INTERNATIONAL AFFAIRS

The Right Honorable Richard Gardiner Casey, C.H., D.S.O., M.C.
Minister for External Affairs
La Trobe (Victoria)

Mr. CASEY.— I turn now to the recent developments in the Middle East which have given the Australian Government serious concern. Honorable members will no doubt be aware, from the full press and radio reports, of developments in Iran and Egypt. I do not wish to deal with them in detail, but rather to speak about certain principles which are involved in both of them. Any community, international or national, depends for its existence on the rule of law and the observance of commitments, great and small. In the international sphere these are usually sanctioned by treaties or agreements which set the pattern of relations between countries. This does not mean that should a treaty fall out of harmony with the times, no redress is possible. Joint discussion or reference to a third and neutral party are the legal processes for amending the old agreement or drafting a new one to the satisfaction of the parties concerned. On the other hand, unilateral abrogation of a treaty leads only towards chaos and danger, loss to both parties, gain for those who wish them ill, and above all, a weakening of the international comity. That is why the Australian Government must regret the unilateral action by both Iran and Egypt in abrogating their obligations under existing agreements.

In regard to Iran, the United Kingdom resolutely sought to avoid any provocative action which might endanger world peace, and, recognizing its obligations to exhaust all peaceful steps which might lead to a settlement, referred the dispute to the appropriate international machinery, the Security Council of the United Nations and the International Court of Justice. By refusing to recognize the competence of those bodies, Iran is turning its back on the door to a settlement which by its international character would properly safeguard Iran’s own national prestige and interests. The International Bank for Reconstruction and Development has now come forward with proposals to re-open the Persian oil industry on an interim basis and its vice-president is at present in Teheran to discuss the principles of the bank’s plan with the Iranian Government. We hope that these negotiations will be successful for it must be clear to all that Iran cannot much longer deny itself the tremendous revenue it enjoyed from its oil resources without risk to its own political and economic integrity and to the stability of the Middle East and South Asian area as a whole. It seems to us that the final settlement, to be lasting and fair, must take into account, first, Iran’s economic needs and the desire of its Government to raise the standard of living of its people ; secondly, the very great contribution which has been made, by British brains and experience to the development of Persian oil resources and the vast capital expenditure involved ; and, thirdly, the fact that Persia alone cannot produce, refine, transport and market the oil. Such a settlement must be reached before Communist elements succeed in exploiting the danger of the present stalemate and growing instability in Iran.

The situation in Egypt developed in a different way. British troops were already in Egypt, in accordance with existing treaty provisions. The Suez Canal is a vital strategic area, as two world wars have shown — wars in which the United Kingdom and Australia and other forces have successfully protected Egypt from foreign occupation and control. Any Egyptian government which ignores the geographical and strategic facts and the dangers of the present international situation is simply burying its head in the desert sand. I remind honorable members that the former Egyptian Government abrogated the Treaty unilaterally, in spite of the fact that it well knew that it was about to receive from four sponsoring powers, the United Kingdom, the United States, France and Turkey, an invitation to join in a Middle East Command. Acceptance of this invitation and a satisfactory working out of the details would have brought about a new relationship between the United Kingdom and Egypt. Instead of accepting the invitation and endeavouring to work out reasonable proposals which would have satisfied their national aspirations, the Egyptian government of the day, without apparently giving these important proposals the careful examination they deserved, rejected the invitation. Honorable members are familiar with the chain of events which followed and which culminated in the shocking riots in Cairo on Saturday, the 26th January, and the change of government two days later. Those riots could by no means be described as a natural manifestation of nationalism. It seems clear that various elements, including subversive elements and those who prefer chaos to law and order, joined the rioters. Fortunately no Australians were killed in the riots but the House will sympathize with the governments of the United Kingdom and Canada in the death of their citizens, who included the Canadian Trade Commissioner, and in the extensive property losses which amounted to several million pounds.

