FoE exposes uranium cartel in 1976

Wieslaw Lichacz

A huge jump in the uranium price occurred in the mid-1970s, thanks to a cartel known as the Uranium Club. The cartel was exposed by Friends of the Earth (FoE). It was disbanded and out of court settlements resulted in some club members paying about $800 million in penalties.

FoE had grappled with the Ranger Uranium Environmental Inquiry since September 1975 in a David and Goliath battle against highly-paid lawyers, company officials, senior government department representatives and corporate public relations consultants.

At the time, Chain Reaction carried generic appeals from FoE's 'Leak Bureau' asking corporate or governmental whistle-blowers to provide information. In the dying days of the Ranger Inquiry we received a phone call from someone who had just flown from Melbourne to Sydney. We were asked to come to a secret location in a terrace house near the Oxford Street Police Station to see some important 'luggage' he had brought from Melbourne. We were told not to tell anyone where we were going.

When we got there, we were confronted with a large box full of original files and documents leaked to FoE from the offices of Mary Kathleen Uranium Mining Pty Ltd.

The leaked company files had evidence of:

  • shoddy environmental practices
  • close surveillance of environmental organisations
  • the close relationship between ACTU president Bob Hawke and the chair of Conzinc Riotinto Australia (CRA), Sir Roderick Carnegie
  • the complicity of Australian government officials in providing advice to mining companies on how to avoid important nuclear non-proliferation safeguards treaties to sell uranium to places like Taiwan (which was not a signatory to the Nuclear Non-Proliferation Treaty) via "Toll Processing" in the US.

The Uranium Club

The files also revealed a uranium producers' group called the "Uranium Club". It consisted of the key Australian and other non-US uranium producers. The Club appeared to have been established with the primary aim of artificially increasing the price of uranium from about US$7 per pound to a lofty US$45−50 per pound from 1972 to 1974 in order to squeeze nuclear power producers and US uranium suppliers.

John Proud of Peko-Wallsend (one of the original joint venturers of the Ranger Uranium Mining Company Pty Ltd with the federal government before the government sold its share) was coordinator of the club at the March 1976 meeting of companies and government bureaucrats. The notes of that meeting finish with the statement: "Mr Proud stressed the need for extreme secrecy".

FoE planned to simultaneously release these documents around the world. We knew that we would need multiple copies. The NSW Environment Centre in Broadway, Sydney, had three photocopiers and we were going like gangbusters. We burnt out one older copier in a puff of smoke! But we kept going with the remaining machines as the bright orange sunrise burnt through the narrow windows over the top of our lone desk in the far corner of the environment centre.

The original documents now had to be re-stapled back into their original state to submit to the Ranger Inquiry as primary evidence.

The first set of copies, wrapped up in brown paper as personal luggage, were immediately taken to the airport, to be hand-delivered to the Californian Energy Commission in San Francisco. The Commission was primed to pass on the documents to the US Justice Department and the US media.

Back-up copies were placed in a locker at Central Railway Station across the road from the Ranger Inquiry, with the key given to one of our office workers with whistle-blowing instructions if something went wrong with our plans. The other set was on the back of a pushbike peddled by an intrepid FoE activist, always on the move – a veritable moving target for the authorities!

We took a big box of the original documents to the Ranger Inquiry. But we had to get through the filter of the inquiry counsel assisting, John Cummins QC. During the gruelling two years or so of the Inquiry from September 1975 to 1977, the counsel assisting the inquiry went out of his way to preclude evidence presented by environmentalists as 'inadmissible'.

We were in the corridor of the Old Gas Light Building waiting for the counsel assisting to consider the documents behind closed doors. The wall clock was stuck on 3:33 for the duration of the inquiry – for a moment time had stopped for us too! Our lawyers became very worried with the time the counsel assisting was taking and we had visions of NSW Special Branch and ASIO officers marching down the corridors with handcuffs jingling and no escape for us. We would be thrown into Katingal maximum security prison, the keys thrown away and we would never see the sun ever again!

I hammered on the counsel assisting's door, pushing it open with my shoulder to see what he was doing. Inside some of the documents were spread over his desk. He was on the phone and looked very embarrassed and hung up quickly. He told us in no uncertain terms that to admit these documents now would mean re-opening the inquiry for another nine months and re-calling witnesses. He would not allow that as the government had given the order for the inquiry to wind up. No more extensions of time, he insisted.

Counsel assisting the inquiry rejected our case to admit the documents as exhibits during the final submission hearings. It is quite likely that the commissioners and their advisers never saw this critical primary evidentiary material.

