Stopping the investment flow to genocideJune 2011
Investors Against Genocide emerged out of the Darfur crisis and now holds some of the world’s biggest financial institutions to account on their investments. Mike Scott talks to IAG’s co-founder, Eric Cohen
An organization called Investors Against Genocide (IAG) might seem to be redundant in this day and age – surely everyone is against genocide? Yet Eric Cohen, co-founder of the US-based group of that name, says ‘there is still lots to do’.
The group came into being ‘somewhat accidentally’, he adds. ‘We were a group of activists concerned about the crisis in Darfur, Sudan. In the course of paying attention to that, we focused on problem companies investing in Sudan – the only current world crisis identified as a genocide – and we targeted investors in those companies, particularly university and state pension funds,’ Cohen continues.
IAG relies on research from the Conflict Risk Network to identify those companies that are complicit in the genocide. ‘Though the Taskforce’s Sudan Company Profiles report lists about two dozen companies that are ‘highest offenders’, we focus on the very worst of those highest offenders – the oil companies that are providing the funds the government of Sudan needs to carry on the genocide in Darfur,’ he says.
The situation is clear-cut because the oil industry provides nearly all the government’s revenues. As a result, it is easy to identify the worst of the highest offenders, which IAG says are Chinese oil groups PetroChina and Sinopec, India’s ONGC and the Malaysian company Petronas. ‘The case against these companies is straightforward, and this small target list makes it as easy as possible for mutual funds and other investment firms to demonstrate their commitment to doing the right thing,’ Cohen says.
IAG’s tactic is to target the mutual funds and investment companies that are the largest investors in those oil firms.
These have at some point included some of the biggest players in the global financial system, such as Fidelity, Franklin Templeton, JPMorgan Chase, Credit Suisse and Vanguard as well as UK-based companies such as Aberdeen Asset Management, Barclays and HSBC.
However, obtaining accurate information is difficult because US investors, for example, are only required to disclose purchases on US markets and because there is a time lag between published disclosures. Furthermore, ‘if someone buys PetroChina shares in Hong Kong, that rule does not apply,’ Cohen says. ‘It is very hard to know exactly what these institutions own.’
One of the organization’s big targets is Fidelity, headquartered in Boston, where IAG is based and, says Cohen, ‘where I and everyone else I know had money invested’. It quickly became clear, he adds, ‘that Fidelity does not want to change its practices even for investments tied to genocide.’
Another giant in IAG’s sights is JPMorgan Chase, where ‘eight years after the start of the genocide in Darfur, I am still arguing with them about what they are doing,’ he says.
At the company’s recent annual meeting, IAG co-founder William Rosenfeld read out a shareholder resolution calling on the group to divest its PetroChina holding. ‘JPMorgan says that the relationship of a company to human rights issues may be complex and fact-specific, and implies that only the government is capable of making these judgments’, says Cohen. ‘If 30 states, 61 colleges, TIAA-CREF, and American Funds can avoid investing in PetroChina, why can’t JPMorgan?’
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