NZI- The Share War Begins

Most of the supporters of the motion were students who through local and national student associations have been buying up a minimal number of shares to give them voting rights in the company. Other support came from shareholdings of religious groups and individuals. There was a marked difference in the appearance of the shareholders present — between the students and the preponderance of aged investors who had been especially urged to come to the meeting by the worried management.

Unusual security precautions were taken by the management, including having police men outside, and a fireman, a first aid attendant and security officers inside. Before beginning the meeting, the Chairman of the Board of Directors, Mr D.H. Steen, checked that, no tape recorders were operating in the audience. (It was later found out that NZI made their own tape of the entire proceedings.)

The first signs of the debate to follow came after the chairman's annual report had been presented by Mr Steen when the Rev. Don Borrie (General Secretary of NZSCM) asked if the directors supported apartheid. This question was ruled out of order. NZUSA International Vice President Alick Shaw then asked: "In view of the fact that this company is involved in commerce in Rhodesia, have the directors of the company taken legal advice about whether this is a breach of UN sanctions and NZ law?" In asking the question he told the directors that a group of experts in constitutional and commercial law are preparing a case in Wellington which will entail the sueing of the directors of the company for such a breach of NZ law. There was laughter around the room and the Chairman said the question was not relevant to the report.

A minor shareholder, Mr Peter Boshier asked about wage differentials between white, coloured and black employees of NZI in South Africa. This question was also ruled out of order.

A shareholder with an American accent asked for discussion relevant to the motion, instead of "all these irrelevant questions." Cries of hear! hear! rang round the room. Alick Shaw pointed out that the chairman's report had six paragraphs referring to South Africa, a not insubstantial part of the report. He said that resolution 6 on the agenda about withdrawal from South Africa could only be properly discussed if the directors were prepared to tell the shareholders exactly what the situation was in regard to NZl's operations in Southern Africa.

A question was then asked about the effects of terrorism in Northern Ireland, Argentina, Rhodesia, South Africa and Mozambique on the company's activities. The chairman said this was "quite irrelevant". He said shareholders were present to discuss the domestic affairs of the company, not politics.

Before the South African motion was moved, Mr Steen made some comments on it on behalf of the company. He said that legally NZI did not operate in South Africa, although it held a majority in the New Zealand Insurance Company (South Africa) Ltd, which was largely independently controlled. He said the company made no apology for operating via a subsidiary in the Republic of South Africa and Rhodesia, although it had never carried on direct business in the Portuguese territories.

Mr Steen said the NZ Government didn't interfere in trade with South Africa and was clearly not discouraging this trade. (Wrong — the government has just dropped South Africa's trade preferences). In Rhodesia, the company was in the same position as the majority of British and US companies there, which were operating through South African companies. He claimed the relevant NZ legislation did not prohibit NZ services being offered in the area. He said the company was being criticised for helping apartheid, but its share of the South African non-life insurance business was very small. Thus, he said, NZI's presence is not likely to be of great concern to the South African Government. The company failed to see that withdrawal would benefit its African staff — about 12 in all — "who would have to seek alternative improvement." Then Mr Steen revealed that he was somewhat disconcerted and that he was patronising toward Africans — he had meant "alternative employment".(He was also rattled at another stage of the meeting when he accidentally declared the company's divident to be 20%. instead of the actual 14%.)

The fault in the anti-apartheid groups' argument was, he said, that they claimed that by withdrawing from South Africa NZI would weaken apartheid. But NZI's operations in South Africa were far too small to do this. In conclusion Mr Steen said he was not prepared to allow a private meeting of shareholders to become a forum for undue political propaganda. He thought that NZI should not be dictated to by a 'local minority group' i.e. the students at the meeting. This was an ironic touch, as a main contention of the students argument was that NZI was being dictated to by a minority white regime in South Africa. The decision on the motion should. Mr Steen said, be based solely on commercial grounds.

Moving the resolution Mrs Sutherland said she took exception to the use of the term political at the meeting. "Politics has nothing to do with my motion." she said, "morals has everything." She said the time was long overdue for a decision on the company's involvement in South Africa. "I blame myself and all our shareholders that this matter was not raised long ago," she said, adding that she was grateful to the directors for allowing her motion to be discussed and that she was also grateful to NZUSA for encouraging her to move the motion. Her main reason for doing so was her concern for the oppressed people of Southern Africa. New Zealand, she said, should page 2 stand for the dignity of all peoples throughout the world. She was also concerned for the good name and reputation of NZI.

Mrs Sutherland said she believed the company should be guided by moral considerations as well as profit motive.

"Is it acceptable to us that in our South African subsidiary white and non-white employees cannot have lunch together or use the same washroom facilities?" she asked.

"Is it acceptable to us that in our South African subsidiary no non-white employee can hold a senior position over white employers? Is it right that as an employer in South Africa NZI should have to administer the pass laws?"

She said that because NZI (SA) had to invest in South African Government securities and pay taxes in South Africa, the company was bound to support institutions based on racism.

NZI should follow a policy aimed at the breakdown of apartheid. The World Council of Chruches, the NZ National Council of Churches and the non-whites of Southern Africa had called on companies like NZI to withdraw from South Africa, Namibia, Rhodesia and the Portuguese territories. She said she wasn't asserting that NZI's withdrawal would bring about the collapse of apartheid but she did assert that withdrawal would reduce international support for apartheid.

