State and Municipal Goverments Take Aim at Apartheid

State & Municipal Governments Take Aim at Apartheid on richardknight.com

This May 1991 article contains a list of states, counties and cities that took economic action against apartheid. It also outlines the different type of action taken. The adoption of these “people’s sanctions” was the fruit of strong local campaigns. These campaigns often lasted years before the measurers were adopted. The American Committee on Africa (ACOA) worked to support these campaigns and link them nationally. ACOA held three conferences on Public Investment and South Africa. ACOA staff crisscrossed the country in testifying before and legislatures and city councils in favor of these measures and meeting with local activists. We also provided support for local campaigns via phone and our publications including newsletters listing states and cities taking or considering action.

The divestment by states and cities from companies doing business in South Africa and the policies restricting state and city business with these companies played a key role in the withdrawal (disinvestment) of more than 200 U.S. companies from South Africa. The withdrawal of state and city monies and other business from banks making loans to South Africa played a crucial in leading banks to the stop making new loans to South Africa. These measures also played a key role in building the pressure that led to the passage of the Comprehensive Anti-Apartheid Act of 1986 (CAAA). The CAAA prohibited new investment in South Africa, imposed financial sanctions (prohibited new loans to South Africa) and imposed a series of restricts on trade.

I have modified the tables of states, cities and counties slightly from the original printed version to take advantage of the web but the content is identical. Because of the tables this page is set up to print in landscape mode.

Richard Knight

November 2002

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——ACOA · American Committee on Africa——

Briefing Paper

STATE & MUNICIPAL GOVERNMENTS TAKE

AIM AT APARTHEID

Campaigns to isolate South Africa have been at the center of the anti-apartheid movement in the United States. The most effective actions taken to force U.S. companies to end their South African business ties have been those taken at the state and municipal level. These “people’s sanctions” include both divestment of public funds from companies that do business in South Africa and selective purchasing which restricts purchases from those companies. As of April 1991, people’s sanctions had been adopted by 28 states, 24 counties and 92 cities. Conservative estimates put the amount divested from companies that do business in South Africa at over $20 billion, including $3.8 billion and $4.2 billion respectively from the retirement funds of the states of California and New Jersey.

In large part because of this action by state and municipal governments, more than 200 U.S. companies have withdrawn from South Africa since the beginning of 1985. Many of these state and municipal measures include not only companies with subsidiaries in South Africa but those with licensing, franchising or distribution agreements.

Selective Purchasing

State and city selective purchasing policies favoring those companies that do not do business in South Africa are increasingly forcing companies to end all their business ties to apartheid. A few recent examples include:

* J.P. Morgan announced in April 1991 that it was withdrawing from the business of processing American Depository Receipts (ADRs) for South African companies when threatened with the loss of being a co-managing underwriter for more than $2 billion in Massachusetts state bonds. Morgan has been the target of a campaign by the Amalgamated Clothing and Textile Workers Union (ACTWU) which released a report on Morgan’s role in the ADR business at a press conference in Boston with State Representative Bryon Rushing. It was on the basis of this report that the State of Massachusetts notified Morgan it was in violation of the State’s selective purchasing policy. By withdrawing from the ADR business, Morgan is effectively ceasing to be a conduit for Americans to own shares in South African companies.

* Dell Corporation, a Texas-based computer company, told its South African distributor in October 1990 that it was forced to end its distribution agreement because of selective purchasing legislation in the county of Los Angeles, the city of Pasadena and the state of Michigan. “We had no orders from them for three or four months,” said a Dell spokesman. “Based on that, we terminated the relationship [with South Africa].”

* Xerox Corporation announced that it was terminating its distribution agreement in South Africa when it expires in June 1991. Xerox has been under pressure from many city governments across the country.

Since the beginning of 1990, a number of cities have adopted or strengthened their selective purchasing policies including Detroit, Jersey City, Los Angeles and New York. The State of Maine is currently considering selective purchasing legislation.

In a major victory for the campaign to get Shell out of South Africa, Governor Jim Florio has directed the New Jersey Turnpike Authority not to renew Shell’s contract to operate service stations along the state’s most traveled highway when it expires in April 1992. Shell will lose an estimated $50 million in revenues as a result of losing the contract.

