THE NATIONALISATION OF MULTINATIONALS IN PERIPHERAL ECONOMIES

Transcription

1 THE NATIONALISATION OF MULTINATIONALS IN PERIPHERAL ECONOMIES

2 THE NATIONALISATION OF MULTINATIONALS IN PERIPHERAL ECONOMIES Edited by Julio Faundez and Sol Picciotto

3 Selection and Chapter 1 Sol Picciotto and Julio Faundez 1978 Chapter 2 Reginald H. Green 1978 Chapter 3 Julio Faundez 1978 Chapter 4 Victor Rabinowitz 1978 Chapter 5 Carlos Fortin 1978 Chapter 6 Petter Nore 1978 Chapter 7 Sol Picciotto 1978 Softcover reprint of the hardcover 1st edition All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without permission First published 1978 by THE MACMILLAN PRESS LTD London and Basingstoke Associated companies in Delhi Dublin Hong Kong Johannesburg Lagos Melbourne }lew York Singapore Tokyo British Library Cataloguing in Publication Data The nationalisation of multinationals in peripheral economies 1. Underdeveloped areas - International business enterprises 2. Underdeveloped areas - Government ownership I. Title I I. Faundez, Julio I II. Picciotto, Sol 338.8'8' HD ISBN ISBN (ebook) DOI / This book is sold subject to the starukj.rd conditions of the.net Book Agreement

4 Contents Notes on the Contributors vu I INTRODUCTION Julio Faunde;:; and Sol Picciotto 2 A GUIDE TO ACQUISITION AND INITIAL OPERATION: Reflections from Tanzanian Experience I Reginald H. Green I 7 3 A DECISION WITHOUT A STRATEGY: Excess Profits in the Nationalisation of Copper in Chile Julio Faunde;:; 7 I 4 THE CUBAN NA TIONALISA TIONS IN THE UNITED STATES COURTS: The Sabbatino Case and its Progeny Victor Rabinowit;:; I 03 5 LAW AND ECONOMIC COERCION AS INSTRUMENTS OF INTERNATIONAL CONTROL: The Nationalisation of Chilean Copper Carlos Fortin 6 THE INTERNATIONAL OIL INDUSTRY AND NATIONAL ECONOMIC DEVELOPMENT: The Case of Norway Petter Nore I6I 7 FIRM AND STATE IN THE WORLD ECONOMY Sol Picciotto 2 I 5 Index 235

5 Notes on Contributors and their Papers Reginald H. Green was Economic Adviser to the Ministry of Finance of the Government of Tanzania, and as such took a major part in the implementation of that Government's nationalisation programme, including negotiations with the companies and the initial reorganisation of the public sector. He is also the co-author of a well-known paperback, Africa-Unity or Poverty, and of numerous articles and monographs. He is at present Fellow of the Institute ofdevelopment Studies, University of Sussex. His contribution is a systematic treatment of the main issues that arise in implementing a nationalisation decision, in particular the negotiation of compensation. The issues are treated in a realistic way, and in very great depth, with a wealth of practical example and illustration, in a manner never before attempted in any published work. His contribution is directly relevant to the general political and academic discussion of the principles involved in nationalisation, and can prove useful to civil servants or consultants called upon to advise in such situations. Victor Rabinowitz is a partner in the US law firm of Rabinowitz, Boudin & Standard, and acted as lawyer for the Governments of Cuba and Chile in litigation following their nationalisations. He provides a detailed account of a sequence of very important cases written from a ringside seat, which is at the same time an analysis of the attempts to develop a legal response (in the Congress and the academic legal establishment as well as the courts) to these nationalisations by Cuba's most powerful and nearest neighbour. Carlos Fortin was in charge of the marketing of Chilean copper in London during the Allende administration. He was formerly Professor of Political Science at FLACSO (Latin American Faculty of Social Studies), and is at present Fellow at the Institute of Development Studies, University of Sussex. His chapter begins by complementing the previous one, in discussing the litigation in European courts by which the copper companies attempted to hinder the marketing of nationalised Chilean copper, and evaluating the effects of the legal processes and the companies' embargo. The legal procedures are then considered within the overall context of diplomatic and international economic pressures on Chile, by the

6 Vlll Notes on Contributors and their Papers companies and by the US government. The paper attempts to evaluate the importance of the copper nationalisation in the events that led to the overthrow of the Allende government, and discusses the terms of the settlement agreed by the military junta. Julio Faundez B., formerly Senior Research Fellow, University of Chile, completed his doctorate on international law at Harvard in 1972, and is at present Lecturer in Law, University of Warwick. The deduction for 'excess profits' inserted into the Chilean copper nationalisation law had a widespread impact. Mr Faundez provides a detailed analysis of this provision and of its origins in the political conjuncture in Chile at the time and within the parliamentary process. His controversial account shows how the Allende government's commitment to parliamentarism led to the unexpected consequence of the opposition parties' forcing upon the executive branch more responsibility for the compensation issue than it might have wished, thus undermining the very legitimacy which the government sought. This study provides an essential complement to the paper by Green, by illuminating the often complex political context within which apparently technical economic decisions are taken. Petter Nore is a Norwegian journalist and editor, a graduate of the London School of Economics, at present teaching at Thames Polytechnic and completing a Ph.D. on Norwegian petroleum policy. He is the co-editor of Economics: An Anti- Text. While focusing on Norwegian petroleum policy, his chapter considers the various forms taken in the relationships between oil-producing states and the oil companies, contrasting Norway on the one hand with the OPEC states and on the other with Britain. He explores the reasons for the changes in these relations in the seventies, and the extent and limits of state control over the oil industry, in the context of its role in national economic development. Sol Picciotto, a graduate of Oxford and Chicago, and formerly lecturer at the then University of East Africa in Dar es Salaam, is at present Lecturer in Law, University of Warwick. He has recently co-edited The State and Capital: A Marxist Debate. His paper provides a historical and theoretical perspective on the changing relations between states and private business firms. This shows that the idealised view of competitive business operating in a laissezfaire environment is an impossible and historically unexampled ideal. It traces the changing nature of private business firms, from the chartered trading companies, through the family industrial company to the multinational corporation, and the related changes in the forms of state and of state intervention in the economy. At the same time these changes involve also the international state system, most crucially the changing nature of international inequality and the problem of underdevelopment of the periphery. It is in the context of the failure of private

7 Notes on Contributors and their Papers lx business to contribute to the development of the periphery, or indeed its contribution to underdevelopment, that the nationalisation of foreignowned firms must be viewed. Yet what is important is not so much the nominal ownership by the state of business companies, but rather the domestic and international political context and the use made of the assertion of political control to transform economic relations.