Will Bok Sell the Stock?

His writings on divestment are prolific, but implications for Sinopec are unclear

As interim president, Derek C. Bok will face pressure from students who want Harvard to cut its ties to an oppressive African regime. For Bok, it may seem like déjà vu.

When Bok was at Harvard’s helm in the late 1970s, the campus was consumed by a controversy over the University’s financial links to apartheid-era South Africa.

Bok, who returns to Mass. Hall on July 1, took a skeptical stance toward divestment demands.

In open letters to the Harvard community, Bok wrote that he believed divestment was unlikely to help end apartheid, and might threaten the University’s academic mission and financial stability.

This time, as students want Harvard to sever ties with companies that do business with the Sudanese government, Bok’s views could assume new importance.

“We can all agree that an educational institution should not inflict harm on others merely to fatten its coffers,” Bok later wrote in a 1982 book on the social responsibilities of universities. “But it is a very different matter for trustees to use institutional funds to help redress an injustice in the outside world for which the university is not directly responsible.”

RATHER THAN DIVEST, BOK BALKED

For about a decade under Bok’s 20-year tenure, the Harvard campus played host to student marches, sit-ins, and once, a shantytown that was erected outside University Hall—all efforts to prod Harvard into selling its holdings tied to South Africa.

But Bok wanted to exert pressure on companies in other ways, such as through shareholder resolutions.

While he objected to “sweeping prohibitions” on investments, Bok suggested in one open letter to the Harvard community that divestment could be justified in extreme circumstances where the investments “work in significant ways to further improper ends or to uphold unethical principles.”

Bok wrote that universities “may refuse to invest in firms that depend heavily on conditions or practices of an immoral nature.”

Last April, Bok’s views were cited by the Advisory Committee on Shareholder Responsibility (ACSR)—a group of students and faculty that advises the Corporation, Harvard’s highest body, on investment decisions—when it recommended that Harvard sell its holdings in Beijing-based PetroChina. The oil firm has been accused of facilitating the ongoing genocide in Sudan’s Darfur region.

But did the ACSR accurately synthesize Bok’s views? In an interview last spring, Bok declined to weigh in. “I never bite the hand the quotes me,” Bok said.

WILL HE TURN BACK THE CLOCK?

Despite last April’s landmark decision to divest from PetroChina, the University has maintained its investments in other companies linked to Sudan, including Sinopec, an oil firm accused of close ties to the Khartoum regime.

Sinopec is the major contractor on a pipeline that will carry oil from the Melut Basin in southern Sudan to a Red Sea port—a project that could boost Sudan’s petroleum exports substantially, according to a December 2004 Washington Post report.

At the end of last year, Harvard owned 134,050 Sinopec shares—a stake that was worth about $8.2 million at the close of trading yesterday.

One of the leaders of the renewed Sudan divestment campaign, Jennifer T. Morse ’07, wrote in an e-mail yesterday that Bok’s decades-old views may not determine how he, as interim president, might view divestment from Sudan.

“We certainly do not presume that his statements in the late ‘70s necessarily indicate his opinions on today’s situation,” Morse wrote. “We look forward to working with Bok with an open mind and hope that he will do the same with us.”

One of the founders of the divestment wing of the Darfur Action Group, Manav K. Bhatnagar ’06, wrote in an e-mail last night that because the PetroChina divestment last year “established a precedent and set criteria for divestment” that he thinks Sinopec meets, Bok’s views are irrelevant.

“Bok’s objection to divestment was that a University’s money shouldn’t be used to create political change,” Bhatnagar wrote. “That is not what divestment is about—it’s about ridding the University of moral culpability and shame through its investments in a genocidal regime.”

—Staff writer Nicholas M. Ciarelli can be reached at ciarelli@fas.harvard.edu.