Economic Imperatives and Ethical Values in Global Business: The South African Experience and International Codes Today

Christian Century, Jan 17, 2001 by James Armstrong, Bishop

Economic Imperatives and Ethical Values in Global Business: The South African Experience and International Codes Today.

By S. Prakash Sethi and Oliver F. Williams. Kluwer Academic Publishers, 423 pp., $159.00.

APARTHEID IN SOUTH AFRICA was a 20th-century equivalent to the three and a half centuries of slavery in America. This brutal system of racial apartness came to an end during the final decade of the 20th century, when Wilhelm de Klerk, the then president of South Africa, lifted the ban on the African National Congress and more than 30 other organizations, freed Nelson Mandela from prison in 1990 and canceled the Population Registration Act, the cornerstone of apartheid, in 1991.

Just as the U.S. religious community had been rent over the slavery issue in the 19th century, so too was the South African religious community divided over apartheid. The Dutch Reformed Church of South Africa (white) rationalized and justified apartheid as God-ordained. The South African Bishops Conference of the Roman Catholic Church and the South African Council of Churches condemned it.

The international religious community was outraged by South Africa's racist policies and practices. The World Alliance of Reformed Churches suspended white South African Dutch Reformed churches (three separate denominations) from membership. The World Council of Churches, a longtime foe of apartheid, played a significant role in sensitizing and involving its member bodies. In the U.S. the National Council of Churches, the Roman Catholic Church and individual Protestant denominations denounced apartheid and urged concrete actions such as sanctions and disinvestment. The Interfaith Center on Corporate Responsibility (an arm of the NCC, with Catholic participants) was effectively aggressive in confronting and challenging U.S. business interests in South Africa.

Leon Sullivan, a civil rights warrior, Baptist preacher and General Motors board member, came to occupy center stage in the conflict when he authored a "set of six principles ... that called for, among other things, the elimination of all types of discrimination between White and Black workers; the recognition of Black unions; and [the provision of] help for Black communities in areas of education, health care and other support services." On March 1, 1977, Sullivan announced that 12 major U.S. corporations had signed on and agreed to abide by the code of conduct defined by the six principles. By 1982, 146 companies were signatories. By 1993, as pressures mounted and companies withdrew from South Africa, the number of participating companies decreased to 50.

S. Prakash Sethi and Oliver F. Williams's book on the antiapartheid movement and the birth and gradual modification of the Sullivan Principles is a monumental achievement. Sethi and Williams have spent more than 20 years in and out of South Africa, interacting with business leaders, union officials, lawmakers and government functionaries, researching the issues, interviewing the primary actors, consulting with ethicists, and spending endless hours with critics and apologists alike. Sethi is University Distinguished Professor at Baruch College, City University of New York. He is currently adviser to the secretary general of the United Nations on international codes of conduct. Williams has served on the national advisory board to the Sullivan Principles and was a member of the UN's observation mission to South Africa for the historic 1994 elections. He is presently director of the Notre Dame Center for Ethics and Religious Values in Business.

The amplifications of the Sullivan Principles over the years applied increasing pressure on the South African government. The signatories, for the most part, resisted politicization of the principles; e.g., "asking companies to press for the abolition of the laws and regulations that constituted apartheid." They had signed on because of the perceived threat of communism and the mounting pressure of American critics of South Africa's policies. Most of them had become reluctant participants in a program designed to oppose a government that had earlier proven to be a very valuable partner. But following Anglican Bishop Desmond Tutu's formation of his "Tutu Principles" in 1983, emphasizing the political nature of the apartheid struggle and downplaying the relative value of economic issues, Sullivan felt compelled to follow suit.

Sethi and Williams acknowledge the weaknesses and failures of the Sullivan Principles. Explaining the limitations of the program, they suggest that the monitoring system eventually became its "Achilles heel." In part this was due to the inability of Sullivan and his religious advisory group to watchdog the companies effectively. Even more, it was due to the lack of strict and evenhanded oversight by the Arthur D. Little, Inc., consulting firm and its point man, Reid Weeden. The ranking devices were too soft and general. There was a reluctance to pit the companies against one another in matters of implementation and performance.