Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-15T06:10:43.880Z Has data issue: false hasContentIssue false

Sugar and Copper: Postcolonial Experiences of Australian Multinationals

Published online by Cambridge University Press:  13 December 2011

David Merrett
Affiliation:
DAVID MERRETT is professor in the Department of Management and Marketing at the University of Melbourne.

Abstract

Between 1973 and 2002, three of Australia's largest multinational companies exited from postcolonial Fiji and Papua New Guinea. Although neither host government wished the companies to leave, the tensions that arose during the course of decolonization made their departure inevitable. Prior to independence, conflicts between Fijians and Indians and decisions about grants of land and mineral rights to foreign firms had been mediated by colonial administrators. After independence, these contentious issues were resolved through domestic political processes. Ultimately, the companies were unable to overcome the limitations of their shared administrative heritage, based on nationalistic chauvinism, that desensitized them to the importance of race relations and communal rights to land within their host countries.

Type
Articles
Copyright
Copyright © The President and Fellows of Harvard College 2007

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Merrett, David, “Australian Firms Abroad before 1970: Why So Few, Why Those and Why There?Business History 44, no. 2 (2002): 6587CrossRefGoogle Scholar; Knapman, Bruce, Fiji's Economic History, 1874-1939: Studies of Capitalist Colonial Development (Canberra, 1987), chs. 5 and 6Google Scholar.

2 Fiji was annexed by the British in 1874. Papua, the southern half of the island of New Guinea, was ruled by the British from 1884 to 1906 when control was formally transferred to Australia. The territory to its north called New Guinea, annexed by Germany in the 1884, came into Australian hands in 1914. Australia continued its administration as a Mandated Territory under the authority of the League of Nations. A unified Papua New Guinea came into being in 1949, administered by Australia as an external territory until it became independent in 1975. The western part of the island was under the control of the Dutch before being transferred to Indonesia in 1963 under the auspices of the United Nations.

3 Eggertsson, Thrainn, Economic Behaviour and Institutions (Cambridge, 1990), 4CrossRefGoogle Scholar.

4 Blainey, Geoffrey, The Rush That Never Ended: A History of Australian Mining, 5th ed. (Melbourne, 2003)Google Scholar.

5 White, Peter, “CSR: An Adventure in Resources,” in Cases in Australian Strategic Management, eds. Lewis, Geoff, Morkel, Andre, and Hubbard, Graham (New York, 1991), 184215Google Scholar.

6 BHP had undertaken foreign direct investment (FDI) into Southeast Asian markets to support its steel sales in the 1960s. Stewardson, Robin, “BHP Billiton” in The Internationalisation Strategies of Small-Countries Firms: The Australian Experience of Globalisation, eds. Dick, Howard and Merrett, David (Cheltenham, U.K., 2007), 258–68Google Scholar. CRA began life as the Zinc Corporation, registered in Victoria, Australia in 1905. It was re-registered in England in 1911. In 1949 ZC merged with the British firm Imperial Smelting Corporation to become Consolidated Zinc Corporation. CZC merged with the Australian business of Rio Tinto in 1962 to become Conzinc Riotinto Australia. While CRA was a subsidiary of the British company RTZ, its largely independent and nationalistic Australian management operated it as an Australian company. Tkoshas, Kosmas, Beyond Dependence: Companies, Labour Processes and Australian Mining (Melbourne, 1986), 3788, 79-84Google Scholar. CRA and Rio Tinto were unified under single management in 1995 before adopting the name Rio Tinto in 1997.

7 Sugar contributed around two-thirds of Fiji's exports from 1875 until the 1960s. See Knapman, Fiji's Economic History, 10, table 1.1, and Fisk, E. K., The Political Economy of Independent Fiji (Canberra, 1970), 15, table 6Google Scholar.

