Thursday, February 16, 2006

Yale Acts to Divest in Response to Darfur Genocide

President Richard C. Levin announced today that Yale University will bar investments of its endowment assets in obligations of the Sudanese government as well as in seven oil companies currently operating in Sudan as a response to the genocide being committed with support from the government of Sudan in the Darfur region.

The decision to divest was made by the Yale Corporation, Yale's governing board, at its February 11 meeting, based on a recommendation by the Corporation's Committee on Investor Responsibility, following receipt and review of a report by the University's Advisory Committee on Investor Responsibility (ACIR). The ACIR's work included an extensive research report prepared by the Allard K. Lowenstein International Human Rights Clinic at Yale Law School.

"Numerous respected United States and international authorities and organizations have concluded that the systematic violence in Sudan constitutes genocide, and that the Sudan government supports and is deeply involved in this horrific activity," Levin said. "The time-honored principles that Yale observes as an ethical institutional investor have guided us to take this strong action."

As a result of the Yale Corporation's action, the University's Investments Office has directed its investment managers to refrain from any acquisitions in the named companies or in Sudanese government obligations and to divest all Yale holdings in them. Those companies are: Bentini, Higleig, Hi-Tech Petroleum, Nam Fatt, Oil & Natural Gas Corporation, PetroChina and Sinopec.

Yale's decision to divest from these oil companies, which are actively conducting operations in Sudan, is based on the finding that more than half of the Sudanese government's revenue is derived from oil. As the source of such revenue, the companies are presumed to be committing "grave social injury" by providing substantial assistance to the perpetrators of genocide. Yale has attempted to engage in dialogue with the companies regarding their business activities in Sudan and has asked whether any actions on their part have advanced efforts to end the genocide in Darfur or aid the victims. The Yale Corporation took its divestment action after those attempts generated inadequate responses from the companies. The Yale Corporation's policy on ethical investments calls for divestment in an entity that it concludes is committing grave social injury when the prospect of changing that behavior through engagement or dialogue would be nil.

In taking this action, the Yale Corporation commended as invaluable the work of the ACIR, whose membership includes faculty, students and staff, and the Lowenstein Clinic. In conjunction with the ACIR, the Lowenstein Clinic conducted an extensive study on the links between companies operating in Sudan and the ongoing genocide in the country. The ACIR and Lowenstein Clinic reports are available on the Web at as a resource to others.

Yale was one of the first institutions to address formally the ethical responsibilities of institutional investors. In 1972 Yale adopted the guidelines outlined in "The Ethical Investor: Universities and Corporate Responsibility," by John Simon, Charles Powers and Jon Gunneman, which established criteria and procedures by which a university could consider factors in addition to economic return when making investment decisions and exercising rights as a shareholder. "The Ethical Investor" was based upon the work of Yale faculty and students, including work conducted in a year-long multidisciplinary seminar.