IHEID AND IMPERIALISM: I

IHEID AND IMPERIALISM: IU.S. Corporate Involvement In South Africa,i~c 1 ),j WSE iblished in cooperation with the 4ERICAN COMMITTEE ONAFRICA and the AFRICA FUNDVOL. 17, NO. 5PTEMBER-OCTOBER 1970PRICE *$t5

AFRlrSEPTEMBER-OCTOBER, 1970VOL. 17, NO. 5TABLE OF CONTENTSApartheid and ImperialismA Study of U. S. Corporate Involvement in South AfricaSouth Africa's Economic Framework Labor in South Africa South Africa Has aFriend on Wall Street Oiling the Apartheid Machine Not All That Glitters Is GoldOur Man - Still in AfricaSouth Africa's Gold Industry Major Contributors to Apartheid The RubberIndustry ConclusionThis issue has been prepared by The American Corn titteeon Africa, 164 MadisonAve., New York, N. Y.About the Cover. .... and this IssueAll of the photographs reprinted on the cover were taken in 1970 inside SouthAfrica. This portrait of apartheid, imperialism and U. S. corporate presence isalmost worth more than a thousand words.8 In opposition to this alliance are the wordsand actions of South Africans such as African 15 National Congress leader,Nelson Mandela. Be17 fore his imprisonment on Robben Island,.Mandelatravelled widely. In 1962 he spoke before 21 the Pan African FreedomMovement of East andCentral Africa Conference in Addis Ababa. His 26 words hold true today.South Africa is now a land ruled by the gun. The Government is increasing thesize of its army, of the navy, of its air force, and the police .... Armament factoriesare being set up in Johannesburg and other cities. Officers of the South Africanarmy have visited Algeria (then French controlled) and Angola where 1they werebriefed exclusively on methods of suppressing popular struggles. Allopportunities for peaceful agitation and(Continued on page 4)

EDITORS: George W. Shepherd, Jr., Tilden LeMelle, Ezekiel Mphahlele, Univ.of Denver Book Review Editor: W. A. E. Skurnik, Univ. of Colorado ManagingEditor: Shirley ShepherdEditorial Contributors Board:Robert Browne-Black Economic Research Council Fred Burke- SUNY at BuffaloKenneth Carstens- National Council of Churches Leo Cefkin- Colorado StateUniv. Stanley Diamond- New School for Soc. Research William H. Friedland-UCSC Collin Gonze - UAW George Houser - American Committee on AfricaBetsy Landis - U. N.John Marcum-Univ. of Denver Robert I. Rotberg - MIT Donald Rothchild - UC atDavis James Scarritt - Univ. of Colorado Richard L. Sklar- UCLA RichardStevens - Lincoln Univ. Sheldon Weeks - Harvard Univ. Peter Weiss - AmericanCommittee on Africa Immanuel Wallerstein - Columbia Univ.The opinions expressed in AFRICA TODAY are not necessarily those of theGraduate School of International Studies or of the Center on International RaceRelations.Published bi-monthly by Africa Today Associates In association with the Centeron International Race Relations, University of Denver, University Park Campus.Denver, Colorado 80210.Founded by: The American Committee on Africa. Subscriptions: one year, $6.50;two years, $12.50; three years, $18.00 Students: one year, $4.50. Foreign (exceptCanada and Pan America) add $2.00 per year. Sterling zone checks accepted.Advertising: Rates on requesL Change of Address: Notify four weeks in advanceadvising old and new address. Unsolicited manuscripts will not be returned unlessrequested and accompanied by a stamped, self-addressed envelope.@1970, Africa Today Associates, c/o Graduate School of Inter national Studies,University of Denver, University Park Campus, Denver, Colorado 80210.

Apartheid and Imperialism-A Study of U.S. CorporateInvolvement in South AfricaBy Blyden B. JacksonFOREWORDThe increased awareness on the part of Blacks, students, churches, trade unionsand others that U. S. investors play an exploitive role in the Third World hascreated a demand for current information and statistics to be used in determininggroup strategies for action. The American Committee on Africa has thereforeundertaken a re-examination of the extent and role of U. S. economic involvementin the Republic of South Africa as a follow-up to similar reports published in1964 and 1966 as special issues of Africa Today.More than 375* U. S. companies now have investments in South Africa. Certainof them are more important than others, because of their contribution to areascritical in the development of South Africa's highly industrialized, selfsufficienteconomy. This study will document and analyze the key U. S. corporations ineach of these areas including: (motors) General Motors, Ford, Chrysler, Kaiser

Jeep; (rubber) Firestone, Goodyear Tire and Rubber; (mining) Union Carbide, U.S. Steel, Charles Engelhard; (finance) Chase Manhattan Bank, First National CityBank, Chemical Bank; (oil) Standard Oil of California and Texaco (Caltex),Mobil, and Standard Oil of New Jersey (Esso).A summary of the conclusions reached in the 1966 study and a brief review of thedevelopments since then will provide the context for the current survey. Thatreport found:1) THAT SOUTH AFRICA WAS MOVING AS RAPIDLY AS POSSIBLETOWARD ECONOMIC SELF-SUFFICIENCY. While seeking economicdevelopment following the U. S. model and participation in the internationaleconomic system, the white leadership has at the same time* A complete list of these corporations is obtainable from the AmericanCommittee on Africa, 164 Madison Avenue. New York, N.Y. 10016.attempted to move the South African economy towards independence from therest of the world, in anticipation of the day when the U. S. and other westernnations might act to implement their denunciations of apartheid. At present, SouthAfrica has all but attained self-sufficiency, and a supreme effort is under way todiscover oil, the one vital commodity the country still lacks.2) THAT THE U. S. AND THE WESTERN WORLD WERE INCREASINGLYDEPENDENT ON CERTAIN STRATEGIC MINERALS PRODUCED BYSOUTH AFRICA. While South Africa continues to play a major role in supplyingminerals such as asbestos, chromium, diamonds, gold, vanadium, uranium andplatinum, for the most part unavailable in quantity or quality outside communistcountries and/or sanctioned Rhodesia, there has been one important modificationin the area of gold; this will be dealt with in a separate section.3) THAT THE SOUTH AFRICAN ECONOMY WAS DEPENDENT ONCHEAP AFRICAN LABOR. There can be no question that the South Africaneconomy continues to function on the backs of its African population. For thecountry's 14.9 million Africans, South Africa's growing prosperity has had littlereal effect. Moreover, the laws restricting the lives of Africans have become morestringent in proportion to their development as an indigenous working class.Treated as third-class citizens in their own country, Africans are allowed toremain in urban or mining areas, in many cases only so long as their labor isneeded, then shuttled from the work area to so-called African "homelands," ruralreserves removed from the central city. These "homelands" or, moreappropriately, African ghettos, promise even further oppression with theconcomitant border-industries concept. This encourages business to locate on thefringes of the reserves making it possible to exploit the African worker evenfurther with low wage rates,AFRICA TODAY

while keeping him out of the white urban areas entirely.4) THAT SOUTH AFRICA'S RESTRICTIONS REGARDING THEEMPLOYMENT OF AFRICANS IN SKILLED POSITIONS WERELEADING TO A CRITICAL SHORTAGE IN THAT AREA, WHTCH COULDBRING SOUTH AFRICA TO A MAJOR TURNING POINT.

New factors which have developed since the 1964 and 1966 studies and must beconsidered are the following:1) THAT SOUTH AFRICA HAS DEVELOPED, WITH AMERICANCORPORATE ASSISTANCE (AND IN SOME CASES, LEADERSHIP), INTOTHE MAJOR INDUSTRIAL POWER ON THE AFRICAN CONTINENT ANDHAS REACHED NEARLY TOTAL INTEGRATION INTO THEWESTERN ECONOMIC SYSTEM DOMINATED BY THE U. S. Total U. S.investment in South Africa (12 percent of the South African total, 1.2 percent ofU. S. foreign investment) belies the major role that U. S. investment has playedand continues to play in the economy of South Africa, because that 12 percent hasbeen utilized largely in areas critical to the development of an industrial society.Moreover, many U. S. companies have worked hand in glove with suchgovernment agencies as ISCOR (South African Tron & Steel Corporation),ESCOM (Electricity Supply Commission), SOEKOR (Southern Oil ExplorationCorporation) and SASOL (South African Coal, Oil & Gas Corporation) whichhave led the drive for self-sufficiency.2) THAT THE AFRICAN LABOR BASE HAS DEVELOPED INTO ANURBANIZED WORKING CLASS.3) THAT U. S. BUSINESS WILL PLAY A KEY ROLE AS SOUTH AFRICAATTEMPTS TO DEAL WITH THE REALITIES OF A HIGHLYINDUSTRIALIZED SOCIETY WITHIN THEFRAMEWORK OF APARTHEID.As a result of the labor conditions outlined above, South Africa is faced with twomajor problems: a) the need for additional external markets to offset her refusal toallow Africans to earn fair wages and develop into a consumer class and, b) theneed to fill a critical shortage of skilled labor.Not yet capable of competing with the United States or Western Europe for exportmarkets in those areas, and unwilling to sufficiently develop a domestic Africanmarket, South Africa must look to independent (and, of course, colonized) Africa,Asia, and Latin America for the export markets she needs to continue her growthand to maintain the domestic status quo.More critical is the shortage of skilled labor. The shift in the South Africaneconomy from agriculture and mining toward manufacturing, as well as hercontinued growth, has virtually exhausted the white skilled labor supply. Yet thecountry's job reservation laws in addition to cus-tomary practice bar Africans, and other Nonwhites in most cases, fromadvancement into the skilled area.* This is 80 percent of the population, the bulkof the potential labor force and a substantial number of un- and under-employed.At present, industry in South Africa is forced to find ways to skirt the jobreservation and other laws and to introduce Africans to the labor areas reservedfor whites, not all of which are skilled. One of the government's solutions is topress for border-industry development which would allow for the utilization ofAfricans in skilled positions (the law forbids the upgrading of Africans into jobsonce held by whites, but this situation would be minimized in the segregatedborder areas). The trick for South Africa, then, is to increase the skilled laborsupply while maintaining rigid apartheid. This entails, too, fending off rightwing

