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CalTex Plant in South Africa
South Africa Map
CalTex Expands in Apartheid South Africa
What motivated CalTex in 1977 when they decided to expand operations in South Africa? As a for-profit corporation, it is fair to assume they went for profit. This writer makes no argument against profit. Society improves when capable stewards take the helm and capitalize resources to establish public works, create labor-saving technologies, and generally improve quality of life. This paper presents the argument against partnering with wrongdoers to create profit.
When CalTex entered South Africa, who can say what the hearts of CalTex decision makers held? Perhaps they felt bringing jobs and more industry to the nation would benefit the people. Perhaps the full scope of apartheid remained obscure in 1977. However, there came a point when CalTex clearly realized that a conflict between what was healthy for society and what was healthy for CalTex business existed.
When a man sits on a couch, and hears a stifled bark, he quickly stands. He aborts the action he began because he realizes he mistakenly entered into an action which would cause harm. When a man realizes he is on the wrong course, he quickly changes direction. Likewise, CalTex, upon seeing the harmful machine in which they served as an important cog, ought to have ceased action. Unlike the man who sat on a dog and quickly stood, CalTex decision makers decided to remain seated. CalTex is like a man who sat on a dog for money and who then had another man sit on his lap when he deemed it profitable to do so.
Real Power is Held by the People
The Right Thing for CalTex in South Africa
The right course of action in South Africa would have been to sell the equipment, oil rights, and contracts to another corporation or individual. Let that person bear the burden of sin in his life. I personally would sell stock in a business heaping such a bad account onto themselves. Who would yoke himself with such a burden? The only stipulation CalTex should have added would be the maintenance of fair pay and fair housing for black, Indian and colored workers. The modern study of ethics overlooks the important principles laid forth by God. However, these principles prove themselves true over and over again. Here is what a well-known prophet said. In the Bible, this word is found in the book of Isaiah, chapter 58, verse 6.
“Is not this the fast that I have chosen? To loose the bands of wickedness, to undo the heavy burdens, and to let the oppressed go free, and that ye break every yoke?” (Isa 58:6 King James Version)
Embargoes and public outcry intend to pressure wayward nations to honor human rights and the basic precepts of culture. To effect this change, the international community says, basically, “We will not play (do business) with you until you play nice.” The United Nations embargoed arms sales to South Africa because of apartheid (voluntary in 1963; mandatory in 1977). One hundred and thirty nations agreed to an oil embargo in 1987. When companies like CalTex work in conjunction with oppressive governments, they effectively extend the suffering of the oppressed. When an addict hits rock-bottom, when the magnitude of his destitute desperation exceeds the magnitude of the desire from his body to behave in a way he otherwise would not behave, then he will change. The rejection of friends and family, ostracization from the community forces him to evaluate his life choices and actions. He forms a new philosophy, new objectives and a new life. But, this only happens when his community rejects him for his actions. The same is true for corrupt governments: they only change when it is less desirable to stay the course than it is to change.
Which of these situations most parallels apartheid in today's world?
What Should Stockholders Do with Stock in Corrupt Corporations?
Building or expanding business in South Africa parallels giving money to an addict. It is funding bad behavior. Building in such a nation, partnering with it, propagates the evil rising up there. An addict continues in addiction until he exhausts all resources. When the church, his family, and his friends refuse to support him in his destructive ways, the addict makes a personal decision and cleans up his act.
Boycotting and public pressure influenced South Africa. Eventually, apartheid failed. Racist oppression and separation, the caste system of skin color called apartheid in the Afrikaans language was brought down. Every person who spoke out, every business that left South Africa, every person who refused to buy South African goods, and every corporation which refused to enter South Africa for business dealings played a part in defeating this wicked philosophy. Contrarily, those corporations which remained worked against and delayed the end of apartheid. An earlier collapse was thwarted by businesses such as CalTex (now Chevron), which decided to be playmates with the unruly child in the above analogy. Developing oil resources in South Africa and expanding business in South Africa prolonged apartheid. This in turn prolonged the human abuse and unacceptable injustice in that nation. In American courts, the man who drives the get-away car in a robbery serves time along with the man who entered the bank and shot the guard. It was South African police who abused, beat and murdered black protesters. But, it was CalTex refined gasoline fueling their trucks and police vehicles. CalTex tax revenues filled government coffers and paid salaries for police, soldiers and politicians. In effect, CalTex drove the getaway vehicle as an enabler. The economy, in turn, was the vehicle providing support for the unethical actions of the South African government.
