.- .. .- HARVARD AND ·. · · . ..,. . . SOUTH AFRICA
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~ 0 0 .c c. Harvard and' South Africa
South Africa has become an issue that the engage students in any serious discussion of the People reading President Bok's "Reflections on Hal!Vard community can no longer-avoid. United issues. The administration, like the ACSR, chose to Divestment of Stock" are faced, roughly speaking, States corporations have invested $1.7 billion in ignore the views of a large segment of the Harvard with two possible interpretations: that country, and U ;S: banks have lent well over $2 community. billion to its white minority government. The facts As a result of the administration's insensitivity, [J] The entire anti-apartheid movement, show that this money in South Mrica does more to , American Indians at Harvard, the Asian American including virtually all black South African support the brutal exploitation of the black Association, the Black Students Association, the - organizations and leaders; is sadly mistaken in its majority than to end it. Harvard University, Democratic Socialist Organizing Committee, La views ofhow to overcome apartheid. President Bok . through its $350 million invested in these banks and Organizacion, Raza, and SASC formed the United has a far deeper u,nderstanding of whai is in the corporations, participates in this exploitation. .Front, which sponsor~ educatioriill activities, interests of South African blacks. He has chosen to. If Harvard University is to have any sort of moral rallies, and demonstrations during the weeks use his immense prestige and his debating talents io integrity, it imist do more than issue statements around the Corporation decision. criticize the anti-apartheid movement in order to deploring apartheid. It must therefore cease being On Monday, April24, 1500 students gathered at contribute constructively to anti-rtu;ist efforts by an investor. in apartheid. · It must add its voice Pusey Library near the Corporation building to warning misguided people away from .an erroneous through action to. the growing international await the decision-but the administration course. condemnation of the South African regime. The announced that they were delaying the decision for [2] President Bok is much more concerned about most morally responsible and effective action for several days. Released that Thursday, the report the ~nti-apartheid movement as a threat to his Harvard would be to divest itself, with a public rejected even t~e ACSR's mild ~ecommendation running of ihe University than he is with apartheid J explilDf!tion, of all stocks and bonds in those that Harvard sell its stock in banks that loan money itself as an affront to the values that Hqrvard corporations and banks until they cease their to the South African goverri-ment-. More ·should standfor. For this reason he directs all ofhis operations in South Africa. importantly, Harvard refused to call for corporate efforts against the anti-apartheid movement; not Many concerned members of the Harvard withdrawal until the ACSR had conducted its against apartheid. He sees his job as qfund-raiser, community, including students, faculty, alumni lengthy case-by-case· review. and his priority as preser~ation of good relations' and workers, support this demand for total Io indignation, 3500 students marched through with irif/uentia/ businessmen. His "reflections" on divestiture. This pamphlet presents the facts which the streets of Cambridge in a United Front South Africa are nothing but sophistries. brought us to our conclu~ions, and we hope that sponsored torchlight paraoe, and several hundred you consider them carefully. Only the mass of the students spent that night and the next day blocking Most people seem to find the second members of this community can direct Harvard the steps of and closing Unive·rsity Hall to protest interpretation more plausible than the. first. University to meaningful action. We hope that you Harvard's failure to take any effective action. join us. The Need for Action Protests in 1978 confront~d the administration The first blatant example of bad faith came only with the issue of South Africa, and forced it to take two days after the Corporation's report and the some action. Yet the administration's bad faitJl wc;:ek of protest. ·The Corporation ignored the .undermined even the minimal concessions it made. ACSR 's recommendations to vote for shareholder The policy of the Harvard Corporation (President resolutions calling for withdrawal-of Motorola and Bok and six Fellows) has been short-sighted, 3M. Both manufacture products for the South evasive, and ultimately deceitful. African pQlice. The Corporation abstained, Student Action claiming that the four designated members could In the fall of 1977, students formed the Southern not meet in time to make the decision. Africa Solidarity Committee (SASC) to educate · Equivocation became deceit when the the community about Southern Africa and to Corporation, one month after issuing its report, protest Harvard's South 1 Africa-related bega:n quietly buY-ing bonds in Manufacturers investments. At that tinie, stu~ents put forward the Hanover Trust and other banks who have publicly minimal demands that" Harvard end its most stated that they will continue to make loans to the blatant