From Wikipedia, the free encyclopedia Disinvestment from South Africa
Disinvestment from South Africa
1964 Conference for Economic Sanctions
1978 World Conference against Racism
UN Security Council Resolutions
Resolution 181 · Resolution 191
Resolution 282 · Resolution 418
Resolution 435 · Resolution 591
Other aspects
Elimination of Racism Day
Biko (song) · Activists
Nelson Mandela 70th Birthday Tribute
Equity television programming ban
The campaign gained prominence in the mid-1980s on univer-
sity campuses in the US. The debate headlined the October
1985 issue (above) of Vassar College’s student newspaper.[1] In November 1962, the United Nations General Assembly
passed Resolution 1761, a non-binding resolution estab-
Disinvestment (or divestment) from South Africa was lishing the United Nations Special Committee against
first advocated in the 1960s, in protest of South Africa’s Apartheid and called for imposing economic and other
system of Apartheid, but was not implemented on a sig- sanctions on South Africa. All Western nations were un-
nificant scale until the mid 1980s. The disinvestment happy with the call for sanctions and as a result boycot-
campaign, after being realized in federal legislation en- ted the committee.[3]
acted in 1986 by the United States, is credited[2] as pres- Following this passage of this resolution the UK-
suring the South African Government to embark on ne- based Anti-Apartheid Movement spearheaded the
gotiations ultimately leading to the dismantling of the arrangements for an international conference on sanc-
apartheid system. tions to be held in London in April 1964. According to
Lisson, "The aim of the Conference was to work out the
practicability of economic sanctions and their implica-
United Nations campaign tions on the economies of South Africa, the UK, the US
(1962-1965) and the Protectorates. Knowing that the strongest op-
position to the application of sanctions came from the
International opposition West (and within the West, Britain), the Committee made
to apartheid in South Africa every effort to attract as wide and varied a number of
speakers and participants as possible so that the Confer-
Campaigns ence findings would be regarded as objective."[3]
Academic boycott · Sporting boycott The conference was named the International Confer-
Disinvestment ·Constructive engagement ence for Economic Sanctions Against South Africa. This con-
ference, Lisson writes,
Instruments and legislation
UN Resolution 1761 (1962) "established the necessity, the legality and the
Crime of Apartheid Convention (1973) practicability of internationally organised sanc-
Gleneagles Agreement (1977) tions against South Africa, whose policies were seen
Sullivan Principles (1977)
to have become a direct threat to peace and secu-
Comprehensive Anti-Apartheid Act (1986)
rity in Africa and the world. Its findings also point-
Organisations ed out that in order to be effective, a programme
Anti-Apartheid Movement of sanctions would need the active participation of
UN Special Committee against Apartheid Britain and the US, who were also the main obsta-
Artists United Against Apartheid cle to the implementation of such a policy."[3]
Halt All Racist Tours
Organisation of African Unity
Conferences
1
From Wikipedia, the free encyclopedia Disinvestment from South Africa
Attempts to persuade British policymak- United States campaign
ers
The conference was not successful in persuading Britain
(1977-1989)
to take up economic sanctions against South Africa
though. Rather, the British government "remained firm
The Sullivan Principles (1977)
in its view that the imposition of sanctions would be un- Main article: Sullivan Principles
constitutional "because we do not accept that this situa- Knight[4] writes that anti-Apartheid movement in the U.S
tion in South Africa constitutes a threat to international found that Washington was unwilling to get involved in
peace and security and we do not in any case believe that economically isolating South Africa. The movement re-
sanctions would have the effect of persuading the South sponded by organized lobbying of individual businesses
African Government to change its policies’."[3] and institutional investors to end their involvement with
The AAM tried to make sanctions an election issue or investments in the apartheid state as a matter of cor-
in the 1964 General Election in Britain. Candidates were porate social responsibility. This campaign was coordi-
asked to state their position on economic sanctions and nated by several faith-based institutional investors even-
other punitive measures against the South African gov- tually leading to the creation of the Interfaith Center on
ernment. Most candidates who responded answered in Corporate Responsibility. An array of celebrities, includ-
the affirmative. After the Labour Party sweep to power ing singer Paul Simon, also participated.
