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Sudan disinvestment law faces legal challenge

October 2006

Lobbyists and pension organizations are taking legal action to try to overturn US legislation requiring some state pension funds to disinvest from companies with Sudan links.

The National Foreign Trade Council (NFTC), a free trade lobby group, has filed a lawsuit challenging one such law in Illinois (EP7, issue 4, p7). It hopes a victory there will prompt six other states to rescind existing legislation and a further seven to drop plans to introduce similar laws.

The lawsuit is backed by eight boards of public employee pension funds, including one for firefighters and seven for police officers.

William Reinsch, president of the NFTC, which represents 300 US companies, including Boeing, Caterpillar, Chevron, Exxon Mobil and General Motors, said he opposed laws such as those in Illinois because they 'inflict pain for no gain, with the pain falling particularly on the pension funds of police officers and firefighters who have put their lives on the line'.

The NFTC is basing its case mainly on a Supreme Court ruling in 2000 that a similar Massachusetts law applying sanctions against companies involved in Burma was unconstitutional because it could undermine the US president's ability to conduct effective foreign policy (EP2, issue 4, p7).

The Illinois law came into effect in January. The six other states with such legislation are Arizona, Connecticut, Louisiana, Maine, Oregon and New Jersey.




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