Contents: ISOLATING APARTHEID: THE CALL FOR U.S. DISENGAGEMENT FROM SOUTH AFRICA • INVESTING IN APARTHEID • THE CASE FOR SANCTIONS • THE DIVESTMENT MOVEMENT • This Issue Brief focuses on U.S. government and corporate involvement in South Africa. It presents the views of Congressman William Gray, III (D-PA), a proponent of U.S. disengagement from South Africa. It outlines links between U.S. corporations and financial institutions and the South African economy and evaluates arguments for and against corporate involvement; lastly, it examines the U.S. divestment movement and challenges it faces. In 1975, Gary, Indiana was the first municipality to enact a divestment ordinance, targeting IBM, ITT, Motorola, and Control Data. Five years later, Nebraska became the first state to adopt comparable legislation. Today, divestment legislation has passed, is pending, or is about to be introduced in more than 26 states and numerous cities. In 1982 alone, divestment bills were passed in Massachusetts, Michigan, and Connecticut and in Philadelphia, Wilmington, and Grand Rapids. These state and local actions against apartheid reflect increased demands for corporate responsibility, popular abhorrence of apartheid, and growing impatience with U.S. support of the racist regime. At least three South African laws - the National Supplies Procurement Act, the Defense Act, and the Official Secrets Act - prevent disclosure of information concerning "security matters." U.S. corporations are able to use various subterfuges to disguise their investments there. Also, the Reagan administration has subverted the intent of the Freedom of Information Act (FOIA) by exempting export licenses from release. Proponents of sanctions argue that they have a psychological impact and also would inflict substantial damage to South Africa’s economy. Foreign capital has enabled South Africa to finance industrial growth, offset balance of payments deficits, and support its growing defense spending and oil imports. The legitimacy of South African investments is increasingly being questioned on college campuses and union halls, in Congress, state legislatures, and city councils, and in shareholder meetings. In response to pressure from institutional investors, Polaroid stopped supplying film and equipment used in production of passbooks. The negative publicity generated by Polaroid's forced admission of its role helped discourage other corporations from becoming so intimately involved with South African police and military agencies. Foreign agents in the U.S. hired by South Africa have threatened to raise legal challenges to state and municipal divestment legislation, asserting that the Constitution forbids state regulation of interstate commerce or foreign policy. The Supreme Court, however, has held consistently that the "Commerce Clause" of the Constitution precludes only state action aimed primarily at or with a major impact on interstate commerce. The newsletter mentions the Gray Amendment, U.S. bank loans to South Africa, "Constructive Engagement,” Secretary of State Alexander Haig, the Commerce Department, Oliver Tambo, the African National Congress (ANC), sanctions, Donald Woods, Krugerrand gold coins, the Sullivan Principles, Congressmen Howard Berman, Stephen Solarz, Howard Wolpe, International Atomic Energy Agency (IAEA), nuclear facilities, and TransAfrica Forum staff Cherri D. Waters, Cecelie Counts, Menda Ahart, and Randall Robinson.
Used by permission of TransAfrica Forum.
Collection: Private collection of David Wiley and Christine Root