elements which would prefer to slow down the rate of economic growth topreserve an almost purist apartheid structure.A major question is whether or not U. S. investors will comply and locate theiroperations in the border areas, or if they do not and continued economic growthforces the introduction of more Africans into skilled work, whether or not theywill continue to pay Africans lower wages than whites receive for the same work.(In the general economic structures Non-whites already receive less remunerationfor equal work, especially in the professions.)Having already helped white South Africa become all but self-sufficient, therebyminimizing the threat of world-wide sanctions, U. S. companies seem prepared tohelp solve this most critical labor problem as well. In both attitude and action, itwould appear that they have little trouble accommodating themselves toapartheid: A U. S. News and World Report poll of Americanbusinessmen in South Africa taken in the spring of 1968 indicated that 40 percentwould, if they were eligible, vote for the ruling Nationalist Party, the leading forcefor apartheid. Nearly 60 percent felt that South Africa's racial policies represented"an approach that is, under the circumstances, at least an attempt to develop asolution." Only 9 percent found apartheid "altogether incorrect."It is also known that most U. S. businesses located in South Africa provide fundsto the South Africa Foundation, an institution whose major function is to promotethe influx of business into South Africa and to improve the country's publicrelations image. U. S. corporations work well with the South African governmentbureaucracy, and although disturbed with the shortage of skilled labor, as is allbusiness, find ways to accommodate. Business, because of continued profitabilityand comfortable economic* Non-whites is an offensive but at present a useful term to explain the fact thatSouth Africa's population includes in addition to 14.9 million Africans almost 2million Coloureds (people of mixed racial heritage) and more than half a millionAsians, mostly Indians.

surroundings, lives well within the oppressive racial context, and uses industrialadvancement and paternalistic sentiment as rationalizations for exploitation andracism.When this generalized portrait of American business is coupled with the fact that,according to the Baltimore News American, July, 1969, the South Africangovernment reported to the U. S. Department of Justice an expenditure of $1million on propaganda in the previous two years; that the U. S. governmentmaintains space-tracking stations in South Africa which could be located inindependent Africa; that the U. S. provides South Africa with a portion of thesugar quota and subsidy set aside for "undeveloped countries;" and that suchcorporate giants as Chrysler and Firestone have already moved large plants into ornear the border areas, it appears that South Africa will have little troublereconciling her apartheid policy and her industrial growth-with essential helpfrom her friends.THE STRUGGLE FOR LIBERATION"From now on we are not only prepared to die for our freedom, but we shall kill

for it as well."-Robert Mangaliso SobukweIn South Africa, and in the other Afri. can countries where Europeans maintaincontrol, the African people are struggling for self-determination and control oftheir own land. As fighting in the region increases, pressure will mount towardsintervention by the U. S., for in addition to this country's extensive investmentsthere, South Africa (within the context of present U. S. foreign policy) hasassumed military importance as well. The sensitivity of the Middle East situationand the closure of the Suez Canal have made South African ports increasinglyimportant. With space exploration functionally established, the U. S. is notanxious to lose her South African tracking stations. More important, maintenanceof this white capitalist power base is of vital interest to the U. S. as a foothold forthe development of the African continent and indeed, much of Asia, for SouthAfrica has the potential to become the industrial workshop for the entire area.Politically, South Africa is seen as part of the bulwark against "internationalcommunism," envisaged as a potential direct military ally and as an extension ofthe NATO alliance through U. S. ties with Portugal.* It was under thisanticommunist pretext that in 1960 the South African nationalist organizationswere banned and their leaders imprisoned. They now operate underground andfrom exile.Formed in 1912, the African National Congress (ANC) adhered to the principle ofpositivea For a thorough study of South Africa's military strengths, allies, equipment,etc., see Abdul Minty's South Africa's Defence Strategy published by the Anti-Apartheid Movement, 89 Charlotte St., London W. 1. England.non-violent action until the Sharpeville Massacre in 1960. The following year asmall cadre for sabotage-Umkonto We Sizwe (Spear of the Nation)-was formedwithin the organization and the entire party gradually reached the conclusion thatarmed struggle was the only alternative left to the Black man in South Africa. Itsleadership imprisoned or exiled (Nelson Mandela is serving a life sentence onRobben Island and acting-President Oliver Tambo operates from exile), the ANCis building an underground opposition. This includes the return of exiles withspecialized training. Recent tactics have included the exploding of small bombs infour major South African cities which contained hundreds of leaflets,simultaneous with the playing of taped messages of ANC leaders andrevolutionary songsfrom machines which were hidden in railway stations and other public placesfrequented by Africans. The ANC is engaged in guerrilla activity with theZimbabwe African People's Union (ZAPU) on Rhodesian soil, and is also alliedwith FRELIMO, MPLA, and PAIGC, in the Portuguese colonies, and SWAPO inSouth West Africa (Namibia).The Pan Africanist Congress (PAC) was formed in a split from the ANC in 1959.Under the leadership of its President, Robert Mangaliso Sobukwe (now underhouse arrest after serving 9 years on Robben Island), PAC was instrumental inorganizing the non-violent protest against the pass laws in 1960 when some20,000 Africans assembled in Sharpeville and other cities. At Sharpeville, South

African police opened fire on the unarmed crowds killing 69 Africans andwounding hundreds. Now remembered as the Sharpeville Massacre, this signalledthe end of non-violent ideology and the beginning of organization for revolutionby both the ANC and the PAC. In 1969 the PAC called on the Organization ofAfrican Unity to organize an African peoples'AFRICA TODAY

liberation army to fight with the movements in southern Africa. PAC activists arealso building bases and organizing within South Africa.It was the liberation movements that first suggested to non-South Africansconcerned about racism and minority rule that the minimum they could do wouldbe to withhold the support they were giving to the apartheid system (throughbuying South African goods and investing in companies with South Africaninterests), and to attempt to influence national policy to end such support. Thiscampaign for disengagement from South Africa has achieved limited success, forinstance in the bank campaign in the United States and in the world-wide sportsboycott. The extent to which white South Africa is strengthened in the economicfield by the United States and its citizens alone is documented here. It reveals acontinuing field for action which will support the liberation struggle byweakening the regime.The persistence of the liberation struggleagainst all odds is demonstrated again as this paper is written (September, 1970).Twenty Africans are now in court charged with violation of the "Terrorism Act,"with the basis of the charges in most cases association with the African NationalCongress. Aside from the imprisoned and exiled leadership, there are alwayscurrent arrests and detentions. Revealing defiance of police-state terror, friends inthe gallery returned the salute given by the prisoners as they entered thecourtroom. On August 14, in Johannesburg, and at about the same time in othermajor cities, 12 explosive devices releasing leaflets from the underground wereset off and reported by the press.A state of armed revolution exists today in Angola, Mozambique and Zimbabwe(Rhodesia), and it is within this context that the struggle must be viewed. SouthAfrica remains the keystone of the southern African region. Positive action in aidto the liberation movements must replace the present U. S. policy of aid toapartheid.About the Cover... and this Issue(Continued from inside front cover)struggle have been closed. Africans no longer have the freedom even to staypeacefully in their houses in protest against the oppressive policies of thegovernment .... Hence it is understandable why today many of our people areturning their faces away from the path of peace and non-violence. They feel peacein our country must be considered already broken when a minority governmentmaintains its authority over the majority by force and violence. . . . A crisis isdeveloping in earnest in South Africa . ..

The centre and cornerstone of the struggle for freedom and democracy in SouthAfrica lies inside South Africa itself. Apart from those required for essential workoutside the country, freedom fighters are in great demand for work inside thecountry. We owe it as a duty to ourselves and to the freedom-loving peoples ofthe world to build and maintain in South Africa a powerful, solid movement,capable of surviving any attack by the government. . .. The struggle in the areasstill subject to imperialist rule can be delayed and even defeated if it isuncoordinated. Only by our combined efforts and united action can we repulse themultiple onslaughts of the imperialists and fight our way to victory.(Speech in January, 1962, to the conference of the Pan-African FreedomMovement of East and Central Africa, AddisAbaba).This special issue of AFRICA TODAY, "Apartheid and Imperialism: A study ofU. S. Corporate Involvement in South Africa," was made possible by the researchstaff of the Africa Fund, and by special contributions from the Africa Fund andthe American Committee on Africa.Bulk copies of this issue can be ordered at bulk rates from the AmericanCommittee on Africa, 164 Madison Avenue, New York, N. Y. 10016. Price: 50cents per issue, 40 cents for 10-100 copies, 30 cents for more than 200 copies.

