French Investing in S. Africa Halted : Paris Recalls Its Envoy to Protest Emergency Rule

France suspended all new investment in South Africa on Wednesday and recalled its ambassador to protest what it called the “repressive” emergency regulations decreed in an effort to end a year of civil unrest here.

French Premier Laurent Fabius said in Paris that the state of emergency, which established virtual martial law in 36 South African cities and towns last weekend, was “a grave and serious deterioration” of the situation and France felt obligated to protest in the strongest terms the resulting violations of human rights.

“By installing the state of emergency and conferring full powers on the army and police, in multiplying arbitrary arrests and in giving the order to fire upon the population, the South African government has underscored its repression,” Fabius said in one of the strongest denunciations ever registered against the minority white regime here by a Western power.

Security Council to Meet

France said it will also introduce a resolution in the U.N. Security Council condemning South Africa for its apartheid policies of racial segregation and urging concerted international action against it. The Security Council will meet today at France’s request.

“For all people who support justice and the rights of man, the apartheid regime in South Africa is inadmissible,” Fabius declared. “It institutionalizes racial discrimination and attacks the moral and political principles that form our society.”

Fabius said that the French ambassador in Pretoria, Pierre Boyer, will return at once to Paris and that the ban on new French investment will take effect immediately.

South African President Pieter W. Botha quickly rejected the French criticism and declared that “South Africa must ultimately fulfill its responsibility to all its people and cannot allow itself to be prescribed to.”

“The South African government cannot be controlled by foreign countries,” Botha declared. “It amazes one that a Western government that takes an interest in Africa and in black people can take exception to a government that restores order when Communists and Communist powers murder black people and that tries to improve the normal daily lives of black people.”

Fabius had warned South Africa at the end of May that France would impose economic sanctions, possibly including a total withdrawal of French investments here, if the minority white regime did not begin to dismantle apartheid within 18 to 24 months.

The French government decided to act now, Fabius explained, in response to South Africa’s declaration of a state of emergency, giving security forces sweeping powers of arrest, detention without trial, unlimited search and seizure and press censorship.

Economic Impact Limited

Although the economic impact of the French action will probably be limited, it is a major blow to South Africa’s battle to avoid international sanctions: Not only was the ban on new investments one of the toughest measures imposed against it so far, but it will undoubtedly encourage other countries to do the same.

The United States recalled its ambassador, Herman W. Nickel, for consultations a month ago, following South African commando raids on neighboring Botswana and Angola. Nickel has not returned, although Washington has been less critical than the French of the state of emergency that went into effect Sunday.

Echoing the South African government, the French Chamber of Commerce and Industry here described the French government action as “completely unnecessary and unjustified.”

Jobs Needed for Blacks

“I think that it will make things worse because investment is needed here to make jobs for black people,” said Jean Lafitte, the group’s president and the managing director of the South Africa office of Total, the French energy company.

But the French move drew praise from opponents of apartheid.

Dan Vaughan, acting general secretary of the South African Council of Churches, said France has shown that “at least one member of the international community has seen through the posturing and maneuvering of Pretoria.”

Trevor Manuel, a top official of the United Democratic Front, a coalition of 650 anti-apartheid groups with two million members, called for the United States and other Western countries to follow France’s lead.

Both houses of the U.S. Congress have approved legislation imposing limited sanctions on South Africa, but differences between the two bills must still be resolved before the measure is sent to President Reagan, who has opposed sanctions but has not said whether he will veto the bill or not.

The House measure would ban new U.S. investment here, but the Senate refused to go that far, fearing that such a ban would hurt blacks rather than undermine apartheid.

Economic sanctions are “worth the consequences (of possible black unemployment),” Vaughn commented.

French companies now have an estimated $1.6 billion invested here, making France the fourth-largest direct investor after Britain, West Germany and the United States. French trade with South Africa, however, amounted to just $1.2 billion last year, with France buying about $180 million more than it sold.

In the past, France was an even more important economic partner. It helped build South Africa’s first nuclear power plant near Cape Town, bought about 50% of its uranium and 40% of its coal imports here and, until the United Nations imposed an arms embargo in 1977, was a major military supplier.

“This step will surprise many South Africans,” Prof. John Barratt, director of the South African Institute of International Relations, said here. “The assumption had always been that France would take a hard-headed and pragmatic view of economic matters, and that has been proven wrong.”

“There is the danger that France’s action will influence other countries, especially in Western Europe,” said Barratt. “Even in Britain and West Germany, which have the largest investments and economic interests here, the French example will be quoted and will be hard to ignore.”

Two weeks ago, Canada imposed a series of economic sanctions, including an end to export and investment incentives for Canadian companies operating here, but stopped short of ordering them to pull out of South Africa or barring new investments. The Scandinavian countries have also acted to reduce their economic ties with South Africa in recent months.

France had originally resisted calls for economic sanctions, and Foreign Minister Roland Dumas repeatedly asserted last spring that they would not work. But the government apparently was persuaded by Bishop Desmond Tutu, the Nobel peace laureate, in May that sanctions represented an important form of leverage for South Africa’s 25 million blacks in their struggle against apartheid. Fabius promised Tutu that France would increase its pressure on South Africa and step up its assistance to blacks here through scholarships and refugee programs.