12. The sovereigns and heads of state note the present disorder in the international monetary system and the absence of rules and instruments essential to safeguard the terms of trade and the value of financial assets of developing countries. They emphasize particularly the urgent need to take the necessary steps to ensure the protection of the developing countries' legitimate interests. They recognize that the pooling of the financial resources of both the OPEC member countries and the developed countries, as well as the technological ability of the latter, for the furtherance of the economy of the developing countries would substantially help in solving the international economic crisis. Monetary Reform They stress that fundamental and urgent measures should be taken to reform the international monetary sysem in such directions as to provide adequate and stable instruments for the expansion of trade, the development of productive resources and balanced growth of the world economy. They note that the initiatives so far taken to reform the international monetary system have failed, since those initiatives haven't been directed towards the removal of the inherent inequity in the structure of the system. Decisions likely to affect the value of the reserve currencies, the Special Drawing Rights, and the price and role of gold in the international monetary system, should no longer be allowed to be made on a unilateral basis or negotiated by developed countries alone. The developed countries should subscribe to a genuine reform of the international monetary and financial institution, to ensure its equitable representation and to guarantee the interests of all developing countries. The reform of the monetary and financial system should allow a substantial increase in the share of developing countries in a decision-making, management and participation, in the spirit of partnership for international development and on the basis of equality. With this in mind, the sovereigns and heads of state have decided to promote among their countries a mechanism for consultation and coordination for full cooperation in the framework of their solidarity and with a view of achieving the goal of a genuine reform of the international monetary and financial system. National Companies 13. The sovereigns and heads of state attach great importance to the strengthening of OPEC and, in particular, to the coordination of the activities of their national oil companies within the framework of the organization and to the role which it should play in the international economy. They consider that certain tasks of prime importance remain to be accomplished which call for concerted planning among their countries and for the coordination of their policies in the fields of production of oil, its conservation, pricing and marketing, financial matters of common interest and concerted planning and economic cooperation among members countries in favor of international development and stability. 14. The sovereigns and heads of state are deeply concerned about the present international economic crisis, which constitutes a dangerous threat to stability and peace. International Cooperation At the same time, they recognize that the crisis has brought about an awareness of the existence of problems whose solution will contribute to the security and well-being of humanity as a whole. Equally aware of the hopes and aspirations of the peoples the world over for the solution of the major problems affecting their lives, the sovereigns and heads of state solemnly agree to commit their countries to measures aimed at opening a new era of cooperation in international relations. It behooves the developed countries, which hold most of the instruments of progress, well-being and peace, just as they hold most of the instruments of destruction, to respond to the initiatives of the developing countries with initiatives of the same kind, by choosing to grasp the crisis situation as an historic opportunty in opening a new chapter in relations between peoples. The anxiety generated by the uncertainty marking relations between those who hold power, coupled with the climate of uneasiness created by the confusion reigning in the world economy, would then give way to the confidence and peace resulting in an atmosphere of genuine international cooperation in which the developing countries would derive the greatest benefit and to which they would contribute their immense potentialities. At a time when, thanks to man's genius, scientific and technological progress has endowed peoples with substantial means of surmounting natural adversity and of bringing about the most remarkable changes for the better, the future of mankind ultimately depends solely on mankind's capacity to mobilize its imagination and willpower in the service and interest of all. The sovereigns and heads of state of the OPEC members proclaim their profound faith in the capability of a peoples to bring about a new economic order founded on justice and fraternity which will enable the world of tomorrow to enjoy progress equally shared by all in cooperation, stability and peace. They accordingly make a fervent appeal to the governments of the other countries of the world and solemnly pledge the full support of their peoples in the pursuance of this aim. APPENDIX 2 LETTER TO HON. ARTHUR F. SAMPSON, ADMINISTRATOR, GSA, FROM ATTORNEY GENERAL EDWARD H. LEVI, RESPONDING TO A PRESIDENTIAL REQUEST UNDER SECTION 708 OF THE DEFENSE PRODUCTION ACT, FOR APPROVAL OF IMMUNITY FROM ANTITRUST LAWS AND THE FEDERAL TRADE COMMISSION ACT Hon. ARTHUR F. SAMPSON, DEPARTMENT OF JUSTICE, Washington, D.C., March 28, 1975. Administrator General Services Administration, DEAR MR. SAMPSON: This is in response to your letter of March 11, 1975 requesting my consultation and approval of a proposed Voluntary Agreement and Program under Section 708 of the Defense Production Act of 1950, as amended, 50 U.S.C. App. § 2158. The document you enclose, which was forwarded to you for approval by the sponsoring agency, the Federal Energy Administration, would allow certain U.S. oil companies to consult and cooperate with an International Energy Agency (IEA) established pursuant to an Agreement on an International Energy Program to which the United States is a