The Battalion, Nov 10, 2015 by Douglas Pils

BATT THE

THE BATTALION | THEBATT.COM

Through the PERMANENT UNIVERSITY FUND, A&M is invested in

10 25 OF THE

companies linked to the GENOCIDE in Sudan by the Texas Comptroller

A DARK S P O T I N

TEXAS A&M’S INVESTMENTS

PART ONE

By Spencer Davis

he bombs fell everyday on Mark Narikan’s village in the Nuba mountains of Sudan. “It was a matter of killing people every night,” said Narikan, an ethnic Dinka who lived with his grandmother in a village called Chukudum. “Where I lived, it was just me and there was always fighting everyday, every night. So one day I decided, ‘I think I’m going to join these people.’” The violence Narikan experienced is one story among many in a Sudanese conflict, whose bloodletting caused the United States and Texas governments to label it as genocide. The parties involved include ethnic sects and global energy companies — some of whom are invested in by Texas A&M University. A three-month investigation by The Battalion into the finances of Texas

TUESDAY:

A&M University and the University of Texas revealed investments by both university systems into companies directly tied to the Sudanese genocide. Texas law bans other state-run investments from putting money into companies related to the conflict, but the law does not prohibit the universities’ investment company from its actions. The conflict in Sudan The “people” Narikan refers to joining are the Lost Boys of Sudan, a group of approximately 20,000 boys who, according to the United Nations Children’s Fund, traveled thousands of miles on foot to escape the genocide perpetrated by the Sudanese government. Narikan became a Lost Boy when he left his village in 1995 after his brother Peter was kidnapped to be a child soldier in the rebel army. “[We] would only walk at night, and then whenever it’s risky, we’d stay in the river,” Narikan said. “Nobody knows exactly

A&M’s link to companies allegedly aiding genocide in Sudan

where we are going, but if you keep going to the east you eventually end up in Kenya. A lot of people died on the way because of no water or food.” Although Narikan was eventually relocated to the Dallas area as a refugee about 10 years ago, the genocide in his homeland continues and is predicted to displace 460,000 people just like him by the end of 2015, according to the United Nations High Commissioner for Refugees. Texas A&M investments in Sudan The Texas government has taken steps to stop public money from being invested in companies tied to the Sudanese genocide in the past. These steps however stop short of prohibiting Texas A&M and the University of Texas from investing university system money into the same companies blocked to other state funds. In 2007, the state of Texas passed the Prohibition of Investment in Su-

WEDNESDAY:

The $32 million invested in companies accused of human rights violations

dan Act. The law blocked two pension funds — the Teacher Retirement System and the Employees Retirement System — from investing in companies considered by the Texas Comptroller to have taken “actions that have directly supported or promoted the genocidal campaign in Darfur.” The University of Texas Investment Management Company, UTIMCO, manages the Permanent University Fund — a public endowment currently worth $17.2 billion established in the Texas Constitution that supports 17 institutions throughout the A&M and UT systems. UTIMCO is invested in 10 of the 25 companies on the Comptroller’s list of those directly involved in the Sudan genocide. These investments are worth about $1.5 million. Texas A&M University and the Texas A&M System declined to comment for this report. INVESTMENTS ON PG. 2

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INVESTMENTS CONTINUED Nothing banned UTIMCO from investing in the same businesses that are tied to the genocide in Sudan. “Oftentimes, we have to settle for a bill that’s less robust than what we would pass in a perfect world, but that’s just part of the compromising that’s required in the legislature,” said the author of the law, state Sen. Rodney Ellis. “When we passed the bill in 2007, the situation in Sudan had become an international tragedy of the greatest magnitude. You always want a bill to be as strong as possible, but you can’t let perfect be the enemy of good.” Sen. Ellis wrote a law in 2009 that would have applied the same restrictions of investment in Sudan to UTIMCO, but after passing a vote in the Texas House of Representatives, the bill died in the Senate Committee on Finance. While the current law does not directly apply to investments by UTIMCO, student groups at UT argued in 2014 the endowment should follow the example set by the law and divest from the companies on the Comptroller list. “While investment in morally gray areas, such as tobacco and fossil fuels, is up for debate, an investment in genocide is not,” said Ali Breland, president of Texans Against Genocide, in a 2014 opinion piece for UT’s student newspaper The Daily Texan. At least 61 universities have divested their endowments from companies they found to help fund the genocide in Sudan after 2005, citing the ethical concerns of investing in companies involved in genocide, according to Investors Against Genocide. A total of 30 states have passed similar laws or made the decision to divest from such companies since 2010, according to Investors Against Genocide.

