Book Review

Whose laws must a multinational corporation obey? That is perhaps the thorniest problem to emerge from the great uranium scandal, which began in 1972 with the formation of an international uranium cartel.

When Westinghouse Electric goes to court next year to seek treble antitrust damages from 29 foreign and domestic uranium producers, the defendants-those who deign to appear in court-will undoubtedly contend that they did nothing illegal under the laws of the countries where the cartel operated, Gulf Oil, a leading defendant in the case, has in fact already argued to the U.S. Justice Department that its participation in the cartel through a Canadian subsidiary was compelled by the government of Canada.

The question of whether U.S. antitrust laws apply to foreign corporations, or to the international operations of American firms, is likely to keep squadrons of lawyers rolling in the hot sauce for years to come.

Litigation spawned by the cartel involves such crucial issues-to say nothing of such huge-sums of money-that it's surprising that only one book has appeared on the subject to date. The facts about the cartel's operation and subsequent public exposure are fairly straightforward, but nothing else is.

Popular wisdom has somewhat oversimplified the whole affair. For example, it is widely assumed that the sharp escalation in U.S. enriched uranium-or- yellowcake prices between 1972 and 1976 was due to the cartel. But as authors June Taylor and Michael Yokell demonstrate in this extraordinarily detailed work, corporations don't spend years in court and billions of dollars in legal fees to litigate cut and dried affairs.

In 1976, the Australian chapter of Friends of the Earth obtained documents that showed that the major uranium producers outside the U.S. had secretly formed a "club" for the purpose of dividing up the world market and "stabilizing"-actually raising-yellowcake prices. Canadian producers, representing the largest share of production, were to get 27 percent of the world market; South African 21 percent; French 20 percent and Rio Tinto Zinc, the British-based mining giant, 10 percent. When a utility would request bids on a yellowcake supply contract, the club would assign it to a producer who would "win" the bid by offering the cartel's floor price. East Asian countries and "middlemen"-i.e. reactor manufacturers-were to be charged higher prices than other buyers.

The U.S. domestic market was excluded from the pricing scheme, partly out of necessity (foreign uranium was effectively embargoed from the United States at the time) and partly because cartel members with American subsidiaries feared running afoul of U.S. antitrust laws. Due to the embargo on imports, the price of yellowcake on the U.S. market was already higher than the world price, and U.S. uranium producers were not tempted to sell overseas.

Meanwhile, the governments of Canada, South Africa, France and Australia were closely involved in the formation of the cartel, and in a sense, provided the key to its success. By monitoring all uranium export contracts "for national security reasons," the governments could detect would-be cheaters who otherwise might have undersold the cartel.

The cartel did indeed succeed in raising the world price of uranium. And during the period of the cartel's operation, the price of yellowcake on the highly insulated U.S. market skyrocketed, as well, from $6 per pound in 1972 to over $40 per pound in 1976.

Meanwhile, during the early seventies, Westinghouse Electric, the largest U.S. manufacturer of reactors, had been busily signing "sweetener" contracts to supply cheap uranium to utilities which purchased Westinghouse reactors. In moves described by one analyst as "the most stupid performance in the history of American commercial life," Westinghouse obligated itself to supply some 70 million pounds of uranium for under $10 per pound uranium it 'did not own, and, by the time its contracts came due, could not buy for less than $26 per pound. Faced with a potential $2 billion loss, Westinghouse defaulted on all of its yellowcake supply contracts in 1975 and was promptly sued by 27 angry utilities.

This touched off a horrendously complex series of suits and countersuits that one federal judge has dubbed "The Lawyers' Full-Employment Case."

Within a year after the utilities sued Westinghouse for breach of contract, the uranium cartel was exposed. Westinghouse subsequently filed an antitrust suit for treble damages against almost every major uranium producer in the world, charging them with conspiring to fix prices and eliminate reactor manufacturers from the uranium market. Gulf Oil, whose Canadian subsidiary operations made it a leading defendant in the cartel case, countersued Westinghouse, charging the company with conspiring to monopolize the nuclear reactor, fuel fabrication. and uranium markets.

