A PROPOSAL FOR COOPERATION BETWEEN AFRICAN STATES AND NON-GOVERNMENTAL ORGANIZATIONS ON COMPANIES INVESTING IN SOUTH AFRICA MEMORANDUM DATED 17 FROM THE AMERICAN COMMITTEE ON AFRICA, NEW YORK SUBMITTED TO THE SPECIAL COMMITTEE ON THE POLICIES OF APARI'HEID OF THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA FOR TIS SPECIAL SES­ SION TO BE HELD AT UNITED NATIONS HEADQUARI'ERS, 17-18 March 1969. The American Committee on Africa has for several years focused attention on the explicit economic and implicit moral, social and ~ political support which American investment in South Africa gives the oppressive Apartheid system. However investment in South Africa is extremely profitable, thus the number of dollars invested has grown every year despite growing world condemnation of South Africa's racial policies. Thus it appears important to diversify the strategy of pressure against the maintenance and enlargement of American investment in South Africa and to extend the area of such pressure. Locally stu- dents have played an active role in demanding that Universities not invest in Corporations with South African connections; some individual shareholders in Corporations with such connections have protested the connection; there has been a widening campaign against the Banks in- valved in giving loans or credits to South Africa. Growing U.S. investment in the rest of Africa now suggests a new and potentially effective weapon in the fight against American economic involvement in South Africa. As will be seen from the brief outline presented below, American investment in Africa as a percentage of total U.S. foreign direct investment is growing, albeit slowly. 2 TABLE I. U.S. INVESTMENT WITH AFRICA AND THE WORLD (in millions of dollars) U.S. Direct Investment Africa1 World Africa as °/o of world 1960 925.0 31,815.0 2.9 1961 1,064.o 34,667.0 3.0 1966 2,078.0 54,562.0 3.8 Earnings On Investment " 1960 33.0 3,546.o .9 1966 415.0 5,680.0 7.3 1Excluding U.A.R. Source: U.S. Department of Commerce Differentiating between Southern Africa and the rest of Africa, it appears that while total U.S. investment is growing throughout Africa, the relative percentage of such investment in North and Middle Africa has grown, while the relative percentage of investment in Southern Af- rica has fallen. TABLE II. U.S. DIRECT INVESTMENT IN AFRICA, BY REGION (in millions of dollars - Book value at year end) Area 1961 1966 Investment °/o of total Investment °/o of total North... Africa · 259 24.5 596 28.7 Middle Africa 383 36.2 726 34.9 West Africa 327 642 East Africa 56 84 Southern Africa1 416 39.3 755 36.3 Total Africa2 1,058 2,077 1 No separate figures given on South Africa in this series. 2Totals do not correspond exactly, due to discrepancies in data. Source: U.S. Department of Commerce 3 A few countries still absorb the major share of U.S. investment South Africa ($601 million, 1966), Libya ($389 million, 1966), Liberia ($2G8 million, 1966) but there are significant totals for an increasing number of other countries too, e.g. Kenya (approximately $100 million). U.S. direct investment in North and Middle Africa is heavily con- centrated in extractive primary industries, to a much lesser extent "in a few manufacturing areas, especially food processing and chemical pro- jects such as fertilizers and pharmaceuticals. TABLE III. U.S. DIRECT INVESTMENT IN AFRICA BY TYPE OF ACTIVITY (millions of dollars - Book value at year end) 1961 1966 Investment <fa of total Investment <fa of total Petroleum $498 46.8% $1,108 53.3% Mining/Smelting 283 26.6 369 17.8 Manufacturing 122 11. 5 331 15.9 Source: U.S. Department of Commerce Investment in South Africa is broader with significant involvement in manufacturing industries such as the auto motive industry, rubber man- ufacture, steel and metal industry, as well as light industry. Never- theless, despite this divergence in major fields of investment North and South of the Zambezi, there are sufficient cases where U.S. com- panies are significantly involved in both South Africa and the rest of Africa to make it possible for strong pressure to be exerted on them by African Host Governments. 4 Two types of companies might well be particularly sensitive. 1. Companies with investments in several African countries. a. Pfizer Products: Kenya, Morocco, Nigeria, Ghana, Ivory Coast, Rhodesia, South Africa. b. Singer Sewing Machine: Congo (Br.), Cameroon, Burundi, Ghana, Chad, Ivory Coast, Malagasy, Liberia, Kenya, Morocco, Nigeria, Sudan, U.A.R., Uganda, South Africa. c. Pan American World Airways: Ghana, Liberia, Morocco, Nigeria," U.A.R., Libya, South Africa. d. Standard Oil of New Jersey and Esso: Libya, Malagasy, Nigeria, Uganda, U.A.R., Kenya, South Africa. 