It is enacted by the General Assembly as follows:

SECTION 1. Section 35-10-12 of Chapter 35-10 of the General Laws entitled "State Investment Commission" is hereby amended to read as follows:

{ADD 35-10-12. Investment in corporations doing business in South Africa. -- ADD} {DEL (1) After July 1, 1985, the state investment commission shall, within four (4) years, in accordance with the timetable that herein follows, divest state funds and pension funds which are, as of July 1, 1985, invested in any corporation doing business in the Republic of South Africa.

(2) The divestment timetable shall be in four (4) phases during which time the state investment commission shall divest of stocks, bonds, and other forms of financial investments issued by any corporation doing business in South Africa as set forth herein, subject to the investment criteria set forth in this section and in sections 35-10-11 and 35-10-6. The state investment commission shall divest:

(A) Phase One: During the period July 1, 1985, to June 30, 1986, stocks, bonds, and any other forms of financial investments of any corporation doing business in South Africa that:

(1) manufactures or sells arms, ammunition, implements of war, or data processing equipment for use by the military, police, or security forces or agencies of the Republic of South Africa for the purpose of implementing or perpetuating the policies of apartheid; and supplies or sells oil solely for the purpose of implementing or perpetuating the policies of apartheid.

Phase Two: During the period July 1, 1986, to June 30, 1987, of any corporation doing business in South Africa which has not adopted the "Statement of Principles of U.S. Firms with Affiliates in the Republic of South Africa" articulated by Reverend Leon H. Sullivan (the so-called "Sullivan Principles" which promote decency and fairness only in the workplace environment of United States corporations operating in South Africa) and set forth in the most recent amplification thereof.

Phase Three: During the period July 1, 1987, to June 30, 1988, of any corporation doing business in South Africa which has adopted the so-called "Sullivan Principles" referred to in Phase Two, but which does not have a performance rating in categories I or V of the "Sullivan Principles" rating system prepared by Arthur D. Little, Inc.

Phase Four: During the period July 1, 1988, to June 30, 1989, of any corporation doing business in South Africa.

(B) Commencing on July 1, 1985, the state investment commission shall invest no new state funds or pension funds in any corporation doing business in, or with, the Republic of South Africa.

(C) The state investment commission, if possible, and for so long as any state funds or pension funds remain invested in any corporation doing business in South Africa, exercise its shareholder rights, if any, in cooperation with other concerned institutions and investor groups which seek the elimination of apartheid in the Republic of South Africa.

(D) The state investment commission shall within three (3) months of July 1, 1985, notify each corporation doing business in South Africa of the passage of this section, giving a summary account of its content.

(3) For the purposes of this section, the phrase "corporation doing business in South Africa" shall mean a United States company, subsidiary, or affiliate conducting or performing banking, financial services, manufacturing, assembly, or warehousing operations within the Republic of South Africa, or, if a bank or other financial institution lending money to the Republic of South Africa, or any agency or instrumentality thereof. These corporations shall be determined by the most recent annual report of "American Firms, Subsidiaries and Affiliates in South Africa" published by the American consulate general in Johannesburg, South Africa and circulated by the United States department of commerce; the annual report issued by Arthur D. Little Company; and by other procedures satisfactory to the state investment commission.

(4) Notwithstanding the directive of subsection (2)(A) of this section, the state investment commission shall not be required to divest of any state funds or pension funds in accordance with phases one through four of the timetable set forth in subsection (2)(A) of this section if to do so with respect to any investments would not be in accordance with such action as prudent individuals of discretion and intelligence in these matters, who are seeking a reasonable income and the preservation of their capital, would take, or when the market value of the investments in any corporation doing business in South Africa is lower than the purchase price of the investments. DEL}

{ADD It is hereby found by the general assembly that:

(1) The African National Congress (ANC), led by Nelson Mandela, has called upon the international community to lift all sanctions previously imposed to censure South Africa for its apartheid policies and to apply economic pressure to leverage political and humanitarian change in that country;

(2) South Africa has held elections in April, 1994, allowing Black South Africans their first opportunity to vote in national elections.

Following democratically-held elections in the Republic of South Africa, the Rhode Island State Investment Commission and all quasi-public agencies shall be free to hold the stocks, bonds, and other forms of financial investments of any banks or publicly-traded corporations which operate in South Africa, hereby lifting the sanctions previously imposed on such investments.

The state investment commission shall encourage, through the voting of proxies with other institutional investors, United States corporations operating in the Republic of South Africa to endorse and comply with the responsible reinvestment standards set forth by the South African Council of Churches (SACC), known as the 'Code of Conduct for Businesses Operating in South Africa', which are designed to promote equal opportunity, workers' rights, environmental protection and community economic development benefitting all South Africans. ADD}

SECTION 2. This act shall take effect upon passage.