Radcliffe Toughens South Africa Stand

Will Use Sullivan Principles to Screen Investments

The Radcliffe Board of Trustees this month voted to further restrict its investments in companies doing business in South Africa and for the first time will not buy stock in companies which have not signed the Sullivan Principles or which do not receive satisfactory Sullivan ratings.

Radcliffe--which holds an investment portfolio separate from Harvard--is now taking a harder line on South African investments than Harvard, which does not screen companies on Sullivan ratings before making investments.

The Sullivan Principles, developed in 1977 by the Rev. Leon Sullivan, are a set of minimum fair labor standards specifically designed for companies operating in the apartheid state.

The Harvard Corporation engages in "intensive dialogue" with companies and will divest only if they refuse to adopt the Sullivan Principles, if persistent efforts to persuade them to adopt the principles fail, and if there is no hope for improvement in work place conditions.

Under these guidelines, Harvard has not divested from a company in the past five years.


The new Radcliffe guidelines also require the College to divest from companies which fail to meet the new investment requirements, generally one year after Radcliffe first questions the companies about their treatment of South African Blacks, said Elizabeth Heffernan, chair of the Advisory Committee on Investor Responsibility.

Specifically, the new guidelines require companies to maintain a Category 1 (making good progress) or Category 11 (making progress) Sullivan rating.

The will only affect a small fraction of its portfolio. Heffernan said that $1.5 million--or 3 percent of the total--is invested in companies that have not signed the Sullivan Principles or have not achieved Category 1 or 11 rating.

The new Radcliffe guidelines, however, specifically do not advocate complete divestiture from South Africa-related companies, a policy advocated this year by an advisory group to the Harvard Corporation.

"The trustees have serious doubts about the appropriateness of complete divestiture," Heffernan said.

Radcliffe will continue its present policy of not investing in banks that lend money to the South African government or companies that conduct a majority of their business in the country.

The divestiture issue has been at the forefront of campus debates in the past six years, as students and some faculty have pressured Harvard to make a stand against apartheid by selling all its stock in companies operating in South Africa.

The push has taken the form of demonstrations each spring, and last year several students staged a week-long hunger strike.

President Bok has issued two lengthy open letters, in 1978 and 1983, explaining his opposition to divestment, arguing that Harvard should pressure companies in its portfolio to improve workplace conditions for nonwhites.

Michall Bhumenthal spokesman for the Corporation's Advisory Committee on Shareholder Responsibility (ACSK), said Harvard is unlikely to fellow Radcliffe's lead of screening companies before investing.

"It's fairly generally acknowledged that it is easier to implement a policy of pre-screening with it small portfolio," Blumenthal added. "[Harvard] is a far different bird, it would be more difficult for a portfolio like Harvard's to adapt."

While refusing to comment on Radcliffe's new guidelines, Blumenthal said the Sullivan Principles should not be the "zine quanon" in deciding whether or not to invest. "There are a number of problems I would see in using the Sullivan Principles at go, no-go guide," he added.

Professor of Law Richard B. Stewart, ACSR chairman said many in the Corporation feel that "the Good Housekeeping seal of approval" provided by a strong Sullivan rating is sufficient. But he added that Harvard's after-investment policy is becoming less satisfactory because the Corporation buys and sells stock in large volume and at short notice.