Britain's decline from world pre-eminence has had its effects on its traditional dominance in trade and investment in South Africa. But, argues John Blair, this does not mean that Britain does not still play a major part in propping up the apartheid regime.
Historically Britain was the most important imperial power in the entire southern African region. It became effectively dominant in 1806 with the takeover of the strategically-located Cape colony from the Dutch East India Company. Natal was acquired from Boer colonists in 1842. When the vast mineral wealth of the region was uncovered later in the nineteenth century, British companies and individuals were in the forefront of its exploration. Estimates suggest that at least 75 per cent of the capital involved in opening the diamond and gold deposits was British.
The 2nd Boer War (1899-1902) was fought successfully with the aim of securing British control of the gold-rich Witwatersrand. Meantime present-day Zimbabwe had been colonised in 1893 by Cecil Rhodes' British South Africa Company and the rulers of the three modern states of Swaziland, Lesotho and Botswana coerced into accepting British 'protectorate' status. At the beginning of the twentieth century Northern Rhodesia (Zambia) and Nyasaland (Malawi) were swiftly conquered. In 1910 the all-white government of the Union of South Africa, formed of the Cape, Natal, Orange Free State and Transvaal, was granted 'dominion', ie. in all essentials self-governing, status within the British empire. Finally the Versailles Peace Congress of 1919 handed mandatory control over German South West Africa (Namibia) to South Africa.
The adjoining territories of Angola and Mozambique meanwhile were under the control of Britain's 'oldest ally' Portugal: a state whose own economy was largely controlled by Britain.
The exploitation of the region's vast mineral wealth depended in the first place on the importation of large amounts of capital from Britain. In addition the late 19th and early 20th centuries saw the emigration of tens of thousands of British workers. The first of these were speculators, staking their claims on the diamond and later gold fields. But as these rapidly came to be controlled by a series of powerful mining houses, the prospectors gave way to skilled workers. Bringing with them a tradition of trade union organisation, such workers frequently featured in the leadership of militant struggles in South Africa. Typical was the engineer, Bill Andrews, later chairman of the Communist Party of South Africa who was a leader of the white miners' strike of 1922 during which more than 60 were killed by government forces.
The 1922 strike in many ways prefigured the whole subsequent evolution of white labour in South Africa. It was called to protest a reduction in the proportion of white to black labour in the mines. Its racist evolution was succinctly summarised in a prominently displayed banner which read 'Workers of the World Unite for a White South Africa'. From 1922 onwards white labour, increasingly including newly-proletarianised Afrikaaners (descendants of the earlier Dutch settlers) and new waves of immigrants from Eastern Europe, stood in perennial alliance with its exploiters' governments and provided one of the most durable examples in the world of the phenomenon of labour aristocracy.
The changing place of British capital
In financing and organising the development of mines, railways, modern farming and manufacture, British capital played a central role in the development of the modern South African economy; at the time of the Second World War more than half of the country's trade was still done directly with Britain. Since then however Britain's economic importance has been progressively and substantially reduced. Two factors have been critical here.
The first was growth of a specifically South African state capitalism. Since the foundation of the Iron and Steel Corporation (ISCOR) in 1928 and the Electricity Supply Corporation (ESCOM) in 1932, the state has been a key agent of capital accumulation. At first political power rested on an alliance of white workers and mainly British-controlled capital. But the numerical preponderance of Afrikaaners among the enfranchised whites and the use of the state to facilitate the emergence of local capitalists from their number provided the basis for the emergence of the Nationalists in 1948 as the single controlling white party. Since then the process of building up domestic in relation to foreign capital has continued apace leading to the emergence of giant companies like those of the Rupert tobacco empire and the Federale Mynbou in mining.
The second factor has been the relative weakening of British imperialism internationally. Britain's position as leading trader with and investor in South Africa has been challenged as a result of its own continuing demotion in the international league table of imperialist nations. The pace of change varies considerably, however, from sector to sector. Broadly speaking it is trade that has been most dramatically affected; here Britain has clearly lost its prime position. The balance of investment is also changing in favour of other capitalist countries but Britain still retains a pre-eminent position in the breadth and extent of its implantation while the challenge to its dominance in the area of banking capital is even slower to develop.
