University System of Maryland officials ordered investment managers last week not to invest in companies thought to be contributing financially to an ongoing crisis in Sudan after concerns were raised by human rights organizations.
The Sudanese government has been involved in a civil conflict in the western region of Darfur since 2003, and has been repeatedly accused of associating with rebels who have engaged in ethnic cleansing there. System officials described their actions as taking “a stand against companies complicit in genocide.”
“It will send a message to our administration, to our leaders and [to] foreign governments that actions like these against innocents aren’t permitted and aren’t approved of,” said Leonard Raley, president and CEO of the University System of Maryland Foundation Inc.
The foundation administers and manages the $700 million endowment that ensures the long-term financial security of the system’s 13 universities and research institutions. The board that runs the foundation blacklisted China’s Sinopec and PetroChina corporations, India’s Oil and Natural Gas Corporation and Malaysia’s Nam Fatt, all of which are heavily involved in Sudan’s oil industry.
The decision came after months of discussion between the foundation and human rights groups. The foundation first said it was unsure if it held any investments in companies thought to be complicit in the crisis in Sudan because officials leave fund management responsibilities to independent investment managers, a common practice.
After analyzing portfolios held by the foundation, no investments in companies with ties to Sudan were found.
Local groups have lobbied heavily, both in Maryland and across the country, to encourage organizations to strip portfolios of investments in companies assisting the Sudanese government, said junior Sarah Goldberg, a member of a local branch of the Sudan Divestment Task Force. She cautioned, however, that more companies may exist that are providing assistance to rebels in Sudan.
“We’re pleased that the university has taken action,” Goldberg said. “But we hope they will listen to our advice and look at other companies which should not be invested in.”
The foundation praised the positive cooperation it has had with university students who demanded it take action, and Raley said the foundation considers the process of examining which companies it does not wish to associate as ongoing.
Experts such as economics professor Roger Betancourt questioned how much impact policies like the University System’s actually have on the Sudanese government, noting the university is a small part of the economic system affecting the conflict.
“[Economic sanctions] are only effective when every government agrees on them,” Betancourt said. “For instance, the ones that were truly effective were the sanctions on South Africa where every major country had stopped investing.”
South Africa’s apartheid government spent much of the 1970s and 1980s under varying degrees of sanctions and boycotts, which are credited as a major reason for the fall of the apartheid regime in 1994.
The goal is to turn Sudan into a new South Africa both in terms of sanctions and raising its public profile, said Daniel Millenson, executive director of the Sudan Divestment Task Force.
“In terms of a financial impact, yes, the University of Maryland isn’t going to end genocide on its own, but the psychological impact is another thing,” Millenson said. “Part of what divestment does is raise the issue on the public radar.”
Divestments even in companies that aren’t native to Sudan also serves to involve other governments in the crisis, Millenson said.
“When you’re hitting these companies, it’s not like they’re not talking to their government,” he said. “They’re realizing that, ‘Gee this genocide is bad for business. Let’s do something about that.'”
With the failure earlier this year of a Maryland State house bill that called for divestment in Sudan by the state retirement and pension system, the decision by the University System of Maryland Foundation marks the first major divestment in companies by a state agency.
Contact reporter Alan J. McCombs at newsdesk@dbk.umd.edu.
