Harvard announces decision to divest PetroChina stock


The Harvard Corporation announced this Monday its decision to have Harvard Management Company divest its holdings of stock in PetroChina Company Limited. The decision, divesting $4.4 million, is a major accomplishment for student activists who have been encouraging the University to divest from any support of the Sudanese genocide.

“This decision reflects deep concerns about the grievous crisis that persists in the Darfur region of Sudan and about the extensive role of PetroChina’s closely affiliated parent company, China National Petroleum Corporation, as a leading partner of the Sudanese government in the production of oil in Sudan,” said the University’s Corporation Committee on Shareholder Responsibility (CCSR) in a statement endorsed by the Corporation. “Oil is a critical source of revenue and an asset of paramount strategic importance to the Sudanese government, which has been found to be complicit in what the U.S. Congress and U.S. State Department have termed ‘genocide’ in Darfur and what a United Nations commission of inquiry recently characterized as ‘crimes against humanity and war crimes . . . [that] may be no less serious and heinous than genocide.'”

The decision came on the heals of a recommendation by the University’s Advisory Committee on Shareholder Responsibility (ACSR), comprised of four faculty members, four students, and four alumni. The committee explored how the financing of PetroChina, through its parent corporation, the China National Petroleum Corp (CNPC), is in effect financing genocide. With CNPC contributing more than $1 billion to the Sudanese government to develop their oil resources, the Sudanese government uses the funds to arm the Janjaweed militiamen who have slaughtered thousands of villagers in the western region of Darfur.

“I want to thank the ACSR for its thoughtful consideration of these issues,” said Harvard University President Lawrence H. Summers, in the University Press Report. “Divestment is not a step that Harvard takes lightly, but I believe there is a compelling case for action in these special circumstances, in light of the terrible situation still unfolding in Darfur and the leading role played by PetroChina’s parent company in the Sudanese oil industry, which is so important to the Sudanese regime.”

The divestment decision represents a major accomplishment for student activists Ben Collins and Manav Bhatnagar who started the Harvard divestment petition. The divestment campaign was a coalition under the United Front for Divestment, and the students were able to generate more than 400 signatures by both students and faculty for their petition. The students also made a compelling presentation to the ACSR which ultimately prompted divestment.

“The magnitude of activism was phenomenal,” commented Chad Hazlett, Co-founder of the Darfur Action Group. “I think it showed the administration that this really is a special case, and one on which we simply will not shut up until the job is done and our hands are clean. Besides this, I think the argument to divest from PetroChina in particular has tremendous moral weight, as it is such a clear example of a company financing a [totalitarian] regime, and ultimately the atrocities they carry out.”

Harvard University is the first university to divest of its Sudanese holdings, in a step that students hope that other universities will follow.

“It’s a risky thing – to be the first University to take a step like this,” asserted Rebecca Hamilton, JD/MPP Class of 07, and co-founder of the Darfur Action Group, “but I am certain that Harvard’s leadership on this issue will create a domino effect for all the divestment campaigns around the country. To me this is the most wonderful part of yesterday’s decision. Harvard is so often a target for criticism, yet I think it’s important we give credit where credit is due.”

The next step in the “domino effect” is to turn student pressure toward divestment of state pension funds, which might have as much as $91 billion invested in Sudanese companies. Students, particularly at Williams College, have already begun the process of pushing legislation in Arizona, California, Maryland, Massachusetts, New Jersey, Illinois, and Texas.

“Divestment begins to show the genocidal regime of Sudan that that there will be a real cost imposed for their actions, and they will not be able to continue the atrocities without expecting additional costs,” commented Hazlett. “While the actual financial impact of this divestment action is miniscule, we hope that seeing Harvard divest – which it so rarely does – will begin a chain reaction of other divestments, both in Universities and in the state-managed pension funds around that country that collectively hold $91 billion in equities of companies the do business with the Government of Sudan. So in that sense, it is the beginning of a real pressure campaign on the Government of Sudan, one that comes from deep roots in student activism and public opinion, and so will not be easily stopped.”