Corporations continue to lobby against this type of legislation. IBM has succeeded in at least delaying passage of selective purchase legislation in Hartford, Connecticut. Realizing that even if federal sanctions are lifted, significant new investment in South Africa is unlikely as long as states and cities continue to target companies that do business with apartheid, South African Ambassador Harry Schwarz is reportedly intensifying his efforts to get state and municipal governments to lift their sanctions.

Divestment Actions

State and city divestment actions also continue to pressure companies that do business in South Africa. The New York City Employees Retirement System divested $562 million in 1990, continuing a trend that has seen billions of dollars divested from companies that do business in South Africa. In 1990 both Virginia and Hawaii adopted divestment policies which will result in the divestment of more than $1 billion.

Bank Loans

State and municipal action played a key role in ending U.S. bank loans to South Africa, which had reached $4.7 billion by the end of 1984. The early 1980s saw a dramatic increase in state and municipal actions against apartheid, with six states, five counties and more than thirty cities restricting their business with banks making loans to South Africa by the end of 1985. As a result, numerous regional banks adopted policies of not making any new loans to South Africa. When Chase Manhattan, one of the largest U.S. lenders to South Africa, followed in mid-1985, it caused a panic. Faced by the prospect of massive capital flight, the South African government was forced to declare a debt repayments standstill. Since that time, South Africa has received few new international loans.

States and cities have also continued to pressure U.S. banks that have other financial ties to South Africa. As a result of this pressure, the Bank of New York ended correspondent banking ties with South African banks in 1990 as did Continental Bank Corporation in 1989. As already mentioned, J.P. Morgan ended dealing in ADRs in 1991 as did Security Pacific in 1990.

Foreign banks have also been targeted for their ties to South Africa. For example, Hudson County, New Jersey removed $28 million from National Westminster USA because its London based parent company continues to make trade loans to South Africa and has correspondent banking ties.

Conclusion

State and municipal action has played an important role in ending U.S. corporate involvement in South Africa. This has increased the isolation of the apartheid regime and strengthened the democratic movement. The release of Nelson Mandela and the unbanning of the African National Congress and other political organizations was an important victory for the democratic movement in South Africa. These victories are the result of the combined internal struggle of the democratic movement and international campaigns to isolate South Africa.

State and municipal governments can play an important role in keeping the pressure on until apartheid has truly been abolished and democracy firmly established.

If you would like to become involved in one of these campaigns or start a campaign to get your state or city to adopt anti-apartheid legislation, contact the American Committee on Africa, 198 Broadway, New York, NY 10038 (212) 962-1210.

Terms

* Selective purchasing - a policy that gives preference in the purchase of goods and services to those companies that do not do business in South Africa.

* Divestment - the sale of stock and other equities from companies that do business in South Africa.

STATES, COUNTIES AND CITIES

THAT HAVE TAKEN

ECONOMIC ACTION AGAINST APARTHEID

As of May 1991, economic action against apartheid has been taken by 28 states, 24 counties, 92 cities and the Virgin Islands. These “people’s sanctions” have caused over $20 billion to be divested from companies that do business in South Africa. In addition, a growing number of states, counties and cities have adopted selective purchasing policies that steer their business away from companies that do business in South Africa.

—— STATES ——
Arkansas	Divestment-1987	Michigan	Banking-1980; Divestment-1982; Purchasing-1986; Purchasing and Divestment-1988
California	Divestment-1987
Colorado	Banking and Divestment-1985
Connecticut	Divestment-1982; Total Divestment-1987	Minnesota	Divestment-1985
Florida	Prohibits purchase of South Africa Equities-1988	Missouri	Divestment and Banking-1987
Florida	Prohibits purchase of South Africa Equities-1988	Nebraska	Divestment-1984
Hawaii	Divestment-1990	New Jersey	Divestment and Banking-1985
Illinois	Banking-1987	North Carolina	Divestment and Purchasing-1987
Iowa	Divestment and Banking-1985	North Dakota	Divestment-1985
Kansas	Divestment-1985	Oklahoma	Banking-1986
Louisiana	Banking-1985	Oregon	Banking and Divestment-1987
Maine	Divestment-1984; Divestment-1986; Divestment-1987	Rhode Island	Divestment-1985; Divestment-1988
Maine	Divestment-1984; Divestment-1986; Divestment-1987	Tennessee	Divestment and Banking-1987
Maryland	Banking-1984; Divestment-1985; Purchasing-1986; Banking-1987; Divestment and Banking-1989	Vermont	Divestment and Banking-1986
		Virginia	Divestment-1990
		West Virginia	Divestment-1986
Massachusetts	Divestment and Banking-1983; Purchasing-1989; Purchasing-1990	Wisconsin	Banking-1987
Massachusetts
		Virgin Islands	Divestment-1983