8 Hempenstall, Peter, “Imperial Manoeuvres,” in Tides of History: The Pacific Islands in the Twentieth Century, eds. Howe, K. R., Kiste, Robert C., and Lal, Brij V. (Honolulu, 1994), 2939.Google Scholar

9 In 1963 nearly three-quarters of the revenues available to the Administration came from Australian taxpayers. Fisk, E. K., “Economic Structure,” in New Guinea on the Threshold: Aspects of Social, Political and Economic Development, ed. Fisk, E. K. (London, 1970), 30, table 2.1.Google Scholar

10 Mair, Lucy Philip, Australia in New Guinea, 2nd ed. (Melbourne, 1970)Google Scholar; Fisk, New Guinea on the Threshold.

11 Lewis, D. C., The Plantation Dream: Developing British New Guinea and Papua, 1884-1942 (Canberra, 1996)Google Scholar.

12 Fisk, “Economic Structure,” 25.

13 Mair, Australia in New Guinea, chs. 8-10; J. M. West, “The Historical Background,” in New Guinea on the Threshold, 6-8.

14 Lewis, The Plantation Dream, 41.

15 Nelson, Hank, Black, White & Gold: Goldmining in Papua New Guinea, 1878-1930 (Canberra, 1976), 25, table 1Google Scholar.

16 Knapman, Fiji's Economic History, 1874-1939.

17 In 1966, 45 percent of the economically active Fijian population was engaged in subsistence agriculture. Fisk, The Political Economy of Independent Fiji, 39.

18 Utrecht, Ernst, “Land and Agriculture, Fishing and Mining,” in Fiji: Client State of Australasia, ed. Utrecht, Ernst (Sydney, 1984), 121–35Google Scholar.

19 Fisk, The Political Economy of Independent Fiji, 38.

20 The number of Indians in Fiji rose from 1,000 in 1881 to 61,000 by 1921. E. K. Fisk, The Political Economy of Independent Fiji, 8, table 1.

21 The transition from plantation to small-scale farming after 1920 was swift. By 1925, 52 percent of the area under cane was farmed by CSR employees on its plantations. By 1939, 97 percent of the area under sugar was farmed by tenants. Lowndes, A. G., ed., South Pacific Enterprise: The Colonial Sugar Refining Limited (Sydney, 1956), 444Google Scholar, appendix 14.

22 CSR used its tenancy agreements, credit extension, unpaid tenant's labor in cane cutting and milling, and strict supervision of cultivation practices to ensure the continuation of high cane yields. Knapman, Fiji's Economic History, 20-21.

23 Fisk, The Political Economy of Independent Fiji, 8, table 1.

24 Judith Bennett, “Holland, Britain, and Germany in Melanesia,” in Tides of History, 42-45; Barrie Macdonald, “Britain,” in Tides of History, 173-79.

25 See Keay, John, Last Post: The End of Empire in the Far East (London, 1997)Google Scholar.

26 Denoon, Donald, A Trial Separation: Australia and the Decolonisation of Papua New Guinea (Canberra, 2005)Google Scholar.

27 Ballard, J. A., “Policy-making as Trauma: The Provincial Government Issue,” in Policymaking in a New State: Papua New Guinea, 1972-77, ed. Ballard, J. A. (St. Lucia, Queensland, 1981), 95132Google Scholar; Denoon, Donald, Getting under the Skin: The Bougainville Copper Agreement and the Creation of the Panguna Mine (Melbourne, 2000)Google Scholar.

28 Moynagh, Michael, Brown or White? A History of the Fiji Sugar Industry, 1873-1973 (Canberra, 1981)Google Scholar.

29 Norton, Robert, “Colonial Fiji: Ethnic Divisions and Elite Conciliation,” in Politics in Fiji: Studies in Contemporary History, ed. Lal, Brij V. (North Sydney, NSW, 1986)Google Scholar, 70n11.

30 A. G. Lowndes, “The Sugar Industry of Fiji,” in South Pacific Enterprise, 68.

31 For an account of CSR's activities in Fiji in the 1950s, see Lowndes, “The Sugar Industry of Fiji,” 67-90.

32 Australian Bureau of Agricultural and Resource Economics, Australian Commodity Statistics (Canberra, 2005), 208Google Scholar.

33 Quoted in Moynagh, Brown or White? 237.

34 Chairman's speech in CSR Annual Report 1970, reproduced in “Colonial Sugar Refining Co. Ltd. C 17,” Sydney Stock Exchange Company Statistical Service (Sydney, 1970), 6Google Scholar.