How the Comptroller’s list was made

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The Texas law allows for the Comptroller to formulate the list of prohibited companies based off of findings from research firms. EIRIS Conflict Risk Network, one of the two research companies contracted by the Comptroller, said the companies are chosen by two standards — their risk of producing conflict and their connections to ethnic violence. “Most of the companies profiled are in the oil, mineral extraction, power production and defense sectors,” said Kathryn Allan, head of projects at EIRIS. “Conflict risk exposure is identified by evaluating current factors contributing to or presenting a potential for conflict, such as a contested border near an oil concession or land and resource disputes involving ethnic tensions, which may give rise to violent conflict.” U.S. Department of State officials say the ongoing conflict in Sudan is

partially driven by a battle for oil production among opposing political and ethnic parties in Sudan. In a 2006 New York Times article, Abda Yahia el-Mahdi, a former Sudanese finance minister, said more than 70 percent of the oil revenue from transnational oil companies went directly to support Sudan’s military, which in turn prosecutes the genocide. PetroChina, Oil India and Petronas, some of the largest oil producers in the country, appear on the Comptroller list as of 2007 and are invested in by UTIMCO.

Nature of the genocide in Sudan

However, the major driver of ethnic violence in Sudan remains religious in nature. The United States Commission on International Religious Freedom, or USCIRF, produces annual reports on religious persecution around the world. In its latest annual report, the commission upheld its statements that minority, non-Muslim groups in the country are being killed for their beliefs by the Sudanese government of President alBashir, the first sitting head of state who is wanted for war crimes and genocide by the International Criminal Court. Narikan said the violence that forced him from his village was due to religious persecution. “They were trying to make everybody go by what they culturally allowed,” Narikan said. “They try to convert everyone to Islam, to follow Sharia law. Probably 90 percent of [the conflict] was that.” Texas A&M President Michael Young was appointed to USCIRF in 1998 by President Bill Clinton, and served in 2004 as chairman when the commission found some senior Sudanese government officials calling for “jihad” and an overall pattern of egregious human rights abuses against Christians. That same year Congress officially declared the abuses in Sudan to be genocide. President Young’s work on USCIRF and his background in international law make him an expert on human and religious rights. Young does not have any direct say in UTIMCO investing policy. While he denied to comment for this article, he has commented previously about his experiences with the Sudan genocide. “I met Sudanese who had left the Nuba mountains or had left their refuges to secure food and supplies being transported by train under the direction of the United Nations,” Young said in a 2007 address at the University of Utah. “As these people approached the trains, the government of Khartoum sent airplanes to strike those trying to get supplies.” What Young heard from the survivors of the ethnic violence in Sudan is consistent with the findings of USCIRF during his tenure and the experiences of other refugees like Narikan.