though, commitment to the anti-apartheid cause dissi- The key instrument of this campaign was the so-
pated. In short order, Labour Party leader Harold Wilson called Sullivan Principles, authored by and named after
told the press that his Labour Party was "not in favour the Rev. Dr.Leon Sullivan. Leon Sullivan was an African-
of trade sanctions partly because, even if fully effective, American preacher in Philadelphia who, in 1977, was also
they would harm the people we are most concerned a board member of the corporate giant General Motors.
about - the Africans and those white South Africans who At that time, General Motors was the largest employer of
are having to maintain some standard of decency blacks in South Africa. The principles required that the
there."[3] Even so, Lisson writes that the "AAM still hoped corporation ensure that all employees are treated equal-
that the new Labour Government would be more sensi- ly and in an integrated environment, both in and outside
tive to the demands of public opinion than the previous the workplace, and regardless of race, as a condition of
Government." But by the end of 1964, it was clear that the doing business. These principles directly conflicted with
election of the Labour Party had made little difference in the mandated racial discrimination and segregation poli-
the governments overall unwillingness to imposing sanc- cies of apartheid-era South Africa, thus making it impos-
tions. sible for businesses adopting the Sullivan Principles to
continue doing business there.
Steadfast rejection by the West While the anti-Apartheid movement lobbied individ-
ual businesses to adopt and comply with the Sullivan
Lisson summarizes the dismal situation at the UN in 1964:
Principles, the movement opened an additional front
"At the UN, Britain consistently refused to accept with the institutional investors. Besides advocating that
that the situation in South Africa fell under Chap- institutional investors withdraw any direct investments
ter VII of the [United Nations] Charter. Instead, in in South African-based companies, anti-Apartheid ac-
collaboration with the US, it worked for a carefully tivists also lobbied for the divestment from all U.S.-based
worded appeal on the Rivonia and other political companies having South African interests who had not
trials to try to appease Afro-Asian countries and yet themselves adopted the Sullivan Principles. The insti-
public opinion at home and abroad; by early 1965 tutional investors such as public pension funds were the
the issue of sanctions had lost momentum."[3] most susceptible to these types of lobbying efforts.
Public companies with South Africa interests were
According to Lisson, Britain’s rejection was premised on thus confronted on two levels: First, shareholder reso-
its economic interests in South Africa, which would be lutions were submitted by concerned stockholders who,
put at risk if any type of meaningful economic sanctions admitted, posed more of a threat to the often-cherished
were put in place. corporate reputations than to the stock price. Second,
the companies were presented with the significant finan-
cial threat whereby one or more of their major institu-
tional investors decides to withdraw their investments.
Achieving critical mass (1984-1989)
Apartheid in South Africa
2
From Wikipedia, the free encyclopedia Disinvestment from South Africa
Events and projects sistance to apartheid, the growth of a democratic
movement, and the savage police and military re-
Sharpeville massacre sponse."[4]
Soweto uprising
Treason Trial · Rivonia Trial The result of the widely televised South African response
Church Street bombing · CODESA was "a dramatic expansion of international actions to
St James Church massacre isolate apartheid, actions that combined with the inter-
Cape Town peace march nal situation to force dramatic changes in South Africa’s
international economic relations."[4]
Organisations
ANC · IFP · AWB · Black Sash University campuses
CCB · Conservative Party · ECC · PP The anti-Apartheid disinvestment campaign on campus-
RP · PFP · HNP · MK · PAC · es began on the West coast in 1977 at Stanford Universi-
UDF · Broederbond · National Party ty[5][6]. It had some early successes in 1978 at Michigan
COSATU · SADF · SAP · SACP State University which voted total divestiture [1] [7], at
University,
People Columbia University [8]; and the University of Wiscon-
University.
