Extension of L.A. Policy on S. Africa Divestiture OKd by City Council Unit

An ordinance that would expand Los Angeles’ anti-apartheid policy by banning some city purchases from firms doing business in South Africa was approved Wednesday by a City Council committee.

Action on the measure, an extension of the divestiture plan pushed by Mayor Tom Bradley and approved by the City Council last August, comes after nearly a year of legal fine-tuning and as concern has mounted over the South African government’s continued crackdown on groups opposed to that country’s policy of separation of the races.

Already in force is an ordinance applying restrictions to city business with banks doing business in South Africa. Also, managers of city employee pension funds have been urged officially to sever investment ties with companies in business there.

Bradley praised the committee’s action Wednesday as “an important milestone toward my goal of severing the City of Los Angeles’ economic ties with the South African apartheid regime.” The mayor, who has made policies on South Africa an issue in his campaign against Gov. George Deukmejian, said the action comes at “a propitious time as the repressive government of South Africa is once again demonstrating to the world its true brutal character.”

Councilman Zev Yaroslavsky, chairman of the Finance and Revenue Committee, which unanimously recommended approval of the ordinance, said the measure does not go as far as he would have liked. But he said it could have a significant “moral impact” because of the message it sends from the nation’s second-largest city.

The proposed ordinance first goes to the City Council next week and is expected to be approved. If adopted, it would require compliance from firms doing about $100 million in city business annually. Where applicable, goods manufactured or assembled in South Africa, as well as purchases from businesses dealing with or operating in South Africa, would be banned.

But the bulk of city purchases--worth several hundred million dollars a year--would not be affected because the City Charter requires most contracts of more than $25,000 to be competitively bid.

Some larger contracts for specialized services, such as consulting and architectural or legal work, do not require competitive bids and would be covered.

The ordinance has been amended a number of times to address administrative concerns of city staff members and legal issues raised by the city attorney’s office, which at one point warned that a more sweeping ban might violate state law.

In the version approved Wednesday, the ban could be sidestepped if it would cause a “significant loss of quality or significant additional costs,” or if the City Council finds that adhering to the restrictions would “otherwise be contrary to the best interests of the city.” Also, in an amendment said to have been sought by banking officials, the restrictions would not apply to lending institutions whose dealings in South Africa are related to securing repayment of previously approved loans.

City Controller Rick Tuttle, a strong supporter of the restrictions, said “the teeth” of the ordinance is a requirement that company representatives doing business with the city, certify under penalty of perjury that they have no dealings in or with South Africa. The ordinance calls for payments to be withheld from firms that obtain contracts and later are found to have dealings in South Africa.

How many businesses would be affected is unclear. An analysis several months ago estimated that the city may have to stop dealing with up to 74 companies. However, there has been a broadening of the restrictions to cover firms with subsidiaries or offices in South Africa.