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Next Step : Americans Keep Up the Heat on S. Africa : Striving to be on the 'right side,' U.S. firms jump belatedly on the sanctions bandwagon.

June 04, 1991|SCOTT KRAFT | TIMES STAFF WRITER

JOHANNESBURG, South Africa — As recently as a few months ago, the American makers of Nike running shoes had a lock on the South African market. They sponsored the country's top runners and were selling 150,000 pairs of shoes a year, at $80 to $200 a pop.

The only trouble: the company pulled out of South Africa three long years ago.

When the Beaverton, Ore., firm discovered that its shoes were still pounding the pavements here, it put its foot down. Hard.

"Somehow, the word got back to them," admitted a contrite representative of Ajay-Sports, the local Nike distributor. "They sat us down and told us to stop selling their shoes down here. We were frankly surprised it took that long for them to find out."

The Nike crackdown reflects a new, growing trend that has mystified many South Africans: Just as sanctions imposed by Europe and other African countries have begun to crumble, growing numbers of American firms are pulling out, and American products are vanishing from the shelves.

One explanation is that American businesses want to be seen as standing on the politically correct side of sanctions on the day they are lifted. After all, most people figure that the leader of the sanctions drive, Nelson Mandela's African National Congress, soon will wield a lot of power in South Africa.

But another reason is that American sanctions, already the most stringent of all worldwide measures against Pretoria, actually are getting tougher.

President Bush is expected to lift most U.S. sanctions when South Africa formally removes the legal pillars of apartheid--the laws that have segregated neighborhoods, restricted black ownership of land and classified all South Africans by race. The South African Parliament is expected to take those steps this month, and Congress is considered unlikely to override Bush on lifting of the sanctions.

But even if Bush succeeds, American businesses won't come rushing back to South Africa. Those congressional sanctions have been dwarfed by an array of even more potent weapons--laws passed by Los Angeles and dozens of other cities, counties and states to stop letting contracts to firms that do business in South Africa.

The laws, many adopted in the past year, have forced large American companies to choose between lucrative local contracts and their business interests in South Africa. And most of those sanctions will remain until the ANC and other black liberation groups inside South Africa give the thumbs-up sign.

"Most cities and states are not going to move until the 'democratic movement' inside South Africa tells them to," said Richard Knight of the Africa Fund, an anti-apartheid group based in New York. "We're not talking about another 20 years, but the timing of all these things is important."

Are times right now? The government and the South African business community certainly think so. And some world leaders agree. Eleven of the 12 members of the European Community recently voted to lift the EC's ban on imports of iron, steel and gold coins from South Africa. But the move was blocked by Denmark.

Even Archbishop Desmond Tutu, whose pro-sanctions stance has long angered white South Africans, recently urged anti-apartheid groups to consider lifting sanctions to help ease black unemployment, now estimated at 45%.

But the ANC and anti-apartheid organizations in the United States and Europe do not agree. They want the pressure maintained because they doubt that the white-led government is ready to turn over power to a government elected by the majority in a country where blacks account for 80% of the 35 million population.

"Yes, there have been changes (in South Africa)," Thabo Mbeki, the ANC's international affairs director, recently told the left-wing weekly New Nation. "But they are not changes which merit a termination or cessation of international pressure."

Even if the ANC changes its mind, no one knows for sure whether investors will come rushing back to South Africa. Many American firms have sent teams to South Africa to investigate, but the black factional fighting that has claimed 1,500 lives in the past year and the already rocky road to black-white power-sharing has them worried.

"As we all know," South African Foreign Minister Roelof F. (Pik) Botha said recently, "investors do not easily invest in a situation where people are killing each other on such a scale in this bloodthirsty manner."

Wayne Mitchell, executive director of the American Chamber of Commerce in Johannesburg, has fielded many inquiries lately from South Africans interested in doing business with American firms. But only a few American companies appear to be exploring the new terrain, and they are doing so secretly.

"You can do away with every bit of sanctions legislation, but unless there is political stability, it will be difficult to attract investors here," Mitchell said.

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