The Multinational Monitor



Stamping Out Apartheid

In response to the growing struggle for freedom in South Africa, the last few years have seen a big upsurge in the movement to force divestment of American corporations and banks from this white-controlled regime. Working in coalitions that have brought together diverse groups of students, trade unionists, church workers, and progressive legislators, thousands of Americans have sent a strong message to the multinationals: stop supporting apartheid. Among their accomplishments:

  • By the end of 1982, 30 colleges and universities had divested more than $100 million from banks and corporations in South Africa, while state and municipal legislation passed last year forced the withdrawal of $300 million in investments.
  • Religious denominations, such as the United Methodist and American Lutheran churches and the Disciples of Christ, have withdrawn their investments from banks and corporations doing business in South Africa.
  • This spring, over the veto of a conservative Democratic governor, the Massachusetts legislature enacted a farreaching bill that prohibits the investment of all state pension funds in South Africa. The bill will affect $90 million in state funds.

The pressures on U.S. investors and the South African government have not gone unnoticed. In reporting the withdrawal of approximately $600 million in corporate investment from South Africa during the first half of 1983, the British Economist noted that "international opposition to investment in South Africa has undoubtedly played a role." And, according to Justice Department figures, the South African government spent close to $2 million in the U.S. last year for lobbyists to promote apartheid and fight the divestment movement.

But if the divestment movement is to succeed in making a dent in the apartheid system, it should push for total withdrawal of American multinationals from South Africa. Many black South Africans and activists in the U.S. stress that the presence of corporations in this racist country supports the status quo. They also insist that regulations of corporate behavior in South Africa-like those suggested in the Sullivan Principles, a code of conduct for U.S. multinationals-are merely cosmetic, and do not challenge the status quo in any way.

Mass Divest, the coalition that organized this year's successful campaign in the Massachusetts legislature, made a strong case for this argument in a recent statement written for the American Committee on Africa. "The Sullivan Principles," they wrote, "shift the discussion away from the fundamental question of how U.S. investment undergirds apartheid. Instead, working conditions for the employees of U.S. corporations who make up less than four percent of the South African work force become the focus of discussion." In their campaign, they emphasized, "nothing short of total divestment was acceptable."

Well said.

A Disappionting Decision

Throughout its three and a half years of publication, Multinational Monitor has directed criticism at many private corporations and public institutions. But the World Health Organization has never been among them. In fact, the Monitor has consistently praised WHO, especially for its uncompromising stance against the marketing practices of infant formula companies.

In view of the strong respect the agency commands, it is disheartening to find out that WHO is, after all, susceptible to political influence. We come to this conclusion after reviewing evidence presented in this issue that high-level WHO officers suppressed publication of material commissioned by the health agency's own legislature. The study, a comprehensive review of the corporate structure and marketing practices of multinational alcohol producers, documents the increasing availability-and hence consumption-of alcohol throughout the world.

Alcohol producers clearly wish to avoid such scrutiny. But in the past, WHO was not intimidated by the strongarm tactics of Nestle and other infant formula manufacturers, so why this time? One major difference is that the economic interests at stake in the alcohol industry, a $170 billion a year industry, dwarf the interests of the $4 billion infant formula industry. But the two cases also have an important feature in common: both industries know they have a strong ally in the U.S. government, which ardently defends corporations' interests in the name of maintaining a "free market." Ever since WHO adopted the infant formula code two years ago, according to former employees of the health agency, the U.S. has let it be known that it will not tolerate any more regulatory codes.

Experience has shown that the U.S. is willing to put action behind its words. WHO has only to hark back to 1977, when the U.S. pulled out of the Industrial Labor Organization, another U.N. agency, alleging that it had become too "politicized." The U.S. took a quarter of the ILO's funding with it, forcing the agency to severely cutback staff and program for two and a half years until the U.S. returned to the fold.

But as one State Department spokesperson confided to the Monitor, "We all know that `politicization' is a polite fiction-virtually everything in the U.N. is political. The truth is that the ILO was going against our interests."

Several former WHO employees have commented that the WHO leadership very much fears the consequences of going against U.S. interests-and may shape their decisions accordingly. As with the ILO, a U.S. pullout would jeopardize a quarter of WHO's funding. The perceived threat of U.S. reprisals could well have precipitated the cancellation of the alcohol study; the chain of events and testimony of those involved suggest it did. But bending to American interests may have cost WHO some of its integrity and independence. It was an unfortunate decision.

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