From “Oil Nationalisation and Managerial Disclosure: The Case of Anglo-Iranian Oil Company, 1933-1951”
Chapter 3: Employee relations and Iranianisation
Author : Neveen Abdelrehim | The university of york
The nationalisation crisis brought the topic of discrimination into sharp focus and it became the subject of claim and counter-claim from the company‟s board and Iranian nationalist opinion. The AIOC had created its own “British Empire” in Iran and established hierarchies by preference for British staff. Keddie argued that the real changes in the structure of power “have been tied to social and economic changes that have reduced the power of certain social groups and classes while increasing that of others”. Meanwhile, Bostock and Jones emphasized that the AIOC‟s linkages with the local economy were few and the fact that the British government was a majority holder in the company was widely disliked and was directly associated for most Iranians with British imperialism. In this section, I will illustrate the validity of this, and demonstrate that the claims of discrimination against the Iranians are true, using relevant archival evidence. Expatriate workforce status communicated key messages about the AIOC. The company desired to have its own British staff seen as powerful and influential for prestige and to maintain control within these prevailing groups. It is worth noting that British managers in Iran did not develop local government relations nor even established social networking and teamwork with the Iranians. Racial injustice was shown by the company‟s practice of excluding Iranians in favour of British workers and through the company‟s most frequent claim that only British candidates had the required skills. The attitude of the company towards Iran was influenced by negative British attitudes towards the Iranians as demonstrated by their slogan “a native is always a native, however good”. For instance, Mr. Jameson, Director of the AIOC, that the company is not willing to replace British staff with the university trained Iranians because of the unsuitability of the ordinary working man in Persia. Discrimination between British and Iranian employees was a key feature in the AIOC where it had been specified by the company that staff must be British by birth and origin. Jacks, Director of the AIOC in Iran declared that the company would never agree to have its administration other than British and the Iranian government should never expect that it should. Obviously, the AIOC was not willing to let Iranians hold technical jobs fearing that they might learn oil operations. Yet, the company avoided engaging British nationals who were thought to have “gone native” and married locally because it was against the company‟s interest to employ them. The company feared that those unskilled workers who had “gone native” might form unions and strike for better terms. Therefore, it was quite obvious, on the perception of skills and character, that the company was preventing itself from “finding” Iranians. Their rationale was that it would be considered as heavy wastage if the company had an obligation to train the Iranian employees. As a result, the AIOC had management hierarchies where the British were always at the top of the company regardless of their efficiency. For example, Jameson was aware of the previous disappointing technical reports associated with the company‟s earlier performance but he persisted in employing and hiring British engineers regardless of how unprofessional they might be. He asserted that:
The Germans are at present erecting extensions to the jetties there [Khor Musa] and if this policy is adopted it is possible that the government may not call for our assistance. The view has been expressed that our proposal to employ consulting engineers to advise us would probably result in the confirmation of previous adverse technical reports.
British managers in the AIOC continued to exercise control over the company‟s
operations in Iran and even clubs and stores discriminated against the natives, which had a negative impact on the Iranian workers. The company missed opportunities to offer better conditions, break down social barriers and mix more with the Iranians so there was no chance for Iranian and British solidarity because of class barriers. British workers used to scorn the natives and did not mingle with them. There was always a sense of oddness when referring to the Iranians because when British staff referred to the “company” this meant that they are referring to themselves as they had organized and conducted their operations, without much thought given to Iranian ideals and customs. All social and operational modes were based on their own usage and from their own standpoint. Accordingly, the labour force was divided into three classes: the first class comprised British; the second class included technical men and salaried office workers with few Iranians who had their education in Britain, whereas the third class included artisans, skilled and unskilled labour, who were exclusively Iranians.
