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M. Msimang, Secretary for Administrtion, ANC: Memorandum to the Chairman of the Special Committee against Apartheid

28 March 1973

Brief on Exposes of British Business in South Africa

On 12 March 1973 the Guardian began a series of articles exposing the extent of British business complicity in the maintenance of the super-exploitative nature of the system of apartheid. Many other British newspapers either followed suit or commented in full agreement with the revelations. This provoked nervous reactions in business circles both in Britain and in racist South Africa.

Plausible as this exercise may be, there is however more to it than meets the eye. Behind this projection of a public image of concern, lurks a shoddy column with vested interests in the present system of oppression and economic exploitation of the Black majority in South Africa. Its objective is "to mobilize the Western presence in South Africa in support of local (liberal) efforts to achieve a peaceful revolution (reformation)" (our emphasis).

In other words, it pretends that the liberalization of investments, accompanied by improvement of the lot of African workers along the lines of the "Polaroid experiment", will eventually corrode apartheid from within. And it overlooks the fact, and conveniently at that, that "the cheap labour system" as our rejoinder in the Guardian of 14 March 1973 points out, is fundamental to the socio-economic system, and to it is bound all those features which illustrate the lack of all African rights in South Africa. To raise African wages... does not guarantee the end of exploitation. In the final analysis, the only solution must be the complete dismantling of the socio-economic structure in South Africa and the return of the country to the (African) people." (our emphasis).

It behoves us to further demonstrate our correct stand on the issue of capital investment and its collaborative role in apartheid. Rather than cry out aloud for total disengagement from apartheid, the articles reproduced hereunder from the British press merely spell out palliatives to salve the conscience of Western businessmen for more and more involvement in South Africa.

British firms tried to suppress pay findings

A confidential study of the wages paid to the African employees of British companies in South Africa has shown that nearly 80 per cent of them were last year being paid below subsistence levels.

The results of the study, conducted by the South African Productivity and Wage Association for the United Kingdom South African Trade Association, were so bad that it vas decided by mutual agreement that they should not be published.

The Productivity and Wage Association`s study of the South African labour market, completed last July, was the most comprehensive ever conducted in South Africa.

It covered more than 1,000 companies of all nationalities who employed between them nearly 200,000 Africans.

After the results were published showing that a vast majority of` Africans were receiving below poverty datum line wages (£10-£11 for a family of five), the Productivity and Wage Association, a South African employers` body, was asked by UKSATA to extract the figures applicable to British companies in the hope that the picture would not be so bleak.

The results, however, were almost identical, as the figures show. Grade One represents unskilled, Grade Seven semi-skilled workers. The vast majority of workers are paid in the lowest unskilled grades.

The weekly wages in the survey - see table - are average minimum rates.

Officials of the Productivity and Wages Association said the results of the survey should be interpreted with caution as it probably gave an unduly favourable picture of wages actually paid by companies. Only 13 per cent of the 1,084 companies surveyed, presumably the best, agreed to co-operate.

British companies All companies surveyed (1,085)

Grade One R 9.68 (£5.53) R 8.95 (£5.11)

Grade Two R11.33 (£6.47) R10.64 (£6.08)

Grade Three R11.95 (£6.82) R11.21 (£6.41)

Grade Four R13.53 (£7.73) R12.34 (£7.05)

Grade Five R14.56 (£8.32) R14.25 (£8.14)

Grade Six R17.26 (£9.86) R16.91 (£9.66)

Grade Seven R16.45 (£9.41) R17.49 (£10)

The wages of apartheid

Not since the early part of the nineteenth century, when the campaign for the abolition of slavery was led by an. influential part of the Establishment, have British businessmen had to face such a moral challenge to their right to profit from black men`s sufferings as they face now over their role in South Africa`s economy.

Revelations last week in the Guardian about the abominably low wages paid to black workers by most of the 512 British firms in South Africa - who have £1,200 million invested in the Republic, producing nearly 10 per cent of Britain`s export trade - add strength to a campaign which has been steadily gaining momentum.

Three years ago a similar campaign was launched in the United States to force American firms either to disengage completely from South Africa or to adopt industrial policies in line with United States practices. So far, only one American company, Polaroid, has said that it would consider withdrawing altogether if it is not allowed to improve conditions for its African workers. So far Polaroid has raised wages, promoted blacks to supervisory posts, introduced training schemes, earmarked a part of its profits to assist African education, and refused to allow its photographic equipment to be used to help the Government`s Pass Laws.

Mobil took its whole board to South Africa to examine its policies on the spot. Another oil company sacked its chief representative for insisting that the company`s policies should follow the lines laid down by the Government. The motor giants - Ford, General Motors and Chrysler - all promised substantial reforms. A United States government official has said that Washington may lay down guidelines for firms dealing with South Africa.