The pivotal question-whether the cartel's price-fixing really did in fact affect U.S. uranium prices-is analyzed with formidable thoroughness _by Taylor and Yokell, who conclude-as have some other observers-that the cartel's direct impact on the U.S. market was minimal. Far more significant factors, they argue, were the U.S. government's own enrichment policies, which directly affected the demand for uranium, and during 19751976, the Westinghouse default itself.

Taylor and Yokell do not believe that Westinghouse can legitimately blame much of its predicament on the cartel. Instead, they paint a picture of high-level mismanagement within the company, lack of interdepartmental communication, and a gross misunderstanding of uranium market trends. For its part, Westinghouse's claim that the cartel discriminated against middlemen is supported by cartel documents, and the upcoming antitrust trial promises to be a long-running, high-budget affair.

The refusal of nine of the 12 foreign defendants to appear in U.S. court has already raised prickly questions about the ability of the United States to extend its antitrust laws to foreign firms-and by extension, to foreign governments, since the companies participating in the cartel did so under the explicit direction of their governments. When the cartel was exposed, Canada and Australia quickly passed laws aimed at preventing the release of any information about the cartel to U.S. investigators.

Unfortunately, Yellowcake barely touches on one intriguing aspect of the case: how much the U.S. government knew, and why it did so little to prosecute the cartel. The authors note that the Justice and State Departments, as well as the Central Intelligence Agency and the Atomic Energy Commission, maintained files on the cartel since its inception. Yet Taylor and Yokell fail to extend their otherwise exhaustive reporting to this part of the uranium affair, confining themselves to polite rhetorical questions as to whether a bit more interagency communication about the cartel might perhaps have been in order.

In fact, Justice and State Department documents have surfaced in the Months since Yellowcake was published suggesting that the hands-off policy of Justice Department investigators was executed under pressure from State Department officials worried about straining U.S. relations with some of its closest allies.

Yellowcake is written with clarity and a touch of humor. The overall approach is one of scholarly inquiry and analysis, and the authors' obvious fascination with their story keeps this from being the dull treatise it could have been.

- Catherine Sunshine

This is the long-awaited synthesis of the most exhaustive research to date on the Green Revolution-l6 studies produced by the United Nations Research Institute for Social Development in the 1970's. Project director Pearse concludes that new technology occasionally can help an economy grow. However, he warns that for the most part, the introduction of such technology "undermines the essential and customary means of livelihood of an ever-increasing number of people in rural areas." -

This is a meticulous, carefully written book balancing evidence with analysis. Discussions of the implications of tenure structure and the peasant-based strategy of participatory development are particularly impressive. It is, in sum, an essential book for both lay readers and specialists alike-crucial to an understanding of the world food system.

The major portion of this book consists of an elementary introduction to planning for a multinational corporate manager in the Third World. It's hard to see its utility for most audiences except as a guide to conservative business way of thinking.

Haner makes a living as a professional political risk analyst; this book illustrates the prevailing techniques of Haner's calling: assign weights to as many variables as imaginably may affect multinationals, combine terms, and arrive at a risk index for countries of the world. That countries buy such assessments is perhaps the most educational aspect of this book.

Documenting corporations from the United States, Europe, and Japan, Davis attempts to detail internal corporate structures and management strategies.

Divided geographically, each section consists of three parts: an introduction, a series of case studies analyzing corporate decision-making, and a set of readings providing commentary on the issues raised by specific corporate organizations.

The text is primarily intended for classroom use and suffers from over-attention to technical details of case studies. Davis regrettably omits any discussion of normative issues concerning the role of multinationals in the global economy.

Work In progress

Workers in two Third World countries are in need of information on the world-wide operations of Triumph, Inc., a women's clothing manufacturer with operations in 48 countries.

In the Philippines, where Triumph is the fourth largest textile company, workers are preparing for negotiations with management for the union's second collective bargaining agreement. In a second unnamed country, workers are preparing a union organizing drive at a Triumph plant.

