Intensive Dialogue Can Work

ALMOST ANYBODY WHO is familiar with the legally enforced segregation which the government of South Africa imposes on the non-white majority of that nation agrees that the injustices must come to a rapid conclusion. But concerned parties have never been able to agree on the best policy for instituting reform in that backward nation.

For almost 15 years now, activists at Harvard have criticized the University's unwillingness to divest of stock in American corporations which do a small part of their business in South Africa because many believe that such operations support the legally enforced segregation, called apartheid. Calling for complete and immediate withdrawal of all assets tied up in such operations, students, faculty, and alumni alike have argued that complete divestiture is the only moral solution to the problem.

For as many years, The Crimson has agreed. But in light of last week's progress report from Harvard's governing Corporation, we believe Harvard has shown its concern for the non-whites in South Africa. The University has demonstrated its intention of activating reform there by using the influence it wields from its stock in corporations which do business in that nation. While we cannot take the University's word at face value and while we recognize that Harvard has taken only small steps to institute reform, we believe the time has come to rethink the value of complete, blind divestiture.

Complete divestiture of stock has little moral value to and of itself because as Americans we will never successfully cleanse ourselves of the corporations which do business in South Africa. Of the top 50 companies in the United States, more than half do some business in South Africa. Companies like CM, Ford, IBM, ITT and Exxon, so intricately connected to our daily lives, have operations in that nation. We would need to boycott everything from automobiles to telephones to maintain that we are morally free of apartheid. Of course, this would be a ridiculous undertaking, but without this isolationism, advocates of divestiture could make no permanent, moral statement which might be of use in fighting apartheid.

As students, we must additionally consider the financial implications involved in divestiture. Reports estimate that complete divestiture initially would cost Harvard between $10 and $30 million. Since each of us pays only a fraction of what it costs to put us through Harvard every year, we should perhaps be slightly less liberal with the University's money. But more than losing just that initial money, we must consider the long-term losses as well. Endowment income is crucial, providing anywhere from 11 to 42 percent of the budgets of the University's 10 faculties. Therefore, banishing so many top, lucrative corporations from Harvard's portfolio would wreak havoc on everything from professors' salaries to financial aid.

Furthermore, we must accept that the University's first commitment is to the advancement of liberal arts education. As a representative of that commitment, Harvard's administration cannot institute any programs which compromise its integrity, as would complete divestiture. As President Bok has argued, if the University were to forcefully exert the political and economic clout it possesses, then it could not argue that Harvard must remain autonomous from outside pressure exerted upon it. In other words, if we were to fully divest, embracing the full economic and political ramifications which divestiture entails, Harvard itself might be subject, for example, to its investors lobbying to impose financial and ethical sanctions on Harvard's liberty to invite communists to speak and teach here. If Harvard intends to retain its academic autonomy, it must respect the ultimate autonomy of others. This by no means precludes working within a system to bring about needed change, but it certainly excludes endorsing an ultimate moral, economic and political statement directed against those who do not favor our policies.

BUT THIS FINANCIAL argument is not the full case against blind divestiture, by any means. More important, if the University were to divest of all of its holdings in operations in South Africa, all of Harvard's stock would be purchased by other institutional investors who generally care only about the bottom line. The corporation in question would not suffer a substantial setback, and Harvard will have done nothing measurable to fight apartheid. In fact, complete divestiture may do more to support the apartheid regime than anything Harvard has done in the past. For Harvard, along with several other concerned universities, is one of the most responsible shareholders around.

Through the last proxy progress report released by the Corporation, Harvard has shown its resolve to improve living and working conditions for non-whites in South Africa. The University's policy of engaging in "intensive dialogue" with portfolio companies not complying with Harvard's code of business ethics has met with at least limited success. Of the 10 companies approached last year by the University for lack of serious effort to fight segregation both in and out of the work place, four companies were dropped from the portfolio for financial reasons, the University divested of one particularly delinquent company, and 11 companies took significant steps to prove their willingness to institute Harvard's moral codes. Harvard is continuing its dialogue with the remaining three. Under the policy, divestiture serves only as a last resort, a failure on the part of the University, and a measure to be taken when the possibility for achieving significant reform is clearly remote.