Seconding the motion David Cuthbert said he was speaking not only as a shareholder and Chairman of the National Anti-Apartheid Committee but on behalf of the people who weren't able to be present at the meeting — the black and coloured people of South Africa. They had called for a total economic boycott of South Africa, Rhodesia and the Portuguese territories. "Essentially the argument for withdrawal of the New Zealand Insurance Company from South Africa is very simple. Not only does this company, we as shareholders and you as directors, by operating in South Africa accept the inhumanity of apartheid, but we moreover support the whole oppressive economic system of South Africa."

Alick Shaw pointed out that NZUSA had only mounted its shareholder's campaign after very lengthy discussions with the board and senior management of NZI. In his report the Chairman of Directors had claimed that NZI enjoyed a reputation as a good and fair employer. But what does being an employer in South Africa entail, or rather what does being an employee in South Africa entail. For instance if a black African is absent from work for more than 24 hours without the permission of the company he is working for he has committed a criminal offence. He is subject to a fine and imprisonment. "NZI employs people in South Africa according to the law of that country. It enforces the law of that country and it pays the wages defined by that country.

"If we look at the wage differentials for people of different races in South Africa we will see that the gap is not only great, but it is ever widening. South Africa's total wage bill for a year is 3,670 million rand. Of this black South Africans who form 70% of the population, receive only 610 million rand, or less than 20%."

An elderly gentleman asked whether the young gentleman had ever lived in South Africa, Rhodesia, and Zambia or had experience in their affairs. He also asked whether the South African Government would tell New Zealand how to treat what he called "our Maoris". Another elderly gentleman said how nice it was to hear Mrs Sutherland speak. He said that for many older shareholders their investments in NZI were a "sentimental matter", as well as providing income. The South African Government had its problems, but eventually they would solve them themselves he hoped. He expressed the sentiment that NZI should not be blamed for the situation in South Africa, which was acclaimed by the older shareholders.

Another speaker against the motion was a red faced, sixtyish racist. South Africa and Rhodesia, he said, "have these problems right on their plate. We ought to sympathise with these people and give them help, and we can't give them help by knocking down every institution they've got.

He quoted a case of an African farmer with 16 wives, 12 of whom were pregnant (laughter). He went on to talk about black millionaires in the Transkei and claimed there is opportunity for black Africans in South Africa and Rhodesia "On account of their breeding proclivities and their particular style of life its a bit difficult to give everybody something out of the pot. But I will tell you that Rhodesia is doing her best. I know Mr Smith, he's got his troubles — anybody would have with a population growing as quickly as the blacks are.

"Anybody who goes to Zambia or Tanganyika for a holiday needs his head examined, and if the doctor says he's all right get the doctor examined (laughter). Now the black man has taken over these countries he's wrecked them, and he'll wreck this company. The greatest need South Africa has is for companies like this. If the company moves out someone else will just move in. And I don't like religion, politics and insurance being mixed up together." (loud applause)

One disgruntled shareholder suggested that the Company's Act should be amended "so we wouldn't have to listen to this sort of discussion." An elderly shareholder said that supporters of the motion were quite happy to draw dividends from NZI. If they were genuine they should withdraw their shares (loud applause). A young businessman replied "the last speaker may like to know that the small dividend I get from this company goes to the World Council of Churches." He said the issue was a clearcut one. It was a moral and ethical issue or "plain moneygrubbing".

Stephen Chan, President of NZUSA, rose to speak. (Muttered comments of "Oh, he's a Chinese!" round the room). "If I were in South Africa I could not be president of the South African Students Association. If I had chosen a career in insurance rather than in the university I would not be able to rise to any managerial position. This is because I am coloured. Although my skin is only slightly darker than the skin of most of the people in this room it makes all the difference. I have a New Zealand girl as my wife. If I were in South Africa I could not have a white girl as my wife." He repeated that NZI's operations in South Africa were regulated by South African law and therefore had to abide by it.

Speaking in her right of reply, Nancy Sutherland said she was ashamed that people of "my age and my kind" had behaved worse than the students at the meeting. She praised the students for their ideals, "without which no progress would be made" and thanked them for supporting her motion. She said that apart from a few inconsiderate people present it had been "a magnificent meeting."

She promised that next year the churches, the students and "people like myself" would continue the campaign in NZI for the right of the African people for self-determination and freedom. She said the churches had substantial investments in NZI "and they will come in greater numbers and will be with us."

Finally she asked the directors to prepare a report on NZI (SA)'s operations, including the extent to which racial discrimination exists within that company.

The results of the voting, announced after the meeting, was predictable — the protestors were swamped by about three and a half million share votes to twenty thousand. But far from being dispirited, they were jubilant. "We regard it as a success that we were able to put our case before the shareholders and get them to think about it," said David Cuthbert. "This will be a long term campaign, perhaps as long as five years. This is just the beginning."

Similar action is planned for the meetings of the South British Insurance and the Guardian Trust in December, and NZI itself may be hearing from the campaigners even before its next AGM.

The idea of this form of campaign did not originate in New Zealand. Ralph Nader used similar tactics in the States, and inspired the Haslemere group in Great Britain to have a go at Barclay Banks investments in the Cabora Bassa dam in Mozambique. Since then various other companies, including Polaroid, Rio Tinto Zinc and Gulf Oil have been under fire from within for their various economic imperialist activites.

Now the campaign has reached New Zealand, and company directors and shareholders are being informed that there are more aspects to business than just making money. The protestors will probably never get a majority at an annual meeting, but if shareholders are made more aware of the moral implications of their investments, and if company directors are made aware that the reputations of their companies may be impaired, they may one day ask themselves whether what they are doing in South Africa is worth it.

By Peter Franks and Roger Steele