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THE OIL CONSPIRACY An investigation into how multinational oil companies provide Rhodesia's oil needs The entrance to the Mobil Refinery near Durban, South Africa Center for Social Action of the United Church ofChrist This report is based on information and documents which were passed to the Center for Social Action of the United Church of Christ by an organization called OKHELA. Enclosed with the material was a state­ ment which reads as follows: "OKHELA is a clandestine organization of white South African patriots who, as militants, are en­ gaged in providing invisible support to the National Liberation struggle, headed by the African N a­ tional Congress of South Africa (ANC). This commitment to the ANC's fight against fascist apartheid, settler colonialism and imperialism includes armed struggle." "The material provided here was gathered by OKHELA during a period of intensive and secret re­ search, with infiltration and intelligence work lasting over a year. The work took place in South Africa, Rhodesia, Mozambique, Britain, the Netherlands and the United States. This is a continu­ ation of an OKHELA program of carrying out clandestine operations both inside and outside South Africa to expose the nature of Western capitalist collaboration with racist minority regimes in Southern Africa." The Center for Social Action of the United Church of Christ (CSA) was approached by OKHELA to write and publish this report because of the Center's earlier research and activity on the issue 9f Rhodesian sanctions. Prior to the publication of this report, the CSA exposed the illegal sanctions-breaking activities in which the New York office of Air Rhodesia was engaged. That revelation culminated in the closing down of Air Rhodesia's New York office. The CSA further launched a nationwide campaign aimed at trav­ el agencies that were promoting American tourism to Rhodesia. June 21, 1976 Additional copies of this report can be obtained from: The Center for Social Action 8th Floor 297 Park Avenue South New York, New York 10010 United States of America Price: $1.00 plus postage. (Special rates for bulk orders.) The printing of this report has been made possible, in part, by a grant from the Robins Fleming Fund. CONTENTS Chapter 1: Summary Chapter 2: Introduction 2.1 Historical background 2.2 Sanctions 2.3 Western ambivalence over sanctions 2.4 Implications for the U.S. government Chapt.er 3; The background on oil 3.1 The legal background 3.2 Rhodesia's oil needs Chapter 4: How oil sanctions have been evaded 4.1 Early methods 4.2 Genta 4.3 Mobil 4.4 The gasoline "paper-chase" 4.5 The improved paper-chase 4.6 The diesel paper-chase 4.7 Aviation turbine fuel (Avtur) . 4.8 Aviation gasoline (Avgas) 4.9 Non-fuel oil products Chapter 5: The evidence 5.1 Origins of the documents 5.2 Selected quotes from the documents 5.3 Letter from Genta to Mobil (Rhodesia); Document #1 5.4 Letter from Mobil (South Africa) to Mobil (Rhodesia); Document #2 5.5 Mobil's imports of non-fuel oil products; Document #3 5.6 Mobil (Rhodesia) and the middle-men; Documents #4, #5, #6 5.7 Two revealing invoices; Documents #7, #8 5.8 Rhodesia's fuel consumption; Documents #9, #10 5.9 Financial links; Document #11 5.10 Mobil's internal finances; Documents #12, #13, #14 Chapter 6: The role of the other oil companies Chapter 7: The importation routes Chapter 8: More on Freight Services Ltd. Chapter 9: Some legal points Appendix A. List of names B. Document # 15 C. Document # 16 D. Document #17 E. Document # 18 Mp The entrance to Mobil's Johannesburg Office A storage tank near Mobil's Durban Refinery 2 Chaptr 1 SUMMARY In 1973, Americans learned during the Arab oil embargo, just what a shortage of petroleum could do to their livelihood. Supposedly amuch more serious trade embargo has been in force against Rhodesia's white minority regime for the past decade. But petroleum shipments to Rhodesia have continued almost without disruption, in spite of the mandatory United Nations sanctions which are aimed at achieving majority rule. Today, the tiny white population of Rhodesia hangs onto power with a tenacity few could have foreseen. But no amount of determination by them could have kept their economy and military machine operating if they bad not received a steady flow of oil supplies. This report reveals-for the first time-how oil seems to be getting through and keeping white rule alive in Rhodesia. The Center for Social Action of the United Church of Christ has obtained a series ofrevealing secret documents, which appear to show that Mobil Oil Corporation's subsidiary in South Africa and its subsidiary in Rhodesia have jointly helped to plan and implement a decade-long campaign to provide Rhodesia's oil needs. Mobil has repeatedly denied any sanctions-breaking activity. Mobil's Chairman, Rawleigh Warner, Jr. has said that since U.S. law forbids Mobil and its affiliates from engaging