There have been a number of hopeful signs during the past few weeks, since the change of Government, but it is stil too early to say whether the new Administration will be able to fulfil its immediate task of stabilizing the internal situation in Egypt and of calling off the attacks on British troops by the terrorists. If that were done, a favorable atmosphere would prevail in which negotiations could be resumed. I am not without hope that a satisfactory solution to the dispute can still be found, which will take into consideration the strategic importance of the Canal Zone, the free world and the national aspirations of the Egyptian people. The United Kingdom has reiterated its willingness to enter negotiations for such a solution and there are some indications that the new government of Ali Maher Pasha may adopt a reasonable attitude to this offer. Before leaving the subject of the Middle East, I should add that, as honorable members are aware, the Australian Government accepted the invitation to join in the establishment of a Middle East Command, final details of which had still to be discussed and worked out. Negotiations to this end have been delayed, primarily because of the situation in Egypt and to some extent also because of the desire of Turkey and Greece to complete the process of their becoming members of the North Atlantic Treaty Organization.

PERSIA.

Kim Edward Beazley
Fremantle (Western Australia)

The Right Honorable Richard Gardiner Casey, C.H., D.S.O., M.C.
Minister for External Affairs
La Trobe (Victoria)

Mr. BEAZLEY.— I direct a question to the Minister for External Affairs. Was the Australian Government consulted on the subject of the tanker boycott on Persia?

Conversation being audible,

Mr. SPEAKER.—Order! It is impossible to hear the question,

Mr. BEAZLEY.— Will the Minister for External Affairs state whether the Australian Government was consulted on the subject of the tanker boycott on Persia? Was the boycott imposed by companies as a purely commercial decision, or was the Foreign Office involved ? Was any opinion transmitted to Great Britain by the Australian Government?

Mr. CASEY.— The Government was informed on what was proposed. I cannot say whether action was taken by government decision or through the companies. I must admit to having no comment to make, because I have a peculiar dislike to making comments on matters on which one has no constructive ideas.

PERSIA.

Kim Edward Beazley
Fremantle (Western Australia)

The Right Honorable Richard Gardiner Casey, C.H., D.S.O., M.C.
Minister for External Affairs
La Trobe (Victoria)

Mr. BEAZLEY. —My question to the Minister for External Affairs arises out of his answer to a question that was asked yesterday. His answer was to the effect that the Australian Government had no reaction to the tanker boycott of Persia. Does the Minister consider that the supply of petrol from Persia is important, and that any good purpose is served by not using these reserves but leaving them intact quite near to the Russian border? Is he prepared to reconsider this matter and take up with the United Kingdom the question whether our failure to get petrol from Persia is wise?

Mr. CASEY.— It is generally admitted that it is a tragedy that the great oil resources of Persia are at present practically unused. The only way that we can affect the situation for the better, is by putting forward a proposal to the Government of Great Britain that it has not already thought of, or tried. The lack of production of oil products from Persia is no fault, Heaven knows, of the British Government or the Anglo-Iranian Oil Company. The trouble arose from the extreme attitude taken by the Government of Iran. As I have said on many occasions, we are always at liberty to make proposals to the friendly Government of our mother country, Great Britain, but I make use, on behalf of the Government, of that privilege, only when I or my officers can think of some positive proposal that we believe would be helpful. The actual responsibility is one for the British Government and not this Government. The British Government is perfectly in order in determining its own attitude, but it has never regarded the matter as closed. So far as we are concerned, we have frequently had opportunities to state any views that we may have.

Mr. BEAZLEY.— We are still buyers of petrol.

Mr. CASEY.— Yes, we are very large buyers of petrol and other oil products, and we wish very much that we had access to the great oil resources of Iran. The fact that we have not is not the fault of the British Government; it is the fault of the Government of Iran.

ROYAL AUSTRALIAN AIR FORCE.

