Bill Seeks Divesting from Companies Working in Sudan

by ekramer on March 20, 2008

The genocide in Sudan’s Darfur region has moved some Kentucky lawmakers to draft legislation encouraging Kentucky to stop investing in foreign companies that do business in that country. WFPL’s Elizabeth Kramer has more.

Tom Riner has a short answer for why he introduced House Bill 703 during this year’s General Assembly.

“Moral outrage at the genocide that’s being sponsored by the Sudan government,” he says.

Riner represents Louisville in Kentucky’s House of Representatives and became interested in Darfur after a Sudanese refugee spoke about it at a local church. That motivated Riner to co-sponsor a bill last year with other legislators prohibiting many state pension funds from investing in foreign companies with ties to Sudan. U.S. sanctions ban most American companies from doing business there.

After the bill failed to pass, Riner and some colleagues modified their approach. The current bill covers just the State Investment Commission and the pension fund for Kentucky judges and legislators. It also only recommends that investments not include specific companies named by human rights organizations because they invest in Sudan’s oil sector and benefit its military. Similar legislation has become law in 24 states.

Local activists seeking an end to the genocide in Darfur back the bill and are aligned with the Sudan Divestment Task Force based in Washington, D.C. It estimates that U.S. investments that benefit Sudan total in the hundreds of millions of dollars.

Adam Sterling is the organization’s director.

“We’ve put a lot of time and energy into finding the good guys and the bad guys,” he says. “And we ensure that the bad guys are the ones that ultimately face divestment from these binding legislations.”

Targeting international investments to achieve human rights agendas doesn’t sit well with William Reinsch of the National Foreign Trade Council. He says these divestment laws lose money for investors and are ineffective.

“They don’t achieve their intended objectives, unless you define the objective as making us feel better,” Reinsch says. “But it doesn’t achieve the objective of changing the behavior of the targeted country.”

Using divestments as foreign policy tools gained credibility in the 1980s after a host of universities and municipalities employed them against companies working in South Africa. Groups backing laws supporting divestment in Sudan cite that experience as a precedent. Others argue South Africa was a partially democratic government and beholden to public opinion, which holds little sway with Sudan’s authoritarian regime.

Advocates for these laws also say they aren’t just aimed at Sudan, but Chinese companies that have made large investments in the country. For example, the China National Petroleum Corporation has invested at least $5 billion in Sudan.

Bennett Freeman is a senior vice president for social research and policy for the Calvert investment firm. He supports these laws.

“Where it’s been most helpful is in getting the message to some of the oil companies that are based in China in particular and getting the message to the Chinese government,” he says.

Tom Riner says that the House bill specifically mentions China.

“That one nation alone could turn everything around in the Sudan,” Riner says.

The bill, which the House passed last week, is nonbinding. Riner and others are working to persuade the Senate to pass it as a binding resolution.

Listen to the story.

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