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U.S. CORPORATE ACTIVITIES IN SOUTH AFRICA U.S. CORPORATE ACTIVITIES IN SOUTH AFRICA HEARINGS AND MARKUP BEFORE THE SUBCOMITTEES ON INTERNATIONAL ECONOMIC POLICY AND TRADE AND ON AFRICA OF THE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES NINETY-SEVENTH CONGRESS ON H.R. 3008, H.R. 3597, H.R. 6393 SEPTEMBER 24, OCTOBER 15 AND 22, 1981; MAY 18 AND JUNE 10, 1982 Printed for the use of the Committee on Foreign Affairs U.S. GOVERNMENT PRINTING OFFICE 99-7800 WASHINGTON : 1983 COMMITTEE ON FOREIGN AFFAIRS CLEMENT J. ZABLOCKI, Wisconsin, Chairman L. H. FOUNTAIN, North Carolina DANTE B. FASCELL, Florida BENJAMIN S. ROSENTHAL, New York LEE H. HAMILTON, Indiana JONATHAN B. BINGHAM, New York GUS YATRON, Pennsylvania STEPHEN J. SOLARZ, New York DON BONKER, Washington GERRY E. STUDDS, Massachusetts ANDY IRELAND, Florida DAN MICA, Florida MICHAEL D. BARNES, Maryland HOWARD WOLPE, Michigan GEO. W. CROCKETT, JR., Michigan BOB SHAMANSKY, Ohio SAM GEJDENSON, Connecticut MERVYN M. DYMALLY, California DENNIS E. ECKART, Ohio TOM LANTOS, California DAVID R. BOWEN, Mississippi WILLIAM S. BROOMFIELD, Michigan EDWARD J. DERWINSKI, Illinois PAUL FINDLEY, Illinois LARRY WINN, JR., Kansas BENJAMIN A. GILMAN, New York ROBERT J. LAGOMARSINO, California WILLIAM F. GOODLING, Pennsylvania JOEL PRITCHARD, Washington MILLICENT FENWICK, New Jersey ROBERT K. DORNAN, California JIM LEACH, Iowa ARLEN ERDAHL, Minnesota TOBY ROTH, Wisconsin OLYMPIA J. SNOWE, Maine JOHN LEBOUTILLIER, New York HENRY J. HYDE, Illinois JOHN J. BRADY, Jr., Chief of Staff MICKEY HARMON, Staff Assistant ANNE MARKWARD, Staff Assistant SUBCOMMITTEE ON INTERNATIONAL ECONOMIC PoucY AND TRADE JONATHAN B. BINGHAM, New York, Chairman DENNIS E. ECKART, Ohio ROBERT J. LAGOMARSINO, California DON BONKER, Washington ARLEN ERDAHL, Minnesota HOWARD WOLPE, Michigan BENJAMIN A. GILMAN, New York BOB SHAMANSKY, Ohio MILLICENT FENWICK, New Jersey R. ROGER MAJAK, Subcommittee Staff Director TABOR E. DUNMAN, Jr., Minority Staff Consultant CAROL PAGE ROVNER, Subcommittee Staff Associate JOHN MAXWELL HAMILTON, Subcommittee Staff Associate SUBCOMMITTEE ON AFRICA HOWARD WOLPE, Michigan, Chairman GEO. W. CROCKETT, JR., Michigan WILLIAM F. GOODLING, Pennsylvania STEPHEN J. SOLARZ, New York ARLEN ERDAHL, Minnesota GERRY E. STUDDS, Massachusetts OLYMPIA J. SNOWE, Maine DENNIS E. ECKART, Ohio ROBERT K. DORNAN, California JOHNNIE CARSON, Subcommittee Staff Director GARDNER G. PECKHAM, Minority Staff Consultant STEVE WEISSMAN, Subcommittee Staff Associate PRISCILLA NEWMAN, Subcommittee Staff Associate CONTENTS Thursday, September 24, 1981: Page Rev. Leon Howard Sullivan, chairman of the board, International Council of Equal Opportunity Principles ........................................................................ 3 Hon. Stephen J. Solarz, a Representative in Congress from the State of N ew Y ork ............................................................................................................... 19 Hon. William H. Gray, III, a Representative in Congress from the State of C aliforn ia ............................................................................................................... 34 Thursday, October 15, 1981: Mr. Joseph F. Dennin, Deputy Assistant Secretary for Finance, Investment, and Services, U.S. Department of Commerce .................. 52 Mr. Princeton Lyman, Deputy Assistant Secretary of State for African A ffairs .................................................................................................................... 60 Mr. Thomas Leddy, Acting Assistant Secretary for International Affairs, Departm ent of Treasury ...................................................................................... 72 Thursday, October 22, 1981: Hon. Carl D. Pursell, a Representative in Congress from the State of M ich igan ................................................................................................................ 121 Rev. William Howard, president, National Council of Churches .................... 133 Mr. William B. Gould, professor of law, Stanford University Law School ... 137 Mr. Randall Robinson, director, TransAfrica ..................................................... 153 Mr. Broadus N. Butler, director, International Affairs, National Association for the Advancement of Colored People ................................................ 157 Tuesday, May 18, 1982: Subcommittees' markup session (no witnesses) ............... 189 Thursday, June 10, 1982: Subcommittees' final markup session (no witnesses).. 203 APPENDIXES 1. Legislation: H.R. 3008, as introduced by Mr. Solarz, April 2, 1981 .................. 225 Amendment in the nature of a substitute to H.R. 3008, July 2, 1982 ............ 