Of course, Harvard's policy of intensive dialogue would signify very little if the moral reforms it calls for were not broad, necessary and realistic. But we believe they are. When associates of the Corporation conduct dialogues with portfolio companies, they demand compliance with both the Tutu Principles and the Sullivan Principles. Together with the University's standard guidelines for operations in South Africa, these principles require companies to: do less than 50 percent of their business in the country; pay laborers equally for equal work, institute a minimum wage; end workplace segregation; invest "massively" in education reforms and in community development; actively oppose the "influx control laws," which control the freedom of non-whites to move about the country and represent the cornerstone of apartheid; and (in the near future) to discontinue producing hardware or supplying any capital whatsoever which might directly aid the South African government itself. The University indicated its intention to forward this last reform when it divested of $51 million in Citibank in 1979 after Citibank continued to make loans to the South African regime. Along these lines, Bok stated in his open letter of last week, the University will begin to persuade companies in Harvard's portfolio to phase out any operations which directly, by sale or loan, buffet any agency which enforces apartheid in South Africa.

Harvard will divest of its shares in any corporation which does not resolve to forward these measures, not as a punishment to the company which fails to conform, but as an admission of its own failure to bring about substantial change. The University has also shown its determination to increase regularly the number and types of reforms which it persuades companies to initiate, and, subsequently, to expand the number of corporations subject to intensive dialogue.

ALTHOUGH THE UNIVERSITY characteristically denies any intention of instigating the downfall of the South African government itself, it does work to better the condition of Blacks and so-called "coloreds" (individual of mixed race) whom companies employ. As these reforms are instituted, non-whites will surely begin to gain economic parity, the first step toward political equality. In addition, the underpinnings of apartheid, which lie both in the abhorrent treatment of non-whites in the workplace and in the community, will gradually be undermined. Through their presence in South Africa, American business, with the direction of concerned shareholders like Harvard, exert a constant and realistic force which the South African regime will, in time, be forced to satiate.

While the University's reforms are sweeping and, in comparison with complete divestiture, effective, we do not believe Harvard's proceedings are sufficient. We believe that it must be more open in its dealings with portfolio corporations, letting the community know which companies are failing to comply with its principles and what it is specifically doing to persuade these companies. We also call for short, standardized time limits for compliance to be imposed on the delinquent corporations, instead of arbitrary and secret proceedings. We also feel Harvard should not originally become associated with companies which have demonstrated no intention of molding their habits to the University's moral guidelines. Finally, our continued support is contingent upon further evidence that Harvard severs relations with any company, regardless of its financial status, which does not succeed in fighting apartheid in South Africa within reasonable time frame.

In comparison with complete divestiture, Harvard's policy seems effective, moral and pragmatically sound. We should not, however, expect Harvard to change the world. While we believe the University is doing its duty as an active shareholder, we must not rest. The possibility for Americans to permanently defeat apartheid in South Africa lies solely within the power of the federal government, and we urge our representatives in Congress to impose economic and political sanctions on the all-white regime. In addition, we encourage Bok to continue his work with the South Africa Education Program, which brings non-whites to this country's universities and returns them to their homeland to lead their troubled nation away from apartheid.

No one likes apartheid; but as a strategy against it complete and blind divestiture is not as effective as Harvard's current policy. The University has taken one small step in the implementation of its oft-stated principles. We have always hoped, and we are now even encouraged, that Harvard can play a role, however small, in the promotion of better conditions and eventual freedom for the oppressed people of South Africa. However, our full praise awaits solid evidence that the policy is in fact contributing to the eventual destruction of the pariah state's persecution of non-whites.