PERSIAN OIL

Evening Post, Volume CXV, Issue 73, 28 March 1933, Page 3

PERSIAN OIL

CONCESSION TROUBLE

THE COMPANY'S CASE

STATEMENT TO LEAGUE

(From "The Post's" Representative.) LONDON, February 3.

Sir John Simon, the Secretary of State for Foreign Affairs, put the case for the British Government in regard to the Anglo-Persian, oil dispute at a meeting of the League Council. It wa3 brilliantly expounded. He showed in a few minutes that the company, far from having failed to fulfil its obligations under the concession, which still had thirty years to run, had faithfully carried out all its undertakings. The Persian memorandum, he said, stated that the company over a number of years had failed to pay the fixed annual sum of 2000 tomeu (£333) due under Article 4 eft the D'Arcy concession; that in 1909 the arrears amounted to 16,000 tomen (£2664); and that the company refused either payment or arbitration.

The real facts were that the matter was amicably settled by the payment by tho company on June 9, 1911, of £.2000.in respect of the Persian Government's claim to date, and that the sum of 2000 tomen had been paid by the company every year since.

The Persian memorandum stated that no payment on account of the 16 per cent. loyalty due to the Persian Government had been paid /by the company up to 1919. In actual fact that company paid tho sum of £325,000 during the period from. 1914 to 1919. COMPANY'S ACTIVITIES. The Persian memorandum alleged that the company had deliberately limited the development of the oil resources ofJ Persia, and that during thirty years had confined the extraction of oil to an area a little more than' one square mile. "This," said Sir John, "was.an extraordinary understatement. The area of the company's oilfields in Persia, over the whole of which oil was now being extracted, amounts to 150 square miles. Further, the company had technically examined over 150,000 square miles, and, geologically, traversed another 250,000. It had drilled in another 23 areas, and had carried out 380. geological surveys, spending £3,500,000 on such work outside the main oilfields." Regarding tho allegation that the company had failed to ..observe the stipulations of tho concession concerning the employment of workmen who were natives of Persia, Sir John said that skilled labour employed by the company in Persia included eighteen categories of employment. The number of non-Persian employees had been steadily diminished, and 90 'per cent, of the company's non-European employees in Persia are now Persian subjects. To fit Persian subjects for employment the company has spent over £100,000 on education in recent years. It has built schools in the province of Khurzistan, where none existed. Further,- Sir John continued, the Persian Government has benefited directly and indirectly by the expenditure in Persia by the company of not less than £22,000,000. On medical services alone in South Persia the company has paid over £550,000 since 1924, and tens of thousands of non-employees have received free medical treatment every year in addition to employees. PERSIAN MEMORANDUM. Sir John Simon quoted from the Persian memorandum the words, "On August 7, 1931, to the Government's great surprise and disappointment,' Sir John Cadman categorically stated in a letter to the Minister at Court that the revision of the concession eould no longer be contemplated." . This, said Sir John, was while negotiations were still in progress on the Minister at Court's letter of April 1, 1931, to Sir John Cadman, putting forward a new claim for a payment of £2,700,000. Such ~a payment would have meant that the company was deprived of nearly the whole of its profits from all sources, and left no return for the 52,000 shareholders and nothing for reserves. This letter from the Minister at Court which Sir John Cadman received made further negotiations impossible. Article 17 of the concession provided for arbitration, but instead of this the Persian Government purported to caneel the concession by unilateral action, thereby depriving the company of the right of appeal to the arbitration clause. On November 27, 1932, tho Persian Government announced the cancellation of the concession, and on December 1 the decision of the Government was confirmed by the Persian Government. If such a decision was valid in Persia, it was not possible for any Persian Court to give a remedy against it. PROPERTY UNPROTECTED. Sir John Simon complained that there was no protection guaranteed for the company's property from December 3 to December 12, .in spite of the fact that it was situated amongst,turbulent tribesmen. The British Government had appealed to the League, confident in the justice it would receive.

After a meeting lasting over four hours the Council of the League adjourned.

"Sir John Simon secured a triumph," | writes the Geneva correspondent of the "Daily Telegraph. " "Ho spoke for one hour and a quarter. Only occasionally did he raise his voice, and that to emphasise a controversial point. "Usually meetings of the Council are a succession of comings and goings, with people moving about all over the room, and a general atmosphere- either of lack of interest or boredom. But this afternoon, whilst Sir John was speaking, all were hushed.

"There was a dramatic moment when the Secretary of State for Foreign Affairs hesitated for a second or two and then pronounced the vital words: 'If it becomes necessary, his Majesty's Government wili havp to ask the Council whether an international wrong has been committed, and that accordingly the concession must be restored.' "