Document No. NS-12

International Seminar on The Role of Transnational Corporations in Namibia

Sheraton Washington Hotel Washington, DC November 29- December 2, 1982

Report on

by: Ms Yoko Kotazawa Pacific Asia Resources Center Japan

Organized by the American Committee on Africa 198 Broadway New York, NY 10038 (212) 962-1210 with the support of the United Nations Council for Namibia Report on Japan by !isYoko Kotazawa Pacific Asia Resources Center

The role played by industrial powers such as Great Britain, the United Sates, West Germany and France in maintaining arjtheid in South Africa and i4rolonging the illegal occupation of Namibia by the Pretoria government is well known. Transnational enterprises, through their capital investments, bank loans, trade and oil shipments are the main economic forces responsible for keeping the economey of the racist South African regime running.

Little is known, however, of Japan's role in supporting apartheid in Southern Africa. This is primarily because Japan is the only non-whifte ntation tn the industrializved world, and it is thought that non-whites 4,buld not knowingly support any regime which oppresses and discriminates against their ovn kind. Secpnd reason is that 4 United Nations sessions and in the meetings of its various opganizations, the Japanese government has in the past voted in favour of every resolution calling for the *ra dication of racism and colonialism in South Africa. Yet, even I was not fully aware of the reality and the extent of Japan's commitment to the white minority government in Pretoria and its apartheid system until I made a first-hand visit to South Africa in the summer of 1974. Japan is a latecomeV% to South Africa compared to the other industrial powers. Its busginess relations beg~an in the early 1960s and mainly took the form of trade, with Japan importing xa raw materials and exporting finished industrial goods. After 1970, when the South Africans launched their industiral development programme, Japanese inroads into the South African econmmy increased considerably. Japanese concerms made feries of massive long-term commitments to purchase mineral resources from Pretoria and at the same time agreed to supply Plants and heavy machinery in support of South African industrialization. Today, Japan buys natural resoutces such as iron ore, manganese, chrome, coal, uranium, sugaro and maize from South Africa and exports industrial goods such as machinery, vhhicles and textiles. Japan is now South Africa's third largest trading partner, with trade between the two contries running over US§2,000 million annualy, more than double -he trade volune for 1972, one year before the oil £ex crisis. This represents an alarming tr~nd when we compare Japan's balance of trace with the rest of Africa - 2 which since 1973 has been decreasing at a steady rate. Japan's exports to the Organization of African Unity(OAU) member states are now five times greater than its imports from these countries. These facts a re contrary to Japan's official position on racial discrimination and its repeated pledges of solidarity to the OAU nations. They tell us that Japanese business works closely with and strengthen the whitte minority regime in South Africa, therby sanctioning apartheid and Pretoria's illegal occupation a of Namibia, My commitment to the support of African national liberation movements began when I joined the office of *the secretariat of the Afro-Asian People's Solidarity Organization in Cairo, Egypt where I worked from 1959 to 1967. Later I worked as a freelance journalist on international issues while researchir ng the activities of Japan-&ased transational enterpr*ses in Asia, Africa, Middle East a" Latin America^ceania- In 1974 I made a one-month trip to the Republic of South Africa to study Japan's business activities on the people of both South Africa and Namibia, xk a who are subjected to the apartheid system and to the illegal oCcupation q the South African minority government. On my return from the &Af trip, and again in July 1980, I was called upon to testify on the background and extent of Japanese uranium purchase in Namibia before the United Nations Concil for Namibia. In my November 1974 testimony, I revealed illegal purchase of Namibi6n uranium from Rossing Uranium Mine Ltd. the largest uranium mine in Southern Africa and a subsid!r of Rio Tinto Zinc. I noted at that time that Japan's purchase of foreign uranium is based on long-term contracts siamd

on ha *behalf of Japanese electric power companies by seven ma.jor trading firms: Mitsubishi, Marubeni, Mitsui Sd.itomo , Nisno-Iwai, C. Itho and Tomen. All of these firms are leading financial contributors to the *ruling Liberal Democratic Pary.

