Chinese companies supplied arms to Sudan, expert says

Politics head says divestment campaign is ‘utterly symbolic’

Daniel Millensen, national advocacy director of the Sudan Divestment Task Force, said divestment is important because 70 per cent of Sudan’s oil revenues go to military expenditures.

“[The divestment campaign will] get other universities to divest in Canada, and other places and the aggregate effect is much larger,” he said. “More importantly, it spurs the federal Canadian government to take more action in Sudan.”

In the U.S., more than 30 universities have divested, as well as seven states, Millensen said.

“There’s a huge connection between that and Sudan funding its genocide,” he said. “Divestment is a way of pressuring companies to behave better or basically face share price depreciation.”

Millensen said the Sudanese government has taken notice of the movement. In addition to taking a $1-million advertisement in the New York Times to advertise investment in Sudan, the Sudanese government has also written opinion pieces condemning the divestment movement.

Millensen said divestment should be a last resort, adding that the taskforce also advocates using shareholder power to change the company’s practices.

“Sinopec and Petrochina have been totally unresponsive to these types of things. Divestments are the only option.”

Arthur Peterson is the lead research analyst in companies involved in Sudan for KLD Research and Analytics, an investment research company.

“The thing to understand about the Chinese oil involvement in Sudan is that it’s all done through the parent company [China National Petroleum Corporation, or CNPC] which is state-owned,” he said. “It’s 100 per cent owned by the CNPC … so CNPC can remain private and publicly traded.”

PetroChina is technically separate from CNPC, allowing companies to invest in CNPC through PetroChina. CNPC is classified as a high offender because of its extensive oil involvement in Sudan and its involvement with the Sudanese government. “There’s evidence that they’ve supplied the government with weapons,” Peterson said. “Because CNPC is state-owned, it creates an alliance with Sudan. A lot of experts say that is why China is blocking [the] UN Security Council’s vote.” China Petroleum and Chemical Corporation is one of the other Chinese oil companies problematically involved in Sudan. Like CNPC, China Petroleum is owned by the private Sinopec group, allowing for companies to invest in Sinopec through China Petroleum. Eric Fernald, director of research at KLD, said investment policies depend on the university, and guidelines can require that all investments pass basic fundamental human rights and environmental screens.

“The norm, unfortunately, is not to have these investment policies. The norm is that your fiduciary responsibility as a trustee is to have prudent financial returns of your endowment.”

Fernald said the concern is whether a company can have social, environmental and financial criteria that can guide the investment without impacting the performance of the endowment.

“You want to have a reasonable investment strategy. The question is, can you have social and environmental and financial criteria that can guide the investment without impacting the performance of the endowment?” Kim Nossal, head of political studies at Queen’s, said divestment will have no impact on the situation in Darfur. “Divestment is an excellent symbolic measure [through which] people can express their concerns about a situation,” he said.

“The impact will be zero.” Nossal said what’s happening in Darfur is beyond the capacity of anyone in the marketplace to have a concrete impact on the Sudanese government’s policies, which he said are responsible for the actions of the Janjaweed in Darfur.

“We can divest until … we have no financial or economic connection with Sudan but there are some realities that one needs to look at,” he said. “The People’s Republic of China … is deeply committed to Sudan. They will use their veto on the UN Security Council to stop any effort to coerce the government in Khartoum.”

Nossal said the surest way to ensure that Darfurians will be safe is to declare war on Sudan and send troops to stop the genocide. “But the reality is that no one is interested in doing that … absolutely no one. That’s why a divestment campaign is utterly symbolic.”

Nossal said he’s not saying the University shouldn’t divest, but that one has to understand what the real impact is. “The government of Sudan understands that they don’t have to seriously worry about
anything. No one’s going to take any serious action against them.

“Until we’re ready to say we’re ready to put Canadian lives and Canadian treasure for the task of stopping the Janjaweed in Darfur, then essentially we need to be a little more circumspect.”

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