Foundation shines light on investors in genocide

August 16, 2006|By JAY HANCOCK | JAY HANCOCK,SUN COLUMNIST

The decision by the University System of Maryland Foundation to forgo investments in companies linked to Sudan will not cause peace to break out anytime soon in Sudan's Darfur region.

The foundation doesn't own stock in PetroChina or any other businesses it agreed to boycott, so last week's announcement causes no change. And even if it did, the janjaweed militias and the Sudanese army perpetrating slaughter in Darfur wouldn't even know about it.

"As a practical matter it doesn't really affect the policy" in Sudan, David Cortright, an economic sanctions authority at the University of Notre Dame, said of the foundation's vow. "I don't want to condemn it by any means, but it doesn't really go very far."

Nevertheless, the foundation's decision is a praiseworthy no-brainer that stands apart from most of the money management that calls itself "socially responsible."

The Sudanese government's behavior is so despicable and its dependence on foreign investment so critical that any right-thinking investor ought to have nothing to do with it.

Natural-resource investment in developing countries rarely benefits the general population, but it doesn't usually fuel genocide, either.

Sudan is the exception. Oil royalties made up 60 percent of Sudan's government revenue last year, according to the International Monetary Fund, amply financing the regime's war on its own people. Khartoum spends the money on ammunition, guns, mines, tanks, helicopters and fighter aircraft, much of it bought from China, according to Human Rights Watch.

And who made it all possible by developing Sudan's oil fields? China National Petroleum Co., the biggest oil investor in Sudan, according to the Allard K. Lowenstein International Human Rights Project at Yale Law School.

CNPC is sister to PetroChina and Sinopec, both publicly traded and both on the Maryland foundation's blacklist. The other two companies shunned by the Maryland foundation, which is a private corporation and not a state agency, are Nam Fatt, a Malaysian construction company, and India's Oil and Natural Gas Corp.

In 2003, responding to attacks by ethnic African insurgents in Darfur, Sudan's Arab government began deliberately bombing, torturing and shooting non-combatants from the same region. Human rights groups figure at least 200,000 people have died since then and 2 million have been displaced.

In September 2004, Secretary of State Colin L. Powell declared that "genocide has been committed in Darfur and ... the government of Sudan and the janjaweed bear responsibility."

Sudan already had a long history of oppressing other internal regions and supporting slavery, as proven a decade ago by The Sun's Gregory Kane and Gilbert Lewthwaite, who traveled illegally to Sudan and bought and freed two young boys.

Thus Sudan is a category apart from the normal targets of the socially responsible money-management crowd, which are gambling, tobacco and U.S. defense stocks.

Killing children is different from running roulette tables. And the publicly traded companies working in Sudan are so crucial to its power and so few in number that they present a plausible target, a confluence of crime and capital that might prove vulnerable to the pressure that groups such as the Maryland foundation are trying to apply.

It'll never happen, says Kimberly Ann Elliott, a senior fellow at the Institute for International Economics in Washington and co-author of a forthcoming new edition of Economic Sanctions Reconsidered.

The U.S. government has prohibited Americans from doing business with Sudan for years, and "if pretty extensive sanctions by the U.S. at the federal level haven't had any effect, why would you expect that these private, state and local sanctions [such as the Maryland foundation's] would be any more successful?"

I'm not sure. But they won't do any harm, and since when are morality and efficacy the same thing?

It took years for international financial pressure to help end apartheid in South Africa. If world opprobrium hasn't changed Sudan's policies, at least it affected some of the companies associated with it.

Canada's Talisman Energy pulled out of Sudan after years of criticism. Protesters helped reduce the money PetroChina was able to raise in a New York Stock Exchange offering from a hoped-for $10 billion to $3 billion, according to Human Rights Watch.

International commerce is usually a force for good. But not in Sudan. More universities ought to follow the example of the University System of Maryland Foundation.

Johns Hopkins University, what about you? The university owns no Sudan-linked stocks, spokesman Dennis O'Shea says, but it hasn't banned them either. "We'll listen to any questions or comments that students have to make," he says.

jay.hancock@baltsun.com

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