The election of Ronald Reagan to the U.S. presidency was an answered prayer for white South Africa. No other event could have so bolstered the confidence and lifted the morale of the apartheid regime.
Gone were the days of public remonstrances and the embarrassing tirades of Andy Young against human rights abuses in South Africa. While U.S. investments in South Africa rose during the Carter years, and while Ambassador Young consistently vetoed U.N. resolutions calling for economic sanctions against the apartheid regime, Pretoria was irked by the Carter style. It was peeved by the holier-than-thou attitude of the United States—the official snubs and embarrassing hand-slaps—while U.S. companies carried on business-as-usual and reaped handsome profits from the system they publicly deplored.
Pretoria's optimistic assessment of the new U.S. president could not have been closer to the mark. In a pre-election interview, one of Reagan's top Africa advisers admitted, "The problem with Reagan is that all he knows about Southern Africa is that he's on the side of the whites." As the administration's South Africa policy took shape, the full import of this statement began to emerge. Less than two months after taking office, President Reagan was interviewed by Walter Cronkite. When asked what the U.S. attitude should be toward the white regime in Pretoria, Reagan responded, "Can we abandon a country that has stood by us in every war we've ever fought—a country that is strategically essential to the free world in its production of minerals we all must have? I feel that ... if we're going to sit down at a table and negotiate with the Russians, surely we can keep the door open and continue to negotiate with a friendly nation like South Africa."
South African Prime Minister P.W. Botha hailed Reagan's remarks as evidence that the United States was adopting a more "realistic" attitude toward South Africa. The reaction of U.S. allies ranged from astonished outrage to barely concealed embarrassment at the president's obvious ignorance of history. Far from being the wartime ally lauded by President Reagan, the currently ruling Nationalist Party had vehemently opposed South Africa's entry into World War II on the side of Britain. Many prominent Nationalist Party members, including former Prime Minister John Vorster, were interned during the war as Nazi sympathizers.
From the outset the Reagan administration began to ease Commerce Department regulations that severely limited U.S. trade with South African security forces. In November, 1977, following a massive South African government crackdown on black activists and organizations, the U.N. Security Council imposed a mandatory arms embargo against South Africa. A few months later, the Carter administration strengthened U.S. support for the embargo by imposing Commerce Department regulations that prohibited the export or reexport of all U.S.-origin products and technical data to the South African military and police. Non-military as well as military sales were prohibited.
The Reagan administration reversed the Carter policy in June, 1981. At that time, the Commerce Department regulations were amended to permit the export of items to the South African security forces which "meet basic human needs" or which "combat international terrorism."
The relaxation of the restrictions in June was but a prelude to a full-scale policy reversal in February, 1982. New Commerce Department regulations were instituted, permitting the sale of numerous U.S.-origin "non-military" products to the South African military and police forces. Among the items no longer restricted were food, non-military clothing, "personal computers," calculators, word processors, electronic copy machines, electronic cash registers, and personal communications equipment.
While the new regulations do not permit export of arms and related equipment to South Africa, the broad definition of "non-military equipment" allows significant room for maneuver. For example, in March, 1982, the Reagan administration approved the sale of 10 Beech Aircraft turboprops to the South African Air Force for use as "air ambulances." A Beech spokesman told Africa News that the turboprops are civilian models of Beech C-12As, military craft used by the United States in Vietnam for electronic surveillance, troop and cargo transport, and emergency evacuations.
Finally, in January, 1983, the Reagan administration lifted restrictions on all but the most sensitive non-military items. The revised Commerce Department regulations decontrolled "non-strategic metal-working machinery, chemical and petroleum equipment, transportation equipment [except automotive vehicles and watercraft], metals and minerals and rubber products [except tires]." These items may now be sold to the South African security forces without an export license.
One notable business transaction approved by the Commerce Department was the export of 2,500 shock batons for use as "crime control" equipment in South Africa. At congressional hearings prior to the latest revision of the export regulations, the Commerce Department was charged with contravening the Foreign Assistance Act, which bars the export of crime control equipment to countries that engage in a "consistent pattern of gross violation of internationally recognized human rights." In response the department claimed that the deal was not illegal since the State Department had never included South Africa on its list of human rights violators.
