End New S. Africa Investments, USC Panel Proposes

In a report endorsed by USC President James H. Zumberge, a university committee composed of faculty, students and administrators has asked the university’s Board of Trustees to stop making new investments in companies that have business ties in South Africa.

The USC proposal calls for a divestiture policy far less sweeping than one passed recently by the University of California calling for the sale of all investments in companies operating in South Africa. But the USC plan, which will be presented to the board at its Oct. 8 meeting, would be squarely in line with many of the more moderate divestment policies adopted in recent years by many American university governing boards.

While acknowledging that the university has a “social responsibility” not to bolster South Africa’s system of apartheid government, the USC plan asks the board to use the university’s proxy votes to try to influence the corporate policies of companies that have operations in South Africa.

If the plan is adopted by the board, the university will begin in 1988 to sell its holdings in any company operating in South Africa that does not demonstrate in some way that it is trying to improve conditions for blacks there.

The principal test of that would be whether the company is adhering to the Sullivan Principles, the code of corporate conduct authored by the Rev. Leon Sullivan of Philadelphia. USC would sell its holdings unless the company has been given a “Sullivan rating” of one or two, meaning that an independent agency has judged the company to be working toward the elimination of racism in South Africa.

According to Lyn Hutton, USC’s senior vice president of administration and a member of the 12-member committee, USC had as of June 30 “a little over $25 million” invested in 65 companies that have ties to South Africa. That figure, she said, represents 10.4% of USC’s $250-million endowment pool. Although Hutton said “the majority of them (the companies in which USC has investments) are rated one or two in accordance with Sullivan,” there are 28 companies, representing some $10 million, that “could be affected” if the policy is implemented by the board.

Although the plan was backed by the president, it was not unanimously endorsed by all members of the committee. J. Wesley Robb, professor of religion and ethics, voted against the plan on the grounds that USC should support full divestment. A student member of the committee, sophomore Virginia Huth, voted for the proposal but said she, too, thought it did not go far enough.

Unlike their counterparts at many U.S. campuses that have experienced protests and even violence over the South Africa issue, the USC faculty and student body have been relatively quiet on the subject. Concern over the issue last year, however, led to the formation of the campus committee to act as a watchdog over South Africa investments.