US schools, states divest from Sudan shares
Mar 7, 2006 (WASHINGTON) — U.S. activists protesting human rights abuses in the war-torn Sudanese region of Darfur hope to prompt a sell-off of companies that do business in Sudan, echoing a campaign against apartheid South Africa in the 1980s.
In less than a year, at least six universities and three U.S. states have decided to sell their holdings of companies that operate in Sudan. Eight other states are considering similar legislation.
Those behind the campaign hope that it won’t be long before companies that do business in Sudan become tainted to mainstream pension funds and other large investors.
“Now we’ve reached the point where it’s going to seem a retrograde activity not to divest,” said Smith College professor Eric Reeves.
Tens of thousands of people have been killed and more than 2 million herded into camps during more than three years of fighting in the remote Darfur region.
Attacks by pro-government Arab militias on civilians have prompted the U.S. government to say genocide is taking place. Non-Arab rebels took up arms in early 2003 accusing the government of neglect.
The United States has barred U.S. companies since 1997 from operating in Sudan except for humanitarian purposes.
Some large funds are debating whether they should sell off shares of foreign companies involved in Sudan or pressure management to scale back operations there. The $370 billion TIAA-CREF teachers’ pension fund is currently examining holdings worth $190 million, a spokeswoman said.
Others, like the $950 billion Vanguard Group, say their shareholders have not pushed them to divest.
“I’m not sure the average individual investor has it on their radar screen,” Vanguard spokesman John Woerth said.
Activists hope the divestment campaign can duplicate the success of the 1980s boycott that helped to end South Africa’s apartheid system.
But while South Africa’s relatively vibrant economy offered human-rights activists a wide range of corporate targets, Sudan’s exports are mostly oil.
Two state-run Chinese oil companies have helped Sudan boost its output more than tenfold since 1999. Oil royalties made up 57 percent of the Sudan government’s revenues in 2003, according to the International Monetary Fund.
Yale University concluded that those royalties were being used to further genocide and announced plans last month to divest from the U.S. subsidiaries of two Chinese state-run oil companies that operate in Sudan — CNPC Ltd. and China Petrochemical Corp.
The subsidiaries, PetroChina Co. Ltd. <0857.HK> and Sinopec. <0325.HK>, do not include the Sudanese assets but that has not stopped other universities from selling them off due to human rights concerns.
Spokesmen for both companies declined comment.
Amherst College in January banned investment in 19 companies, including Alcatel and Siemens AG , that are helping to build infrastructure in Sudan.
An Alcatel spokesman said the company’s telecommunications projects in Sudan will ultimately promote democracy. Siemens declined to comment.
Reeves said the divestment campaign already has one victory. Canadian oil company Talisman Energy Inc. sold its stake in a Sudanese pipeline project in 2003, in part because the project had depressed its share price and brought pressure from religious and human-rights groups.
The stock prices of Sinopec and PetroChina could take a short-term hit from a divestment campaign but could eventually recover as other investors sense a buying opportunity, said Tim Evans, a senior analyst at IFR Markets in New York.
Neither company is likely to pull out of Sudan even if their share prices plummet because their parent companies place a higher priority on maintaining access to oil for China’s growing economy than making investors happy, he said.
(Reuters)