Darfur, Heal Thyself?
In Regarding the Pain of Others, Susan Sontag argued that war photography allows spectators to feel content with the knowledge that they are both sympathetic to the victims of the atrocity and impotent to change it. That may explain why the great number of documentaries on Sudan have seemed to make little impact on the current state of affairs. Sure we are informed, sure we are unsettled, but … we also watch American Idol.
However, a new ad campaign called the spectator into action. Save Darfur directly named Fidelity investments — where more than likely you’ve got a retirement pension — as “investing in companies that fund genocide in Darfur.”
In the 30 second commercial, a Darfur refugee reads a letter the campaign received from Fidelity in October, “Fidelity portfolio managers make their investment decisions based on business and financial considerations and take into account other issues only if they materially impact these considerations.” It is deeply unsettling, and would rank among history’s most effective political ads, if Fidelity hadn’t already dumped most of its Sudan-linked investments before the ads aired. (To the Save Darfur’s credit, Fidelity only announced their holdings on Tuesday night – Wednesday morning in Hong Kong.)
“I have investments with Fidelity and I am considering ending them in light of this information.” wrote Kevin Ohannessian last week on the Fast Company blog — hardly a hotbed of crunchy keffiyeh-wearing activism. Likewise, Fortune senior writer Marc Gunther has sympathetically covered this controversy, as well as The Economist, which published a recent story with the headline, “Genocide in the boardroom.”
Business like Siemens, Talisman Energy, and most recently Rolls Royce have all submitted to activist group pressures to cease operations in Sudan. But in Fidelity’s case, the connection was indirect. Fidelity had over a billion dollars worth of investments in PetroChina, a subsidiary of China National Petroleum Corporation (CNPC), which is Sudan’s largest partner in the oil industry.
Libertarians have long argued divestment, like sanctions, won’t work — that the tactic only starves the poor. However, Human Rights Watch estimates 70 percent of Sudan’s oil revenue is channeled to the military — and no US business should want that residue sticking to its hands. Oil is Sudan’s only significant export. Requesting US business divestment from PetroChina is voluntary and non-coercive.
Yesterday, Fidelity Investments announced they reduced holdings of PetroChina Co. Ltd.’s American depositary receipts (ADRs) by 91 percent in the first quarter of 2007. Fidelity’s filing showed it owned 420,916 ADRs of PetroChina as of March 31, compared with about 4.5 million ADRs as of the end of December.
John Bonnanzio, editor of independent newsletter Fidelity Insight, told Reuters Fidelity has “buckled to the mounting political pressure.”
A fox and hedgehog comparison might be made with the other major US PetroChina investor: Warren Buffett’s Berkshire Hathaway. At the May 5th shareholder meeting, Buffett hosted a long debate over PetroChina’s dealings with Sudan.
“Buffett publicly explained his reasons, took questions about the issue at Berkshire’s shareholder meeting and invited shareholders to vote on the matter. They supported him, by an overwhelming margin. I think Buffettt should at least raise his voice about the genocide, as so many others are doing, but at least he has taken the issue seriously,” wrote Marc Gunther on his blog.
Berkshire Hathaway will inevitably submit to political pressure to divest. But one might argue, Buffett’s transparency is still preferable to Fidelity’s reticence. Fidelity has absolutely no mention of Sudan or PetroChina on its website, and refused my request for an interview. While Fidelity portfolio managers may have acted favorably, the same can’t be said for their PR department.
Joanne McNeil is Brainwash‘s Science and Tech Editor. Her website is joannemcneil.com.