Statement to President Mills and Trustees
Read President Mills' cover letter to the trustees that accompanied this report.
The Advisory Committee on Darfur was formed by President Barry Mills “in
response to the important concerns on this campus and among our alumni about
acts of genocide and human rights violations in the Darfur region of Sudan.”
President Mills has directed the committee to review this disturbing situation
and to recommend to himself and the Board of Trustees a meaningful course of
action for the College. This committee is comprised of trustees, students, faculty,
and staff. We have examined the history of the conflict in Sudan, investigated
academic institutional responses, debated possible courses for a meaningful
Bowdoin policy, and provided opportunities to engage the wider Bowdoin community
in a discussion of methods to address the crisis.
Overview of the Crisis in Darfur
Sudan is a country that has been in intermittent turmoil since their independence
from Britain in 1956. Until the crisis in Darfur, a civil war between the predominantly
Arab north and the religiously and ethnically diverse south was the nexus of
violence. The unstable political situation led to millions of deaths, millions
displaced, widespread famine, and opportunities for the germination of terrorist
activity (including harboring Osama bin Laden).
Since 2003, the conflict between north and south Sudanese has waned, giving
Arab Muslim elements an opportunity to direct violence toward non-Arab Muslims
in the western Darfur region. While the government in Khartoum denies supporting
the “janjaweed” (the name given to the loose grouping of Arab tribesmen
who are conducting the murderous and destructive raids through Darfur’s
villages), international observers see a direct and obvious complicity. The
world community has been slow to put pressure on the ruling interests in Khartoum.
Countries interested in exploiting Sudan’s petroleum reserves, such as
China and Russia, have made intervention through the United Nations nearly impossible.
The United States has imposed strict sanctions against Sudan—prohibiting
nearly all economic interaction that is not humanitarian. However, there are
non-U.S. companies conducting business in Sudan. U.S. and international observers
are concerned that the revenue from these foreign interests is paying for the
Khartoum government’s military endeavors.
In July of 2004, the United States Senate and House passed a joint resolution
declaring the conflict genocide. A United Nations report detailed crimes against
humanity but did not declare genocide. Recent estimates place the number of
dead in the hundreds of thousands and the displaced in the millions. As the
people of Darfur fled into neighboring Chad, the janjaweed have followed, bringing
murder and mayhem. Troops from the African Union have not been able to provide
safe haven. This month has provided a glimmer of hope. Rebel groups are trying
to negotiate peace with Khartoum; though, years of distrust have made the terms
of a peace treaty difficult to settle.
Overview of Other Institutional Policy Statements on Darfur
A number of U.S. colleges and universities have already announced plans to
amend their investment policies in response to the humanitarian crisis in Sudan.
However, the range of Sudan policies established by other state and educational
investment pools varies broadly. Some state funds will use a pan-divestment
approach, through which all companies with any Sudanese activities would be
avoided. At the other extreme, some universities have taken a tactical approach,
identifying certain specific stocks to be prohibited, without a clear statement
of the rationale. Still, it is clear that educational institutions overwhelmingly
recognize that the pan-divestment approach is indiscriminate and disproportionate;
they are setting up procedures to avoid those companies with direct Sudanese
operations which are doing more harm than good in the country, while not penalizing
companies which are not contributing to the problem. Below is a summary of responses
from other academic institutions.
April 6, 2005 – Harvard Corporation announced it would divest of its
direct holdings in PetroChina, a subsidiary of China National Petroleum Company.
In March 2006, Harvard announced it would divest all holdings of Sinopec as
a result of ongoing business interests in Sudan.
June 7, 2005 - Recommendation by the Special Committee on Investment Responsibility
(SCIR) to divest all direct holdings in PetroChina, ABB, Sinopec, and Tatneft
because of business operations supporting the Sudanese government. SCIR made
up of trustees and acting on the recommendation of the Advisory Panel on Investment
Responsibility, whose members include faculty, staff, students, and alumni approved
by the President of the University.
November 12, 2005 – Dartmouth College board of trustees votes to avoid
investing in six oil companies deemed to be directly complicit in support of
the Sudanese government. Companies that will be excluded from investment: ABB;
Greater Nile Petroleum Operating Company; PetroChina; Sudanese White Nile Petroluem
Company; Petronas; Sinopec.
