Boycott which backfired

person by Trude Meland, Norwegian Petroleum Museum
Trondheim had ambitions in the mid-1980s of building up an oil industry, and threw itself into the fight to secure the operations organisation for Draugen. That effort failed. The question is why.
© Norsk Oljemuseum

Part of the answer can be traced back to one of the major international political issues of the 1970s and 1980s – the apartheid regime in South Africa.

Segregation

This systematic implementation of racial segregation was adopted after South Africa’s 1948 general election, but had roots which extended back to the 17th century Dutch colonists in the country. Eventually attracting wide international attention and condemnation, apartheid was maintained through a number of laws which defined four main race-based groups in the country.[REMOVE]Fotnote: Apartheid is the word for segregation in Afrikaans, a Dutch-based language spoken by part of the white population of South Africa and Namibia. In hierarchical order, these were whites (descended from Europeans), coloureds (mixed white and black), Asian and black. The first had all the privileges, while the black majority were denied any political and economic rights.

Conditions in South Africa after 1948 attracted little interest at first. However, a number of dramatic incidents during the 1960s and 1970s drew foreign attention.
That applied particularly to the Sharpeville massacre in 1960, when 69 black people were shot – mostly in the back – and killed by the white police.

The victims were taking part in a demonstration against new pass laws which would greatly increase restrictions on black freedom of movement. This event attracted much international attention, and scepticism around the world about South Africa’s system of government increased.

The African National Congress (ANC) was the first organised mouthpiece for the black population, and its leader, Albert Luthuli, won the 1961 Nobel Peace Prize for his work against apartheid.

A new massacre in 1976, when police again opened fire on protesting crowds and killed hundreds of black youngsters, increased pressure on the South African regime. This incident followed an uprising in Soweto, which began as a peaceful protest by young blacks against poor schools and the imposition of Afrikaans as the medium of instruction.

The conflict hardened during the 1980s, when the regime became strongly militarised and black resistance was rigorously suppressed. A state of emergency ran from 1985 until apartheid ended in 1990.

South African bishop Desmond Tutu was awarded the Nobel Peace Prize in 1984 for his work to promote black rights. Like Luthuli, he also called loudly for the West to impose economic sanctions.

Turning point

The Soweto uprising is regarded as a turning point in the fight against apartheid, both nationally and internationally. In 1975, the UN general assembly voted to exclude South Africa from all organs of the world body, and a resolution calling for an arms embargo was adopted.

The international solidarity movement was also aroused, and put the fight against the racist state at the top of its list. Churches and trade unions mobilised worldwide. More than 2 000 foreign companies were represented in South Africa at the time. They included Royal Dutch/Shell, heavily involved in local mining through its Shell South Africa arm.

Because of this presence, the group was among the enterprises which came in for heavy criticism. A number of organisations launched a campaign in the early 1970s against what they saw as Shell’s support for the apartheid regime. But the real explosion in the world’s media came in the mid-1980s, with an international consumer boycott of Royal Dutch/Shell launched in 1985. People were urged not to fill up at the group’s service stations, while communities worldwide were asked to reject tenders from Shell to deliver oil or other commodities. A number of countries also changed their official policy towards the apartheid regime during this period. Denmark passed a unilateral boycott Act in May 1986.

The European Community (precursor of the EU) introduced a ban on importing South African iron, steel and gold coins in September of the same year. In October, the USA adopted the most extensive legislation when Congress overturned President Ronald Reagan’s veto and approved a virtually total boycott.

Where Norway was concerned, the campaign fuelled a desire for the country to be a champion of the anti-apartheid struggle. The question was not whether but how it would oppose the regime. Opinions in the international community were divided, and a unilateral Norwegian boycott was not considered likely to have much effect. In an effort to strike a balance between a desire to act and concern for Norway’s economic interests, the Labour government headed by Odvar Nordli reached a “gentleman’s agreement” in 1979 with oil companies operating on the Norwegian continental shelf.

This deal was characterised as “an understanding between the government and the companies exporting oil produced in Norway that Norwegian crude would not be delivered to South Africa”.