Since Ronald Reagan took office in January, 1981, U.S. strategic and economic involvement with South Africa has been on the upswing. Currently, the United States is South Africa's largest trading partner. Between 1943 and 1978, U.S. direct investment in South Africa grew from $50 million to $2 billion—an increase of 4,000 percent. Stimulated by the Reagan administration's policy of "constructive engagement," U.S. investments in South Africa rose to $2.6 billion in 1981. This sum accounts for 20 percent of South Africa's total foreign investment and is surpassed only by the investments of Great Britain.
Even more important than the dollar value of these investments is their strategic significance. U.S. companies control the most vital sectors of the South African economy: 33 percent of the motor vehicle market, 44 percent of the petroleum products market, and 70 percent of the computer market. U.S. companies literally grease the wheels of the apartheid machine. Ford and General Motors provide the South African military and police with motor vehicles. Firestone and Goodyear sell tires to the South African government, products that can be transferred to the security forces.
Caltex, Mobil, and Exxon are supplying oil to South Africa in violation of a 1979 OPEC embargo. This oil keeps the military and police forces running and fuels the war of occupation in Namibia. The California-based Fluor Corporation is helping to build and equip a massive coal-to-oil conversion plant that will provide an estimated 30 to 50 percent of South Africa's oil requirements within the next year. This plant will help South Africa to circumvent the oil embargo and bolster its long-term program of strategic self-sufficiency.
U.S. computers are used in every sector of the South African economy. The motor vehicles, petroleum, tire and rubber, and mining industries, South African banks and financial institutions, and its large corporations could not function without U.S. computers. An IBM computer runs the Johannesburg Stock Exchange and military communications in Namibia.
IBM, Burroughs, Sperry Rand, and Control Data equipment help to run local administration boards, implement pass laws, and control the flow of black labor. U.S. computers assist ARMSCOR, South Africa's major armaments manufacturer, as well as the Atomic Energy Board and the Council on Scientific and Industrial Research, government agencies that are developing South Africa's nuclear weapons capability.
As crucial to South Africa as strategic U.S. products is the acquisition of U.S. technology and expertise: the training of technicians and transfer of licenses. All of these factors are helping South Africa to become strategically self-sufficient. Once this goal has been achieved, the white minority regime will be able to defy international economic sanctions, resisting external pressures for internal change.
Stung by criticism of their involvement in South Africa, American corporations have tried to convince the public that they are a "progressive force" for change in that country. In an attempt to mollify their critics, a number of U.S. companies doing business in South Africa have endorsed a fair employment code called the "Sullivan Principles." Consisting of six principles, the code calls for desegregation of the workplace, fair employment practices, equal pay for equal work, job training and advancement, and improvement in the quality of workers' lives.
Since the principles were introduced in early 1977,145 of the 300-odd American companies in South Africa have become signatories to the employment code. The Sullivan signatory companies are highly capital-intensive, employing a disproportionate number of skilled (i.e., white) workers. Thus while white workers constitute only 20 percent of the national workforce, they compose 36 percent of the workers in these companies. While "African" workers constitute 68 percent of the workforce nationwide, they make up only 44 percent of the workforce in Sullivan signatory companies. The Sullivan signatory companies employ only 0.6 percent of the combined "African," "colored," and "Asian" workforce.
The impact of the Sullivan code must be considered within this limited context. Such progress that occurs in terms of employment practices affects only a fraction of South Africa's "African," "colored," and "Asian" population. Moreover, the very companies that claim to be providing benefits to the black population simultaneously bolster the apartheid structure through the provision of strategic materials, technology, and expertise to South Africa's public and private sectors. The cost of their involvement to the black population is far greater than the minimal benefits they provide in the workplace. In most cases, even the highly touted employment reforms have been more rhetorical than real.
In the six years since the employment code was introduced, progress in implementing it has been extremely limited. Endorsement of the code is voluntary. There are no penalties for non-compliance. In 1982 one-quarter of the signatories that were required to report on their activities failed to do so. Of those that turned in compliance questionnaires, more than one-third received the lowest possible rating. While the Sixth Report on the Signatory Companies to the Sullivan Principles (November 1, 1982) states that, "All but one of the reporting Signatories indicate that all their facilities are desegregated" (Principle 1), the companies faired poorly in the more substantive areas.