party along with other members of the Organization for Economic Cooperation and Development. Section 708 of the Defense Production Act, as amended, would provide immunity from the antitrust laws and the Federal Trade Commission Act with respect to acts or omissions to act by participants in the Voluntary Agreement, and their designated affiliates, which are undertaken pursuant to the terms of the Agreement in order to implement the International Energy Program (IEP). Such acts, as limited and defined by Sections 5 and 6 of the Agreement, would include membership in standing groups, working parties and advisory committees established by the IEA, if the participant is requested to join such groups by that agency; furnishing of data and information, and consultation and planning in respect thereof in accordance with the IEP; consultation and planning to formulate and develop principles/plans to implement the international allocation of petroleum pursuant to the IEP; and action taken in implementation of approved principles/plans if notified by the Administrator of the Federal Energy Administration that emergency measures established in the IEP have been activated in accordance with the terms of the IEP. The Agreement also provides for membership in, and similar activities by, ancillary industry groups established by the U.S. Government. I should note in passing, however, that unlike those formed by the IEA, operations of these groups, if established by the State Department, would be governed by the provisions of the Federal Advisory Committee Act 5 U.S.C. App. I (1973 Supp.). If established by the Federal Energy Administration, they would also be subject to the special provisions of Section 17 of the Federal Energy Administration Act of 1974, 15 U.S.C.A. 776. In reviewing the Voluntary Agreement and Program, I must consider whether any adverse effects it may entail for the competitive free enterprise system outweigh the benefits it may provide to the national defense. As you are aware, Justice Department and Federal Trade Commission staffs participated actively in the many interagency consultations involved in the process of drafting this Agreement. As a result, the document incorporates procedures to ensure all practicable antitrust safeguards consistent with the fact that the principal industry bodies contemplated would be formed by and would work under an international agency, not an agency of the United States Government. I conclude, therefore, that in relation to the defense benefits offered, the possibility of adverse effects to competition from actions by oil companies under the Agreement would be minimized by rigorous application of these safeguards. Accordingly, I hereby give my approval to the proposed Voluntary Agreement and Program. In studying the proposed Agreement I have also considered whether it is in compliance with the terms of the Defense Production Act. This question is twofold: first, whether the Agreement will tend to "further the objectives of [the Defense Production] Act" and therefore qualify as a voluntary agreement providing for exemption from the antitrust laws and the Federal Trade Commission Act pursuant to Section 708 of the Act; and second, whether the procedures proposed to approve the Agreement and to request actions by the participants comport with the requirements of Section 708. On the first point, the objectives of the Act, which are set out in Section 2, as amended (50 U.S.C. App. § 2062), include "the development of preparedness programs" "in order to provide for the national defense and security." The IEP is conceived of as a means to reduce the vulnerability of this nation and its allies to a reduction in the general availability of foreign oil by minimizing the effects of a supply interruption. Such a plan clearly seems to fall within the scope of a "preparedness program," and because the plan is aimed at insuring adequate supplies of a commodity essential for the national defense of the United States and its allies, it is of course a program providing for the national defense and security. I conclude, therefore, that the Agreement, by furthering that international plan, furthers the objectives of the Act and would qualify as a voluntary agreement under Section 708 of the Act. The second question relates to the procedures by which the Agreement will be approved and the actions pursuant to it will be requested. Section 708 (a) of the Act authorizes the President to consult with representatives of private companies "with a view to encouraging the making by such persons with the approval by the President of voluntary agreements and programs. . ." In turn, Section 708(b) grants antitrust exemption with respect to any act or omission to act by the parties to the agreement "if requested by the President pursuant to a voluntary agreement or program approved under subsection (a) and found by the President to be in the public interest as contributing to the national defense. . ." In practice, however, the voluntary agreements made in the past, and the proposed Agreement, have uniformly been drafted by the sponsoring government agency, perhaps amended after consultation with industry representatives, and finally presented to the President's delegate for approval. And, in earlier voluntary agreements the only statutory request to act made by the President's delegate was the request to particular members of industry to become participants in the agreement, each act pursuant to the agreement being considered as having been requested by the request to participate therein. This has always been the way that the Act has been interpreted and administered by the Executive Branch. Moreover, the Small Business Mobilization Law, 56 Stat. 357 (1942), which had a similar voluntary agreement provision on which Section 708 is based, was interpreted by the Executive Branch in a like manner. Congress has apparently assented to this administrative interpretation. In the face of the large number of DPA voluntary agreements drafted and carried forward in this manner, Congress has amended Section 708 a number of times since 1950 without indicating any changes in the procedures to be used for future agreements. I would conclude therefore that the procedures for adoption of the proposed Agreement and