Harvard Pressures Firms To Alter S. Africa Policies
Members of the governing Corporation have been meeting for the past year with senior officials of companies in Harvard's investment portfolio which do business in South Africa to urge them to take a more active role in combatting apartheid.
During the past year Corporation members have and personally with the heads of three firms--Joy Manufacturing Company. Dim and Bradstreet Corporation and Phibro Salomon, Inc.--whose policies are considered particularly objectionable.
The University has also corresponded and held personal discussions with the heads of 15 other companies operating in South Africa to determine the degree of corporate commitment to ending apartheid in South Africa.
The survey showed that about half of the companies are making "acceptable progress" toward the goals that Harvard advocates, while the remaining half require further stockholder scrutiny.
The discussion of the University's actions regarding companies working in South Africa came in the lengthy Annual Report of the Corporation Committee on Shareholder Responsibility (CCSR), a subcommittee of Harvard's seven-man governing body. The report, released yesterday, provided the first public explanation of Harvard's attempts to influence--through a process of "intensive dialogue"--its portfolio companies on the South Africa issue.
"There is a good deal more disclosure, openess and candor (in this report) than there was before," said CCSR Secretary Michael Blumenfeld. The report, "is in large part a response to the ACSR report which said 'lets see the numbers," he added.
The CCSR receives and passes final judgement on recommendations received by the Advisory Committee on Shareholder Responsibility (ACSR). The ACSR is a 12-member group composed of students, faculty and alumni in equal proportions.
Last year, in a major report on University policy toward companies that do business in South Africa, the ACSR voted 6-5 with one abstention to recommend that Harvard sell all the stock it holds in companies that do any fraction of their work in South Africa. Failing unilateral divestiture, the ACSR urged the Corporation to strengthen its advocacy of the so-called Sullivan principles and make corporate adoption of the Tutu Resolutions prerequisites for continued University investment.
The Sullivan Principles are a set of minimum fair labor standards for companies operating in South Africa. The Tutu Resolutions go significantly beyond the Sullivan Principles, calling for companies to actively involve themselves with the South African political process to bring an end to apartheid.
Current University policy stipulates that portfolio companies that do business in South Africa must sign the Sullivan Principles. If companies that the University holds stock in refuse to sign the principles or do not seem to be complying with them, the University institutes a period of "intensive dialogue" with the corporation's chief officers for an 18-month period. If the University is not convinced by that time that the corporation has made reasonable. progress toward adopting fair policies, divestiture will be considered.
According to the report, of the four companies that Harvard has engaged in intensive dialogue with for a period of at least one year, only one--Pepsico--has signed the Sullivan Principles.
There are currently 67 companies in the University portfolio operating in South Africa; 50 are Sullivan Principles signatories in good standing, according to the Arthur D. Little Co. which monitors corporate compliance with the codes.
The 56 companies represent a combined value of $256,205 in Harvard holdings. Two companies in the portfolio have signed the guidelines, but did not satisfactorily comply with the principles. Six portfolio companies have signed the principles but did not report their efforts to enforce the provisions of the principles.
Nine companies in Harvard's portfolio have not signed the principles. Companies refusing to comply or sign the minimum standards represent a combined value of more than $51,000 in University holdings.
The CCSR is scheduled to discuss several issues that were not addressed in the report--all involving University policy on South Africa--at a joint meeting with the ACSR to be held Monday afternoon, Blumenfeld said.
Members of the ACSR contacted last night said they welcomed the openness of the report and hoped the information it contained would raise the level of debate within the Harvard community on questions of investment policy.
Committee members added, however, that they were unsurprised by the report's contents since South Africa policy had ethical criteria for defense contracting were subjects of constant debate last year