But the American anti-apartheid lobby is now divided between those who insist on total disengagement from South Africa, and those who think United States fires should use their economic power to improve conditions of black workers and help to remove discrimination in industry.

This conflict over strategy is also likely to divide South Africa`s opponents in Britain. Many critics of apartheid believe that the issue of wages and conditions of employment for black workers - though deeply important - is only part of a much wider problem.

For more than two decades international pressure on South Africa to abandon or mitigate the harshness of apartheid has achieved virtually nothing. This has persuaded many activists that the only possible solution is force, either by external intervention or internal revolution. Others - more conscious of the power of the South African Government, less hopeful of external intervention, and fearful of bloodshed for the blacks have looked for alternatives.

They seek to mobilize the Western presence in South Africa in support of local efforts to achieve a peaceful revolution. This is an unattractive course for those who are impatient for an immediate end to the present situation but, so the argument goes, it is the only. practicable and humane approach. The problem may be simply stated: how is this peaceful revolution to be achieved, given a powerful, confident and intransigent regime? The solution is more complex.

In the past, South Africa has proved a magnet for foreign investors because it offers a higher return on capital than almost any other country. These golden returns have always depended on industrial peace and political stability. In recent years both factors have begun to look less permanent.

Because of the rigid application of racial policies in a period of massive economic expansion, South African industry has begun to suffer. from a serious shortage of suitably trained labour, despite the existence of over 1,250,000 black unemployed. Moreover, the 80 per cent of the working force that is black is prohibited by law from doing skilled jobs. This has faced the Government with a dilemma: whether to slow up industrial expansion, or to open the doors of industry to more skilled black workers. To adopt the second course would, in the long run, seriously undermine the economic basis of apartheid.

Industrialists, both Afrikaner and English, have been pressing the Government to abandon its rigid stance. Some reluctant concessions have been made; but the Govennment, backed by a section of white trade unions, has resisted the economic imperative to use its black labour fully. Economics and politics have collided, producing serous internal strains. At the same time, the black workers have become more militant.

Caught between these twin pressures - industrialists demanding a greater use of black labour and black labour demanding more pay and better jobs - the Government has been unable to make up its mind. The unpalatable choice is between diluting apartheid or facing a slow-down in economic growth and a possibly violent black industrial revolt.

South African political leaders, businessmen and newspapers speak with increasing urgency about what the Financial Mail in Johannesburg has described as "a rising tide of black grief and unemployment in town and country (which) is the greatest threat imaginable to the white man". It was echoing a statement by the Prime Minister, Mr. Vorster, that "the greatest threat confronting South Africa is not so much the threat from outside her borders, serious though that may be, but mass unemployment and disturbed race relations".

Yet he sacked his Minister of the Interior, Dr. Theo Gerdener, when he warned that the country`s priority was to reduce the wage gap between white and black, otherwise neighbourliness would turn into "enmity which could lead to murder and violence".

An equally solemn warning was given a few months ago by Mr. W. B. Wilson, deputy chairman of Mr. Harry Oppenheimer`s Anglo-American Corporation: "Our assessment of the labour situation is that our attitudes and practices towards black employees require a major overhaul: that this is a potential trouble-spot and that there are trends that call for a change in direction."

South Africa`s 3,800,000 whites will never be able to say they weren`t warned. There is unmistakable evidence now that turbulence is growing among the 19 million non-whites. Predicting trouble in any country is unreliable, but there have bean just too many explosive puffs lately in South Africa for the signs to be misread.

If the police had not learnt a lesson at Sharpeville 13 years ago, no one can say what the industrial scene might have looked like by now. This time the police, as one officer put it, allowed the strikes to "play themselves out". The trouble is that the strikes are beginning, very slowly, to spread to Johannesburg, where almost one million blacks are congregated in the vast, sprawling township of Soweto.

It was in Johannesburg last week that the Zulu leader, Chief Buthelezi, warned of "bloody revolution". He has never spoken quite so aggressively before. This is a signal every white man should be reading; the way Chief Buthelezi is stepping up the pace of verbal confrontation, and how he is winning the support of other Bantustan leaders.

An Afrikaner, Professor D. P. Erasmus, of Potchefstroom University, spoke of the 5 million Africans in the metropolitan areas "constituting a large complex of slumbering discontent".

In fact, there have been so many warnings by whites, blacks and Coloureds that they have become repetitious. But what is being done?

British businessmen say they can`t do much to alter the system on their own. If any firm with a conscience wishes to pay its black workers more, they say, it will price itself out of the market unless others are made to do the same. They say they want to train their black labour, but come up against at least five laws which restrict their freedom to do so. This is only partly true.