As Hazlett noted, this decision also marks one of the few times that Harvard has chosen to divest for non-financial reasons. Other instances of principled divestments are limited to divesting from South Africa during the era of apartheid and from tobacco companies, according to Hamilton.

“The University maintains a strong presumption against divesting itself of securities for reasons unrelated to investment purposes, and against using divestment as a political tool or a “weapon against injustice” – not because there are not many worthy political causes or deeply troubling injustices in the world, but because the University is first and foremost an academic institution,” noted the CCSR statement. “The University, as an academic rather than a political institution, must take great care to avoid leveraging its endowment or prestige in ways that could embroil the institution in political and social controversies not directly related to its academic pursuits, and thus compromise the core values and independence of the academic enterprise.”

Nevertheless, the committee found that the exceptional circumstances in this case, including statements by Congress and the United Nations that condemned the genocide in Sudan, mandated the divestment.

“Cynics will talk about this being a ‘symbolic’ or ‘political’ decision,” commented Hamilton. “However a lot of well-researched augmentation went on behind the scenes and I think that at the end of the day the Harvard Corporation were genuinely convinced that this was the right thing to do – and thankfully they had the courage to act on that belief.”

The divestment from Petrochina, however, may not represent the total cessation of the University’s financial support of the Sudanese government.

“For now, Harvard has only stated that it will divest from PetroChina,” asserted Sadine Ronc, undergraduate coordinator of the Darfur Action Group. “Students are still protesting the fact that Harvard has not disclosed all its holdings in Sudanese companies. Once that information is made available, ‘the unique circumstances” the Corporation mentioned may again be found to justify further divestment.”

According to Crimson reports, Harvard may still own Sudanese investments, most notably 10,000 shares in a subsidiary of Sinopec, a Beijing-based firm that is reportedly constructing a pipeline that could substantially boost Sudan’s oil exports.

“It has been made very clear that the administration intends to stop with PetroChina; that this is a special case,” observed Hazlett. “Such statements were necessary of course to prevent a ‘slippery slope’ condition. But how far they will go to protect against other questionable investments now or in the future, I do not know. Ultimately I think a calculation has to be made in each case, weighing the moral imperative and political pressure on one hand with the hassle and the dangerousness of the precedent on the other.”

The divestment announcement corresponded with the beginning of Darfur
Action week, led by the Darfur Action group. Darfur Action Week consists of a weeklong program designed to both raise student awareness and increase student activism relating to the genocide in Darfur.

“To a jam-packed Kennedy School Forum on Monday night, Samantha Power congratulated the work of student activists in driving the divestment decision, and John Prendergast from the International Crisis Group predicted that Harvard’s decision would set off a chain reaction,” Hamilton stated.

The program for this week includes the launching of the Genocide Intervention Fund, a new fund that will provide aid to African Union peacekeeping troops, providing much needed protection to both Darfurians and humanitarian aid workers, with moderation by Samantha Power and speakers including Lt-Gen Romeo Dallaire. On Thursday, the Darfur Action Group is holding a film screening (interviews with survivors in Darfur) and advocacy workshop. Also on Thursday there is a luxury fast (students abstain from chocolate, soda, cigarettes and donate the money they would have spent) with all proceeds going to The Genocide Intervention Fund. On Friday, there is a panel moderated by Martha Minow regarding last week’s decision to refer Darfur to the International Criminal Court. Panelists include Justice Goldstone, Michael Ignatieff and UN Special Advisor on Human Rights in Sudan, Ian Martin. More information is available at www.darfuractiongroup.org.

“Divestment is a big word, and, wielded appropriately, it sends a big message,” commented Ronc. “Divestment is both concrete and moral. On one hand, by withdrawing investments from a company that helps finance government sponsored militiamen, you weaken the bloodline of the genocidal campaign to a certain degree. On the other hand, divestment is a powerful vehicle to bring people together around a transcending belief in Humanity and give them the tools to act upon that belief. Because even if you’re not going to do anything about genocide, at least you shouldn’t help finance it. But once you’ve realized that, it’s hard not to want to do something to help stop the killings.”

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