Why Pressure Investment Firms about Genocide

Individuals must take the actions that they can to help

• Moral response to the very worst human rights and ethical problem on the planet:
  Americans simply do not want to be connected to genocide. When they learn the facts, people are typically horrified to discover that their money or the company they trusted to manage their money is investing in genocide. A recent study reported that 71% believe that companies should take into account human rights abuses such as genocide when investing overseas rather than base their investment decisions on economic criteria only. And 77% say they would switch their investments if they learned that those managing their funds had significant investments in firms that were active in Sudan, where the first genocide of the 21^st century enters its 6^th year as of March 2008.
• Effectiveness of divestment in the case of Sudan and the power of divestment action by large investors:
  Divestment and threat of divestment can have real impact on the government of Sudan and make a difference for the people of Darfur. Since investment companies are the largest public investors in the worst offending oil companies helping to fund the genocide in Darfur, customers and potential customers of those investment firms can have a powerful voice. If some of these large investors change their investment policies, then the result is significant economic pressure on the offending companies and on the government of Sudan, which relies on those companies for expertise, capital investment, and revenue from oil sales. In addition, pressure on the Chinese oil companies operating in Sudan can have particular impact, since those companies are primarily owned by the government of China, China is the largest trading partner with Sudan, and China has been protecting Sudan by blocking strong action by the UN. If large numbers of citizens and customers speak loudly, that message will be heard, not only by the problem investment firms, but also by the Chinese and other oil companies operating in Sudan and the government of Sudan.
• Each of us must do what we can
  In the face of genocide, each person must take the actions that they can to help. Although there may be few actions that individuals can take, one area in which each person can take action is how their money is invested, and how the organizations with which they affiliate invest their money. Fidelity's SEC filing on May 15, 2007, and the attendant press coverage shows that our combined voices can have an impact. Click here for more.

Summary of why citizens and investors should take action

• Sudan and its government-sponsored Janjaweed militia have committed pervasive violations of human rights in Darfur, Sudan, since early 2003, earning the designation of the first genocide of the 21st century.
• The atrocities taking place in Darfur, Sudan, have been identified as genocide by unanimous declaration of Congress in July 2004, by two Secretaries of State, and by the President of the United States.
• The genocide in Darfur has resulted in the deaths of hundreds of thousands and the displacement of millions of Darfurians, and is continuing to claim victims.
• There is a well-established link between the oil industry in Sudan and the revenue of the Government of Sudan which overwhelmingly goes to increased arms and funding of the genocide in Darfur.
• There are multiple, large problem investment firms which, often through their mutual funds, have been major investors in the four largest oil companies operating in Sudan, particularly PetroChina (through its parent CNPC).
• PetroChina's closely related parent, CNPC, is Sudan's largest partner in the oil industry there. We hold PetroChina accountable, just as we would CNPC, since the "separation between these two companies is largely cosmetic" and they "should not be rewarded" for creating distinctions on paper to obscure their connections to the genocide.
• US law prohibits American companies from doing business in Sudan, yet Americans are legally able to invest in foreign companies operating in Sudan. Over the last two years, many large investors, including US colleges and states pension funds, have made the responsible decision to divest from PetroChina and other offending companies operating in Sudan.
• Millions of Americans are customers of of these problem investment companies and have money entrusted to them. We can and should expect better from a trusted advisor. Who wants to support a company which insists on investing in companies which help fund genocide?
• Looking back, who would support the idea of investing in firms that sought to make a profit by selling Zyklon-B gas to the Nazis or machetes for the genocide in Rwanda?Looking forward, who wants their personal savings and pension funds invested in companies that help fund the genocide in Darfur?

Some of the good things that can happen as a result of citizens and investors voting for genocide-free investing, complaining to the problem investment companies and moving their money

• Many people complaining will increase public awareness of the problem with these investment companies and increase awareness of the genocide in Darfur and the need to help.
• Submitting shareholder proposals for genocide-free investing and voting for the genocide-free investing sends a strong, public message to the investment company, even if the proposal does not win a  majority vote.  Successful proposals give an outstandingly clear message and can result in the mutual fund or investment company changing the fundamental rules for how it invests!
  
• The problem investment companies may feel the pressure and take constructive action to influence PetroChina (or the other companies) and the government of Sudan, using their large investment position as leverage.
• One or more of the problem investment companies may feel the pressure and might divest. Other firms may see the pressure and therefore be influenced to divest from PetroChina or the other oil companies in Sudan or to avoid investing in those companies.
• Increased awareness of the problem may result in getting Congress to change the law, so that US capital can not be used to help Sudan fund the genocide in Darfur. Note that US law already prohibits nearly all US companies from operating in Sudan, for just that reason.
• The problem investment firms may give more consideration to ethical issues before making investments in the future.
• People can free themselves from any ethical concerns they have about their own investment company's connection to the Sudan oil industry.