Imports from UK as % of South African imports by value
1957: 32.6 | 1964: 28.7 | 1968: 23.9 | 1970: 22.2 | 1973: 19.0 | 1976: 17.5 | 1977: 16.4 | 1980: 12.1
From being the supplier of nearly one third of South Africa's imports at the beginning of the sixties, the UK is now reduced to a one-eighth share. In 1980 it was behind the USA and West Germany and not far ahead of Japan, with France also coming up behind. In the early sixties more than 4 per cent of Britain's exports went to South Africa. The figure now is 2.02 per cent. Such figures are a firm indication that an area that had once lay firmly in the British imperial orbit is now slipping from its grasp.
Movement in investment patterns is much more difficult to assess: it is however almost certainly much slower to change. It is in the manufacturing sector that foreign holdings are most apparent with practically every prominent multi-national represented. Further scrutiny however reveals that in many cases the products of these big companies are being manufactured under local licence. An examination of the top 100 South African industrial companies shows foreign shareholdings in 49. Of these 36 are British and they include 13 in which a majority shareholding is held in the UK. (see Table 2)
Table 2: Registered Direct Holdings by British companies or individuals in top 100 South African Industrials 1977. Columns: Ranking (top 100) — Name — Holding % — Registered Foreign Holder.
1 — Lonrho — 53 — Lonrho UK & Mr Tiny Rowland
2 — South African Breweries — 13.6 — London share register
5 — Barlow Rand — 5.0 — London share register
7 — African Explosives and Chemical Industries — 49.5 — Imperial Chemical Industries UK (ICI)
8 — Huletts — 3.5 — London share register
10 — Safmarine — 36.0 — British and Commonwealth Shipping UK
11 — OK Bazaars — 4.1 — London share register
12 — Premier Milling — 52.3 — Associated British Foods UK
14 — Tiger Oats — 4.7 — London share register
15 — Dorman Long — 19.8 — British Steel UK, Venderbijl (indirect holding)
19 — Tongaat — 0.6 — M.G. Maskell, London
21 — Sentrachem — 16.2 — British Petroleum Chemicals (indirect)
24 — Blue Circle — 76.5 — Associated Portland Cement UK
26 — Pretoria Portland Cement — 8.2 — London share register
28 — Steward and Lloyds — 22.9 — British Steel UK (direct); 17.9 British Steel UK (indirect)
[?] — African Oxygen — 58.3 — British Oxygen UK
40 — Metal Box — 60.3 — Metal Box UK
41 — Federale Kunsmis — 1.8 — Commonwealth Development Finance UK
45 — Swazi Sugar — 99.9 — Anglo Ceylon & General Estate UK (Lonrho)
46 — Reed Nampak — 51.8 — Reed International UK
49 — Mitchell Cotts — 80.0 — Mitchell Cotts UK
51 — Union Steel — 66 — [illegible] Forrester London
[?] — Abercom — 11.0 — London share register
60 — Hubert Davies — 48.7 — Associated Portland Cement UK
6[?] — Standard and Chase — [nominees] Channel Islands
65 — Utico — 72.7 — British American Tobacco Industries UK
66 — Woolworths — 3.7 — London share register
67 — Dunlop — 70.0 — Dunlop International UK
77 — Primrose Industrial — 12.2 — London share register
[8?] — Beesers — 50.0 — Fraser family, UK
91 — Tollgate Holdings — 27 — Pearl Assurance Company UK
93 — African Cable — 58.0 — Combine of cable manufacturers UK
95 — Marshall Industrials — 1.5 — Pearl Insurance Company UK
9[6] — Adcock Chemists — 1.9 — Mrs H. Duchen, London UK
100 — Cadbury Schweppes — 66.0 — Cadbury Schweppes UK
These bare statistics clearly establish the key historical role of British capital in South Africa. But they tend to underestimate the importance of many minority shareholdings and ignore the other means by which foreign multinationals gain influence in and profit from cheap black labour in South Africa.