sin–Madison.
sin–Madison Following the Michigan State University di-
P. W. Botha · D. F. Malan vestiture in 1978, in 1982, the State of Michigan legisla-
Desmond Tutu · F. W. de Klerk ture and governor voted for divestiture by all of the more
Walter Sisulu · Helen Suzman than 30 State of Michigan colleges and universities, an ac-
Harry Schwarz · Andries Treurnicht tion later struck down by the Michigan Supreme Court
H. F. Verwoerd · Sheena Duncan [2].
Nelson Mandela · Oliver Tambo The initial Columbia divestment, focused largely on
B. J. Vorster · Kaiser Matanzima bonds and financial institutions directly involved with
Mangosuthu Buthelezi · Steve Biko the South African regime.[9] It followed a year long cam-
Winnie Madikizela-Mandela · Joe Slovo paign first initiated by students who had worked togeth-
Trevor Huddleston · Hector Pieterson er to block the appointment of former Secretary of State
Hastings Ndlovu · Jimmy Kruger Henry Kissinger to an endowed chair at the University
Places in 1977.[10] Broadly backed by a diverse array of student
groups and many notable faculty members the Commit-
Bantustan · District Six tee Against Investment in South Africa held numerous
Robben Island · Sophiatown teach-ins and demonstrations through the year focused
South-West Africa · Soweto on the trustees ties to the corporations doing business
Sun City · Vlakplaas with South Africa. Trustee meetings were picketed and
Related topics interrupted by demonstrations culminating in May 1978
in the takeover of the Graduate School of Business.[11][12]
Afrikaner nationalism
These initial successes set a pattern which was later
Apartheid laws · Freedom Charter
repeated and many more campuses across the country.
Sullivan Principles · Kairos Document
Activism surged in 1984 on the wave of public interest
Disinvestment campaign
created by the wide television coverage of the then re-
South African Police
cent resistance efforts of the black South Africans.
Apartheid in popular culture
Students organized to demand that their universities
The disinvestment campaign in the United States, which "divest", meaning that the universities were to cease in-
had been in existence for quite some years, gained crit- vesting in companies that traded or had operations in
ical mass following the Black political resistance to the South Africa. At many universities, many students and
1983 South African constitution which included a "com- faculty protested in order to force action on the issue. For
plex set of segregated parliaments." Richard Knight example, in April, 1986, 61 students were arrested after
writes: building a shantytown in front of the chancellor’s office
at UC Berkeley.[13]
"In a total rejection of apartheid, black South As a result of these organized "divestment cam-
Africans mobilized to make the townships un- paigns", the boards of trustees of several prominent uni-
governable, black local officials resigned in droves, versities voted to divest completely from South Africa
and the government declared a State of Emergency and companies with major South African interests.
in 1985 and used thousands of troops to quell "un- The first of these was Hampshire College in 1977.
rest." Television audiences throughout the world Harvard University only undertook a partial "divest-
were to watch almost nightly reports of massive re- ment" from South Africa and only after significant re-
3
From Wikipedia, the free encyclopedia Disinvestment from South Africa
1984 1987 1988
Number of institutions divesting 53 128 155
sistance.[14] Adam Soften and Aln Wirzbicki give this de- Act of 1986. Ronald Reagan responded by using his veto,
scription: but surprisingly and in testament to the strength of the
anti-Apartheid movement, the Republican controlled
"Throughout the ‘80s, Harvard professors for the senate overrode his veto. Knight gives this description
most part avoided involvement with South Africa the act:
in protest of apartheid, and then president Derek
C. Bok was a vocal supporter of work by the U.S. "The Act banned new U.S. investment in South
to prompt reform in South Africa. But the Univer- Africa, sales to the police and military, and new
sity was slow to pull its own investments out of bank loans, except for the purpose of trade. Specific
companies doing business in South Africa, insisting measures against trade included the prohibition of
that through its proxy votes, it could more effec- the import of agricultural goods, textiles, shellfish,
tively fight apartheid than by purging stocks from steel, iron, uranium and the products of state-
its portfolio. But after a decade of protests, Harvard owned corporations."[4]
did adopt a policy of selective divestment, and by
the end of the ‘80s was almost completely out of The results of the act were mixed in economic terms ac-
South Africa."[14] cording to Knight[4]: Between 1985 and 1987, U.S. imports
from South Africa declined 35%, although the trend re-
University of California, in contrast to the limited action verses in 1988 when imports increased by 15%. Between
undertaken by Harvard, authorized the withdrawal of 1985 and 1998, U.S. exports to South Africa increased by
three billion dollars worth of investments from the 40%.
