In May 2001, after the Project unleashed a short but intense “hip-hop activism” campaign, Sodexho divested from CCA. Idealistic college students could chew their vegetarian-options without the prison-for-profit system sitting heavily in their bellies.
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Sudan Divestment Task Force
San Antonio Interfaith
Drummin’ for a cause:
Save Darfur Coalition benefit
“The Lessons of the World’s longest civil war: Southern Sudan” A talk by bobbie-Frances McDonald, founder of the Sudan advocacy action forum.
March 28, 7 p.m.
Free and open to the public
In the long-term, however, the divestment didn’t make much difference. CCA bounced back from a stock crash and, with the Sodexho connection severed, the student movement lost its avenue of engagement. YDS turned its attention to anti-war and immigrant-rights campaigns, and little has been heard from the Project since 2004. Meanwhile, Sodexho expanded its holdings in private-prison corporations in the U.K. and Australia.
The moral of the story: Divestment exists on overlapping pragmatic and ethical levels, and success in one dimension doesn’t necessarily guarantee success in the other.
With this in mind, consider the debate regarding the Sudan divestment plan before the Texas Legislature, and recent criticism leveled at Governor Rick Perry. Earlier this month, Perry publicly endorsed a divestment plan to pressure the Sudanese government to end the genocide in Darfur. The next day, he awarded an $8.5 million grant from the Texas Enterprise Fund to Fidelity Investments, a major stockholder in two Chinese oil companies operating in Sudan, Petrochina and Sinopac.
The Sudan divestment bill, introduced by Senator Rodney Ellis in the Texas Senate and representatives Corbin Van Arnsdale and Ruth McClendon in the House, is fairly simple. The Texas Employees Retirement System would compile a list of companies who do business with the Sudanese government or earn 10 percent or more of their revenues off oil, mining, or power production in Sudan.
Then, each state agency would compile a list of the companies they invest in, either directly or through mutual funds, and cross-check it against the Sudan list. When they find a match, the agency would issue the company a Freeze-Or-Our-Fund-Will-Divest letter, warning the company to halt its operations in Sudan. If the company ignores them, or worse, becomes even more complicit in genocidal practices, the agency would pull half its investment within nine months and the rest six months later.
The divestment plan is the brainchild of the Sudan Divestment Task Force, an international nonprofit, whose plan is designed with effectiveness in mind, as opposed to the absolutist, moralist divestment scheme of the Prison Moratorium Project. For example: To appease fiscal conservatives, the legislation would protect state agencies from even the slightest revenue loss. Under the provision, if an agency’s assests drop in worth by more than half a percent because of the divestment, they’re allowed to jump back in bed with Sudan-involved
And getting back to Perry and Fidelity, an agency also wouldn’t be required to divest from mutual funds that back suspect companies. The agency need only send them a letter requesting they delete those companies from the fund, or alternately, create a separate fund that doesn’t invest in those companies.
Only certain Fidelity funds, such as the Fidelity Contrafund, invest in Petrochina and Sinopac. Requirement fulfilled, and Perry is off the hook.
“If anything, this is a good opportunity for Governor Perry to engage constructively with Fidelity and encourage them to take similar action as he’s doing in supporting this legislation,” Task Force Director Adam Sterling says.
And this may be where the Sudan-divestment proponents will splinter. The Massachusetts Coalition to Save Darfur has specifically targeted Fidelity, and while the Coalition has yet to call for divestment from Fidelity, they are attempting to collect 400,000 signatures (the same number of estimated genocide casualties) to pressure Fidelity to divest from Petrochina and Sinopac.
In the meantime, the Task Force is exclusively going after companies with operations on the ground. After all, if they were to take divestment as a theory absolutely and across the board as the Prison Moratorium Project did, and started advocating for second-degree divestment and freezing business transactions with anyone investing in a company in Sudan (or anyone that invests in a company that invests in a company that invests in a company), no legislature would support it. The states themselves, because of their investments, would be targets. Fidelity is a huge company that exists far beyond its mutual-fund holdings in these certain holdings, just like Texas invests in many companies,” Sterling said. “We wouldn’t advocate an end to business with Texas, or Texas doing with business with other states, nor an end to business in general with Fidelity.”
Sudan, by Way of San Antonio
In our research we came across the following two cases, which we ran by Adam Sterling’s moral-o-meter.
University of Texas at San Antonio
The Issue: In 2006, UTSA accepted a $7,500 research grant from French power company ALSTOM for coal-based power
The Sudan Link: The Merowe Dam Project and the North Khartoum Power Plant.
“The projects ALSTOM is working on benefit a very small region of elites in the Sudanese government,” Sterling said. “The Merowe project is one of the most conspicuous in Sudan, not just because it’s providing revenue to the Sudanese government but because of the countless human-rights abuses that have been attributed to the
According to Task Force research, ALSTOM told the California Public Employee Retirement System that promoting human rights isn’t its responsibility, and leaves that to its employer, the Dam authority.
Task Force Verdict: Thumbs down.
“`UTSA grant acceptance` is problematic more so than the Perry situation,” Sterling said. “The situation is different because with investing you are supplying funding, but in a sense conducting research helps the company do its suspect operation in Sudan. They’re engaging in business directly with the company, and there’s a reputational cost.”
Response: UTSA researchers said they were unaware of ALSTOM’s operations in Sudan and believe their research project is not directly tied those operations.
The Issue: Rodney Frank Chase, chairman of U.K.-based company Petrofac, also sits on the board of directors of San Antonio-based oil giant Tesoro.
The Sudan Link: With an office in Khartoum, Petrofac plays a supportive role in Sudanese oil production. Specifically, they won a $40-million, four-year contract from the Greater Nile Petroleum Oil Consortium for machine management.
“The Sudanese government, because they don’t themselves have the capabilities to run oil operations (e.g. extract, refine, and distribute oil on the open market), they set up these consortiums. Then Sudan holds a minority interest or ownership in these consortiums with these companies,” Sterling said.
Task Force Verdict: Jury’s still out. “I think there’s a definite problem with `Chase’s` organization, but I’d want to look into what it means to be on `Tesoro’s` board, who decides that, what the situation is, and what the ramifications and responsibility is for that U.S. company,” Sterling said.
Response: Neither Petrofac nor Tesoro returned requests for statements on company policy regarding Sudan.