Alexander Russell Downer
Angas (South Australia)

Mr. DOWNER.— In common with all honorable members on this side of the House I am glad that the Leader of the Opposition (Dr. Evatt) has supported this move on the part of the Australian Government. Everybody realizes that the Middle East has become, perhaps more than ever before, one of the primary concerns of Australia. Through this region passes one of our great trade arteries with the northern hemisphere, and the greater part of our oil supplies are drawn from Saudi Arabia, Iraq and Iran. It is unnecessary to remind honorable members that in the Middle East our troops fought with great distinction in the last two world wars. The sending of a Royal Australian Air Force contingent to this part of the world in these critical days will be an important gesture, both practically and psychologically.

The inflammatory political position in the Middle East is as full of danger at present as it has been at any time since the war ended. Persia is ruled by a fanatic—a prime minister swaying, weeping, gesticulating and gyrating like a hobgoblin in a ballet. Egypt is in the throes of a revolution, and who can say that after having rid themselves of a corrupt and contemptible monarch the Egyptians will achieve in any real degree a better government than the one that is now passing away.

ESTIMATES 1952-53.

Alexander Russell Downer
Angas (South Australia)

Mr. DOWNER.— The general world picture to-day provides us with no grounds for complacency either with the international situation or with our own efforts, commendable though they have been. A full-scale war is still raging in Korea and large numbers of Australian troops are involved in it. A most difficult military situation exists in Indo-China, and it may well become a direct threat to us. The guerrilla warfare in Malaya is by no means resolved. The Middle East is a cauldron which is still approaching the boil. There is an immediate danger of a Russian coup in Persia. Such a stroke might occur on any day. Anybody who is conversant with the situation in Egypt must be distinctly uneasy about developments in that country. As bad as any of those situations is the sinister Russian threat in Western Europe as the European summer draws towards its close.

COMMONWEALTH OIL REFINERIES LIMITED.

Rt. Hon. Robert Gordon Menzies, K.C., Prime Minister
Kooyong (Victoria)

Mr. MENZIES.— The Leader of the Opposition (Dr. Evatt) has just made a very interesting speech. It would have been even more interesting if any of his facts had been right. In reality, the proposition that he has put before the House is one of great confusion. Before I point out how true that statement is I desire to say that we have listened with profound interest to the right honorable gentleman working himself into almost a frenzy on behalf of the Anglo-Iranian company. That had all the charm of novelty. Only the other day the Prime Minister of Iran set about confiscating Anglo-Iranian oil under the guise of nationalizing it. I do not remember any protest being made by honorable members opposite, and I do not remember them explaining that this was a great company that had the blessing of Mr. Churchill.

IRAN.

Reginald William Colin Swartz, M.B.E., E.D.
Darling Downs (Queensland)

The Right Honorable Richard Gardiner Casey, C.H., D.S.O., M.C.
Minister for External Affairs
La Trobe (Victoria)

Mr. SWARTZ.— I ask the Minister for External Affairs whether, prior to the Iranian Government’s action in breaking its agreement with the Anglo-Iranian Oil Company Limited, the national income of Iran depended to a large degree upon income from sales of petroleum through that company. As Iran, despite the loss of this principal source of income, has managed to maintain a degree of economic stability, is any information available about whether certain financial aid has been provided to that country by other countries? Has any information been received officially about Mossadeq’s intentions regarding the recent British proposals for the settlement of the present oil dispute?

Mr. CASEY.—It is true that revenue from the Anglo-Iranian Oil Company Limited represented a substantial part of the budgetary receipts of the Iranian Government. I believe that about one third of Iran’s total revenue was derived from that source. The embarrassment caused to the Iranian Government by the cutting off of that source of revenue is quite apparent. I understand that Iran has made every effort to fill the gap left by the loss of that revenue by all sorts of methods that cannot be detailed, including the running down of its overseas balances, the more stringent collection of overdue taxes, heavy internal loans and the collection of revenue from other sources that will not be permanent. The United States of America, in past years, has helped Iran in both military and civil development in the same way as it has helped a great many other countries that are trying to re-establish their economies or increase the scope of their developmental projects. I understand that American aid is not now forthcoming to afford budgetary assistance to the Iranian Government. I have no current information on the last part of the honorable member’s question. I believe that the negotiations have made no progress, but I shall have that matter investigated and advise him about it subsequently.

