Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

S/S–NSC files, lot 63 D 351, NSC 29 Series

Memorandum by the Under Secretary of State (Webb) to the Executive Secretary of the National Security Council (Lay)¹

top secret

Washington, January 21, 1952.

• Subject:
• Eighth Progress Report on the Implementation of NSC–29, “Security of Strategically Important Industrial Operations in Foreign Countries.”²

1. NSC–29 was approved as Governmental policy on September 4, 1948. It is requested that this progress report dated December 15, 1951, be circulated to the members of the Council for their information.

2. The Special Interagency Committee on Foreign Sources of Critical Materials on November 1, 1951 accepted the following revised list of strategically important foreign industrial operations:

1. Venezuela—petroleum

2. Chile—copper

3. Nigeria—columbite and tantalite

4. Surinam—bauxite

5. Trinidad—bauxite transshipment facilities

6. Bolivia—tin and tungsten

7. Canada—nickel and platinum

8. Gold Coast—all grades of manganese

9. Southern Rhodesia—chromite

10. Union of South Africa—metallurgical manganese and metallurgical and chemical chromite

11. Indonesia—tin and petroleum

12. India—manganese

13. Mexico—petroleum

14. Aruba—petroleum

15. Curacao—petroleum

16. Belgium/Luxembourg—petroleum

17. France—petroleum

18. Italy—petroleum

19. Spain/Portugal (including Canaries)—petroleum

20. The Netherlands—petroleum

21. Japan—petroleum

22. British Borneo—petroleum

The addition to the previous target list of oil facilities in Indonesia and the countries numbered 13–22 grew out of NSC Staff actions taken in connection with the NSC–97 project “A National Petroleum Program”, of December 28, 1950³ which directed the Director of Defense Mobilization to develop a national petroleum program leading to a complete supply of Allied requirements for petroleum. As a result of NSC–97, the Petroleum Administration for Defense (PAD), prepared a report dated July 20, 1951, entitled “World-Wide Demand and Supply of Petroleum in Event of a Major War 1952–1957.”⁴ One of the recommendations in the report calls for preventive action by the Government against possible sabotage of oil installations abroad. The Senior NSC Staff requested the Department of State and the Central Intelligence Agency jointly to study and report on measures that could be taken to counter sabotage of these installations.

Since the action required falls logically into the same category with action now being taken under NSC–29, it was decided to use the NSC–29 mechanism for handling the problem of security measures for foreign oil installations. Accordingly, the Special Interagency Committee was convened to consider the PAD report, and a Petroleum Working Group was established to identify those specific oil installations abroad which require security action. The above additions to the NSC–29 target list were recommended by the Petroleum Working Group.

Measures which the Department of State plans or already has initiated for the security of oil facilities in the areas listed above are outlined below.

European Countries

In the case of the continental European countries the Department of State will instruct:

(a) The United States Representative at the first meeting of the North Atlantic Petroleum Planning Board to stress the extreme importance of participating countries maintaining and improving the physical security arrangements of their oil installations. Member governments will be urged to cooperate with each other to this end.

(b) The United States Missions in the countries designated to express to the appropriate authorities our mutual interest in maintaining the security of oil facilities and to offer United States assistance in devising appropriate security arrangements, where necessary and practicable.

Curacao and Aruba

A physical security survey was made in 1948 of the refineries in Curacao and Aruba by a Central Intelligence Agency field team. Because the team concluded that security conditions in the Island refineries then compared favorably with those of large industrial operations in the United States, no action was recommended or taken. Recent information received by the Department indicates that security conditions at the refineries are not entirely satisfactory. The Department therefore will request permission of the Netherlands and Netherlands West Indies Governments to have a survey team review security conditions at the refineries.

In addition the Department is considering the assignment of a full time security officer to the Consulate General at Curacao to provide continuing surveillance of security conditions at Aruba, Curacao, and Surinam. Informal discussion with the Netherlands West Indies Government indicates that the assignment of such an officer would be welcomed.