On the first point it is important to examine more closely the role of many companies that hold only minority shareholdings. The seventh largest industrial company in South Africa is African Explosives and Chemical Industries (AECI) in which the British Imperial Chemical Industries has a 49.5 per cent holding. Even a cursory glance at its local products reveal that AECI has access to the full range of research and development undertaken by its parent without which its sophisticated products for mining and the military would be at the very least considerably more expensive and difficult to manufacture.
Similar considerations must certainly surround the holdings of the nationalised British Steel Corporation (BSC) in Dorman Longs and Stewart and Lloyds (15th and 28th respectively). Such minority shareholding is now a common feature of the operations of multinational companies world wide. In the South African case it particularly enables firms like BSC whose public ownership does give an element of accountability, to disclaim responsibility for the practices of their local associates.
For South Africa, transfer of technology of the kind described above is now the most important feature of its links with the multinationals. Calculations made by one author showed for instance that between 1967 and 1971 nominal UK investment increased by 398.9 million Rand. But of this 323.9m Rand or 81 per cent was accounted for by unremitted profits. Some 17 per cent came from the reinvestment of debts incurred to parent companies so that the net new acquisition of shares and loan capital represented only 2 per cent of this increase.(1) Thus at the industrial level it is now technology and not money that is the most important input from outside.
In this respect it is above all in the production of military and military-related equipment that British firms continue to provide an essential lifeline. For example riot control gas is manufactured by AECI, communications equipment by Plessey and GEC Marconi, computers by ICL, Land Rovers by British Leyland, warships are designed by Yarrow African Maritime Consultancy.
Banking
The other area in which British imperialism, despite its decreased overall importance as trader and investor, continues to provide essential backing for the apartheid regime is the provision of finance capital. Far and away the largest two banks in South Africa are the British-owned Barclays and Standard. For the former 1 in 5 of its branches are located in the Republic and £53 million gross or nearly one fifth of group profit was made there in 1980. Between them, they control more than one half of total banking deposits.
More crucial to the survival of the South African economy as presently structured and developing is the provision of loans to government and government-sponsored enterprises. Vast sums are currently sought at home and abroad to help reshape the economy to be able to withstand possible international sanctions by reducing dependence on imported goods and technology and to maintain its present growth rate. Over the nine years 1972-80 South Africa borrowed a total of nearly 7 billion US dollars from overseas banks via 186 separate loans. Of this, large parts were managed from London by merchant banks like Hill Samuel and Hambros or by Barclays. A typical example was the 250 million dollar loan organised by Barclays in 1980 in collaboration with the American banking group, Citicorp, Dresdner Bank, and Union Bank of Switzerland. A very specific project for which Barclays and others have been centrally involved in overseas fund raising is the South African Oil Fund. This hopes to offset the effects of the dependence on foreign oil that is often described as South Africa's achilles heel. Despite persistent searches over many years no significant deposits have been found in an area that is rich in virtually every other known mineral. The government is making accelerated efforts via the SASOL oil from coal project and the storing of massive quantities — now up to two years' supply — in disused mine workings, to insure against the worst.
That there is currently no shortage of oil in South Africa is due crucially to two British companies, Shell and BP, who currently deliver more than one-third of its supplies. The experience of Zimbabwe where both these successfully avoided internationally agreed trade sanctions for fourteen years shows that South Africa will be well placed to resist the effects of any possible future embargo and that British companies would be in the forefront of their subversion.
British involvement in South Africa — Namibian uranium
One of the best exposed of Britain's links with South Africa concerns the exploitation of the uranium of the Rossing mine in Namibia by a consortium that includes the Rio Tinto Zinc Corporation. (Lord Carrington, currently British Foreign Secretary has a big holding in RTZ and was on the board of directors until his appointment to government office in 1979). This provides another typical example of the utilisation by South Africa of the technical and marketing resources of a foreign company while themselves maintaining ultimate control over the product. RTZ has only a minority shareholding in the Rossing Uranium Company. A majority of voting rights are held by the South African Industrial Development Corporation and the big mining house Federale Mynbou. The mine falls under the provisions of the South African Atomic Energy Act. This makes the export of uranium subject to official permission. A major part of Rossing's development costs have been borne by the government. Its importance will be to provide the regime with new sources of uranium for energy and weaponry.
