While Massachusetts lawmakers’ decision to divest from companies linked to the Sudanese government has earned praise from grassroots activists, critics say the state’s resolution further highlights the deficiencies in the divestment policies of the Massachusetts Institute of Technology and Boston University.
On Nov. 2, Gov. Deval Patrick signed a resolution making Massachusetts the 21st state to divest from companies with business dealings in Sudan, where more than 400,000 civilians, and 2.5 million others have been displaced in refugee camps as a result of alleged violence levied by the government-sponsored janjaweed militia.
“[The people of Darfur are] suffering at the hands of a government that has not taken enough action to end injustice and violence,” Patrick said at the signing. “The people of Massachusetts will not play a role in continuing in any way stabilizing that.”
The state will have six months to remove 50 percent of its investments in companies with business relations in Sudan and a year to fully divest, said Sudan Divestment Task Force Legislative Director Daniel Millenson.
Millenson, a Brandeis University junior who played a major role in crafting the resolution, said the act is a major step toward influencing other investors.
“Massachusetts sets a good example for nonprofits and individuals in the state and beyond,” he said. “The more states that do this [and] the more companies that are responsive, the more other countries around the world will be inspired to do this.”
The state’s pension fund holds more than $50 million worth of stock in eight different suspect companies including PetroChina, Millenson said — an oil company that has business dealings with the Sudanese government — adding the key to the bill is its ability to adapt and target companies involved in Sudan at any time.
“Companies move in and out of the country, and the list needs to be flexible,” he said. “[Unlike other bills], the Massachusetts bill doesn’t say you have to divest from [specific] companies but says [the state will divest] from any companies involved with Sudan.”
MIT graduate student Kayvan Zainabadi, a leader in the school’s push for divestment, said the flexibility of the state resolution is superior to MIT’s policy, which remains unclear after months of activist organizations campaigning and negotiating with the school.
On Sept. 21, the university had completely divested from the 20 companies regarded as the “highest offenders” by the National Sudan Divestment Task Force, according to The Tech, MIT’s student newspaper.
The policy followed a May 14 announcement by MIT Corporation spokesman Kirk Kolenbrander, who said the university “will divest as appropriate” from companies that fund the Sudanese government and thus “violate MIT’s investment principles,” according to a September Daily Free Press article.
Though Zainabadi said the school’s divestment status in September was a “major victory” compared to the May announcement, he said MIT’s new policy is still insufficient.
“There was a lot of maneuvering, and [MIT] didn’t want to disclose what companies they divested from,” Zainabadi said. “It was just announced that they don’t have holdings in any of the worst companies involved in Sudan [at the time].
“At the time, the plan was sufficient, but a list of the worst offending companies is not something set in stone,” he continued. “If another company enters the list, we have no way of knowing if MIT will divest.”
Zainabadi said MIT should establish a permanent watchdog commission with representatives from across the MIT community to ensure the school engages in socially responsible investing.
“If history shows us anything about genocide, there will be another crisis,” he said. “We don’t have the luxury of time in some crises, so we want to make this a lasting change.”
Though BU earned praise from activists when it became the 14th school in the country to divest from companies directly funding the Sudanese government in May 2006, it has also come under fire for its continued involvement with Fidelity Investments, the nation’s largest mutual fund company.
As of April 30, Fidelity owned 1.1 billion shares of PetroChina. On May 16, Reuters reported that Fidelity had sold 91 percent of its holdings of PetroChina American Depositary Receipts on the New York Stock Exchange in the first quarter of 2007.
But according to the Fidelity Out of Sudan campaign — the group that evolved into the further-reaching Investors Against Genocide — only 38 percent of Fidelity’s shares in PetroChina were lodged in the NYSE, with the other 62 percent in the Hong Kong Stock Exchange.
Eight months later, Fidelity has not disclosed information on the status of its investments in the Hong Kong Stock Exchange, said School of Public Health 2007 graduate Jirair Ratevosian, who helped found the BU for Darfur Coalition last year.
Though BU offers employees the option of opening retirement accounts and pension plans with either Fidelity or TIAA-CREF, Ratevosian said BU should better inform employees about where their money is actually going.
“Since [BU’s decision to divest in 2006], nothing has happened at BU as far as progress on the divestment front,” Ratevosian said. “President Brown said, ‘It’s not my job to tell people how to divest their money. People have a choice of TIAA CREF or Fidelity.’
“We wanted [Brown to release] a public statement that said ‘Genocide in Darfur is bad. If you don’t want your money to be tainted with blood, [switch your plan to TIAA CREF],'” Ratevosian said.
BU spokesman Colin Riley said the school’s stance on the issue has been the same since it first divested.
“Every employee has the option to manage their retirement accounts with either TIAA-CREF or through Fidelity,” Riley said. “It is a personal decision.”
In recent months, Investors Against Genocide has broadened its scope from focusing on Fidelity to monitoring the activities of all investment firms sinking money into companies that fund the Sudanese government, said organization spokeswoman Susan Morgan.
“We started with Fidelity because at the time, they were the largest holder in PetroChina on the New York Stock Exchange and our next-door neighbor,” Morgan said. “We wanted to start with the one that was the biggest and the closest.”
Investors Against Genocide will participate in today’s Congressional Human Rights Caucus’s “genocide-free investing” hearing by proposing policy changes to stop the alleged genocide in Darfur and prevent future genocides, she said.
“If this concept of genocide-free investing becomes widespread, countries will be on notice that if there are countries where there are widespread human rights violations, it will inhibit any investments,” Morgan said. “That’s a pretty big incentive not to practice genocide.”
According to the Investors Against Genocide website, Fidelity has the ninth-most holdings in PetroChina, overtaken in the top spot by Franklin Templeton Investments.
In April 2005, Harvard University became the first school to divest from PetroChina, and after six colleges committed to divest from the company, including Stanford University and Northwestern University, Harvard divested from Sinopec, another Chinese oil company, in March 2006, according to the Investors Against Genocide website.
Illinois, Oregon and New Jersey were the first states to fully divest from companies linked to Sudan in the summer of 2005, the website states.
