U.S. Firms, S. Africa Butting Heads : Anti-Apartheid Bid Called ‘Corporate Civil Disobedience’

Efforts by American companies operating here to help end apartheid have brought the firms into direct conflict with President Pieter W. Botha’s conservative government, which increasingly sees some of their activities as amounting to “corporate civil disobedience.”

Controversy is mounting fastest over the companies’ attempts to break down the racial segregation of residential neighborhoods by moving black employees, usually executives and middle-management people, into areas reserved by law for whites.

Government officials warned this week that both the companies and the employees may be prosecuted and the property seized and sold.

On Friday, amid newspaper reports of a crackdown on blacks living in whites-only neighborhoods, Stoffel van der Merwe, the deputy minister for information, told state-run Radio South Africa that the government had been “forced to maintain order when certain institutions purposely tried to achieve the scrapping of legislation by civil disobedience.”

‘Back-Door Integration’

A pro-government newspaper referred to this process as “back-door integration.”

President Botha may lay down the rules for political activity by foreign businesses, especially in attempting to force residential integration, when he addresses Parliament next week. National Party sources predicted what one called “a cooperate-or-get-out ultimatum” to companies with substantial anti-apartheid programs.

“Putting blacks into white suburbs has quite clearly been meant to bait the government and force the group-areas issue,” a well-informed government source said. “And just as obviously, no government can tolerate a situation of deliberate challenges to the law. The Americans have been looking for a confrontation, and they are about to get it.”

The American Chamber of Commerce, which represents about 200 U.S. companies, said in a statement issued Friday that its members will continue to house blacks in whites-only areas “in the belief that employees deserve living conditions appropriate to their economic status and social standing.”

According to a recent report, 42% of the larger American firms have such policies.

The American companies are also coming under sharp criticism for their efforts to promote racial integration in South Africa’s largely segregated educational system and in medical services, recreation facilities and transportation, much of which is still segregated.

Political Activity Seen

U.S. companies, particularly the 179 firms that adhere to the Sullivan Code of non-discriminatory labor practices, have been “progressively drawn into the South African political arena,” according to Prof. Carl Noffke, director of the Rand Afrikaans University’s American Studies Institute in Johannesburg. Noffke warned that “no government, certainly not this one, will stand for this sort of interference.”

Noffke, assessing the latest report of the Sullivan Code firms, said: “Direct confrontation with the South African government has become part of the corporate agenda. This radical shift is unique for U.S. multinational companies that have long practiced a policy of avoiding challenges to host governments outside the United States.”

Noffke contended in a study and in a subsequent interview that most of the American companies still in South Africa have become “the political captives” of the Rev. Leon Sullivan, a Philadelphia pastor and civil rights leader, who drew up the code of fair labor practices a decade ago and expanded it in 1985 to require efforts “to eliminate laws and customs that impede social and political justice.”

“Commercial companies, whether domestic or foreign, simply should not be involved in acts of civil disobedience--and there is no other term for many of the challenges being mounted here--against any government anywhere in the world,” Noffke argued. “Politics is not the business of business, and campaigns of civil disobedience undermine the whole spirit of free enterprise.”

End-of-May Deadline

Sullivan last year set the end of May as a deadline for calling on all American companies to leave South Africa and for the United States to impose a total economic boycott on the country unless apartheid, the system of white minority rule and racial separation, had been eliminated.

According to a confidential letter to American companies published Friday by a pro-government newspaper, Sullivan plans to visit South Africa from May 24 to 29 to gather information before making an announcement in early June.

Noffke said: “The price of staying in the face of all the pressures for disinvestment has meant for many American companies becoming Sullivan’s political tools in what can only be described as an attempt not just to force the pace of political and social change in South Africa but to dictate those changes.

“We are not talking about social responsibility, those very worthwhile programs that South African as well as foreign companies have to assist the upliftment of blacks. . . . What is disputed is the deliberate violation of laws and regulations in what can only be viewed as a campaign of civil disobedience and the programmed efforts of foreign interests to decide what kind of society, what kind of political system that we will have. This is a most serious matter.”

Defends ‘Constructive Role’

The American Chamber of Commerce, which held an urgent meeting this week to discuss the growing criticism, said in its statement Friday that “to describe those carefully considered initiatives (promoting residential integration) as civil disobedience is irresponsible and counterproductive to the government’s stated commitment to reform.”

“We believe,” it went on, “that business has a constructive role to play in actively supporting the removal of all discriminatory legislation, an approach which is consistent with statements and business practices of leading South African companies. The American business community will continue to address responsibly those issues that affect their business mission and the well-being of their employees, together with that of the broader community.”

But the U.S. firms’ activist policies seem certain to draw more criticism and to make their efforts an issue themselves.

“The pressure put on American companies to become the agents of political change in South Africa can end only in the defeat of those companies,” the Johannesburg financial newspaper Business Day warned in an editorial. “The breakdown of (overall American-South African) relations left the defiant companies dreadfully exposed, and they will look in vain to their own government for protection as the South African government moves against them.

“The fact that the government has indeed decided to move against them merely underlines the American loss of leverage in South Africa.”

The hard line being taken by the government’s supporters and the increasingly influential Conservative Party on the far right was reflected by an editorial in The Citizen, a pro-government newspaper.

“There are suggestions that any clampdown will hasten the departure of U.S. firms from this country,” the editorial said. “Better that than they be allowed to carry on as they are going.”