The board of the California Public Employees’ Retirement System said Monday that it would consider moves to discourage corporate investment in Sudan in response to the mass killings in that nation’s Darfur region.
Board members of CalPERS, the nation’s largest pension fund, backed the creation of a coalition with funds in other states to identify companies that do business in Sudan.
Investment staffers reported that they had targeted five corporations in CalPERS’ portfolio, with stock worth about $1.7 billion, for “constructive engagement.” CalPERS’ assets total $196 billion.
Chief Investment Officer Mark Anson said CalPERS planned talks in the next couple of months with top executives at Royal Dutch/Shell Group and French firm Total, two of the world’s largest oil companies; communications giants Siemens of Germany and Alcatel of France; and Swiss technology group ABB Ltd.
“This is a priority issue,” said board member Charles P. Valdes, who chairs CalPERS’ investment committee. “We’ve taken a leadership role and applied more resources to this than any other investor in the world.” He directed staffers to continue compiling information on corporate investments in Sudan.
Rep. Barbara Lee (D-Oakland), who is leading a drive in Congress to stop the killing in Sudan, urged CalPERS to move quickly and play a pivotal role in boosting human rights, as it did in the late 1980s to protest apartheid in South Africa.
Lee said she would like to see CalPERS join pension funds in Louisiana, Illinois, Arizona and New Jersey, as well as Harvard and Stanford universities, in pulling investments from companies working in Sudan.
Lee said the five companies already identified by CalPERS could be just the first confirmed as making tax and royalty payments to the Arab-majority Sudanese government, which in turn could use those funds to buy arms and bankroll militias.
Citing one analysis, she said as many as 44 major corporations, representing stock holdings of $9 billion in the portfolios of CalPERS and other California government pension plans, could be operating in Sudan.
For their part, four of the five companies identified by the CalPERS staff described their Sudanese business activities as unrelated to the Darfur violence.
Shell said it operated about 50 retail and wholesale locations in the African nation. Total holds an exploration and production interest in a drilling block that it said had remained inactive for 20 years because of civil unrest. ABB supplies oil field instrumentation and hydroelectric equipment, and Siemens sells communications and medical products. Alcatel has not responded to CalPERS’ request for information.
CalPERS’ commitment to use its investment clout to boost human rights could be positive, said Susan Aaronson of the University of North Carolina’s business school. “You want market forces to use the leverage that companies have over governments,” she said.
California’s pension plans have a moral and a fiduciary duty to “ensure that our investment funds are in no part contributing to this crime against humanity,” said state Treasurer Phil Angelides, an ex-officio member of CalPERS’ board.