UTIMCO companies involved in the genocide

Young also served on the Commission in 1999, when it asked the U.S. Treasury Department to extend sanctions to the China National Petroleum Corporation, CNPC, the national Chinese oil company, on the grounds that their oil interest in Sudan funds a, “war against the south ... patterns of forced conversion to Islam, manipulation of food aid, bombing of refugee camps, hospitals, churches, and other civilian targets, as well as enslavement.” UTIMCO invested in CNPC in 2014 with $494,858 through PetroChina Company, a subsidiary that is approximately 90 percent owned by CNPC. Both CNPC and PetroChina appear on the Comptroller list of banned companies funding genocide in Sudan. CNPC has been accused of direct involvement in the genocide by University of Pennsylvania professor John Ghazvinian. During the second Sudanese civil war, CNPC built a 900-mile oil pipeline from their wells in Central Sudan to the Red Sea. In his book “Untapped: The Scramble for Africa’s Oil,” Ghazvinian said thousands of Christians and non-Muslims were killed or displaced in the process, and locals report that their villages would first be bombarded by the Sudanese Air Force and quickly followed by CNPC bulldozers and soldiers burning huts. This pattern is all too familiar with the violence that forced Narikan from his home years before. In 2005, he left Kenya, where he had been living for 10 years, as part of a program that resettled 3,500 of the Lost Boys of Sudan in cities around the United States. Assimilating to a new culture was difficult, but Narikan worked at a grocery store for several years while earning his GED and eventually graduating from the University of North Texas in 2011. He is currently running a GoFundMe campaign to raise money for a drinking well in Kikilai, a village in the area where he was born that remains relatively isolated from the continuing violence in Central Sudan. Narikan returned to his home village in South Sudan in 2011, seeing his family for the first time in 11 years, and noted the ongoing destruction in the country. He hopes his campaign for a water well is one small step in putting the country back together. “I still remember how it looked,” Narikan said. “I see a lot of people mixed up with different tribes, but it’s going to take time.” This is Part One of an investigative series into Texas A&M’s investments in companies tied to human rights violations. The series’ articles will be published throughout the week in The Battalion, as well as at thebatt.com.

11/10/15 12:44 AM

T H E B L AC K L I S T

A list of allegations made against 50 companies invested in by the Permanent University Fund, a joint fund between Texas A&M and the University of Texas

LINKED TO GENOCIDE IN SUDAN Investment amount from FY 2014

Companies the Texas Comptroller banned the Teacher Retirement System and the Employees Retirement System from investing in due to links to the genocide in Sudan

Return on Investment FY 2014

Offense

*China Petroleum and Chemical

$530,206

37.4%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*PetroChina

$494,858

25.7%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*Petronas Chemicals Group

$169,135

- 4.4%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

Bharat Heavy Electricals

$143,063

- 45.7%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*Oil and Natural Gas Corporation

$106,374

10.3%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*MISC Berhad

$55,060

14.2%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

LS Industrial Systems

$54,177

- 3.9%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*Petronas Gas

$42,886

129.5%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

Oil India

$37,525

- 11.3%

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan

*Petronas Dagangan

$22,516

Chemicals

Oil and Gas Chemicals Energy

Oil and Gas Shipping

Energy and Power Oil and Gas Oil and Gas Oil and Gas

Accused by the State of Texas of being “directly involved” in the genocide in Darfur, Sudan *Also accused by the State of Texas of significant dealings with the Government of Iran 103.6%

FOREIGN CORRUPTION

Companies with allegations of bribery on an international scale, charged by the Securities Exchange Commission

V I O L A T O R S Location of offense

Investment amount from FY 2014

Return on Investment FY 2014

Indonesia

$10,838,416

20.5%

$75,000 to bribe Indonesian officials to avoid taxes

Nigeria

$9,889,249

67.8%

$5 million of bribes to Nigerian officials for contracts

BHP Billiton PLC

Columbia

$5,429,446

9.7%

$3 million to illegally sponsor 236 government officials to attend the Beijing 2008 Olympics

Helmerich & Payne

Venezuela

$2,815,177

3.8%

$185,000 of bribes to Venezuelan officials to win oil contracts

Statoil ASA

Iran

$2,666,443

25.9%

$5.2 million of bribes to Iranian officials to win contracts

Alcoa Inc.

Bahrain

$1,190,148

35.0%

$110 million in bribes to Bahraini officials

Tenaris SA

Uzbekistan

$1,082,281

0.56%

$5 million to win government contracts

$1,011,641

19.0%

Kickback schemes in Europe and Iraq to illegally obtain contracts business

Baker Hughes

Oil and Gas

Halliburton

Oil and Gas Mining

Oil and Gas Oil and Gas Metals Steel

Johnson & Johnson Greece, Romania,

Pharmaceuticals

General Electric Co Multi-industry

IBM Corporation

Electronics

Hewlett Packard

Electronics

Siemens AG

Multi-industry

Chevron

Oil and Gas

AON Corporation

Insurance

Total SA

Oil and Gas

Magyar Telekom

Telecommunications

Pfizer Inc.

Pharmaceuticals

ABB Ltd.

