Business Becoming a Force for Change : S. Africa Firms Urge Apartheid Reform

JOHANNESBURG, South Africa â€”  After accepting South Africa’s policies of racial separation for years, the country’s business community is now pressing the government for far-reaching reforms that would dismantle much of the apartheid system.

Although business stops short of demanding total elimination of apartheid or of advocating one-man, one-vote democracy here, its proposals would nonetheless substantially transform South Africa by repealing its racially discriminatory laws, integrating blacks throughout the economy and involving them in political decision-making.

In other words, business wants South Africa’s 24 million blacks to be able to live and work where they want and to have a significant share of the political and economic power that is held almost exclusively by the country’s 4.8 million whites.

This new outlook, ending years of complacency and timidity, could make business a major force for change in South Africa during a watershed period for the country.

In a bold challenge to the government last week, six major business groups, representing about 80% of South African industry and commerce, laid out an agenda for reform that not only goes far beyond anything proposed by President Pieter W. Botha and the ruling National Party but also rejects apartheid’s whole concept of “separate development.�

In a joint statement, the groups called for early legislative action by South Africa’s white-dominated Parliament to assure blacks “meaningful political participation� and equal citizenship with whites, a fair judicial system and an end to restrictions on blacks’ economic activities, including regulations dealing with where they may work.

The business groups also urged an end to the forced resettlement of blacks, limits on police authority to detain critics of the government and measures to strengthen labor unions, which are becoming a significant political voice for blacks.

Declaring their own “strong commitment to furthering an ongoing process of economic and political reform,� the business groups said they would use their considerable influence to see these changes enacted as quickly as possible.

“The organizations believe that without a stable, secure and prosperous work force, the country’s economic potential and political stability cannot be ensured in the future,� the groups said in their statement, implicitly warning that the reform process must be broadened considerably and accelerated if South Africa is to avoid revolution.

Although such calls were made in the past by a few liberal white business executives, such as Harry F. Oppenheimer, the retired chairman of the giant Anglo American Corp., they are coming now from many others who had been far more cautious--or silent--in the past.

Afrikaners Included

The groups that signed the statement last week included not only the South African Federated Chamber of Industries and the Assn. of Chambers of Commerce, which largely represent the interests of the English-speaking business community, but also the Afrikaanse Handelsinstituut, which represents the interests of the more conservative, Dutch-descended Afrikaners who hold most of the political power here.

Other signers included the black National African Federation of Chambers of Commerce, the Chamber of Mines, and the Steel and Engineering Industries Federation.

“A very broad consensus has emerged among very diverse business interests, and that consensus is that change must come faster and business must work actively to promote it,� said a business executive involved in drafting the statement.

“We see, in plain terms, the country heading for disaster politically and economically, and we have frankly lost all patience with the government’s slow and often wrong-headed ways of dealing with the country’s problems and often compounding them.�

‘There’s a feeling that the wheels have begun falling off.’ Widespread racial unrest here in recent months prompted this reappraisal, according to senior business executives.

“The government seemed to have no realization of how bad the situation was,� the South African chairman of a large American affiliate here commented, “and everything they did made it worse.�

Another factor, however, was the growing campaign, particularly in the United States, to impose economic sanctions on South Africa. While they doubt the effectiveness of such measures as the withdrawal of foreign investment or trade restrictions, South African businessmen see them as further undermining a recession-weakened economy and causing a backlash against their efforts at political reform.

Drafting of Manifesto The threat of such American action led the leaders of the six business groups to draft their manifesto for presentation last week to Sen. Edward M. Kennedy (D-Mass.) during his visit to South Africa.

“Our argument against disinvestment and other economic sanctions, while real enough, was actually a vehicle to present our views of what needs to be done,� said another business executive engaged in drafting the declaration.

“We might not have been able to get a consensus so readily without Kennedy; and had we confronted the government directly with such a list of demands, our chances of success would have been reduced.�

Kennedy, who was presented with the position paper at a private meeting with business leaders at the home of Gavin Relly, the present chairman of Anglo American, later called it “an important milestone--if it not only reflects a sentiment but signals genuine change.�

“The heart of the matter,� Kennedy told the business community in a speech here last week, “is to translate the words into deeds, the paper into policy.�

Black commentators have also been skeptical of the depth of the business commitment to change. After the business leaders’ statement was made public, blacks expressed doubt that South African commerce and industry are really willing to dismantle a system that has benefited them in so many ways, starting with low wages for black employees. They also believe that no white businessman would truly opt for majority rule, thus putting him and his company under a black-dominated government.

More radical blacks, often arguing from a Marxist view, see the business pressure as accelerating the pace of reform but, in the end, limiting its scope and leading to changes in the present system rather than to the totally new political and economic system that the radicals want.

More Moderate Line Yet, blacks acknowledged that business pressure, coming in a joint statement by three employer organizations and in scathing criticism by senior business executives, helped force the government to release labor leaders imprisoned in a two-day general strike in November and to take a more moderate line in recent weeks.

The strike, in which hundreds of thousands of workers stayed away from their jobs, was “an eye-opener to those who thought they could coast along,� said the human resources director of one of the largest South African companies. “More than any other single event, that convinced almost everyone that we were in a crisis, that we had to act and that we must now pursue our own agenda for reform.�

To do that, the six business groups plan to promote reforms, such as equal employment opportunity, within their own industries and to lobby vigorously for the legislative changes needed to go further, according to officials.

The efforts of the Afrikaanse Handelsinstituut will be particularly important because the government and the National Party are controlled by Afrikaners, who have been far more resistant to change than English-speaking whites.

“While we differ among ourselves on how fast the pace of reform should be and perhaps on what the ultimate solutions should be, we (the English) and the Afrikaner business community now agree on the need, the urgency, of action,� said a senior executive of a major firm long recognized for its progressive policies.

‘Wheels Falling Off’

To ensure solidarity in anticipation of government attempts to divide the groups, particularly the Afrikaners from the English, officers agreed not to speak individually on the business leaders’ statement, and those drafting it asked not to be quoted by name.

Business leaders recognize that to push reforms effectively, they will have to sell their assessment of race relations in South Africa--and it differs sharply from the government’s assertion of recent progress.

“If I sense the views of many of my colleagues in business correctly, there seems to be a feeling that the wheels have begun falling off,� said Tony Bloom, chairman of Premier Group Holdings, one of the largest conglomerates here.

Bloom, one of the most outspoken of South Africa’s top executives, was instrumental in getting other businessmen to take a more forceful political stand.

“I have always totally rejected the notion that businessmen should stay outside of the political field,� Bloom said. “In South Africa, business and politics are interwoven, and I believe it is not only the right but indeed the duty (of business) to take part in the broader issues of society and contribute in its way to the problems we face as a country.�

Bloom and other top businessmen fear that if South Africa fails to deal with its racial problems quickly and adequately, it could lead to a cycle of violence, further repression and eventually revolution--a revolution that could bring civil war and black victory, with a socialist regime to follow.

Mike Rosholt, chairman of Barlow Rand Ltd., another of South Africa’s largest companies, warned last month that the government can no longer impose its solutions but must negotiate each step of a political accommodation with black leaders. The country, he said, has only five to 10 years to see whether whites and blacks can live together.

“What is ultimately at stake is not merely the profitability of business or the survival of the system of free enterprise,� Bloom told other businessmen, “but possibly the survival of the total South African community.