Some of the corpses had their ears chopped off, others their eyes torn out or limbs dismembered. Brian Steidle has seen firsthand the mutilated victims of the “Janjaweed” militias in Sudan’s Darfur region. He’s seen the charred remains of villagers who’d been burned alive in their torched huts. He’s watched as one village, home to 20,000, was looted and burned.
For more than three years, the Janjaweed, backed by the Sudanese government, have waged a brutal war against two rebel groups, the Sudanese Liberation Army and the Justice and Equality Movement. In a vicious campaign, labeled genocide by the U.S. in 2004, they have murdered tens of thousands of civilians who belong to the same ethnic groups as the rebels.
Steidle, a 29-year-old former U.S. Marine, served as an unarmed military observer and U.S. representative to the African Union’s peacekeeping mission in the region for six months beginning in September 2004. Now he’s a leader in a growing grass-roots movement to pressure the international community to stop the slaughter in Darfur. He has been crisscrossing the country, visiting universities, church groups and community centers, showing “Tour for Darfur: Eyewitness to Genocide,” a chilling set of photos he took while he was an observer in the region. Steidle is also endorsing a strategy that has not been so widely embraced since the days of apartheid in South Africa: divestment.
The United Nations has declared Darfur the worst human rights crisis in the world today. Some international observers put the death toll as high at 400,000, and more than 2 million people have been displaced by the crisis. Yet the U.N., the U.S. and the European Union have consistently failed to take any serious punitive actions against the Sudanese government. The U.S. has pushed for a stronger world response to the crisis, but its diplomatic efforts have continued to flounder. Just this week, Secretary of State Condoleezza Rice urged NATO to assume a larger role in Darfur. “We’ve seen a lot of strong words from the president and the administration, but they’re just words,” says Steidle.
Tired of waiting for the international community to respond, activists, including students and religious and humanitarian groups, are calling on the Bush administration to support a stronger multinational force in Darfur. And in recent months, they have launched a growing divestment movement to hold public and private companies doing business with Sudan accountable — and, ultimately, to try to change Sudan’s behavior. It’s estimated that U.S. state public pension plans alone have invested $90 billion in companies important to the Sudanese government. Activists have persuaded universities, including the entire University of California system, to withdraw financial holdings from key companies operating in Sudan. And some U.S. states are not waiting for the federal government. Illinois is in the process of divesting billions from companies doing business with the African nation.
Activists believe that if they can put enough economic pressure on companies doing business with Sudan, those companies will in turn put pressure on the Sudanese government to change its policies. Skeptics say that divestment won’t have an impact quickly enough.
Many leading Darfur activists will participate in a Washington rally on Sunday, which marks the deadline in the latest round of peace talks between the Sudanese government and Darfur rebels. Save Darfur, a coalition of 164 religious and humanitarian groups, is sponsoring the rally. It is expected to draw tens of thousands of visitors and will feature actor George Clooney, who has just returned from Darfur, Illinois Sen. Barack Obama, and Nobel Peace Prize winner Elie Wiesel. Similar events are planned for San Francisco, Seattle, Chicago and Austin.
Steidle, who will show his photos at the Washington rally, wholeheartedly endorses the divestment campaign. “A lot of people are concerned that these divestment programs are going to hurt the people of the country, the way that the sanctions against Iraq hurt the people,” he says. “That’s not what a divestment campaign against the Sudan would do. It would not hurt the people already affected by the genocide. They are people who have lost everything already.”
The Bush administration may be talking tough on Darfur, but critics say its war on terror has caused it to act with trepidation. Since the ’90s, when it harbored Osama bin Laden and al-Qaida, Sudan has been designated a terror state by the U.S., meaning American companies, with few exceptions, have not been allowed to operate there. But in recent years, U.S. intelligence has turned to Sudanese officials, including some considered architects of the Darfur genocide, for information on suspects in the global war on terror. Critics charge that the U.S. has been reluctant to take tough action because of the Sudanese government’s strategic importance in the fight against al-Qaida.