form of support for apartheid by divesting South African government. The report had said itself {}f stocks and bonds in banks that loan money · that Harvard would not buy bonds in such banks. to the South African government, and that Actions speak louder than words. -· Harvard call, through shareholder resolutions, for , The Response the withdrawal qf all U.S. corporations from South Pressure from thousands of merrtbers of the Africa. Harvard community fc;iced the seven members of 3200 students signed a petition supporting these the Harva·rd Corporation tO confront the issue of demands and 76 campus organizations, including invest~ent in South Africa. As it has in its dealings all 13 House Committees, endorsed them. with minorities, workers and Cambridge residents, Educational activities continued throughouL the the Corporation again exhibited callousnes~. winter and spring. Stronger pressure is necessary if.t_he Corporation is Despite weekly informational pickets of their not to continue to ignore the facts of corporate ~eetings, the Advisory Committee on Shareholder presence in South Africa and evade the University's Responsibility (ACSR) rejected students' demands moral responsibilities. for action. Instead, the ACSR recommended a Harvard must use its position as a major investor lengthy case-by-case review of each of Harvard's and prestigious university to add its voice to the South Africa-related investments, a~guing ·that struggle for majority rule and the end of racial "progressive labor practices" could somehow oppression. Harvard must divest. Join us. outweigh the many forms of support that all ~orporations give the white minority regime. Engelhard· . 400 students. protested the shortcomings of the Why South ·Africa? · The Engelhard Library is another iliustration of Harvard's ACSR report, and an angry confrontation between Among all the oppressive countries in the world, South Ainca ·willing'fiess to piace profit before principle. Chades Engelhard deserves our attention because: · was an American businessman who made a fortl!Jle in the South Third World students and members of the •No other society in the world relies so heavily ·an legalized African gold miniil!.industry, of which he controlled 15%: He Corporation outside Mass Hall demenstratc:d that racism to support its.sm:-ial, _economic, and political systems. was a vocal supporter· of the V orster regime and was the only students would not accept delay and inaction by - • A~erican corporations prefit from this legalized racism and foreigner to sit on the boards of two government agencies tha:t Harvard. provide crucial sup.port.to the w~ite minority government. recruited cheap black migrant labor to work the mines pnder The focus of protest then shifted to the • As a major investor in these corporations the Harvard horrifying conditions. Engelhard not· only directly benefitted ·Corporation is an accomplice _to-apartheid. from the apartheid ·system, but organized bank loans to save the Corporation, the body with the real power. But the •Black South Africans' struggle for freedom is reaching a Scuth African econorriy in the days after the Sharpeville students from many organizations who janime(l the critical· stage, and both nationwide and worldwide the Massacre in 1960. Corporation's open hearing April 10 found that movement against the South African govenirnent is gaining The Kennedy School of Government proposed to Engelhard's only three Corporation members bothered to show momentum. Withdrawing .foreign invt:stments now .can family foundation that it donate ~I million for~ Charles W, up; cine of them, President B.ok, only came after significantly contribute to the elimination of apartheid. Engelhard Public Affairs Library-without doihg the slightest '*Virtually every anti-apartheid organization in South Africa_ bit of checking'into Engelhard's background. students insisted that he be present. Despite their has called for the withdrawal of foreign corpomtions. One way 500 students demonstrated to demand the library be renamed professed commitment to "free and opefl debat~." we can. expreSs our sUpPQfl for the liberation struggle .is to put at the Kennedy School Dedication. As a result, the library was President Bok and the -others.· largely refused to pressure on the corpomlons in the United States. renamed after Littauer. an American businessman.
.- ----~------~.---- -. .. Harvard's ReSponse
The Corporation F ?port appears to have moved away from that position in Harvard's batik oivestments policy. The Harvard Corporation answers the call for return for increased governme-nt tolerance of his Shortly thereafter Citicorp response to complete corporate withdra \Val with a promise to various political activities and interests. Harvard's .stated desire to consider a case-by-case revit:w. each. of Harvard's South Africa-related In fact, Buthelezi is the only black South African review for banks could be found in the New York investments case-'by-case. But t1Ie very act of of any- stature whose name President Bok can Times. "We Knew You· Were Only Kidding, investing- in South Africa. demonstrates that invoke_ to support his position. Harvard" should have been the title of the article.. · corporations completely s,ubordinate moral By citing these men, while ignoring the opinions What is ostensibly the