For example, under Principle 3 (equal pay for equal work), the Sixth Report notes, "For the second year in a row, all reporting units stated that they are paying all races the same rate for equal work." The report does not point out that very few "African," "colored," and "Asian" employees work in the same job grade as white workers. Those who do usually find themselves at the low end of the wage range for that particular grade, with whites at the high end. Furthermore, the Sixth Report shows that in 1982, 74 percent of the unskilled workers were "Africans," while only 0.3 percent were white. Of the professional workers, only five percent were African, while 89 percent were white. Two percent of the managers were "African"; 97 percent were white.
Given the overall concentration of "Africans" in unskilled and semi-skilled labor and whites in skilled and white-collar jobs, it is not surprising to find a huge discrepancy between "African" and white workers' wages. The Sixth Report states that in 1982, average pay increases for "African," "colored," and "Asian" employees "fell off significantly from previous years. The white average pay increases, on the other hand, held their own."
Signatory progress in implementing Principle 4 (the training of "African," "colored," and "Asian" employees for supervisory, administrative, clerical, and technical jobs) has been equally dismal. In fact, the Sixth Report notes, "Analysis of the response in this category ... suggests quite strongly that in difficult financial times, ["Africans," "coloreds," and "Asians"] are much more likely than Whites to feel cutbacks in training efforts." These workers have "lost ground steadily in clerical/administrative training programs over the last three years, and have slipped this year in the skilled category." White workers, on the other hand, do not seem to be faced with the same problems. In spite of the faltering economy, their representation in the training programs has actually increased.
As for Principle 5 (increasing the number of "African," "colored," and "Asian" workers in management and supervisory positions), the Sixth Report indicates that "the proportion of ["Africans," "coloreds," and "Asians"] in supervisory positions has dropped, indicating a lack of progress in this area." The proportion of "Africans," "coloreds," and "Asians" in skilled jobs likewise fell during the sixth reporting period. In spite of "difficult financial times," the number of managerial jobs increased by 23 percent in 1982. White workers filled 94 percent of these new managerial slots.
Notwithstanding their poor showing in the implementation of the Sullivan Principles, signatory companies continue to describe themselves as a "progressive force" for change in South Africa. Individually and collectively, they have dismissed criticism of their strategic involvement in the apartheid economy and pointed to their endorsement of the fair employment code as justification for their continued presence in South Africa.
Until 1982 the annual signatory compliance reports failed to acknowledge the controversy surrounding U.S. investments in South Africa.
While the Sixth Report acknowledges that the question of corporate collaboration with apartheid is in fact an issue, it refuses to involve itself in the debate. The Sixth Report states,
At times during the past year, there have been elements of controversy about the Sullivan Principles and the role they play in helping justify the continuing presence of American corporations in South Africa. Much of this controversy is a result of confusion about what the Principles cover and therefore, what the ratings actually imply about a company's conduct.
The Principles do not cover what some have called the "strategic issues": loans made to South Africa, imports of certain types of equipment, etc. What the Signatories are doing in these areas is outside the scope of this report.
In effect, the Sixth Report admits that signatory companies are contributing strategically important goods and expertise to the apartheid system and that the employment code was never intended to address this issue. In a few brief lines, the fundamental weakness of the Sullivan Principles is revealed: the principles address corporate employment practices as if they occur in a vacuum, as if the bottom line is the desegregation of toilets and recreation areas, rather than U.S. corporate support of apartheid structures. The Sixth Report ultimately exposes the Sullivan Principles for what they are: absolutely irrelevant to the struggle for freedom and justice in South Africa.
For U.S. companies in South Africa, the shift from Carter to Reagan has meant little more than business-as-usual, minus the inconvenience of keeping up appearances. There are fewer obstacles to doing business under the Reagan administration. Almost anything goes. As investments increase and strategic collaboration mounts, the sham of the Sullivan Principles has become even more blatant.
During the Carter years, Andrew Young was notorious as a true believer in corporate do-goodism. Determined to prove that U.S. businesses could be a "progressive force" for change in South Africa, he lauded the efforts of some and took swipes at the most flagrant abusers. The Reagan administration has dispensed with the "progressive force" argument and simply advocates corporations. The result has been pleasing to white South Africa.
Elizabeth Schmidt had traveled in South Africa, was the author of Decoding Corporate Camouflage: U.S. Business Support for Apartheid (Institute for Policy Studies) and was a doctoral student in African history at the University of Wisconsin when this article appeared.
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