While U.S. companies don’t operate in Sudan, Chinese, Russian, Malaysian and Indian companies do, and billions of dollars of stock in those companies are held by U.S. universities and state pension plans. “The international actors that are most blocking international action on Sudan are China, Russia and India,” says Jason Miller, 27, an M.D. and Ph.D. candidate at the University of California. “China and Russia are especially important because they both sit on the U.N. Security Council, where they have veto power. They’ve blocked almost every single substantive resolution regarding Darfur to date. It’s totally transparent what they’re doing. They’re protecting their companies’ interests.”
So students, like Miller, on campuses from the University of California system to Amherst, Yale, Brown, Stanford, Harvard, Dartmouth have launched their own attack on Sudan’s economic interests, successfully lobbying their universities to divest from companies they consider to be the worst actors in the Sudan, including oil and telecommunication firms. New Jersey, Maine and Oregon, along with Illinois, have done the same with their pension plans, while a dozen other states have similar legislation in the works. Earlier in April, Providence, R.I., became the first American city to divest.
The University of California system, which has 10 campuses, has estimated that it may have as much as $2.6 billion of its endowment invested in the Sudan in 70 multinational companies. In March, under pressure from thousands of students, U.C. divested from nine companies doing business there, both direct investments and monies in index funds, in a move that will impact tens of millions of dollars of those securities, making it the biggest divestment from Sudan by a university so far. The California State Teachers’ Retirement System followed suit, with its board voting unanimously to create its own divestment plan. Harvard has targeted just two companies, Sinopec and PetroChina, Chinese oil firms also fingered by U.C., amounting to about $12 million in securities.
Calling their efforts a “targeted” divestment campaign, activists say that they’re going after the companies that they consider the most important to the Sudanese government, and that will have the least negative impact on civilians. “We think that we can accomplish the ends of South Africa with means that have fewer side effects. We want the same results, but we don’t want to hurt civilians,” says Daniel Millenson, 19, a freshman at Brandeis University.
“The government of Sudan gets most of its revenues through oil revenues from international companies, so it would really hurt it if those oil companies threatened to pull out,” says Seth Izen, a sophomore at Williams College, where activists have focused on pressuring the state of Massachusetts, since Williams’ endowment does not hold stock in the key companies in the Sudan.
Putting pressure on Chinese companies like PetroChina and Sinopec means that those companies wouldn’t have to actually withdraw from the country for the divestment to have an effect. John Prendergast, senior advisor for theInternational Crisis Group, explains: “The likelihood of the Chinese withdrawing investment in the Sudan is nil. One of the objectives of divestment would be to reduce the share price of publicly traded Chinese oil companies, raising alarm bells in Beijing, and forcing the Chinese in its own interest to go to the Sudanese government and say: ‘Enough is enough.’ There has to be a cost, and the cost has to be reducing their share price, reducing the value of their company, because investors would, in mass, head for the exits.”
The divestment has gained steam in just over a year. “This is the largest, most successful divestment campaign since South Africa, whether you measure it in money or states or institutions or rapidity,” says Miller of U.C.. By focusing on university endowments and state pension plans, the activists hope to have the greatest financial impact, while noting that individual investors who have money invested in emerging-market funds likely have money in companies that support Sudan, too.
Some of the divestment declarations from institutions are more symbolic than substantive. For instance, early this year, Amherst declared it would not have direct holdings in 19 companies doing business with Khartoum. Yet, Amherst didn’t have any direct holdings in any of those companies, so the declaration amounted to giving direction to their asset managers about future holdings.
Jerry Fowler, staff director of the Committee on Conscience at the United States Holocaust Memorial Museum, sees such efforts as important for raising awareness in the U.S., as much as putting economic pressure on the Sudanese government: “It helps alert a wider audience to the issue, and the seriousness of the issue. That is its primary benefit. In terms of an actual effect on the Sudanese government itself, any effect it will have, I think, will be in the long term.”
