South Africa Post Will Go to Human Rights Foe

The Reagan administration is expected to appoint Herman Nickel, a leading multinational corporate booster, to be the next U.S. ambassador to South Africa.

"It's not a big secret that (Nickel) is going to be named," says Chuck Berk, a staffer for the Senate foreign relations committee, which votes on ambassadorial appointments. at the State Department, one official familiar with South Africa says Nickel's appointment "is not official, but I won't deny it."

When contacted by Multinational Monitor on January 20 at the State Department's Africa bureau, where he is taking calls, Nickel refused to comment on the possibility of his appointment.

Nickel has made a career of defending big companies from human rights and other issue-oriented critics. He spent 23 years as a writer for Time, Inc., retiring on December 31, 1981 from his last post with the company as Washington editor of Fortune magazine.

An examination of a number of Nickel's Fortune articles over the past three years, when he was a Washington editor, gives a clue as to the kind of person Reagan favors for a sensitive diplomatic post in a country where human rights violations are codified, and where multinational corporations play a controversial role.

"Talking Back To The Anti-Nukes," dated January 28, 1980, is a vintage Nickel piece. He spends three pages ridiculing opponents of nuclear power and exalting the nuclear industry's advocates. Using Jane Fonda and Tom Hayden as whipping boys, Nickel claims that industry spokespeople - whom he refers to as "truth squads" five times in his first page - have a far superior grasp of the nuclear issue.

In the article, two young nuclear advocates employed by the industry follow Fonda and Hayden around, "correcting their misstatements." From this unsubstantiated claim, Nickel concludes that "the young engineers could hardly match the New Left's dazzle duo in fame or notoriety, but they clearly outclassed them as experts on the issue."

In "The Corporation Haters," which appeared in Fortune on June 16, 1980, Nickel makes a more serious - and controversial - assault on business critics.

Singling out the New York-based Interfaith Center on Corporate Responsibility as a subject of this expose, Nickel uses McCarthyite tactics to smear the organization's efforts, which consist primarily of filing shareholders resolutions at the annual meetings of corporations.

"The confluence of radical Christian and radical Marxist thinking has been under way for some time," Nickel writes, "without arousing much opposition from individual congregations. The Interfaith Center represents 170 Roman Catholic orders and dioceses and 17 Protestant denominations. Nickel brands its employees as "Marxists marching under the banner of Christ."

In this same article, Nickel goes after activists who have campaigned against the marketing practices of infant formula manufacturers such as Nestle.

Nickel labels the boycott of Nestle and the campaign to restrict industry marketing as "bizarre" and describes the arguments of the protesters as "terrible distortions," "transparently silly," "anti-corporate propaganda." For the seasoned Fortune editor, the issue of whether infant formula manufacturers should promote their product in the third world really is a simple one: "the benefits easily outweigh the risks,' Nickel says.

Not surprisingly, Nickel's story delighted the infant formula industry. "The Fortune article... is the best opportunity we have had yet to put the record straight," states a Nestle internal memo from the company's international vice-president to the company's chief executive officer, "and must be fully exploited" (Nestle's emphasis). Bristol-Myers, another producer of infant formula, seized upon the story as well, purchasing more, than 100,000 reprints for which Nickel received royalties.

"The Case For Doing Business in South Africa," published in Fortune on June 19, 1980, provides the clearest indication of how the person likely to be the next U.S. ambassador to South Africa views both the role of Western corporations and the possibilities of change in that country.

Imputing to corporations an acute moral sensibility ' that overrides profit considerations, Nickel says multinational companies have wrestled long and hard with the issue of investing in South Africa, internationally condemned for its racist policy of apartheid.

"For [the companies], the crucial question is: would U.S. withdrawal bring the desired human, practical and political rewards?" Nickel answers his own question: "The true nature and impact of any such withdrawal bears little if any similarity to the avowed objective of its ardent advocates. And this is essentially why," Nickel concludes, "the vast majority of companies - after sober weighing of all risks and uncertainties - have chosen to stand their ground."

Nickel claims that corporations contribute to "an evolutionary process" that "is at work" eroding apartheid. His basic argument is that foreign investment brings economic advance, which 'in turn will sweep apartheid away in its wake. _

"Institutional racism is plainly incompatible with the functional requirements of an expanding industrial society," Nickel says. Because of a "structural transformation of the labor market" in South Africa, notes Nickel, there simply are not enough skilled white workers available to service the economy. Solution: Break down racist laws so that blacks can be allowed to rise to the position of "skilled workers."

"It is, after all, in business's own interest," Nickel writes, "that the status of the 10 million urban blacks be improved and given full recognition, for they are indispensable workers."

Nickel's argument "doesn't really hold water," says Richard Knight of the American Committee on Africa.

Even though economic developments have increased the need for skilled labor, "only a few blacks" in South Africa are affected by this trend, Knight says. And those who are able to land skilled jobs still may be discriminated against, he argues: "There is no reason why (companies) can't pay skilled blacks less than skilled whites." This ability to discriminate, claims Knight, is one reason so many South African companies will reduce overall company labor costs.

More importantly, however, Nickel's position removes the entire question of "political rights" from the debate, Knight says. Merely increasing the number of skilled black laborers, he argues, has nothing to do with "changing anything politically."

Nickel also downplays the vital importance of Western investments in South Africa, Knight adds. "It's Western technology (South Africans) rely on," Knight says, pointing to the oil, computer, and automotive sectors as areas of high foreign investment.

Because of Nickel's position on U.S. companies in South Africa, a number of organizations, including the Washington Office on Africa and the Interfaith Center on Corporate Responsibility, are planning to oppose his nomination.

"The appointment of Nickel would be a reflection of a shift in U.S. policy," says Tim Smith, director of the Interfaith Center on Corporate Responsibility, "toward an alliance with white supremacy in Southern Africa."

If Herman Nickel's article entitled "The U.S. Failure in Iran" (Fortune, March 12, 1979) is any indication of his human rights position, then blacks in South Africa should beware. Nickel, likely to be the next U.S. ambassador to South Africa, blames the Carter administration's human rights policy for causing "problems" in the Shah's Iran. One "confusing effect" of the policy in Iran, Nickel writes, was that it "embolden(ed) the religious opposition" by convincing the Shah's "enemies that he was losing his grip." Another problem, Nickel says, was that the Shah "was inhibited by the fear that the U.S. would not stand for a bloodbath."