Testing the Leverage

Spreading demonstrations on American campuses against South Africa’s racist policies are a welcome sign of social and political concern among American university students and of their commitment to justice. There is good reason for indignation, for anger. There is little likelihood of change in South Africa, however, unless the protests are carefully targeted.

President P. W. Botha raised hopes of significant change in his Jan. 25 speech to the opening of parliament, asserting that “all government bodies must ensure that black communities are involved in decision-making that affects them in the socio-economic sphere.” But the dialogue explicit in his plan has not taken place because of the conditions that he has set, barring those who could best bargain for the majority and in recent days broadening the attack on those who oppose apartheid, accusing of treason even those seeking change through peaceful means.

At the same time, however, the shrill campaign against divestment within his government and within the press of South Africa indicates that there is an extraordinary sensitivity to the economic implications of this obstinacy. South Africa is in deep recession, and the threat of foreign investments being frozen or withdrawn inspires anxiety and new fears of global isolation.As Bishop Desmond Tutu has argued, investors have political leverage to accelerate change.

That leverage is effective only so long as it is used appropriately. The best way for foreign investors to press for reform is through strict conformity with the Sullivan Principles that now have been extended to include a demand for an end to apartheid. The University of California Regents can exercise influence when they use the proxies that go with their $30 million in shares of Nalco Chemical Co. to prod the managers of that company into better performance under the Sullivan Principles. The Regents would have no influence if they sold the stock.

In the same way, buckshot legislation that seeks to cut off all investments would eliminate whatever leverage there may be for investors who conform strictly to the Sullivan Principles. There are 32 American companies, among them some of the largest employers, that qualify for Category I performance, “Making Good Progress,” in implementing reforms that eliminate racism from the workplace and seek equality in the community.

There are skeptics who counsel the futility of all this, and they may prove right. But it would compound the tragedy of today’s events to waste the opportunity to test the leverage, however limited, that is at hand.