African Activist Archive

The press release says, on April 17, the citizens of Berkeley, California, passed the Responsible Investment Ordinance (RIO), the first law in the U.S. requiring a major city to remove municipal funds from banks making loans to South Africa. The RIO also mandates direct citizen participation in determining how public monies shall be invested. The City of Berkeley, long known for its progressive tradition, has given new impetus to the growing grassroots movement to pressure financial institutions to cut their ties to South Africa and to give citizens a greater say in how their public monies are to be used. Berkeley maintains about $5 million of temporarily idle funds in local branches of banks doing business with South Africa. The new law requires that all these funds be withdrawn by May 1, 1980, and reinvested "according to a policy that takes ethical, social, and economic considerations into full account" - a policy to be determined by a nine-member 'citizens committee' appointed by the City Council. The RIO will set a precedent in democratic control of public funds. The press release says the RIO directly challenges major financial institutions with the threat of public condemnation for the lack of social concern in bank investments; although Berkeley's $5 million is a small percentage of the assets of the relevant banks, it represents a significant portion of the working capital of local branches. Also, 12 other cities in California are likely to have similar ordinances on their next municipal ballots. The South African government showed concern over the Ordinance by arranging for the head of the South Africa Foundation to campaign against the Ordinance in Berkeley. By a margin of nearly 2 to 1, voters in Berkeley rejected opposition arguments that American investments in South Africa may have a "liberalizing effect" on apartheid. All leading black organizations in South Africa condemn such investments. Proponents of the RIO stressed that a more creative municipal policy could directly address local needs, gain an equitable return on investment, and end municipal support of the South African apartheid regime. Contacts on the press release are Sam Ragent, Miloanne Hecathorn, and Kaighn Smith.

African Activist Archive

[On Tuesday, April 17, the citizens of Berkeley, California, passed the first law (Responsible Investment Ordinance) in the United States requiring a major city to remove its municipal funds from banks making loans to South Africa.]

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