In 1970, Japan's electric power companies, all of them privately

owned, began xuaa* pushing atomic Snergy as the only viable alternative power source to oil and organized a number of overseas missions to search

out sources of low-priced uranium. This sale year, the Kansai Electric Power Company based in Osaka, the second largest powe compaany in Japan, signed through its business agent, the Nitsubishi Corporation, an advance

purchase contract for 8,200 toms of uranium with Rossing Uranium of Namibiao The details of the contract are alfollows: Japan agreed to import 500 tons

in 1977 and 1978, 600 tons in 1979 and 1980 and 1,000 tons annualy between

1984 and 1986 (these details *re recorded in the minutes of the Foreign -3 -

Affairs Committee of the House of Representatibes on June 5, 1975). This particular contract was signed long before the Rossing mine was Wtually developed. I noted that this act constitutes a gtoss violation of the Council for

Naibia' s Decree No. L guarantee~ing the proteation of Nal.bian resources, that any purchase of Rossing products only encourages South Africa in its illegal occupation of Namibia and that such dealings mia indicate that the nations of #the world are willing to do business as usual with Pretoria. Based on this analysis, I urged the Council to encourage kka the Japanese government to end the purchase of all Nnmibian resources by Japanese companies and to publicly announce that it has taken this step to set an example for other counties. I further arjued 1) that all parties daiin dealing with Rossing should Withdraw their investments 2) that the Council should hold hearings on the question of foreign economic investmenn Namiia and inv"ite the major tradeSand inVestorSto testify before it (at the vey least, these interests should recieve a public letter from the Council clearly outling its position) and 3) that concerned nations such as Japan, the US and UK should be asked publicly by the 9muma Council to approach thaese companies on the issue and add their support to# the Council's position.

As a result of my 1974 testimony, the issV&tof Japan's illegal inpgorts of uranium from Namibia drew domestic and international attention. On

December 19, 1974, the Japanese Diet put the question of Japanese uranium purchases up to debate in the Budget Committee of Ithe House of Representatives during tha its 74th session. In the couse of *the discussion , the aa head of the Natural Resourses and Energy Agency* othe Ministry of International

Trade and Industry (:,"I) confirmed that an import contract for 8,200 tons of Namibian uranium had in fa~ct been signed by a Japanese company. Both the Minister of Foreign Affairs and the Prime Minister pledged thlat the isst would be handled thereafter in accordance with the U0N. resolution on Namibia. (See Annex A) Between May 12 and 14, 1975, a delegation from the Countil for Namibia

hE&&ed by Mr. Rupia Banda visited Japan. After many talks with government representatives and megbers of the business world, the delegation demandea

that Japalcancel its uranium contracts with Namibian companies in light of South Africa's continuing illegal presence in the territory. The dele gation also warned the Japanese that they would be asked for compensation when Namibia becoms independentshould h they continue to purchaftNamibian - 4 -

V, resotwes through South Africa. In response to the U.N. warning, 'Ir.Kono

Fumihiko, the Ihen chairman of the Africa Committee of the Japan Economic Federation and former president of a i1itsubishi Heavy Ifdustries, asserted that such imports were essential as Japan had no natural resources of its own

on which to fall back. Neither the government nor business ciwcles showed any intention of complying with the recommendation fA of the U.N. delegation.

