Harvard cuts Sudan Business Tie

Under mounting pressure from student activists, Harvard University plans to sell an estimated $4.4 million stake in PetroChina, whose parent company is closely tied to the Sudanese government, which the United States has accused of waging a genocidal campaign in Darfur.

Activists say Harvard's intention, which was announced Monday, is the first major victory in a growing national campaign for divestiture of business connections with Sudan. It is also an important decision for Harvard, which has so strongly resisted public pressure on its investments that, unlike many other major universities, it never fully divested itself of companies doing business with 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's president, Lawrence Summers, said in a statement.

The decision was made by the Harvard Corporation, the governing board, of which Summers is a member.

Public filings with the U.S. Securities and Exchange Commission indicate that, as of December, Harvard Management Company owned 67,200 shares of PetroChina, worth about $4.4 million, according to The Harvard Crimson, the student newspaper. The university's total endowment is almost $23 billion.

PetroChina is an oil company owned by the Chinese government.Summers recently told a group of students that Harvard may own additional PetroChina stocks on the Hong Kong Stock Exchange, which it would not be required to report to the Securities and Exchange Commission, the Crimson reported. Harvard declined Monday to disclose the exact size of its PetroChina investment.

Darfur has become a popular cause for college students, especially at Harvard.Last autumn, students started a divestiture petition, which has garnered about 1,000 signatures. A group of seniors recently unveiled a campaign to encourage classmates to withhold their contributions to the annual senior class gift until Harvard had divested itself of Sudan connections.

About 250 students attended a demonstration in favor of divestiture Monday, timed to coincide with the Harvard Corporation meeting. Harvard announced the decision just as the protest was beginning.Student activists reacted to the news with guarded enthusiasm because Harvard's announcement mentioned only PetroChina and did not say whether the university would divest itself of connections with other companies doing business in Sudan.

"We are really excited, but I'm also really worried that people will think the fight is over," said Matthew Mahan, a Harvard senior and a founder of the campaign to withhold senior gift contributions. "Time will tell whether they really care about genocide in Sudan or only about avoiding a lot of bad press."

In its filings with the Securities and Exchange Commission, Harvard is not obligated to report stocks it owns that are traded on foreign markets, nor does it have to disclose the companies in which it is invested only indirectly, through investment funds.Alan Stone, the university's vice president for public affairs, said Monday that he did not know whether Harvard was invested in other companies doing business in Sudan. He said Harvard Corporation's decision applied only to PetroChina.

The corporation's statement said concerns on campus about PetroChina and the situation in Darfur had prompted Summers to ask the Advisory Committee on Shareholder Responsibility, a group made up of faculty, student and alumni members, to study the issue. That group set up a panel, which met with the divestiture proponents, did research and presented a report to the corporation.

Harvard made it clear that the decision on PetroChina did not mean the university's investments should be guided by political considerations, but said it considered the Sudan situation so egregious that it was incumbent upon the university to act."

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,"' the panel wrote, "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.

"Harvard did not fully divest itself of South Africa connections despite years of controversy, including sit-ins and hunger strikes, but in 1990 the university sold its shares in companies that manufactured tobacco.

Summers also entered a debate over a drive for divestiture of connections with Israel in 2002, when he said that supporters were "advocating and taking actions that are anti-Semitic in their effect, if not their intent."