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Financial Times: US falters in bid to press Sudan on Darfur killings

EXTRACTS: Tens of billions of dollars in equity are at stake, mostly of non-US companies and including two listed Chinese energy giants involved in Sudan’s rapidly growing oil industry which fuels the military with arms and other supplies.

Companies affected by the divestment campaign include PetroChina, Sinopec, ABB, Alstom, Siemens, Schlumberger, Tatneft of Russia, Italy’s Finmeccanica, Weir Group of the UK, and Shell.

THE ARTICLE

By Guy Dinmore in Washington
Published: September 18 2006 03:00 | Last updated: September 18 2006 03:00

Moves in the US Congress to put financial pressure on Sudan to stop the killings in Darfur have been stymied by big business interests and the Bush administration, according to supporters of legislation blocked in the Senate that would have endorsed decisions by US states to divest from companies involved in Sudan.

Tens of billions of dollars in equity are at stake, mostly of non-US companies and including two listed Chinese energy giants involved in Sudan’s rapidly growing oil industry which fuels the military with arms and other supplies.

While giving rhetorical backing to anti-genocide protests staged around the world yesterday, Democrats and Republicans admitted that a new watered-down draft of the Darfur Peace and Accountability Act was further evidence of US unwillingness as well as inability to take decisive action.

The draft put forward last week after long delays by Senator Richard Lugar, head of the foreign relations committee, took out controversial language known as “section 11” in the House equivalent that passed in April. This would have given a green light to a growing, celebrity-backed Sudan divestment campaign that has successfully targeted states, universities, pension and investment funds, persuading them to dump stock.

In June New Jersey became the first state to divest fully public funds from foreign companies linked to Sudan, selling $2.16bn (£1.1bn) of stock. Maine, Oregon, Illinois and Connecticut have also passed divestment legislation, as have many universities with billions of dollars in endowments.

“Section 11 was critical,” said Jason Miller, national policy director of the Sudan Divestment Task Force, which is co-ordinating the campaign. His group pushes for divestment targeted not at all companies in Sudan but at those deemed to be directly helping the government, through the oil industry, which accounts for over half of state revenues and some telecommunications companies that have directly assisted the military.

On the other side, the National Foreign Trade Council, a US lobby group representing big industries, is fighting the campaign and has sued Illinois.

Bill Reinsch, president of the NFTC, says the principle is simple: “The president of the United States runs foreign policy; the mayor of Berkeley does not.”

It is not clear whether Mr Lugar’s draft will pass the committee, though there is a sense that so much time has been wasted that something is better than nothing. The sudden arrival of the draft caught many by surprise and it is still being studied. No one contacted by the FT could explain why support for a “no fly zone” over Darfur had apparently been dropped as well.

The State Department declined to make an official comment on the issue.

One administration official questioned whether the legislation would make any difference. He said there was little the US could do on its own, its military was stuck and exhausted in Iraq, China was refusing to co-operate and Nato was tied up in Afghanistan.

To that list, analysts said, should be added US reluctance to make Darfur a priority in its difficult relationship with China, Sudan’s oil wealth, and a still close intelligence relationship between Washington and Khartoum in the war on terror.

Companies affected by the divestment campaign include PetroChina, Sinopec, ABB, Alstom, Siemens, Schlumberger, Tatneft of Russia, Italy’s Finmeccanica, Weir Group of the UK, and Shell.

Copyright The Financial Times Limited 2006

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