(See Asahi Shimbung. may 22, 1975). As for the Japanese government's response& 4e, to the visit of the U.N. delegation, the .ITI madepublic of the text of the Decree No. 1 translated into Japanese in its officla bulletin on ;.ay 31, 1975, which kadxkq was by no means the pzaxgnkizmx promulgation of decrees, and administrative regulations. At the grass-roots level, however, the response to these allegations was immediate4, and a movement opposing Kansai Electric' s uranium imports quickly formed. In Osaka, where the company has its headqutaters, the group

was organized primarily by farmers4 and szmidld students and assisted by nuclear scientists, lawyeres, Christian activists and workers. It also

declared itself opposed * to the construction of atomicreactors planned by Kansai Electric Pufr Company. In , meetings and demonstrationU

damzm denouncing the Namibian contract were organized by anti-apartheid groups which joined tith organizations in Osaka Pn sending open letteors and petitions demanding immediate cancellation of 6the _zmmnKNX contract. No reply has yet been recieged, However, despite mounting pressures from Aomestic and iximxan inter national opinion, the company has shown no sign of reconsidering its position. The reasons for this intransgence may be attibuted to the following factors.

First, annulment of othe Rossing contract would affect aftx eight percent of Japan's total uranium imports for the ten-year period 1975-1985. Furthermore, as Kansai Electric is solely responsibe for *the contract, cancellation

would spell the e'nd of the company's atomic ener - development plan. S~cond, such a move would undoubtedly affect uranium contracts signed by

other power companies, since Japan is scheduled to iftmport close to 40 percent of its uranium from Rio Tinto Zinc subsidiaries iin South Africa, Canada, and Austtalia. - 5-

On November 28, 1975, the Nihon Kogyo Shimbun, an industrial newspaper in Tol;yo, carried a report from Namibia that ouranium shipments to Japan would start sometime in 1977. In early 1977, I learned that Rossing had indeed begun exporting and that Re-gxka Namibian branium had already arrived in Japan. On March 20, 1977, the Asahi Shimbun confirmed k si this, indicating that 4itsubishi had bpoujit the uranium in via a Rio 2w Tinto Sinc's subsidiary in Switzerland. The article is worth quoting at length.

The history of Japanese uranium deals began in 1970 when the ansai Electric Power Company concluded a contract for #the purchase of 3,200 tens i M of uranium oxide, i.e. yellowcake, from Rossing Uranium over a ten-year period begining in 1976. Rossing Uranium is a South African corporation which mines and refines Namibian uranium. It operates as a jointe-venture between the British multinational RTZ and 2 South African firm. RTZ's main sales agendy for uranium in Japan is the Mitsubishi Corporation, with iarubeni playing a lesser role. '-.r Ito, head of othe Nuclear Energy RisiDivision of !iitsubishi, stated that the contract (with Ross-hing) is to remain dormant untl the sittation in Namibia is resolved with justice. However, some times in 1971 or therabouts, WTZ set up a Swiss corporation zo act

a Ns a sales subsidiary through which the Japanese power companies are (now) purchasing uranium. They do not purchase uranium oxide paifier directly but ranter U4, a compound of aura-nium and M flourine which Ws already been processed into a gas. At thiis sa stage, the uranium oxide produced in various ccntries is completely mixed together so that all traces of die illegal Naiibian ore is included in the UFL sold by the Swiss corporation in question eam-vzIS very high. Kitazawa Yoko refers to Switzerland as taking advantage 9f its not being a member of the U.N. to allow uranium transactions through the Swiss company. She believes that Japan should not follow European firms in "dirtying its Hands" with wespect to its dealing with South Africa and Namibia. The company in question is RTZ MiximRa I!ineral Services, LTD. In thie summer of 1977 while attending a nwmrmeeting on transnational corporations held by the WJorld Council of Churcheo in Geneva, I contacted various research groups in Swi-terland. i was told that such "paper sublideries" were usually located in small villages at some distance from the main ciuies. thie help of qthe ;thile in London, I located the adreess of the company with - 6-