This is only the beginning of a much bigger story that ran on for many years right into the mid-1980s and beyond. Many of the details are covered in books (listed below) written by former Australian Trade Practices Commissioner George Venturini.

Cartel shut down

The cartel story was published in The National Times in its August 16–21 1976 edition, causing serious embarrassment to the government and the uranium cartel members that included RTZ, RioAlgom, CRA, Mary Kathleen Uranium Mining (the only company producing uranium in Australia at the time), Electrolytic Zinc, Peko-Wallsend, Pancontinental, Noranda Uranium Mining and Queensland Mines.

On August 30, once the Californian Energy Commission released the documents in San Francisco, the story broke internationally, and it was splashed across the front pages of major financial papers and dailies around the world over the next few days.

The scheduled Uranium Club meetings in New York were immediately cancelled. The US Justice Department had issued subpoenas for the company executives who were named in the documents and other members of the cartel to appear before a Grand Jury any time they set foot in US. Future meetings scheduled for Paris were also cancelled and the Uranium Club was disbanded.

A person purporting to represent Westinghouse tried unsuccessfully to bribe FoE to get the documents, stating that "price was no object" and that through Westinghouse's contacts in the Marcos regime, a Filipino environmentalist on death row would be recommended for a pardon by President Marcos.

Through our carefully laid out plan, many of the documents were ultimately placed on the US Congressional Record for all to see despite the Australian inquiry counsel refusing to admit them.

Litigation by Westinghouse and General Electric against the members of the cartel picked up momentum in the US courts and eventually flowed into Australian courts. The conservative Fraser government passed legislation in November 1976 – the Foreign Proceedings (Prohibition of Certain Evidence) Act 1976 – to prevent FoE or anyone else from providing any further documentary evidence against the uranium mining companies from Australia. The Act was described in a Chain Reaction editorial as "one of the most corrupt pieces of legislation to go on to the Australian statutes".

Westinghouse finally settled out of court with the uranium cartel participants for damages in excess of US$800 million to make up for its losses due to the artificially inflated price of uranium supplied over four years and some punitive damages for breaching the US Sherman Antitrust Act.

Meanwhile, the Ranger Inquiry concluded that the nuclear power industry was unintentionally leading to an increased risk of nuclear war. The Inquiry recommended caution and consultation, but its findings were misrepresented by the government as a green light for uranium mining. John Howard was promoted to Minister for Special Trade Negotiations and was responsible for using uranium trade as a lever to gain better access to European markets. Then in 1980, Bob Hawke switched from being a pro-uranium trade union leader to a pro-uranium politician. And the rest is history ...

Wieslaw Lichacz was a foundation member of FoE in NSW and continued with activist work that included Ambassador of the Atom Free Embassy for 18 months outside Lucas Heights. He represented FoE at the Ranger Inquiry for two years. He is now working on international climate change issues.

More information:

− Stannard, Bruce, The National Times, 16−21 August 1976, pp 1, 3−4, 44.

− Venturini, George, 1980, "Malpractice − The Administration of the Murphy Trade practices Act", Sydney: Non Mollare. Discussed at tinyurl.com/u-howard

− Venturini, George, 1982, "Partners in Ecocide: Australia's complicity in the uranium cartel", Victoria: Rigamarole Books. Reviewed by Evan Jones at tinyurl.com/u-cartel

− Senz, Deborah and Hilary Charlesworth, "Building Blocks: Australia's Response to Foreign Extraterritorial Legislation", http://beta.austlii.edu.au/au/journals/MelbJIL/2001/3.html

− Dalton, Les, May 2006, "The Fox Inquiry: Public Policy Making in Open Forum", Labour History, Vol.90, tinyurl.com/u-dalton

− Finch, James, 2006, "Is This Uranium Bull Market For Real?", tinyurl.com/u-finch. (Note: The author is incorrect in his assertion that FoE "offered Westinghouse additional documents if the nuclear power plant manufacturer would help the environmental group release jailed members in the Philippines".)

− Lichacz, Wieslaw, 2006, Submission to the UMPNER Inquiry, tinyurl.com/wl-sub

− Lichacz, Wieslaw, 2004, Submission #82 to the Senate Inquiry into Environmental Regulation of Uranium Mining, tinyurl.com/wl-sub-u

From Chain Reaction #123, April 2015, national magazine of Friends of the Earth, Australia, www.foe.org.au/chain-reaction/editions/123