Darfur pressure rises. Hope after all?

Major investors have increased the demand for investment research identifying businesses involved in Sudan after worldwide attention on alleged genocide in the Darfur region. On Friday August 26, New York City Pension Funds began urging a shortlist of companies in their portfolio to review business ties to Sudan. Media coverage has included Time’s September 5 US edition “Who Speaks for Her? Rape is the weapon of choice in Darfur, but Sudan's government doesn't want to hear about it” and CBS television news magazine 60 Minutes on Sunday August 28 reporting on Darfur crisis in a segment titled “The Killing In Sudan”.

Dedictaed blog The Passion of the Present has logged more coverage of the issue and a number of NGO websites have sprung up specifically on the issue.

In New York, a judge on Tuesday August 30 permitted the Talisman Energy genocide case to proceed despite warnings from Canada and the US .In the lawsuit, Talisman Energy Inc. and the Sudanese government are accused of working on a plan for the security of oil fields as Talisman hired its own advisers to coordinate military strategy with the government. The oil giant is accused of participating in ethnic cleansing, confiscation of property, kidnapping and rape, according to LARRY NEUMEISTER Associated Press Writer, August 30, 2005.

In the US, pressure had been building on states to divest holdings in businesses active in the Sudan. Illinois was the first state to act, passing legislation in May of this year baring the state’s five pension systems from investing in companies that do business in the Sudan . At the time, two of the state’s five pension systems had approximately $1 billion invested in 32 companies doing business in Sudan. New Jersey, Maryland and California have also been active on the issue, with New Jersey becoming the second state after Illinois to act - and with a much faster exit strategy. The NGO Divest Sudan has identified 81 public pension portfolios with over $91 billion in assets exposed to the Sudan.

Harvard University decided to sell $4.4 million of PetroChina Co., a company engaged in oil exploration in the Sudan, in April 2005. Similar to the divestment movement targeting South Africa in the 1980’s and Burma in 1990’s, divestment from the Sudan is seen as an economic lever to bring about change in a troubled regime. Additionally, investors do not want to be seen to profit from the misery of others. Student-led divestment campaigns have begun on campuses including Stanford , University of California , Duke University and the University of Pennsylvania.

SRI firms are now scrambling to meet demand. Conflict Securities has positioned itself as a key player with its research in this niche with a product called Sudan Corporate Monitor. But questions are being asked about their ability to offer excellent information sourced only from public documents. Firms involved are not US-based because in 1997 Congress instituted economic sanctions against the Sudan due to its support of terrorism. The sanctions remain in force.