Heat on Sudan ties
NEW YORK – Activists against the bloody conflict in the African nation of Sudan might say your 401(k) plan is contributing not only to an enjoyable retirement, but also to violence that has killed hundreds of thousands of people.
“People through their investments may unwittingly help fund the genocide that’s going on in Darfur,” a region in Western Sudan, said Allyn Brooks-LaSure, spokesman for the Save Darfur Coalition.
Save Darfur and other groups seeking an end to the fighting have been pressing mutual funds, pension funds and endowments to sever financial ties to companies that operate in the country. The groups’ efforts represent what some observers see as a larger push toward what’s called socially responsible investing. It remains unclear, however, how far-reaching the effects of these groups will be.
The cause for the activists’ alarm is clear, as the conflict in Sudan has exacted a heavy human toll. Fighting between ethnic African rebels and the Sudanese government has killed more than 200,000 people and displaced some 2.5 million since the violence began in 2003.
The activists contend that holding investments in companies that operate there makes investors complicit in supporting the conflict.
Some big investors are responding. Kansas, taking cues from California, this month passed a law prohibiting the state’s largest pension fund from investing in companies that operate in Sudan. And the University of Illinois in recent weeks joined dozens of other U.S. universities in vowing to sell investments in companies that do business there.
“I think the groups are trying to shed some light on the connection between outrageous behavior in some part of the world, like genocide, and the money connection to the average investor through their 401(k) plan or their pension plan. They’re trying to make a connection between two seemingly different worlds,” said Jeff Tjornehoj, an analyst at Lipper Inc., which tracks funds.
In recent weeks, Fidelity Investments, the nation’s largest mutual fund company, disclosed it slashed the stake that its U.S. funds hold in China’s largest oil producer, PetroChina Co., which invests in the Sudanese government’s oil exploration efforts. However, Fidelity has said repeatedly its move wasn’t the result of pressure and that it doesn’t tell its fund mangers when to buy or sell stock.
But even as some companies reduce their investments in Sudan, for whatever reason, other companies appear unmoved by pressure to follow suit.
Earlier this month, shareholders of Berkshire Hathaway Inc., the company controlled by billionaire investor Warren Buffett, voted by a wide margin against a proposal to sell the company’s stake in PetroChina.
Representatives of groups placing pressure on those that invest in Sudan say much work remains.
“It means we move the ball down the field,” said Brooks-LaSure, referring to a decision by a company or investment adviser to reduce holdings in Sudan. “You don’t declare victory until genocide is over in Darfur.