BUSINESS
A hiiapartheid demonstrators at VC, Berkeley: A crisis of conscience on the campus
est American investments are concentrated
in oil, auto, mining and rubber works. These
giants, like Mobil, General Motors, Ford,
Goodyear. IBM and Union Carbide, are
regularly.challenged by shareholders over
their South African investments. Most de
fend themselves by pointing to their adher
ence to the “Sullivan Principles," drafted in
1977 by the Rev. Leon B. Sullivan, a Phila
dephia pastor who serves on GM’s board of
directors. His statemen t offers six principles
of conduct for com panies doing business in
South Africa—among them desegregating
work places, paying equal salaries for equal
work and training non whites for manageri
al positions.
Are the principles making any differ
ence? Like almost everything else in
South Africa, the answer depends
on your point of view. The most recent
monitoring report, prepared by Arthur D.
Little Inc., of Cambridge, Mass., gave a
mixed review. Thirty-two firms, including
GM and IBM, ranked in the “making good
progress” category. Another 44, including
Ford and Gillette, were rated as “making
progress.” Thirty-two others, including
Motorola and Carnation, were said to
“need to become more active.” Still, the
report says that all work stations in the
surveyed companies have been desegregat
ed and that blacks hold more jobs than they
once did. The bad news is that only 1 to 6
percent of managerial appointments go to
nonwhites, and the percentage of non whites
training for these jobs has fallen.
No one pretends that this record is entire
ly satisfactory. “The bottom jobs are still
full of blacks and Colored, and the whites
are still on the top,” complains Jennifer
Davis of the American Committee on Afri
ca. “The Sullivan Principles maintain and
strengthen the whole system.” But, counter
American executives; critics.must be more
realistic. “We all agree that it is a; morally
indefensible system and that it should
be changed," says William Broderick' of
Ford Motor Co. "The real difference is over
the most effective means to achieve such
changes. Sullivan signatories say stay, and
work for change pn t he spot
This moderate approach has great appeal
to university administrators,. since, if both
assumes the possibility of rational reform
and endorses the maintenance of. lucrative
investments. But it’s a hard sell.to.campus
activists, as Columbia’s weary Dean Pol
lack has learned. Chairman of a university
investment-review committee, Pollack rec
ommended last November a multistep ap
proach to the problem that appears; to.have
cost him support on both sides. While op
posing outright divestment, the group sup
ported refraining from any new investments
in companies that deal with South Africa
and leading an effort by a consortium of -
universities to stiffen the SulliVan rules. St u
dent opponents find this
approach namby-pamby,
yet it may still be too stern
for the trustees. "The re
port is not a sellout,” Pol
lack says. “It hurts me
that people think that.”
Is there life after divest
ment? The answer appears
to be yes. In 1978, follow
ing a round of student pro
tests, the University of
Wisconsin sold off all its
shares in firms that had
South African ties. The
state school unloaded $9.8
million worth of stocks
and bonds at a paper loss of
about $850,000. The deci
sion to sell, incidentally,
did not come from the regents. Instead.
Wisconsin Attorney General Bronson La
Follette ordered the sale, after uncovering
an obscure state law that prohibits the uni
versity from doing business with companies
that condone racial discrimination. The
Texas regents'have refused' to sell- their i
stocks, in part because of worries over their
portfolio's ful ure. But t hat judgment too is a
matter for debate - Student, groups have
pointed to a 1.982 trust-company- report ar
guing that'investments in large-companies
without-ties to-South' Africa actually.;per- ;■
formed slightly better-1hanf.the-major,slock'- ]
market average. ■’
-.- Rate of return: is.su.re to be one of the
central issues in June when the' Califoriiia
• r.egents.take up.a special, report on diyest
anenl; About S I .7 billion of the system's S5.S 1
'• billiort poTtfolib is invested' in companies
'with South African ties I he stakes could
. hardly be higher a complete L’C divestment
wbujd be larger t han all (if ) he (it her cainpus
'sales..combined. Ninety, percent of these
shares support staff and faculty pension
funds, and the regents who serve as trustees
are bound by law to behave in a "prudent
manner." That consideration weighs heavi
ly on regent Joseph Moore, who says, "It’s
licit my money or the students'money, it s
the employees’ money." The likeliest out
come is that the regents will not opt for
divestment blit may officially: protest
apartheid.'.. • •
Whether or not tIC divests, "The
diVesiment campaign keeps the
SputhAfricaiigciyernnient.herv
ousand worried, sb i t dtjes. have an: effect,".
according, to UjC-'.s. resident expert on
South Africa, political; scifeii.ee”PrbT R<)b
Crt Price - "The paradox is. t|iaf. it’s a
powerful, toql. iintif it's used; (J!rice; sanc
tions are invoked,' the power is loit.'-’"Nd
university investor coi'i’ld' state; jhe creed,
any better, and forithe-moment; .it appears
iike'ly; -that, fe'w schools- will, challenge ■
Price’s .analysis: . From Harvard’s' Derek
Bok to Stanford’s Donald Kennedy, The.
Sulli ran: A mailer of principles
leadership hopes to have it
both ways: righteous state
ments and a reasonable re
turn. What university au
thorities appear to believe
is that the current South
African regime will last
awhile, whether they like
it or not. But if they con
tinue to invest, and they
have misjudged the explo
sive political situation,
their dividend checks may
be consumed in the fire
next time.
ARIC PRESS with RICHARD
MANNING m Del roil.
MARGAKI I MITM I IIACII
m Berkeley. Calif. KI I I V K NOX
in Austin, resas. SHARON
WAXMAN m New York
and bureau reports