Sudan divestment campaign makes several gains in US
March 29, 2009 (WASHINGTON) – A major US pension fund aims to convince Chinese companies doing business in Sudan to change their operations, or else it will eventually sell its stakes in the companies if they do not respond.
On Thursday the financial services company TIAA-CREF announced a policy of shareholder engagement with companies like PetroChina, which has invested substantially in the Sudan. The policy means that the investment firm will seek to engage with PetroChina over human rights issues in the Sudan.
“TIAA-CREF believes that members of society have a moral responsibility to confront genocide and crimes against humanity. Therefore we are publicly asking companies operating in Sudan to help alleviate the suffering of its people,” said a statement from the company.
The statement added that the company will call upon other financial services companies to follow their lead and increase pressure on target companies.
PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation, Sinopec and PETRONAS are targeted for divestment if after nine months they refuse to “engage in a productive dialogue.”
As of the end of 2008, TIAA-CREF managed US$363 billion in assets.
“Today’s announcement, which is consistent with our policy, continues efforts begun in 2006 to encourage 22 companies to end ties to Sudan or operate responsibly there. To date, 10 of the targeted companies have either discontinued operations in Sudan or committed to humanitarian initiatives, such as improving education, health and water supplies,” said the company.
Another major company, Vanguard, took what is possibly a preliminary step toward a divestment policy. The trustees have “directed Vanguard to implement a formal procedure for regular reporting to the trustees on portfolio companies whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment,” according to a March 10 filing to the Securities and Exchange Commission.
The policy is “substantially identical” to a proposal submitted by Darfur activists who are shareholders of the company, said the filing. However, the trustees also noted that they do not believe that it is their responsibility to address “social change” and added that they “sincerely hope that the international community can resolve through political and diplomatic means the important issues that concern the advocates of this proposal.”
As of the end of 2008, Vanguard held more than $300 million in shares of mostly Chinese companies doing business in Sudan.
Investors Against Genocide, an organization which encourages mutual funds to divest from Sudan, said “we will be keeping a close eye on Vanguard’s filing expected on March 31 showing the holdings of Vanguard’s Emerging Markets Stock Index Fund among several others. If these funds show a significant reduction in their holdings of PetroChina, then we will have a clear signal that Vanguard’s trustees are serious about not connecting their customers with the genocide in Darfur.”
Also on Thursday, the legislature of the state of Georgia unanimously passed a law that would block the state from doing business with companies that work in Sudan’s oil, military and energy sectors.
Divestment policies have been enacted in a majority of the 50 US states, as well as adopted by the endowments of some universities and cities’ retirement funds. Activists say that the aim of the divestment movement is to weaken the economy of Sudan, particularly in the oil sector, in order to help the population of Darfur.
(ST)