35 “Colonial Sugar Refining Co. Ltd. C 17,” Sydney Stock Exchange Company Statistical Service (Sydney, 1967), 10Google Scholar.

36 Moynagh, Brown or White? 223.

37 Vernon, Raymond, Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (London, 1971), 4653Google Scholar.

38 Knapman, Fiji's Economic History, 8.

39 Ibid., 19.

40 Industries Assistance Commission, The Sugar Industry (Canberra, 1979), 48Google Scholar.

41 Marks, Stephen V. and Maskus, Keith E., “A Survey,” in The Economics and Politics of World Sugar Policies, eds. Marks, Stephen V. and Maskus, Keith E. (Ann Arbor, Mich., 1993), 3637CrossRefGoogle Scholar.

42 Clive Turnbull, “Widening the Field,” in South Pacific Enterprise, 207-29; White, “CSR: An Adventure in Resources,” 184-215.

4 Yule, Peter, Ian Potter: A Biography (Melbourne, 2006), 235–51Google Scholar.

44 Alexander, John and Hattersley, Richard, Australian Mining, Minerals, and Oil (Sydney, 1980), 359–60Google Scholar.

45 Coghill, Ian G., Australia's Mineral Wealth (Melbourne, 1971), 104.Google Scholar

46 White, “CSR: An Adventure in Resources,” 188.

47 McKern, R. Bruce, Multinational Enterprise and Natural Resources (Sydney, 1976)Google Scholar.

48 Raggatt, Harold G., Mountains of Ore (Melbourne, 1968), 72, table 6.Google Scholar

49 “CSR clippings file,” J. B. Were Collection, 100:17, box 177, University of Melbourne Archive, Melbourne. The company's statement in 1971 and its accounts for the five previous years suggest that the profits from SPSM from 1966 until 1970 were approximately 12 percent of the group total. “Colonial Sugar Refining Co. Ltd. C 17,” Sydney Stock Exchange Company Statistical Service (Sydney, 1971), 2Google Scholar.

50 McKern, Multinational Enterprise and Natural Resources, 206-25, appendix 1.

51 Boyce, Gordon, “Multilateral Contracting in Australian Mining: The Development of Hamersley Iron, 1961-1966,” Enterprise & Society 2, no. 3 (2001): 543–75CrossRefGoogle Scholar.

52 Oliver, Douglas, Black Islanders: A Personal Perspective of Bougainville, 1937-1991 (South Yarra, 1991), 120Google Scholar. Emphasis in the original.

53 Tsokhas, Beyond Dependence, 82.

54 Mikesell, Raymond F., The World Copper Industry: Structure and Economic Analysis (Baltimore, 1979), 248–51Google Scholar.

55 United Nations Centre on Transnational Corporations, Transnational Corporations in World Development (New York, 1983), 238–68Google Scholar. See also Mikesell, The World Copper Industry, 256-70.

56 Mikesell, The World Copper Industry, 292; Ross Garnaut, “The Framework of Economic-policy Making,” in Policy-making in a New State, 193-97.

57 An excellent account of mining on Bougainville is found in Oliver, Black Islanders, 118-59.

58 See Oliver, Black Islanders, 124. Bougainville Copper Ltd. was incorporated in PNG as a private company on 2 June 1967. It was converted to a public company on 9 Aug. 1973. Its shareholders at that time were CRA (53.6 percent), the Government of PNG and the Investment Corporation of PNG (20 percent), the public (25.5 percent), and Panguna Development Foundation (0.9 percent). Alexander and Hattersley, Australian Mining, Minerals, and Oil, 162-63.

59 West, Richard, River of Tears: The Rise of the Rio Tinto-Zinc Corporation (London, 1972), 115–16Google Scholar.

60 Nonggor, John, “Foreign Investment in the Mining and Petroleum Sectors of Papua New Guinea: Benefit Sharing and Customary Land Issues,” in Law and Economic Development: Cases and Materials from Southeast Asia, eds. Quah, Euston and Neilson, William (Singapore, 1993), 347Google Scholar.