Counter-Information Centre and ma also obtained the aames of its board of directors. The activities of the RTZ M.ineral Services are offically defined as providing services related to the extraction and sales of natural and refined minebals and executing all business pertaining to trade activities Including akkus±ix wzsxaiin-transit shippingi The company can also parti cipate in enterprises with similar aigm. At my request, one of the Swiss research grcups visited ZI9g, a village abput 15 kilometers from Zurich where RTZ Nineral Services has its head quarters. The adress was discovered to consist merely of ane room winich was rented by other firms as well. There were no RTZ employees, despite the company name-plate which hung outside. The company's telephone number in Zurich, when rung by a member of the group, turned out to be a lawyer's

office which threatened legal action " if you investigate RTZ". It had

become clear that RTZ was nota simply a paper company bjt a shost company. This means that transactions with Mitsubishi are being handled either through Mitsutbishi's head office in London or directly with Rossin in Namibia.

Uranium from Namibia, then, can be easily mixed with uranium from Canada, Austialia, South Africa or elsewhere. Since Japan imports the substance from these coun'"tr4es as well, it is virtually impossible to track down Namibian ore$. Furthermore, 6he ores are sent directly to the US

for enrichmentl as Japan is entirely dependent on the US in this area. The uranium is then shipped to Japan in the form of fuel rods for #use in Japan's nuclear reactors. Moreover, since Switzerland is not a member of #the UN,

illegal trade in Namibian uranium is able to proceed unfetted by kjm go~ernment interference. Since no laws, decrees nor administrative regulations are promulgated in Japan , the Japanese government couidive the firms importers and utilities) an administrative guidance not to deal with Namibian uranium. The kossing RTZ-iNitsubishi connectioin is a typical example of the true nature of #the transnational enterpriseg which read$ily ignore, for their own profit-seeking, the ft sufferings of the victims of colonialism and racial discrimination. Av-Azx A.

The 74th Session of the House of Representatives Minutes of the Budget Committee on December 19, 1974

Chairman: Seijuro Arafune Cabinet members Prime Minister, Minister of State, Minister of Foreign Affairs, etc.

Question: Haruo Okada, deputy, Socialist party This is probably a matter related to the Ministry of International Trade and Industry, but the Atomic Energy Committee may answer if possible. According to the Atomic Power Generation Programme decided by the Government of Japan, Japan will be generating 60 million kilowatts of atomic energy in 1985. It is claimed that 80 percent of uranium ore necessary for the Programme has already been contracted for. Japanese electric power companies have sealed long and short term contracts with uranium producers overseas. I want you to show how much of the uranium ore we are going to buy is coming from South Africa-- particularly uranium ore produced in Namibia ?

Answer: Minoru Masuda, chief of Resources and Energy Agency of the MITI. It is electric power companies that are securing contracts on uranium ore imports.. Since it is only when import license appli cations are filed that we come to know about these contracts, we have not yet formally been informed of the import plans in question. However, as far as we know, 20,000 tons of uranium has been covered by 10-year import contracts with South Africa. Concerning imports from South West Africa, we are told that 8,200 tons are going to be imported.

Question: Haruo Okada Here is a magazine "Kozan" in which Shinya Aoki, an official in the Atomic Industrial Office of the Resource and Energy Agency, clearly writes that 8,200 tons of uranium ore will be imported from Namibia. You used the word South West Africa, but retract the word because the UN decided to use the word Nambia . But the import contracts involving Namibia should be regarded as null and void. If you cling to these contracts, you may be compelled to pay penalties, because these contracts constitute violation of the UN resolution concerning Namibia. Does the Energy Agency know that such contracts are against the UN resolution ? Did you signed the contracts knowing that it runs counter to the UN resolution ? Answer: Minoru Masuda I will call it Namibia. I correct myself... I understand that the UN decided to prohibit direct assistance and investment in Namibia. The import of uranium ore, however, belongs in the category of trade and not assistance or investment. So we understand that the action does not violate the UN resolution.

