Harvard Executive Vice President Katherine N. Lapp announced Friday that the Harvard Management Company will review business practices of HEI Hotels & Resorts, a controversial company which has come under fire from Occupy Harvard and other student advocacy groups for allegedly unjust labor practices.
HEI, which is currently under investigation by the National Labor Relations Board, has been a central focus of the Occupy Harvard campaign. Last month Yale University announced that it would not reinvest in HEI, joining the University of Pennsylvania and Brown University, who both announced that they would not reinvest in HEI earlier this year.
HEI manages a number of private equity real estate funds, meaning that investors committed to a fund would be unable to immediately sell their stake. But investors like HMC would be able to choose not to commit capital to future funds.
While the University’s statement does not commit Harvard to not reinvesting in HEI, it does suggest that Harvard will be rigorously evaluating the ethics and lawfulness of HEI’s practices.
“Harvard University has followed with interest reports concerning labor relations at HEI Hotels & Resorts,” said Lapp in the statement. “The Harvard Management Company, as part of its investment and due-diligence process, will review HEI’s business practices and policies, including labor relations, and its compliance with industry standards, regulations and laws, prior to making any decision to re-invest in HEI-sponsored investment funds.”
Student activists said that they felt the statement was too vague, but that they were generally pleased with Harvard’s announcement.
“The statement is unclear about what the next steps for Harvard are,” said Karen A. Narefsky ’11, a Harvard Occupier and member of the Student Labor Action Movement. “But I am feeling really positive about [the statement]; I think it points to Harvard heading in the right direction.”
However, union representative Wayne M. Langley said the statement is too weak to signify real change.
“The thing about this statement is that it does not commit Harvard to any kind of ethical investing in the future,” said Langley, director of higher education for SEIU Local 615, the union that represents Harvard custodians and security guards. “It’s perplexing that Harvard is shying away from committing to a broader practice of ethical investing.”
Narefsky also noted the lack of commitment to broader ethical investing and said that such a commitment can only follow increased transparency of University investments.
“I think the next step is a more concerted push for transparency,” Narefsky said. “There’s no reason why all of Harvard’s investments should not be subjected to this type of scrutiny.”
—Staff writer Mercer R. Cook can be reached at email@example.com