The scandalous conditions of African, Asian and Coloured workers are one of the least controversial of all the vexatious issues raised by apartheid. The basic facts are not in dispute. Even the Government accepts that an average African family requires £35 a month to live above the poverty datum line, which provides for only the bare essentials.

In Soweto, 70 per cent of all African households live below the poverty line. Only 30 per cent of urban black families earn more than about £30 a month, which is still well below the poverty line, while 14 per cent of them earn less than £10 a month. Only 13 per cent earn more than £50 a month. The situation is similar in all other areas.

When rural incomes are included, the national average income for Africans is £18 a month. This compares with £299 a month for whites, £78 for Indians and £47 for Coloureds. Nearly 15 per cent of the total African population (1,250,000) are unemployed; the official projection is four million unemployed. by 1980.

The social consequences are reflected in the incidence of disease among Africans. The mortality rate for infants among black urban dwellers is 122 per 1,000 compared with 31 per 1,000 for whites. In the Transkei, disease kills 40 per cent of all children before they reach the age of 10. South Africa, one of the world`s richest countries, is one of the few countries where the incidence of tuberculosis is rising.

This is the "tide of black grief" which is causing so much concern to South Africans. But, so far from conditions getting better, they are steadily getting worse.

Under the pressure of strikes and growing public disquiet, substantial wage increases have been granted in the last two years. But steep living costs and the initial low level of wages mean that the position of all black workers, except a tiny percentage of the better-paid, is worse now than ever before. A Cape Town professor, Dr. Francio Wilson, recently demonstrated that the real wages of the country`s black miners are no higher today than they were in 1911.

Meanwhile, the gap between the wage levels of whites and blacks has grown steadily, as the white workers cream off the lion`s share of the Republic`s prosperity.

These facts bear out the charge that British firms participate in a harshly discriminatory system. Yet, even if they do increase wages to the poverty datum line - which will require a minimal doubling of all black wages across the board - this will only relieve the immediate economic hardship of urban workers. It won`t make a fundamental difference to apartheid.

South Africa`s Achilles heel is her economic dependence on foreign investment and overseas markets. More than half this investment is British, with substantial amounts from the United States, Western Europe and Japan. When African delegates at the United Nations accuse these Governments of hypocrisy in simultaneously condemning apartheid and condoning - and in some cases actively encouraging - national investment in South Africa, they make a valid point.

How could "the economic lever" be used to erode, and then destroy, apartheid? Four principal alternatives present themselves.

The first is that foreign firms should continue to invest heavily, but should insist on conditions of employment for Africans which the South African Government would have to accept.

Then there is the argument, most articulately expressed in Britain by Mr. Neil Wates, the builder, that there should be no more new investment in South Africa while present apartheid policies are maintained. This voluntary embargo would, again, have to be widespread to have any real impact, and does not touch the question of increased operations by firms already there.

Another argument, generally associated with Mr. Harry Oppenheimer, is that the rate of growth of the South African economy should be accelerated by more foreign investment, thereby creating a labour demand which would compel firms to train, pay, and look after black employees in vastly better conditions than at present. This argument is viewed with scepticism by observers who note the remarkable growth rate of the South African economy over the past two decades and the absence of any significant improvement - to put it mildly - in the wages and conditions of black workers. Then there is the call for full and complete disengagement, which is usually put forward vehemently. But how is this to be achieved, and if it were achieved, what would be the consequences? Is there any guarantee that the withdrawal of British, American and West European investment would not be immediately replaced by eager investors from other areas? Would not such a development, in effect, throw away the West`s "economic lever"? To these crucial questions no sensible answers have been provided.

Here are four possible alternatives, but we lack the firm evidence on which to reach a decision as to which one is likely to be the most effective way to destroy apartheid. The real facts of the situation are hardly known at all. Many foreign firms operating in South Africa hide behind the argument that they are necessarily bound by South African laws, but until recently no detailed study of these laws has been attempted. Research in this field is extremely difficult. Not surprisingly, the South African authorities are thoroughly alarmed at the possibilities of such research, and their apprehension will now have been greatly increased.

The work, however, is in hand. It is being undertaken by an international consortium of British, American, Swedish, and West German universities, with the active involvement of the Africa Publications Trust in London. The leading British sponsor is the Institute for the Study of International Organisation of the University of Sussex. Its purpose is to conduct objective research on the facts; to publish them; and to provide a solid basis for decisions by Governments, firms, and politicians on the most practicable course to be followed. It is exactly the kind of project which arouses the fevered contempt of militants on the one hand and the suspicions of firms on the other, but it perseveres in its difficult task, convinced that when the full facts are known the impact on public opinion will be even greater than last week`s revelations.