This reveals that British personnel were always employed in the top grade posts where their superiority could be always maintained and where they gained no experience of being among Iranians (who were in the lower grades). The following figures explain British and Iranian employment ratios in the AIOC. Firstly, the number of foreigners had risen in 1945 to over 4,000 out of a total of 42,000 which is a ratio of less than 10 percent against 7 percent in 1938. Meanwhile, foreign salaried employees had risen from 1,744 to 2,478 between 1939 and 1945 whereas Iranian salaried employees had actually fallen from 1,496 to 1,479. Additionally, in the artisan grade, the figures were 979 and 1,552 for foreigners, and 6,516 and 6,254 for Iranians which illustrates a drop for the latter. To the public, the British authorities claimed that the continued operation of the AIOC was vital to their mutual wellbeing, as it contributed to Britain‟s wealth. Moreover, the AIOC justified their unfairness and inequality towards Iranian employees by claiming that “it has aroused in the various nationals feelings of jealousy towards the British, which in some instances are closely akin to dislike”. There was no sense that the AIOC was in a quest for equality because discrimination remained and there was little scope for those amenities which ought to play a considerable part in the life of the Iranians. The company continued to behave unfairly and even Cadman, Chairman of the APOC/AIOC (1927- 41), felt the injustice and advised Ministers to establish mutual confidence between the British and the Iranian government. He recommended that they should strive increasingly to regard the company‟s activities through Iranian eyes and in terms of Iranian vocabulary. However, this was not the case and the company maintained its practice of not engaging Iranians even in non technical posts. The company claimed it was unable to find these talents and experience among the locals, for instance, The company is undertaking very extensive measures to increase the supply of Iranians possessing the requisite competence and skill and to attract and retain in its employment all available candidates. Even so, it seems certain that their numbers will fall short of the total number of skilled employees required for many years to come. Moreover, among their excuses, Jacks affirmed in his correspondence to Fraser that “it should be no matter of surprise that as a result of [their] experience with purely local and uneducated tribal people the company and its management had little confidence in the ability of its Persian employees to rise to any important position in the company‟s operations”. Attitudes to local staff in the AIOC showed indisputable discrimination against the Iranians in a direct way or indirect way. Even promoted and educated Iranians of the company were also in an unfortunate position because the company did not want them to prove successful nor to engage them in first grade jobs, and consequently their views were not necessarily respected. Even as the service of the company attracted the more intelligent Iranians, it became evident that their living conditions were unsatisfactory and this feeling of dissatisfaction among superior Iranian employees became increasingly evident. Moreover, the company refused to provide additional training to competent and efficient Iranian employees and disclosed that it would be difficult to allocate an annual grant “in providing additional education and training abroad for Persians who in the course of their employment in the south had demonstrated by good work and general loyalty their suitability, subject to additional education and training, to promotion in the company”. As a result, it was a very common complaint that the British staff of the company treated their Iranian colleagues and subordinates as racial inferiors with whom all association and contact had to be conducted. Iranians of all grades, from workmen up to senior staff, including UK graduates, who served the company in Khuzistan, related their experiences concerning alleged insults which they suffered on the grounds of nationality from British members of the staff. To sum up, discrimination against the locals was all-encompassing in Iran as the existing British attitude was based on fear of allowing the Iranians to have influence in the company because this would be detrimental to company prestige. It is worth mentioning that these divisions of classes existed for housing, wages, hospitals and for all major issues concerned with the whole life of the community. Therefore, the evidence that the AIOC treated its Iranian staff badly will be set out in the following section.
Notes & References
384. Bostock and Jones argued that in areas of British influence rather than administration, AIOC had long acted as agents of empire in blocking the tendencies of other great powers.
385. Keddie, The Iranian power structure and social change 1800-1969: an overview, 3.
386. Bostock and Jones, British business in Iran, 1860s- 1970s, 46.
387. BP 66815, Jameson to Robert [his brother], 7th June 1916, 2.
388. BP 67589, Notes of meeting held on 6th February 1934, 47.
389. BP 52887, Jacks to Fraser, 15th December 1933, 4; Johnson, British multinationals, culture and empire in the early Twentieth century.
390. Johnson, Ibid, 88.
392. BP 52887, Jacks to Fraser, 15th December 1933, 3.
393. BP 68067, Jameson to Fraser, 6 March 1938, 5.
394. BP 59011, Elkington to Medlicott, 11th July 1929.
395. Elwell-Sutton, Persian Oil, A study in power politics, 92.
396. House of Commons, Parliamentary debates 1 May 1951, 1011.
397. BP 49673, Report by J. M. Wilson on certain aspects of the company‟s building proposals in Persia, 3rd April 1934, 2.
398. BP 68386, Report by Sir John Cadman, visit to Persia and Iraq, Spring 1926, 28.
399. Ibid, 47.
400. Gidel Memorandum.
401. BP 52887, Jacks to Fraser, 15th December 1933, 3.
402. BP 49673, Report by J. M. Wilson on certain aspects of the company‟s building proposals in Persia, 3rd April 1934, 2.
403. BP 52887, Jacks to Fraser, 15th December 1933, 4.
404. BP 126349, Reference No. 522, Northcroft to Rice on 12th December 1950, 6.