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5/79 5/79 NOTES AND DOCUMENTS* BANK LOANS TO SOUTH AFRICA, 1972 - 1978** by May 1979 Corporate Data Exchange, Inc. **This report, was commissioned at the request of the Special Committee against Apartheid to promote campaigns for the cessation of all loans and credits to South Africa in accordance with the resolutions of the General Assembly. It covers mainly credits or bonds raised on the international capital market and involving large numbers of banks of different nationalities. It does not include loans made by banks in individual countries, trade financing and interbank lending. The General Assembly of the United Nations, in resolution 33/183H of 24 January 1979, called for an end to all new investments in and to all financial loans to South Africa. It was adopted by 99 votes to 10 with 20 abstentions. * All material in these notes and documents may be freely reprinted. 79-13090 Acknowledgement, together with a copy of the publication containing the reprint, would be appreciated. TABLE OF CONTENTS 1. Statement by H.E. Mr. Leslie 0. Harriman (Nigeria), Chairman of the Special Committee against Apartheid, at a press conference on 2 April 1979 to announce the release of the report . 2. Introductory statement made by Ms. Beate Klein, Project Director for the Bank Loan Study at the Corporate Data Exchange, at the meeting of the Special Committee on 2 April 1979 . 3 3. Statement made by H.E. Mr. Leslie 0. Harriman (Nigeria), Chairman, at the meeting of the Special Committee on 2 April 1979 . 9 4. Report on bank loans to South Africa (1972 - 1978) . .. ii -I- 1. Statement made by H.E. Mr. Leslie 0. Harriman (Nigeria), Chairman of the Special Committee against Apartheid, at a press conference on 2 April 1979. This press conference has been called to announce the release of a very important report on Bank Loans to South Africa, 1972-1978, which has been presented to the United Nations Centre against Apartheid by the Corporate Data Exchange, Inc. As Chairman of the Special Committee against Apartheid, I call upon the journalists of the world to disseminate the important contents of this work, which now becomes the most complete and well documented evidence of the continued economic collaboration of certain banks with the racist South African regime in contemptous defiance of the international community and of the United Nations. Moreover this report documents without question the total disregard for black life in South Africa held by these financial institutions. The results of this report are shocking to any human being who is concerned with justice and the elimination of racism. At a time when the international community through the General Assembly has repeatedly condemned economic collaboration with South Africa; at a time when only recently the General Assembly has called upon all Governments concerned not only to sever links with the apartheid r6gime and specifically called upon these Governments to take measures to prevent transnational corporations; banks and all other institutions from collaboration with the apartheid r6gime, we learn today that more than $5.4 billion has been loaned in a six year period to bolster a r~gime which is responsible for some of the most heinous crimes ever committed against humanity. The report indicates that the financial institutions of five countries (the Federal Republic of Germany, the United States, the United Kingdom, France and Switzerland) are responsible for a large portion of these loans. The Federal Republic of Germany, which according to the data in the report ranks first in terms of loans to South Africa during this period, made seventy-two loans which totaled $2,427.3 (United States million dollars). However, even these figures do not reveal the full extent of this unethical complicity. If trade financing obtained through the ExportImport of the United States as well as loans previously cited in United States Bank Loans to South Africa (August 1978) is added to the figures cited here, then the total amount loaned through institutions in the United States becomes $2,810.4 (U.S. millions) and this country becomes the number one collaborator in terms of bank loans. The significance of the information in this report becomes all the more revealing when we note the recent publicity by some of these same financial institutions that they have stopped loaning money to South Africa. Often these statements refer to direct loans to the South African Government or parastatal agencies. Their public proclamations -2- hide their continued support of the private sector in South Africa which oftens funnels aid to the South African rigime. We are all aware that in some instances these private corporations have even agreed to develop contingency plans to participate in the military oppression of the black population in South Africa. How ironic that a Government such as that of the United States could only last week in the Security Council advocate a peaceful solution in South Africa - while at the same time abstaining from resolutions which would prevent further South African aggression in Angola and would close its eyes to