those contemplated for requesting actions thereunder are within the requirements of Section 708 so as to confer exemption from the effects of the antitrust laws and the Federal Trade Commission Act with respect to actions under the Agreement. The foregoing review would appear to answer the request in your letter of March 11, 1975 for my views as to whether your approval of the proposed Agreement and Program obviates any need on your part for further approvals or requests with respect to subsequent action which may be undertaken in implementation of the Agreement. In specific response, I would advise that once you have given statutory approval to the agreement, you need only address to each industry member presently or in the future proposed as a participant a single request to enter the Agreements and participate in it in accordance with its terms. This is not to say that your responsibility necessarily ends there; since Section 708 (d) authorizes you to withdraw any request or finding you have made, you will of course wish to continue to monitor operations under the Agreement, particularly from the viewpoint of your priority and allocation responsibilities under the Defense Production Act and as set forth in Executive Order 10480. In your letter of March 11, 1975 and a later lettter of March 19, 1975 you have forwarded for my approval lists of members of the industry, with designated affiliates, which you have received from the Federal Energy Administration and to whom it is proposed that you have address requests to enter the Agreement and participate thereunder. This is in compliance with Section 708 (c) of the Act, which requires that the President's delegate consult with the Attorney General and with the Chairman of the Federal Trade Commission not less than 10 days before making any request or finding and that he obtain the approval of the Attorney General to any request before making the request. Section 9 of the proposed Agreement outlines procedures for an oil company to become a participant. It notes that a request for participation is to be made to a company, "together with such of its affiliates as it may have previously designated. ." In compliance with this, companies to be requested to participate in the Agreement have already furnished lists of designated affiliates. Review of these lists, a few of them quite voluminous, has given us some concern. It may be that in haste to effectuate the Agreement and get the IEA industry bodies organized some misapprehension has arisen among some of the oil companies contacted as to what affiliates should be designated. I do not believe that the opportunity for antitrust immunity should extend, so far as a participating company is concerned, to virtually every worldwide affiliate it effectively controls. In effect, this approach was followed in the past with respect to operations under the Foreign Petroleum Supply Voluntary Agreement. In contrast, I believe that immunity should be much more limited and controlled. I am prepared to approve requests to act covering only such affiliated companies of a parent as to which there are substantial grounds to believe its participation is reasonably necessary to operations under the Agreement as presently foreseen. Holding these views, I think it incumbent upon the sponsoring agency to screen the lists of designated affiliates forwarded to it as to be able to assure the General Services Administration and the Attorney General in forwarding these lists for a request to act that each affiliate so listed meets the criterion set forth above. The sponsoring agency should also ascertain and transmit information on the percentage of stock ownership or degree of effective control a company holds over each designated affiliate so as to provide assurance that the parent is in a position to speak for its affiliate. I am loathe to withhold approval of the oil companies and their affiliates until such a screening process has been completed. I am well aware that there is pressing need for full activation of the IEP. This requires speedy completion of U.S. legal requirements and early organization of the industry working bodies to assist in implementing the program. At the same time, however, my responsibility will not permit me to issue an unconditional approval for the participation of all affiliates of these companies at this time. I have concluded that the best resolution of this problem is to provide approval of the proposed requests with respect to the parent companies. With respect to their designated affiliates, however, I am approving the requests for a period of thirty days from the date of this letter. The Federal Energy Administration, after reinvestigation of each such designated affiliate, is to furnish me with respect to each such affiliate (1) written assurance that to the best of FEA's information and belief, there are substantial grounds to believe the affiliate's participation is reasonably necessary to operations under the agreement as presently foreseen, and (2) information on ownership or control of the affiliate by the parent company. We have already begun staff consultations with the Federal Energy Administration to effectuate this. Acceptance of your request to act will convey the full antitrust immunity to the parent. It will further provide full antitrust immunity to all designated affiliates for a period of thirty days. Following provision of the required information by the Federal Energy Administration, I will advise you promptly which affiliates will then be approved by me. In accordance with the foregoing, I am approving unconditionally consultation and cooperation with IEA by the companies whose names are underscored on the attached list. I am giving approval to consultation and cooperation by the other firms on the list for a period of thirty days. I am mindful that in the thirty-day period following the date of this letter some time will be consumed in fulfilling the remaining legal requirements under the Act, in action by the IEA to select companies for its working groups, and in organizing those groups. Thus, it is highly unlikely that in this period any actions will be undertaken by the designated affiliates as to which the question of antitrust immunity would yet arise. Sincerely, EDWARD II. LEVI, |