text: Republic oJGermany havediuinvested about6percentoftheiroperations. Disinvestmt'nt bycompanies baseclinCanada, Australia, Denmark, theNetherlands and anumberofotherWestern European Stateshasalsotakenplace. ~/ 126.Twotrendshaveemerged intheareaofdisilivestment. Firstly, thenumberof companies, bothfromtheUnitedStatesandfromothercountries, endingtheir directinvestment inSouthAfricadropped in1988fromthepeak1981levels. According totheInvestor Responsibility Research CentreInc.,28UnitedStates companies withdrew in1988,justonehalfofthenumberthatwithdrew in19~7.For companies fromothercountries, thedecrease wasevenmoremarkedl 11disinvestments in1988,compared with44in1981. Asofmid-1989, atotalof 134UnitedState; com~l\nies and423companies fromothercountries haddirect investment oremployees inSouthAfrica. ~I 121.Second, anumberofdisinvesting companies haveretained non-equity link~with SouthAfricaunderagreements affectIng suchmatters aslicences, technology transfers, management, assembly, distribution andfranchise. Sucharrangements afford"hewithdrawing companies continued opportunities forprofit-making, while thecontinued flowoftechnology andtechnical support services isvaluable to SouthAfricaforitsindustrial development. ~/Inaddition, disinvestment under thesetermsallowsthewithdrawing companies toavoidthepubliccriticism intheir homecountries asaresultoftheirinvestments inSouthAfrica. ArecentstUdyby theUnitedNations CentreonTransnational Corporations foundthat,ofthe155 UnitedStatescompanies thatdisinvested fromSouthAfricabetween 1January 1984 and14April1989,atleast83(53percent)hadretained non-equity tieswith theirformersubsidiaries1 atleast59(38percent)didnot1and13(8percent) didnotrespond torequests forinformation. Ofthe122companies fromother countries thatwithdrew duringthesameperiod, atleast24(20percent)have retained non-equity links1atleast49(40percent)didnotland49(40percent) didnotrespond torequests forinformation. ~I -33-128.Inearly1989,thelargest UnitedStatescompany continuing tooperate in SouthAfrica, MobilOilCorporation, announced itsintention tosellallitsassets andtechnology inthatcountry eaofJune1989.Mobilisthesecondlargest petroleum operation inSouth Afri~a, with1,000outlets andarefinery. Itemploys 2,800workers. Inaddition tolong-standing shareholder pressure, animportant consideration inmakingitsdecisions wasreported tobethetaxeffects ofthe UnitedStates Ra~gelAmendment, enacted bytheUnited St~tesCongress ~nlate1987. whicheliminat.d foreign taxcro~ita fortaxespaidtothePretoria regime beginning in19Sij. 129.Mobilia decision becameatestoftheprocedure usedbytransna~ional corporaticns todisinvest fromSouthAfrica. Following theMobilannouncement. the COSATU-affiliated Chemic~l Workers Industrial Union(CWIU), speaking onbehalfof theMobilworkers, revaaled thatthecorporation's disinvestment planalloweditto maintain uon-equity tieswithGeneral MiningUnionCorporation (GENCOR). the purchasing SouthAfrican company. CWIUalsounderscored thatGENCORhasarecord ofrepression against tradeunionsinSouthAfrica ~hetradeunionhadalready begunnegotiations with 3~transnational corporations concerning a"fair disinvestment procedure" shouldtheydecideto~ithdraw fromSouthAfrica. Thus, initsdemands toMobil,thetradeunioncalledfornegotiations betweqn the corporation andCWIUonthetel'msofdisinvestment, including the disclosure-of-sale agreement. AGtrikeatHobilrefinerles ledtonegotiations between Mob!landCWIU.Although someissueshavenotyvtbeenresolved. thotrade unionhasobtained mostofitsdemands. CWIUhascalledfortheinclusion of labourrightsclauses inallsanctions ordisinv8stmAnt procedures asaprescribed methodtocomplywithsanctions. Arecentstudyondisinvestment. con1ucted bythe Community AgencyfocSocialEnquiry. madedemands similar tothoseofCWIUand suggested criteria thatcorporations couldfollowindisinvesting. IQI 130.Corporations arewithdcawing fromSouthAfricaforreasons otherthantax considerations. Theseinclude theworsening economic situation inthecountry and thedevaluation oftherand,throughitsnegative effectonthetcansfer of profits. Manycompanies citedpUblicpressure inth.homecountry asafactor. In theUnitedStates, toagreater extentthan elsewher~, state.countyandmunicipal selective purchasin9 and/orcontcacting policies werecitedasaninfluencing factor. Although theUnitedKingdom, theNetherlands andtheScandinavian countries havealsoenacted purchasing and/orcontracting legislation, their initiatives havebeenfewerthanintheUnite~States.AAI
analysis: The text discusses the phenomenon of disinvestment by companies in South Africa, including the reasons behind this trend and the consequences for the country's economy. It highlights the role of international pressure, tax considerations, and economic factors in shaping companies' decisions to disinvest. The text also touches on the issue of non-equity links between companies and their former subsidiaries in South Africa.