Ethical investment: Sudan

• Published on 21/08/2009
• Business Network

Amnesty (USA) is currently asking fund managers to review investments in PetroChina, Sinopec, Petronas and the Oil and National Gas Corporation (ONGC), after Amnesty International linked the companies to providing revenue to the Sudanese government.

Sudan has mostly been run by military dictatorships promoting an extreme Islamic Government since independence from Great Britain in 1956. In the past two decades around 1.5 million people have died in civil war.

There is debate as to whether the war in the Darfur region of western Sudan involves genocide. Does that matter? If it even comes close to being considered genocide something very wrong is happening regardless of what it is called.
On one side of the armed conflicts are the Sudanese military and the Janjaweed, a Sudanese militia group. On the other a variety of rebel groups, notably the Sudan Liberation Movement/Army and the Justice and Equality Movement. The Sudanese government publicly denies supporting Janjaweed, and providing money and assistance to the militia. Again it doesn’t matter what it is called, but rather what has occurred, and more importantly could be changed. This being that since the current conflict began in February 2003, up to 450,000 people have been killed, and 2.7 million displaced. Some credit is due to Citigroup for meeting with Amnesty about how to deal with the investments over a four-month period, even if they do not fully address Amnesty’s key concerns. This being to address risks related to its investments. Four months would also appear to be too short a period in a country troubled by ongoing conflict. Amnesty maintains Citigroup owns ‘sizeable amounts’ of assets in companies operating in Sudan that are known to be supporting their local government.

To ask Citigroup, or any entity, to divest completely would be to give up the bargaining power held through involvement in the region. Amnesty actually calls for a use of the corporate investor position to support a call for change. Amnesty has so far persuaded Morgan Stanley, Merrill Lynch and T Rowe Price, who engage companies that operate in Sudan, to use their economic influence to instigate change.

United, investors can exert economic influence. But realistically no one is going to give up financial returns for nothing. Be that one investment over another, or choices within a selected investment. Why not give up something for something? Or for the same return rather than being swayed by the marketing of what a corporation may sponsor and support, why not also look at what it doesn’t support.

Do you really know or care what is going on behind the funds you invest in? Some might be swayed by the lure of promotions and giveaways when making an investment decision. However would you be willing to surrender even 0.5% in returns to, for example, instigate change in Darfur, or address corruption in the Sudanese Government? Better still if it doesn’t make any difference to the return, but maybe a little time and effort to select one fund over the other, or one investment option over the default.

Fiona Bachmann
Amnesty Business Network (NSW)

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