Repeal Local Divestment Sanctions

AS global reform sweeps into South Africa, South African President F.W. de Klerk, British Prime Minister Margaret Thatcher, and some American supporters of Pretoria have begun calling for the end to economic sanctions. It is too early for President Bush or Congress to lift American economic sanctions against South Africa. But it is time for our states, cities, and universities to start dismantling their hodgepodge of antiapartheid regulations. Unless these restrictions are eliminated, when it is time to respond to real progress in South Africa our foreign policymakers will be hamstrung by the legislatures, city councils, and boards of trustees across the country still pursuing their own South African policies.

More than 100 states, cities, and counties have adopted laws in the last 10 years that restrict investment of government funds in companies doing business with South Africa. At least as many colleges and universities have adopted similar policies. Tens of billions of investment dollars have been affected.

The various laws impose a range of restrictions on investments in or contracts with companies operating in South Africa, from outright bans to standards for black-employee relations (the Sullivan Principles). The financial leverage of the employee pension funds of the state of California or City of New York, or the endowment funds of Georgetown, Harvard, or Ohio State universities provide a powerful disincentive for companies considering a return to South Africa, even if federal law is changed.

There is no parallel in the history of American foreign relations to the widespread response of local governments and institutions to South African apartheid.

In the early '60s some cities attempted to ban the sale of goods manufactured in communist countries. In the 1970s, 13 states adopted laws designed to prevent businesses from participating in the Arab boycott of Israel. Most recently, some states and cities have passed investment restrictions to force US companies operating in Northern Ireland to reform their hiring practices toward Roman Catholics (the MacBride Principles).

None of these issues, though, has struck a chord the way the white South African government's treatment of black South Africans has. There are many reasons for the widespread revulsion and response of local governments. The claim of South Africa to be a Western democracy, the shadow of our own nation's recently abandoned segregation, and the heavy involvement of American business all heightened the sense of injustice and outrage.

These factors make it extremely difficult to remove or reverse such laws and policies. So when the federal government wants to signal to President de Klerk and the African National Congress that they have made progress, and encourage US business to return, the state and local restrictions will still operate as powerful counterweights.

This is the central problem with the involvement of state and local governments in conducting foreign policy. The US ends up with hundreds of foreign policies rather than one. There are three ways to eliminate this problem: through Supreme Court invalidation, congressional action, or individual state and local reversals.

The US Supreme Court has struck down local intrusions into foreign policy decisions on several occasions, emphasizing the need for the nation to speak with one voice on foreign affairs. The court has recently been asked to review a Maryland court decision upholding the Baltimore divestment law, but the changes currently under way in South Africa make it unlikely that the justices will tackle the case this term.

Congress is even less likely to act. The issue of overriding state and local laws created a storm of controversy when the Comprehensive Anti-Apartheid Act was adopted in 1986. Congress could preempt the state and local anti-apartheid investment laws when it considers relaxing federal South African sanctions, but the additional controversy this would generate makes such congressional action unlikely.

This means that the time has come for those who pressed so hard for state and local action on South Africa to begin to eliminate the complicated maze of economic restrictions and disincentives they have created. Taking this step now is not going to unleash a flood of US business into South Africa or convince De Klerk that he has done enough in the way of reform.

But it will return some much needed flexibility to US policy toward South Africa. More important, elimination of these laws will enable that policy to be carried out by President Bush and Congress, as American foreign policy should be carried out.