March 8, 2006 – Following a report on investing in the Sudan released
by the Advisory Committee on Investor Responsibility, President Richard C. Levin
announced that Yale University will bar investments of its endowment assets
in obligations of the Sudanese Government, as well as 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. Yale Investment office directs
all investment managers to refrain from any acquisitions in Sudanese Government
obligations or the following companies: Bentini, Higleig, Hi-Tech Petroleum,
Nam Fatt, Oil & Natural Gas Corporation, PetroChina, and Sinopec.
University of California
March 16, 2006 – Summary recommendation from President to the Regents:
Pursuant to a report by the Sudan Divestment Study Group, divest all shares
within an 18 month period and prohibit future purchase of the following nine
companies: Bharat Heavy ElectricalsLtd., China Petroleum and Chemical Corp.
(Sinopec), Nam Fatt Co. Bhd., Oil & Natural Gas Co. Ltd., PECD Bhd., PetroChina
Company Ltd., Sudan Telecom Co. Ltd. (Sudatel), Tatneft OAO, and Videocon Industries
Ltd., held within separately managed equity portfolios of the University of
California Retirement Plan (UCRP) and the General Endowment Pool (GEP). The
proposed policy would apply to both indexed and actively managed, publicly-traded
equity portfolios. Further recommend to communicate the decision to divest shares
held in the nine companies to the managers of commingled accounts in which assets
of the UCRP and GEP are invested, with a request that they consider the University’s
stand on this issue as they make their investment decisions. Instruct the Office
of the Treasurer to contact the management of several other companies identified
by the Sudan Divestment Study Group to ask them to ensure that their business
operations in Sudan, while providing beneficial effects for the people of Sudan,
do not inadvertently contribute to the campaign of genocide.
March 17, 2006 – Advisory and Executive Committee approved the recommendation
of President Ruth J. Simmons that the University exclude from its direct investments
the shares of six companies: ABB, Alcatel, PetroChina, Siemens, Sinopec, and
Tatneft. The Investment Office will inform Brown’s investment managers
of the University’s desire not to be invested in these companies.
April 10, 2006 – Executive committee unanimously endorsed a statement
to keep the university’s endowment free of any holdings in companies doing
business in Sudan. The endowment does not hold any investments with ties to
Sudan. The committee said it would exclude from the ban companies that contribute
to the economic or humanitarian welfare of the people of Sudan.
Brief Statement on Bowdoin’s Investment Position
The goal of the endowment is to generate the highest risk-adjusted returns
possible to support the mission of the College. The endowment is composed of
allocations to a variety of asset classes, including fixed income, domestic
equity, international equity, real estate, and private equity, combining non-correlated
asset classes together to create a diversified portfolio of investments that
will best achieve the College’s financial goals. Bowdoin’s endowment
does not directly invest in publicly-traded equity or debt obligations. Rather
the endowment is invested in a diversified portfolio of commingled funds or
Limited Partnerships managed by skilled outside investment managers. As a member
of a commingled pool or Limited Partnership, Bowdoin benefits by having access
to a variety of investment strategies and managers that would otherwise be closed
to the College due to the relatively small size of the endowment pool in the
institutional market place. Although often lower in fees than separately managed
accounts or direct investments, in these investment structures the College forfeits
the ability to impose investment constraints on the fund manager. Should Bowdoin
disagree with the investment strategy or the individual holdings of the managed
portfolio in a commingled fund or Limited Partnership, the College can choose
to exit the fund.
Prior to the hiring of any fund for the endowment, the Investment staff at
the College undertakes a rigorous due diligence process involving quantitative
and qualitative analysis of the specific fund’s investment approach and
performance track record as well as a careful review of investment firm culture,
professional staffing, firm-wide ethics, and professional integrity. Recommendations
for potential investments are presented to the Investment Committee for approval.
The Investment Office actively monitors each investment on an ongoing basis,
monitoring investment strategies, changes in key personnel, and investment performance.
Throughout the process of the discussion on the situation in the Darfur and
Bowdoin’s best response to the issues, the Investment staff has carried
out a careful review of the endowment’s investment holdings across funds.
As of April 30, 2006 Bowdoin’s endowment has no exposure to any of the
companies identified by peer institutions (Harvard, Yale, Brown, Dartmouth,
USC, and others) as being complicit in their support of the Sudanese government.
