U.S. Corporate Presence Rising Again in S. Africa : Apartheid: Sixteen firms have opened offices or established economic links to the troubled nation since 1991.
Sixteen U.S. companies have opened offices or otherwise established economic links to South Africa in the last 1 1/2 years, reversing the “disinvestment” trend of the late 1980s, a research firm said Wednesday.
The Investor Responsibility Research Center Inc. in Washington said the new investments were facilitated by then-President Bush’s 1991 executive order repealing a ban on new U.S. investment in South Africa. That ban was included in the Comprehensive Anti-Apartheid Act of 1986.
Three firms invested in 1991, the IRRC said, and the other 13 went into South Africa last year.
The IRRC declined to name all 16, saying it wanted to protect its research. But it did say Visa International, Lotus Development Corp. and Cummins Engine Co. were on the list.
The news was not welcomed by apartheid opponents in the United States.
“It looks like I’ll have to deal with this again,” said Rev. Leon Sullivan, author of an operating code for companies in South Africa called the Sullivan Principles. The principles called for integration of the South African workplace and fair treatment of workers in the country.
None of the 16 new companies are signatories to the Sullivan Principles, the IRRC said.
The African National Congress, through its president, Nelson Mandela, has said it welcomes investment in South Africa, but only when a new government is in place.
On Feb. 18, the ANC formally agreed to govern jointly with whites and other parties for up to five years after the end of apartheid. The current, white-led government said black people could join the national government in a largely advisory capacity by June.
Sullivan said, “My position still holds that until there is a non-racial government and blacks have the equal right to vote, the sanctions should remain and the objective must be to eliminate apartheid.
“We must keep the pressure up,” he said.
Visa Vice President David Brancoli said that there are six companies with Visa franchises in South Africa. Asked if Visa had any qualms about doing business in South Africa, Brancoli answered: “As long as they (the franchises) observe the operating regulations of the (Visa franchise) program, they are members in good standing.”
Richard Eckel, a spokesman for Lotus, said his company went into South Africa in 1991 “in a responsible way” and is a “positive element of change in the country.” He said Lotus contributes to community development. “They are happy we are there,” Eckel said of the South African people.
An IRRC survey found that 119 U.S. companies now have direct investment or employees in South Africa.
The new economic links effectively reverse the disinvestment trend that saw 168 U.S. firms sell or close their South African operations from 1985 to 1990, the IRRC said. Four of the companies on the IRRC list have re-entered South Africa after disinvesting in the mid-1980s.
Steven L. Zeller said Cummins had no investments in South Africa but did contract with an independent distributor with whom they have a “longstanding relationship” of more than 10 years. They also have an employee on temporary duty there, who has been in South Africa for a year, Zeller said.
The anti-apartheid law was enacted after a national campaign that included arrests at the South African Embassy in Washington.
Alison Cooper, an IRRC spokeswoman, said a number of the 16 companies have a small presence in South Africa. “But it does bump them from one category to another, from no employees to one with employees,” she said.
Other companies have chosen not to invest directly but have formed licensing and distribution agreements with South African companies. From July, 1991, to the present, the IRRC has found that the number of U.S. companies with non-ownership links to South Africa has jumped from 184 to 299.
