Sudan is the greatest human rights catastrophe in the world today. As more than five years of ineffective international diplomacy has underscored, there are no easy answers for how to effectively address genocide in our time. That is why I applaud the creative and courageous steps taken by Harvard students who have the power to contribute to a peaceful resolution of the Sudanese crisis.
Two weeks ago, the Crimson Staff demanded that the Harvard Management Company (HMC) divest its 72,000 shares of Chinese state-owned energy giant PetroChina because of its oil operations in Sudan. The editors rightfully pointed to the connection between Harvard’s endowment funds and the atrocities in Sudan. Through its investments in companies that continue to operate in genocidal Sudan, Harvard provides political and financial cover to businesses whose tax revenues and advanced technology arm Khartoum for the battle it wages against its citizens each day.
And students have responded to the paper’s call for local action. Just last week, two students launched a website that urges Harvard to divest its endowment holdings in Chinese energy firm PetroChina. PetroChina, which has a long history of oil exploration and production in Sudan, lost billions of dollars because of its Sudanese operations during its initial public offering on the New York Stock Exchange in 2000. So far, the student petition has more than 180 student and faculty signatures.
In addition to providing a specific target for divestment, these important steps shed light on the important relationship between rogue states and all publicly-traded companies that fund them. But it is a likewise only a first step. Indeed, PetroChina is not the only company operating in Sudan in which Harvard’s endowment has invested.
According to Harvard’s most recent filing with the Securities and Exchange Commission, made last Friday, Harvard also holds 10,000 ADR shares of Sinopec, a Chinese energy giant whose latest business ventures present a similar problem for human rights and US interests. This $205,000 stake in the company is worrisome for two reasons.
First, Sinopec’s recent history in Sudan is well-documented. Shortly before Sinopec went to the U.S. capital markets in October 2000 for its IPO, the Asia version of The Wall Street Journal revealed that the company was operating in Sudan. Shortly thereafter, Sinopec dropped its operations in Sudan, a move that has been widely attributed to the company’s concerns that its activities in Sudan would diminish investors’ appetites. And just last week, after a brief hiatus from Sudan, Sinopec resumed operations there with the acquisition of a regional oil company that will begin production of an estimated 4,000 barrels of oil per day by next year.
Just as Sinopec fails to consider genocide sufficient reason to cease operations in Sudan, the company recently cemented a cozy oil and natural gas deal with Iran, a country whose determination to develop a nuclear weapons program threatens regional security—to say nothing of its sponsorship of terrorist organizations such as Hamas, Hezbollah and al Qaeda. The deal offers China access to Iran’s Yadavaran oilfield and a 30 year supply of liquefied natural gas.
To be fair, China views oil interests in Iran and Sudan as means to power its factories that produce inexpensive exports supplying US markets. Oil-rich Sudan attracts countries that are increasingly pressed to find new reservoirs of energy, regardless of the costs involved in exploration and production. Responsible citizens, who largely benefit from China’s consumption of oil and subsequent exports, must also consider the degree to which the short term benefits of consumption contradict international standards of human rights and U.S. security interests. What better place to begin this discussion about the long-term consequences of present actions than at the leading university in the world?
Harvard does not have to be so passive about where it invests its endowment funds, or how it approaches emerging political and security risk categories. Harvard is part of an institutional investor community that exacerbates human rights abuses in Sudan and sustains terrorist-sponsoring states by investing in PetroChina, Sinopec, and dozens of other companies active in the world’s pariah states. According to the Center for Security Policy’s Divest Sudan initiative, 87 U.S. public pension funds have invested more than $90 billion dollars in 83 public companies that maintain active business projects in Sudan.
Although students and professors may find these investments unconscionable, the HMC will defend its holdings with companies active in Sudan and other terrorist-sponsoring states in three ways. First, they will claim that divesting will hurt financial returns for Harvard’s endowment, which will limit academic enrichment opportunities for the community. Next they may respond that Harvard’s endowment should not be used as a political tool. Or, as HMC president Jack Meyer told the Crimson last week, divesting from companies may hurt job prospects for Sudanese civilians.
However the HMC intends to rationalize investments, Harvard has already twice divested South African holdings in the 1980s and tobacco companies in the 1990s. One would think that divesting from companies operating in genocidal and terrorist sponsoring states is of more immediate concern than previous divestment campaigns.
Harvard’s investment holdings in PetroChina and Sinopec should raise more than a few eyebrows on a campus that strives to protect any infringement of rights, no matter how small. In the 1980’s, students equated Harvard’s holdings in companies active in South Africa with university complicity in apartheid. Is the university not today, for the same reasons, complicit in the genocide in Sudan and the sponsorship of terrorism in states such as Iran?
Students and professors agree that it is unconscionable for Harvard’s Management Company to invest in these companies. Now is the time for students and endowment managers to demonstrate Harvard’s well-established leadership on human rights issues by demanding the disclosure of every portfolio company active in Sudan.
Bryan J. Auchterlonie is a first year MA candidate at The Johns Hopkins University School of Advanced International Studies in Washington, DC., and a part-time employee at the Center for Security Policy.