reason for review is the conceJ;"ns to -economic ones. You don't invest in of most blacks, Harvard is not only being racist and desire to distinguish between banks that make loans slavery and then say you are trying to "improve" it. paternalistic,~ 'but downright deceitful. South fOF "humanitarian" purposes and those that don't. Thus Harvard's attempt to separate the g{)od guys Africans aren't asking for a case-by.,.case review; Strangely enough, -the well~documented from the bad guys is shot through with they know perfectly well what the situation is and expansion of loans to South Africa in the past few contradictions. It ignores the following facts: they want immediate corporate withdrawal. years by the United States and International •Virtually- every anti-apartheid leader and Desegregating Bathrooms Monetary Fund has not resulted in increased calls organization in South Afri~a has called for all The case-by-case- review assumes that for "divestment except for humanitarian -corporations to get out immediately. corporations can somehow bring about sweeping corporations" by black lead~rs or _international •Desegregating a few bathrooms and training a bodies, such as the U.N. General Assembly or f-ew b-lack executives can ·never bring about basic Harvard!s Share in Apartheid. World Council of Churches. - social change in South Africa. A Partial List Harvard's Holdings }n fact, as the third largest recipient ofiMF loans •All corporations in South Africa contribute to In millions of dollars (1976-1977) and the recipient of American loans General Motors 61.6 -the str-ength of the white minority regime in South IBM 63.4 which increased $1 billion in the recession years of Africa. Standard of California 20.1 1975-1976, South Africa was not and is not noted •Economic sanctions against South Africa can Exxon 36.5 for undertaking humanitarian projects. only be based on the withdrawal of all Mobil 18.1 With 60% of the electricity consumption of all of corporations. Raytheon 7.2 Africa and about 27 million people of the ITT 6.0 •The case-by-case review has been an extremely Caterpillar Tractor 9.2 continent's more' than 400 million people, South time-consuming process that only gives the South 3M . 4.6 Africa has a gross national product about the size of African government more time to complete its drive Motorola .6 Africa's largest economy, Nigeria's, which has for strategic self-sufficiency. General Electric 14.3 somewhere between 67 and 100 million people Harvard's Paternalism Manufacturers Hanover Trust 11.0 depending on the estimate. Still, South ·Africa HoneyweU .2 While President Bok and the other members ot Foxboro 1.0 manages to absorb more IMF loans than all of the Harvard Corporation claim to find the black Africa. (1976-1977) cepiession of blacks in South Africa "repugnant Citicorp and its peers are not saying that they and inhumane," they refuse to listen to these same change in Sooth Africa by improving their cannot find enough countries to ren·der employment pract~~es. But U.S. corporations only blacks' pleas for assistance in getting multinational humanitarian assistance. They're not ~aying South corporations off their backs. employ 0.4% of the black workforce, and the Africa is especially incapable of taking care of its 1he seven men on the Harvard Corporation improved employment practice~ do nothing at all people. They must be saying that they make up to a 'claim to know better. They claim that they are the for the majority of blacks. They do not de!!.I with the 30% return on loans to South Africa and they need fundamental political issues, and do not challenge ones to judge what is _best ~or black SouthAfricam. as many excuses to make .as many such loans as I o support their argument they cite black "leaders" the apartheid system in a~y way-as the South possible. such as Chief Buthelezi and former Neiman fellow African government's endorsement of the Sullivan The Need for Action Percy- Qoboza. Principles clearly shows: · · The Corporation is relying on the vagueness and But Buthelezi is a black "leader" apP.ointed by the The case-by-case approach tries to distinguish complexity of their report and the case-by-case white regime, and Qoboza has taken pains to point the· bad guy and good guy corporations in South review to lessen. the pressure for immediate, out that to call for corporate withdrawal from Africa. But all corporations support the apartheid effective action. We cannot allow that to happen; South Africa is a crime punishable by death(he was system-they provide loans, foreign exchange, simply because they have adopted a policy, we recently released from prison himself). taxes, technology,. strategic goods and services, should not stop demanding that they adopt an protection from economic and diplomatic effective policy. "Heavy investments in the South African sanctions, and symbolic "approval to South Africa. economy, bilateral trade with South Africa ... are The "Democratic" ACSR "With this reasoning ...