When the UC Board of Regents voted in March to withdraw funds
from companies involved with the Sudanese government, they created
the most extensive university divestment plan to date.
The decision-making process was led by a task force that
included students and used research done by students, independent
research firms and other divestment campaigns.
The vote to divest came in response to an ongoing conflict in
Sudan that began about three years ago and has caused hundreds of
thousands of deaths in the Darfur region and millions
displacements. This conflict has recently reached outside the
country to affect civilians in neighboring Chad. The United States
has called the Sudanese government’s actions genocide.
The regents made the decision to divest on a moral, rather than
financial, basis.
The high level of student involvement and large number of
companies chosen sets the University of California’s process
apart from that of a school like Harvard University, which was the
first university to divest and has withdrawn funds from two
companies with holdings in Darfur.
There, students were not consulted to the same extent, said Ben
Collins, a member of the Harvard Darfur Action Group.
And the UC’s divestment also differs from other
universities’ actions because instead of divesting from
direct holdings, the UC is divesting from index fund that invest in
these companies, said Adam Sterling, co-chair of the divestment
task force and a member of the study group on divestment.
The UC invests in indexes made up of groups of companies rather
than in companies individually, tying those funds which are
invested in companies with holdings in Sudan to billions of dollars
in other sectors.
The UC divested from nine companies: Bharat Heavy Electricals
Ltd.; China Petroleum and Chemical Corp. (Sinopec); Nam Fatt Co.
Bhd.; Oil & Natural Gas Co. Ltd.; PECD Bhd.; PetroChina Co.
Ltd.; Sudan Telecom Co. Ltd. (Sudatel); Tatneft OAO; and Videocon
Industries Ltd. These companies are primarily based out of China,
India, Russia and Malaysia.
The companies that the UC considered for divestment were mostly
energy companies, said Student Regent Adam Rosenthal.
The task force narrowed down the companies from a list of 35,
targeting companies that directly benefited the government of Sudan
but not the citizens themselves.
“What we did was we had a list of about 35
companies,” Rosenthal said. “We were confident that …
these 35 were the biggest offenders.”
The original 35 companies that were considered came from other
divestment campaigns and significant student research, he said.
“From that list we commissioned a private research company
that specializes in furnishing institutional investors with data
about companies that they are invested in or want to be invested
in,” Rosenthal said.
The extent of the reports varied because some of the companies
are not as transparent as many American companies have to be, he
said.
The reports generally had in-depth information about business
activities in Sudan: The company’s revenue, stock and
operations in the country as well as any social programs those
companies may or may not have in the country, Sterling said.
The task force also wrote letters to chosen companies expressing
concerns and asking for explanations regarding their business
practices in Sudan, Rosenthal said, but many of the companies did
not respond.
From the information received in the reports as well as research
done by divestment campaign research “it became clear that
(the targeted companies) were in cahoots with the government of
Sudan,” Rosenthal said.
There is no fixed definition for a targeted company, with such a
diffuse process, said UC spokesman Trey Davis. The companies ranged
in their activities and involvement in Sudan.
Subgroups of the committee took the information and determined
how closely linked the companies were with the government, and thus
whether to recommend divestment.
The committee tried to exclude companies that provided
advantages to the citizens.
“Having a company that is solely focused on oil provides
very little benefits to the people of Sudan,” Rosenthal
said.
But a telecommunications company, for instance, would not have
been recommended as such a company could provide services for the
citizens of the country, he said.
The process ended with a list of recommendations more expansive
than any other university’s divestment.
Harvard divested from Petrochina in April 2005, and since then,
a handful of private universities have done the same. Stanford
University divested from four companies in June 2005 and Yale
divested from seven companies this February. Amherst College,
Dartmouth College and Brown University have also divested to
varying degrees.
Last week, Harvard divested from one more company, Sinopec.
The investment in Sinopec had increased since Harvard’s
original divestment a year ago, said co-founder of Harvard’s
Darfur Action Group Chad Hazlett. The groundwork had been laid, and
they just had to hold the university to what they had agreed to
with the initial decision to divest, Hazlett said.
Divestment at Harvard was less of a back-and-forth discussion
between students and the administration than the process at UCLA
was, he said.
When the Harvard Corporation reported its direct holdings to the
Securities and Exchange Commission and the increase in Sinopec
stock was publicized, there was an interest on campus to finish the
job that was started with last year’s Petrochina divestment,
said Collins, the member of the Darfur Action Group.
But the divestment came as a surprise to students involved in
the campaign and had no over-arching goal to prevent future Harvard
investment in such companies, he said.
“They meet in secret; we weren’t really consulted on
this,” Collins said. “It seems as if this divestment
decisions was made with an explicit focus with not setting any sort
of precedent.”
Only 20 to 25 percent of Harvard’s holdings are public and
all of their indirect investments are kept private, he said, unlike
the UC’s involvement of students and open process.
Such UC student involvement will continue to play a factor in
divestment from Sudan on a broader level.
Now that the regents have voted to divest, the students are
focusing on a national campaign. Members of the Darfur Action
Committee plan to lobby California to divest this Thursday in
Sacramento.