RTZ don't do badly out of the deal either. In 1980 the Rossing mine contributed £21 million out of the record £155 million profit. In 1979 the mine had produced £12.6m. The British government has been involved in the Rossing development since its inception. In 1967 the then Labour government accepted a contract that guaranteed the United Kingdom Atomic Energy Authority delivery of 7,500 tons of uranium oxide between 1976 and 1982. In 1973 Tony Benn wrote a letter to the Guardian newspaper expressing the view that a future Labour government should cancel the contract as part of their response to South Africa's illegal occupation of Namibia. As Minister of Energy in the 1974 Labour government Benn did however accept the continuation of the deal. Within the Labour Party the question was raised time and again by the executive and at conference. Typical of the leadership response was that of David Ennals, then Minister of State at the Foreign Office in reply to a letter from Alex Kitson of the Transport and General Workers' Union in 1975: 'If Namibia achieves independence in the near future ... then the economic value of the Rossing mine and of the Atomic Energy Authority — Rio Tinto Zinc will be of enormous importance to the new nation. Given the possibility of rapid constitutional change in Namibia, it is our view that on balance the AEA-RTZ contract is in the interests of both Namibia and of Britain.'
Six years later after constant South African prevarication encouraged by the manoeuvres of the 'western contact group' nothing has changed for Namibia. Meantime Britain (or at least British Nuclear Fuels and RTZ) has certainly benefited and the other main recipient of the riches of Namibia has been South Africa. That Ennals' view was not shared by SWAPO was made clear in its categorical reply in 1976 that demanded the immediate termination of the contract and emphasised that foreign companies such as RTZ were taking advantage of the immediate political situation to make 'a criminal exploitation of irreplaceable natural resources which rightly belong to the people of Namibia'.
Practical activity to frustrate the implementation of the Rossing uranium contract has been constantly sought by various groups in Britain. These have been led by the Preston Trades Council (BNF's processing plant to which the uranium is delivered is near Preston) and the Anti Apartheid Coordinating Committee of the North West Trades Union Congress. A specific Campaign Against the Namibian Uranium Contract (CANUC) exists to co-ordinate research and publicity on the theme.
Unfortunately RTZ and BNF have so far collaborated successfully to smuggle in the products of Rossing. These are transported by air to France and then by truck across the Channel. Despite numerous efforts no progress has been made in attempts to stop this trade. Chiefly culpable here is Alex Kitson's Transport and General Workers' Union who organise British dockers and truck drivers. The battle to stop the Namibian contract and to ensure a clear Labour Party commitment to its abolition remains a central priority of Anti-Apartheid activists in Britain.
Rowntrees and union busting
Rowntree Mackintosh are Britain's biggest manufacturers of confectionery and biscuits. They have subsidiaries around the world. Their South African plant, Wilson Rowntree in East London, employs up to two thousand people and has recently been brought into 100 per cent ownership by the parent group. Since 1940 Rowntree SA recognised the Sweet Workers' Union as representative of its workforce. This was led by whites, representative only of the non-African minority of workers and ultra-conservative. Management claimed earlier this year that in the entire 40 years of its existence as the only workers' organisation in the plant there had been not a single dispute!
In the middle of last year a new union became active in the area: the South African Allied Workers' Union (SAAWU). It began to organise in the plant and rapidly gained a majority of the Africans who in turn make up the overwhelming majority of the workforce. In October it received begrudging recognition from management. Over the next six months at least 30 stoppages took place around a variety of issues and in March this year management determined to act decisively against the SAAWU. Three workers were dismissed for refusing to make repairs to a machine which they were operating. Six months previously they had all received official warnings for doing precisely that when it had broken down. They therefore insisted on waiting for skilled engineers to do the job. Their dismissal was challenged by protest walk-outs by wide sections of the workforce. Management responded by decreeing instant dismissal. In the end more than 800 workers were sacked.
