More than 130 U.S. companies operating in South Africa launched an American Chamber of Commerce tonight with a view to fostering trade and commerce between the two countries. The move coincides with a Carter administration review of commercial relations with South Africa and followed an announcement by a major U.S. firm that it was withdrawing from the market here.
While the formation of a chamber of commerce has been discussed among American companies here for several years, its organization now, can be seen as a response to fears of increased pressures on business from both the American and South African governments, as the countries clash over the racial policies of the ruling National Party.
Yesterday, the Poloroid comany announced an immediate end to its dealings in South Africa.
The chamber hopes to get across in Washington "a more balanced view of what American business is doing in South Africa," said John L. Caldwell, manager of the U.S. Chamber of Commerce's international division in Washington.
Spokesmen for the organization say that opening a chamber office here does not signal approval or tolerance of South Africa's racial policies.
"This is a group of firms that are already here," said Clifford E. Lyddon, chairman and managing director of Esso Standard S.A. Ltd. and a member of the new governing council of the Chamber of Commerce. "If there is any tolerance or approval for government policies, it would be on the part of individual firms that are here," and not on the part of the Chamber of Commerce itself.
The Carter administration recently recalled the commercial attache from the U.S. Consulate in Johannesburg for a review of commercial relations with South Africa as part of its bilateral moves to show disapproval of this country's crackdown on dissent last month. Proponents of harsher measures have suggested that the administration should move to cancel double taxation agreements in which firms are not taxed in both the U.S. and South Africa and to actively discourage new U.S. investment here.
Caldwell, who is in Johannesburg for the inauguration of the new Chamber of Commerce office, said that he had spoken to administration officials shortly before he left and, "I received no indication that the administration is opposed to American business in South Africa or to the formation of this organization."
International pressure on South Africa to change its racial policies and the world-wide recession have caused the government here to tighten up somewhat on import licenses and foreign exchange regulations in the past two years. About two weeks ago, the government also notified businesses that it had reactivated World War II powers under which it can require firms to manufacture and sell to the government certain items it may consider strategically important. The measure is meant to be implemented if the government begins to feel a squeeze on essential items as the result of any future trade sanctions.
Lyddon did not rule out that the Chamber of Commerce would formulate a code of employment practices for its members, but he said that "would come later."
There are between 300 and 350 U.S. companies operating in South Africa. According to the privately funded, Washington based, Investors' Responsibility Research Corporation. These companies employ about 100,000 South Africans, of which 70 per cent are black.
These firms have a total direct investment of $1.6 billion, but this represents only 1.2 per cent of all U.S. Investment overseas. Only a few American companies, according to the research council, report that their South African subsidiaries represent more than 1 per cent of the company's total assets or sales.
Meanwhile, Helmut Hirsch, managing Director of Polaroid's distributorship in South Africa, said today he was shocked by the company's decision to stop its sales inside South Africa.
"We feel that their decision of withdrawing from South Africa is neither in their own interest, nor even possibly in the interest, of those that they intended it to be," he said.
He added that he understood why they made the decision, "being under considerable pressure to which they are very sensitive."
Hirsch will fly to the United States this weekend to consult with Polaroid in an attempt to get them to reconsider their action, he said. The distributorship, Frank and Hirsch, has been selling Polaroid merchandise in South Africa for 18 years. The company is a totally South African-owned firm that has been in existence for 42 years.
Hirsch said Polaroid's decision to withdraw was due to its belief that his distributorship had violated a gentlemen's agreement that it would not sell Polaroid equipment directly to the South African government. Hirsch said his company had stuck to the "spirit and substance" of that agreement and that any violation that might have occurred had happened without his knowledge.
[According to the Boston Globe South Africa's Bantu affairs department was using Polaroid film for photographs taken for the internal passport all Africans must carry.]