VIEWPOINTS : Economic Fight Against Apartheid: Mission Half-Accomplished

During the last month, we have witnessed a number of dramatic decisions as corporations announced their withdrawal from South Africa, land of apartheid. Among those companies selling their assets and heading for the exit are Coca-Cola, General Motors, IBM and Honeywell.

Other companies are expected to announce soon that they are also leaving.

More than 60 companies already have left South Africa, and that trickle is soon to become a flood.

Xerox, Burroughs and many others are re-evaluating their presence there. John Wilson, chairman of Shell South Africa, the biggest multinational investor there, has warned the company’s executive team that apartheid leads to “ungovernability and chaos” and that “Shell’s position is not comfortable. The threat of disinvestment is real.”

Why has the tide turned? Why is the U.S. business community making such a dramatic shift? For several reasons:

- Apartheid has had an extremely negative effect on the economy. Many companies’ South African subsidiaries operate in a sea of red ink.

- Although U.S. companies have argued repeatedly that they are a “constructive force for change” in South Africa by lobbying for abolition of apartheid, the South African government has met international appeals for change with increased repression and a commitment to maintain white supremacy politically and economically.

The efforts of U.S. businesses to be a catalyst for reform are in a shambles, their hopes bankrupt. After a decade of trying, many companies are admitting failure.

- Pressures in the United States have risen astronomically over the last month.

Investors controlling a total of $160 billion in investment assets have committed to sell stock of companies with South African operations; the state of California is among those investors.

Institutions such as churches, universities and the pension funds of the state and city of New York--with a cumulative wealth of $150 billion--filed shareholder resolutions with corporations calling for their withdrawal from South Africa.

More than 30 cities and states have joined Los Angeles and San Francisco in passing ordinances that prohibit the purchase of products from certain companies with South African links.

Shell Oil faces an international consumer boycott, led in the United States by the Free South Africa Movement, eight major trade unions and numerous churches.

In short, the corporate bottom line is being adversely affected by the South Africa connection. For many it is wiser to disengage.

Yet, for some companies, the disengagement is incomplete. Consider IBM.

IBM should be commended for selling its subsidiary because of “the deteriorating political and economic situation in South Africa.” It sends a strong signal to the apartheid regime.

However, while IBM is selling its assets to a group of employees and thus technically withdrawing its operations, the whole range of IBM products will still be sold in South Africa.

For 15 years, U.S. churches challenged IBM on its South Africa stake. The issue with IBM has always been how its computers facilitate apartheid with the sale of such technology to the South African government and its agencies.

IBM is unable to promise that the new, independent company being organized to run its South African subsidiary will not sell to the government.

IBM products may be routed to agencies or South African corporations that help implement apartheid. Indeed, IBM’s spinoff in South Africa will be desperately seeking new markets.

The last chapter involving IBM and apartheid will not be written until the company makes a complete break.

If IBM does not stop all computer sales and service in South Africa, pressures will continue and IBM will not escape the “U.S. hassle factor.”

The goal of such campaigns is not to stimulate scholarly debate about what constitutes disinvestment.

The goal is to put concrete pressure on the white supremacist government of South Africa. Economic pressures are one of the few peaceful levers for change we have left.

Perhaps the current South African government, having ignored decades of moral appeals, will respond better and come to the conference table when its pocketbook is affected.

Further action is needed. The products of Mobil, Shell, Chevron and Motorola should not be sold to South Africa’s repressive police and military.

Citibank needs to end all loans there. Hewlett-Packard and Burroughs, having refused earlier appeals to stop sales to the government, need to leave the country immediately.

While U.S. companies plan to sell operations, the anti-apartheid movement is working to ensure that authentic disengagement occurs and all supportive links to apartheid are cut.

The time has come for U.S. corporations to read the signs of the times. Profits and morality demand that they leave apartheid South Africa--and that it be a clean break.