Will Exploitative Corporate Practices Go the Way of South African Apartheid?

Will Exploitative Corporate Practices Go the Way of South African Apartheid?

Will Exploitative Corporate Practices Go the Way of South African Apartheid?

The year was 1986. Yale University President Bart Giamatti was on his way back to his office from a birthday lunch when he stumbled upon Mike Morand, a student leader of the anti-apartheid movement on campus.


“Did you build this?” asked one man.

“Yes, we did,” answered the other.

“Are you going to take it down?”

“No, we’re not going to take it down.”

"Either you take it down, my friend, or we will.”

The year was 1986. Yale University President Bart Giamatti was on his way back to his office from a birthday lunch when he stumbled upon Mike Morand, a student leader of the anti-apartheid movement on campus. With the help of their beloved chaplain, William Sloan Coffin, Morand and other students had built two formidable shanties on Beinecke Plaza, not unlike the ones black South Africans inhabited under the brutal apartheid regime.

“Winny Mandela City,” named for the wife of dissident Nelson Mandela, was the iconic expression of a longer battle waged by students, campus workers, and other local activists to get Yale to divest the reported $300 million it held in companies doing business in South Africa. This sum, put together with New Haven’s recent hosting of the Northeast Anti-Apartheid Conference, garnered Yale international attention. “We would like to thank you, the students and workers of Yale University, for your efforts to isolate the racist regime of South Africa and put pressure on the transnational corporations which have been giving support to that white minority government,” read a message from the African National Congress. “Economic sanctions are our last chance for reasonable, peaceful change in South Africa,” declared Bishop Desmond Tutu. “I call upon the trustees of the Yale Corporation to make the moral decision.”

Yale wouldn’t have been the first institution to cut its ties with the apartheid regime. Already over forty other universities, seventy national and local churches, and a number of municipal and state legislatures (including Connecticut’s) had partially or fully divested. In September of that year, Congress passed the Comprehensive Anti-Apartheid Act over President Reagan’s veto—the first such foreign policy override in the twentieth century.

But neither Giamatti nor Yale got the message. Though several large protests and scores of arrests kept the students’ shanties alive until 1988, the University hewed to a bankrupt strategy of “constructive engagement” with the South African regime. Before apartheid fell in 1994, Yale never fully withdrew its holdings.

This was the same Yale whom the New York Times once described as “the first university to abandon its role as passive institutional investor.” We should expect Yale and its non-profit peers to rise above the corporate profiteering and partisan plutocracy that control the global economy, and to maintain their exceptional endowments by doing good for the world.

So they can, if students have anything to say about it.

In these heady revolutionary times, students across the country have fought to preserve the public benefits of American schools and universities. At the University of California, 30-plus percent tuition increases and pay raises for millionaire regents have been met with massive student occupations and demonstrations. In Wisconsin, Michigan, and Ohio, graduate teaching assistants and high school and university students have helped lead fights against school privatization and labor repression. And at Yale and other wealthy universities, irresponsible investment has sparked coordinated action reminiscent of the apartheid era. This time, students have joined in solidarity to push our boards of trustees to stop investing hundreds of millions of endowment funds in HEI Hotels & Resorts.

HEI is the seventh-largest hotel operator in the United States, owning or managing over 30 properties across the country. The company runs largely on university investment, receiving over $1.2 billion from some two dozen schools. Yale alone has contributed upwards of $119 million and claims at least 10 percent holdings in each of HEI’s three equity funds.

Despite HEI’s assertions of fair worker treatment—“We have excellent relationships with all our employees,” vice president Nigel Hurst says—the company boasts a persistent pattern of allegations against its corporate behavior. Converging worker testimonies speak to HEI’s often extreme profit-maximizing measures following hotel acquisition—including drastically reducing staff, slashing the wages and benefits of those who remain, demanding strenuous housekeeping labor, and intimidating workers for speaking out. After firing a pro-union worker in Virginia in 2009, the company was forced to settle with the National Labor Relations Board’s General Counsel. Last August, the Embassy Suites in Irvine, California, became the fourth HEI hotel whose workers have called for a consumer boycott.

Our universities are bankrolling this exploitative behavior. And so, as students, we’ve struck back. In 2008, the Yale Undergraduate Organizing Committee staged a sit-in at the office of Yale CIO and investment pioneer David Swenson. Last year, students at Notre Dame waged a five day hunger strike. With the help of UNITE HERE, the hotel and restaurant workers union, and United Students Against Sweatshops, a student-run network with over 250 chapters across North America, students have taken action at Vanderbilt, Chicago, Cornell, Harvard, and beyond.

The shell has begun to crack. In February, following pressure from the Brown Student Labor Alliance, a letter of concern from Brown President Ruth Simmons to HEI CEO Gary Mendell, and the recommendation of the Brown Advisory Committee on Corporate Responsibility in Investment Policy, the Brown Corporation voted not to re-up its investment in HEI. Just three weeks ago, after three years of campaigning by the Penn Student LaborAction Project and its allies, including faculty and a coalition of 30 campus student groups, University of Pennsylvania officials revealed that the University has no current plans to invest in HEI in the future.

In the wake of what has happened at Brown and Penn, the national campusmovement is ripe for escalation. But at our supposedly worldly, pro-bono universities, barriers remain. Some schools, like Chicago and Princeton, don’t have university committees that evaluate investor responsibility like those at Harvard and Brown. At Yale, we face committee leadership that has fallen short on its promises. “I can report that we are a very open-minded and receptive group,” wrote Jonathan Macey, professor of corporate law and economics and chairman of Yale’s Advisory Committee on Investor Responsibility, in a 2008 op-ed. Following Brown’s recent decision, however, Macey has betrayed opposite sympathies. “If HEI were a student in a class, he would say, you know, why are you picking on me?” Macey told the Yale Daily News. “There are lots of other people with just as bad attendance records.”

As long as students receive this kind of pushback, we will continue to pick on our universities. Our meetings with HEI workers, and their own displays of resolve, leave little choice. “The workload has doubled, and I basically feel like I’m working like a slave right now,” said Peter Ho, a porter at HEI’s San Francisco Le Meridien hotel, in a press conference at Yale last year. “It was clear the company was testing how much it could get away with,” said David Williamson, a janitor at the Irvine Embassy Suites. “We have drawn a line in the sand and we stand together.”

Just like in Wisconsin, the swelling of labor injustice at HEI hotels has ignited solidarity across workers and students alike. While there’s no telling whether exploitative corporate practices will go the way of South African apartheid, let’s hope Yale and its peers will at least stand up and join the fight.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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