US pension group severs ties to Sudan
TIAA-Cref has become the first large US asset manager to sell stakes in four Asian oil groups over concerns about human rights abuses in Sudan. The move will increase pressure on other investors to sever ties with those companies.
TIAA-Cref, which has $400bn under management, said on Monday night that it had divested holdings in PetroChina, CNPC Hong Kong and Sinopec, the state-controlled Chinese oil companies, and India’s Oil and Natural Gas Corporation.
The US pension manager had small stakes in the companies and its decision failed to damp immediate appetite for PetroChina’s Hong Kong shares, which gained 5 per cent on Tuesday after the company reported that its parent group had been buying its shares.
But the move is a victory for campaigners who have been urging financial groups to sell shares in companies that do business with Sudan’s regime.
International bodies and foreign countries have condemned the Sudanese government for human rights abuses during the conflict with rebels in Darfur.
TIAA-Cref’s share sale, which raised about $60m, will fuel calls for other large mutual fund companies to follow suit. Only US state pension funds and not-for-profit groups have pulled out of companies with links to Sudan.
Calpers, California’s state pension fund, banned investments in nine companies, including CNPC and Petrochina, three years ago, but has not divested stakes in other companies it identified as having potential links to Sudan.
TIAA-Cref, which manages pensions and supplies financial services for academic, medical and research institutions, said it had made good on its vow to sell stakes in companies that “refuse to acknowledge the genocide [in Sudan] and engage in a productive dialogue about it”.
Hye-Won Choi, head of corporate governance, told the Financial Times that TIAA-Cref had decided to sell only after unsuccessful talks with the four companies. “Divestment is not something we take lightly and it was a measure of last resort,” she said. “[But] we could not see eye-to-eye with the companies.”
TIAA-Cref said that it would retain its stake in Petronas after Malaysia’s national oil group engaged in “constructive dialogue” and “took some responsibility to remedy the situation in Sudan”.
Sudan is a contentious issue in energy-thirsty developing economies such as China and India. Some oil companies have turned to nations such as Sudan after efforts to purchase oil assets in developed markets failed amid concerns about national security.
Copyright: The Financial Times Limited 2010.
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- Unpaid Debt A comprehensive overview of the role of the Lundin Consortium in the oil war. ECOS calls upon the Swedish, Austrian and Malaysian governments to investigate whether, as a matter of international law, Lundin, OMV and Petronas 'were complicit in the commission of war crimes and crimes against humanity by others during the period 1997-2003.’ In response, the Swedish Public Prosecutor for International crimes opened a criminal investigation into ‘links between Sweden and the reported crimes’.
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