Pension Board OKs Divestiture Intent
Episcopal News Service. May 30, 1986 [86092]
NEW YORK (DPS, May 1) -- The Church Pension Fund's board of trustees has voted to divest the Fund of holdings in "certain companies doing business in South Africa."
There was no audible opposition as the trustees approved a three-page policy document presented by Canon Yung Hsuan Chou of the Diocese of Michigan. Chou's Social and Fiduciary Responsibility Committee has worked closely with the Finance Committee of the board over the last six months to develop a response to a General Convention call for all Church agencies to join the divestment movement. The Pension Fund has been under wide public pressure recently to take the step since the Fund -- with marketable assets valued at over $1 billion -- is the largest single Episcopal Church investor.
The policy statement rehearses the Fund history of fiduciary accountability and its commitment to its beneficiaries and reviews recent actions in support of stockholder resolutions and conversations with firms active in South Africa. It then asserts: "Taking into account both our mandate to our beneficiaries and our history of involvement within the narrow constraints of this mandate, it is clear that we must find moral and legal ways to do more so as to properly respond to the General Convention Resolution (urging divestment.)
"Within the rules of prudence and with due regard to our fiduciary responsibility, we have decided to divest holdings in certain companies doing business in South Africa."
The paper then lays out seven steps for initial action:
- The Trustees have voted and confirm the policy of not investing pension funds for any purpose, no matter how worthy, that might reasonably be expected to reduce present or future pensions for the clergy and their families.
- The Committee for Social and Fiduciary Responsibility will continue to monitor the activities of companies we invest in, doing business in South Africa and Namibia in the interim in which we continue to hold stock in such companies.
- The Trustees will commend those companies taking positive action pressing for the dismantling of apartheid.
- The Trustees will not invest in any company rated by the Arthur D. Little Company as Category III under the Sullivan Principles, or in any company which has operations in South Africa and has not signed the Principles, subject to regular review.
- The Trustees will not invest directly or indirectly in securities of the South African Government, its agencies or in South African firms or companies controlled by South African firms.
- The Trustees will not invest in securities of financial institutions which make new loans to or buy bonds of the Government of South Africa and it agencies.
- The Trustees will divest immediately from those companies whose actions work to support the government, its military and police in South Africa and Namibia.
The Diocese of Newark has been a leader in pressuring the Fund and voted at its annual convention to establish an escrow account for diocesan pension contributions if the Fund did not move to divest. In a move that Pension Fund officers said was unprecedented, observers from the Diocese of Newark and members of the press were allowed into the cramped boardroom for the discussion and voice vote.
What they heard was the end of conversations that had obviously been going on since February, with many board members offering research, ideas or suggestions to the committees. Pittsburgh Dean George Werner, who wrote the final draft, noted that most Board members had studied it overnight. A few changes were offered to clarify language.
After reviewing the document for a week, a spokesman for the Newark group said that "it appears to be one we can live with and we will probably recommend that the diocese accept it. But we will be looking very closely at the way the Fund applies this policy and will be in weekly telephone contact with Fund officers."
The fullest comment during the meeting was offered by Bishop John T. Walker of Washington, who said that while he was voting for the measure, he was also aware that "Apartheid is coming to an end," and we need to look to the future of black rule in South Africa.
Walker said he believed it was important for U.S. church leaders to use their influence to get corporations to help provide training for black South Africans to take over after the end of apartheid. Some critics of black liberation efforts "would like to see blacks take over and fall on their face," he said. "It doesn't have to happen." He said help from corporations is "necessary if that country is going to make it."
Walker said he is working to arrange for Bishop Desmond Tutu to visit the United States in June to meet with leaders of "five or six corporations" that do business in South Africa. 'We can use our influence to get some of these American corporations to come to a meeting to plan for the future", he said. "But if all these corporations leave South Africa, I don't know if we'd have companies interested in training young blacks to run corporation."
Walker added, "I don't want (President P.W.) Botha to be able to say, 'I told you so.'"
Walkers remarks were incorporated into the minutes and the board agreed that the Fund should take a lead and invite black South African potential managers to work as guests of the Fund to gain experience in pension and insurance management.