Sudan Ties May Still Exist

Harvard’s decision to divest from PetroChina Monday may not have severed the University’s financial ties to the Sudanese government. As of the University’s most recent Securities and Exchange Commission (SEC) filing, Harvard owned 10,000 shares in a subsidiary of Sinopec, a Beijing-based firm that is reportedly constructing a pipeline that could substantially boost Sudan’s oil exports.

Student activists have pledged to forge ahead with their campus divestment movement until Harvard sells its shares in Sinopec and reveals the full extent of its holdings in companies with ties to Sudan. The SEC only requires Harvard to reveal its investments on domestic stock exchanges.

If Harvard has maintained its stake in Sinopec since its last SEC filing on Dec. 31, its holdings would have been worth $236,700 at the close of trading yesterday.

University spokesman John Longbrake said yesterday that he could not comment on whether Harvard has held onto the stock. The University’s SEC filings from the first quarter of 2005 will not be available until mid-May.

On Monday, the Harvard Corporation Commitee on Shareholder Responsibility (CCSR) announced the University would sell its stake in PetroChina, an off-shoot of the China National Petroleum Corp. (CNPC), which has spent more than $1 billion developing Sudan’s oil resources. According to the CCSR’s statement, “substantial revenue from Sudan’s oil production has gone toward the purchase of weapons.” The Sudanese government has armed the Janjaweed militiamen who have slaughtered tens of thousands of villagers in the western region of Darfur.

Yesterday, activists continued to celebrate the CCSR’s decision, which made Harvard the first major institution to divest from PetroChina.

By selling its stake in PetroChina, “Harvard has divested from the most culpable company by far, slated to inherit all of CNPC’s southern Sudanese oil assets,” said Eric Reeves, a Smith College professor and outspoken critic of the Sudanese regime.

But Harvard’s announcement on Monday amounted to an “incomplete action,” said Manav K. Bhatnagar ’06, organizer of an online divestment petition that garnered several hundred signatures from students and faculty.

“It’s a commendable step that [the Corporation] divested from PetroChina, but their policies and their investments should be consistent with the guidelines they’ve set forth,” Bhatnagar said.

Though the University’s stake in Sinopec is just a fraction of the estimated $4.4 million in PetroChina stock that Harvard held prior to Monday’s divestment decision, Bhatnagar said “this has never been about the amount of money.”

Bhatnagar said he and fellow petition organizer Benjamin B. Collins ’06 specifically mentioned Sinopec as a target for divestment in a February meeting with the Advisory Committee on Shareholder Responsibility (ACSR), the 12-member panel of students, faculty, and alumni that advises the Corporation on ethical issues surrounding Harvard’s stock holdings.

University President Lawrence H. Summers said last night that the ACSR and the CCSR will consider divestment from Sinopec and other companies that do business with Sudan “in light of the criteria established in the CCSR’s statement.”

“What seems to me most important, though, is the statement that Harvard has made about the seriousness of what’s happening in Darfur,” Summers said.

A TANGLED WEB

According to SEC filings, Harvard purchased 10,000 shares of Sinopec Beijing Yanhua Petrochemical Company, or “Yanhua,” in the second quarter of 2004.

The majority stake in Yanhua is still owned by the state-controlled Sinopec Corp., but 30 percent of Yanhua’s shares are traded publicly on the New York and Hong Kong exchanges.

Sinopec’s complex internal governing structure—and its murky relationship to the Sudanese government—have befuddled analysts for years.

“The way that Sinopec fits into all this, I think will be very, very difficult to uncover,” Reeves said.

In the run-up to the initial public offering (IPO) of Sinopec stock on global exchanges in October 2000, the company weathered criticism from human rights activists over its small stake in a Sudanese oil exploration block. Sinopec sold the Sudanese holding to CNPC before the IPO, company officials said at the time.

But Reuters reported in October 2004 that Sinopec had purchased a six percent stake in two Sudanese oil blocks in the eastern Upper Nile region of the country. And the Washington Post reported in December that Sinopec is constructing a pipeline connecting the Melut Basin, in the south of Sudan, to a tanker terminal on the Red Sea.

Once the pipeline from the Melut Basin is up and running, revenues will be shared by the Khartoum regime and the rebel-led government of South Sudan, said Jemera Rone, a researcher at Human Rights Watch in Washington, D.C. Until a final peace accord is reached ending the two-decade-long Sudanese civil war, the South’s share of oil revenues will accrue interest in an escrow fund, Rone said.

—Staff writer Daniel J. Hemel can be reached at hemel@fas.harvard.edu.