- there is nothing to amongst the sins of which America is accused. All The case-by-case review is a delaying tactic prevent the school from investing huge sums in a these activitie~ reblte to whites and their interests designed to entangle the members of the Harvard heroin ring ; .. in tbe hopes that it could influence a:nd serv·e to entrench the position of the minority community in a lengthy debate over meaningless the thinking of major dealers from within. As regime. American must therefore re-examine her employment-practices data. The review involves Harvard and Bok see issues like this, the university policy toward South Africa drastically ••• Whilst it' close to 60 corporations, and ffiough the. review wc_mld not have turned in stock it might have held is illegal for us to call for trade boycotts, ~rms started in the spring of 1978, as of January 1982, with I. G. Farben or the Krupp companies during embargo, withdrawal of inv.estments, etc., America Harvard has not divested from a single non-bank World War II when both corporations were dQing a herself is quite free to decide what price_ South corporation. huge government business with AdolfHitk!r. They Africa must pay _for maintaining obnoxious The group responsible f~r this review is The might be making ovens now, Harvard ·would polities." Advisory Committee on Shareholder probably have said, but give us a couple of years on ~steven Biko, New York Times 9/18/77. Responsibility (ACSR). The faculty and ~Jumni the board and we'll talk them into making toasters)' members are primarily from business and -Mike 'Barnicle, columnist for the B~ston Most- disingenuous of all is Pr-esident Bok's · economics backgrounds. Even the recom-" Globe, 4/ 16/79. distortion.orthe position of martyred leaderStev~n mendations of this cloistered body, which had one Biko. In numerous statements Biko made it known public meeting in all of the 1980-1981 academic . The administration likes to claiin that they only that he unequivocally supported corporate year, can be and are rejected by the corporation. make deci~ons on the. basis of "reasoned withdrawaL Moreover, the two organizations he Harv3rd's Broken Promise ·discliSsion" 'and ·"rational discourse"-yet the founded, the Black People's Convention and the Harvard_'s failure to divest itself publicly of bonds members of the Corporation avoid engaging South African Students Organization, as a matter in banks that loan r:noney directly to the South students on this issue at every .opportunity. of basic policy demand .corporate withdrawal. African· government most clearly demonstrates its Student pressure forced ROTC off the Hai"Vard According to Donald Woods, who was present at · refusal to take any effective action. In the spring of campus after Corporation-style ·"reasoned the trial cited by Bok, the prosecution was 1981; Harvard sold its bank notes in Citic{)rp. As discussion~· led to nothing but delay and inaction. attempting to·irap Biko into admitting publicly that the second of two divestitures from banks, this The C.orporation's current policy and the steps he and his . associates supported unconditi~nal in~ve could have been used . as an effe-Ctive taken so far to implement it are so inadequate that corporate withdrawal. Under such duress, Biko pronouncement against apartheid. we can and must mount the necessary pressure to ~bviously gave an am~iguous answer in order to However, as in the case of ~iuvard's divestment · . force Harvard to· divest, to end Harvard and- all save his comrades .. from 'Morgan Guaranty, Harvard chose, to be U.S. corporate complicity with apartheid, to pave unclear in intentions. Not only was the bank note .the way for majority rule in South Africa. Until1974, even Zulu ChiefGatsh~ Buthelezi, who sale secret and thus . minimal in impact in ~be is frequentiy.cited as a prominent black opponent This leaflet is a virtual reprint of a Harvard ~Radcliffe divestment movement, but also a·7:30 a.m. meeting Southern Africa Solidarity Committee leaflet that appeared in of corporate withdrawal, endorsed economic of the ACSRon the first day of exams in Januliry the 1978-1979 academic· year because the issue is virtually the sanctions. Iri recent years, however, '·Buthelezi 1982 brought to light tl!_e decision to revie-W same. Call 498-7304 for more information. I ·. Wby -Corporate With Ut)ited ·states corporations, by their very black workers justify thei~; presence in ·south Other South African organizations-joining in the _ presence in South Africa, · strengthen . white Africa:. · . call for withdrawal are the South African Congress . ·minority rule and perpetuate racial oppression. They claim that by improving ,their employment of Trade Unions, the South African Council of Considering the technology, strategic goods and practices, by adhering to the "Sullivan Principles" Churches, and the Christian Institute. . _ · services; trade, foreig~ exchange, taxes, protection which call for desegregated bathrooms and training In .response to the demand of black. South from economic sanctions, and symbolic approval programs for token bla<;k executives, they ~THE GENERAl. ASSEMBLY, given by American firms to the apartheid regime, it somehow can bring about sweeping cl.ange in Noting with grave concern that some is evident that U.S. corporations should withdraw. South Africa. Governments, in pursuing strategi~ and econoinic Econo~ic Assistance But U.S. corporations only employ 0.4% of the and other interests, continue to collaborate with ~he , -•American corporations -have $1 .7 billion black workforce in South. Africa; thus whatever racist regime of South · Africa _·and thereby 'invested in South Africa. They