Fidelity Investments supports Genocide in Darfur

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June 13, 2009 by The Mormon Worker

Fidelity Investments is one of the largest financial firms in the world, and employs hundreds of people in Salt Lake and Utah counties. Currently proxy voting is underway for 13 different Fidelity mutual funds. This year’s proxy vote is rather controversial, because of resolution #3 on the proxy ballot. Shareholders will be voting to decide whether to “institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.”
The resolution was put forward by activist investors concerned about companies that do business with the government of Sudan, which, according to the Bush Administration, is committing Genocide against portions of its black African population in the Darfur region in western Sudan. The campaign to divest from companies doing business in Sudan is meant to pressure the Sudanese government to stop its campaign of Genocide, much like boycotts of companies doing business in South Africa sought to pressure the Apartheid government to change its race policies.
In recent years, several Fidelity mutual funds have held significant numbers of shares of PetroChina (PTR), which pays royalties to the Sudanese Government in exchange for the right to exploit Sudan’s oil resources. These royalties provide funding for Sudan’s military. In 2007, as pressure mounted on Fidelity and other firms to sell their PetroChina holdings, the Boston Globe reported that Fidelity insisted on maintaining the ability to invest in companies that contribute to Genocide in order to maximize profits for its shareholders. Fidelity spokeswoman Anne Crowley stated that:
“Our funds have a fiduciary responsibility to act in the financial interests of their investors, in keeping with the investment policies for each fund. This is not Fidelity investing its own money, this is Fidelity investing the money of millions of people.”

A resolution to ban Fidelity mutual funds from investing in companies contributing to Genocide was put forward in 2008, but was defeated after Fidelity’s opposition to the measure. The same resolution will be voted on this year amid continued pressure from rights groups.
Sadly, Fidelity Investments has again asked shareholders to oppose the resolution. However, the rationale Fidelity is now offering has changed. Rather than arguing that making profits for its investors trumps human rights concerns, Fidelity now argues that it can have a positive influence on the Sudanese government by staying invested in companies doing business in Sudan.
The mutual fund giant released a statement on its website explaining that, “we have concluded that when it is appropriate to remain actively invested in a company, we will do so, thus retaining the ability to oppose company practices that we do not condone. This, in the long term, may have the greatest chance of ending those practices. There is the possibility that driving publicly traded companies out of Sudan may actually make the situation worse, exposing the region to state–owned companies or companies that are not traded on the world’s exchanges and, therefore, not subject to any shareholder influence whatsoever.”
However, Fidelity has not shown that it has taken any steps to leverage the influence it may have in order to improve the human rights situation in the Sudan. For this reason rights groups find Fidelity’s new rationale for investing in companies that contribute to Genocide insincere, and contend that Fidelity continues to prioritize profits over the lives of the men, women, and children being killed, displaced and raped by the Sudanese government and its proxy militias. Despite what conservatives keep saying after Obama’s election, it looks like capitalism is alive and well in American after all.

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5 thoughts on “Fidelity Investments supports Genocide in Darfur

  1. Deontologist says:

    Unfortunately, Darfur is not South Africa and divestment probably won’t be as effective in ending the crisis as it was in ending apartheid. This is for a lot of reasons, including the fact that Sudan’s economy isn’t completely dependent on Western investment the way South Africa’s was.

  2. libertymoonbeam says:

    Thank you so much for bringing these issues into the public eye. It takes true courage to uncover harsh truths and to expose tyrants for what they truly are. Fidelity has the blood of these innocent women and children on their hands and needs to be held accountable for their actions. Even if this proposal does not make a difference, the principal of standing up for those who cannot help themselves is upheld and others will also take action.

  3. Grégoire says:

    I really appreciate this article for many reasons.

    It is the inherent function of capital to reduce human beings to mere merchandise in the relentless pursuit of profit. The deportees who are mutilated, raped and assaulted into tenuous camps in surrounding countries are perhaps the unluckiest of all.

    Middle America ma and pa rest easy on the backs of the dead and the suffering, looking at their dividends and patting each other on the backside for their ‘sound investment’ and ‘good sense’. They are shielded from the horror they create and support by capital, and capital uses them to fund the next big war.

    Whether divestment will end the crisis is not important. What is important is that we all take small steps of conscience which move beyond signing a one-hundred dollar check and sending it to some relief fund, assuaging our own consciences and making us all feel like ‘good guys’. We created the mess, we profit and grow fat upon it; throwing pennies at our victims is not commensurate with our own petty gains.

    We all sell out constantly. Selling out Fidelity won’t hurt us. I only wish we (collectively) had the backbone.

  4. Deontologist says:

    Gregoire, you claim that “whether divestment will end the crisis is not important,” then you say that we shouldn’t do things that only “[assuage] our own consciences and [make] us all feel like good guys.” Well, if divestment doesn’t help end the crisis in Darfur, then all it’s doing is assuaging the consciences of divestors. Why be happy with “busy work” when there are plenty of policy prescriptions to advocate for that would actually help?

  5. I’m no expert on divestment campaigns, but it makes sense that something like divesting from companies like petrochina would be helpful. Even if that’s not the case, I guess the important thing to notice is that Fidelity initially made no effort to claim that divesting wouldn’t help stop genocide, they just basically said “well its our job to make as much money as we can, for ourselves and our investors, so that’s what we’re going to do.” Such a statement kind of shows what Capitalism is all about, profits above all else, regardless of the costs to others. Once saying that actually began to look bad from a PR perspective, they finally got around to coming up with some bullshit excuse to try and counter the bad press.

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