The unemployment rate of more than 20 per cent in and around East London made it relatively easy for Rowntrees to recruit scab labour to replace the sacked workers. Workers were invited to apply for reinstatement as individuals but management weeding out of 'troublemakers' ensured that a net total of 498 were effectively dismissed. Rowntrees suffered considerable disruption of production in the short term because of the need to retrain a completely new work force for many sections. This disruption was however less than that caused and continuing to be caused to their sales in South Africa. Utilising the slogan 'Spit out that gum, Chum!' and widespread leafletting and postering via community organisations in the black areas, the SAAWU and its supporters are running a consumer boycott which aims at the same success as was achieved by the same means last year by the strikers at the Fattis and Monis meat processing plant in the Cape.
In this case the solidarity of British unions has been unfortunately very weak. The General and Municipal Workers' Union (GMWU) which has a relatively right wing leadership, organises the majority of production workers in Rowntrees' main British plant in York. It has sent messages of support from its national office to the SAAWU but has done absolutely nothing to propagandise among its members locally about the significance of this struggle for them. Meantime management has responded to campaigning initiated by the local Anti-Apartheid group with the backing of the Trades Council and Labour Party by peddling the lie in the factory and local press that the SAAWU has organised intimidation and violence against scabs.
Campaigning in Rowntrees in support of their South African workers is considerably more difficult than it is where close links exist as with the Namibian uranium that arrives in Britain from Rossing. Effective action would involve a comprehensive embargo on all contact with the South African plant — in particular of a financial and technical kind. To do this the cooperation of all unions would be essential and it is potentially important that the one local branch to have discussed and passed a clear motion on this question is the Technical and Supervisory Staffs (TASS). But it is not possible to envisage success for such an operation until the mass of workers in Rowntrees here are won to a political understanding of the need for such solidarity. Continued inaction by the leadership of the main union in the York plant will make this a much more difficult task.
British Leyland backs apartheid
British Leyland is a state-owned car and truck company that has its biggest overseas operation in South Africa. Although this operation, like its British counterpart, has suffered a precipitous decline in the immediate past (only 1.6 per cent of the car market compared to more than five per cent five years ago) the company is currently engaged in consolidating its presence there. This involves selling its Blackheath commercial vehicle plant to the Anglo-American group for £8.5 million and transferring all production to an expanded plant at Elsies River. There the workforce will be doubled to 4,000 with planned production of 45,000 vehicles per annum.
BL has a long history of dispute with the new wave of independent black trades unions. The Metal and Allied Workers' Union (MAWU) began recruitment in 1973 at its Mobeni plant. A strike demanding recognition in 1974 was smashed by sacking all the participants and re-employing them individually and selectively to eliminate 'trouble-makers'. From these earliest days BL also consistently used the state Security Branch to deal with union organisers, arresting and threatening them, confiscating literature etc. In 1976 three MAWU organisers were served with five year banning orders.
The nationalisation of BL by the British Labour government in 1976 — a measure taken to stave off its collapse — made no difference to its South African operations. The latest example of Leyland SA's long established management style came in May this year when all 1900 workers at Elsies River struck over a pay dispute. Once again all were sacked and selective re-recruitment undertaken. The opportunity was taken to increase the percentage of women workers from 10 per cent to 30 per cent. This was not however an act of positive discrimination since management claimed it would ensure greater stability of the labour force in the future.
Unions in British Leyland in Britain have been a good deal more active than those in Rowntrees in trying to build support for their African fellow workers. In 1977 there was at least one half day of token action in the Coventry Rover plant in their support. Unfortunately activity has tended to fall short during the past few years while the British company has been shedding nearly one third of its own labour force. It is precisely at times such as this that the need to ensure unfettered activity of free trade unions in all sections of such a multinational can in fact most easily be understood by workers threatened by redundancy and closures that are often accompanied by the transfer of work to cheap labour and unorganised plant.