2. Companies with investments in the rest of Africa larger than or equal to those in South Africa and/or of greater profitability or growth potential. a, Kaiser Corporation of America has 90°/o control of the Tema Alu- minium smelter in Ghana - has subsidary Republic Aluminium in South Africa. b. Firestone Tyre and Rubber Company is establishing a joint com­ pany with the Ghana government - f:4o% Ghana government, 60°/o Firestone, u.s;J to manufacture tyres and also to participate in the rubber plan- tations. Firestone has subsidary in South Africa. c. Olin Mathieson Chemical Corporation in collaboration with other international groups is a shareholder in FRIA, the alumina producing company in Guinea - current production over 500,000 tons accounts for more than half the total value Guinea exports. South Africa subsidary of Olin Mathieson is Squibb Laboratories. d. Alcan Aluminium is a participant with other U.S. and foreign corporations in Halco Mining Corporation. Halco mining (51°/o) and the Guinea government (49°/o) will jointly own Guinean Bauxite Company to 5 develop a mine at BoJ-;:e, the eventual investment estimated at $100 mil- lion. Alcan Aluminium South Africa has a rolling mill in South Africa and is currently embarking on a major expansion program. The accompanying list of American Companies which have substan- tial di.rect investment in South Africa and in one or more other African .. countries is only an initial guide to the potentialities of the sug- gested approach. The list is not complete even for the countries quo- ted, as such in:':'ormation is slow to be '.)Ublished - and in general, in- formation covers only companies already active in Africa prior to the end of 1966. Further, present lists cover only a few of the indepen- dent African countries, selection having been arbitrary or due to the accessibility of material. \ ··, .... ·... , .... Ethiopia Eth~ottanCompany U.S. Par&rtt Co. South Af'rican Company De Leuw Cather Int. Inv Same Same Addis Ababa Chicago, Ill Johannesburg. Goodyear Int. Corp Goodyear Tire&Rubber Goodyear Tyre & Rubber S.A. Addis Ababa Akron Ohio Port Elizabeth I.B.M. World Trade Corp I.B.M. World Trade Corp I.B.M. S.A. Pty Ltd. Addis Ababa New York Johannesburg. National Cash Register Co National Cash Register Co National Cash Reg." Co S.A. Addis Ababa Dayton Ohio Johannesburg Mobil Oil Socony Mobil Oil Co Mobil Refining Co S.A. (East Af'rica)Ltd. Natal Addis Ababa New York . & Socony S.A. Pty Ltd Isando & Mobil Oil S.A. Pty Ltd Capetown Ghana Ghanaian Company U.S. Pareat Company South African Company Farrell Lines Inc Farrell Lines Inc Farrel l Lines Int Corp Accra New Y'ork Johannesburg I.B.M. World Trade I.B,M. World Trade Corp I .B.M. S.A. Pty Ltd. Corp. Accra New York Johannesburg National Cash Regiater National Cash Register National Cash Register S.A. (Ghana) Ltd Accra Dayton Johannesburg. Pan American World Pan American World Airways Pan Am/ World Airways Airways Inc. Accra New York Johannesburg Pfizer Products Ltd Prizer and Co Pfizer Laboratories S.A. Accra New York Johannesburg. Singer Sewing Mach Cofp Same Singer S.A. Pty Ltd. Accra New York Johannesburg. Mobil Oil (Ghana) Ltd Socony Mobil Oil Co Mobil Oil S.A. Pty Ltd Accra Bew York Capetown (&others see under Ethiopia) Kaiser Corp Of America Same Republic Aluminium CoPtyLtd Oakland Calif. Olifantsfontein Tvl. Firestone Ghana Ltd also Firestone Tire and Rubber Co Pirestone S.A. Pty Ltd Ghana Rubber Estates Akron Ohio East London •· -2·· Guinea Guinean Company U. S • Parent Company:, South_African Company Olin Mathieson Olin Mathieson Chemical Squibbs Laboratories Chemical Corp. C-o~:pcration New York Isando, Tvl. Halco Mining Corp Alcan Aluminium Ltd Alcan Aluminium S.A. Kenya Kenyan Company U.S. Parent Company Sout;h Afr~canCompany Caltex Oil(Kenya)Ltd California Texas Oil Corp Caltex Oi l (SA) . Ltd Nairobi New York Capetown Caterpillar Overseas Caterpillar Tractor Co Caterpillar Africa _Pty Ltd Nairobi Peoria Ill. Johane.esburg Coca-Cola Bottling Co Coca-Cola Export Co. Coca-Cola Export Corp ~ Nairobi New York Johannesburg Kodak (East A:r) Eastman Kodak Co Kodak S.A. Pty Ltd Nairobi Rochester,N.Y • Capetown Essa Standard Esso Standard Eastern Inc Essa Standard SA. PtyLTd (East Africa)Ltd & Nairobi Standard Oil, N.J. Johannesburg Farrell Lines Inc Same Farrell Lines Int . Corp Nairobi New York Johanaesburg Goodyear (East Africa}Ltd Goodyear Tire & Rubber Co Goodyear Tyre & Rubber SA . Nairobi Akron Ohio Port Elizabeth California Packing Corp C~li~ornia Pac~ing Co~p California Packing Corp San Francisco Johannesburg I.B.M. World Trade Corp Same I.B.M. S.A. Pty Ltd Nairobi New York Johannesburg International Harvester Same International Harvester SA. Nairobi Chicago Joha:o,nesburg JohnsManville Int Corp Sa111e International Johns­ Manville Corp. Nairobi New York Johannesburg Nati~al Cash Register Same Same Nairobi New York Johannesburg Pepsi Cola Bermuda Ltd Pepsi-Cola Int.