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Harvard Ups PetroChina Investment

The Harvard Crimson

February 15, 2005

Harvard nearly doubled its number of shares in oil stock PetroChina during the last quarter of 2004, despite widespread concern surrounding the Beijing-based company's role in funding the ongoing genocide in Sudan.

More than 80 faculty members and nearly 600 students have signed an online petition calling on the University to divest from PetroChina. But in the final three months of last year, Harvard purchased 34,500 additional shares of the company's stock, according to reports filed yesterday with the U.S. Securities and Exchange Commission.

The acquisitions come on top of the 32,700 shares of PetroChina stock that the University owned at the end of September. In total, Harvard's holdings in the company are now valued at an estimated $3.97 million.

Harvard's move to increase its PetroChina holdings does not signal that the University's top brass has definitively rejected the divestment petition. "No final decision has yet been reached," University President Lawrence H. Summers said last night.

A subcommittee of the Harvard Corporation, the University's highest governing body, met last week to consider whether Harvard should maintain its ties to PetroChina, Summers said.

The sub-group, known as the Corporation Committee on Shareholder Responsibility, held a joint session with the Advisory Committee on Shareholder Responsibility, a 12-member group of students, faculty and alumni who issue recommendations on University investment policy.

Summers said the two committees are "looking into" the divestment proposal, but critics of the University's links to PetroChina demand swifter action.

In a statement issued last night, the two students who organized the divestment petition, Manav K. Bhatnagar '06 and Benjamin B. Collins '06 of Eliot House, said that "there is no excuse for Harvard's continued investment in PetroChina."

"This is an embarassment to the Harvard community," they said in the statement.

U.S. companies have been prohibited from investing in Sudan since President Clinton imposed economic sanctions against the Khartoum regime in November 1997.

PetroChina officials have assured investors that the firm does not deal directly with Sudan. But the firm is a spin-off of the China National Petroleum Company (CNPC), which has invested more than $1 billion in a joint venture with the government of Sudan to boost that country's oil production. CNPC still controls 90 percent of PetroChina, and a restructuring plan unveiled late last year would move all of CNPC's overseas assets-including its Sudan stake-directly into PetroChina's hands.

Jesse A. Sage '98, associate director of the American Anti-Slavery Group, which is coordinating divestment efforts nationally, wrote in an e-mail yesterday that "there's no reason Harvard investments should support corporations that exploit the current loophole that allows multinationals to partner with a genocidal regime and access American wallets."

The Sudanese government has backed Arab militiamen in the western region of Darfur, where more than 70,000 people have died and millions have lost their homes in a two-year conflict. The U.S. charges that the Sudanese regime is guilty of genocide, although U.N. Secretary General Kofi Annan-who holds an honorary law degree from Harvard-disputes that claim.

After Bhatnagar and Collins launched a divestment petition in November, students at several local schools-including Boston College, Boston University, Emerson College, and Tufts-followed suit.

But the efforts have had little effect on PetroChina's share price, which reached $59.02 on the New York Stock Exchange yesterday-its highest close in more than a year.

Staff writer Daniel J. Hemel can be reached at hemel@fas.harvard.edu.

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