Gray, ANC representatives debate on divestment issue
By Prabhat Mehta
Lindiwe Mabuza, chief representative of the African National Congress to the United States, challenged the position of the MIT administration on the issue of divestment at Wednesday's Undergraduate Association colloquium. Her comments were aimed specifically at President Paul E. Gray '54, who articulated the MIT anti-divestment position.
"The question of apartheid <>
is not an academic question," Mabuza told a standing room only crowd of over 400 in 10-250. "There is no choice except for liberation."
Her remarks came in response to those of Gray, who argued that divestment would have no effect on companies doing business in South Africa. "There is no evidence that divestment affects disinvestment," he said.
Gray's remarks, though admittedly personal, supported the position of the Executive Committee of the MIT Corporation, which has final say on the divestment issue. Gray serves as chair of that committee.
The moral argument
Gray opened the debate with a detailed study of the reasons and consequences of divestment.
There must first be a moral dimension which impels an institution to divest. But according to Gray, the moral argument itself comes into question. The notion that US companies in South Africa aid and abet the repressive regime is an "oversimplification," he felt.
Many companies which do business in South Africa, Gray argued, do benefit by providing employment, education and housing opportunities. These companies are the ones which adhere to the Statement of Principles, the only ones in which MIT invests.
The Statement of Principles, established by the Reverend Leon Sullivan more than a decade ago, defines a set of principles for equal employment opportunities for companies in South Africa. The principles were later repudiated by Sullivan, who felt little progress had been made by South Africa in ending apartheid.
Many US corporations in South Africa, Gray noted, also provide essential products such as medicines. Currently, MIT claims it holds investments in 13 companies, totaling $84 million, which do business in South Africa. Six of those are pharmaceutical corporations.
The number and value of the Institute's investments has consistently come under criticism by the Coalition Against Apartheid, which claims the investments total $289 million.
Gray also argued that, based on the moral argument, MIT would have to act in other ways against those companies in South Africa. He mentioned other areas such as corporate gifts, internship programs and relationships in the Industrial Liaison Program where relationships would also have to end.
"Morality requires continued involvement," Gray said.
Divestment as a mechanism
The moral question aside, Gray felt that the impact of divestment as a mechanism for change would be minimal while the negative consequences it would have for MIT would be substantial.
"Divestment is not an effec-<>
tive lever," he said. It is only a "transfer of ownership" of stock holdings and therefore remains "largely ineffective."
Effective strategies for disinvestment, Gray felt, include government sanctions and purchase restrictions and consumer boycotts. He argued that those companies which have in recent years pulled out of South Africa did so because of such direct pressures, which threaten profitability.
Gray felt MIT as an educational institution could best help blacks in South Africa by providing educational and financial aid for South African students, financing black students in South Africa, promoting faculty interaction, and engaging in technical exchange programs.
Furthermore, if MIT were to divest, the consequences would be severe for MIT, Gray said. Divestment would "unavoidably have a negative impact here."
Many companies, he noted, have said they would sever ties with MIT if the Institute divests.
In addition, a decision for divestment, in being a political statement, would disenfranchise those on campus with different views and open the Institute's investment portfolio to other political issues.
As an example of the latter, Gray noted that environmentalists have recently called for divestment from major polluting companies under the so-called Valdez principles.
Finally, Gray noted that a divested investment portfolio yields 10-20 percent less than standard investments.
Mabuza's rebuttal focused on the ANC's strategy of total isolation of the white minority government in South Africa. In reference to the structure of Gray's speech, she said the anti-apartheid strategy could not be separated into moral, political and economic elements and scrutinized at smaller levels.
Every institution in South Africa, she felt, supported apartheid. "It's not just an economic, social, political question, they have a total strategy for a total onslaught."
As an example of how outside companies have been absorbed by the apartheid system, Mabuza cited two laws allowing the South African government to use private companies to preserve national interests.
The National Supplies Procurement Act forces companies to act to ensure "the survival of the country" in times of crisis. This law allows the government to obtain goods and services from companies on demand. Failure to comply results in confiscation of property.
The National Key Points Act of 1980 defines "certain institutions that have special importance for" national security. Under this law, the minister of defense has targeted 413 official "Key Points" and 800 other "semi-Key Points" as of March 1984.
The proprietor of a "Key Point" must provide security under supervision from the armed forces. Thus employees of companies are often recruited to put down black demonstrators, Mabuza said.
In the face of such institutionalized oppression, any move to isolate South Africa becomes imperative, she felt. "It is better to have an end to this terror, than to keep those companies there."
In response to Gray's claims that divestment does not work and that corporate involvement is not always detrimental, Mabuza said, "Even the limited sanctions have worked."
She claimed that the limited pressure provided by the withdrawal of many American and European companies in the last five years has led current South African President F. W. de Klerk to begin negotiations with black leaders.
She also asserted that the international arms embargo imposed in 1977 prompted South Africa to grant independence to Namibia.
Outside nations must be willing to make sacrifices -- such as those required for divestment -- to contribute substantially to the movement for change.
Furthermore, she argued, the sacrifices, when taken in perspective, would not prove to be so painful. Regarding the possibility of losing corporate gifts as a result of divestment, she asked whether it was appropriate to accept gifts which came from the blood of black South Africans.
The crowd, which mostly supported Mabuza's arguments, erupted when she spoke with frustration of the black liberation movement: "Why should we be treated as perpetual children who don't know what's correct for them?"