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Fluor Pulls Out of South Africa

December 5, 1986

IRVINE, Calif. (AP) _ Fluor Corp. has joined the exodus of companies leaving South Africa, but its chairman said Friday that the withdrawal would not hasten the end of apartheid.

Fluor’s action came a day after Honeywell Inc. and Revlon Group Inc. announced their decisions to pull out of the racially-divided nation.

Industrial giants General Motors Corp. and International Business Machines Corp. recently announced their intended departures.

Fluor spokesman Rick Maslin maintained the company wasn’t acting because of the international clamor to end apartheid but in the interests of the company and its 1,500 employees in South Africa, including contract labor.

All Fluor’s South African assets were sold to an independent trust which will retain its local management, ″enabling continued employment for the racially integrated work force,″ the company said in a written announcement.

″The management of Fluor believes that the enactment of sanctions and the departure of American companies are not an effective way to hasten an end to apartheid,″ chairman David S Tappan Jr. said. ″We have reached the point, however, where an orderly transfer of ownership is in the best interests of the corporation, its employees, shareholders and clients.″

″There’s obviously a lot of pressures taking place, legislative and otherwise,″ Maslin said. ″We are taking steps so that we are still in control of the transfer of ownership.″

″We don’t know what kind of increasing steps are going to be taken from a sanction standpoint. We wanted to make sure we would be able to do something that was orderly,″ he said.

Tappan said the divestiture ensures that Fluor’s clients will still receive the same engineering and construction services from the independent trust.

One of those clients is the South African state-owned SASOL petroleum company, Maslin said. ″We work under contract to SASOL,″ he said. ″It’s not our only client; it’s one of many. It’s the only government entity (client) that I’m aware of.″

He said he believed the independent trust would continue to do business with SASOL but said Fluor no longer speaks for the trust.

″There are contractual obligations to clients which will obviously continue,″ he predicted.

Meantime, Fluor retains a repurchase option on the independent trust, and the company announcement said it ″looks forward to the time when it can again assume an ownership position in South Africa.″

The South African operations had accounted for less than half a percent of total Fluor assets and revenues, so the divestment has no material impact on financial results, the announcement said.

″We’ve worked long and hard to have a racially integrated work force there, and those people were the No. 1 priority, making sure that their continued employment under the right type of guidelines was assured,″ Maslin said.

He said the independent trust was set up to follow the Sullivan Principles, guidelines for companies doing business in South Africa established by the Rev. Leon Sullivan of Philadelphia, a Baptist minister.

″The trust is constructed in a way that the operation will continue to work aggressively toward ending racial inequality in South Africa,″ Maslin said.

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