Question: Haruo Okada Okay. Come close and sit down. Look. Here is the UN resolution which states clearly that no person or entity.... may search for, prospect for, explore for, take, extract, mine, process, refine, use, sell, export, or distribute any natural resource ..... Read item 5. It states clearly that any vehicle, ship or other means of transporta tion .... shall also be subject to seizure and forfeiture by or on behalf of the UN Council for Namibia.... After you read all this, can you still say that your action does not violate the resolution ?

Answer: Minoru Masuda This is the first time I have read the resolution. I admit that the whole question should be examined on the basis of that resolution. What I want to point out is that the import has not yet been made. It will be at the stage where applications for import licenses are presented that MITI can handle it as a formal matter.

Question: Haruo Okada So you claimed that Japan does not violate the resolution while not knowing what it is. Then are you prepared to cancel what you have said ?

Answer: Minoru Masuda My knowledge indeed was insufficient. And so I cancel what I have said.

Question : Haruo Okada Who is here from the UN bureau ? Where is he ? Your Bureau must have known the resolution. What the Energy Agency chief has said, is shapeless. What is the official view of the Ministry of Forpign Affairs ? Answer: Fumihiko Suzuki, chief of the UN Bureau of the Ministry of Foreign Affairs I will answer. The resolution passed by the Council for Namibia has no legal binding power as does a resolution by the Security Council.

Question: Haruo Okada Is this a state.ent from the UN Bureau ? Look. Here is a document oublished by the Foreign Office on tne basis cf the UN resolution on the founding of the Council for Namibia. The outline of major international organizations ..... this is :he document detailing the functions and rights of the Council. Item (b) resolution 2248 states.... to promulgate such laws, decrees and administrative regulations as as necessary for the administration of the Territory until.... If you say that the decision does not bind as does the Security Council decision, then what is the Council for ? The UN Bureau chief has said something very grave and serious. You can cancel what you have said now. If you don't want to, that will be all right. This will flare up into a serious international issue.

Answer: Fumihiko Suzuki The Council's decision has no such binding power as the Security Council's one. This is my understanding.

Question: Haruo Okada What do you mean exactly ?

Chairman: Seijuro Arafune More clearly Mr. Suzuki. So that all can understand well.

Answer : Fumihiko Suzuki The Council for Namibia's decision has no such binding power as the Security Council's one.

Question: Haruo Okada I cannot understand. Nobody is saying that the Council for Namibia's resolution has the same legal binding power as the Security Council's. But is it not true that the Council for Namibia's reso lution has legal power ? Do you want to say that the resolution has no legal power ? If you think so say so clearly. If this what you want to say ..... since the resolution has no legal power, Japan can do anything in violation of it ? Foreign Minister. I don't want to talk with the Bureau chief.

Chairman: Seijuro Arafune Mr. Suzuki, would you consult on this matter with the Foreign Minister ?

Answer: Kiichi Miyazawa, Minister of Foreign Affairs What the Bureau chief has said is not altogether correct, in my opinion. What he wanted to say is that the Council for Namibia's resolution has no coercive power. Binding power is mot the same as coercive power. So we think that we are bound by the resolution.

Qeestion: Haruo Okada if we are bound by the resolution, it follows that the said contracts, though they are civilian contracts, should be disapproved. Isn't this the logical consequence? Answer: Kiichi Miyazawa Concerning such contracts concluded after the said resolution came to have binding power, we think that the taking effect of such contracts should be regarded as unfavourable as long as we follow the principle of cooperating with the UN.

Question: Haruo Okada Unfavourable ? No. It is illegal.

Answer: Kiichi Miyazawa Polit-ically the Government's basic policy is cooperation with the UN. So, private contracts should be formulated in accordance with this policy of the Government.

Question : Haruo Okada Prime Minimster Miki. What is the attitude of your cabinet on this matter ? Mr. Prime Minister, answer clearly.

Answer, Takeo Miki, Prime Minister Aside from particular circumstances surrounding particular cases, the policy of the Government is that. this matter should from now on be dealt with in accordance with the UN resolutions. Haruo Okada: Okay. I understand.