Nevertheless, the Storting (parliament) passed an Act imposing an economic boycott of South Africa in 1987. By then, a number of countries had introduced sanctions against the apartheid regime. This legislation prohibited trade in commodities between Norway and South Africa as well as trade in goods and services with companies or individuals based in the apartheid country. Shipping, with the exception of crude oil transport, remained unaffected on the grounds that the South African market was of limited significance for Norwegian shipowners.

However, restrictions on sailing to South Africa would be highly significant for certain companies. Calls there formed part of a more extensive sailing pattern where profitability depended on continued calls at South African ports.
But the government’s stated position was that an official boycott of Norske Shell was not on the cards. It would only act against an individual company if it broke Norwegian law.

Although the issue of a government ban on Norske Shell was raised in the Storting several times, the response was always the same.

Local initiatives

Many Norwegians were involved in the public debate on boycotting the apartheid regime. While central government debated a national response, several local authorities took independent action. About 10 of them supported the sanctions call – including Trondheim. As early as 1985, the city council resolved that its agencies and institutions would not buy or advertise for South African products.
They also aimed to avoid collaborating with companies which had financial interests in the country, and to promote information on, understanding of and knowledge about the position there.[REMOVE]Fotnote: Adresseavisen, 19 February 1985, “Interpellasjon om Sør-Afrika”.

Trondheim’s city council resolved to postpone a land sale to Norske Shell indefinitely. Nor would it take up loans from the oil company. All existing agreements and contracts with Shell were to reassessed and where appropriate cancelled.

This decision was as close as it could be to a straight boycott of the company without actually using that word.[REMOVE]Fotnote: Hermann Hansen, “Brudd med Shell”, Adresseavisen, 30 April 1987. “Indefinitely” was interpreted to mean until apartheid ended. In formal terms, the boycott applied only to the purchase of land for a new service station and financial support for highway construction – which delayed a new road and boosted its cost. But the move was to have far wider consequences. Norske Shell was to develop Draugen in the Norwegian Sea and to decide where to locate the operations organisation and supply base.

While Trondheim’s sanctions were probably not crucial for Shell’s decision, they had a negative effect. The company did not feel welcome in the city. The government had already signalled strongly that Vestbase in Kristiansund would be selected as the main supply base in mid-Norway. But the fight over the operations organisation remained a three-way struggle between Kristiansund, Stjørdal and Trondheim, with close to 300 jobs and other spin-offs at stake.

Passed by 50 votes to 33, the Trondheim council decision was controversial. Nationally, the Norwegian Confederation of Trade Unions (LO) was not recommending a unilateral boycott of Shell.

The union movement maintained that its views on the apartheid policy were best promoted through direct consultations with the oil company. And the effect of such embargoes on South African policy was not the only factor. Securing jobs from locating offshore activities to Trondheim also had to be taken into account.

Reversal

The city council reversed its decision on a unilateral sanctions of Norske Shell as early as August the same year. After a tough debate, it voted 47 to 38 to restore normal relations.

After backing the boycott vote in the previous round, the Labour Party on the Trondheim council now divided into two equal blocs on the issue.[REMOVE]Fotnote: Hermann Hansen, “Ingen Shell-boikott”, Adresseavisen, 28 August 1987. But this turnaround was not enough to mollify the company when it presented the plan for development and operation (PDO) of Draugen on behalf of the licensees in September 1987.

Submitted to the Ministry of Petroleum and Energy, this recommended that the operations office and supply base for the field should be located in Kristiansund.
Fifteen months later, on 16 December 1988, the Storting’s standing committee on industry and energy presented its final recommendation on the issue. This built on Norske Shell’s proposals, with both office and base in Kristiansund.

Trondheim had thereby lost the battle and failed to secure the revenues and jobs which would have accompanied a direct involvement in developing a Norwegian Sea oil field. But the city was not left entirely empty-handed. Shell decided to establish an industry office there in 1988, after the council had again voted to drop its boycott of oil companies with economic activities in South Africa. Following that decision in March 1988, it was alleged that some councillors had known in advance of the Shell plans. These were not announced until after the council had voted.

