Political Commentary

The Burmah Oil Affair

By ALAN WATKINS

'THE rule of law and the independency of the judiciary,' intoned Sir Eric Fletcher on Monday, 'constitute the bulwarks of our free society and one of the most cherished of our national institutions. Was he being entirely -serious? Certainly those of us who had been in the House five days previously could be forgiven for emitting a hollow laugh. For then the govern- ment of which Sir Eric is a member forced through the second reading of a Bill that is indis- putably contrary to the rule of law and arguably an interference with the independence of the judiciary.

The Bill is an innocent-looking little thing. It bears the chaste title of the War Damage (No. 2) Bill. It contains only two clauses. It is, however, one of the nastiest and most unprincipled measures ever to have been presented to the House of Commons, and that is saying something. It is penal, retrospective and confiscatory. It is directed at one concern—the Burmah Oil Com- pany. The Bill reverses a recent decision of the House of Lords in the company's favour, and against the Crown; further, it reverses the deci- sion retrospectively, so that the company is denied the right to-recover damages.

Before going into the history of this sorry measure some tribute should be paid to the way in which the House debated it. Mr. Niall MacDermot and Sir EIWyn Jones, it is true, both made speeches which would have ensured them glittering careers under Charles 1 (if you want a real hack, look for a lawyer); but the rest of the House rose magnificently to the subject.

The story starts with the Japanese invasion of Burma in 1942. The British Government had decided on a 'scorched earth' policy in face of the enemy advance, and in accordance 'with this policy the Burmah Oil Company was ordered to destroy its refinery at Syriam, near Rangoon. It is important to be clear about who precisely gave the orders. First Field-Marshal Alexander visited the installations and said that it might be neces- sary to destroy them. Then a Mr. Foster arrived, with credentials from the War Cabinet, and supervised the preparations for the destruction. Finally General (as he then was) Slim gave the order to destroy.

These individuals are important because alter the war the Labour Government shrugged off responsibility. It could not compensate the com- pany under the Defence of the Realm Act or the War Damage Act, as the damage had occurred overseas. It could, however, have made an ex- gratia payment. It did not do this. Instead. in 1947, Sir Stafford Cripps instructed the company to bring an action against the Government of Burma in the Burmese courts. Now at the best of times this would have been a highly specula- tive enterprise. This was hardly the best of times. Burma was now independent, Britain was un- popular and the Burmese government had already announced that it did not consider itself liable. Nevertheless, the company brought the action.

By 1949, however, it was already clear that there would be little if any mohey forthcoming from the Burmese. The British government made a grant of £10,000 not for the purpose of coin' pensation—this was made very clear—but in order to rehabilitate companies in Burma and create employment. A committee set up by the Board of Trade assessed the Burmah Oil Com- pany's claim as £17,370,000, of which it actually received, on a proportional basis, £4,750,000. During the 1950s the company's claim to com- pensation was discussed by successive Law Officers and Chancellors of the Exchequer. Their conclusion was always the same: that nothing whatever should be given away. And in 1960 the Burmese High Court decided, not altogether sur- prisingly, that there was no compensation due from Burma either.

But all was not lost. The Burnish Oil Cony pony is registered in Scotland, which fortunately for the company has a longer period than Eng- land for the limitation of actions. It brought a. case against the Crown in the Scottish courts. The response of the Treasury was swift. A Deputy Treasury Solicitor wrote to the company a letter which contained this passage: Her Majesty's Government are, moreover, satisfied that the claim made is not, in any event, one which ought to be met by the British tax-

payer. Her Majesty's Government have accord- ingly decided that, in the unlikely event of

your company succeeding, legislation would be introduced to indemnify the Crown and its officers, servants or agents against your com- pany's claim. • By any standards this was a disgraceful com- munication. It was calculated not only to intimi- date the plaintiffs but also to influence the courts. But the threat failed to work. The company con- tinued with its action. And the company won.

In the Scottish court of first instance Lord Kilbrandon went back to the international lawyers of the seventeenth century and drew a distinction between 'battle damage' and 'denial damage.' Battle damage occurred where property was destroyed in the actual course of fighting: for this no compensation was payable. Denial damage, on the other hand, arose where property Was destroyed under the royal prerogative in order to deny its use to the enemy: here com- pensation was due. Lord Kilbrandon's decision was reversed on appeal; though it is significant that the Scottish judges agreed with his legal analysis, but differed from him on whether the destruction of the refineries should be classified

as battle or denial damage. In the House of Lords, Lord Kilbrandon's judgment was restored-by a

majority of three. to two. All the learned judges agreed that there was no clear authority one way or the other. At its simplest, the difference be- tween the majority and the minority was that Lords Reid, Pearce and Upjohn could see no reason why the common law should not give a right to compensation, whereas Lords Radcliffe and Hodson could see no reason why it should. While the law lords were deliberating, the Treasury had not been idle. A Bill was framed: it was considered at a lugubrious meeting of the Conservative Cabinet's economic policy com- mittee; and Mr. Selwyn Lloyd, so Mr. Mac- Dermot privately alleges, then did his best to hold it over until a new government took office. Mr. Mac Dermot and Sir Elwyn are, one suspects,

against the Bill in their hearts. At any rate, the line they take with troubled Labour back-

benchers is that this hurts them more than it hurts the Burmah Oil Company. Whether this is SO or not, certain of their arguments need to be exposed.

First, far tram being the jolly commonplace Which Mr. MacDermot and Sir Elwyn imply it IS, retrospection has been applied in only very limited cases. Taxation is one, Acts of Indemnity another. It was suggested in the debate that the War Damage measure was really an Act of Indemnity, and Mr. Attorney fell hungrily upon this point. The War Damage Bill is nothing of the kind. Acts of Indemnity may protect officials from actions in tort (and tort was not involved in the Burmah case) or they may provide that individuals shall not be subject to penalties they would otherwise have incurred. But it is a curious Act of Indemnity which deprives the citizens of the fruits of his litigation. In fact the War Damage measure is much nearer to an Act of Attainder than an Act of Indemnity.

The second argument used by the Govern- ment is that the compensation payable is bound to be enormous. The figure of £100,000,000 has

been mentioned. Even if this were so it would not alter the justice of the case or the shadiness of the government's practices. But it is not so; the compensation will be much lower; and any- one who doubts this should read the speeches in the House of Lords and the company chairman's letter in Tuesday's Times. The Bill is a thoroughly squalid one. And, if it is not defeated or with- drawn, it is difficult to see how Lord Gardiner, Sir Elwyn and other ministers can conscientiously remain members of the international organisation 'Justice,' whose praises they so loudly proclaimed in the days before Harold gave them jobs.