Student activists put the squeeze on Sudan oil industry
March 7, 2007 (KHARTOUM) — After four years of failed Darfur diplomacy, a group of American and British students is trying to hit Khartoum where it hurts, by pressing foreign companies to stop doing business with Sudan’s oil industry.
Billions of dollars are believed to be involved in indirectly funding Khartoum’s war effort, which the student “task force” hopes to staunch, although some critics fear the population could suffer more than the regime.
“Four years of diplomacy have not done the job everyone hoped,” said Hamish Falconer, director of Sudan Divestment UK, which was founded in November.
“With 60 percent of Sudan’s oil revenues going into military expenditure, as oil revenues increase, so does Khartoum’s capacity to carry out its military campaign in Darfur,” he said.
Some Sudanese economists put the percentage of oil revenue going to the army, security and police force at well above 80 percent.
The group aims to strangle that flow of money by targeting foreign firms that support Sudan’s oil-dominated industry as well as the savers and pension funds that finance them.
“Divestment aims specifically at removing flows that are facilitating the genocide,” said Falconer.
Washington has accused Khartoum of genocide in its western region of Darfur, and the International Criminal Court last week accused two Sudanese officials of war crimes there.
According to the United Nations, at least 200,000 people have been killed and about 2.5 million displaced since the start of the conflict four years ago.
While awareness of the atrocities committed in Darfur has grown globally through numerous campaigns led by rights groups and Hollywood stars, Sudanese President Omar al-Beshir has withstood all forms of diplomatic pressure so far.
The divestment movement was born on US college campuses in 2005 and, according to Daniel Millenson, co-founder of the US-based Sudan Divestment Task Force, the amount of divested assets “is well in the billions.”
Last month, Vermont became the seventh US state to fully divest from firms identified by the task force as supporting the Sudanese government’s activities in Darfur. It joined Arizona, California, Illinois, Louisiana, New Jersey and Oregon.
Another 20 states are due to examine bills this year.
Activists point out that even a tiny state like Vermont manages a three-billion dollar pension fund. If private mutual funds enter the equation, the overall sums involved are huge, even if small percentages of investment in companies involved in Sudan are removed.
Among the divestment campaign’s top trophies were announcements earlier this year by Swiss power giant ABB and German engineering heavyweight Siemens that they would pull out of Sudan.
In February, US billionaire Warren Buffett — who took the headlines last year by becoming the most generous philanthropist of all time — came under criticism because an investment and insurance company he owns refused to divest from a Chinese oil firm with ties to Khartoum.
“These first results are very encouraging,” said Falconer.
Yet the fledgling movement’s fight for ethical corporate governance draws scepticism if not alarm from some observers.
Mohammed Ibrahim Abdu Kabaj, though an outspoken critic of the Sudanese regime and its policies in Darfur, drew a parallel with the crippling sanctions slapped on Iraq in the 1990s and argued that ordinary people would once again pay the price of the boycott.
“The government’s revenues come from oil and taxes mainly. Most of the oil revenues are spent on the army and the police. What is left to finance educational, health and development projects comes from taxes,” he told AFP.
“If the regime loses oil revenue, it will start increasing the share of taxes revenue it diverts towards military and security expenditure,” Kabaj warned.
Critics of the divestment campaign also argue that Western companies pulling their interests out of Sudan could make way for other nations that are perhaps less sensitive to human rights concerns.
“The previous sanctions on Sudan were implemented only by the Americans and the Europeans and then the Asians came in,” said a Khartoum-based Western diplomat, who doubted divestment would seriously jolt Khartoum.
In recent years, China has led the pack of foreign investors in Sudan. It has poured billions into the oil industry and other projects in a bid to secure a steady flow of mineral resources that are vital to its booming economy.
But Falconer argued that China could soon become increasingly concerned about its image as a rapacious economic coloniser and about Western divestment from some of its key firms.
“There is this great myth that China is completely intractable … Divestment is not about obtaining anything very radical from China, it’s about making it in their interest to stop funding the genocide,” he said.
Activists point to the success of a previous campaign in 2003, when Canadian energy company Talisman eventually pulled out of Sudan after its stocks fell following a divestment drive over accusations it had helped the government kill and displace civilians to clear the way for oil exploration.
“It was seen as one of the factors that brought the government to the negotiating table and led to the north-south peace deal” signed in January 2005, Millenson said.
(AFP)