"the Issue Has Caught Fire"

By Ed Magnuson.

Apartheid. Nearly everyone deplores it. Divestment. It is a way to fight apartheid by withdrawing U.S. investments from South Africa, so who can be against it? That may be an oversimplification, but leaders of the movement to apply economic pressure on Pretoria's white government are making dramatic progress in the U.S. with that argument. Even though its impact is sharply debated, divestment has become a new buzz word of social protest on college campuses, at shareholders' meetings and in legislatures across the country. Said Los Angeles Mayor Tom Bradley: "The issue of divestment has really caught fire."

New York Governor Mario Cuomo gave the movement a big lift last week, proposing a bill that would require the state's pension funds to withdraw more than $4 billion now invested in stocks of U.S. companies that do business in South Africa. To help fund managers prevent sudden losses, the divestment would be phased in over five years and would initially not apply to companies that comply with a set of progressive employment practices known as the Sullivan principles.

Critics argue that a U.S. withdrawal of investment would hurt rather than help the situation of blacks in South Africa. Fully one-third of the U.S. companies listed in Standard & Poor's 500 large American firms have some ties to South Africa. If they all pull out, the argument goes, the U.S. will lose its chance to influence the government. Many blacks will be deprived of jobs in the American firms, which generally offer considerable racial equality. Groups like the World Bank argue that all of black Africa would be adversely affected by divestment, because economic growth on the continent is closely tied to business in South Africa. Other critics feel that divestment would, in fact, have little impact on South Africa because other nations would replace the U.S. in making investments.

On the other side, Bishop Desmond Tutu, the South African clergyman who won a Nobel Peace Prize for his opposition to apartheid, complained recently in Los Angeles that "people ought to stop using us South African blacks as alibis for not doing what they know they ought to do." At a lunch last week with TIME editors, Cuomo said, "There is no question that divestment has caught on." The Governor cited Tutu's current prominence as a major reason for the rising American interest. In Cuomo's view, Tutu is telling Americans that "you're patronizing us, you're wrong. We know we'll lose jobs. We know we pay a price for this. But in the long run, we think it's good for us." In Los Angeles, Mayor Bradley ordered his city's $4 billion pension fund to get rid of $700 million invested with companies that deal with South Africa. He vowed to replace any pension fund commissioner who failed to carry out his directive. At the state level, Republican Governor George Deukmejian, who is also a University of California regent, did not commit himself to support a divestment either from state pension funds or from the university. But he gave divestment advocates hope, saying, "The divestment method might be a very effective tool in helping to correct the racial oppression that exists in South Africa."

So far, six states have passed some form of divestment law (Connecticut, Michigan, Nebraska, Massachusetts, Maryland and Iowa), and 14 others are considering a variety of such proposals this year. Eleven major cities (New York, Newark, Boston, Washington, Seattle, Miami, San Francisco, Rochester, Pittsburgh, Philadelphia and Detroit) have enacted some kind of divestment requirements, and twelve others are considering them. Most of the laws and ordinances passed or being considered are targeted at U.S. companies that ) operate facilities in South Africa or banks that lend to the South African government.

In Washington last week the House began debating a bill that would prohibit any new investments by American companies in South Africa and would ban any new loans from U.S. banks. It would also forbid the sale of computers to the South African government and the importation of gold coins minted in South Africa. A similar bill in the Senate is being considered by the Banking Committee.

Among the many demonstrations last week was one in Biloxi, Miss., where pickets marched outside the annual meeting of the Southern Co., the only U.S. importer of coal from South Africa. The Rev. Joseph Lowery, president of the Southern Christian Leadership Conference, exercised the S.C.L.C.'s right as the owner of a single share of stock to address the meeting and urge Southern to end its coal imports. The purchases, Lowery claimed, "support the apartheid system, which forces black workers to earn less wages, work under deplorable conditions, live under restrictive policies away from their families and suffer other countless indignities." The company agreed to reconsider its South African contract when it comes up for renewal in 1987.

The crusade for divestment is likely to be spurred on by actions of the Pretoria government, which is preparing to put on trial 16 members of the United Democratic Front, a coalition of labor, church, political and community organizations, which sharply opposes apartheid. The government charges that the 16 are allied with such outlawed groups as the African National Congress and the South African Communist Party, and accuses them of activities aimed at causing "chaos and revolution." If the trial, scheduled for July, persuades more Americans that South Africa is bent on repression rather than reform, the pressures for divestment are sure to grow.

With reporting by Peter Hawthorne/Johannesburg and Barry Kalb/New York