Toward a Meaningful Policy on Investment/Divestment
The College’s endowment is fundamentally important to the institution’s
well-being. We have a fiduciary responsibility to maintain and enhance the endowment
so that it will provide essential financial support for the College’s
mission for many generations to come. The endowment is not a place for expression
of social or political activism. The decision of when to allow matters unrelated
to prudent investment management to intrude on policy must be extraordinary
and not subjective.
That being said, establishing a policy on investments related to Darfur and
the Sudan does not represent simple activism. Instead, this is a requirement
of conscience, because the genocide occurring there far surpasses any threshold
of acceptable moral behavior. The genocide and human rights abuses occurring
there are clearly and unambiguously in conflict with what the College stands
for. Developing such a policy under these circumstances supercedes the consideration
of investment return, and reflects on the College’s willingness to practice
what it preaches. This is an appropriate conversation for us to have.
As a general statement, we recommend that Bowdoin should avoid companies with
Sudanese operations which support the government’s policy of genocide
there. As an example, companies providing important financial support to the
government, such as some energy companies, should be prohibited, while companies
providing products and services unrelated to the government should not. Important
questions to be determined include: 1. the criteria used in distinguishing between
acceptable and unacceptable investments; 2. how the list of prohibited investments
will be developed; 3. who will be responsible for the list; 4. what communications
will take place with our managers; and 5. how Bowdoin will terminate a manager
who is disregarding our list of prohibited holdings.
- Criteria: With the criteria subject to further refinement,
prohibited investments under our Sudanese policy will comprise companies actively
operating in Sudan, whose activities are under their direct control, and which
are judged to contribute to the welfare and support of the Sudanese government
and its policy of genocide and human rights abuse.
- Creation of the List: Bowdoin’s list of prohibited
investments will be compiled using a variety of sources, including institutional
shareholder data vendors and other educational institutions with similar policies
on Sudan related investments. The intent is to avoid primary research on individual
companies, since this is readily available elsewhere.
- What group will compile the list?: A new committee will
be established to develop the list of prohibited investments. This four person
committee should include representatives from the Investment Committee, the
faculty and the student body, and the Vice President of Investments. This
group should meet at the outset to establish an initial list, and then meet
no less frequently than every six months to update the list.
- Communication with managers: In the due diligence process
with prospective managers and the monitoring process with existing managers,
Bowdoin should provide a statement of our Sudan policy and a list of prohibited
investments. If any of these prohibited investments is held, this should be
the point of discussion. Due to the manager’s presumed knowledge of
the specific company, it is possible the manager might be persuasive that
the company is improperly identified as a violator. However, just as likely,
the manager might continue to hold the stock of a violator for strictly financial
reasons. Since our investments are held in commingled funds, we simply have
influence over a manager, not the power to dictate whether an investment must
- Termination of a manager: Termination of a manager will
be a final step, and the process will likely take a minimum of 6 months, but
no longer than 1 year. The first step will be a discussion with the manager
to encourage sale of the stock or to clarify whether the investment truly
belongs on the prohibited list. Next, we should identify other institutions
investing with the manager in question and ally with them to influence the
manager to avoid the investment in question. Assuming those approaches are
unsuccessful, the manager should be given a deadline for sale of the stock,
and terminated if the sale is not made. Termination shall be made according
to the normal contractual procedures of the specific manager.
This policy should be subject to periodic review and should be ended when the
U. S. Government withdraws its sanctions on investments in Sudan.
Engaging the Bowdoin Community
The committee made several efforts to engage the greater campus community in
thinking about the crisis in Darfur and the College’s response to it.
In the comments and recommendations received by the committee, the nearly unanimous
response was that regardless of the committee’s decision on an investment
policy, Bowdoin should actively engage all constituencies of the Bowdoin community
in taking action to help solve the situation in Darfur and other similar crises
in the future.
In late April, the committee created a web site to provide the Bowdoin community
with information about the committee, links to news pieces about the conflict
in Darfur, and an email address giving the community a means to contact the
committee with comment. In addition, we organized a public forum to solicit
comments from faculty, staff, and students on what the College should do in
response to the disturbing conditions in Sudan. In this forum, the committee
conducted a short presentation outlining the current state of affairs in Darfur,
divestment actions taken by other colleges, and the current position of Bowdoin’s
endowment. Following the presentation, the committee listened to public comment.
