South African Pullout
With the decisions of General Motors and IBM to leave South Africa, the pullout of American companies is accelerating. The actions have brought cheers from many foes of apartheid who have wanted to break all U.S. ties so long as South Africa continues its odious racial practices. But the cheers may be premature, because pullouts can do more harm than good unless carefully done.
Most of the 28 companies that have withdrawn or announced divestment plans this year have been supporters of the Sullivan Principles, the code for racial equality in the work place that also commits the companies to work for an end to apartheid. The implementation of those fair employment practices has not ended apartheid.
That was clear in the recent commitment of President Pieter W. Botha to oppose any change in the group areas act that legalizes segregation in housing. But the code’s principles have been adopted by other companies.
The IBM announcement includes some encouraging elements. IBM will turn over its operations to a new South African company created “for the benefit of the employees,†of whom 23% are non-white, and IBM will continue its investment in social reform that last year saw $15 million going to education and legal reform. Earlier, Coca-Cola had said it would sell its interests to black entrepreneurs, a step that would strengthen the voice of the majority, still excluded from a political role, in the economy.
The Ford Motor Co., when it reduced its interests to a 42% minority share of the South African operation in 1985, made acceptance of the Sullivan Principles an element of the merger agreement. That is a minimum condition of any sellout.
General Motors has not yet indicated how it will arrange its departure. It would be particularly regrettable if the arrangements failed to include agreements designed to make the most of the opportunity to influence the reform of South African society, to elevate the role of the black majority. The Rev. Leon Sullivan devised the Sullivan Code as a member of the GM board of directors and GM has been a strong supporter of work place justice in South Africa.
Unfortunately, some companies have sold out unconditionally, missing an opportunity to influence events.
An opportunity to enhance the future of blacks is open both to American companies that remain engaged in the South African economy and those that use their departure to reinforce the principles most have long espoused.