		28 States
		1 Territory

—— COUNTIES ——
Alameda, CA	Divestment-1985; Banking and Purchansing-1986	Montgomery, NJ	Divestment-1985; Banking and Divestment-1986
Alameda/Contra Costa Transit, CA	Banking and Purchasing-1989	New Castle, DE	Divestment and Banking-1986
Alameda/Contra Costa Transit, CA	Banking and Purchasing-1989	Prince George’s, MD	Purchasing and Banking-1986
Bergen, NJ	Banking-1983	Rockland, NY	Banking-1986
Cuyahoga, OH	Divestment-1984	San Francisco, CA	Divestment-1985; Divestment, Banking and Purchasing-1986 Divestment, Banking and Purchasing-1990
Dade, FL	Divestment, Banking and Purchasing-1988
Fairfax, VA	Divestment-1990
Hennepin, MN	Banking and Purchasing-1985	Santa Barbara, CA	Banking-1986
Howard, MD	Divestment, Banking and Purchasing-1986	Santa Clara, CA	Divestment-1986
Hudson, NJ	Banking-1991	Solano, CA	Banking and Purchasing-1986
Los Angeles, CA	Divestment-1985	Sonoma, CA	Divestment, Banking and Purchasing-1985
Middlesex, IN	Divestment-1985	Tompkins, NY	Banking and Divestment-1986
Monmouth, NJ	Banking and Divestment-1988	Westchester, NY	Banking-1985; Banking-1989
Monroe, NJ	Banking and Purchasing-1985
		24 Counties