South Africa'sEconomic FrameworkThe one word that best describes South Africa's economy is growth. Since theformation of the Union of South Africa in 1910, gross domestic product (G.D.P.)built on a combination of vast mineral wealth and cheap African labor has grownsteadily, increasing almost fivefold in the past twenty years. 11911-12 1920-211940-41 1950-51 1960-61 1968*Randmillions266437 9562,497 5,2609,641* Provisional figureDollar millions372 6111,334 3,496 7,364 13,497During the last decade expansion has been shaped at least partially by a dualgovernment emphasis on developing economic self-sufficiency (this tendencybeing given added impetus by the economic and political crisis which followedSharpeville) and on integration into the western economic system. Growth hasbeen accomplished by a combination of state-run development agencies, whosefunction is to channel domestic and foreign capital into various areas of theeconomy, and private capital, the latter being attracted by high returns which have

recently averaged as much as 17 percent in mining and 13 percent inmanufacturing.MININGSouth Africa's mineral resources continue to provide the foundation of herexpanding economy and have subsidized much of that growth. Moreover thestrategic value of many of these minerals lends South Africa an influence on thewestern world out of proportion to her size and strength. In 1969 there was arecord gold production of 31.3 million ounces for sales of $1.2 billion, includingprofits from uranium, sulphuric acid, pyrite and the unofficial premium sales.Over-all mineral sales (including premium gold sales on the unofficial market) seta record of almost $2.1 billion, an increase of 9.1 percent over 1968.2 Diamondproduction increased to over 7 million carats in 1969, with sales of $145 million.In fact mining still accounted for 58 percent of all exports in 1968, but as goldproduction is expected to fall off steeply in the next few years there is increasingemphasis inside South Africa on developing other sectors of the economy.MANUFACTURINGThe changing shape of the economy, from a heavy reliance on agriculture andmining to a greater dependence on manufacturing and construction is reflected inthe growing contribution of secondary industry to the domestic product. In 1917industry generated only 9 percent of total out-put; by 1947 this had grown to 20percent and in 1968 the relative contributions stood as follows:4Manufacturing 31.4 percentMining 11.3 percentAgriculture 9.5 percentServices 47.8 percentIndeed, it has been in the decade of the 1960's that the manufacturing sector hascome into its own and has become the primary source of internal economicgrowth. From 1961 through 1967 the manufacturing sector contribution to theG.D.P. increased 4 percent, from $1,395 million to $2,641 million. In other wordssecondary industry itself grew at a rate averaging 11.2 percent per year. 5Clearly South Africa is moving away from being simply a source of raw materialsto more advanced economies and is becoming a manufacturer in its own right.Thus a number of new economic alternatives have opened up, the most lucrativebeing a neo-colonial role in relation to the rest of Africa-South Africa importingraw materials, converting them to finished products and selling them back at aprofit. South Africa may become to Africa-and indeed to much of Asia andpossibly parts of Latin America-what the United States is to the WesternHemisphere. The main obstacles to such development are the tcfact that SouthAfrica's economic growth is threatened by aparthvid, via the exclusion ofAfricans from skilled work, and the refusal thus ftr cf mcst irdependent Africanstates to cooperate because they oppose apartheid. Even so the S auth Africaneconomy continued to grow during 1969 and the year's growth rate was expectedto tcp 5 percent. 6TOURISMSouth Africa expects that the foreign exchange secured by her growing touristindustry will help replace that lost by the expected depletion of the gold reserves

within the next thirty years. The forecast in the summer of 1970 was that by 1980there would be a million tourists annually. 7 A more detailed report for 1968indicated that the 36.3 percent rate of the increaseAFRICA TODAY

in tourists for the five year period 1962-67 was maintained, with the number oftourists topping 300,000. Tourists from the United States numbered 12,850, a 23.5percent increase, which is continuing. 8 Tourism not only provides foreignexchange but has the added benefit of increasing sympathy for South Africaamong a section of the white and reasonably affluent populations of WesternEurope and the United States.IMPORTS AND EXPORTSThe diversification into manufacturing also represents an attempt to solve balanceof payments problems by exporting manufactured goods; however, imports arestill greater than exports. Imports for the first seven months of 1969 were up 9percent while exports were down 4 percent from 1968, mainly because of loweragricultural exports. Areas of major import increase since 1968 were: machineryand electrical equipment, 33 percent; transport equipment, 47 percent; textiles20.5 percent. 9The weak trend in exports continues. Total merchandise exports over the first halfof 1969 were below thcse of the corresponding period in 1968. The wider tradegap brought about by the leveling in total exports and the sharp upwardmovement of imports very probably means that the deficit of $109.2 million onthe current account of the balance of payments in the second quarter of 1969 wasfollowed by a further deficit, at least as large, in the third quarter. 10COMMERCEIn some areas of retail trade the shortage of skilled white labor and the ban on theuse of Africans in skilled capacities have forced retailers to resort to self-servicetype operations and to introduce new methods of packaging. 11TRANSPORTATIONSouth African economic planners have set a high priority on seeing that railroads,harbors and South African Airways keep pace with the overall growth of theeconomy. Several recent developments in this sector should be noted.The closing of the Suez Canal has caused large numbers of ships to use the Caperoute around Africa with the resulting greater use of South African harborfacilities. In addition the introduction of the new oil super-tankers, many too largefor passage through the Suez Canal even were it open, has prompted South Africato extend and develop harbor facilities to handle what appears to be an area ofnew growth. The harbor at Richards Bay on the East coast is being developedwith this in mind. It is expected to be operative by 1975; a major new rail line willlink the interior area of Vryheid and Empangeni to this new harbor facility.ISCOR is the prime mover in the proposed development of a $459 million railwayline across some hundreds of miles of desert to a new Western Cape port atSaldanha. The scheme is still tentative, and hinges partly on current negotia-tions between ISCOR and Japanese combines for the sale of 10 to 15 million tonsof iron ore a year from the northwestern Cape mine at Sishen. The scheme would

open up a potentially mineralrich area of the country and would also give SouthAfrica another major seaport. The alternative would be massive extensions to theexisting facilities at Port Elizabeth. If the new railway is built ISCOR will beresponsible for raising the capital, much of which might have to come fromabroad in order to comply with the government insistence that internal capitalresources should not be overstrained. 12 United States sources might well beapproached to provide some of the necessary funds. A United States firm hasalready been involved in the ore-port controversy-Soros Associates, American consulting engineers having recently made afeasibility study for an off-shore ore terminal near Port Elizabeth. 13Another important development in this area of transportation is the projectedexpansion of government-owned South African Airways, which already runs mostinternal South African airflights and a number of overseas routes and which beganflights to New York via Rio de Janeiro in 1969.FOREIGN AND U. S. INVESTMENTTotal foreign investment in the republic increased from $4.86 billion in 1965 to$5.4 billion in 1969, including $1 billion from the dollar area. While foreigncapital has always been welcomed, South Africa no longer feels dependent on itas she once did because of her own development.An article in the Wall Street Journal late last year observed that the book value of275 American companies' investment in South Africa is now estimated at morethan $750 million up from $667 million at the end of 1967 and nearly double thebook value of only a half dozen years ago. Since most companies understate bookvalues, the real worth of the U. S. investments is probably much greater. U. S.Department of Commerce figures show that although U. S. investments in SouthAfrica account for only 1.2 percent of total American foreign investments, theyproduce 2 percent of total U. S. overseas earnings. Net on book value forAmerican companies in South Africa averages 15 percent and profits are freelyrepatriated. 14 Having assisted the South Africans in their drive for self-sufficiency by investment in vital sectors of the economy, the thrust of Americancorporate involvement appears now to be shifting from aiding in development tosharing management techniques and technology.THE OUTWARD POLICYInvestment is not a one-way street. It is for both political and economic reasonsthat the Vorster Administration has initiated and encouraged new ties with theother countries of Africa and has taken steps to extend this to South America. Theeconomic rationale is that it is an

outlet for a growing economy. The political reason is that, facing an internalopposition with a potential of 80 percent of the population and the hostility ofindependent Africa to the apartheid system, any ties that can be made beyondSouth Africa's own boundaries help create a buffer between the two forces forfreedom, internal and external. South West Africa (Namibia) has beenincorporated into South Africa. The ex-protectorates are nearly surrounded andare part of the South African customs and monetary systems. Malawi (whose newcapital South Africa is building) is hardly viable economically and is heavily

dependent upon the migrant labor she sends to the South African mines. Rhodesia(Zimbabwe) survives the international embargo because her trade goes throughSouth African (and Portuguese) channels. And in both Zimbabwe and PortugueseAngola and Mozambique, South Africa has the advantage of being able to fightthe liberation movements hundreds of miles from her home territory.The Johannesburg Rand Daily Mail has put it:Decolonization has left a vacuum in Black Africa which South Africa is quietlymoving out to fill. South Africans are playing an important role as expatriateexperts vital to newly independent nations. Their companies are busy in suchlands as Malawi and Mozambique. Their money is financing the projects. Andtheir intelligence men are building a chain of listening posts across the continent.This 'outward looking' policy has been spectacularly successful in countries likeMalawi, Swaziland, Botswana, and Lesotho, but bridges are now being built tonations like Malagasy, Ivory Coast, Senegal, Congo (Kinshasha), evenKenya and Uganda.15The parallel program toward South America has a double primary focus: anincrease in trade, with a vast market conveniently located; and the potential of aSouth Atlantic Treaty Organization, if NATO cannot be stretched to include thePortuguese colonies and South Africa. Brazil, with its close relationship toPortugal, and Argentina, where right-wing sympathies are still strong, have beenthe logical opening possibilities politically, as well as because of their size anddominance in South America.THE U. S. AND SOUTH AFRICA, 1970At present, the United States stands second only to the United Kingdom as amajor South African trading partner and economic ally, providing aid andassistance financially, via investment, trade and rising tourism; and supplying awide range of other needs by providing technological information and training,sharing scienOfic and management "know how." The extent of this United Statessupport for the South Af-CHART I-South African Domestic ProductionAgriculture, forestry -1 Secondary industryand fishing EMining and quarrying I Tertiary activitiesper cent Proportions of gross domestic product oroduced1917 1927 1937 1947 1957 1967(Source: Union Acceptances Ltd., Merchant Bankers. Scop for Investment-SouthAfrica's Growing Economy [Johannesburg. 196]. p. 31.)rican economy is detailed in the following sections and discussed in terms ofselected critical industries. However, before examining the industries itis necessary to look at the laborstructure which affects all business in SouthAfrica.FOOTNOTES1. D. Hobart Houghton, The South African Economy, (Cape

