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US: Harvard Divests from PetroChina

Associated Press
April 7th, 2005

Harvard University, after months of pressure from student activists, will sell an estimated $4.4 million (A3.42 million) stake in PetroChina, whose parent company is closely tied to the Sudanese government, university officials said.

Activists say the move is the first major victory in a national campaign for divestment from Sudan, whose government has been accused by the Bush administration of waging a genocidal campaign in the Darfur region.

It is also a huge step for Harvard, which has been resistant to pressure to divest, and never fully divested from companies doing business in apartheid South Africa.

"Divestment is not a step that Harvard takes lightly, but I believe there is a compelling case for action in these special circumstances, in light of the terrible situation still unfolding in Darfur and the leading role played by PetroChina's parent company in the Sudanese oil industry, which is so important to the Sudanese regime," Harvard President Lawrence H. Summers said in a statement Monday.

The divestment decision was made by the governing Harvard Corporation.

The western Sudanese region of Darfur has been the scene of what the United Nations has called the world's worst humanitarian crisis. An estimated 180,000 people have died in the upheaval and about 2 million others have been displaced since the conflict began in February 2003.

The Darfur conflict began when rebels took up arms against what they saw as years of state neglect and discrimination against Sudanese of African origin. The government is accused of responding with a counterinsurgency campaign in which the Janjaweed, an Arab militia, committed wide-scale abuses against the African population.

Filings with federal securities regulators indicate that in December, the university owned 67,200 shares of PetroChina worth about $4.4 million (A3.42 million), according to the Harvard Crimson student newspaper. The PetroChina investment represents a small fraction of the university's $23 billion (A17.85 billion) endowment.

PetroChina, a Beijing-based oil company, is owned by China National Petroleum Co., which has invested more than $1 billion (A780 million) in a joint venture with Sudan to increase that country's oil revenues, some of which is used to fund the military.

Harvard may also own shares of PetroChina on the Hong Kong Stock Exchange, but the university is not required to disclose its Hong Kong holdings publicly.

The divestment from PetroChina should just be the start, student leaders of the divestment campaign said.

"We applaud Harvard living up to its responsibility to divest in this case, but we are still calling on the Corporation to disclose and divest from all companies doing business with the Sudanese government," said senior Matthew W. Mahan, who helped organize a campaign encouraging seniors to withhold donations to the senior class gift until Harvard divested.

Manav K. Bhatnagar, who helped launch the campus divestment petition, said he will continue to pressure the administration.

The decision to divest was made by the three-member Corporation Committee on Shareholder Responsibility. The panel said it considered Sudan to be a special case and remained reluctant about linking its investments to political considerations.

"The university maintains a strong presumption against divesting itself of securities for reasons unrelated to investment purposes and against using divestment as a political tool or a 'weapon against injustice,' not because there are not many worthy political causes or deeply troubling injustices in the world, but because the university is first and foremost an academic institution," the panel wrote.

Despite intense pressure, Harvard never fully divested from apartheid South Africa. The university did, however, sell its shares in tobacco manufacturers in 1990.

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