Contents: U.S. INVESTMENT IN SOUTH AFRICA • How Investment Serves Apartheid • RATIONALES FOR CONTINUING INVESTMENT • U.S. Corporate Guidelines: The Sullivan Principles • Strategic Minerals Argument • POLITICAL INITIATIVES FOR DIVESTMENT • State and Local Divestment • National Divestment • Major Points of Current Debate Concerning U.S. Investment in South Africa • PROS -- WHY U.S. FIRMS SHOULD REMAIN IN SOUTH AFRICA • CONS -- WHY U.S. FIRMS SHOULD LEAVE SOUTH AFRICA • The report says after the 1960 Sharpeville Massacre in South Africa in which 69 Black men, women and children were shot to death while peacefully protesting apartheid, there was a loud international outcry; as a result of the senseless murders, many national and international organizations moved to isolate the apartheid regime; churches, universities, unions, and organizations started boycotts and protests to end their country's relations to South Africa. The report says one of the popular measures started was the divestment movement: an effort to withdraw invested funds from corporations and banks investing in South Africa. The report says the purpose was to pressure the South Africa government to eliminate its apartheid policies; in the U.S., the divestment issue has been one of the most controversial campaigns launched by the anti-apartheid movement. The report says currently, over 350 U.S. corporations are operating in South Africa with direct investments totaling $14.6 billion; these figures represent a tripling of U.S. investments since 1960; in 1979, the U.S. replaced Britain as the number one investor in South Africa; this leap in U.S. investments in South Africa began in the last decade, at a time when apartheid was becoming increasingly more repressive; fearing Black unrest, the South African government used its increased foreign investments to build up its military and police systems; the investments of U.S. corporations, bank loans and credits have been absolutely critical in buttressing South Africa's economic and military power. The report says outstanding U.S. loans to South Africa steadily declined to about $1.05 billion between June 1977 and December 1980; between January 1981 through June 1982, however, U. S. banks increased their lending by $2.6 billion -- a whopping 246%. The report says while Citibank is the only U.S. bank with a number of branches in South Africa, over 125 U. S. banks have made loans to South Africa totaling nearly $2.4 billion; this international lending helped South Africa weather its 1982 trade deficit of $2.8 billion, following its record 1981 deficit of $4.5 billion; the bulk of these loans have helped finance massive infrastructure projects aimed at making white-ruled South Africa less vulnerable to international sanctions or domestic labor unrest; they have also enabled South Africa to strengthen its military and police apparatus--and sustain its illegal occupation of Namibia- -during a period when its revenues from gold sales dropped dramatically. The report says the Sullivan Principles are a voluntary set of six principles relating to workplace conditions in South Africa; they were developed by Leon Sullivan, the only Black member of the General Motors board of directors who theorizes that U.S. companies can be agents for change in South Africa; signers of the Sullivan Principles pledge to support a series of workplace reforms in South Africa, including the ending of segregation in locker and dining facilities, the provision of training and advancement opportunities for Blacks and the payment of equal wages for equal work. The report says the Sullivan Principles, however, are not directed toward attacking the roots of the apartheid system; because apartheid controls every aspect of life, the problems faced by Blacks in the workplace cannot be separated from those encountered in the society at large; nor can the Principles significantly alter Black working conditions in South Africa, particularly since U.S. companies employ only about 1% of the total workforce; as a result of the ineffectiveness of the Sullivan Principles, the debate around divestment has intensified, and moved from the churches and universities to national, state and local legislatures. The report says the U.S. is very dependent on South Africa for strategic minerals, including chromium, manganese, platinum, and uranium; however, if we are speaking of cutting off corporate investments in South Africa and bank loans to South Africa, then the supply of minerals would not be affected; contrary to popular myth, most of the minerals we obtain from South Africa are available elsewhere; we need to develop these supplies now as well as build up our stock piles in case of any interruptions in supply; no government in South Africa could ever afford to cut off the West from its minerals. The report says the debate over divestment has been extended beyond institutions such as churches and universities and moved to the national, state and local level; in 1980, anti-apartheid activists started political activities to have state and local legislative bodies introduce legislation calling for the withdrawal of public monies from corporations investing in South Africa and stipulated that such monies be invested in local community projects or in other socially responsible ways. The report says in 1982, there was an unprecedented level of city and state legislation curtailing investment in South Africa; MASSACHUSETTS, MICHIGAN, CONNECTICUT and the cities of PHILADELPHIA, WILMINGTON, and GRANO RAPIDS all enacted legislation that will force the divestment of up to $300 million; currently, legislative action against apartheid is being worked on in 21 states and 8 cities and counties, with many victories expected in the coming year. The report says fewer than one percent of the total workforce is employed by U. S. corporations, so it does not provide significant employment opportunities for Blacks; the educational system does not provide Blacks with skills and technical training necessary to work in capital intensive industries. The report says although the South African government claims it is "reforming", it simultaneously states that Blacks will never vote or be citizens of their own land. The report says the South African government considers divestment so harmful that they have instituted a law that charges any South African advocating divestment with treason which carries the maximum penalty of death; the South Africans have launched major campaigns to defeat the divestment movement; they send their agents to testify at state divestment hearings and do intensive lobbying in all states where legislation is pending. The report says national political action has been stimulated by congressional opposition to the Reagan Administration's policy of "constructive engagement". The report says consequently, congressional support has increased for legislation which would restrict U.S. economic ties to South Africa and began to end U.S. economic support for apartheid; the following legislative amendments were attached to the Export Administration Act and were passed by the House of Representatives in October, 1983; a total of 36 congresspersons spoke for passage of the amendments on the floor. Included were republican conservatives: Jack Kemp (R-NY), Jim Leach (R-IA), Ed Bethune (R-AR), and Bob Livingston (R-LA). The report discusses transport, Ford, General Motors, Chrysler, energy, Exxon, Texaco, Shell, petroleum, natural gas, computers, IBM, Control Data Corporation, NCR, pass laws, strikes, unionization, influx control, Gray Amendment (HR 1392), Solarz provision (HR 3231), the importation of South African gold coins, the Krugerrand, D.C. Divestment bill, Bishop Desmond Tutu, the South African Council of Churches (SACC), Dr. Motlana (Nthato Motlana), Steve Biko, self-determination, employment opportunities, and political rights.
Used by permission of Africa Action (successor to the Africa Policy Information Center).
Collection: William Minter Southern Africa Papers