Town: Oxford University Press, 1964). (Statistical Appendix to 1951. thereafterSouth African Reserve Bank Quarterly Review, quoted from the Standard BankReview,Statistical Appendix. April, 1970). 2. New York Times, June 24, 1970.3. Standard Bank Review, July, 1970, p. 22.4. South African Reserve Bank, Quarterly Report, January,1969, p. 611.S. Ibid., December. 1969, p. 614.6. Chase Manhattan Bank. Quarterly Report, October. 1969,p. 69.7. The Star (Johannesburg), August 15, 1970. . South African Department ofInformation. South AfricanDigest, November 29, 1968, and Scope, December. 1968.9. Standard Bank Group, Quarterly Reort, July. 1969, p. 28. 10. MerchantBankers of South Africa, Economic Review, November, 1969, p. 67.11. Ibid., p. 68.12. The Star (Johannesburg). August L 1970. 13. News/Check (South Africa),August 21, 1970. 14. Wall Street Journal, December 11. 19. 15. C. Legge, C.Pratt, R. Williams and H. Winsor, "The BlackPaper: An Alternate Canadian Policy towards South Africa." July 25. 1970,mimeo.AFRICA TODAY

Labor In South AfricaUNITED STATES FIRMS AND APARTHEID LABORNowhere in the world are the class-race lines so firmly drawn and the people ofthe lower classdarker skins so openly exploited as in South Africa. United Statescorporations have, over the years, taken advantage of the apartheid structurewhich has supplied their operations with a large, controlled, cheap labor supply.In their own defense they have argued that, as foreign investors, they must obeythe laws of the host country-even though those laws strip the vast majority of thepopulation of all basic human rights, force them to live in fear and poverty andreduce millions of women and men to little more than labor units. The typicalrationalizer goes on to argue that the presence of United States corporations inSouth Africa serves to liberalize the apartheid system and raise the standard ofliving, thus benefitting the African population. In fact there is not one shred ofevidence that United States corporate presence has liberalized any facet ofapartheid; indeed, on the contrary, both in word and deed U. S. investors havesteadfastly implemented the laws of the land as they stand.What does this mean in human terms? Over the years, as the South Africaneconomy has expanded, two sets of laws have developed. The first, which appliesprimarily to whites, sometimes also to Coloureds and Asians, lays down strictregulations with respect to conditions of employment, wage negotiations, tradeunions; the law safeguards the right to organize, even recognizes the right tostrike.

A separate scheme of laws applies to Africans. First there are the so-called"Bantu"* laws, which regulate what most people would consider to be personalmatters: where an African may live, where and when he may travel, how long atime he may spend in a town (always formally called "an urban area"), whetherhis wife, his children or his parents may live with him, where he may own land,build a house, farm the land or run a business. These laws are not new . .. someform of such "Pass Law" has been in operation in South Africa for almost 300years . and the purpose has always been to restrict Africans to small corners of thecountry (the reserves) which act as labor reservoirs and out of which men maymove only as "Authority" permits them.Recent years have seen this process given a new name-'"separate development."The rhetoric now explains that as all peoples have the right to develop separately,in their own way,each group is entitled to its own "Homeland" or "Bantustan." In practice the eightAfrican homelands which are promised are almost identical to the old reserves-and amount, in total to less than 13 percent of the land for 68 percent of thepeople. Thus the homelands policy simply intensifies the oppression of thepeople, removing the few vestiges of rights that remained to them. HenceforthAfricans will have no rights in the white areas whatsoever, no matter how longthey have lived there. They are migrants allowed only because, and when andwhere, their labor is necessary. Not only the unemployed but non-members of thelabor force (wives, widows, children, the aged and infirm) can be "endorsed out"-sent to homelands they have never seen, or to barren relocation centers.**Temporarily homes may be rented or even owned in African locations in whiteareas, but the land can neverWe have at the moment 3.7-millionWhites and 13.7-nillion Africans. The Bureau of Census and Statistics estimatesthat by the end of the century there will be 7million Whites and 27.9-millionAfricans ("Die Beeld" recently published new estimates, which it said wereauthoritative, of6-million Whites and 35-million Africans).At the moment 4.1-million Africans livein the projected Bantustans. If these areas are developed to a quite unimaginabledegree with the creation of 85,000 new jobs a year (the present average is 100),they will be able to accommodate at most 10-millionAfricans by the end of the century.That means at least 17.9-million Africanswill still be living in "White" South Africa -or 25-million if one works on"Die Beeld's" figure. Plus 5.8-million Colouredsand 1.1-million Asians.In other words even if separate development is implemented with unimaginablesuccess, "White" South Africa will still be more than three-quarters Non-White.Nothing will have been solved.From the Rand Daily Mail, April 18, 1970*A term used by the South African government for Africans. "There are stillspecific conditions under which a worker and his family may remain in some

circumstances: if he has lived In the area a given length of time, held the same joba given number of years, and so on; but the aim Is to eliminate this too.

be owned, so that forced removal is always a threat.While Africans are in white areas, they are controlled by a series of laws whosepurpose is to secure the maximum segregation within those areas. But above all,as the white state seeks the benefit of the white citizens, the Africans are subjectto viciously discriminatory labor legislation.Africans are denied the right to organize effective trade unions. No African unionmay be registered or participate in collective bargaining. African workers are"represented" in wage negotiations by the Department of Bantu Affairs. Allstrikes are illegal.Africans have consistently -been denied access to skilled and managerial jobs bycustom and by law. Apprenticeship Laws have always excluded Africans, theearliest Mines and Works Acts firmly established the principle of racial jobdiscrimination on the mines. The Industrial Conciliation Act of 1956 gave theIndustrial Tribunal power to reserve certain jobs for members of a particular race.The government has the power to insist on race quotas in a particular industry,area or plant. White workers, through their trade unions have constantly sought tokeep Non-whites, particularly Africans, out of skilled jobs. In those cases whereAfricans do hold the same jobs as whites, they are paid only a fraction of thewage earned by the whites.THE BANTU LAWS AMENDMENT BILLRecent legislation aims at stripping the African worker of even such meagersecurity as has been left to him. The Bantu Laws Amendment Bill, introducedtowards the end of 1969, provides the Minister of Bantu Administration andDevelopment with the power to arbitrarily prohibit the performance of work by,or the employment of an African:a) in a specified area;b) in a specified class of employment;c) in a specified trade;d) in the service of a specified employer orclass of employers.The Act also empowers a municipal or district labor officer to refuse to allow thecontinued employment of any African in the district on a number of grounds,including lack of adequate housing.' This may be used to seriously affect theemployment of Africans in urban areas, because, in accordance with the theory ofseparate development, there are fewer and fewer approved living areas forAfricans in the urban centers. In effect, this law will give the Minister of BantuAdministration and Development the absolute power to stop any African fromdoing any kind of work anywhere.Job reservation and other restrictions on African labor are part of the traditionalway of life in South Africa, and traditionally they served a dual function:protecting the white workers' privileged position obviating the risk of too much

competition, and keeping wages low by forcing Africans to work while removingtheir bargaining power. Both the white employer and the white worker profitedfrom this arrangementonly the Black worker gained nothing from it.The most extensive recent government prohibitions on African labor participationin either particular catagories of work or particular areas have left some whiteemployers, notably the industrialists, less happy, for the fairly severe restrictionshave created various problems, including some shortage of skilled labor.In fact, South Africa faces a fundamental contradiction. Rapid economicexpansion has brought hundreds of thousands of Africans into the cities asindustrial workers; more Africans in the cities means greater pressure onapartheid. The current South African government is particularly sensitive tothe danger posed to white supremacy by the growth of a conscious, urbanizedAfrican working class: thus the drive to restrict the flow of workers into the cities.On the other hand the fruits of economic expansion are sweet and few SouthAfricans wish to sacrifice them, so industrial growth must be nurtured. The effectsof this contradiction frequently make the South African scene rather confusing.On the one hand the government speaks with the voice of a rabid ideologue-promising to "turn the black tide" away from the white cities whatever theeconomic consequences. On the other hand its actions are quite often flexible andpragmatic.THE URBAN POPULATION EXPLOSIONBrief reference to developments on the labor front in the last decade will illustratethe tensions which now operate. The dramatic expansion of the economy has beenmirrored in the rapid rise in the size of the working force. In twenty yearsemployment, led by the manufacturing sector, has more than doubled. The growthof Nonwhite employment in industry has been particularly rpid since 1963-6.5percent per annum as against a growth in white employment of only5.1 percent per annum.2TABLE I-Growth in Employment1955-56 1965-66Proportion Proportionof ofTotal Whites whites Total Whites whites '000 .000 % '000 '000 %Mining ..... ....... 547 66 12.1 636 66 10.4Manufacturing 678 191 28.2 947 241 25.4 Construction 106 24 22.6204 41 20.1 Transport 217 106 48.8 226 116 51.3Communications 39 29 74.3 45 33 73.3Total 1,589 416 26.2 2,058 497 24.1(Source: Union Acceptances Ltd.. Merchant Bankers, Scope for Investment-SouthAfrica's Growing Economy, [Johannesburg, 1969], p. 18.)Finally the figures for African urbanization will serve to indicate the closerelationship be-AFRICA TODAY

