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December 10, 2004
Divesting From Genocide: A Conversation with Eric Reeves of the Divest Sudan Campaign
    by William Baue

In part one of this two-part interview, Mr. Reeves explains why shareowner action and direct dialogue with companies operating in Sudan is not an option in the context of genocide.

Six years ago, longtime Doctors Without Borders supporter Eric Reeves, an English professor at Smith College in Northampton, Massachusetts, had a "life-changing" conversation with the humanitarian organization's executive director.

"We were lamenting the fact that Doctors Without Borders felt compelled to name southern Sudan the most under-reported humanitarian crisis of 1998," said Mr. Reeves. "Out of that conversation grew a very active and passionate, productive advocacy career--that's really what I do."

Mr. Reeves is currently on sabbatical and next semester will take his fourth semester leave without pay in the last six years to work fulltime researching and analyzing the Sudan crisis. Recently, he spoke with about the Divest Sudan campaign, which he helped initiate in September of this year. Why divest from companies doing business with the Khartoum government?

Eric Reeves: The Khartoum government is engaged in serial genocide. All close observers of Sudan over the past 15 to 20 years would argue that what took place in the Nuba mountains starting in 1992 was genocide; most observers would also argue that the scorched earth civilian clearances in the oil regions of southern Sudan were genocide; and certainly what is happening in Darfur is genocide. We're talking about a serially genocidal regime that refuses to make peace, continues to defer a peace process, and is supported by the Asian and European companies that are targeted by the divestment campaign.

It's important to note that the US has comprehensive economic and trade sanctions that prevent any US companies from supporting this regime. Until this regime feels very significant commercial, financial, economic pressure, it will not change its genocidal course of action.

SF: Why not use shareholder activism, which leverages investment positions to dialogue directly with companies, pushing them to change?

ER: The direct dialogue argument, it seems to me, is not relevant in the context of ongoing genocidal destruction that is taking over 30,000 human lives a month. We need to do everything we can to convince companies like Siemens [ticker: SIEG], ABB [ABB], Tatneft [TNT], PetroChina [PTR], Alcatel [CGEP] to suspend their operations immediately, and I know that if we engage in dialogue, it will go on for months and will not produce the kind of immediate response we're calling for. There's simply too much urgency to go what might be a more appropriate route were it not for the fact of ongoing, massive genocidal destruction.

SF: What are the relative benefits and problems with companies pulling out of Sudan?

ER: Actually, we're not really asking that they pull out, but rather that they suspend operations and resume only when genocide has ended in Darfur and a comprehensive peace agreement between north Sudan and the people of the south has been completed. Now I'm starting to hear from different quarters, 'what about the unemployment risk to Sudanese nationals?' I don't really think we can put unemployment problems in the balance with lives that are being lost to massive genocidal destruction. I certainly don't want to see unemployment increase, but I also don't want to see a thousand people die every day for the foreseeable future, and that's what all the data suggests.

SF: What about other companies coming in and taking up whether the departed companies left off?

ER: I think that's one of the advantages of suspension as opposed to withdrawal: if a company like Siemens, which is building the largest diesel-powered electrical generating plant outside Khartoum, decides to suspend operations, it would be very difficult for anyone else to come in and pick up where they leave off. There would be very little incentive for Khartoum to do that--it would only add to their overall level of indebtedness. It's important to remember that this is arguably the most indebted economy in the world, on a per-capita basis--they have $22 billion in external debt that they cannot service--they survive economically only because the Asian and European companies continue to prop up an economy that is very badly run, that is deeply opaque with revenues, especially oil revenues, and cannot survive without this kind of continuing capital investment.

SF: So from a business perspective, one argument to companies is that this is a bad business decision to be involved with such an unstable economy?

ER: I think the Khartoum government has been able to pay its bills. The real argument to companies is that this divestment campaign will crater your share price. That's what we did in a divestment campaign focused on just one company, Talisman Energy [TLM], the largest independent oil company in Canada and the only Western participant in oil development in southern Sudan. We drove them out of Sudan with their tails between their legs in about two-and-a-half years, and we fully intend to do the same with any company that does not agree to suspend operations. They can be skeptical; Talisman was, then they saw a 33 percent decline in share value. That gets everybody's attention.

In part two of this two-part interview, Mr. Reeves discusses the efficacy of recent initiatives by the investment and legislative communities to address the crisis in Sudan.


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