Center for Policy Alternatives
CPA - Header Photo

Divestment to Support Human Rights in Sudan

About 450,000 people have died and 2.5 million have been displaced by government-supported genocide in Sudan.1
Since February 2003, the Sudanese government has attempted to crush a rebel movement in the Darfur region of western Sudan. In this struggle, the government has backed Arab militia groups called the janjaweed. Together, the Sudan military and the janjaweed have mercilessly attacked the non-Arab civilian population. It is estimated that the military and the janjaweed have looted or destroyed approximately 90 percent of all villages in Darfur, causing widespread disease and starvation.2 The ethnic cleansing of non-Arab people in Darfur is recognized as genocide by numerous international organizations and national governments, including the Bush Administration.3
There is no end in sight for the Darfur genocide.
In May 2006, the Sudanese government signed a peace agreement with one Darfur faction, but violence continued after a new alliance of rebels rejected the accord. Sudan has refused to allow a United Nations peacekeeping force into Darfur. In the fall of 2006, Sudan tightened restrictions on aid workers and foreign journalists traveling to Darfur in order to conceal the bloodshed.4
The Sudanese government depends heavily on foreign investment for military funding.
Foreign investment in the oil, energy and construction sectors of the Sudanese economy is largely used to strengthen that nation’s military. For example, more than 60 percent of the country’s 2001 oil revenue was used to support the military.5 Little of Sudan’s revenues benefit the civilian population south and west of Khartoum. For example, in 2000, the government announced that it had spent three million dollars on development in the south—an amount equivalent to one percent of the military budget in that year.6
Divestment is a proven tactic in the battle for human rights.
Throughout the 1980s, at least 16 states (CA, CO, CT, IA, KS, LA, MD, MA, MI, MN, NE, NJ, NM, ND, RI, WI) and dozens of municipalities enacted laws that blocked government investment in companies doing business in South Africa. This campaign, aimed at ending apartheid, resulted in a significant decrease in U.S. investment in South Africa. In the 1990s, some jurisdictions ended investments in companies doing business with Burma to protest abhorrent human rights violations in that country.
State divestment is legal in the absence of federal legislation that expressly or impliedly preempts state authority.
In the 2000 case of Crosby v. National Foreign Trade Council, the U.S. Supreme Court struck down a Massachusetts law forbidding state purchases from companies doing business with Burma.7 But the court limited its ruling to the issue of preemption, finding that Congress had enacted a law that substantially conflicted with the Massachusetts statute. The Supreme Court did not adopt arguments that the U.S. Constitution bars states from ever having the power to enact divestment provisions.8 Since there is no federal law that conflicts with state divestment from Sudan, such legislation is legal.
Eight states have enacted divestment legislation.
Five states (CA, IL, ME, NJ, OR) have enacted statutes to divest state pension funds from companies that do business with the government of Sudan. New Jersey’s divestment law, adopted in July 2005, requires all state pensions and annuity funds to phase out investments in companies which directly or indirectly support the Sudanese government—with the exception of companies that provide humanitarian aid. The law affects about $2.16 billion in investments and requires all divestment to be completed by July 2008. Three other states (CT, OH, VT) have passed non-binding resolutions that encourage divestment from Sudan.
Americans favor divestment from Sudan.
A November 2006 Lake Research poll found that, by a three-to-one margin, voters favor legislation “that directs state pension funds to boycott companies that do business in Sudan, until that government protects the people in Darfur.”9
Divestment will not harm U.S. companies.
In the 1990s, the U.S. government listed Sudan as a country which supports terrorism. As a result, the Clinton Administration imposed trade sanctions which remain in place today. The sanctions prohibit companies based in the U.S. from operating in Sudan. Therefore, divestment legislation only requires states to end their investments in multinational and foreign-based companies that do business in Sudan. In fact, several multinational companies, including Xerox and 3M, have already limited operations in Sudan to humanitarian work.10
Endnotes
  1. Associated Press, “Aid Group Quits Darfur, Citing Disruptions,” Washington Post, November 11, 2006.
  2. Sudan Divestment Task Force, “Options and Resources for Sudan Divestment,” updated July 5, 2006.
  3. Sudan Divestment Task Force, “Arguments for the Efficacy of Targeted Divestment from Sudan,” updated August 17, 2006.
  4. Reuters, “Controls Tighten on Media and Aid Workers in Darfur,” New York Times, November 8, 2006
  5. “Arguments for the Efficacy of Targeted Divestment from Sudan.”
  6. Christian Aid Society, “The Scorched Earth: Oil and War in Sudan,” March 2001.
  7. Crosby v. National Foreign Trade Council, 530 U.S. 363 (2000).
  8. Michelle Cadin, “State Autonomy and International Policy Making: Crosby v. National Foreign Trade Council,” New England Journal of International and Comparative Law, 2002.
  9. Lake Research Partners, conducted for Center for Policy Alternatives, November 2006.
  10. ‘Nora Boustany, “Sudan Divestment Effort Gains Momentum at State Level,” Washington Post, October 7, 2006.’
Updates