A Permanent Solution

Over the past week, The Crimson has uncovered the full extent of Harvard’s indirect investments in PetroChina and Sinopec. These are two of the worst offending companies in terms of financial complicity with the Sudanese government’s genocidal campaign in Darfur, and as reported yesterday in an online update, Harvard currently holds $16 million worth of shares in them.

The Harvard Corporation’s earlier decisions to divest from holdings in these two companies earned the University widespread praise as the catalyst for a national movement in which 30 other universities and six states have divested from companies supporting the Sudanese government’s genocidal regime. This movement has generated more leverage over Khartoum than most of the governmental approaches to date. So while the revelations about the scale of Harvard’s indirect investments are deeply troubling, there is still reason to be hopeful that Harvard will take the action necessary to live up to its positive public reputation on this issue.

However, there is a more effective way to ensure this happens than to rely on The Crimson to be Harvard’s moral and financial watchdog. Students from the Harvard Darfur Action Group are currently working with the nationwide Sudan Divestment Taskforce to propose a targeted divestment model, like the one recently adopted by the state of California and taken up by other universities, including the University of California. If implemented, the targeted model would secure Harvard’s good reputation on this issue once and for all.

Under the model, Harvard would commit to screening out the "worst-offending’"companies from any current and future investments. In order to fall into this category, a company must meet all of the following criteria: They must have a business relationship with the Sudanese government or be involved in a government-created project, fail to benefit civilians outside of the government, fail to implement a substantial corporate governance policy regarding the genocide, and fail to respond to attempts at shareholder engagement. In other words, it is a high bar.

By adopting this approach, Harvard can ensure it minimizes any potential harm to both Sudanese civilians and to Harvard’s endowment. In addition, it would mean that Harvard would protect itself from ending up in the position it is in today—of finding its money invested in companies with which it has already made a policy decision not to be associated.

The implementation of this model would not require any substantive policy change from the position Harvard adopted when it decided to divest from its direct holdings in PetroChina and Sinopec back in 2005 and 2006, respectively. Both those decisions were made on the grounds that Harvard should not be supporting companies with proven complicity in a situation that the U.S. government has determined to be genocide—in other words, companies that meet the "worst offending" criteria. Furthermore, there is precedent for this approach. During the mid-1980s, Harvard started screening the "worst-offending" companies operating in South Africa under apartheid.

In Monday’s Crimson, Interim University President Bok said he did not know about the University’s indirect holdings in PetroChina and Sinopec, and that the investments must relate to something that happened prior to his interim presidency. As long as the current ad hoc approach to Darfur-related divestment remains in place, we can expect to see the incoming Harvard president make similarly blinkered statements, which will ultimately undermine Harvard’s good standing on this issue. By contrast, the implementation of a targeted divestment model as a matter of policy provides a way out of this bind and creates a win for all involved.

It would be a win for the University, which could enjoy its reputation—unchallenged—as having come down on the right side of history regarding Darfur. It would be a win for students, who would not have to expend energy re-fighting the same fight each time inadvertent holdings are discovered. And most importantly, it would be a win for Sudanese civilians, who could be assured that an institution with the moral standing of Harvard would not, inadvertently or otherwise, support the companies most responsible for funding the genocidal campaign in Darfur.

Rebecca J. Hamilton is a student at the Harvard Law School and the Kennedy School of Government. She has worked in Sudan and co-founded the Harvard Darfur Action Group.