Case-by-Case Review of UC Investments Is Proposed

University of California President David P. Gardner has proposed that the Board of Regents examine UC investments linked to South Africa on a case-by-case basis to determine which would be candidates for divestiture, it was learned Tuesday.

Under the proposal, now quietly being circulated among regents, university holdings in firms that have made little effort to aid blacks in South Africa likely would be sold and no new investments would be made in such businesses. Sources familiar with the plan described it to The Times.

The regents, after months of debate and student demonstrations over South Africa’s apartheid system of racial separation, are scheduled to decide Friday whether to sell $2.4-billion worth of stock in firms that do business there. The investments were purchased with university pension funds.

Gardner declined to discuss details of what he will recommend to the regents and said he is still discussing his proposal with members of the board.

“The language of my recommendation is not in final form,” he said in a statement issued by his office. “As recently as this afternoon we have been consulting with members of the board individually, and we will be seeking more advice from them in the next two days.”

According to two separate accounts of briefings by Gardner’s office on his proposal, the plan calls for the university to condemn South Africa’s policy of apartheid but falls short of the full divestiture advocated by some regents.

His proposal, an apparent attempt to find a middle ground among the regents, would establish a committee of faculty members, students and administrators to review all of the 33 companies doing business in South Africa in which the university has invested.

The committee would first examine the conduct of those companies that have not signed the Sullivan Principles, a voluntary code under which U.S. corporations agree to work toward establishing equality for blacks in South Africa. (The university holds stock in three companies that are not Sullivan signatories.)

The panel would then examine the conduct of the remaining firms to determine which have lived up to their responsibilities under the Sullivan code.

The committee would make recommendations to the regents’ investment committee on whether to keep or sell stock in these companies, under Gardner’s proposal.

No Timetable

However, there would be no timetable for the committee’s review or for the regents to act on its recommendations.

Gardner also proposed that the university make no further investment in companies that either have not signed the Sullivan Principles or have not received one of the highest two ratings for compliance with the principles.

It was not immediately clear whether Gardner’s plan would comply with anti-apartheid provisions inserted into the proposed state budget by the Legislature. In part, they call for pension fund trustees to halt new investments in companies linked to South Africa.

Gardner’s proposal contains several programs not directly related to divestiture. He suggested:

- Establishing a group of representatives from colleges and universities around the nation to study the issue of investment in South Africa.

- Devising programs that would increase educational opportunities for South African blacks.