CHART I-Comparative Employment, 1948 & 19681948 1968 1948 1968 1948 1968

CONSTRUCTION MINING and MANUFACTURINGQUARRYING(Source: Union Acceptances Ltd., Merchant Bankers, Scope for Investment-SouthAfrica's Growing Economy, [Johannes. burg, 1969], pp. 17. 18.)This tendency is similarly reflected in the figures for African-only employmentgiven below.TABLE Il-Number of Africans Employed1946 1951 1900 1967INDUSTRY No. ln % of No. ig% of No. in % of No. in'000 Tot. '000 ToL '000 Tot. '000 Tot. I. Mining 441 88 449 88 548 89522 902. Manufacturing 163 45 227 45 309 48 530 53 3. Construction 76 50132 55 161 58 170 674. Commerce &Finance 71 29 101 31 189 37 ? ?(Source: W. Langschmidt. Some Characteristics of the Ur. ban Bantu Market,[National Development and Management Foundation of South Africa, 190869], p.22.)tween recent economic expansion and the flow of Africans into the cities.According to a report issued by the National Development and ManagementFoundation ofTABLE Ill-Urbanized Population 1968 Expressed asNumber: percentage ofmillions each populationgroupWhite 3.1 86Coloured 1.3 69Asian 0.5 84African 4.3 33(Source: W. Langschmldt, Some Characteristics of the Urban Market, p. L)South Africa, the urban African population is probably the fastest growing sectionof the South African population. It has grown from 1.2 million at the time of the1936 census, to 1.9 million at the time of the 1946 census, to 3.5 million for the1960 census and to 4.3 million (estimated) by the beginning of 1968. Thisrepresents an increase of 126 percent in 22 years, and a 23 percent growth in thelast 8 years.3LABOR SHORTAGEDespite the rapid expansion of the urban and industrial labor force there appearsto be an increasingly acute labor shortage in the face of which various SouthAfrican experts and businessmen are calling for relaxation of restrictive laborlaws so that the country can continue to expand economically.Actually, there is no manpower shortage in South Africa, only wastage andmisuse of manpower. The racism runs so deep that the entire economy isthreatened by the refusal to let Africans hold skilled jobs. The problem, asarticulated by non-government spokesmen, is clearly illustrated by the followingstatement by Dr. E. G. Malherbe, former President of Natal University.

The tempo of South Africa's future economic development will be determinedmainly by the rate at which "know-how"and management are acquired by the Bantu-the largest untapped sector of SouthAfrica's manpower resources. Immigration at best can have only a marginal effectand does not offer any long term solution .... The indisputable fact remains that inan expanding economy (especially in a country where two-thirds of thepopulation is non-white) there can be no irremovable boundary between workdone by whites and work done byNon-whites.4Dr. Lawrence McCrystal, the former Chief Economist of the IndustrialDevelopment Corporation, maintained in January, 1969 that if all laborrestrictions were lifted and if all labor was effectively trained, South Africa couldsustain a growth rate rivalling that of Japan.5Harry Oppenheimer,* Chairman of AngloAmerican Corporation has warned thatthe country was heading for economic suicide. Stating that he was "sick and tiredof hearing how sound South Africa's economy is," the mining mogul added, "Idon't think that the economy of a country which deliberately sets out not to tradeand not to make proper use of 80 percent of its po*It should be noted thatOppenheimer heads the Progrsive Party, which differs from the government muchmore sharply than the official opposition United Party; and that while thesestatements represent the more dynamic capitalist elements, they represent neitherthe government nor the maJority.

tential working population can be described as sound." Oppenheimer's warningcame after a speech by Tom Murray, a South African trade anion leader whodeclared that "white workers are not going to work themselves to death for thesake of an outdated policy. What do our economic leaders want? For us to gowithout sleep altogether to keep the wheels of industry turning?" Murray addedthat every man in his union was averaging ten hours overtime per week.6The current lack of an adequate supply of labor is likely to intensify over the nextfew years, as demands for more and more workers escalate along the pathprojected in the study below as necessary for steady general economic growth.*TABLE IV-Changing Labor Needs1960 1910White Non-White White Non-White1. Professional,technical, admin. 189,459 76,332 350,000 250,000 2. Clerical and sales379,396 97,234 500,000 430,0003. Industrial, skilled,semi-skilled 376,861 325A06 700,000 1,100,0004. Industrial-unskilled - 1.379.498 - 2.000,000 5. Agricultural 115,7651,731,534 50,000 2,050,0006. Domestic Service - 755,765 - 1,300,0007.-Services 68,067 156.483 100,00 410,000(Source: Financial Mall, July 14, 1967, p. 45.)

Again it is clear that the South African economy is faced with a dilemma: thenecessity of an increased skilled labor force versus the maintenance of apartheid.These are the horns: relax apartheid or develop a scheme to utilize Africanswithin the existing structures in skilled positions. The solution proposed isthe borderindustry scheme, whose measure of success will be influenced by thecooperation of U. S. investors. If U. S. companies move into or adjacent to borderareas, as Chrysler, Kaiser and Firestone already have, they will help perpetuateapartheid at a time when it would be in serious trouble but for their assistance-because the border industry scheme is designed to solve the tproblem of tle lackof skilled labor.BORDER INDUSTRYThe South African government has been ruthless in displacing Africans from thecities, but, as a means to continuing the exploitation of African labor withoutunwanted urban concen*A partial solution that the South Africans have notImplemented is the use of automation. Some automation has been introduced intothe country but there is apparently no realization of the extent to which, forInstance, the mines and railroads in the United States have displaced labor byautomation since World War 11, or how completely bookkeeping and other whitecollar operations have been taken over. It may be discussed in top business circlesbut it has not entered public discussion.Other solutions proposed in recent South African discussions include lengtheningthe working day, greater use of wo. men, speeding up immigration-thus increasingthe white labor force. There have even been suggestions as to Incorporation ofsections of the military in the labor force.tration the state is now pressing for the development of industries alongside thehomelands. Border areas are little more than large labor pools for white industryforbidden direct access to tribal homelands and for African laborers forbiddenaccess to urban work areas.Since 1960 there has been a concerted drive for development of the border areasand the government has allowed many exemptions to companies willing tocooperate. The Industrial Development Corporation is trying to establish industryin the border areas by direct investment, loans to, and partnership with, privateinvestors. Various incentives are offered for entering the border area, such as:1) an additional 10 percent tax allowance on the cost of power, water, andtransport on new and expanding undertakings for a minimum of five years.2) an initial allowance of 30 percent of the cost of machinery.3) investment allowances of 25 percent of the cost of factory buildings and 35percent of machinery cost.4) allowing those who move from urban areas to double the additionaladministrative and manufacturing costs of the first five years for tax purposes.5) allowing the inclusion of the cost of moving a factory to the border area in thecapital amount for annual depreciation allowance.7Moreover, certain industries have received exemptions from any wage regulatingmeasures.8Further measures taken by the government to insure the movement of industry tothe border areas include the Physical Planning and Utilization of Resources Act of

1967. In terms of this Act, land may not be zoned for industrial purposes withoutthe permission of the Minister of Planning. This means control over theestablishment or extension of factories in any area ("extension" meaning anyincrease in the number of African employees), giving the Minister of Planning thepower to curtail or stop industrial growth in metropolitan areas.9 In accordancewith this Act, the Minister of Planning stated in September, 1969 that "not anotheracre of land in the big industrial complexes would be proclaimed for the purposeof building factories, and in general, new industries would have to go to theborder areas."10PROGRESS IN THE DEVELOPMENT OF BORDER INDUSTRIESDespite government pressure and propaganda, border industry development is, forthe most part, proving to be slow and expensive. The Permanent Committee forthe Location of Industry recently stated that the total direct additional investmentin secondary industry in border areas undertaken from 1960 to the end of 1968(including investment by industrialists who were not assisted by the state)amounted to over S439,000,000. Assistance by the state, in variousAFRICA TODAY

forms had led, in the 8 years under review, to the establishment of 135 newindustrial concerns; another 110 new establishments had gone into operationwithout state assistance. Altogether an average of 5,000 new industrial jobs hadbeen created annually for Africans in the border areas. The Committee hoped toincrease this to at least 9,000 annually, and admitted that livelihoods in otherareas would have to be found for the remainder of the approximately 35,000African men who "become available annually for the labor market in the Bantuhomelands."' By 1968 a total of 109,000 Africans were being employed inindustry in the Bantustans and border areas, as against 55,000 Africans soemployed in 1960. (In 1967 over half a million Africans were already working inindustry in urban areas-i.e., away from the border areas.)In 1969 a private firm of border area consultants was set up in Johannesburg withthe object of helping industrialists to overcome the problems involved in movingto border areas and of advising them on the available benefits and channels ofapproach. The head of this firm reported in August, 1969 that 48 local firms andat Icast 3 foreign firms were considering moving to border areas because of thelabor shortage in the cities caused by new restrictions.12Many Africans are doing more advanced work in the border areas than would bepossible in the cities, but this is still restricted to the semi-skilled level. Reporterswho have toured the areas say that at present it would not be worth anindustrialist's while to give the lengthy and expensive training required for fullartisan status, even if the white trade unions would allow this, for most of theborder area factories operate on production lines.13 Thus border area industrydoes not improve conditions for the African worker who is still kept on the lowestrung of the ladder and may well be paid less than usual for the work he does.WAGES

With the class-race laws clearly delineated and the labor pool of Africanscontrolled and regulated to suit production needs, U. S. corporations find theirgreatest benefit in the low wages they pay Africans, who make up more than halfthe labor force.The present pattern of employment and worker-management relations was setduring the nineteen-twenties by legislation which is still basically (withsubsequent amendments) in operation. The Wages Act of 1925 as amended in1957 established a Wage Board which, with the approval of the Minister ofLabor, sets minimum rates of pay for industries in which workers are notsufficiently organized to negotiate collectively. The Industrial Conciliation Act of1924 provided machinery for collective bargaining between trade unions andemployers' organizations and for arbitration of disputes. Effectively, it enableswhite workers to negotiate the wages ofall grades of labor, and Africans, barred from any decision making process, arebound by the agreed terms although gains made for the white workers are oftenachieved specifically at the expense of Black workers. However determined,wages discriminate against African and other Non-white workers-averaging onlyfrom 1/5 to1/10 of white wages. There is nothing in all of the legislation to preventemployers from raising wages above the minimums set, yet U. S. employerscannot be distinguished from South African employers in terms of a labor policyfollowed.Mr. W. Langschmidt, managing director of M'arket Research Africa, has notedthat while Africans constitute 67.9 percent of the population, they receive only18.8 percent of the nation's personal cash income. The whites, constituting only19.2 percent of the population appropriated 73.3 percent of that income. Averagemonthly income per head is $133 for whites, only $9.80 for Africans.14URBAN INCOMESTwenty-four and one-half percent of all urban African households have a monthlyincome under $27.Another 40 percent of such households haveTABLE V-Average Monthly Earnings, 1968-69 Industry WhitesColoured Asians African(in rands)Mining 297 62 76 180Building construction 282 98 135 450Wholesale trade 245 171 94 48Retail trade 130 51 82 38Banking institutions 205 56 72 53Building societies 229 77 107 49Public service 211 100 127 36Provincial administrations 198 49 67 32Local authorities 230 71 50 38(One rand is equivalent to $1.40)*Including cost of food and other benefits provided to the miners.