Indonesia

The Department believes it would be politically inadvisable at this time to approach the Indonesian Government on the problem of security of oil installations under its jurisdiction, and it is proposed to have prepared a study of the security of Indonesian petroleum facilities based on available information in this country and that supplied by the Embassy Djakarta. The Central Intelligence Agency will be requested to develop, on the basis of this study, recommendations for the improvement of existing security arrangements. Appropriate steps will then be taken to implement these recommendations.

British Borneo

Since approaches to the United Kingdom regarding the security facilities in colonial areas previously identified under NSC–29, produced results only very slowly, it was decided not to take up directly with British authorities at this time the question of security of oil installations in Brunes [Brunei?], Sarawak and North Borneo. Instead as in the case of Indonesia, a research study will be made of these facilities based on information available in this country and data supplied by the Consulate General, Singapore.

Japan

SCAP, Tokyo, has been requested to furnish information on existing threats of sabotage to petroleum facilities in Japan, and security arrangements now in force to guard against such threats. SCAP also has been requested to recommend what action should be taken if in its view existing security arrangements are unsatisfactory.

Mexico

In view of the known sensitivity of the Mexican Government toward its nationalized oil industry, the Department believes it would be inappropriate at this time to approach directly Mexican officials regarding the security of oil installations. Embassy Mexico has been requested to ascertain what information it has in its own files on the security of the oil industry. In addition the Embassy has been asked to determine whether any security surveys of the Mexican oil industry have been made or are contemplated in the near future, and, if not, to indicate whether the Mexican authorities would accept the assistance of the United States Government in the making of such a survey. Further action is being reserved pending receipt of Embassy Mexico’s reply.

3. Further progress continues to be made with respect to the previously identified NSC–29 target list. Developments since the release of the last quarterly report are summarized briefly below.

Chile

In response to a request of the Chilean Government, a plant security expert was dispatched to Santiago, December 3, 1951. He will be attached to the Embassy for approximately one month to assist in the implementation of the recommendations set forth in the report prepared by the Central Intelligence Agency.

Surinam

Copies of the Central Intelligence Agency field survey report on the Surinam bauxite industry have been made available in suitably edited form to the Netherlands and Surinam Governments and to the Aluminum Corporation of America with a request that comments be made to the Department as soon as possible. As soon as these comments have been received, the Department will proceed with implementation of recommendations of the survey.

Venezuela

Reports from Embassy Caracas indicate continued deficiencies in the security arrangements of the oil fields. Physical devices for security protection are much in evidence, but a generally lax attitude toward security enforcement is in evidence. Apparently a major problem is maintaining a high spirit of security alertness in the absence of sabotage attempts. To deal with this problem, Embassy Caracas has recommended that a qualified person be attached to the Embassy for an experimental period of six months to discuss with and advise the oil companies on security matters. The Department is now planning to recruit such a person.

Bolivia

A copy of the Central Intelligence Agency Report of Survey of the Vulnerability to Sabotage of the Tin and Tungsten Industries of Bolivia⁵ was forwarded to the Embassy last May with a request that wherever feasible measures be taken to implement the recommendations. However, because of disturbed political conditions following the May 6, 1951 election, and the subsequent United States-Bolivian impasse on a new tin agreement, the Embassy reports it has not yet been possible to approach either the Government or the companies regarding the report.

Surveys of Chilean and Peruvian ports, which are the shipping points for Bolivian tin and tungsten exports, have been carried out as recommended by the Central Intelligence Agency study. Embassy Santiago’s report on Arica and Antofagasta indicates security standards at these ports are very low and could be improved with little effort. According to the Embassy however the Chilean Government probably would not take the necessary steps unless the international situation underwent further serious deterioration. The Department is now considering how the Chilean Government can be stimulated to take more immediate action, or what other measures are appropriate.

Embassy Lima’s report on Mollendo indicates poor security conditions at that port. The Embassy has been requested to approach the Peruvian Government to investigate its port security conditions with a view to adopting improved standards for security.

Indonesia

A study on the Banka Tin mine prepared by the J. G. White Engineering Company⁶ has provided the Department with useful additional information on the security of Indonesian tin installations.

