ACSR Calls Upon Harvard to Divest

In its strongest statement ever, the Advisory Committee on Shareholder Responsibility (ACSR) yesterday issued a comprehensive 35-page report calling for sweeping changes in Harvard's investment policy toward companies that do business in South Africa.

By a plurality of six to five, with one abstention, the 12 member committee recommended for the first time in its 12-year history that Harvard unconditionally divest its holdings in companies that operate in the white-ruled state.

In a second, more general part of the report the committee called by a vote of 11 to none, with one abstention--for broad changes in the way Harvard handles its over all policy on investments in the apartheid state.

All four student representatives to the student-faculty alumni ACSR--Claude D Convisser '85, Jack Dunlevy, a Kennedy School student, Edward J. Hoff, a Business School student, and Thomas Mackall, a student at the Divinity School--voted for the divestiture recommendation according to the report.

Three of the four administration representatives voted against the measure. One administration official abstained and the four alumni representatives split evenly.

Corporation representatives said yesterday the University's governing body is unlikely to accept the recommendation for divestiture but will probably be more receptive to other reforms proposed in the report.

The meticulously argued report, which is the ACSR's most thoroughly researched statement since 1978, offers its strongest critique yet of Harvard's stated policy of "intensive dialogue" with companies in the University portfolio.

Should its call for divestiture be ignored, the ACSR recommended that the current policy be "expanded and strengthened."

The report, coming a year after President Bok reaffirmed Harvard's commitment to continued investment combined with pressure on companies to improve workplace conditions for non-whites, runs counter to many of Bok's arguments.

"The minimum standards of ethically responsible behavior adopted by Harvard six years ago must be reassessed and modified in light of subsequent experience," the section of the report approved by 11 committee members states.

Specifically, the ACSR proposed that Harvard:

*In cooperation with other universities strengthen the so-called Sullivan Principles, a set of minimum fair labor standards for companies operating in South Africa.

*Require that corporations it holds stock in adopt the so-called Tutu Principles as a prerequisite for continued University investment, and institute a specific time-limit for compliance with those principles.

The principles call for direct corporate involvment in the South African political process to oppose influx control laws, the legal underpinning of the South African system of apartheid Companies that endorse the Tutu Principles also must agree to invest massively in education programs for non-white citizens of South Africa, permit unionization of Black workers, and a number of similar measures.

*In conjunction with other universities "develop information" on the direct involvement in asparteid of U.S firms.

*Develop specific principles defining the types of direct support for apartheid that should be eliminated in any company Harvard invests in.

*Support initiatives in the U.S. government to end aparteid "to the extent consistent with its role as an independent university."

*Prepare and distribute an annual report to the Harvard community providing detailed information on companies in the Harvard portfolio that operate in South Africa and how each comply with the Sullivan and Tutu Principles.

*Direct the Harvard Management Company, the organization that handles day-to-day management of the University's endowment, to report each year on its acquisition of South African-related companies to the Corporation Committee for Shareholder Responsibility (CCSR) and ACSR.

Under current policy, Harvard will divest from companies operating in South Africa only if they refuse to adopt the Sullivan Principles or simliar policies, if persistent efforts to persuade them to adopt the principles have failed, and if there is no hope for improvement in work-place conditions.

The Advisory Committee presented a draft copy of the report to the University's governing Corporation Monday at a joint meeting with the CCSR, spokesmen for both organizations said yesterday.

The ACSR is a committee of students, faculty, and alumni that advises the Corporation on ethical issues relating to management of Harvard's $2 billion endowment.

The CCSR is a subgroup of the nine-man Corporation that receives ACSR recommendations. The Corporation has final authority on all University investments.

"Anything less than total divestment denies the fundamental truth, that it is impossible to invest in South Africa without investing in Apartheid," said a statement released last night by the Southern Africa Solidarity Committee, a student divestiture group.

Claude Convisser '85, the undergraduate representative to the ACSR said he abstained on the less forceful part of the report "because I felt it would dilute my vote for divestiture."

Other Action

In other investment-policy action this week the CCSR accepted an ACSR recommendation on proxy resolutions calling for studies of the involvement of corporations with the production of military equipment.

In general, the advisory committee recommended that the Corporation approve such resolutions only if:

*The study had no presumed outcome.

*A similar study had not been done for the company before.

*Such a study could be done without placing an undue financial burden on the company.

*A substantial part of the corporation's business was in defense contracting.

The Corporation used the newly adopted policy to reject an ACSR recommendation that it approve a proxy resolution calling for a report on the involvement of Eastman Kodak Company in space weaponry research.

Kodak does less than four percent of its business in defense-related work and consequently did not warrant such a study under the ACSR's fourth criteria, Blumenfeld said.

"It is highly unlikely that the Corporation will adopt a proposal for blanket divestment," said CCSR spokesman Michael Blumenfeld. But, Blumenfeld added, "I expect that their recommendations [on acceptable corporate behavior] will be evaluated carefully," Blumenfeld added.

The Corporation will respond to the recommendations "as soon as possible," Blumenfeld said. Earlier, the spokesman predicted that a reply would come "within a matter of works." The CCSR and ACSR have one more joint meeting before Commencement.

"When the CCSR looks at ACSR recommendations it looks at the degree of unanimity as well as the recommendation," said an informed source with close ties to the Corporation, who asked not to be identified.

Student activists contacted yesterday generally applauded the committee's vote on divestiture but atacked the recommendations on investment policy as obfuscatory.

"Divestiture is the issue and the only issue that should be considered," said President of the Harvard African Students Association Funmi Arewa '85. "You have to look at the significance of American capital in South Africa and the involvement of the U.S. in providing strateigic computers, army trucks and similar material. Workplace reform really doesn't address that," Arewa added