**In building construction, Africans are generally provided with freeaccommodation.(Source: United Nations, Unit on Apartheid, Notes and Documents, "This isApartheid: Facts and Figures." No. 12-70, April, 1970, p. 29.)a monthly income ranging between $28 and $68 and 20 percent have monthlyincomes of between $70 and $110. Thus at least 65 percent of the families* livingin towns and cities have monthly incomes of less than $70-although, by a strangequirk of statistics the average African household income was exactly $70 in1968.1In 1969 the Johannesburg municipal NonEuropean Affairs Department drew upan absolute minimum family budget necessary for survival. This allowed for onlythe barest subsistence, and came to $83.50 (family of five) or $89*The average household, as used In this study, consisted of5 or 6 members.

Source: Sechaba, Volume 4, No. 1., January, 1970.(family of 6).16 Thus comparing the budget figures with the average incomefigures given previously it is clear that at least 68 percent of the African urbanpopulation now exists, somehow or other, below the breadline.Indeed, the wages of all the peoples of color in the various industries and ingovernment service are only a fraction of the wages earned by whites:HOMELANDS INCOMESIn a speech before Parliament in February 1969, Sir de Villiers Graaf, leader ofthe opposition United Party, reported that the standard of living of the Africanpeople in the reserves, the show-pieces of separate development, had eitherremained static or had fallen in the last 15 years. He recalled that the TomlinsonCommission had estimated in the mid-1950's that the income per head in thehomelands was $67.20; of this $36.10 was earned in the homelands and theremainder was earned by migratory work outside the reserve area. In 1969, morethan ten years later, the income per head was $74.20 ofwhich $30.80 was earned in the homelands. Taking the value of money intoaccount, the standard of living of the people had actually fallen.17WORKERS' STRUGGLEIn April 1969, some 2,000 dockworkers in Durban went on strike for higherwages. Officials of the Departments of Bantu Administration and Labor, seniorpolice officers and the Special Branch (secret police) were all called in and theAfricans were given the option of returning to work under the existing conditionsor being paid off. About 1,500 were discharged, although of these, some 400 werere-employed at their own request after screening. The rest were given 4 hours toleave Durban and new labor was recruited from amongst unemployed men in andaround the city. Although the strike was lost, dock wages were subsequentlyincreased.During the same period 130 Non-white doctors in hospitals in Durban andPietermaritzburg submitted mass resignations as a protest against being paid on ascale different from white doc-AFRICA TODAY

tors. Substantial increases were eventually offered, and most of the doctors werereinstated (but at least nine Durban doctors were not accepted back).Despite the fact that strikes are illegal, and that strikers therefore face criminalpenalties, there has been industrial action, albeit limited, in most of the urbanareas of South Africa.An unusual recent (summer 1970) victory was that of the multi-racial,predominantly Coloured, Food and Canning Workers Union. Despite allgovernment efforts to discourage such organizations, it not only continues to existbut won a substantial pay award for fruit and vegetable processing factoryworkers. And it has begun to organize the workers in fish-processing and fruit-drying plants.18During 1967 there were 20 stoppages of work involving 1,302'Africans whichcould be regarded as strikes (according to latest report of the Department ofLabor, for 1967). They arose from demands relating to wages and otherconditions of employment. A further 38 disputes resulted in stoppages of workthat were not regarded as strikes: these involved 798 Africans. Nineteen disputes,involving 466 Africans, were settled through the machinery without workstoppages. Two lockouts involving 140 Africans took place during the year.19It is possible that we will see more and more efforts such as the above as theAfricans, legallyor illegally, enter the skilled area and develop into a cohesive working class.There may be morespontaneous trade union activity, strikes and efforts at organization. If not, it willbe becausethe entire weight of the state machinery is and will be mobilized against theworkers. Again thedynamics of the labor issue are clear. The subsequent sections show that if thepast is any indication, U. S. corporations will follow the predominant SouthAfrican pattern of preserving white control at all costs.FOOTNOTES1. South African Institute of Race Relations, A Survey of Race Relations In SouthAfrica, 1969, (Johannesburg, 1170).2. Union Acceptances Ltd. Merchant Bankers, Scope for Investment-SouthAfrica's Growing Economy, (Johannesburg,199). pp. 17. 36.3. W. Langschmdt, Some Characteristics of the Urban BantuMarket, (National Development and Management Foundation of South Africa,1961/1169), p. 2.4. A Survey of Race Relations, M, p. 87. . Rand Daily Mail, January 15, 1969. 6.New York Times, November. 1969.7. Financial Mail (South Africa), October 13. 167.8. A Survey of Race Relations, 1969, p. 96.9. A Survey of Race Relations, 1967. 10. Rand Daily Mail, September 11, 1M.11. A Survey of Race Relations, 1969, pp. 97-0& 12. Rand Daily Mail, August 2.1M. 13. Ibid., July 5. 1M.

14. W. Langschmidt. op. cit. 15. Ibid., Chart 7.16. A Survey of Race Relations, 1969,,p. 82. 17. United Nations, Unit onApartheid, Notes and Downmt"This is Apartheid: Facts and Figures," No. 12-70, April,1970.18. Anti-Apartheld News (London), August, 1970. 19. A Survey of RaceRelations, 196.

Banking:South Africa Has AFriend On Wall StreetSOUTH AFRICA CANCELS U. S. CONSORTIUM LOANOn November 21, 1969 an Associated Press release reported an announcement byMr. Gerald W. Browne, of the South African Ministry of Finance, that "becauseof the Republic's strong gold and foreign exchange position, credit (a $40 millionrevolving loan from a consortium of 10 U. S. banks) had not been used for somethree years, and it was not deemed necessary to incur the expenses of extendingit." Thus was the direct loan to the South African government by U. S. banksended. (Participating banks were: Bank of America [National Trust & SavingsAssoc.]; Chase Manhattan Bank; First National City Bank; ManufacturersHanover Trust Co.; Morgan Guaranty Trust Co.; Chemical Bank New York TrustCo.; Bankers Trust Co.; Irving Trust Co.; Continental Illinois Bank & Trust Co.;First National Bank [Chicago].) The dynamics behind this decision are unknown;it is entirely plausible that the banks themselves initiated the action to discontinuethe revolving loan, even though the announcement was from the South Africangovernment to Dillon Read and Co., the investment firm responsible for formingand administering the consortium. Indeed participation in the loan was becominga public relations burden on the banks involved, particularly Chase Manhattan,Chemical Bank (the only bank at the United Nations, where pressure wasmounting among various delegations to bring the matter before the GeneralAssembly) and First National City, as 1969 saw increased concern and action onthe part of churches, university groups and legislators.There are, however, some basic economic questions concerning the "strong goldand foreign exchange position" of South Africa. As South African newspapersand journals pointed out,1 the need for external loans to help drain excessliquidity, increased worry over balance of payments problems, and even thedesirability of "keeping one's name on the important capital markets of the world"made it clear that a continuation of the credit arrangement would have been anasset to South Africa.The consortium loan-the most overt exampleof cooperation between U. S. capital and the South African economy-has ended,and this must be seen as a victory for the forces supporting disengagement.However, less visible forms of support and participation remain, notably thecontinued operations of First National City and Chase Manhattan Banks insideSouth Africa.FIRST NATIONAL CITY