Power

BAT_11-10-15_A3.indd 1

Iraq

Offense

China

$897,843

1.02%

$3.6 million kickback scheme to Iraqi governmental officials while the country was sanctioned

China, South Korea

$895,557

23.2%

Contracting a local police force that has killed 16 people

Russia, Poland, Mexico

$507,926

1.79%

$3.6 million in bribes to government officials to win contracts

Multiple continents

$507,034

23.2%

$1.4 billion bribe scheme to government officials in Asia, Africa, Europe and South America

Iraq

$299,634

2.8%

$20 million to bribe Iraqi officials for contracts while the government was sanctioned

Multiple continents

$285,410

74.9%

$3.6 million to win contracts in Asia, the Middle East and South America

Iran

$257,778

20.2%

$60 million to Iranian officials to win oil contracts

Macedonia, Montenegro

$70,721

- 46.1%

$15 million in bribes to defeat competition and defeat regulations

Multiple continents

$12,364

- 2.7%

Bribed foreign officials to influence regulations and drug approvals

Iraq

$3,908

- 14.2%

$2.7 million in bribes to sanctioned Iraqi officials to win contracts.

11/10/15 12:38 AM

HUMAN RIGHTS

Companies accused of gross environmental negligence, labor, abuse and forcing communities from their homes

V I O L A T O R S Location of offense

Return on Investment amount Investment FY 2014 FY 2014

Offense

Glencore Xstrata Democratic Republic

$6,382,263

8.3%

Employing children as young as 10 in ITS copper mines, according to BBC and Mining Watch Canada

BHP Billiton Plc

Columbia, Brazil

$5,429,446

9.7%

Forced evictions of 700 Colombians to make room for a mine; dam burst in Brazil that killed at least 15, according to London Mining Network and Wall Street Journal

Papua New Guinea

$5,231,416

8.8%

Poor conditions at the mine in Bougainville instigated civil war, according to Reuters and Hearts and Mines

China

$4,669127

42.5%

Owner of Foxconn Technologies, whose poor labor conditions created high worker suicide rates, according to The New York Times

South Africa, Anglogold Ashanti Democratic Republic $2,029,109 of Congo Ltd. Mining

- 33.0%

Exposing 17,000 workers to Silicosis in South Africa; funding warlords in the Congo, according to Human Rights Watch

Mining

of Congo

Mining

Rio Tinto Plc

Mining

Hon Hai Precision Company Electronics

Barrick Gold

Papua New Guinea

$1,930,041

- 45.6%

Contracted security forces conducted mass rapes of women in the surrounding community, according to Human Rights Watch

Vedanta Resources

India

$1,529,043

- 41.6%

Forced evictions of communities without just compensation, according to Amnesty International

Vale SA

Brazil

$750,725

- 44.8%

Convicted by the Brazilian government of overworking employees and accused of spying on political dissidents, according to Amazon Watch and Wall Street Journal

Tanzania

$710,794

- 4.1%

Contracted brutal, corrupt police force who killed 16 people, according to Mining Watch Canada and The Guardian

Democratic Republic of Congo

$571,123

29.1%

Employing children as young as 10 years old in their Tilwezembe copper mine, according to BBC and Mining Watch Canada

Vinci Construction

Qatar

$262,865

2.2%

Broke Qatar labor laws by overworking employees in extreme heat, according to Amnesty International and Reuters

Bollore SA

Liberia

$180,586

213.1%

40 percent owner of a company accused by the United Nations of using child labor, according to the United Nations

Hyundai Engineer and Qatar Construction Construction

$97,401

13.0%

Workers contracted by the company were held for four months before being allowed to leave, according to Amnesty International

China

$71,168

-0.1%

Poor labor conditions at Apple factory that drove workers to suicide, according to The New York Times

Bangladesh

$13,086

412.8%

Contracted work to a garment factory that collapsed and killed 1,127 workers, according to Radio Poland and The New York Times

Mining Mining Mining

African Barrick Gold

Mining

Katanga Mining Company Mining Construction Mining

Foxconn Technology

Electronics

LPP SA

Clothing Company

IRAN SANCTIONED

Companies with direct ties to the Iranian government and banned for investment by some Texas public funds

C O M P A N I E S

Investment amount FY 2014

Return on Investment FY 2014

Sinopec Group Overseas Development

$802,208

37.38%