Re-investment in South Africa unlikely for U.

The University has no immediate plans to re-invest in companies doing business in South Africa, despite recent reforms of that country's apartheid system and the end of U.S. sanctions barring trade and investment there. Stephen Heyman, chairman of the Board of Trustees' Committee on University Responsibility, which handles the University's divestment policy and will discuss the issue at its quarterly meeting tomorrow, said last week that the South African government still has not met all the conditions outlined in the University's 1987 divestment policy. He said the government there has not released all political prisoners and has not rewritten its constitution, which denies blacks the right to vote and concentrates political power in the hands of the white minority. "It doesn't matter what President Bush said, because we have our own guidelines that we adopted," Heyman said, referring to President Bush's appeal this summer that colleges begin reinvesting. "Our moral interest has to be higher than our desire for the income." The federal sanctions, which President Bush lifted in July, called for an end to the state of emergency in South Africa, the repeal of the laws forming the foundation of the apartheid system, the legalization of banned political parties, the release of all political prisoners and the start of negotiations between the government and the black majority. But ironically, the nationwide moral debate which led to economic sanctions and divestment in the mid-1980s may be irrelevant now, as companies weigh economic and political factors -- not moral ones -- when deciding whether to re-invest. This is important because even if the University eventually changes its divestment policy, there must also be companies willing to re-invest for the new policy to be significant. Jennifer Kibbe, a research analyst with the Investor Responsibility Research Center in Washington, said companies are still restricted by a bevy of local and state laws which automatically cancel valuable municipal contracts with banks and companies that establish business ties to South Africa. She added that the "selective contracting laws" currently on the books in five states and 42 cities, including Los Angeles and New York, extend beyond the terms of the federal sanctions and will apply, in some cases, until blacks gain the right to vote. The federal law, passed by Congress in 1986 over President Reagan's veto, said nothing about power sharing or voting rights. Kibbe said re-investing may be more difficult now because European and Japanese firms have already moved into South African and filled the vacuum created in the last few years by the departing American firms. She also said the emergence of new world markets, such as those in Eastern Europe and the Pacific Rim, might make investing in South Africa even less attractive to U.S. companies. Another concern among business leaders in the U.S., according to Kibbe, is continuing domestic violence among rival black South African factions, because that could increase the risk of investing. But Kibbe said since the South African market has great potential for growth in the next few years, there is growing support for re-investment. Jean Mayer, the president of Tufts University, has urged Tufts' trustee board to abandon their divestment policy because he said investment by American firms would lead to jobs which blacks badly need. While the Committee on University Responsibility will hear a routine report on conditions in South Africa tomorrow, Heyman said there will be no change in the University's policy. The Trustees voted to divest in 1987 after concluding that the South African government had not made "substantive progress in dismantling the legal structure of apartheid," and said any move to re-invest would only come after the government had taken "meaningful steps to ensure the effective sharing of political power in South Africa with all nonwhites." Lucy Momjian, Associate Treasurer for Investments, said the University at the time had holdings in just three companies, Tenneco, Caterpillar and Boeing, which were doing business in South Africa. She said the University sold its stock in both Tenneco and Caterpillar, which opted not to pull out of South Africa, and retained Boeing after the company sold its subsidiary, Boeing International.

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