Wednesday, January 6, 2010

U.S. pension fund divests from Sudan-involved companies

U.S. pension fund giant TIAA-CREF has sold its holding of four Asian firms to protest their business relationships with the government of Sudan, which is accused of presiding over the genocide in Darfur.

In March 2009, TIAA-CREF, with more than US$400 billion in assets under management, said it would seek meetings with China’s Sinopec, PetroChina and CNPC Hong Kong; India’s Oil and Natural Gas Corporation; and Malaysia’s Petronas – and would divest by year-end 2009 from those that "refused to acknowledge the genocide and engage in a productive dialogue about how to confront it."

In a statement, the pension fund noted that there was "insufficient progress" in talks with the companies, with the exception of Petronas.

"Our decision to sell shares in these companies culminated a three-year effort to encourage them to end their ties to Sudan or attempt to end suffering there," said Roger W. Ferguson, Jr., TIAA-CREF's chief executive. "We have not divested from Petronas, which has acknowledged our concerns and engaged in dialogue about how it might address them."

Responsible Investor reports that the equity holdings in the four companies are believed to have been valued at about US$60 million and were sold on December 31, 2009.

In 2007, the U.S. House of Representatives and the Senate passed the Sudan Accountability and Divestment Act, which allows states and institutions to legally divest from Sudan.

TIAA-CREF says its corporate governance policy sets a "high bar for divestment. The company's decision regarding portfolio companies with ties to Sudan considered a number of factors. They included the gravity of TIAA-CREF's concerns in Sudan, the likelihood of successful dialogue with target companies and a conclusion that divestment would have an insignificant impact on the financial performance of participants' portfolios."

The fund provides retirement services in the American academic, research, medical and cultural fields.

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