The Center for the Progress of Peoples, a Hong-Kong based, church-funded research and action group, is aiding Triumph workers in the collection of information about Triumph's international operations. In particular the Center is collecting information on:

• the daily production schedule and worker production quotas in other factories;
• brief history of union, or other attempts by workers to achieve better wage and working conditions;
• the working conditions in other factories;
• how worker pay is determined (hourly or daily wages, piece work, ' incentives, bonuses, allowances).

Send information to:

Center for the Progress of People
48, Princess Margaret Road I/ F
Kowloon, Hong Kong

Organizations

Founded in 1978, the Women's Network on Global Corporations is a nationwide women's organization , which aims to highlight the effects : multinationals have on women, and the actions women workers and health ' activists take in resistance.

The Network acts as an independent clearinghouse for information, focusing particularly on the textile, electronic, and agribusiness industries in the U.S. and overseas. The organization strives both to assist women on a grass-roots level who are protesting against multinationals and to contribute to a general understanding of the role of these companies in developing countries.

The group contributes regularly to the Women and Global Corporation section of the quarterly, Women's Newsletter, of the American Friends Service Committee (AFSC). The Network also assisted AFSC's women's program with Women and Global Corporations: Work, Roles, and Resistance, a comprehensive directory of resources in the field.

For more information, contact:

Women's Network on Global Corporations
80 Prospect Avenue
San Francisco, CA 94110

Periodicals: A Southern Perspective

Information, like technology, manufactured goods and technical expertise, flows from North to South. To redress this imbalance, developing countries have called time and time again-most recently in November at the UNESCO conference in Belgrade-for a "New International Information Order."

In the midst of these cries comes South. Based in London, but edited and written mainly by Third World journalists, this new monthly magazine seeks to bring a developing country perspective to global political and economic issues. South, states an introductory editorial aims to "articulate the unvoiced, identify the incipient." Already, in its first two editions, it has presented a wide range of worthwhile material from a staff of correspondents around the world.

South brings to three the creations of the Third World Foundation. The group also publishes Third World Quarterly, a scholarly journal now in its second year, as well as a weekly "Third World" page in The Guardian (London). All of these efforts are backed by the Bank of Credit and Commerce International, a Pakistani bank in London that does not appear to have any narrow economic or political motives in financing the foundation.

Each issue of South contains an array of fairly up-to-date political and diplomatic reports on topics such as the Iran-Iraq war, and Prince Norodom Sihanouk's views on the Kampuchean situation.

The first love of the editors, however, seems to be not politics but economics. Many of the articles focus on the current dialogue between developed and developing countries over the creation of a "new international economic order" (NIEO). Both the October and November issues featured lengthy items on producing and consuming country efforts to reach agreements on commodity price stabilization plans, as well as interviews with officials of the U.N. Commission on Trade and Development (UNCTAD) on the prospects for forward movement in the North-South economic dialogue.

South fills a vital role, especially in its attempts to report on particular efforts by Third World countries to cooperate among themselves, both for direct economic benefit and as a way of building strength in bargaining with the industrialized countries. Articles in the opening issues examined the potential role of OPEC in sponsoring Third World cooperative projects, and the efforts to negotiate a general system of preferential trade among developing countries.

Unfortunately the magazine's preoccupation with "North-South" issues as defined in 'international fora leads to an almost exclusive focus on national governments as economic actors; Relatively little attention is given to the activities of international corporations or workers in the world economy. Nor is much space devoted to the role played by private economic interests in shaping the position of industrialized country governments.

Off to a promising start, South will no doubt have to take further steps to define its audience and maintain a more consistent approach to its chosen tasks. Currently, while the "politics" articles are valuable for a general audience, many of the "economics" pieces assumes a considerable knowledge of international finance and familiarity with the North-South debate. Although the discussions of specific commodities are good, the more general economic ones tend to be dry; with little analysis of trends and events, the going is sometimes tedious.

Nonetheless, particularly for those with a serious interest in the NIEO issues, the magazine should prove essential reading.

To subscribe, write:

South Publications New Zealand House Haymarket London SW1 Y 4 TS England