—— CITIES ——
Alexandra, VA	Divestment and Banking-1985	New Orleans, LA	Divestment and Banking-1985;
Amherst, MA	Divestment-1984		Divestment, Banking and Purchasing-1988
Ann Arbor, MI	Divestment-1986	New York City, NY	Divestment-1984;
Atlanta, GA	Divestment and Banking-1985		Purchasing and Banking-1985;
Atlantic City, NJ	Divestment and Banking, 1983		Purchasing-1987; Divestment-1989
Austin, TX	Purchasing-1989		Purchasing and Banking-1990
Baltimore, MD	Divestment-1985; Banking-1986	Newark, NJ	Divestment, Purchasing and Banking-1984;
Berkeley, CA	Divestment-1979; Purchasing-1986		Purchasing-1989
Boston, MA	Divestment-1984;	Newton, MA	Divestment and Banking-1986
	Banking and Purchasing-1986	Niagara Falls, NY	Banking-1986
Boulder, CO	Divestment and Banking-1985	Oakland, CA	Divestment, Purchasing and Banking-1985;
Brookline, MA	Divestment-1986		Divestment, Purchasing and Banking-1987
Burlington, VT	Divestment-1985	Omaha, NE	Divestment, Purchasing and Banking-1985
Cambridge, MA	Divestment-1980	Opa Locha, FL	Divestment and Purchasing-1987
Camden, NJ	Divestment, Banking and Purchasing-1985	Orlando, FL	Divestment-1986
Charleston, SC	Divestment-1985	Palo-Alto, CA	Banking-1985; Divestment-1986
Charlottesville, VA	Divestment-1984	Pasadena, CA	Purchasing-1989
Chicago, IL	Purchasing and Banking-1986;	Philadelphia, PA	Divestment and Banking-1982;
	Purchasing and Banking-1990		Divestment and Banking-1986;
Cincinnati, OH	Divestment-1985;		Purchasing-1989
	Banking and Divestment-1990	Pittsburgh, PA	Divestment and Purchasing-1985;
Cleveland, OH	Banking-1986		Divestment-1990
College Park, MD	Purchasing and Banking-1985	Portsmouth, VA	Divestment-1985
Columbus, OH	Banking-1985	Rahway, NJ	Banking-1984
Dallas, TX	Divestment and Banking-1989	Raleigh, NC	Purchasing and Banking-1986
Davis, CA	Banking-1980	Richmond, CA	Purchasing and Banking-1986
Denver, CO	Divestment-1986; Divestment-1989	Richmond, VA	Divestment-1985; Purchasing-1986
Des Moines, IA	Divestment and Banking-1986	Rochester, NY	Divestment, Purchasing and Banking-1985;
Detroit, MI	Divestment and Banking-1985;		Divestment-1987
	Divestment and Banking-1990	Sacramento, CA	Divestment, Purchasing and Banking-1985;
Durham, NC	Divestment, Banking and Purchasing-1986		Divestment, Purchasing and Banking-1987;
East Lansing, MI	Purchasing-1977		Divestment, Purchasing and Banking-1989
Erie, PA	Divestment and Banking-1985	St. Louis, MO	Divestment and Banking-1986
Fairmont, WV	Divestment, Purchasing and Banking-1986	St. Paul, MN	Banking-1985
Flint, MI	Divestment-1985	St. Petersburg, FL	Divestment-1985
Fort Collins, CO	Purchasing-1985; Banking-1988	San Diego, CA	Purchasing-1987
Fort Worth, TX	Divestment-1986	San Francisco, CA	Divestment-1985;
Freeport, NY	Banking-1985		Divestment, Banking and Purchasing-1990
Fresno, CA	Divestment and Banking-1985	San Jose, CA	Divestment-1985
Gainesville, FL	Divestment-1985	Santa Barbara, CA	Banking-1985
Gary, IN	Divestment, Purchasing and Banking-1985	Santa Cruz, CA	Banking-1984
Grand Rapids, MI	Banking-1982	Seattle, WA	Banking-1985; Divestment-1989
Hampton, VA	Divestment-1985	Stockton, CA	Divestment, Purchasing and Banking-1985
Hartford, CT	Divestment-1980	Syracuse, NY	Divestment and Banking-1987
Houston, TX	Divestment-1986;	Takoma Park, MD	Purchasing-1989
	Purchasing and Banking-1987	Tallahassee, FL	Divestment, Banking, Purchasing and
Jersey City, NJ	Banking and Divestment-1985;		Tax concessions-1989
	Divestment and Purchasing-1990	Topeka, KS	Divestment-1986
Kansas City, KS	Purchasing-1985	Tucson, AZ	Divestment-1985
Kansas City, MO	Divestment-1985	Washington. DC	Divestment-1983; Purchasing-1986
Los Angeles, CA	Divestment and Banking-1985;	Watertown, MA	Divestment and Banking-1986
	Purchasing-1986;	West Hollywood, CA	Purchasing and Banking-1985
	Divestment and Banking-1988	Wichita, KS	Divestment-1987
	Purchasing-1989; Pirchasing-1990	Wilmington, DE	Divestment-1985; Purchasing-1986
Madison, WS	Purchasing-1976	Youngstown, OH	Divestment-1985
Miami, FL	Divestment and Banking-1986	Ypsilanti, MI	Divestment-1985
Middletown, CT	Divestment-1985
Minneapolis, MN	Divestment and Banking-1985;	92 Cities
	Divestment-1986
New Haven, CT	Divestment-1985; Purchasing-1989

Banking - withdrawal of funds and/or other business from banks on the basis of their ties to South Africa.

Divestment - binding measures requiring the sale of stock and other equities from companies that do business in South Africa.

Purchasing - policy that gives preference in the purchasing of goods and services to those companies that do not do business in South Africa.

Written by Richard Knight, May 1991

The American Committee on Africa was formed in 1953 to support African independence and majority rule. Because of the Committee’s role in supporting legislation at the federal, state and municipal level, contributions are not tax deductible.

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