Rosenborg, the popular local football club, also benefitted from oil-based support when Norske Shell became its principal sponsor.

Not alone

Trondheim was not alone in voting to boycott Norske Shell. A number of Norwegian local authorities responded to the call and resolved to cease cooperation with the company. Both Oslo and Kristiansand decided to sever ties with enterprises which had interests in South Africa, including BP, Mobil and Texaco as well as Norske Shell.

Oslo’s boycott did not last long. Just six months later, after a long and emotional debate, the council voted to abandon sanctions against Shell, Mobil and BP from August 1987.[REMOVE]Fotnote: Egil Wettre Johnsen, “Oslo-boikott av oljeselskaper oppheves”, Aftenposten, 3 March 1988.  That meant the city resumed normal commercial relations from that point with these companies.[REMOVE]Fotnote: Akkurat nå … house journal, no 7/88. The ban imposed by Kristiansand council in March 1985 was also overturned in September 1988.[REMOVE]Fotnote: Fædrelandsvennen, 9 September, 1988, “Oljeboikott opphevet”.

Flared up again

But criticism of Shell’s presence in South Africa persisted, and flared up again after the World Council of Churches urged 400 million Christians to boycott the company in August 1988. Shell found itself in a moral dilemma. It took an active stand in opposition to apartheid and was committed to working for its termination as soon as possible with minimum use of force. On that basis, the company believed it had to be possible to differ over which policies and strategies were best suited to opposing the regime.

It maintained that great disagreement prevailed among opponents of apartheid, both in South Africa and globally, over which measures were most effective in undermining the system.[REMOVE]Fotnote: Akkurat nå …, no 26/88.

Shell noted that it had been in South Africa for decades, and had a policy that the international group would not become involved in national politics. It complied with national law in the countries where it operated. The group also argued that the Shell South Africa subsidiary pursued a progressive social policy. If it left the country, the government would take over its operations, worsening conditions for the black workforce.

Norske Shell perceived the campaign against the group as unfair, perhaps with justification. It stated: “Through its position as a subsidiary of a foreign parent company, [it] is in exactly the same position as about 2 000 similar western industrial and trading companies”.[REMOVE]Fotnote: Akkurat nå …, no 7/89.

The group maintained a difference existed between Shell in South Africa and Norway. The latter was a subsidiary of Royal Dutch/Shell and a Norwegian limited company which operated in accordance with Norwegian law. No business links existed between it and South Africa or that country’s Shell arm.

At the time, Norske Shell had 1 200 employees in exploration and production of petroleum and refinery operation, as well as more than 500 service stations operated by independent dealers. These people were also affected by popular opposition to Shell, which included harassment and bullying of employees as well as vandalism and sabotage.

A group calling itself “Shy Young Heroes” threw a Molotov cocktail through a window at a Shell service station in Oslo during August 1987. The head office in the capital was also vandalised on the same evening, and an attempt was made to set fire to another station a week later.[REMOVE]Fotnote: Aftenposten, 27 August, 1987, “Trussel om flere aksjoner”.

Sports boycott

A proposed agreement between the Football Association of Norway and Norske Shell fell through, despite offering commercial benefits for both sides. It transpired that the association was not prepared to enter into a collaboration with the oil company because of fears that this would cause internal discord.

At the same time, the Norwegian federations for skiing, handball and tennis had deals in place with Mobil, Conoco and BP respectively. The Norwegian Confederation of Sports took the view that Shell was not in a special position, and had no objections to a possible agreement between the company and the footballers.

Regime change

Growing pressure both domestically and internationally led in 1990 to the freeing of ANC leader Nelson Mandela and other political prisoners, and previously banned organisations were permitted. Many apartheid laws were repealed the following year. All South Africans were able to vote for the first time in an election in 1994, when Mandela became the country’s first black

Published October 1, 2018   •   Updated October 2, 2018
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