The Corporation yesterday took what appeared to be an unusually tough stand on South Africa investments, sharply limiting its definition of Harvard's ethical obligations when examining companies doing business in the apartheid state.

The governing body's chief spokesman on shareholder issues, Hugh Calkins '45, said that whether or not a firm's activities in the country adhere to certain ethical principles does not affect Harvard's initial decision to invest in the company, which he implied was solely based on financial reasons.

Calkins' remarks followed a meeting between members of the Corporation and the Advisory Committee on Shareholder Responsibility (ACSR). While Calkins said the position was totally consistent with stated University policy, several members of the advisory committee said it represented a significant departure from what they considered the spirit of that policy.

During yesterday's meeting, members of the Corporation and the ACSR--which advises the Corporation on shareholder ethics--were said to have argued over this new issue in the long-brewing controversy over Harvard's investments in companies doing business in South Africa.

In the past, discussions over the topic have generally been confined to what Harvard should do about companies already in its portfolio of stocks and bonds.

Some members of the ACSR and campus activists have in particular raised objections to Harvard investments in firms receiving low ratings according to the so-called "Sullivan Principles," a set of equal-opportunity and fair-labor practices for U.S. firms operating in South Africa.

But yesterday, members of the ACSR said Harvard should examine the Sullivan ratings or other similar guidelines before buying a particular stock, citing in particular two recent Harvard acquisitions of stock in companies that have refused to even sign the Sullivan principles, Dun-Bradstreet and Cheseborough Co.

Several ACSR members were angered by Calkins' position that Harvard would not check such information before buying a stock.

Composed of students, alumni and faculty, the ACSR makes non-binding recommendations to the Corporation on ethical issues it may face in handling Harvard's $2 billion endowment. The ACSR meets with members of the Corporation twice a year to discuss various issues concerning its recommendations.

Harvard does not have to determine before it invests in a certain company whether or not that company's activities fulfill certain guidelines for business in South Africa. Calkins said yesterday, explaining his interpretation of Harvard policy set in 1978.

Calkins added that the Corporation is obliged to "ensue in dialogue with the company concerning its involvements in South Africa," but that it is not practical to have this dialogue before asking businesses in South Africa "to disclose what they are doing."

There is not enough time moreover, Calkins said, to investigate thoroughly a company's involvement in South Africa before buying the stock, adding that it's more convenient to complete the investigation after the stock has been bought.

"I find it so outrageous that Harvard is not using at least the Sullivan principles as a screen" for deciding whether to invest in South African-related companies, said Frederick T. Smith, a Law School student member of the ACSR.

Consequently, Harvard "is knowingly investing in companies... that are non-signatories of the Sullivan principles," Smith added.

Thomas Mackall, Divinity School student member of the ACSR, agreed with Smith, saying, "I am rather surprised that the Corporation would be willing to take a positive act and buy stock is companies that do not adhere to the Sullivan principles."