Time to Explore Iran Divestment

Last week, President Barack Obama reminded the Iranian government of his end-of-the-year deadline for Iran to enter negotiations regarding its nuclear program, and the International Atomic Energy Agency Board of Governors passed a resolution calling on Iran to suspend its nuclear activities. The Iranian regime responded to these overtures with a flat rejection and an aggressive promise to build an additional 10 enrichment plants. In response, the administration is reaching out to Russia, China, and our European allies to win support for tough new sanctions at the United Nations Security Council at the beginning of the new year.

In this context, the Harvard community is challenged to consider what role it might play in helping to avert an international crisis. Many of us were inspired this past spring by the pro-democracy rallies in Iran, many of which were initiated and directed by students and other Iranians of our generation. How might the Harvard community, a premier American university, stand up for the rights of those Iranian students who have risked their safety by challenging their own regime?

We should call on President Drew Faust and the Harvard Corporation to consider a targeted divestment from companies doing business with Iran’s energy sector. Divestment should not be considered lightly, but today it is a necessary tool. The Iranian regime oppresses its own people, it is the largest state sponsor of international terrorism against innocents, it has threatened genocide against its neighbors, and now it is charging forward with a nuclear program despite a global consensus in peaceful opposition. There should be an exceedingly high standard to meet for divestment, but today Iran certainly meets that standard.

We are at a critical juncture in efforts to prevent Iran from obtaining nuclear weapons capability. Iran has rejected a proposal to ship its low-enriched uranium out of the country for further processing and is refusing to meet the main requirement of the international community—the long-overdue suspension of its enrichment of uranium. Since Iran imports up to 40 percent of its refined petroleum, curtailing its access to fuel might have a severe impact on the Iranian economy, forcing the regime to suspend its nuclear program and open the door to relief from sanctions. As President Obama has said, “If Iran does not take steps in the near future to live up to its obligations, then the United States will not continue to negotiate indefinitely, and we are prepared to move towards increased pressure.”

More than three quarters of the House of Representatives and the Senate have already cosponsored the Iran Refined Petroleum Sanctions Act, which the House will vote on next week. This bill seeks to leverage private market forces by making companies choose between doing business with the United States or with Iran. In October, the House overwhelmingly passed the Iran Sanctions Enabling Act by a vote of 414-6 (one of the bill’s original co-sponsors was Harvard alum and Massachusetts Representative Barney Frank). This bill authorizes state and local governments to divest from companies investing in Iran’s petroleum and natural gas sector or doing business with Iran’s nuclear industry. Since these companies are already liable for sanctions under the Iran Sanctions Act, states have a fiduciary responsibility to consider the financial consequences of holding stock in them.

Nearly twenty states have already passed legislation divesting their state pension plans of any foreign company that invests more than 20 million dollars a year in Iran (there are 19 such companies). Scores of municipalities and labor unions are beginning to follow suit. Given today’s economic climate, it is financially prudent for Harvard to divest its holdings from companies that could soon be the target of American and international sanctions.

In October, the Student Government Association at Morehouse, the nation’s oldest liberal arts historically black college (and Mr. Bennett’s alma mater), formally requested for their institution’s endowment to divest from companies doing business in Iran’s energy sector. Richard Fulton, a student signatory to the letter, declared in an editorial that the motivation behind the letter was “in order for the voices and concerns of Morehouse students to have real resonance in the various human rights and national security debates of our time…Iran’s march toward nuclear weapons poses an immediate threat to global security.”

We should be inspired by the students at Morehouse to follow suit here at Harvard. The Harvard Corporation has acquiesced to student pressure to divest in the past. In 1989, a campaign of three students ultimately led Harvard to divest from tobacco companies. In 2005, Harvard became the first university in the country to divest from Sudan, choosing to sell its holdings in PetroChina after two undergraduate students started an online divestment petition.

President Faust should look into this matter and contact the relevant companies in which Harvard holds investments, asking their intentions with regard to Iran. We must ensure that at the moment of a great international moral crisis, Harvard is on the right side of history.

Alexander Chester and Darrell J. Bennett, Jr. are third-year students at Harvard Law School.