A major scandal is threatening to break here over charges that the government-owned British Petroleum and five other major oil companies have been violating the ban on trade with Rhodesia since the birth of Ian Smith's illegal white government 12 years ago.
An official enquiry into the alleged sanction-busting is now virtually completed, it was learned yesterday. A report is due to be given to foreign minister David Owen in a few weeks.
Vague reports about ban violations have circulated for years. But now detailed accounts, supported by memos from BP and Shell, partners in the venture, are surfacing here.
Both companies refuse to confirm or deny the accuracy of these accounts. Both insisit they will make no comment until Owen's inquiry is finished.
Shell is owned by British and Dutch interests. Some 51 percent of BP's are owned by the government and the former foreign office chief, Lord Greenhill, sits on its board.
One extensive version of the alleged sanction breach has been published in the weekly new statesman by Martin Bailey and Bernand Rivers. They are consultants to the commonwealth secretariat at the United Nations.
A parallel story has been told by Jorge Jardin in his new book, "Sanction Double Cross." Jardin is a former Portugese cabinet mininster who was in charge of insuring Rhodesia's oil supplies from Mozambique before that nation gained its independence.
Without oil, the Smith government would almost certainly have collapsed years ago. Since the world trade in oil is dominated by seven major companies - the "seven sisters" - it has long been apparent that at least some have been providing white Rhodesians with their lifeline.
The two published descriptions of the trade agree that the companies have carefully observed the division of th e Rhodesian market that existed when Smith declared independence. It has been split, down to the decimal point, by BP and Shell acting as a unit: Caltex, a partnership of Standard Oil of California and the Texas Company: Mobil, and a subsidiary of Comapagnie Francaise des Petroles, according to the report.
This last company has sometimes been called an "eighth sister" because it collaborates so frequently with the seven who dominate exploration, production, transportation, refining and marketing of the non-Communist's world's oil.
The U.S. Senate Subcommittee on Foreign Economic Policy is in the preliminary stage of an inquiry into American firms' involvement in the Rhodesian sales. Karin Lissakers, of the subcommittee staff, said initial evidence suggests that African subsidiaries of Mobil and Caltex have sold oil to Rhodesia since the issurance of a Presidential order in 1968 prohibiting such transactions by American firms.
Spokesman for both Caltex and Mobile said yesterday that none of their subsidiaries is trading with Rhodesia. A Treasury Department probe of Mobile in 1977 found no evidence to suggest Mobile products were going to Rhodesia. Mobile's South African subsidiary, however, refused to provide documents or testimony for that investigation.
After sanctions were imposed on Rhodesian trade in 1965, the oil companies are said to have worked through thinly disguised intermediaries to bring in their product. Acording to Bailey and Rivers, the most important conduct worked this way:
Shell-Moizambique, jointly owned by Shell and BP, took oil from tankers docking at Loureno Marques (now Maputo) the capital of Mozambique. Shell-Mozambique sold it to a specially created South African firm, Freight Services. This outfit then delivered the oil by rail to GENTA, the Rhodesian purchasing agent.
That simple technique made a monkey of the British Navy which was blockading another Mozambique port, Beira, for nine years, threatening to intercept tankers that never came.
A variant of the scheme was described by Jardim, the ex-minister in Portugal's Salazar government. Under this arrangement, the French concern took over Shell's Rhodesian orders and placed a matching order with Shell.
Bailey and Rivers estimate that BP and Shell alone have supplied Rhodesian with 100 million pounds or nearly $190 million in oil products. Their share of the trade, the U.N. aides wrote, has held at a remarkably steady 42.5 percent.
The new Statesman writers insist that the parent companies in London had to know what their Shell-Mozambique subsidiary was up to. This is because the Portugese government insisted that the Shell-Mozambique countersign customs documents in which Freight Services declared that the oil was heading for Rhodesia.
In the late 1960's, the heads of BP and Shell, William Fraser and Frank McFaddean, began worrying about the arrangements, according to memos and cables quoted by the U.N. aides. They tell how the oil chiefs explained to George Thomson, then the commonwealth secreatary, that the great concerns could not be certain that their oil was not reaching Rhodesia.
Lord Thomson, as George Thomson is known today, now says that the companies had been "less than frank" with him.
By 1974, the general manager of Shell-south Africa was writing his board in London, "It is extremely difficult to find a fool-proof arrangement which will demonstrate that we have not been aware of any dealings with Rhodesia."
Bailey and Rivers charge that a BP official ordered that Shell-Mozambique to burn papers implicating the company in the trade, and these orders were faithfully executed.
It is not known for certain how Rhodesia has continued to get oil after newly independent Mozambique closed its border against the illicit regime in March 1976. But the oil flows nevertheless.
The inquiry ordered by Owen will have some embarrassing questions to answer, such as : How much did Labor government officials know of breaches in the policy they had imposed?
There had been speculation that this and related questions will persuade the government to sit on the reprort, at least until a general election, widely forecast for October, has been held.
However, officials here believe there has been so much attention drawn to the charges that no government will dare to suppress the inquiry. A well known lawyer, Thomas Bingham, has been conducting the investigation for Owen.
His findings could lead to criminal trials. The maximum sentence for breaching sanctions here is two years in prison and a fine depending on the size of the illegal trade.