Wednesday, May 16, 2007

Genocide Intervention via Fidelity [Dis]Investments


A few months ago disciplined anti-genocide strategists publicized their fight to pressure the Sudanese perpetrators by organizing a boycott of Sudan's oil infrastructure. Yes, the main thing that emboldens and allows the Sudanese government to ignore world protests with impunity is its OIL. Fidelity, a huge investment firm, has holdings in Sudan. Here is an article passed along by Genocide Intervention Network which appeared in the LA Times. The author is Nancy Kristof. Any relation to my revered Nicholas Kristof, who has been tirelessly writing about the Sudanese slaughter of Darfur in the NYTimes for years, I wonder?

My contention is that money changes things, for the better and for the worse. Investors really have a chance to weigh in here. Though you don't need to be an investor to be active on this issue, of course. The easiest action is to sign their petition. The article below links to an online tool for determining if any of your holdings are invested in Sudanese oil. One invested company is Berkshire Hathaway. Warren Buffet has just donated 35 billion dollars to the Gates Foundation, so he's no misanthrope, but in this case he indicated he doesn't see this strategy working. So if you're a BH investor, shoot him an email, too. If Warren Buffet spoke up on this issue, the world would take note!

Personal Finance

How investors can help fight the Darfur genocide

Individuals acting in concert to push for divestment may force Sudan to change.
May 13, 2007

Adam Sterling wants individual investors to know that they are a powerful force — and they can use that power to help stop genocide halfway across the world in the Sudanese region of Darfur.

If American investors pull their money from companies that fund the Sudanese government, Sterling believes that government will be forced to curtail atrocities by its forces and allied militias in their fight against Darfur rebels. In four years of conflict, more than 200,000 villagers in the region have died and more than 2.5 million have fled their homes, the U.N. says.

"Divestment has been the one real action that the government of Sudan has responded to," said Sterling, director of the Sudan Divestment Task Force in Washington. "Genocide is expensive. The Sudanese government relies heavily on foreign investment to fund its miliary and the janjaweed militias."

In simple terms, divestment refers to getting rid of investments in companies and mutual funds that do business with an offending government. To be sure, no one individual investor is likely to have enough money invested in Sudanese firms — or in companies doing business in Sudan — to have an effect. But millions of investors acting in concert might.

"You are not just an individual doing your thing; you are part of a large group," said Amy Domini, president of Domini Social Investments, a family of mutual funds intended to be socially responsible. "People are finally beginning to realize that acting as part of a group can be really powerful."

The Sudan divestment campaign resembles an effort decades ago to press South Africa to give up its practice of apartheid, which stripped economic and legal rights from the country's black majority. That divestment bid isolated South Africa economically, and in 1992 the government ended apartheid.

The South African divestment effort took about 15 years to be successful, gaining steam as some large institutional investors in the U.S. pulled funds from the country's economy.

The anti-Sudan movement is already well underway. Forty-two colleges and universities and eight states, including California, have started to sell their Sudan-related investments. An additional 17 states are considering doing so. The nonprofit Genocide Intervention Network is attempting to get individual investors on board to stoke up the heat on mutual fund companies.

Two things make the Darfur effort different from the movement to pressure South Africa, Domini said.

Whereas the South Africa campaign advocated pulling funds from all companies doing business in South Africa, the Darfur effort is aimed at a relatively small number of firms. The targeted companies provide a disproportionate share of funding for the government, which has used that money to fund its military, Sterling said.

"Oil provides the Sudanese government with 90% of their export revenue, and 70% of that is used for military expenditures," he said. "We are not targeting industries that don't provide capacity for the Sudanese government."

Another big difference between today's call for divestment and the call in the 1980s: This time, it's easy.

Hundreds of U.S. companies had operations in South Africa in the 1980s, but because the U.S. government considers Sudan a sponsor of terrorism, American companies are banned from doing business there. So if you own nothing but individual U.S. stocks, there's a good chance you have no holdings with Sudan ties.

However, some of the targeted companies have no operations in Sudan but do have investments in other targeted companies. For instance, divestment advocates recently protested at the annual meeting of Berkshire Hathaway in Omaha. The reason: Berkshire owns shares in PetroChina, which gets oil from Sudan.

In addition, if you invest in mutual funds, you could indirectly own Sudan-related holdings in a fund portfolio. Divestment advocates have made it easy to check your portfolio: Go to http://www.sudandivestment.org , and click on the "screening tool" tab. That brings up a window to type in the fund name, ticker symbol or fund family. For instance, if you want to determine whether a T. Rowe Price fund owns offending stocks, you type "T. Rowe Price" to call up a list of its funds.

Click on the fund you're interested in, then click "get report." You'll find, for example, that the Cap Opportunity fund owns 11,040 shares of Schlumberger Ltd., a targeted company that has its headquarters in Houston but is incorporated in the Netherlands Antilles. But T. Rowe Price's mid-cap value fund owns no targeted stocks.

Divestment advocates suggest writing a letter to your fund manager if you find targeted investments in a fund you own, and ask that the shares of the problem company or companies be sold.

And if you end up selling a mutual fund because of a Sudan-related holding, be sure to tell the manager why, Sterling said.

"There is so much movement of money among mutual funds that if you just sell, they aren't going to know why," he said. "But if you sell and explain why, then they understand the repercussions of that investment."

The idea is to put pressure on fund managers to avoid the targeted stocks. Such a strategy requires large numbers of investors to be effective, particularly when dealing with a large investment firm.

"I don't know how many people would have to go to [mutual fund giant] Fidelity before they'd get rid of their investments in Sudan," Domini said. "But I don't think it would take that many individuals to bail out of the smaller funds before the managers say, 'This isn't the hill that I want to die on.' "

1 comment:

A Designer's Eye said...

Thanks for publicizing this. If you (or any of your readers) are interested in more information on the genocide, check out www.savedarfur.org.