Administration February 2, 2007

Idaho Lawmakers Consider Forcing Pension Funds to Dump Sudan-linked Investments

February 2, 2007 (PLANSPONSOR.com) - The Idaho state legislature is considering a measure that could force the Public Employee Retirement System of Idaho (PERSI) to withdraw $41 million in investments tied to oil-rich Sudan to protest the violence in Darfur.
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The $10.7 billion fund, whose officials stand against the legislation, currently holds investments in Chinese, Brazilian, Swedish, French and British energy companies that have relations with Sudan, according to the Associated Press.  U.S. sanctions on Sudan have kept out American companies since 1997.

The legislation is not aimed at companies “whose primary benefit goes to civilians,” but at companies whose oil payments are supporting the government in Khartoum and would not mean shedding all of the $147.3 million invested in European, Asian and South American companies with links to Sudan, the wire services reported.

Like others who have fought against divestment of pension investments, PERSI officials warn that pulling the investments would be too complicated and have little of the expected impact on the conflict there.

The investment in companies dealing in Sudan have proved lucrative, earning $81 million on $65 million in investments, Alan Winkle, PERSI’s director, told the AP. If the divestment measure passes, the state would have to sell shares in the following:

  • Chinese companies Petrochina and Sinopec Shanghai Petrochemical,
  • Alstom, a French turbine maker;
  • Lundin, a Swedish energy exploration company;
  • Petronas, a Malaysian oil and gas company; and
  • Britain’s Rolls Royce Group.

“There was no support for the divestment of the assets in PERSI,” Winkle told the AP. “It’s not that we are unsympathetic to what’s happening in Sudan. It’s a horrendous action. It’s just unconscionable. But the board is bound to make professional investment decisions, regardless of what our personal feelings may be.”

Other states and pension funds have passed similar measures to pull their public pension investments from companies tied to the country.

North Carolina ‘s pension fund said in November that it would pull its $24 million holdings with nine companies that were said to be propping up the Sudanese government (See Sudanese Investments Get Boot From Tar Heel Pension Fund ).

Five months after the trustees of the California Public Employees’ Retirement System (CalPERS) decided to pull their Sudan-related holdings (See CalPERS Votes to Bar Sudan-related Investments ), California Governor Arnold Schwarzenegger signed two bills in September that required the state pension funds to divest (See Schwarzenegger Signs Sudan Divestment Bills).

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