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As a private institution of higher education Smith College
relies significantly on the earnings of its endowment to provide the kind of education
for women that its founder wanted, i.e. one equal to the best available anywhere
to young men. But by the same token Sophia Smith intended her college to have a moral
mission, through which the wrongs of women would “be redressed, their wages
adjusted, their weight of influence in reforming the evils of society...greatly increased...”
Since 1979 the Smith Board of Trustees has explicitly
acknowledged that the College’s moral mission must also play a role in the
investment of its endowment. In its statement on the “Social Responsibility
Dimension of Investing the Smith College Endowment,” the Trustees set out to “establish
a program and procedures to discharge their investment responsibilities both to the
ongoing work of the College and to the society in which that institution seeks to
continue to advance toward the goal of academic excellence.”1 The Trustees
voiced a note of caution by acknowledging the general difficulty of applying moral
criteria to investments in an imperfect world. Nonetheless, they asserted, within
a general policy of avoiding perfectionist goals, “we believe it is possible
to identify some corporations or industries whose actions or policies do not deserve
endorsement by the intellectual community represented by Smith College. We believe
that the avoidance of investment in companies in this latter category should be a
specific and deliberate part of the investment policy of the College.”
This policy has been formally applied by the Board of
Trustees on three occasions since its inception. The first was with respect to investment
in South Africa during the 1980s; the second targeted companies producing tobacco
products; and the third was aimed at a single company, Talisman Energy, Inc., a Canadian
oil company (cf. below).
It is hard to imagine “corporations or industries
whose actions or policies do not deserve endorsement by the intellectual community
represented by Smith College” more than do those currently providing goods,
services, technology and revenues vital to the genocidal policies of the government
of the Sudan in the Darfur region. In response to civil unrest in that region, the
government in Khartoum has armed and aided Arabic-speaking Darfuri militias, known
as Janjaweed, who have murdered, raped, and destroyed the villages of their ethnic
African neighbors in this region. In one of his very numerous and widely disseminated
articles on this tragic conflict, our internationally honored colleague and Sudan-expert
Eric Reeves writes that since 2003, “some 400,000 Darfuris have perished; more
than two million have been driven from their homes to squalid and dangerous camps;
and the United Nations estimates that altogether roughly four million people in the
region need humanitarian assistance.”2 Figures such as these challenge our
ability even to imagine the suffering, and clearly represent a moral crisis of enormous
proportions.
In July of 2004, by a vote of 422 to zero, the United
States House of Representatives, with the Senate concurring, passed a resolution
which stated that the violence in Darfur appeared to be particularly directed at
a specific group based on their ethnicity and appeared to be systemized, in other
words, a case of genocide. In September of that year the Bush administration concurred
in that characterization. Attempts have been made to arrange a halt to the massacre,
including the efforts of the African Union to provide security in the region. But
the government in Khartoum has not kept its promises, and the AU mission, underfunded
and outmanned, has not been able to stop the ongoing mayhem.3 The brutal slayings
continue, as documented first hand by, among others, the courageous journalist Nicholas
D. Kristof.4 In a recent article Kristof presents evidence that young Sudanese Arabs
are being enticed into the Janjaweed by the promise of payments of $250, a hefty
sum in the Sudan.
And that is where the issue of our responsibilities
as investors comes in. Divestment offers the possibility that private organizations
in the United States can encourage a policy change in a foreign country, specifically
in this case, the end of the genocidal policies of the Sudanese government. The hope
is that Sudan-active companies will be motivated to disinvest their assets from the
Sudan because these Sudan-active companies fear a large-scale divestment movement
will lead to falling stock prices.
The funds expended on this genocidal mission by the
government in Khartoum come largely from foreign investment in the relatively new
and rapidly expanding Sudanese oil industry.5 Other large European and Asian companies
outside the oil sector are providing vital infrastructure to the government (American
firms, with a few specific exceptions, have been barred from investment in the Sudan
by law since 1997). It is the view of Eric Reeves and others that without this investment
and infrastructure, the Khartoum government would find it impossible to continue
its policy in Darfur, and would instead be forced to seek a peaceful solution to
the regional conflict.
The effectiveness of divestment campaigns is controversial.
That individual companies, particularly in the West, are clearly susceptible to stockholder
pressure is shown by the case of the Canadian oil company, Talisman. This company
was engaged in southern Sudan in exploitation of the oil reserves, control of which
was a principal issue in the decades-long civil war between Khartoum and rebels in
the south. A vigorous campaign was brought to bear against its stock, and the company
eventually decided to sell its interests. In announcing its decision to withdraw
from the Sudan in October of 2002, Talisman CEO Jim Buckee admitted that the effects
of the divestment campaign on his company’s stock market performance made the
move necessary.6 The impact of this decision on the government in Khartoum to seek
a negotiated solution is impossible to know for sure, and the Talisman decision was
just one of many factors in play at the same time. Be that as it may, it was not
long before the negotiations led to a formal peace agreement between Khartoum and
the southern rebels.
Thus, aside from the moral imperative not to do clear
and grievous harm, there is a possibility that a divestment decision by Smith and
others will have both direct impact on the funding of this genocide and call international
attention to the humanitarian disaster in Darfur. A number of colleges, universities,
and state pension funds have already made the decision to divest from, and bar future
investment in, the Sudan. It is safe to assume that in the near future many more
will join Harvard, Stanford, Dartmouth, Yale, Amherst, Brown, and the University
of California system, as well as state pension funds either prohibiting or restricting
investment in the Sudan, such as those of Illinois, New Jersey, Louisiana, Oregon,
and Arizona (similar legislation has also been approved in California, and is pending
in five additional states).
Having committed itself under a charge from
President Christ to a thorough examination of the implication of divestment from
companies which substantially and materially aid genocide in Darfur, it is the view
of the CIR that Smith should divest from, and ban future investment in, such firms.
The Committee will confidently make this recommendation to the Board of Trustees.
A decision to divest from and ban future direct
investment in companies enabling the government of the Sudan to fund its genocidal
activities requires a clear statement of criteria used to identify investments that
are included in such a decision. The criteria set forth below are based on current
information about the link between the current regime in Khartoum and the genocide
on-going in the Darfur region of the Sudan. The Committee commits itself to revisiting
these criteria periodically and at any time that a report of change in the Sudan
merits reconsideration. An independent research firm specializing in global security
risk shall be utilized in determining which companies meet this criterion.
All recommendations to divest from or ban specific companies
will be examined using the criteria below.
Exceptions to these criteria:
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1. “The Social Responsibility Dimension of Investing
the Smith College Endowment: Principles and Policies,” approved by the Board
of Trustees, April 28, 1979, revised and approved by the Board of Trustees, October
21, 2005.
2. March 13, 2006 issue of the New Republic Online
3. Eric Reeves, African
Union Decision on Darfur Mission Fails the "Rwanda Test," March 15, 2006
4. See for example his recent pieces in the 3/12/06 and the
3/14/06 New York Times. On April 18, 2006 Mr. Kristof won the Pulitzer Prize for
commentary: "To Nicholas D. Kristof of the New York Times for his graphic, deeply
reported columns that, at personal risk, focused on genocide in Darfur and that gave
voice to the voiceless in other parts of the world."
5. Cf. the report
of the Allard K. Lowenstein International Human Rights Clinic and The Allard K.
Lowenstein International Human Rights Project, Yale Law School, pp. 11 ff.
6. Cf. pp. 15-16 of the IRRC Human Rights report, 2/16/06. |