245 H.R. 3597, as introduced by Mr. Gray, May 14, 1981 ........................................ 278 H.R. 6393, as introduced by Mr. Bingham, May 18, 1982, and voted out of June 18, 1982 m arkup .......................................................................................... 274 2. A position statement of U.S. churches on bank loans investment in South Africa and December 1980 ICCR brief submitted by Rev. William Howard, president of the National Council of Churches of Christ in the U.S.A ............. 276 3. Statement submitted by General Motors Corporation, October 23, 1981 ......... 283 4. Statement submitted by Ray Denison, director, department of legislation at the American Federation of Labor and Congress of Industrial Organization s ................................................................................................................................ 298 5. Letter dated November 9, 1981, submitted by Nicholas L. Deak, chairman of the board of DEAK-PERERA ............................................................................... 309 6. Letter dated November 25, 1981, submitted by J. R. Fluor, chairman, president, and chief executive officer, and D. S. Tappan, vice chairman of the F luor C orp .............................................................................................................. 311 7. Letter dated November 19, 1981, from Mr. Wolpe to Department of Treasury and response letter dated December 30, 1981 ................................................. 315 8. Responses to questions submitted to the Department of Labor by the subcom m ittees ............................................................................................................... 318 9. Article by the Economist, September 19, 1981, "America and South Africa Trade Follow s the Flag". ............................................................................................ 324 10. Article by Joseph Lelyveld, published in the New York Times, August 10, 1981, "South African Discloses Bid To 'Break' Black Union" ................ 325 11. Article by Joseph Lelyveld, published in the New York Times, November 28, 1981, "14 Unionists, Seized by South Africans" .............................................. 327 (i1) U.S. CORPORATE ACTIVITIES IN SOUTH AFRICA THURSDAY, SEPTEMBER 24, 1981 HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, SUBCOMMITTEES ON INTERNATIONAL ECONOMIC POLICY AND TRADE AND ON AFRICA, Washington, D.C. The subcommittees met at 2:15 p.m., in room 2200, Rayburn House Office Building, Hon. Howard Wolpe (chairman of the Subcommittee on Africa) presiding. Mr. WOLPE. Today, the Subcommittee on Africa and the Subcommittee on International Economic Policy and Trade are meeting jointly to begin the first of our public hearings on two bills introduced during this session of Congress on the role of American corporations operating in South Africa. The first bill, introduced by my colleague from New York, Congressman Solarz, would require all American companies operating in South Africa to adopt and implement a fair employment code. His proposed legislation would also prohibit the importation into this country of South African krugerrands, and bar American banks and lending institutions from making loans to the South African Government. The second bill, sponsored by my colleague from Pennsylvania, Bill Gray, would require the United States to ban any new American investments in South Africa. South Africa's system of apartheid has been a growing source of international concern for nearly three decades. However, in the past several years, as South Africa's white leaders have refused to end that country's appalling racial system, an increasing number of American political leaders, labor unions, State legislatures, private foundations, religious groups, and colleges have urged the U.S. Government and Congress to reexamine American policy toward that country and to take some type of meaningful action to protest the flagrant violations of human rights that occur daily in that nation. As a part of this reexamination of American policy toward South Africa, attention has focused increasingly on America's wideranging commercial and trade ties with South Africa. This has occurred because many people in and outside of South Africa believe that foreign businesses and investment help sustain and prop up South Africa's domestic racial system. Clearly, American companies have a major stake in South Africa. U.S. investment in that country is in excess of $2 billion, representing the largest single U.S. investment in any country in Africa. Moreover, in recent years the United States has become South Africa's leading trading partner, with a two-way trade of nearly $4.7 billion. This afternoon we will hear from three distinguished proponents of that legislation: