A Wise Divestment

Murder and genocide are categorically intolerable. Ultimately, it was that maxim that led Harvard to divest itself of its holdings in Sinopec, and it is why we resoundingly support and applaud Harvard’s announcement last month that it will sell its Sinopec shares.

Since Harvard’s divestment from PetroChina one year ago, Sinopec’s involvement in the Sudan has grown substantially. Though the exact relationship is complex because of a web of partnerships and holding companies, it is well established that Sinopec is a partner in Petrodar, which began to drill for oil in the Sudan early this year, with production expected to rise to 250,000 barrels per day by the end of the year. In the Petrodar venture, Sinopec is a partner with both the Sudanese government and the Chinese National Petroleum Company, the parent company of PetroChina. Sinopec has also announced its intent to purchase oil fields in the Sudan so it can further expand its business there.

Oil is a key source of revenue for the Khartoum government and is used to fund the Janjaweed militias that are committing genocide in Darfur. This oil provides a clear and direct chain of causation between Harvard’s monetary interests and the most heinous of injustices and human rights abuses. Indeed, it would be difficult to justify the same link if the firm in question dealt with almost any other commodity besides oil.

When we wrote last April that Sinopec’s involvement in Sudan was not worthy of Harvard’s divestment, Sinopec’s links to the Sudan were much murkier, particularly compared to those of PetroChina. For two decades, Sudan has been embroiled in a civil war between the Khartoum regime in the north that supports the genocide and a fledgling opposition government in the south. Because Sinopec’s Sudanese pipeline project benefited both regimes and was built into the peace agreement ending the civil war, we argued Harvard’s investment was helping to keep the peace and also the southern government more than it was hurting it by aiding Khartoum.

We have, however, realized that this logic is flawed—no utility calculus can negate the fact that Harvard’s money was linked with the ultimate evil of murder. Combined with Sinopec’s larger presence in Sudan that has developed in the past year, divestment from Sinopec was the only proper course of action. We applaud the University’s divestment. That it did so before considerable student pressure developed (although a petition drive was amassing signatures) is a particularly promising sign.

Many have pointed out that Harvard’s sale of stock is a mere blip in the stock’s overall price and claim that it will have little effect on the profitability of others’ investments in Sinopec. Instead, they argue, Harvard’s action is only symbolic. Harvard, however, has attracted media attention to the genocide, and its PetroChina divestment set a precedent followed by a number of other institutions, including Amherst College, Yale University, Stanford University, and recently the entire University of California system. Furthermore, the University’s profiting from slaughter contradicts every one of Harvard’s values. Even if divestment is only symbolic, it is still the right thing to do.

This second case of divestment from a firm doing business in the Sudan also compels us to call on Harvard Management Company (HMC) to disclose all of its holdings in firms with significant commercial activities in the Sudan and with the Khartoum regime. While we still believe that HMC cannot feasibly operate with constant oversight of all its holdings, the Sudanese genocide is an exceptional circumstance that warrants extreme measures such as disclosure, and possibly divestment. It would be hypocritical of the University to hide its holdings on foreign stock exchanges of other oil companies doing business in the Sudan, which Harvard can theoretically do since regulations only require HMC to disclose its holdings on domestic exchanges. In particular, Harvard may still hold shares of five such companies from which other universities have divested. Most notably, Harvard holds a nearly $5.1 million stake the Russian oil firm Tatneft.

The question of where Harvard should draw the line regarding divestment is complex and the answer involves many human judgment calls. Both our own judgment and Harvard’s precedent, however, make it clear that holding shares in Sinopec fell clearly on the side of divestment. Harvard’s endorsement of this position is reason for brief celebration before we recommit ourselves to ending the genocide in Sudan once and for all.