Britain and the 'Code of Conduct'
The starvation wages paid to black workers in South Africa were the subject of a good deal of press publicity in Britain in the early 1970s. That this happened was no accident: it coincided with the new upsurge of black working class activity in South Africa from 1973 onwards. The upshot was the production in 1974 of a government ('White Paper') laying out a proposed 'Code of Practice' for British firms in South Africa. The main emphasis was on the increase of wages to levels of 50 per cent above the official Poverty Datum Line and firms were 'invited' to make reports to government about the extent to which their subsidiaries had implemented such principles. The increased presence of other European companies in South Africa was reflected in the production in 1977 of an EC (European Community) Code of Conduct that was essentially a revised version of the British one. What lies behind the 'Code of Conduct' approach was honestly expressed by a German academic at a recent conference which discussed the experience of the EC code: 'We should like to know which inputs can induce this machinery to produce some degree of change other than spectacular violence or oil boycotts or the like.'
In other words, the profitability of our investments in South Africa is threatened. Change is badly needed to ensure its maintenance. The code of conduct will help to ensure this happens with the minimum of disruption and offers the best chance of maintaining profitable exploitation of black labour.
In fact the formulae of the various codes of conduct are stuck to just so long as they suit employers. Those who don't comply certainly receive protection from the British government. A recent report in the Observer gave details of a confidential report prepared by a former British Labour attache in Pretoria. It named 21 British companies paying African workers below the PDL (ie. 50 per cent below the agreed 'Code of Conduct' level). This was 3 more than in the last published report of 1979. This time however the information was not to appear in the published report. According to the Trade Secretary in the Tory government, John Biffen, publication 'would not be productive'.
Socialists should be clear about the cosmetic function of 'codes of conduct'. Their very existence can be a source of valuable information. They cannot however be relied on to produce any results of the kind demanded by South African labour. Our demands must be that the trades union movement, working wherever possible in co-ordination with its brothers and sisters in South Africa, produce its own series of demands on management for the defence and spectacular betterment of black workers' living standards and conditions. In particular that it fight for defence of the basic democratic right to organise in the South African plants.
Nor should such demands be seen as contradictory to our long time attempts to isolate the apartheid regime through a policy of overall opposition to any investment in or trade with South Africa. Propaganda in support of the struggles of black workers against British firms there, especially when it is angled towards employees of the same firms here, can be one of the most striking and effective ways through which to win long term support for the policy of an overall boycott.
Britain and South Africa: the diplomatic game
Just as the economic importance of Great Britain has undergone considerable change as her capitalist competitors catch up with her at the level of trade and increasingly investment, so Britain's position as the sole maker and executor of Western policy for this region has come under increasing pressure. At one time United Nations ritual resolutions against apartheid and calls for boycott action were opposed and vetoed by Britain alone. On the last such occasion two months ago the United States stood as the sole opponent of a resolution on Namibia while Britain and France felt able to abstain.
The increased co-ordination of Western policy in southern Africa is reflected in the existence of the so-called 'contact group' of five — Britain, Canada, USA, France and Germany — charged with seeking a 'settlement' of the Namibian question. This development in turn reflects the increased collective anxiety of the nations of the Western alliance about the prospects of revolutionary upheaval in southern Africa. They know that every day that South Africa is ruled by the white racists lessens the possibility of preventing their overthrow by a mass revolutionary struggle of the black oppressed. They know too that this struggle will be led by a black working class that grows incessantly larger and stronger and that the overthrow of the apartheid regime will pose the question of a transition to socialism in this mineral rich region as an immediate and living question. What remains certain however is that, whatever the increased co-ordination by the West, at the end of the day the British government is most likely to be the final executor of any deals that are cooked up. Similarly it appears certain that a British government minister will have responsibility for yet more attempts to clinch a 'peaceful transition to majority rule' in Namibia and that it will be British diplomats, academics etc. who will be charged with the ten times more difficult task of persuading the Nationalist regime in Pretoria to come clean on its promises of change.
Such a 'historic role' for British imperialism places an equally gigantic task on the shoulders of the British working class movement which must become the best defenders of the coming South African revolution.
Approximate breakdown of foreign companies having investments in South Africa (from Apartheid and Business 1980): Britain 1,200; West Germany 350; USA 340; France 50; Japan 50; Netherlands 50; Australia 35; Belgium 20; Italy 20; Switzerland 12; Sweden 10; Spain 6; Canada 5.
(1) John Suckling: Study Paper No 5 in Project on External Investment in South Africa and Namibia, Africa Publications Trust.