L.L. 1985/019

Enactment date: 3/15/1985

Int. No. 900

By Council President (Ms. Bellamy) the Vice Chairman (Council Member Cuite), and Council Members Vallone, Messinger, Foster, Pinkett, Samuel, Spigner, Williams, Wooten (by request of the Mayor); also Council Members Berman, Dryfoos, Friedlander, Gerges, Lisa, Maloney, Michels, Albanese, Alter, Eisland, Crispino, Ferrer, Greitzer, Horwitz, Robles, Fossella and O'Donovan

A Local Law to amend the charter of the city of New York in relation to the depositing of city funds in banks that have dealings with the government of the Republic of South Africa, and to amend the administrative code of the city of New York in relation to the purchase by the city of goods originating in the Republic of South Africa or Namibia and city contracts with companies that export goods to the Republic of South Africa or Namibia in violation of the arms control act or the export administration act, and companies that make direct sales to certain agencies of the South African government

Be it enacted by the Council as follows:

Section 1. Declaration of legislative intent and findings. The legally enshrined policy of apartheid practiced by the government of the Republic of South Africa is morally repugnant to the people of the city of New York. Under apartheid, the South African government uses the processes of law to deprive the black majority of basic human freedom and dignity. Blacks are by law excluded from participation in politics and government. They are overwhelmingly compelled to live in designated homelands far from cities and employment, systematically excluded from education and training, and almost all relegated to menial, low paying jobs. Other non-whites have been allowed nominal participation in some aspects of government but suffer many of the same privations and indignities as do the blacks. Apartheid is maintained by the repressive tactics of a police state. Under South African law, blacks must carry passes in order to travel. The police detain and arrest persons indefinitely without charging them with the commission of a crime. Freedom of speech, press, and assembly are severely restricted. Non-whites seeking to exercise fundamental human freedoms individually or collectively are swiftly subjected to brutal repression. Apartheid, which has been official government policy at least since nineteen hundred forty-eight, as yet shows no signs of retreat in the face of condemnation by the world community of nations.

The city of New York has a long tradition of regulating the use of public monies to ensure that purchases, deposits and investments are made consistently with moral standards and in a manner which promotes the public welfare. For example, as early as nineteen hundred forty-two the council enacted a local law prohibiting discrimination on the basis of race, color or religion by city contractors. The council has also required that city contractors agree not to violate provisions of the export administration act prohibiting participation in foreign-sponsored boycotts of nations friendly to the United States. The council recently enacted legislation providing for a "locally based enterprise" program to increase opportunities for disadvantaged persons to be employed in city construction contracts. The charter provides that city funds may be deposited only at banks which have a policy of hiring and promoting employees without regard to race, color, creed, religious affiliation, sex or national origin. The trustees of the New York City Employees' Retirement System have adopted a resolution calling for the divestiture of assets invested in those companies doing business in the Republic of South Africa which are not doing enough to oppose apartheid. In keeping with this tradition, the council seeks, through city policy on depositing public funds and public contracting, to send a message to the government of the Republic of South Africa and to encourage those who do business there to support change.

This local law provides that the banking commission shall not designate a bank or trust company as eligible to receive city deposits if, after the effective date of this law, the bank or trust company provides certain services that benefit the South African government. A bank or trust company may not be so designated if it promotes the sale of krugerrands or other coins minted in the Republic of South Africa or Namibia outside of the Republic of South Africa or Namibia, but merely selling the krugerrands or other such coins to a customer upon request would not disqualify a bank for designation. Nor may a bank or trust company be designated if it underwrites securities for or makes a loan to the government of the Republic of South Africa. An exception is made for loans for educational, housing or health facilities, but only where these are available to ail persons on a totally nondiscriminatory basis and located in geographic areas accessible to all groups of the population. A further exception is made to allow for the designation of a bank if such designation is necessary to allow the city to obtain essential services which are not reasonably obtainable from another bank.

This local law also applies to certain city contracts for goods and services. Recognizing the needs of city agencies to contract economically and in accordance with applicable competitive bidding requirements, this law provides for a determination to be made whether it is in the public interest to contract with persons who do not agree to certain conditions concerning their activities in the Republic of South Africa and Namibia if the city can obtain goods or services of comparable price and quality from a person who does agree to those conditions. This determination would occur when a person seeking a contract would sell the city goods originating in the Republic of South Africa or Namibia or sells goods or services other than food or medical supplies directly to the South African police, military, prisons, or the department of cooperation and development (the agency that administers the pass laws). In addition, contracts by city agencies will be required to provide that the contractor shall not violate provisions of the export administration act or the arms control act concerning shipment of military supplies and equipment and other goods to the Republic of South Africa and Namibia.

These provisions not only express the moral concerns of the city of New York, but also seek to protect the financial interests of the city by limiting the number of city contracts which may depend for their satisfaction on the internal security of the Republic of South Africa, where relentless oppression has led to increasing civil disturbances, making sabotage of business interests and even revolution possible. Like the provisions concerning deposits, these provisions operate prospectively, and contracting decisions shall not be based on a contractor's dealings with the South African government prior to the effective date of this law.

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[Consolidated provisions are not included in this Appendix A]

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§ 4. No bank shall be denied designation pursuant to section two of this local law because of any action taken prior to the effective date of this local law.

§ 5. The provisions of section 343-11.0 of the administrative code as added by this local law shall not apply to actions taken or contracted to be taken by any person prior to the effective date of this local law.

§ 6. Nothing in this local law shall be deemed to restrict or diminish the powers conferred on the board of estimate by law.

§ 7. If any provision of this local law or the application thereof is held invalid, the remainder of this local law and the application thereof to other persons or circumstances shall not be affected by such holding and shall remain in full force and effect.

§ 8. This local law shall take effect one hundred twenty days from the date it shall have become law, but all actions necessary to prepare for the implementation of this local law may be taken prior to its effective date.