Ninety-six U.S. companies have pulled out of South Africa since last year, but nearly half have maintained indirect ties that permit their products to continue to be manufactured and sold in that country, according to a new study by a private research group.
As a result of these indirect ties -- such as licensing and distribution agreements -- the wave of U.S. disinvestment from South Africa in recent years has had little effect on that country's economy, one of the group's researchers said.
"The impact on South Africa of disinvestment by so many U.S. firms has been extremely small, at least in part because of the retention of licensing and other agreements," said David Hauck, a senior analyst with the Investor Responsibility Research Center, which is based in Washington. "The South African economy still has unrestricted access to U.S. products and to much of the U.S. technology it needs."
What this means, in a practical sense, is that products such as Coca-Cola soft drinks, IBM computers, General Motors cars, Xerox copying machines and CBS records still are being sold and distributed in South Africa, even though the parent U.S. companies have severed their direct investment links, the study says.
The study is the first to document what many analysts have predicted will become an evolving and more subtle phase in U.S. corporate relations with South Africa, a nation that is becoming increasingly ostracized for its policy of white supremacy, known as apartheid. A company-by-company breakdown in the report shows that, of the 96 companies which sold their South African subsidiaries last year, 45 later signed licensing and distribution agreements with the new South African owners. The agreements permit the companies' brand-name products to continue to be sold, usually with parts or components supplied from the U.S. firms' other overseas subsidiaries.
These agreements generally call for the U.S. firms to receive royalties, calculated as a percentage of annual sales, permitting South African revenue to continue flowing into U.S. corporate coffers.
In at least one case -- General Motors Corp. -- the study indicates that the company's disinvestment appears to have permitted the sales of products to the South African military, which otherwise would be prohibited. The sanctions legislation that Congress passed last year forbids U.S. companies operating in South Africa to sell products to the South African military or police.
But this restriction does not apply to the new South African owners of the GM plant. The study says these owners, the former local managers, have indicated they will resume sales of GM cars to the South African military, using parts and technology supplied by GM from Europe.
The IRRC study found that, over the past two years, as antiapartheid pressure in the United States has mounted, the overall pace of U.S. disinvestment from South Africa has quickened. Since Jan. 1, 1985, 135 U.S. companies have sold off their South African subsidiaries, including 50 last year and 46 in 1987. That leaves 167 U.S. firms that still have direct investment or employes in South Africa, including 14 that have said they plan to leave but have not.
Of the U.S. firms that have direct investments in South Africa, the five largest in terms of number of South African employes are: Mobil Corp., 3,106; Goodyear Tire & Rubber Co., 2,474; USG Corp., 2,239; RJR Nabisco Inc., 2,202; and Caltex Petroleum Corp., 2,140