IRAN.

Edward Nigel Drury
Ryan (Queensland)

The Right Honorable Richard Gardiner Casey, C.H., D.S.O., M.C.
Minister for External Affairs
La Trobe (Victoria)

Mr. DRURY.— Has the Minister for External Affairs any official information that he can give to the House about recent proposals for a settlement of the oil dispute between Britain and Iran?

Mr. CASEY.— We have no information of any consequence, other than that which has appeared in the press, about the negotiations for a settlement of the dispute which have taken place during the last ten days. Our information supports press statements about the more hopeful terms of the last approach to the Iranian Government by the United Kingdom Government, and the response to that approach. I am afraid that I cannot give the honorable gentleman any further information.

OIL AGREEMENT BILL 1952.

Alan Charles Bird
Batman (Victoria)

Mr. BIRD.— ...Last year the Anglo-Iranian Oil Company Limited, unfortunately, was precipitated in a hurry out of Persia, and lost its big refinery at Abadan. Consequently, it had to find, without loss of time, a location for another refinery, and proceed with the erection of the establishment with all possible speed. That is why the project at Kwinana is being accelerated. The work will be hastened, not because of, but in spite of, this Government's activities. The Persian situation is such that the Anglo-Iranian Oil Company Limited has been forced to take speedy action, and whatever the Government has done in the matter, it certainly cannot take the credit for that project...

STATES GRANTS BILL 1952.

Kim Edward Beazley
Fremantle (Western Australia)

Mr BEAZLEY.— The honorable member for Forrest (Mr. Freeth) mentioned the establishment of the new oil refinery at Kwinana and gave credit for it to the Prime Minister (Mr. Menzies) and the Premier of Western Australia, Mr. McLarty. There are some who might be disposed to give credit to Dr. Mossadeq, of Persia, as being the original cause of the desire of the Anglo-Iranian Oil Company Limited to found a refinery in Australia. If any explanations for this development are to be sought, they will be found in Persia, not in the policies of the governments in Perth and Canberra. The honorable member for Forrest spoke of the disabilities of “Western Australia”. The bill represents an attempt to fulfill the obligation, which has always been implicit in the system of federation, for the more developed parts of Australia to contribute financial aid to the less developed parts.

INTERNATIONAL AFFAIRS.

Reginald William Colin Swartz, M.B.E., E.D.
Darling Downs (Queensland)

Hon. Paul Meernaa Caedwalla Hasluck
Curtin (Western Australia)

Mr. SWARTZ.— In view of the situation that has arisen in Iran and the reported breach of the diplomatic relations between that country and the United Kingdom, will the Minister acting for the Minister for External Affairs make a statement to the House regarding this position and indicate any effect that this international development may have on Australia? Will the Minister also report on the serious situation that has apparently developed in Indo-China?

Mr. HASLUCK.— The situation in Iran concerns the United Kingdom and does not directly concern Australia. From time to time the views of the Australian Government on the situation in Persia have been communicated to the United Kingdom Government. I do not think that there is anything that I can usefully add to the account of this matter that has already been published. For the time being it might be out of place for me to intervene in a public discussion of a matter which directly affects the United Kingdom and not Australia. So far as the situation in Indo-China is concerned, as the honorable member knows, the Australian Government recently established a base at Saigon and is receiving reports on the situation in Indo-China. At present the offensive which is in progress against the French is developing in such a way as to give grounds for a great deal of anxiety. I shall consider the possibility, at a later stage, of supplying further information to the House on the situation in Indo-China.