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Gray's message on divestment clashes with Mandela's

"It is time to intensify the struggle." -- Nelson Mandela

In his "open letter" of April 3 ["An open letter on South Africa and investments"], Paul E. Gray '54 attempts to answer the question, "What should be MIT's role in ending apartheid?" He claims that MIT should support companies which work against the apartheid system by setting good examples: non-racist hiring practices, non-segregated work facilities, management level training for blacks, etc. At first glance, Gray's arguments seem to make sense -- he feels he knows what's best for black South Africans.

Unfortunately, the majority of black South Africans, including Nelson Mandela and the African National Congress, disagree with him. Historically, the South African government has moderated apartheid laws only when corporations withdrew foreign capital. Therefore, black South Africans feel the best way to end apartheid is through international economic sanctions and multinational corporate withdrawal. Though these actions may hurt South Africans in the short term, they feel economic pressure is the only way to bring lasting change to their troubled land.

Having considered both Gray's and Mandela's positions, the MIT Coalition Against Apartheid stands with Nelson Mandela and the ANC.

In the past year, CAA initiated a multipoint program which supports the struggle for liberation in South Africa. This campaign has included a campus-wide education program and a multi-campus fundraising effort for the Solomon Mahlangu Freedom College (an ANC community school in Tanzania which educates over 1000 South African refugees).

In addition, the coalition is actively supporting a boycott of Coca-Cola products; Coca-Cola pays over $10 million to the South African government and provides supplies to their military.

MIT has about $289 million invested in companies doing business in South Africa. We concur with anti-apartheid leaders that the Institute's divestment from these companies would send a strong political message and induce these corporations to withdraw from South Africa. During the divestment campaigns of 1985-87, 89 universities and several states divested and over 100 corporations withdrew from South Africa.

Gray claims, using the Statement of Principles (The Sullivan Principles until Reverend Leon Sullivan admitted their failure in 1987), that MIT only has investments in companies that are socially sensitive.

From the outset, however, anti-apartheid groups opposed the Sullivan Principles for two reasons. First, the principles could do little to improve the condition of blacks given the overarching restrictions of apartheid. US corporations only employ one percent of the black South African population, and even companies which follow the Sullivan guidelines must obey the repressive laws of formal apartheid. For instance, no black person can supervise a white worker, and thus black workers are relegated to the lower paying menial jobs. Sullivan's "equal pay for equal work" means little when the janitors are all black and the executives are all white.

Second, the principles would be used as a moral justification for continued corporate presence in South Africa. Companies use the principles to maintain a facade of responsibility to the public, while at the same time financing the South African government through taxes, loans, corporate holdings, and trade.

Corporations such as Shell Oil (in which MIT has invested $500,000), a Sullivan principle signatory, provides cheap oil to the South African military and bolsters the South African government with corporate taxes. IBM (in which MIT has $27 million), a former signatory which no longer has operations in South Africa, still supplies the police with computer systems which they use to enforce laws confining blacks to designated areas. The chairman of IBM, John F. Akers, clarified his attitude toward South Africa and the Sullivan Principles in April 1987 when he said, "We are not in business to conduct moral activity. We are not in business to conduct socially responsible action. We are in business to conduct business."

In his open letter, Gray overlooked his friend and fellow MIT Corporation member John S. Reed '61, chief executive officer of Citicorp. In October 1989, Citicorp, in which MIT has $7 million, recently "rolled over"(i.e., extended debt payments on) $666 million in loans to South Africa. Over the past 30 years, apartheid has been faced with three major crises: the Sharpville massacre (1960), the Soweto uprising (1976), and the present national "state of emergency" imposed by the government in 1985. After each event, when South Africa faced international isolation, Citibank stepped in with massive aid packages. A friend in need is a friend indeed.

Though MIT's investments in South Africa declined from 1988 to 1989, it was not of their own volition. Over that period, several companies in which MIT has large investments severed their ties. The decline would have been greater had MIT not invested in additional companies in South Africa such as Coca-Cola and Raychem.

Finally, Gray argues that the logical corollary to divestment is for MIT to refuse grants, recruiting access, internship programs, and research sponsorship from companies that do business with South Africa. He feels that the elimination of such programs would not be in MIT's better interests. This, however, is not up to Gray to decide. It is up to the MIT community -- its student, faculty, and staff -- to balance the economic benefits of dealing with these companies against the moral cost of supporting the apartheid regime.

Though divestment may have negative fiscal effects, many other major universities have divested and suffered no crippling consequences. In fact, investment firms maintain "South Africa free" portfolios which provide returns equivalent to MIT's present portfolio. John Parsons of the Sloan School has presented and argued for such alternative portfolios in the past.

The coalition, through attempted meetings with Gray and Chairman David S. Saxon '41, has tried to present these arguments at both the general Corporation meeting and the executive committee meeting, but neither would even put the issue of divestment on the agenda. Though we will continue to use these channels, as long as they accomplish nothing, we must consider more effective tactics. This year, actions have included rallies, demonstrations, and marches through MIT. Our hope is that by revealing the stance of the MIT Corporation to the public, MIT will be forced to take a responsible position and divest.

Cindy Evanko '92->

Clark Bowers '92->

Jamie Winebrake G->

with the consensus of the->

Coalition Against Apartheid->