Meanwhile, some states, like Illinois, which has $117 billion in its 17 largest state pension funds, have passed legislation to divest all securities invested in the Sudan, except for those with an obvious humanitarian mission in the region, potentially impacting billions in assets. Take the four largest pension funds in the state: The Illinois Municipal Retirement Fund projects it will divest $443 million, or 2.1 percent of its portfolio; the Illinois Teachers’ Retirement System projects it will divest $898 million, about 2.6 percent of its portfolio; the State University Retirement System projects it will divest $400 million, about 3 percent of its portfolio; and the State Retirement System projects it will divest $184 million or about 1.6 percent of their portfolio. The pension funds have 18 months, from late January 2006, to make the divestments. And, at least a dozen other states have pending divestment legislation, including New York, Kansas, Rhode Island and North Carolina. Some states, like Arizona and Louisiana, have voted to divest from Sudan because of terrorism, rather than genocide.
The divestments have prompted firms such as Northern Trust Bank and Barclays to start offering Sudan-free index funds, making it easier for others to get on board. KLD Research and Analytics, a socially responsible investing and research firm, maintains a list of 134 companies doing business with Sudan, updated twice a month, which money managers use to evaluate holdings. At the end of November, the firm had one client for this list. Now it has 140, and director of global sales for KLD Randy O’Neil says that interest in avoiding companies implicated in the Sudanese genocide is growing so fast he expects to see more clients “by the end of the day.” Many of the companies the list identifies are in oil and gas, revenue from which the Sudanese government uses not only to finance the militias committing human rights abuses in Darfur, but also to pay the interest on its massive foreign debt. Also on the list, telecommunications companies, accused by observers like Steidle of turning off phone service before attacks begin so warnings cannot get out.
For investors, “divestment introduces a radical uncertainty,” says Eric Reeves, a Smith College professor and Sudan expert. “As we see more and more states divest, the bull’s-eye is going to get bigger and brighter.” In the ’90s, Reeves led a divestment campaign against a Canadian energy company, Talisman Energy, that did business with the Sudanese government during the country’s civil war between the north and south. “The example of Talisman Energy has not been forgotten by people who manage money professionally,” Reeves says. After its stock price fell, the company eventually sold off its Sudanese assets to an Indian company, and left the country.
That’s just what some skeptics fear. Under pressure, one company leaves, but another that cares even less about human rights will step in. Miller, one of the key advocates for the U.C. divestment campaign, says that many of the companies they’re targeting are already the worst of the worst. “The answer here is that we are targeting the worse actors,” says Miller. “We’re interested in knowing what each company does in the Sudan. Does that company contribute to the government, or does it contribute to building infrastructure and helping the disaffected population? We’re also interested in knowing what their policies have been expressly about the Darfur genocide, and weighing all the factors, coming up with a set of companies that are the worst players — the ones that most substantially support the government, and contribute the least to the general welfare in the country, and have zero concerns about Darfur.” The hope is that the economic stick, not any moral imperative, will pressure the companies to pressure the Sudanese government.
Still, not everyone actively working to halt the genocide in Darfur is convinced that attacking the stock prices of foreign companies is an efficient approach. One reason: It’s just not fast enough. “Divestment is not the best immediate strategy for stopping genocide in Darfur, Sudan, mainly because it is a long-term and indirect tactic and what we’re trying to address — genocide — is urgent,” says Ann-Louise Colgan, a spokeswoman for Africa Action, an organization that works to influence U.S. policy toward Africa, via e-mail. “There are no U.S. companies directly invested in Sudan because of existing U.S. sanctions against Khartoum, so then divestment focuses on investments in foreign companies — or mutual funds that include foreign companies — that are invested in Sudan, so it is less direct than it would be in other situations.”
Yet the activists say that the only way to put economic pressure on the country is to take on the companies doing business there. “The U.S. is left without its biggest economic stick now,” says Miller. “What are we going to do? We can’t do anything more from a government standpoint on the economic side. So far, the Sudanese government has felt nada, zip, zero economic pressure. The only economic pressure it has felt is because of terrorism.”
Steidle, the former Marine, says that he thinks that divestment speaks not only to the targeted companies and the Sudanese government but to Washington, too: “It sends a clear message to Washington that we’re not going to stand by and allow this to happen. We’re going to take whatever possible means that we the people of the country have, and that includes not allowing our money to be invested in companies that support genocide.”