According to the report the security situation on the Island is good and travel is safe at all times throughout the area. However this and other information available indicates there is still room for improvement of security conditions in Indonesian tin mining operations. The Department is considering how the problem can be dealt with in view of the known sensitivity of the Indonesian Government.

The Gold Coast, Nigeria and Trinidad

The Sixth Progress Report of April 11, 1951⁷ mentioned that the British Foreign Office was undertaking to obtain for the Department information on the security of identified industrial installations in the Gold Coast, Nigeria and Trinidad. The requested information has been forwarded to the Department by Embassy London and is contained in the attached Foreign Office note (See Annex⁸). On the basis of the Foreign Office note the Department is satisfied that British Colonial authorities are thoroughly cognizant of the problem of security of the identified installations and are taking all practicable measures for their protection. Until contrary information comes to hand, the Department considers further action on these targets unnecessary.

Southern Rhodesia

The Department has received a detailed report from Salisbury on the security of the Chromite Industry of Southern Rhodesia. The report states that the industry is relatively vulnerable to sabotage through damage to transport and power facilities. However, the physical guarding of such facilities, except at a few highly strategic points, is considered virtually impossible at present because of the heavy manpower requirements. Fairly effective control over the activities of possible saboteurs is maintained by immigration officials and the Criminal Investigation Division of the British South Africa Police. These two organizations work closely together and maintain a tight check on the activities of all European visitors and local residents considered potential trouble makers. According to the British Security Liaison Officer at Salisbury there is not much danger of sabotage by Africans. The few natives with Communist leanings are under constant surveillance.

The Department now plans to instruct the Consulate General at Salisbury to conduct direct discussions with Southern Rhodesian authorities regarding the need for and practicability of taking further measures to safeguard the chromite industry.

4. The Special Interagency Committee on Foreign Sources of Critical Materials has been strengthened by the addition of a representative from the Office of Defense Mobilization. At the November 1, 1951 meeting of the Committee^* it was agreed that the NSC–29 target list should be reviewed in the light of revised stockpile objectives as well as the relevancy of the other criteria which governed the selection of the original list. The basis for such a revision will be provided by a National Intelligence Estimate, Likelihood of Loss of Important Economic Resources in Foreign Areas⁹ which is now being prepared. This study will attempt to estimate the possibility of loss or decline of economic resources located in various world areas which are of importance to the security interests of the United States.

James E. Webb

1. This memorandum was discussed at the 112th meeting of the National Security Council on Feb. 6, at which time Deputy Secretary of Defense Foster indicated that the Munitions Board felt that the Special Interagency Committee for this subject should continue to study the problem with particular attention to the security of the Indonesian oil facilities, the Mexican petroleum industry, and mining facilities in the Gold Coast, Nigeria, and Trinidad. The Council took note of Webb’s memorandum and of Foster’s remarks. (Truman Library, Truman papers, PSF–Subject File)
2. NSC 29, Dec. 4, 1948, is not printed; nor have any of the preceding seven progress reports on NSC 29 been printed. All of these papers are in the S/S–NSC files, lot 63 D 351, NSC 29 Series.
3. For the text of NSC 97, see Foreign Relations, 1950, vol. i, p.489.
4. Regarding this report, which is not printed, see the memorandum dated Nov. 29, 1951, ibid., 1951, vol. i, p. 970.
5. Not found in Department of State files.
6. Not found in Department of State files.
7. Not printed. (S/S–NSC files, lot 63 D 351, NSC 29 Series)
8. The Foreign Office Note, dated Dec. 19, 1951 and transmitted in despatch 2808 from London, Dec. 21, is not printed.

9. Pursuant to NSC Action No. 531. [Footnote in the source text. The reference here is to the discussion of the seventh progress report on NSC 29, July 24, 1951, which took place at the NSC meeting of Aug. 22. The record reads as follows:

   “Discussed the reference Progress Report and agreed to refer it to the Senior NSC Staff for recommendations regarding the desirability of a revision of the list of operations contained therein and the frequency of future progress reports by the Department of State.” (S/S–NSC files, lot 66 D 95, “Records of Action”)]

9. There is no evidence in Department of State files that the National Intelligence Estimate under reference was completed.