Yale will discontinue its current and future holdings in all known oil companies operating in Sudan as well as future investments in Sudanese government bonds following a unanimous Yale Corporation vote, University President Richard Levin announced Wednesday afternoon.
The Investments Office has instructed its investment managers to refrain from acquisitions in seven target companies — Bentini, Higleig, Hi-Tech Petroleum, Nam Fatt, Oil & Natural Gas Corporation, PetroChina and Sinopec. Levin said the University currently holds stock in one of the seven companies, a “relatively minor” investment that may be worth several million dollars.
The divestment decision follows the recommendation of the Corporation’s Committee on Investor Responsibility and a final report by the Advisory Committee on Investor Responsibility in collaboration with the Lowenstein International Human Rights Clinic at Yale Law School.
Levin said guidelines for divestment from Sudan were devised after extensive consideration.
“This is based on very careful research,” Levin said. “We think Yale is doing this in the most responsible possible way. I am delighted that the Corporation had the courage to stand up for its convictions.”
In 1972, Yale adopted the criteria for responding to concerns about investment holdings outlined in the book “The Ethical Investor.” The University divested from several companies operating in South Africa in 1978.
The measure brings Yale into compliance with current investment guidelines and will influence future investment decisions more than current holdings, Levin said.
“Our guidelines always pertained to actual holdings and potential future holdings,” Levin said. “Our managers trade stocks every day. It’s important that they be on notice not to acquire any of these stocks. The policies are, in a way, more important for the prospective action than the retrospective action.”
Nick Robinson LAW ’06, who assisted the ACIR through work at the Law School’s Lowenstein International Human Rights Clinic, said he also thinks the decision will primarily impact potential future holdings rather than current ones.
“We’re very pleased, and we think it’s a thoughtful decision from the Corporation, taking into account the report that the Lowenstein Clinic put out and the tremendous amount of support that the student body gave to this issue,” Robinson said. “With an endowment like this, it’s not necessarily important how much money we have in companies now, but in the future as well.”
Some of the areas — including the oil sector — targeted by the University for divestment have significant economic clout in the Sudan, said Nahla Ivy, a member of the environmental and social analytics team at Institutional Shareholder Services. The ACIR purchased data from ISS as part of its research into companies operating in the Sudan.
“Definitely the oil sector and in many ways the energy sector have had a heavy footprint in Sudan, but we basically stop short of saying that those revenues support the government which then supports genocide,” Ivy said. “That’s basically an interpretation of what the revenues do.”
In 2003, oil revenue accounted for $1.8 billion of $3.2 billion in total revenues for the Sudanese government, according to the ACIR report dated Jan. 31.
Lauren Jacobson ’08, co-chair of the Yale chapter of Students Taking Action Now: Darfur, said she thinks the terms of the divestment decision will ensure that the people of Sudan will not suffer as a result.
“I am extremely excited about Yale’s decision to divest, and I think that their policy has been constructed in a way that will make it effective and not cause any negative consequences for the people of Sudan, which a lot of people have been concerned about,” Jacobson said.
Landon Hairgrove ’09 said he understands why the University would wish to divest from investment holdings that support the Sudanese government, although he said he thinks companies of concern should be identified on an individual basis.
“I can appreciate that line of reasoning, that divesting money from the government might be a means of taking action against the alleged genocide of the Sudanese government,” Hairgrove said. “I think you have to take it on a case-by-case basis if the money is not coming from a good place.”
The Corporation meeting last weekend was conducted as part of a new format for February Corporation meetings, with one day dedicated to a particular area of the University — at the recent meeting, it was the Yale School of Medicine. Before the new format was adopted, Fridays were reserved for committee meetings and the full Corporation met on Saturday.
Presentations on the Green Building for the School of Forestry and Environmental Studies, a new building for the Sculpture Department, and a new Health Services building adjacent to the Yale Police Station were given to the Buildings and Grounds Committee at last weekend’s meeting, Levin said. Discussion within the committee also covered planning and preliminary designs for the renovation of the Hall of Graduate Studies. The Corporation also gave final authorization for the Cross Campus Library renovation project, with $47 million allocated for the project adjusted from $48 million, he said.