equip the apartheid minor changes they make wil' do nothing at all for encourage it to persist in its crimiilai policies~ system with the sophisticated technology necessary the other 99.6% of the black population. Improved Calls upon all Governments to take effective for its efficiency and its surVivaL For instance, U.S. employment practices will do nothing to break action to prohibit all loans to or investments in firms import and refine 50% of the regime's oil and down the migrant labor system, the Bantustans, or South Africa by banks and c:;orporations within provide 70% of the country's computers. · the repressive . legal system. . They cannot their national jurisdiction ... •The United States is South Africa's leading enfranchise blacks, or correct any of the other Requests all agencies within the United Nations trading partner. Its trade with South Africa has fundamental injustices. system to refrain from any dealings with tripled in the 1970s. Former Chairman of the Senate Subcommittee corporations which provide any loans to, or make •U .S. corporations bring in hundreds of !D:illions on African Affairs, Dick Clark, started to expose any investment in South Afri:ca." of dollars in foreign exchange, allowing the South the nature of the U.S. corporate role. An intensive -U.N. General Assembly Resolution 31 / 6H, African regime to buy yet more manufactured investigation of his committee concluded: adopted 11 / 9/76 ' goods and weapons. "Collectively, U.S. corporations •American businesses pay over $200 million a operating in South Africa have Africans, other organizations around the world year . iri taxes directly to th~ South African made no significant impact on have taken up the call for corporate withdrawal: the government and only $70 million in wages to blackS either relaxing apartheid or in Uriited- Nations .General Assembly, the World in South Africa. · · . establishing company policies Council of Churches, the OrganiZation of African Big Banks which would offer a limited but Unity, the International Labor Organization, and U.S. banks, led by Citicorp, Bank of America, nevertheless important model of the International Confedera~ion ·. of Free Trade Morgan Guaranty, and Manufacturers · Hanover mul~inational responsibility. Unions. Trust, have lent $2.2 billion to South Africa. "By Rather, the net effect ofAmerican - Iri the United States, the' NAACP, the making the bulk o( their loans to state-owned investment has been to strengthen Congressional Black Caucus, the United Auto companies, they have freed South African ·capital the economic and military self- Workers, the New · York Times, and numerous for expansion in neighboring countries such as suffic~ency of South Africa.:s churches, universities and trade unions have echoed Namibia. They have also freed tax revenues for an apartheid regime." the call for total corporate withdrawal. enormous increase in military ·spending. Sonth African money in the "Mulde~;gate" scandal Corporations Can and Do Withdraw Furthermore, American banks have been willing was indicated in Clark's defeat in November ofl980 . Polaroid ceased its marketing in South Africa; to intervene at critical times to prop up the by the New York Times and Washington Post. General Electric of Great Britain sold its apartbeid regime. For example, after the shooting Even t.he S'outh--.African government endorsed investments to a South African firm, denying it key of. 250 peaceful demonstrators' at Sharpeville the Sullivan Princi les- after a clause callin for new technology;. Weyerh~use r sold its carton Ian · prompted $300 million of foreign_capital to leave "The economic boycott o ou rica WID en-t~1 undoubte ar s ip for the country, U.S. banks intervened to prevent a depression. At the instigation of Charles Africans. We do not doubt that. But if it is a me_thod which shortens the day of Engelhard, they mobilized over $150 million in blood, the sufferjng to us will be a price we are willing to pay." loans to replace the departed ·capital and maintain the regime's solvency. po 1hca c ange was dropped. a t t em request. • 1s In recent years, the South African economy's same government has made it .a terrorist offense " ... I must report that the idea of doing business growth has slowed dramatically. In 1976, the punishable by death to call for corporate in South Africa is totally unacceptable; we could economy grew a fraction of one percent, and its withdrawal. Recently, nine members of the South not be true to the basic principles on which we run balance of payments deficit rose to $3 billion. To African Students Organization received average our business and we could lose our integrity in the rescue · the South ·African economy, American prison terms of ten years for this "offense." process. We should have to ,operate within an. · banks between early 1975 and late 197.6 doubled What clearer · demonstration is there that economic climate which is deliberately designed to their loans from $1 billion to $2 billion. As a result, improved employment practices do not pose a demoi•alize and to maintain an industrial helotry; South Africa posted a balance of payments surplus threat to apartheid but that corporate withdrawal we should in turn profit from such exploitation and of $1.4 billion in I 'i77, and since then the economy do~s? ultimately end IJP with a vested ··interest in its rec~vered. · Donald Sole, South African ambassador to the maintenance." Protection and Approval U.N . commented: -Mr. Neil Wates, Managing Director of U.S. cprporate investment in South Africa both "I do not think that they (U .S. Wates, Ltd., after visiting South Africa in 1970 and constrains U.S. foreign policy and represents an corporations) will play any tole iri rejecting an invitation to invest in !hat country. economic vote of cdnfidence in the racist regime. what .you refer t{) as the White South Africans remain confident that the 'elimination of apartheid . . . 