A successful conclusion to this month's national elections in South Africa could prompt a repeal of many remaining sanctions that prohibit certain U.S. cities and states from doing business with firms that have South Africa ties.
The vote, which began Tuesday and concludes today, marks South Africa's first nonracial national elections and in all probability means the end to centuries of white minority rule.
States and localities, following the lead of activist Nelson Mandela, have already removed many of the sanctions that made South Africa an economic pariah for its apartheid policies. Mandela, the president of the African National Congress and probable future president of South Africa, told the United Nations last September that the country's progress toward democracy justified an end to sanctions.
In the months since the speech, many of the remaining federal restrictions on doing business in South Africa have been lifted, and states, cities, and other jurisdictions have been quick to follow suit.
According to a report issued this month by the Investor Responsibility Research Center, which studies various business and public policy issues that affect major corporations and institutional investors, 137 state and local. governments have lifted their sanctions, leaving only 43 jurisdictions where sanctions have yet to be repealed..
As of last September, 38 state and local governments had sanctions and five had codes of conduct, said Bill Moses of the investor research center. The codes are based on guiding principles presented by the African National Congress in September San Francisco's deputy fiscal officer. The arduous debate in San Francisco and Oakland on whether to permanently repeal sanctions was resolved more decisively in many jurisdictions, many of whom acted swiftly after Mandela's UN appeal.
Berkeley, Calif., which in 1979 became the first city in the nation to divest itself of holdings in companies doing business in South Africa, quickly repealed its ban last October.
In New Orleans, the city council also eliminated sanctions last fall. The council approved an ordinance that repealed all three sections of the city's code that banned contracts with South African-related companies and prohibited pension funds from investing in firms doing business with South Africa. The bill was sponsored by council member Joseph Giarrusso.
D.C. Repeal
Also last fall, the District of Columbia repealed two laws that prohibited the investment of city funds in companies doing business with South Africa and penalized firms seeking to do business with the city if they, had South Africa links.
The two laws guided the city'.s finance office since they were enacted in 1983 and 1986, respectively, city officials said. The repeal, initially temporary, became permanent when Congress acted on the measure.
Mayor Sharon Pratt Kelly said on signing the temporary repeal last fall that she pledged her support of the legislation in a private meeting in September with Mandela. Also attending the meeting and pledging support for repeal was Rep. Eleanor Holmes Norton, the district's Democratic delegate in Congress, Kelly said.
Many other localities also removed their South Africa restrictions, although their policies did not always affect their dealings with underwriters of bond offerings.
Last September, for example, then Virginia Gov. Douglas Wilder issued an executive order lifting a three-year state ban on doing business with South Africa. The ban had barred state agencies "from further investing in companies that were not substantively free of interests" in South Africa and ordered agencies to start divesting of any interests in firms active in the country.
However, the ban had little effect on the use of underwriters, state finance officials and a number of dealers said.
In January, the Minneapolis city council waived a ban that prohibited the city from dealing with banks that had investments in South Africa, according to a spokeswoman in the city clerk' office.
Although many state and local governments moved quickly to repeal sanctions, several have just added their names to the rolls within the last month.
On March 30, California Gov. Pete Wilson signed a bill to lift the state's sanctions. The measure, sponsored by Assembly Speaker Willie Brown following Mandela's plea to end sanctions, repeals the law preventing state pension plans from investing in firms that conduct business with South Africa.
California became the largest entity to divest when then-Gov. George Deukmejian signed legislation in 1986 that required state pension plans to divest more than $4 billion from the African nation.
Two weeks ago, New Jersey Gov. Christine Todd Whitman signed a bill that undoes a 1985 divestiture, law that forbid the state from investing in South Africa or in companies doing business there. The legislation passed both houses of the legislature earlier this year.
The proposal was considered in last year's session, but its sponsor, Assemblyman Willie Brown, D-Essex, withdrew his support temporarily to assure himself that prospects, for full black representation in South African government were secure.
New Jersey withdrew about $4 billion in pension fund investments. from companies doing business in South Africa after the 1985 law was passed.
Many other governments lifted restrictions on investing retirement moneys.
A measure signed by Baltimore Mayor Kurt Schmoke on Oct. 21 ended a ban on purchases of South African goods by the city and halted the prohibition against the city's retirement funds from investing in firms that do business with South Africa, according to Roger Nissly, an aide to Schmoke.
In Illinois, Gov. Jim Edgar on Jan. 26 signed legislation that repealed a similar ban on product purchases and investment of retirement funds.
Another Midwestern state, Michigan, lifted a partial ban in October, when Gov. John Engler signed into law measures that repealed prohibitions on state investments in South African companies.
The measures, approved in 1988, prohibited investments by state pension funds and state universities, but did not prevent Michigan from dealing with firms that do business in South Africa.
Numerous other local governments and pension funds have repealed restrictions prohibiting investments in companies with South African ties. The list includes such entities as, the University of Washington Board of Regents, the Seattle Employees' Retirement System, and the Washington State Investment Board.
In New England, two of the region's largest municipal issuers last fall removed their sanctions against companies that do business in South Africa, but attached certain conditions.
Gov. William F. Weld lifted Massachusetts' ban in September in order to provide South Africans with the capital they need to make social changes. Weld said that companies doing business in South Africa will be responsible for upholding workers' rights, including the rights to organize, strike, and implement affirmative action programs.
In Connecticut, state Treasurer Joseph M. Suggs lifted sanctions against 143 companies that did business in South Africa.
Although Suggs repealed the sanctions, he did not overturn an internal state treasury policy that prohibits the holding of securities in companies with South African links whose products are arms or nuclear materials.
"Divestiture has successfully forced dramatic change in the government of South Africa," Suggs said at the time. "Continued progress toward a democratic South African government must now be supported and given every; opportunity to succeed."
