Episcopal Resolution Defeated at Shareholder Meeting
Diocesan Press Service. April 24, 1973 [73107]
BARTLESVILLE, Okla. -- An Episcopal Church proxy resolution dealing with exploration, mining and oil drilling activities in Namibia (South-West Africa), was defeated at the annual meeting of Phillips Petroleum Company here, though 9 percent of the shares voted were either for the Episcopal position or were abstentions.
The Episcopal resolution asked Phillips not to "conduct exploration, mining, or oil drilling activities in Namibia (South-West Africa), either directly or through affiliates " and to "wind up any operations currently underway in that country as expeditiously as possible."
The Episcopal Church owns 15,600 shares of the 60 million represented and voted at the meeting.
Approximately 91 percent of the shares were voted for management, 4.5 percent for the Episcopal resolution, and 4.5 percent abstained.
Institutions and churches supporting the Episcopal resolution were Yale University, Harvard (70,000 shares), the American Baptist Churches (58,920 shares), the Reformed Church in America (29,000 shares), and other Protestant denominations. While universities in the past have voted their shares asking companies to disclose operational details, this was the first time they have supported a resolution asking a company not to begin investments and operations.
Paul M. Neuhauser, Iowa City, Iowa, chairman of the Episcopal Church's Committee on Social Responsibility in Investments, in moving the resolution, said: "The issue before us is not what the policy of the company is regarding equal employment opportunity, or the difficulty facing business in an imperfect world. The issue is that we have entered into agreement with the government of South Africa for concessions in another country, Namibia. "
He said that the Republic of South Africa, which has granted Phillips concessions to search for oil offshore Namibia, has no legal right to do so since it is not the legal government of Namibia. "It is a usurper," he said, "and is recognized as such by virtually all of the governments of the world."
As recently as 1971, he pointed out, the International Court of Justice ruled "that South Africa's presence and administration of Namibia is illegal and that member states of the U.N. are obliged to recognize that illegality and 'to refrain from any acts and in particular any dealings with the Government of South Africa, implying recognition of, or lending support or assistance to, such presence and administration.'"
In 1966 the United Nations terminated the League of Nations Mandate which had placed Namibia under the administration of South Africa and itself assumed that trust. The U.N. set up an 11-member Council for Namibia to administer the territory but that council has not been able to exercise its authority in Namibia because of South Africa's refusal to recognize the U.N. as the successor of the League of Nations and because of its continued occupation of the territory.
"United States government policy," Mr. Neuhauser said, "is to discourage investment by U.S. nationals in Namibia. It more than discourages; it urges U.S. corporations not to invest in Namibia. We urge the management of our company to support President Nixon's policy. Follow the lead of other corporations such as Gulf Oil which has declined to become involved in bolstering South Africa's position."
Gulf Oil had previously announced that it will not invest in South Africa or Namibia. Mr. Neuhauser said that stockholders' investments would be jeopardized if Phillips invests and operates in Namibia since the U.S. government has agreed not to give "assistance in protection of such investments against claims of a future lawful government of Namibia."
Mr. Neuhauser said that Chief Kapuo of the Herero people of Namibia recently expressed the fear "that when freedom comes to this land, it will be returned to us with no minerals left . . . We wish all foreign firms to be removed immediately; we wish to be consulted on ways and means by which our peoples can have a fairer share in benefitting from the wealth of the land of their birth."
The Rev. Al Baugh, Deputy Executive Secretary for the National Ministries of the American Baptist Churches, in seconding the resolution, said that he came to the Phillips annual meeting "to be the voice of the Namibian people, who cannot be here today. "
"We are here today," he said, "to make an appeal to management. Do not invest in Namibia; do not put American dollars and international prestige on the side of South Africa's illegal occupation of Namibia; do not give South Africa added incentive to stay in Namibia by helping it find oil there; do not continue an agreement that surely will be discarded when Namibia becomes independent, thus jeopardizing Phillips' shareholders' dollars; do not ignore the wishes and needs of 750,000 black people who search for freedom and independence while Phillips searches for profits."
"All across the continent of Africa," he said, "one hears one cry, 'We will be free!' Will you as a corporation facilitate the achievement of that goal or will you join the oppressor and postpone that day of freedom in Namibia that must surely come ? "
Another supporter of the Episcopal resolution was Tim Smith, representing the Reformed Church in America. He said, "There is no possibility of neutrality in Namibia when it is occupied by a foreign country. All are agreed that such neutrality is impossible. "
The management of Phillips argued that investment in South-West Africa does not involve their company "in taking any position as to the legal standing of any such authorities. Further compliance implies neither approval nor disapproval of the controlling authority for its political or social policy. "
About 1,000 shareholders attended the Phillips meeting and listened attentively to the supporters of the Episcopal resolution.
The 4.5 percent support for the Episcopal Church's resolution was sufficient for it to be included in management's proxy for next year.
Continental Oil Company, which has also been granted concessions from the government of South Africa to search for oil offshore Namibia, faces a similar resolution at its annual meeting on May 1. A proxy resolution has been filed by agencies of the United Church of Christ.
At the conclusion of the Phillips meeting, Mr. Neuhauser said, "We are greatly encouraged by the fact that almost 10 percent of the shareholders either voted for us or refrained from supporting management. "
The Episcopal Church is a participant in the Church Project for U.S. Investments in Southern Africa -- 1973, a cooperative venture of boards and/or agencies of seven religious denominations and one independent organization of Episcopal churchmen. he boards and/or agencies are from the American Baptist Churches, the National Council of Churches, the Episcopal Church, the United Church of Christ, the United Methodist Church, the United Presbyterian Church in the U.S.A., the Unitarian- Universalist Association, and the Episcopal Churchmen for South Africa.