'They Burlington Mills withdrew its textile operations; U.S . government will continue to protect them cannot play any role whatsoever regional banks such as United Virginia and First because of the vast U.S. corporate involvement. in the institution of black majority National of Dallas have ceased to make loans to Other-foreign investors are confide.1i that the U.S. rule." South Africa; Chemical Bank and other major will use its dipJomatic and military power to protect The Call for Withdrawal banks, have 'also ceased to make loans. the economic stability of white South Africa. The most compelling reason for corporations to Effective Action? . For example; economic sanctions-were vetoed in withdraw from South.... Africa is that virtualiy every - U.S. corporate · withdrawal would severely t I The Ca~e for Divestiture Total divestiture is the most forceful, moral, and instance, Harvard's torch-light demonstration and to be:l2.5~18.7 cents per share. effective. action that Harvard University could takt: the Engelhard. Library- (now named Littauer Since Harvard has 4.95 million shares' In South against the ·apartheid regime and the U.S. Library after student protest. at the dedication') Africa-relat~d investments, the' short te~m . cost ~orJ,orations which support it. protest both received extensive coverage in the would equal'·about .$600-900,000 using Stanford's Because of Harvard's enormous prestige and South Afdcan daily press. _ estimates. In other ,words, Harvard's estimate is influence, its divestiture of South Africa-related Finally, Harvard's divestiture_· would have a eight to sixtee·n times as great as Stanford's1 stocks and bonds would contribute immensely to positive ef(ect on the liberation fighters. The On March.13, 1979, Kenneth J. Arrow; James the mounting pressure on U.S. corporations to knowledge of support elsewhere would boost their ·. Bryant Conant Professor of Economics and .withdraw. . spirits and strengthen their resolve. recipie'rit of the Nobel Prize in Economic Science in The time to act is now. The liberation movement Resolutions Don't Work 1972, r-eleased a letter stating his conclusions in South Africa has reached a critical juncture: all ·. Some people wonder why Harvard should not regarding ·Harvard's estimates of . the cost 'of institutional links with the racist regime must be try to: work within the corporations to persuade divestiture: '· severed in order to clear the way for maj~rity rule. them to withdraw from South Africa. Proponents "(I) the short-run price effects, Total divestiture is an outright condemnation ol of tt'~is approach say Harvard should exercise its even the low estimate . : . , seem all U.S. corporate involvement in South Africa. It is influence as a shareholder at annual meetings by too high; ·(2) the long-nin lost a condemnation backed up by action. No longer supporting_ resolutions calling for the corporation returns (from the inability to wou~d Harvard passively condorie apartheid by to withdraw from South Africa. The problem with invest in the selected companies) accepting money from those who bolster the South- this approach is ·simple: Shareholder resolutions do are very uncertain and a £air African government. . not.work. expected value should be well. Harvard would not be almie in t3:king this-action. In 1977, withdrawal resolutions appeared in only below the High figure . . . lri Divestiture is the focal point of the movement in four of the more than 350 corporations operating in making these statements, I am not this country for. corporate· withdrawal. Many South Africa. In these four corporations, the in any _way taking a stand on institutions-churches, unions, _colleges, and average vote in favor of withdrawal was 2.77%. In divestiture policy as such, since it universities~have divested their financial ties to only one of the corporations did the resolution. involves :many considerations South Africa. receive enough support to enable it to reappear on other than the financial aspect These divestitures have an impact: They have the ballot the riext year. which alone is addressed_ here," pressured such investors as Chemical Bank, U.S. Even conservative resolutions merely calling for President Bok has never responded to Professor Trust Company, Republic"'National Bank of Dallas a study of the South Africa issue have been Arrow's critique, but he continues to cite the and United Virginia Bank into pledging not to loan overwhelmingly defeated, year after year. ex~ggerated figures·as reliable.