The arrangement almost exclusively benefited whites. Additionally benefiting were white racism and every other industry operating in South Africa which was not owned by blacks. The oil and natural resource of the land rightly belong to the people of South Africa. The right to work and to earn fair wages eventually went out to all South Africans – after apartheid fell. If foreign corporations had departed sooner, apartheid would have failed sooner. CalTex and other corporations cannot truthfully claim to impact the job market by giving some small number of jobs in a large population. In 1977, CalTex had 742 black workers in a nation of 25.8 million (data.worldbank.org) of which 82 percent were black. This amounts to .0035 percent. In effect, CalTex co-sponsored oppression of 21.2 million people to improve conditions for several hundred others. CalTex cannot claim they produced any benefits except to the reigning regime and to CalTex itself.
The possible utilitarian benefits of building the CalTex plant in 1977 were not more important than the violations of moral rights and of justice involved. There are no benefits which would not also exist in a free and sovereign society, which we see today. The only benefits were to CalTex. Building the plant would further support and even strengthen the state of power in South Africa- racism. The most important factor in 1977 South Africa was removal of apartheid. Everything needed to be done to this end. The pressure needed to mount to such a degree as to break the will of the white ruling minority.
If I had sat on the board for CalTex in 1977, I would have voted yes, CalTex ought to terminate its operations. I would not ask CalTex to cease selling fuel to the military or police of South Africa. The law of the land should be obeyed, so I would not vote for this provision. However, I would expect CalTex to honor the will of its stockholders and work politically to rescind this law. The Student Guide Case #4, An African Investment acknowledges that corporations can influence governments to the benefit of the corporation. “Because it was important that American companies remain in South Africa, however, the government became more receptive to the lobbying efforts of American companies.” (Ashford University, p. 11). Later, in June, 1987, the exodus of American companies became nearly complete as Citibank and Ford Motor Company announced their exits. (Feder, 1987). The end of apartheid soon began with negotiations in 1990 and culminated with the elections of 1994 in which Nelson Mandela, an imprisoned activist, became president.
As a stockholder in 1977 CalTex, I would believe that CalTex should implement the Tutu principles, omitting the clause for unions. History shows that unions become political work horses and fail to serve the workers’ interests. Otherwise, the Tutu principles promote fairness and respect. This improves the quality of life for all.
Obligations of Mankind, CalTex in South Africa Included
Managers of Texaco and SoCal should have made the same responses to the resolutions as just described, above. Mankind has a responsibility to the members of our kind. Real, tangible, and negative consequences result from wrong action. The phrase “Therefore all things whatsoever ye would that men should do to you, do ye even so to them...” (Mat 7:12a KJV). This ‘golden rule’ is misrepresented as a philosophy. In reality, we find it is a law of God. When a person commits an action against another, that same action, situation or experience comes into the life of the offending party. What you do to others is what happens to you.
A company does not own the liberty to make decisions based only upon the need to produce a high return. Instead, natural laws of accountancy obligate leaders to make decisions based on high returns- but only within the limits of fairness and ethics. The ultimate criterion for a decision is “What does God think about this?” The rate of return is important and should be maximized only as long as it does not violate God’s will for unity and love in mankind. Individuals working and taking action in the world under the umbrella of a legal corporation are not exempted from God’s law. Therefore, these leaders have a responsibility to obey God’s will for honesty, fairness, and other forms of loving kindness. Each individual member of society has a responsibility to speak against wrong action when it is encountered. All must ostracize and refuse to support rogues who violate basic principles of humanity. Further, we must refuse support to those who aid violators of basic human tenants.