apartheid state. Nelson Mandela has stated his belief that Knight attributes some of the increase in imports in
the University of California’s massive divestment was 1988 to lax enforcement of the 1986 Act citing a 1989
particularly significant in abolishing white-minority rule study by the General Accounting Office. Knight writes
in South Africa.[15] that a "major weakness of the Act is that it does little to
Overall, according to Knight’s analysis[4], the num- prohibit exports to South Africa, even in such areas as
bers year over year for educational institutions fully or computers and other capital goods."[4]
partially divesting from South Africa were:
Budget Reconciliation Act
States and cities A second federal measure introduced by Representative
In addition to campuses, anti-apartheid activists found Charles Rangel in 1987 as an amendment to the Budget
concerned and sympathetic legislators in cities and Reconciliation Act halted the ability of U.S. corporations
states. Several states and localities did pass legislation from attaining tax reimbursements for taxes paid in
ordering the sale of such securities, most notably the South Africa. The result was that U.S. corporations oper-
city of San Francisco. The result was that "by the end of ating in South Africa were subject to double taxation. Ac-
1989 26 states, 22 counties and over 90 cities had taken cording to Knight:
some form of binding economic action against companies
"The sums of money involved are large. According
doing business in South Africa."[4] Many public pension
to the Internal Revenue Service, taxes involved in
funds connected to these local governments were leg-
1982 were $211,593,000 on taxable income of
islated to disinvestment from South African companies.
$440,780,000. The U.S. Chamber of Commerce in
These local governments also exerted pressure via en-
South Africa has estimated that the measure in-
acting selective purchasing policies, "whereby cities give
creases the tax bill for U.S. companies from 57.5% to
preference in bidding on contracts for goods and services
72% of profits in South Africa."[4]
to those companies who do not do business in South
Africa."[4] Further legislative efforts
Federal involvement An additionally and much harsher sanctions bill was
passed by the House of Representatives (Congress) in Au-
The activity at the state and city level set the stage for ac-
gust 1988. This bill mandated "the withdrawal of all U.S.
tion at the federal level.
companies from South Africa, the sale by U.S. residents
Comprehensive Anti-Apartheid Act of all investments in South African companies and an end
Main article: Comprehensive Anti-Apartheid Act to most trade, except for the import of certain strate-
This began when the Senate and Congress presented gic minerals."[4] In the end, the bill didn’t become law
Ronald Reagan with the Comprehensive Anti-Apartheid as wasn’t able to pass the Senate. (In the United States
4
From Wikipedia, the free encyclopedia Disinvestment from South Africa
legislative system a bill must be passed by both the Se- September 1985 it imposed a system of exchange control
nate and the House of Representatives before it can be and a debt repayments standstill. Under exchange con-
signed into law by the President.) Even so, the fact that trol, South African residents are generally prohibited
such a harsh bill made any progress at all though the leg- from removing capital from the country and foreign in-
islature "alerted both the South African government and vestors can only remove investments via the financial
U.S. business that significant further sanctions were like- rand, which is traded at a 20% to 40% discount compared
ly to be forthcoming" if the political situation in South to the commercial rand. This means companies that dis-
Africa remained unchanged. invest get significantly fewer dollars for the capital they
withdraw."[4]
Effects on South Africa
Anti-Apartheid opposition
Economic effects While disinvestment, boycotts and sanctions aimed at
Main article: Economic history of South Africa#Sanctions the removal of the apartheid system, there was also con-
siderable opposition from within the anti-apartheid
movement within South Africa coming from both black
and white leaders. Mangosuthu Buthelezi, Chief Minister
of KwaZulu and leading black figure slammed sanctions,
stating that "They can only harm all the people of South-
ern Africa. They can only lead to more hardships, par-
ticularly for the blacks".[16] Well known anti-apartheid
opposition MPs Helen Suzman and Harry Schwarz also
strongly opposed moves to disinvest from South Africa.
