Stanford divests from Sudan

By DANIEL J. HEMEL, The Harvard Crimson

June 15, 2005 — Following Harvard’s lead, Stanford University last week became the second major institutional shareholder to divest from oil company PetroChina in protest of the Beijing-based firm’s role in funding the ongoing genocide in the western Sudanese region of Darfur.
While Harvard-citing the “unusual combination of circumstances presented by this particular holding”-limited its April divestiture to PetroChina, Stanford announced that it would also pull out of three other stocks linked to the Sudanese regime, including Swiss-based engineering firm ABB Ltd., Russian state-run oil producer Tatneft, and Chinese oil company Sinopec.

Harvard’s latest filings with federal regulators revealed that the University held more than $3 million in Sinopec stock and over $2 million in Tatneft shares. The filings showed no Harvard stake in ABB -although the stock is traded on several foreign markets, and the University is only required to disclose its holdings on U.S. exchanges.

Student activists have called on Harvard to cleanse its endowment portfolio of all companies that conduct business with the Sudanese government, accusing the University of following a double-standard by divesting from PetroChina while maintaining stakes in Sinopec and Tatneft.

Echoing the Harvard Corporation’s April statement characterizing divestment as a “rare step,” Stanford president John Hennessy said last week that “divestment is an act that should be made rarely and carefully.” But Hennessy said that all four companies had “at least partly enabled” the genocide in Darfur, which-by some estimates-has led to approximately 400,000 deaths since February 2003.

Sinopec is currently constructing a $65.5 million pipeline in Sudan that could substantially boost the regime’s oil export revenues. ABB’s contracts in Sudan total to more than $36 million, and the company won a contract last year to improve the country’s power grid. Tatneft allegedly entered an oil-for-weapons swap with the Sudanese government in 2002, although initial reports of the deal have not been confirmed. Tatneft officials did not return repeated requests for comment from the Crimson.

Stanford’s move yielded no discernible impact on the four companies’ stock prices, all of which remained close to their historic peaks. Following Stanford’s announcement last week, PetroChina-a subsidiary of the China National Petroleum Company, which has poured billions of dollars into the development of central Sudanese oil fields-reached an all-time high on the New York Stock Exchange.

But coordinators of the pro-divestment movement hailed Stanford’s announcement as a victory. Colin Thomas-Jensen of the International Crisis Group wrote in an e-mail to The Crimson that Stanford’s move would have a “substantial impact” on the divestment debate at the nine-school University of California, which has reported that its owns $66 million of stock in companies that conduct business with Sudan.

“Stanford’s decision to divest generated significant media coverage in news outlets throughout California,” wrote Thomas-Jensen, who says that the primary aim of divestment movements is to keep international attention focused on the Darfur crisis.

Meanwhile, the Stanford chapter of “Students Taking Action Now: Darfur” (STAND), the activist group that pressed the university to divest, has not called on the school to sell its stake in two other firms that carry on joint ventures with the Sudanese government-French communications company Alcatel and German engineering giant Siemens AG.

STAND’s divestment campaign coordinators, rising senior Ben Elberger and rising sophomore Seth Silverman, argued in a May report that these two firms’ efforts to improve Sudan’s communications infrastructure do not aid the regime’s campaign of genocide.

Companies such as Alcatel and Siemens may in fact “play a beneficial role in Sudan in diverting government funds from the prosecution of genocide,” Elberger and Silverman wrote in the May report.

But Eric Reeves, a professor of English at Smith College and a leading coordinator of divestment efforts nationwide, wrote in an e-mail to The Crimson that “the exemption of Alcatel and Siemens by the students seems to me extremely ill-considered.”

According to Reeves, the Sudanese government would not be able to survive without European investors’ support.

– Daniel. J. Hemel can be reached at [email protected].