Stanford Will Dump Mining Firm’s Stock
Stanford University trustees voted Tuesday to sell off the university’s investments in Newmont Mining Corp. and warned two other companies to cooperate in opposing South African apartheid or face similar fates.
The decision to dump the Newmont stock was the first punitive action under the “selective” divestiture policy of Stanford, one of the nation’s most generously endowed private universities. Similar policies at other universities have led to divestiture of substantial holdings.
Selective divestiture involves the disposal of investments from firms that do business in South Africa and follow that government’s policy of apartheid, or strict racial segregation.
Tuesday’s vote came one day after some trustees met with representatives of student anti-apartheid activists, but the board’s resolution fell far short of the activists’ demands--and even the expectations of some administrators.
The action affects only $9,900 invested in New York-based Newmont; student activists also wanted to withdraw $400,000 invested in Diamond Shamrock Corp. of Dallas and $3.5 million in Schlumberger Ltd. of France.
But the trustees voted to simply warn Diamond Shamrock and Schlumberger. Diamond Shamrock has said it will shed its South African operations by October, but school officials said Schlumberger ignored Stanford’s queries.
Stanford’s divestiture decision is significant because of the university’s reputation and large, $1.2-billion endowment portfolio, but the decision is not unique. At least 40 other colleges have sold some or all of their South Africa-related investments since 1977.
Except for the bad publicity it may bring a company, divestiture is mainly a symbolic act. Universities and other institutions disposing of investments under such conditions are legally bound to do so in a way that doesn’t reduce the value of the holding. If it is a large block of stock, that means selling it in small quantities over time.
Students Demonstrate
Board of Trustees President Warren Christopher announced the university’s decision under heavy guard in the manicured garden behind the house of University President Donald Kennedy. More than 100 students demonstrated near the house Monday after a larger anti-apartheid rally on campus.
In making the brief announcement of the board’s decision, Christopher was vague about what Newmont had done--or did not do--to prompt the board vote. “They did not carry out a series of reforms consistent with the Sullivan Principals,” he said.
The Sullivan Principles were developed by the Rev. Leon Sullivan, a black Philadelphia clergyman, as moral guidelines for American firms doing business in South Africa. They recommend companies treat employees equally regardless of race and help educate blacks and raise their standard of living.