Both politicians of the Progressive Federal Party, they ar-
gued that disinvestment would cause further economic
hardships for black people, which would ultimately wors-
en the political climate for negotiations. Suzman de-
scribed them as "self defeating, wrecking the economy
Because of South Africa’s heavy reliance on investments and and do not assist anybody irrespective of race". Schwarz
trade from the West, it was particularly vulnerable to the cam- also argued that "Morality is cheap when someone else is
paign. The result was a flight of capital which plunged the paying".[17]
economy into a prolonged period of high inflation (12% to 14%
a year.)[4]
Outside criticism
While post-colonial African countries had already im- Many criticised disinvestment because of its economic
posed sanctions on South Africa in solidarity with the impact on ordinary black South Africans. John Major said
Defiance Campaign, these measures had little effect be- disinvestment would "feed white consciences outside
cause of the relatively small economies of those involved. South Africa, not black bellies within it".[citation needed]
The disinvestment campaign only impacted South Africa Many conservatives opposed the disinvestment cam-
after the major Western nations, including the United paign, accusing its advocates of hypocrisy for not also
States, got involved beginning in mid-1984. From 1984 proposing that the same sanctions be leveled on either
onwards, according to Knight[4], because of the disin- the Soviet Union or the People’s Republic of China.
vestment campaign and the repayment of foreign loans, Libertarian movement leader and polemicist Murray
South Africa experienced considerable capital flight. The Rothbard also opposed this policy, asserting that the
net capital movement out of South Africa was: most-direct adverse impact of the boycott would actually
• "R9.2 billion in 1985" be felt by the black workers in that country, and the best
• "R6.1 billion in 1986" way to remedy the problem of apartheid was by promot-
• "R3.1 billion in 1987" ing trade and the growth of free market capitalism in
• "R5.5 billion in 1988." South Africa.[18]
The capital flight triggered a dramatic decline in the in- Ronald Reagan, who was the President of the United
ternational exchange rate of the South African currency, States during the time the disinvestment movement was
the rand. The currency decline made imports more ex- at its peak, also opposed it, instead favoring a policy of
pensive which in turn caused inflation in South Africa to "constructive engagement" with the Pretoria govern-
rise at a very steep 12-15% per year.[4] ment.
The South African government did attempt to restrict
the damaging outflow of capital. Knight writes that "in
5
From Wikipedia, the free encyclopedia Disinvestment from South Africa
Further reading Washington: U.S. Government Printing Office.
p. 213.
• For U.S. Firms in South Africa, The Threat of [8] "Columbia Senate Supports Selling South African
Coercive Sullivan Principles. Heritage Foundation. Stocks Selectively". N.Y. Times. 1978-05-07.
November 12, 1984. [9] "Trustees vote for divestiture from backers of S.
• On "Constructive Engagement" in South Africa. The African government". Columbia Spectator.
MIT Tech. 105(47). November 5, 1985. 1978-06-08.
• The Choice for U.S. Policy in South Africa: Reform or [10] "400 sign petition against offering Kissinger faculty
Vengeance. Heritage Foundation. July 25, 1986. post". Columbia Spectator. 1977-03-03.
• Misconceptions about U.S. policy toward South [11] "Demonstration at Columbia". New York Daily
Africa. US Department of State Bulletin. September News. 1978-05-02.
