Divesting from Darfur

VI. Targeted divestment's influence on countries blocking multilateral action on Darfur

This report has thus far discussed why targeted divestment is likely to influence government behavior and minimize impacts on ordinary citizens. It is important to note that there are other significant benefits to this method of economic pressure. Section III detailed the extensive involvement of companies from Russia, China, India, Malaysia, and other countries in Sudan, and how these associations have allowed sale of arms to the Sudanese military and provision of stipulation-free loans to the government while creating roadblocks to effective international action on Darfur. Such companies operating in Sudan tend to hold the belief that "business and politics don't mix" - beliefs similar to those of their home countries. These companies flaunt their growing business ties with Khartoum while ignoring the political environment on the ground and are therefore most likely to meet the criteria for targeted divestment outlined in Section V. Targeted divestment sends a strong and pointed signal to the home countries of these companies that it is unreasonable to blindly protect economic interests (including arms dealings) in the face of outright genocide. In remarks directed to the University of California Board of Regents, Princeton Lyman, former Assistant Secretary of State and current director of Africa Policy Studies at the Council on Foreign Relations, noted that:

"China is not impervious to public pressure and criticism of its role in Sudan. It has given way slightly in allowing passage of the UN Security Council resolution last March [2005] opening the door to sanctions and to initiating the role of the International Criminal Court. Divestment targeted at Chinese companies doing business in Sudan would therefore add to China's recognition that its position in Sudan is costing it in American public and political opinion. India is also a significant investor in Sudan's oil industry and, as a democracy, should also be sensitive to the human rights implications of its role there. If divestment can touch India's companies, that would also send a message."

Many of the Chinese, Indian, and Malaysian companies operating in Sudan are state-owned enterprises - such as PetroChina and Sinopec (from China), Bharat Heavy Electricals and Oil & Natural Gas Company (from India), and Petronas (from Malaysia). Nevertheless, several of these companies have found themselves in critical need of capital. As a result, Petronas has issued public debt obligations while PetroChina, Sinopec, and Oil & Natural Gas Company have issued public equity to raise needed capital. Clearly, then, these companies are susceptible to ever-narrowing sources of available capital as the divestment movement spreads.

*All information provided by the Sudan Divestment Taskforce, www.sudandivestment.org

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