First National City entered South Africa in 1958 and now has six branches there.In addition to participating in the consortium loan, First National City unilaterallyhas extended loans to the South African government. At the height of SouthAfrica's financial crisis of 1961 (when capital fled the country following theSharpeville Massacre) First National loaned the South African IndustrialDevelopment Corporation (IDC) $5 million. 2 Other post-Sharpeville loans by U.S.owned-or-influenced financial institutions included the World Bank, $28million, and the International Monetary Fund, $38 million.In 1965- First Consolidated Leasing Corp. (Pty.) Ltd. was established by FirstNational City along with Hambro's Bank of London and the SchlesingerOrganization.In early 1969, J. Howard Laevi, Vice Chairman of First National, toured SouthAfrica and "Citibank" branches. Mr. Laevi stated Citibank planned to openadditional "mini" banks which are described as full service banks, but with staffsof only four or five people in response to the acute shortage of skilled whites. Oneof these so-called "mini" banks has been opened at Isando. Mr. Laevi stated thatFirst National was also interested in going into computer leasing in South Africa.3CHASE MANHATTAN BANKChase entered South Africa in 1959, and originally maintained three branches runby the Chase Manhattan Overseas Banking Corp., a subsidiary of Chase in NewYork. However, in 1965, on acquiring a substantial (15 percent) interest in SouthAfrica's second largest bank, Standard Bank, Chase dropped the use of its namewhile merging all existing Chase facilities into the 805 branch Standard complex.Chase has two mem-AFRICA TODAY

bers on Standard's Board of Directors including Chase Vice-President, John B. M.Place.4 According to recent reports, Standard is about to combine with theCharter Bank of London, which has more than a thousand branches in the Nearand Far East. The merger is likely to lower theCHASEMANHATTANChase interest in Standard from 15 percent to about 14 percent, although it isdoubtful that the new arrangement will affect Chase in South Africa.In July, 1959 Chase loaned $10 million to the South African government for threeyears and also negotiated an $8.5 million revolving credit for the IndustrialDevelopment Corporation. This credit allows South Africa to draw on readilyavailable funds as needed and thus provides a buffer to her international creditrating. Both Chase and First National have made loans to the IDC which has amajor role in providing incentives for the relocation of industry into the borderareas adjacent to the so-called "homelands."CHEMICAL BANK NEW YORK TRUST COMPANYAnother consortium loan member was Chemical Bank. While it maintains nobranches in the country, Chemical states that it is "favored" with accounts fromthe South African Reserve Bank as well as the New York agency of the Standard

Bank of South Africa. Chemical takes the position that the South African CentralBank has, over the years, maintained a very satisfactory account with them andthey (Chemical) feel obligated to render financial assistance if needed.5Essentially, this is both the rationale and the danger of U. S. banking links withSouth Africa. Apartheid has been profitable to them and they feel an obligation toit.FOOTNOTES1. For a full report of the campaign against the consortium loan, write TheAmerican Committee on Africa, 164 MadisonAvenue, New York 10016.2. Financial Mall (South Africa). January 31, 1989.3. New York Times, July 3, 1969.4. Associated Press, November 21, 1969.5. Letter dated February 16, 1968 from Chemical Bank's Executive Vice-Presldent Keith M. Urmy.This man- arranged one of thelargest ore deals of all time.For three long years, he presuaded, he created, he planned. His plan - to convincethe South Africans to build their own blast furnaces for converting raw ore intopig iron. Then, simultaneously, convince the Japanese to start importing pig ironfrom South Africa.His global matchmaking paid off. His achievement one of the largest trading dealsof all time.Chemical Bank was at his side.We put our 145-nation International Division at his disposal. We supplied lettersof credit. We came up with vital information on local politics. And strategiceconomic and logistic advice. To say nothing of the money it took to close thedeal.Today, the American Capitalist is an international capitalist. He needs a bank withworldwide capability. His bank is Chemical Bank.ChemicalBankThis advertisement by Chemical Bank lauding its big South African deal wasplaced in the New York Times on March 18, 1969. On that same day the U.N.Special Committee on Apartheid was meeting in a seminar with various Americangroups to discuss ways to combat South African racism. The advertisement wasbrought to the attention of the seminar, as well as the fact that Chemical Bank wasthe bank in the U.N. headquarters. The pressures brought against Chemical for itsaid to South Africa were probably key in the termination of the $40 m.consortium loan.

Oiling The Apartheid MachineTHE SEARCH FOR OILWhile American banking interests have demonstrated their loyalty to South Africain crisis and are presently in the wings, American oil interests have center stage.Having played the key role in developing refining facilities for South Africa's

imported oil, U. S. oil companies have now assumed an important part ingovernment plans to locate oil within the country itself.RECENT DEVELOPMENTSFor 60 years South Africa, rich in natural resources, has been drilling for oil, theone mineral it lacks and needs most to become industrially self-sufficient andtherefore safe from any threat of sanctions by the international community. SouthAfrica spends approximately $190 million per year importing almost all its oil (90percent) from potentially hostile Persian Gulf sources and manufactures theremainder of its requirements through an oil-from-coal process.' Oil consumptionis rising rapidly-12 million tons in 1969 compared with 7.3 million tons in 1967.2Ignoring the 1963 United Nations resolution urging member states to refrain fromsupplying oil to South Africa, U. S. companies have taken the lead in the crucialarea of oil exploration (as well as refining and marketing), and in March, 1969,South Africa announced a petroleum gas strike by the Superior Oil Company ofHouston. This strike confirmed the presence of oil on the Continental Shelf offPlettenberg Bay3 and has spurred expanded activity off-shore.The increasing tempo of the search is evidenced by Superior's intention to spendabout $7 million in 1970 on the operations of its huge oil drilling platform, OceanTraveller, which will operate in the vicinity of the gas strike.4 Until now, drillinghas been carried out from ships such as the Glomar Sirte which pinpointed thegas. The arrival of Ocean Traveller, the first semi-submersible drilling platform inSouth African waters, is regarded as a significant event in the oil hunt by theSouthern Oil Exploration Corporation (SOEKOR), a government agencyestablished in 1965 to coordinate the search and award concessions. 5 Since itsfoundation, SOEKOR has spent approximately $26.6 million looking for oil. Fouryears ago South African geologists knew little about oil, but now the agency'sexploration methods compare with any in the world. Moreover, SOEKOR hassucceeded in leasing the whole of the South African off-shore area as well as allavailable areas off Namibia (South WestAFRICA TODAYAfrica)-primarily to U.S. companies. SOEKOR works with an annual allocationof $7 million from the government and will receive increasingly large slices of theoff-shore concessions. Under the terms of their agreements, foreign investors willforego a quarter of their concession areas (they decide which quarter) after 39months, and another quarter after seven years. First retrocessions are due thisyear.6 With this in mind and in preparation for partnership in selected off-shoreventures, SOEKOR has hired a consulting firm to coordinate and interpret theresults of the off-shore explorations.The Mossel and Plettenberg Bay areas between Cape Town and Port Elizabethhave been described as "a hive of activity" as second and third U.S. companieshave joined Superior in the offshore hunt in areas ceded by Midlands Oil, a largeon-shore concession holder.7 One company, U. S. National Oil, will operate onbehalf of Midlands.8 Next to the Superior concession in Agulhas Bay, U.S.Natural Resources, Inc. of Delaware, in conjunction with Rand Mines andSOEKOR will spend $2,800,000 to explore a 5mile-wide strip between MosselBay and Plettenberg Bay. This will be SOEKOR's first direct participation in off-

shore exploration.9 Transworld 61, a 6,000-ton rig built in Japan, arrived off PortElizabeth in August, 1970 to start drilling operations five miles off-shore fromMossel Bay. 10A crude oil strike at Colchester near Port Elizabeth early this year has motivatedincreased activity on-shore. The presence of crude oil was detected in an on-shoreborehole in the prospecting lease area of H. M. Mining and Exploration Companywhere SOEKOR is exploring for oil by agreement with that Canadian company.H. M. Mining is an associate company of the Syracuse Oil Company of theUnited States.'In the search for oil in southern Africa, 1970 will probably be the peak year so faraccording to the Financial Gazette, with expenditures in South Africa andNamibia alone approaching $28 million, equal to the total spent by SOEKOR inits four years of operation.12 Officials of SOEKOR are saying that while chancesof finding commercial oil deposits on-shore are not promising, the prospects for asignificant strike off-shorewhere the search is dominated by giant U.S. firms-aremuch better. Credit for the development of this area is acknowledged by the SouthAfrican Institute of Mining and Metallurgy: "It is encouraging to observe thevigorous manner17

in which the South African off-shore lessees (U. S. companies) have gone aboutexploring their respective areas."The various U. S. exploration interests are outlined below:U. S. ON-SHORE CONCESSIONS1. Argus Oil, owned equally by Texans Mike Dodgen, Sam Collins and WarrenThackston, has exploration concessions covering 20 percent of South Africa'sland surface.132. Ashland Oil, Valveline Oil Company S. A. is in the Transvaal.143. Glair and Kestler is a Los Angeles group with mineral rights at Kareebosch'where deep drilling started in July, 1966, at a ceremony attended by the late PrimeMinister Verwoerd. They make use of a special oil rig built by KeirCawder-Amscott of the U.S. with the cost of drilling paid by the South Africangovernment.164. Gulf Oil Corporation had until recently a 70 percent interest in Zululand OilExploration. The remaining 30 percent is shared among SOEKOR, EngelhardHanovia and two other South African mining groups.17 While Gulf's investmentin South Africa was not particularly large, the company is prominent in thesouthern Africa area as a whole with a major oil strike in Cabinda (Angola), andoperations off-shore Mozambique.185. Midlands Oil is a major land concession holder with rights extending the lengthof the Cape ,coastline.196. Syracuse Oil Company of the U.S. is associated with the Canadian company,H. M. Mining, and SOEKOR in the Eastern Cape region.20U. S. OFF-SHORE CONCESSIONS1. American Pacific Petroleum (Los Angeles) in which Pantepec International,Petroleum Corporation of America, Kewanee Overseas Oil Company of Tulsa,

Oklahoma, West Germany's Bochumer Mineralol Gesselschaft and Company, andUnion Corporation, Ltd., S. A. also have interests.21 Under the terms ofagreement with American Pacific, each company acquired an 18.75 percentworking interest in a prospecting sublease amount to 1,152,000 acres north ofDurban, covering exploration for oil, gas and other hydrocarbons. AmericanPacific retains a 25 percent interest in the property. A marine seismic survey hasbeen started on the block which extends approximately 80 miles north fromDurban.222. Amoco has an off-shore concession east of Cape Town.233. Atlantic Richfield (Los Angeles) has exploring rights off-shore Anniston.244. Chevron-Regent (a Caltex subsidiary) is off-shore Stillbaar.5. Esso Exploration Inc. (New York) arrived in South Africa in 1963, and inaddition to marketing, is moving into the oil search.26. Mobil (New York) is in a consortium with B. P. Shell and C. F. P. (Total) ofParis off-shore Humansdorp-East London.7. Placid Oil, owned by the H. L. Hunt family,US EXPLORATION SITESU. S. EXPLORATION LEASEHOLDERSSOUTH AFRICA: ONSHORE SOEKOR sub-leaseholders1-Argus Exploration2-Karroo Basin 3-H. M. Mining 4-Midlands Oil 5-Zululand OilSOUTH AFRICA: OFFSHORE SOEKOR sub-leaseholder.6-Esso Exploration & Production7-Amoco8-Atlantic Richfield9-Caltex10-Placid International11-Superior, Highland Resources.Tenneco, Cities Service12-Mobil, Total, Shell BP13-American Pacific14-U. S. National15-U. S. Natural ResourcesNAMIBIA:SWAKOR sub-leaseholder.16-Shell BP 17-Gulf Oil18-Chevron Diamond Mining19-H. M. Mining, Syracuse Oils, Woodford20-Consolidated Diamond Mines [subleased byChevron Oil SWA (subsidiary of StandardCalif.) & Regent Petroleum SWA(subsidiary of Texaco)]21-Etoshahas exploring rights off-shore Mossel Bay forcrude oil only.