· . any further funds to the South African government .. Most importantly, the mechanism of shareholder Harvard not only has exaggerated its figures, it Harvard's Clout resolutions itself prohibits shareholders from has also exaggerated their importance to intimidate Harvard has the potential to con~ribute uniquely having any real i-nfluence. As long as management the Harvard community. In no way would to this movement for corporate withdrawal. Its controls ~0% of shareholders' votes through proxy, divestiture threaten Harvard's f).nancial status. The endowment dwarfs that of any other university in no progressive resolution has a chance of passing. cost of divestiture, using eveQ. the inflated figures of the country; in fact, its assets place it near the top of - Even if a. shareholder resolution did receive a the . Corporation, would only comprise a tiny all corporate instit1,1tions in this country,. higher majority of the votes, management would not have percentage of Harvard's total budget which than the Mellon and Rockefeller Foundat~ons to accept ~hat decision. Under law, a shareh~ider approaches $300 million. combined. resolution can only be a request to the Board of And Harvard acquires money at an incredible As a corporate entity of such stature, Harvard Directors; it cannot b~ legally binding, rate. In 1980 and 1981, Harvard's capital fund drive wields significant influence. Harvard's divestiture Since shareholder resoh1tions are absolutely· brought in $185 million. That amount of money would reverberate throughout the corporate ineffective in themselves,_ the only possible alone would cover Harvard's divestiture costs for community, shaking the confidence of -the beneficial effect they could have on the liberation decades by Harvard's own exaggerated estimates corporations dealing with South Africa. movement would .be as a statement against anci for cel!_turies by other estim~tes. some anaiysts As an academic institution, Harvard commands corporate involvement in South Africa. But.what is even sqggest that bonds are better investments than unrivaled respect. The impact of a powerful action more hypocritical than voting for shareholder stocks in consideration of the returns of by Harvard .cannot be dismissed; it would lend resolutions, knowing that they will fail, while still - multinational cdiporations of the 1970s. legitimacy to the demand for corporate withdrawal profiting from a system one claims to abhor? In short, the cost argument does not wash. Nevertheless, Harvard hopes. to use it to scare away and prompt oth~r universities and other Only divestiture would serve notice on the institutions ,to divest. corpor-ations that concerned investors will no· -scholarship and Third World students, Junior If Harvard divested, it would be a major news longer cooperate with them. Only divestiture wouid Faculty and workers, dividing the movementalong event worthy of front page coverage in The New attract national media attention. Only divestiture economic and racial lines. · Y C?rk Times and prominent coverage in Time and would raise the issue in the national community. _Some opponents of divestiture argue that if Newsweek. The more attention the issu~ gets, the Only divestiture would force U.S. corporations to Harvard were to, sell its stocks and borids, someone ' more pre'ssure will come to bear on the withdraw. .else who cares even less about South Africa would "Someone c~rporations. Exaggerated Costs simply buy them. This is like sa)ri"ng, has The_ Impact on Corporations Another argument against divestiture centers on to. ~ell heroiJl, so it might as well be me." A_s the p_ressure intensifies on U.S. corporations, the actual cost of the process. The -Harvard Total divestiture is the demand . .If Harvard· they will be forced to reevaluate their policies, if not Corporation has already raised the specter of University has any claim to moral standards, ifthe out of moral concern, at-least .out of economic fear. economic costs as a ~efense for its continued profits University_has·any commitment to freedom for all ln_itially, they will respond by increasing their costly from apartheid. peoples,. then it must no longer profit from public relations counter-offensive (Mobil alone The · implication that Harvard weighs this apartheid. Instead it must take the most effective spends $21 million on corporate image-building). "economic cost" against the costs in life and blood action it can to support the liberation struggles in At some point fhe corporations will realize that of the -South African people illustrates the moral South Africa. It must take the'action that will best continued business in South Africa does· not. "pay bankruptcy of the Corporation. Accumu1ation of expedite the withdrawal of U.S. corporatio~s from off' for them on tfie balance. Public relation costs money through exploitation is wrong. As Donald South Africa: That act-ion is total di'(~stiture. and potential losses from concerne_d co9sumers will Woods, exiled editor of the South African Daily exceed the benefits of continued investment in Dispatch and former Harvard .Nieman fellow "Historically, shar~holder resolutions usually South Africa. T-his is, unfortunately, the· only compellingly argues: "If Harvard has to be lose when management recommends against them. language the corpo'ni.tions understand .. dependent on the fruit_s of oppression, then it Once an actiOn is voted a·ow.n explicitly, it inay As the ·divestiture movement grows, corporate shouldn't exist." . . become much· more difficult to raise the