61 Alexander and Hattersley, Australian Mining, Minerals, and Oil, 162-64.

62 Mikesell, The World Copper Industry, 41, 263-64.

63 The price of copper on the London Metal Exchange doubled between 1971 and 1974, from US$1,081 to US$2,053 per ton. Australian Bureau of Agricultural and Resource Economics, Australian Commodity Statistics (Canberra, 2005), 269Google Scholar. For the terms of the 1974 Bougainville Copper Agreement see Oliver, Black Islanders, 154.

64 BHP used Dampier Mining, a wholly owned subsidiary, as its vehicle for participation. Dampier held a 37.5 percent interest in Ok Tedi Mining Ltd. (OTML). Its partners were the Mount Fubilan Development Company Pty. Ltd., a wholly owned subsidiary of Amoco Minerals Company (37.5 percent) and Kupferexplorationgesellschaft (25 percent), representing three German companies. The PNG government had the right to take a 20 percent stake, which they did exercise. Alexander and Hattersley, Australian Mining, Minerals, and Oil, 229.

65 Mikesell, The World Copper Industry, 285-86.

66 Denoon, Getting under the Skin, 157-60.

67 Greg Roberts, “Gold-diggers Leave Worries Behind,” Weekend Australian (1-2 Apr. 2006).

68 “CRA clippings file,” J. B. Were Collection, 100:17, box 637, University of Melbourne Archive, Melbourne.

69 Nonggor, “Foreign Investment,” 349.

70 Oliver, Bougainville, 161-67. For a detailed discussion of traditional forms of land tenure amongst two of the five major ethnic groups on the island see Oliver, Black Islanders, 106-11,127-29.

71 Denoon, Getting under the Skin.

72 Eggertsson, Economic Behaviour and Institutions, 284-85.

73 Oliver, Black Islanders, 126.

74 Harding, Thomas G., “Land Tenure,” in Anthropology in Papua New Guinea: Readings from the Encyclopaedia of Papua and New Guinea, ed. Hogbin, Ian (Melbourne, 1973), 107–8Google Scholar.

75 Nonggor, “Foreign Investment,” 349-53.

76 Quoted in Tsokhas, Beyond Dependence, 85-86.

77 Ballard, “Policy-making as Trauma,” 95-132.

78 Oliver, Bougainville, 204-9.

79 The average rainfall is eight meters per annum. General Electric Company (GEC), OK TEDI 24:00 (n.p., 1983), 33.

80 Nonggor, “Foreign Investment,” 355.

81 Cannon, Michael, That Disreputable Firm… The Inside Story of Slater & Gordon (Melbourne, 1998), 243–58Google Scholar.

82 “Ok Tedi Mine Closure Could Cost Owner $250 million,” Pacific Islands Report, Pacific Islands Development Program/East-West Center, Center for Pacific Islands Studies/University of Hawai'i at Manoa (9 June 1999).

83 “The Ok Tedi Pages,” Rettet die Elbe, http://www.rettet-die-elbe.de/oktedi/, accessed 20 Apr. 2006.

84 In 1993 BHP became the majority shareholder in OTML, increasing its share to 50 percent, and the PNG government lifted its stake from 20 percent to 30 percent. BHP Annual Report 1993.

85 “BHP Billiton Withdraws from Ok Tedi Copper Mine and Establishes Development Fund for the Benefit of Papua New Guinea People.” http://www/bhpbilliton.com/bb/news Centre/newsReleaseDetail.jsp?id, accessed 20 Apr. 2006.

86 “Ok Tedi Sustainable Development Program.” See BHP Billiton Web site.

87 Bartlett, Christopher A. and Ghoshal, Sumantra, Transnational Management: Texts, Cases, and Readings in Cross-Border Management (Homewood, Il., 1995), 472.Google Scholar

88 Lowndes, ed., South Pacific Enterprise, 418-19, Appendix 7; Rutledge, Martha, “Kater, Norman Murchison (Mick) (1904-1979),” Australian Dictionary of Biography, vol. 14 (Melbourne, 1996), 598–60Google Scholar.

