Corporate social monitoring in South Africa: A decade of achievement, an uncertain future

Abstract

Corporate social monitoring has reached its most systematic form and has had the most practical impact with regard to companies doing business in South Africa. The Sullivan Principles have guided the monitoring system for U.S. companies, of which about 166 remain in South Africa and about 140 have withdrawn. However, corporate social monitoring in South Africa is currently subject to certain tensions. The Rev. Sullivan has called for the withdrawal of U.S. companies, and has himself withdrawn from the monitoring effort.

This paper discusses the economic climate for U.S. business in South Africa both historically and currently, the conflicting pressures experienced by U.S. companies remaining there, and the effectiveness of strategies aimed to create pressure for companies to withdraw, including divestment resolutions, purchasing restrictions, and sanctions.

Current attempts to retain a form of corporate social monitoring are described. The potential politicization of the system is discussed, with particular attention paid to the formation of a new structure which could come to provide the moral leadership formerly provided by the Rev. Sullivan. However, corporate social monitoring could become confused with an anti-sanctions lobbying effort on the part of corporations, and would lose credibility if this were to occur.