8. Security Resources (East) owned by a group of Los Angeles businessmen willoperate offshore East London-Durban.9. Superior Oil Company (Houston) is the operator for a group of U.S. companiesincluding Cities Service Company, Tenneco Inc., and Highland Resources. Majorexploration and petroleumgas strikes have been found off-shore in the Plettenberg Bay area.10. U. S. National Oil will operate on behalf of Midlands Oil.2611. U. S. Natural Resources, Inc. (Delaware)

functions under an agreement concluded in December, 1969, when Rand Minesand SOEKOR obtained half shares in a 52.2 percent slice of the off-shoreconcession area (barely 35 miles from the scene of South Africa's off-shore gasstrike) ceded to U. S. Natural Resources by Midlands. Engelhard Hanovia and theTransvaal Consolidated Land and Exploration Company will operate in theinterest of Rand Mines, and a new corporation, Engelhard Enterprises has recentlyacquired a 10 percent interest.2REFINING AND MARKETINGCaltex (jointly owned by Standard Oil of California and Texaco), Mobil, and Essocontrol approximately 44 percent of the market for all petroleum products inSouth Africa.28 Caltex and Mobil own two of South Africa's three majorrefineries and refine half of her imports.29Texaco began marketing in South Africa in 1911 while Caltex was formed in1941. It did not build a refinery until 1966, and is now involved in marketing andmanufacturing with 20 percent of the market. Caltex has a refinery at Kilarny,Cape Province, a $27.4 million operation with a capacity for crude of 30,000barrels daily and a storage capacity for crude of 1.2 million barrels.3° In February,1967, the company opened a new refinery at Milnerton, Cape Town to process30,000 additional barrels per day,31 and recently moved into the final phase of a$21 million expansion of this refinery which will increase the output to 50,000barrels per day.3 With the new equipment in operation, there will be an additional8 percent yield of kerosene and jet fuel. Until now Caltex has imported its jetfuels.33 In 1965 Caltex signed an agreement allowing a South African tanker toship about 15 percent of its Cape Town refinery requirements.3 Throughanother subsidiary, Chevron-Regent, Standard Oil of California and Texaco alsoare involved in oil exploration.Caltex employs 550 Non-whites out of 1,700 employees, and claims to have anenlightened wage policy. But looking at the weekly wage scale one notes that theminimum wage for an unskilled Non-white worker in the Cape is $18.20, for awhite the minimum pay is $43 a week.Both Caltex personnel and the corporation itself openly support South Africa. R.D. Wrigley, Jr., former American manager of Caltex, S. A., is a member of theSouth African Foundation. In addition, Caltex ran an ad campaign inJohannesburg papers and magazines. One ad read as follows: "Ahead of Caltexlies many years of search and perhaps disappointment--or the discovery whichwill free South Africa for all time from dependence on outside oil supplies."'3 YetCaltex personnel try to hide behind legalities. John D. Tierney, Manager, Public

Relations Department claims, "Caltex Petroleum Corporation is not typical in thatit does not itself operate in Africa, but owns independent and separate subsidiarycompanies in some countries there.TABLE I - Caltex Weekly Wage Scale For NonWhites--CapetownGrade Wage Description1 $18.20 (minimum) least skilled: floor$16.80 (Reef pay) sweeper, kitchen hand$15.40 (other)2 $20.30 (minimum) drum cleaner, messenger3 $22.40 messenger4 (no information) asphalt operator, charge5 hand, chauffeur, chef6 no information, but note that the whitewage scale cuts in at this point, i.e. whitestaff grade 2 is equal to Non-white grade 6.7 $33.88-$50.40 gauger, loading rock operator, clerical assistant, truck driver8 $40.56-$66.78 traveler sales representativeThe oil industry is affected by the general conditions regarding skilled laborincluding forms of job reservation. For example truck drivers of bulk trucks arewhite, while smaller trucks can be driven by Non-whites.These subsidiaries are nationals of the countries in which they do business."36Along with Caltex, Mobil refines and transports half of South Africa's oil. Mobiland Standard Oil of New Jersey (Esso) were combined as Standard Vacuum andoperated as such in South Africa until 1962, when a U. S. government antitrustsuit forced them to split. Mobil Oil retained the entire southern African operationand took the name Mobil Petroleum Corporation.37 MobilMobilTRUCK DRIVERSVacancies exist in Durban and Natal forexperienced European Heavy Duty Truck Drivers. Applicants should be betweenthe ages of 25 and 35 and have at least three years' heavy duty truck drivingexperience.Possession of Junior Certificate will be arecommendation. Participation in excellent Pension and Medical Aid Schemes isa condition of employment.Written applications, giving full details,should be addressed toEMPLOYEE RELATIONS DEPARTMENT,P.O. BOX 136, DURBAN99817 777A18A "whites only" Ad placed by Mobil in the South African Daily News, January16, 1970.AFRICA TODAY

has a refinery at Durban, where it recently launched an $8.4 million expansion,38with an annual capacity of 1,450,000 tons of crude, and dealership and servicestations throughout South Africa.39 Additional facilities are located in Natal,

Isando, and Cape Town.40 For the period August, 1965, to July, 1968, Mobilsupplied South African Airways with aviation fuel.41 Mobil also has joined in oilexploration in a consortium described above. Shell and Mobil cooperated in 1966to finance a 100,000 gallon oil depot at Messina in the Transvaal within easyreach of the Rhodesian border, a depot which could help relieve the sanctionscrisis in that country.42Mobil has an annual sales volume of $162 million with slightly more than halfthat amount of the sales held in stock. It controls about 25 percent of refining andmarketing of petroleum in South Africa.Mobil employs 1,970 whites, 1,250 Non-whites. It claims that all its workersreceive the same benefits, but, as is common, the areas of medical assistance,pension plans and vacation benefits differ between the racial groups. Mobiladmits that Non-whites are not employed in the supervision of whites or in "directbusiness dealings with Whites," but rather have lower echelon jobs as drivers,clerks and storemen with a few salesmen, "minor Department Heads," labassistants and computer operators. In the Non-white grade scale, average wagesbegin at $16 a week, while at the top grade, where there are very few Nonwhites,the wage is $56 a week. Europeans are paid on an entirely different scale based oninternational standards. Mobil workers are not unionized. Mobil does have aprogram for training Non-whites in service station work, and is aidingbusinessmen in the Transkei and other Bantustans, a program in line with SouthAfrican government policy.Standard Oil of New Jersey (Esso), which was the other partner in the StandardVacuum split, did not re-enter South Africa until 1963. Standard, operating asEsso Petroleum Company, has an automated oil terminal at Cape Town worth$980,000,43 as well as one on a 20-acre site at Durban and a terminal atMilnerton, Cape Town with 10 tanks and a capacity of 7.5 million gallons. Theyhave also built new storage depots at Pctchesfstroom, Pietermaritzburg,Johannesburg, and Kroonstad.44 Esso markets through 50 or more retailers andhas a small work force of several hundred employees. Some predict Esso isplanning to enlarge her South African investment, and a Financial Mail articlereports Esso has been talking to the South African government about thepossibility of building a refinery at Richards Bay, which would move Esso fromsimply marketing to a new stage in her commitment to South Africa.45A consortium formed by Fluor InternationalInc. (Los Angeles) and Fur Mineroltecknik (Frankfurt) is building an $84 millionrefinery for National Petroleum Refiners of South Africa(NATREF). Located a few miles from Sasolburg,the refinery will process 2.5 metric tons of crudea year and will produce a full range of petroleum products, including liquidpetroleum gas, jet fuel, petrol paraffin, diesel fuel, light fuel oil and bitumen. Theprocess design for the factory wasdone by Universal Oil Products of Des Plaines, lilinois.46Tn sum, U. S. oil firms in the refining, marketing and exploration field are at theforefront ofthe South African economy. Working with

SOEKER and other governmental bodies, the statement of one oil official seemsto be an understatement. He said, "We couldn't live here if we weren't goodcitizens; therefore we are very law abiding."FOOTNOTES1. New York Times, December 7. 1969.2. International Petroleum Encyclopedia, 1970. p. 77.3. New York Times, December 7, 1969.4. South African Scope, March, 1970; News from South Africa, December 10,1969; South African Digest, January 9, 1970.(All three references are publications of the Government ofSouth Africa.)S. New York Times, December 7, 1969.6. Financial Mail (South Africa), Jan