Investment and the ANC Stand

Pre-empting that cautious but deceitful move to create more favourable conditions for increased international capital flow into South Africa, the African National Congress of South Africa addressed a communication to the Secretary-General of the United Nations on 7 March 1973, drawing his attention to the setting up in London of a "Study Project of External Investment in South Africa" by a group of international sponsors which, quite apart from the brilliant exposures in the articles above, is being canvassed..

The concessions for higher wages extracted by the black workers from their employers are no substitute for the dismantling of the apartheid edifice. At best, they are the harbinger of the seizure of power by the oppressed majority. Equally, "complete disengagement" from South Africa is not in itself an end but a desirable step in the creation of favourable conditions for the final liquidation of apartheid. For the oppressed and fighting people of South Africa it means a little more sacrifice. To the overseas investors with a conscience, if at all, it means an unqualified rejection of bloodstained super-profits reaped from the obnoxious system of apartheid. Yet the mere mention of "complete disengagement" vexes the minds of the British, American and West European investors because of the ever-present fear that they may be replaced "by investors from other areas". If previous attempts have not proved effective in this direction, it is because of the reluctance of the imperialist countries to implement United Nations resolutions on sanctions against racist South Africa.

It will be recalled that similar dishonest considerations moved the representatives of the American military-industrial complex in 1971 to perpetrate flagrant violations of the United Nations Security Council resolutions on sanctions against Rhodesia. Through a legislative stratagem, the importation into the United States of "strategic and critical commodities" from Rhodesia was made possible. Rather than import these from other areas, the long-term American profit motive superseded all else. By relieving the illegal Rhodesian regime from international pressure, the United States of America was underwriting her lucrative profits in South Africa at the expense of principles and the aspirations of the people of Zimbabwe.

In the letter referred to hereinabove, the African National Congress of South Africa made the following valid points: "We believe it to be a well-known fact, supported by copious research and documentation, that South Africa`s economic growth and the present size and nature of its economy are substantially the result of the high rates of foreign investment in South Africa over the past 80 years or more. Furthermore, we believe it to be a fact that the flow of investment funds, the political super-structures of white racism and apartheid and the high rates of profits earned by foreign capital in South Africa, all stand in a relationship of mutual dependence on each other. The apartheid system ensures high profits through the massive repression and exploitation of the African majority; the inflow of foreign capital serves to bolster the security of the South African regime and so sanction the apartheid system. Hence in our opinion, any study of the role of foreign capital in South Africa which does not rest on the political understanding and on a grasp of these political facts will either be of little real value or will serve those who wish to perpetuate the present situation, e.g. the Polaroid Experiment. In our view, the aims and objects of the Project fail to take these facts into account and hence we must have grave reservations about its value and purpose.

"Secondly, the United Nations in response to petitions and vehement protests from the ruthlessly oppressed black people of South Africa, through the African National Congress, has taken a number of important resolutions calling for an embargo on the flow of foreign capital to South Africa and Namibia. Those resolutions are based on extensive studies published by the Special Committee on Apartheid and other agencies of the United nations. These studies conclusively show that the South African apartheid system and the continued South African illegal occupation of Namibia crucially depend on the support of international capital and its continued flow into South Africa and Namibia. The Project ignores these resolutions and studies and, above all, callously negates the call of the oppressed people for a total international boycott - economic, political, cultural, etc. - of South Africa. Therefore, we fear that any re-opening of the question as the Project attempts to do can only serve to undermine the credibility and force of the policy of the United Nations.

"Finally, the African National Congress of South Africa as the premier liberation movement of the African people of South Africa have not been consulted by the sponsors of the Project. Had we been so consulted when the Project was first mooted, we would have certainly urged the sponsors to clearly define. the political frame of reference of the Project in the terms given... and next, that any research being undertaken should be directed towards strengthening the policies of the United Nations and the international campaign for the ending of foreign investment in South Africa and Namibia."

The world should therefore understand that the current strikes by the black workers are not a new phenomenon in South Africa`s political scene. Rather, they are part of the revival of political activity among the masses after a period of the most vile and barbaric repression and the suppression of all legal forms of political expression. They underline an unfolding political crisis in the country in which the African people are in a state of revolt both in the urban areas and in the countryside. A crisis which is fast revealing the inability of Vorster and his ruling class cohorts to rule our people with reckless and contemptible abandon.

Throughout the country, the rural population is resisting government orders to leave their lands. The students, churches, professionals and other such groups are asserting their national pride and human dignity. Even the chiefs, who all along have been reputed for their docility to the racist regime, are becoming more articulate in voicing their protests reflecting, in the process, the pressure of the masses from below.

For years, the African National Congress has been making the same demands and is still irrevocably committed to their achievement. From experience, however, it recognizes that demands must be fought for and won in the context of the fundamental struggle for the transfer of political power to the African majority.

AMANDLA - MAATLA!

POWER TO THE PEOPLE!