in any transactions involving goods destined for Rhodesia, "the management of Mobil's Internationai Division has gone to considerable effort to make sure that we have complied fully with the restrictions imposed upon us by the U.S. government in this con­ ne~tion." Yet it would appear that if he consulted with his International Division Executive Vice President, who is also a director of Mobil (South Africa), he might learn what is explained in this report-namely, that a highly sophisticated scheme seems to have been operated by Mobil (South Africa) for ten years, whereby the latter has sold oil products to Rhodesia through an agreed chain ofintermediary South African companies, most ofwhich are in fact bogus. These products were ultimately retailed by oil companies within Rhodesia, including Mobil's Rhodesian subsidiary. The intention of the scheme seems to have been to allow oil products to get through this chain without the eventual destination being discovered by outside observers. But even if the destination were discovered, the scheme also seems to have been constructed to concealfrom all but the most diligent researcher, that Mobil (South Africa) had any intention of selling goods which were bound for Rhodesia. We believe that the documents presented herewith and other relevant evidence tends to establish at least on a prima facie basis that: ' • Mobil (Rhodesia) was asked in the mid-sixties by a secret Rhodesian government agency caJled Genta to set up a 'paper-chase' of intermediary companies, through which Genta could import all of Rhodesia's gas­ oline and diesel requirements from Mobil (South Africa); • Other oil companies in South Africa-Shell, B.P., Total and Caltex-have set up similar procedures to get other oil products to Rhodesia; , •A confidential memorandum within Mobil (Rhodesia) stated: "When orders for lubricants and solvents are placed on our South African associates [i.e,. Mobil (South Africa)], a carefully planned 'paper-chase' is used to disguise the final destination ofthese products. This is necessary in order to make sure that there is no link between MOSA [Mobil (South Africa)] and MOSR's [Mobil (Rhodesia)'s] supplies••• "This 'paper-chase' which costs very little to administer, is done primarily to hide the fact that MOSA is in fact supplying MOSR with product in contravention of U.S. Sanctions Regulations•••" 3 Only Portugal and South Africa refused to abide by this Cha er 2 decision. INTRODUCTION The United States voted in the U.N. Security Council to support economic sanctions against Rhodesia, and further­ more the President promulgated two Executive Orders, 2.1 HISTORICAL BACKGROUND numbers 11322 and 11419, prohibiting the trade of any Rhodesia is ruled by one of the two remaining white commodities or products with Rhodesia by any person or minority regimes in souther Africa. Britain began its company subject to the jurisdiction of the United States. colonial rule of Rhodesia betw en the years 1889 and 1896 through treachery and with the aid of its troops stationed in South Africa. This was the first step in an attempt to realize the dream of Cecil John Rhodes-a dream of 2.3 WESTERN AMBIVALENCE OVER "British soil from Cape to Cairo." Political decisions were SANCTIONS made within Rhodesia by a totally white electorate as the Britain, which initiated economic sanctions against franchise was restricted by financial qualification re­ Rhodesia, did so not only ambivalently but primarily to quirements, the intention being to exclude African par­ "save face" with the Afro-Asian nations. Prime Minister ticipation. Although Britain maintained constitutional Wilson went so far as to inform Smith of the kind of sanc­ authority, it never exercised its power to veto dis­ tions Britain would apply, singling out oil and tobacco, in criminatory legislation. the event of a UOI. As a result, when UOI was declared, In 1963 Rhodesian whites began to agitate for in­ Smith was well prepared for sanctions, while Britain had dependence from Britain. In the negotiations, Britain's neither a plan of implementation nor a method of enforce­ condition for the granting of full independence was the ment. Having a favorable balance of trade with, and the guaranteeing of basic African rights. This was unaccep­ largest investment in, South Africa and realizing that table to white Rhodesia. In 1964 Ian Smith became the South Africa would go to the aid of white Rhodesia, Bri­ Prime Minister and immediately began making tain was afraid of disturbing its relations with South preparations for a unilateral declaration of independence Africa. Britain therefore stalled pressures for comprehen­ from Britain. Following the breakdown of talks with Bri­ sive mandatory sanctions for three years, during which tain, the Smith regime declared Rhodesia independent on time Smith was able to diversify and consolidate the November 11, 1965.

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