Our aim was to be open to ideas and not to debate.
Nearly all members of the Bowdoin community who chose to contribute their thoughts
to the committee were supportive of some form of divestment policy. Considering
the uncertain effect of a divestment policy at Bowdoin—especially in light
of the fact that the College does not have significant holdings in the companies
most often cited as the culpable in the conflict—respondents argued that
a potentially “symbolic” investment policy could have significant
positive effects in raising awareness about investment in Sudan and in the crisis
in general. However, respondents felt that in addition to a decision to divest,
the College could take other meaningful actions to help address the situation.
These comments acknowledged that the endowment was only one of the many academic,
financial, and political resources that Bowdoin could direct toward improving
the situation in Darfur.
Resulting from committee discussion and public suggestion, the committee recommends
that the College consider the following responses in addition to the investment
policy described above:
- Create a permanent committee to identify crimes against humanity:
Bowdoin should create a standing committee—distinct from the ad hoc
committee suggested above—to ensure the swift identification of international
problems to which Bowdoin would have a moral obligation to respond. The College
would create this committee with the understanding that using the endowment
as a tool for activism should be used only in the most extreme cases. Such
a group could also help create a formal association with peer institutions
that would jointly monitor global human rights issues and discuss ways in
which member schools can respond.
- Use Bowdoin’s academic resources to increase community awareness
of human rights crises: Recognizing that Bowdoin is first and foremost
an institution of higher education, the College should evaluate the extent
to which its academic program provides sufficient opportunities for students
and faculty to study international conflicts and crimes against humanity.
The College should also consider raising academic awareness about such global
issues by sponsoring lectureships or seminars on humanitarian crises.
- Encourage activism: The College should remind members of
the Bowdoin community that active engagement in moral issues is ultimately
everyone’s personal responsibility regardless of any actions taken by
the College or the government. Toward this end, students, faculty, staff,
and alumni can communicate with their elected representatives regarding issues
of human rights. Furthermore, the large number of Darfur refugees living in
Maine may provide volunteer opportunities to assist them in their transition
to a new country. Finally, in light of the importance of oil in the Darfur
conflict—and the various ways in which the global search for energy
can contribute to geopolitical instability—all members of the Bowdoin
community should consider ways to reduce their consumption of fossil fuels.
- Utilize the financial resources of members of the Bowdoin community:
Considering the significant financial resources of many members of
the Bowdoin community, the College should encourage and promote opportunities
for charitable giving. The College could inform the community about agencies
that may be appropriate to direct contributions and also place links to these
agencies on its website. Bowdoin could also consider expanding its employee
community giving program to allow employees the option of directing some or
all of their voluntary payroll contribution to an international aid organization.
Finally, the College could help educate its employees about any potential
exposure their own pension funds may have to companies complicit in the genocide
and what actions they could take in response.
- Communicate with the Bowdoin community on the issue of Darfur: Bowdoin
should work with the Office of Communications to effectively communicate the
College’s responses to the public and consider directly notifying Maine’s
U.S. Congressional delegation of the College’s decisions. The College
should continue to maintain the web presence that the advisory committee established
to detail the actions the College has taken in response to situation in Darfur
and provide visitors with links to helpful online resources on the crisis.
Final Comments from the Advisory Committee
Institutions of higher learning must be engaged in current and world events.
When our inspection of these events, even if they are distant, provides evidence
that crimes are being committed, we are obligated to stand as moral witnesses
to the atrocity. Bowdoin College must always be guided by, as President Mills
stated, “[our] commitment to ethical behavior and our tradition of service
to the common good.” It is with great honor that the Advisory Committee
on Darfur submits this report to the President and the Trustees in the sincere
hope of bringing positive change to the crisis in Sudan.
James D. Baumberger '06
Jorunn J. Buckley, assistant professor of religion
Gerald Chertavian ’87 trustee (Chair)
Emma Cooper-Mullin '07
Kevin M. Johnson, academic department coordinator, philosophy
Mary Lou Kennedy, director of dining and bookstore services
Henry C.W. Laurence, associate professor of government and Asian studies
James MacAllen '66, trustee
Paula J. Volent, vice president for investments
Message posted May 10, 2006