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Daily Iowan: Investing in Slaughter

By Mason Kerns
11/15/2006

Click here to read the entire article.

Below is an excerpt of an article from the Daily Iowan:

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More than two years after Congress unanimously declared that Sudan's Khartoum regime was waging genocide against its Darfuri minority, the Iowa Public Employees' Retirement System, or IPERS, still possesses stock and other equity holdings totaling $28 million in companies doing business with the African nation's government, according to IPERS' most recent portfolio figures dated June 30.

In the past few years, select American institutions operating in the public and private realms alike have obliged those calling for financial divestment from foreign corporations determined to have strong ties to the Khartoum government, the de facto authority of the country's Janjaweed militias. These Arab fighters are commissioned by their government to eradicate Darfuris and, recently, attack humanitarian-aid workers in the region. Human-rights groups estimate that the rogue network has killed between 260,000 and 450,000 people. The Associated Press reported that as of Nov. 10, 2.5 million refugees had fled to neighboring countries, particularly Chad.

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The Daily Iowan's review of IPERS holdings found the pension fund has stake in three firms operating in Darfur whose ethics are considered by human-rights and divestment organizations as questionable and two companies whose policies have been called blasphemous. Specifically, PetroChina/Chinese National Petroleum Corp., Alcatel SA, Petronas, Cummins Inc., and Total SA are among companies that "warrant scrutiny" for their alleged transgressions in the region, according to research by the Sudan Divestment Task Force, renowned Darfur scholars, a Yale Law School committee, a report from Harvard University, and other sources.

These experts' research has concluded the companies, most notably two oil consortia - Petronas, which is owned by the government of Malaysia, and PetroChina, a subsidiary of the Chinese-government-operated China National Petroleum Corp. - provide the Janjaweed fighters with oil revenue, arms, and military support, even as they continue to scorch and plunder Darfuri internally displaced persons camps and rape and kill refugees throughout Sudan.

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Sudan expert Eric Reeves, a literature professor at Smith College in Massachusetts who is often credited with catalyzing nationwide divestment efforts, said IPERS, similar to other public institutions, owes it to its shareholders to invest responsibly, and thus should stop pipelining capital to "offending companies" in Sudan.

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While conducting research in Sudan, Reeves said, he encountered hordes of southern Sudanese who had been attacked by the military's helicopter gunships, offensive fighting machines that have been used in numerous wars around the globe. The choppers are especially effective for strafing enemy villages.

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Through interviews with some of [the victims], he said, he soon learned the gunships were flown by Khartoum-backed Janjaweed rebels on behalf of the China National Petroleum Corp. The company would clear unwanted refugees from their oil fields at any cost, he concluded.

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Independent investigations by a number of institutions and scholars point to the ongoing transgressions of PetroChina, a subsidiary of China National Petroleum, as contributory to, if not complicit in, the slaughter of Darfur refugees and other Sudanese civilians. Jason Miller, national policy director for the Sudan Divestment Task Force, said that in 1999, the Chinese corporation spawned PetroChina as part of a public-relations front to appease taxpayers unwilling to invest directly in China National Petroleum because of its allegedly atrocious human-rights record. Shares of PetroChina were subsequently offered on the New York Stock Exchange, despite resistance from such U.S. officials as Sen. Sam Brownback, R-Kan., who feared American funds would "unwittingly empower a terrorist and genocidal regime in Sudan," as the senator said in a statement.

And, at some point, IPERS acquired PetroChina stock, and it continues to hold that stock despite human-rights concerns.

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Offending companies have regularly shunned media exposure, said Miller of the Sudan Divestment Task Force. Repeated DI e-mails and phone calls to China National headquarters in Beijing and Petronas' main office in Kuala Lumpur yielded no response.

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"There is in all of Africa a no more destructive bilateral relationship than that between China and Sudan," Reeves' testimony began. In his statement, Reeves went on to chastise petroleum players in Sudan for knowingly providing Janjaweed fighters with arms for eradicating civilians from southern Sudan's oil fields.

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Evidence from Refugees International, revealed in a June statement, is perhaps the most telling.

"China National Petroleum Corp. contributes Chinese-made tanks, fighter planes, bombers, helicopters, machine guns and rocket-propelled grenades, firearms, and ammunition to the Sudanese military," the group found.

This oil-money-guns-murder cycle, Miller said, could be quashed with help from investment systems such as IPERS, should those organizations choose to divest their stock holdings.