The most effective way to pressure South Africa to end apartheid is a campaign of "selective disinvestment" aimed at forcing key strategic American and international firms to pull out, the head of South Africa's largest black labor federation told an AFL-CIO conference here yesterday.

"It was after a long and agonizing debate that CUSA agreed to pursue this campaign of selective disinvestment," said Phirosaw Camay, head of the 250,000-member Council of Unions of South Africa. Camay was among 11 labor leaders freed from detention in a South African prison Dec. 8 after five weeks of widespread international protests.

Heated debate over the disinvestment issue, here and in South Africa, revolves around fears that a full-scale pullout of foreign firms would hurt black workers who would be left without jobs, and that the departure of those firms would eliminate the chance that they could exert pressure to liberalize South African policies.

Camay asked that American and international labor organizations help target companies dealing in military, nuclear and high-technology products that are crucial to "propping up" the white minority government.

"Total disinvestment was not going to work in South Africa," Camay said. "We decided that those agencies and companies which were particularly propping up the apartheid regime, either through computer technology, through defense technology and another other technology that assists South Africa . . . we decided to target those specific companies." He said the targets have not yet been named.

The remarks by Camay came in the opening session of a three-day strategy conference on labor in South Africa, cosponsored by the A. Philip Randolph Educational Fund and the AFL-CIO's African-American Labor Center. Camay is among 10 South African union officials attending the conference.

AFL-CIO president Lane Kirkland, noting that "neither fiery rhetoric nor toothless diplomacy have so far brought results," said the labor federation was firmly committed to aiding South African unions, which he said can be the most effective means of promoting equality. He said the Africans themselves should determine how Americans can best assist. The AFL-CIO has previously advocated a series of pressure tactics against South Africa, ranging from selective bans on imports to a full boycott, complete disinvestment and severance of diplomatic ties.

Kirkland also called on the International Labor Organization to set up a commission to investigate "the appalling conditions of black labor," similar to past ILO inquiries on workers in Poland and Chile. He said the agency should particularly police the performance of foreign firms in abusing workers' rights.

Camay noted that unions within his country are divided on strategy, with some advocating total disinvestment, some opposing it, and others saying it should be aimed only at firms abusing workers.

Roughly 300 American firms do business in South Africa and total U.S. private investment is estimated at more than $2 billion. More than a dozen American cities and five state governments have enacted various disinvestment laws, generally withdrawing public funds from companies doing business in South Africa.

The selective disinvestment effort will likely be supported by the 83-million member International Confederation of Free Trade Unions, said John Vanderveken of Belgium, general secretary of the labor organization, which includes the AFL-CIO. "A stage-by-stage approach in strategic sectors would have more impact than to attempt an all-out embargo," he said.

Meanwhile, demonstrations continued for the eighth week at the South African Embassy yesterday with the arrest of three public officials, Rep. Patricia Schroeder (D-Colo.), Mayor Robert Blackwell of Highland Park, Mich., and state Sen. David Holmes, also of Michigan.

Camay, who was freed from preventive detention during a period of intense protest, said at the conference, "I want to express my humble appreciation for the actions taken by civil rights groups, and other groups and individuals in the United States to obtain the release of those of us detained . . . . We owe you our sincere obligation. Your spotlighting our detention helped obtain our release."