Model May Be Set for Future Disinvestment : Exiting Mobil to Pay S. African Workers
In an agreement described as establishing a model for future disinvestment from South Africa, Mobil Oil Corp. has agreed to pay $2.3 million to compensate its black workers for the company’s exit from the country.
The deal, which ends a bitter, two-month dispute between Mobil and the black Chemical Workers Industrial Union, works out to a payment of $716 for each worker, or one month’s salary, whichever is greater.
In addition, the workers have been promised that there will be no retrenchments for a year and that there will be no adverse changes in working conditions when Mobil’s operation here is taken over by its South African purchaser, Gencor, at the end of June. Gencor has pledged that it will uphold this and all other agreements between Mobil and the union.
The agreement is regarded as a triumph for the black labor movement, which has encouraged disinvestment to put economic pressure on South Africa to abandon its apartheid policies but has argued that foreign companies should pay black workers when they do pull out.
The movement contends that these companies have profited over the years from the low wage base that apartheid has established in South Africa, so that when they leave they are morally bound to pay reparations to the workers.
Arguments like that have not been accepted in corporate board rooms, and departing companies generally have chosen simply to sell and leave. Few of the 520 foreign companies--more than 350 of them American--that have quit South Africa since the disinvestment campaign began gathering momentum in 1985 have paid compensation.
But a combination of strikes by the black unions and pressure from anti-apartheid organizations at home has forced several departing companies to negotiate compensation terms in recent months.
When Mobil, the largest U.S. company still operating here, announced in April that it was selling to Gencor, one of South Africa’s five big mining firms, there was no initial suggestion of compensation.
When the chemical union began demanding compensation, few people took it seriously. South Africa’s leading financial newspaper, Business Day, accused the union of naivete and suggested that it was time the black labor movement faced the economic realities of its sanctions campaign.
But the union pressed its case. Protesting that Mobil had violated a pledge to consult its workers if it decided to pull out of South Africa, the union accused it of a breach of trust and complained that Gencor’s labor-relations record was among the worst in the country.
The local Mobil management ignored the protests at first, but when the union called a strike in May, the parent company in the United States came under more pressure from opponents of apartheid there. At a meeting in London on May 20 between representatives of the South African and U.S. managers, the local executives were told to negotiate.
