American Telephone & Telegraph Co. has bowed to requests from a small group of employes by agreeing to sever virtually all business ties to South Africa, including phasing out its purchases of minerals, cutting off computer sales, and refusing to provide special long-distance and data transmission services.
As part of a seven-part program that will be announced tomorrow, the company also will terminate a contract with the Olivetti company for the sale and distribution of AT&T products in South Africa, a company official confirmed yesterday.
The AT&T program was described by anti-apartheid activists as among the most significant of a series of steps recently taken by major U.S. corporations to put heat on the South African government and distance themselves from apartheid.
These moves, some taken in response to pressure from U.S. activists, include the recent call by Coca-Cola Inc. for the release of jailed African National Congress (ANC) leader Nelson Mandela and for direct negotiations between the Pretoria government and the outlawed ANC.
"This is a terribly important precedent," said Tim Smith, executive director of the Interfaith Center on Corporate Responsibility, an anti-apartheid group, about the AT&T move. "It's really a full-court press, covering every aspect of their business relationship there. . . . It's going to broaden the debate over disinvestment and put more pressure on a lot of other companies."
Although AT&T has no plants or sales offices in South Africa, Smith and others see the agreement as particularly significant because of the firm's pledge not to offer anything beyond its basic long-distance telephone service in South Africa.
Company officials said this means AT&T will not expand its services to include several that routinely are offered in the international market, including toll-free 800 numbers, videoconferencing and data transmission for businesses.
In addition, the company has promised to stop buying South African platinium and palladium -- two precious metals widely used to manufacture electronic equipment and catalytic converters. Platinum is the largest single U.S. import from South Africa; the only other major supplier is the Soviet Union.
"This is basically a boycott of South Africa," said David Hauck, the chief South Africa researcher for the Investor Research Responsibility Center, a group that monitors U.S. investment in that country. "Not too many companies have done this."
The AT&T program, negotiated with five employes from Bell Labs, is slated to be announced by AT&T Chairman Charles Brown at the firm's annual meeting in San Francisco tomorrow.
AT&T agreed to the steps after the five Bell Labs employes filed a shareholder resolution that called for these and other steps. Barbara Wilson, a Bell Labs physicist and spokeswoman for the group, said the five were "amazed at what they [AT&T] offered" and agreed to drop the shareholder resolution as a result.
But Edward M. Block, AT&T senior vice president for public relations, stressed the company was not seeking publicity over its decision because its direct investment in South Africa is minimal. "We don't want to be seen as grandstanding," Block said. "I don't want AT&T to look sanctimonious or look like we're taking a cheap opportunity to look good."
AT&T bought $5.5 million worth of platinum and palladium in 1985 under two contracts with Impala Platinum Ltd., a South Africa mining company. Both contracts will expire by the end of next year, and Block said they will not be renewed. He said AT&T will not be forced to buy the minerals from the Soviet Union because the company expects to be able to recycle existing supplies.
Block also said ending the South African distribution contract with Olivetti, an Italian company that is 25 percent owned by AT&T, will have little impact. Olivetti, which will continue to distribute AT&T computers in Europe, only recently opened its offices in South Africa and there have been virtually no sales of AT&T products there, he said.
Other elements of the AT&T agreement, according to Block, include terminating all teletype sales to South Africa, pledging that the company will not purchase or sell parts manufactured in South Africa, and offering employes who participate in a company-sponsored savings plan an option of investing only in U.S. companies that do not operate in South Africa.
The AT&T moves come at a time when many U.S. companies with large presences in South Africa have been taking new steps to justify remaining in that country.