issue with withdrawal will become an issue in mainstream The University claims that total divestiture management and to pursue it. on a less formal basis. politics. The Pr~sidep.t and members of Congress would cost them between 4.7 and 15.7 million Further, it forces management to take a public will not. be able to dismiss so easily the· option of dollars in the first yeai'~pd 5-ro million dollars each position from which it may ·be ·.t_ifflcult to. back .economic sanctions on South Africa. year after that. · down later. Tberefore, iri causing changes in · Harvard's 'di~estiture would have an impact in ·Stanford University; however, did a study ofthe management behavior, shareholder resolutions r . South Africa itself. The rulers ofSo,uth.Africa pride costs of divestment and came up with figures that .1; • •• , ·~ <.. . seem to us t() be relatively ineffective." themselves on bemg the defenders of Western did not even approach Harvard's. · Harvard's -January 25, 11)]9 ACSR Report. ciyilization in Africa. Their self-confidence relies on Advisory, Committee on ·shareholder at least taci-t U.S. support. South African wlfites are Responsibility note9 that Stanford estimited the hypeNenstiti've to U.S. attitudes about them; for cost of the 'one-time market ~xpense of divestiture Nukes Liberation The thousands of Harvard students, who in petitions and ~ The administration informs us that corporate behavior in The only people who can rtberate South Africa are the South demonstrations have taken a stand against apartheid, join South Africa is a very complex is~ue: oniy acase-by- I The Corporate Role U.S. corporations and banks bolster k_ey seetors Big Brother of the. South.African economy. TheY, provide South IBM alone C'Ontrols 40-50% of the South African Afri"ca with - strategic - goods and services, computer market and does one-third of its business strengthening the econ,omy and enabling the with the government. It supplies and maintains apartheid system to function effiCiently. A closer -'computers for the Department of Defense, the · examination of U.S. corporations.' involvement in Department of Prisons, and the Atomic Energy the ~outh African economy will reveal the nature Board. The Department of the Interior uses two and extent of their complicity. IBM machines to manage the information Big. Oil necessary for the efficient functioning of the Mobil Oil and Caltex (a JOint venture of passbook system. Standard Oil of Califqrnla and Texaco) are the Other American companies, inCluding Univac, largest U.S. corporate investors -in South Africa National Cash Register, and Honeywell, control an and have combined assets there of $550 million. additional 20% of the market. Both have built refineries in the country, and Caltex Big Names is now expanding its facilities using$100 million in ITT has invested over $50 million m new foreign capital. manufacturing facilities, it sells 70% of its South Africa, without domestic oil reserves, production to the white government, including depeiids entirely upon imports. If there were an telecommunications systems to the police. effective oil embargo, South Africa would run out Goodyear and Firestone both have tire plants in of oil within two years, according to a U.N. study. South Africa. Union Carbide, Kennecott, AMAX, - Together Mobil and Caltex control 45% of the and Phelps-Dodge all · have extensive mining South African market and guarantee it access to operations iri South Africa and Namibia: General foreign oil. Electric builds· consumer goods and locomotives. , I Motorola produces two-way radios for the police Big Three and military. General Motors and Ford are the next largest In brief, U.S. cor_porations are essential elements investors, with Chrysler not far behind. Together in the South African economy. They provide the they -- have asse.ts of over $600-million and _control advanced technology necessary for a modern, one third of the vehicle market in the country. G.M. competitive economy that neither South African trucks transported police to Soweto in 1976, and nor European fi,rms could provide in their absence. Ford buses transport prisoners for the Department They provide hundreds of millions of do.Ilars which of Prisons. - maintain the apartheid regime's solv_ep.cy and Beyond mere1y size arid sales to police, the big strength. The effects of their withdrawal cannot be three are important to the apartheid regime because unde~estimated. they give it access to the continental African "The ending of foreign investment in South market. Like other American manufacturi~g Africa is, of course, a tactical question; it is a means interests, the auto companies located their major of undermining the power oft he apartheid· regime. African operations in South Africa to reap the But it is of such importance· that there can be no benefits of political stability arid high profits. They compromise whatsoeve'r about it from our point of export vetlicles and spare parts throughout the view. Foreign .investment is a pillar of the whole continent, earning desperately needed foreign system which ll_!aintains the virtual slavery of the exchange, and encouraging the economic Black workers in South Africa." dependency of ·other African nations. on South - John Gaetsewe, General Secretary of the Africa: South African Congress•of Trade Unions.