the fact that a United States bank Citicorp-has loaned nearly 1/5 of the $5 billion plus which has gone to bolster apartheid. In fact, we find to the disgrace of every nation which takes its commitment to the United Nations seriously, that between 1972 and 1978 bank loans to South Africa increased by nearly 1/2 billion United States dollars. In fact, the report indicates that in every year between 1972 and 1978 (except between 1976 and 1977) loans to South Africa have increased. For too long we have heard certain nations complain about the lack of human rights in certain parts of the world, while they are in fact financing the destruction of these rights in other parts. This report removes the veil of false claims of all those who on the one hand shudder publicly at the loss of black lives in southern Africa while privately they finance it. During this International Mobilization against Apartheid, we remind the world that the General Assembly has called upon the Security Council to consider mandatory economic sanctions against the racist rdgime of South Africa. We remind the world aggin that reports of the Special Committee against Apartheid have indicated that the racist regime of South Africa has stepped up its policy of apartheid, repression, "bantustanization" and oppression in flagrant defiance of United Nations resolutions. We therefore call upon all freedom loving peoples of the world to increase their efforts to mobilize against those who continue to finance apartheid. 2. Statement made by Ms. Beate Klein, Project Director for the Bank Loans study at the Corporate Data Exchange, at a meeting of the Special Committee against Apartheid on 2 April 1979. The study of Bank Loans to South Africa, 1972-1978. commissioned by the United Nations Centre against Apartheid, documents 158 loans, totalling nearly $5.5 billion, to South African borrowers in the sevenyear period covered. The list of 382 banks, encompassing 22 nationalities, constitutes the most extensive roster of lending banks identified to date. The vast majority of the loans in the report were made by banks headquartered in five countries: the Federal Republic of Germany, United States of America, United Kingdom, France, and Switzerland. Given the close oversight of banking institutions by national agencies, the Governments of these countries must ultimately bear some of the responsibility for such massive lending to the apartheid r4gime of South Africa. The individual bank holding companies with the most exposure -Citicorp (United States) heads the list - have traditionally had strong financial relations with South Africa. This report confirms the inseparability of corporate and financial interests and details the world-wide banking structure which underpins the racist apartheid policy of South Africa. The hundreds of financial institutions which contribute to South Africa's massive economic infrastructure have an active interest in maintaining the South African Government in power. The data contained in the report is culled from public sources ranging from World Bank files, to exclusive banking publications, to clippings from the business section of daily newspapers. The relative complexity of this source material, combined with its cost and limited circulation,prohibits the widespread use of even this information. Although some sources provide much greater breadth and detail on lending than others, no single source can be considered a-athoritative. This lack of information in the face of a growing worldwide protest against the international banking community's involvement in financing apartheid was what prompted the study on Bank Loans to South Africa. The difficulty of obtaining information on bankig g activities is well known to anyone attempting to penetrate the traditional banker's code of confidentiality. This code ranks client trust high above public accountabiliy. National regulatory agencies are closely interconnected with financial institutions and refuse to disclose much, if any, of the information which they collect. The inadequacy of international and national disclosure requirements permits banks to operate independently of public opinion and renders systematic inquiry into banking activities difficult or impossible. The obstacles encountered in preparing this report clearly illustrate this point. Although the study reveals an unprecedented breadth of international involvement in South Africa lending, the data which surfaces in public documents is severly limited. The vast majority of loans contained in the report are credits or bonds raised on the international capital market, involving large numbers of banks of differing nationalities. However, the type of financial information which is not generally made available to the public includes: loans made on domestic markets involving banks of a common nationality; private transactions of an individual bank or its foreign subsidiaries with a South African client; trade financing - an increasingly important factor in South Africa's economic viability; and loans made between banks via interbank lending and correspondent accounts.

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