1986. [12] "Student Sit-in at Columbia". New York Post.
• Chapter: Sanctions, Disinvestment, and U.S. 1978-05-02.
Corporations in South Africa. Richard Knight. [13] "AROUND THE NATION; 61 ARRESTED AT BERKLEY
Sanctioning Apartheid (Africa World Press). 1990. IN PROTEST OF APARTHEID". AP. 1986-04-02.
• Disinvestment from South Africa: They Did Well by [14] ^ A CONFLICTED RELATIONSHIP: Harvard
Doing Good. Contemporary Economic Policy. supported South Africa through investments, but
XV(1):76-86. January 1997. partially divested under protest in Harvard Honors
Nelson Mandela. Adam A. Sofen and Alan E.
See also [15]
Wirzbicki.
https://www.msu.edu/~divest/apartheid.html
• Anti-Apartheid Movement [16] http://www.samedia.uovs.ac.za/cgi-bin/
• Academic boycotts of South Africa getpdf?id=1047634
• Disinvestment [17] http://www.samedia.uovs.ac.za/cgi-bin/
• Economic history of South Africa getpdf?id=1030957
• Socially responsible investing [18] Rothbard, Murray. "The Crusade Against South
• Disinvestment from Iran Africa." Making Economic Sense. Chapter 90. Auburn,
• Disinvestment from Israel AL: Mises Institute, 1995. Online Edition, Accessed
November 19, 2009.
References
[1] The Fergusson Years: Vassar, 1986-2006, Vassar External links
College Libraries Archives & Special Collections. • [3] 2,000 documents, posters, t-shirts, buttons,
Poughkeepsie, NY. 2006. photos, video, and memories of activism in the U.S.to
[2] "Did an academic boycott help to end apartheid?", support the struggles of African peoples against
George Fink, Nature, Volume 417, Issue 6890, pp. apartheid, colonialism, and social injustice,
690 (2002). 1950s-1990s. Also includes a directory of African
[3] ^ The Anti-Apartheid Movement, Britain and South activist organizations across the U.S.
Africa: Anti-Apartheid Protest vs Real Politik, • Documenting the U.S. Solidarity Movement: With
Arianna Lisson, PhD Dissertation, September 15, reflections on the sanctions and divestment
2000 campaigns
[4] ^ Chapter: Sanctions, Disinvestment, and U.S. • U.S. Economic Involvement with Apartheid South
Corporations in South Africa. Richard Knight. Africa
Sanctioning Apartheid (Africa World Press), 1990 • An Analysis of U.S. Disinvestment from South Africa:
[5] Schutt, Randy. "A Powerful and Inspiring Unity, Rights, and Justice
Campaign: A Short History of SCRIP’s Efforts to End • Black South African Opinion on Disinvestment
Stanford University’s Support of South African • The Crusade Against South Africa
Apartheid in 1977". Vernal Education Project. • Inkatha Freedom Party - Inkatha and the
1998-02-03. disinvestment campaign
[6] D. (pseudonym), Bob. "Students Organize Against
Stanford’s Investment Policy". Grapevine. Volume 5,
Number 6. Palo Alto, CA. June 1977.
[7] U.S. Senate Committee on Banking, Housing, and
Urban Affairs. (1985). The Anti-Apartheid Act of 1985.
Retrieved from "http://en.wikipedia.org/w/index.php?title=Disinvestment_from_South_Africa&oldid=459038691"
6
From Wikipedia, the free encyclopedia Disinvestment from South Africa
Categories:
• Boycotts of apartheid South Africa
• International sanctions
• South Africa–United States relations
• Economy of South Africa
• Disinvestment
This page was last modified on 4 November 2011 at 21:34. Text is available under the Creative Commons Attribution-
ShareAlike License; additional terms may apply. See Terms of use for details. Wikipedia® is a registered trademark of
the Wikimedia Foundation, Inc., a non-profit organization.Contact us
Privacy policy About Wikipedia Disclaimers Mobile view
7