. One manifestation of this oppositional role of the national liberal bourgeoisie was its decision to take over the foreign oil interests,
Ceylon is not the only example of this. One need only to recall the decision of Mossadeq in Iran to nationalise the Anglo« Iranian Petroleum Company or of Nasser in Egypt to nationalise the Suez Canal to realise that the liberal capitalist class of backward countries which bases itself on incipient industrial interest is compelled to take specific measures against specific imperialist interests,
While a Mossadeq or Nasser or Mrs. Bandaranaike can, in cer
tain conditions, come into isolated conflict with an imperialist power, it would be idle to expect either the Shah, or King Farouk or Mr. Dudley Senanayake to do the same,
POLICE IN JAPAN TOLD TO GIRD FOR MASS