89 Legge, J. S., ed., Who's Who in Australia (Melbourne, 1971), 142, 279, and 917Google Scholar.

90 Essington Lewis and Harold Darling dominated BHP from the 1920s to the 1950s. Trengove, Alan, “What's Good for Australia…!”: The Story of BHP (Stanmore, NSW, 1976)Google Scholar. W. L. Baillieu, W. S. Robinson, L. Robinson, Colin Fraser, and Francis Govett were extremely influential in the base-metal industry. Poynter, J. R., “Baillieu, William Lawrence (1859-1939),” Australian Dictionary of Biography, vol. 7 (Melbourne, 1979), 138–45Google Scholar.

91 A useful discussion of this literature can be found in Calori, Roland, Lubatkin, Michael, Very, Phillipe, and Veigra, John F., “Modeling the Origins of Nationally-bound Administrative Heritages: A Historical Institutional Analysis of French and British Firms,” Organization Science 8 (Nov.-Dec. 1997): 681–96CrossRefGoogle Scholar; Lubatkin, Michael, Calori, Roland, Very, Phillipe, and Veiga, John F., “Managing Mergers across Borders: A Two-Nation Exploration of a Nationally Bound Administrative Heritage,” Organization Science 9 (Nov.-Dec. 1998): 670–84CrossRefGoogle Scholar.

92 Encel, Sol, Equality and Authority: A Study of Class, Status, and Power in Australia (Melbourne, 1970), 390409Google Scholar.

93 Ibid., 399 and 407, tables 21.5, 21.9, 21.10.

94 McCalman, Janet, Journeyings: The Biography of a Middle-Class Generation (Melbourne, 1993)Google Scholar.

95 Brett, Judith, Australian Liberals and the Moral Middle Class (Cambridge, 2003)CrossRefGoogle Scholar.

96 Calori, Lubatkin, Very, and Veiga, “Modeling the Origins of Nationally-bound Administrative Heritages,” 683.

97 Birch, Alan, “The Implementation of the White Australia Policy in the Queensland Sugar Industry, 1901-12,” Australian Journal of Politics and History 11, no. 2. (1965): 198210CrossRefGoogle Scholar; Bolton, Geoffrey, A Thousand Miles Away: A History of North Queensland to 1920 (Canberra, 1970), 233–55Google Scholar.

98 See, for instance, Keon-Cohen, Bryan and Morse, Bradford, “Indigenous Land Rights in Australia and Canada,” in Aborigines and the Law, eds. Hanks, Peter and Keon-Cohen, Bryan (Sydney, 1984), 74102Google Scholar; Rowley, C. D., The Destruction of Aboriginal Society (Canberra, 1970), chs. 1-2.Google Scholar

99 Quoted in Blainey, Geoffrey, The Steel Master: A Life of Essington Lewis (South Melbourne, 1971), 1213Google Scholar.

100 Denoon, A Trial Separation, 31.

101 McKenzie, P., “Aborigines in Industry—Groote Eylandt,” in Aborigines in the Economy: Employment, Wages, and Training, eds. Sharp, Ian G. and Tatz, Colin M. (Melbourne, 1966), 257Google Scholar.

102 McKenzie, “Aborigines in Industry,” 259.

103 Rowley, C. D., The Remote Aborigines: Aboriginal Policy and Practice (Canberra, 1971), 137–38Google Scholar; Macintyre, Stuart, Winners and Losers: The Pursuit of Social Justice in Australian History (Sydney, 1985), 126–37Google Scholar.

104 In 2005, CSR's sugar business contributed only 40 percent of its revenues with the remainder coming from aluminum and building products. CSR Annual Report, 2005.

105 Interview with Don Carruthers, chairman of Bougainville Copper Limited, “The Panguna Mine Impact (2),” in Bougainville: Perspectives on a Crisis, ed. Polomka, Peter (Canberra, 1990), 57Google Scholar.

106 Oliver, Black Islanders, 156.

107 Denoon, A Trial Separation, 131-32.

108 Denoon, Getting under the Skin.

109 Denoon, A Trial Separation.

110 In 1988 BCL contributed 17 percent of government revenue and 45 percent of exports. Carruthers, “The Panguna Mine Impact (2),” 55-56.