Berkshire shareholder's PetroChina proposal fails
By Jonathan Stempel
OMAHA, Nebraska (Reuters) - Shareholders of Warren Buffett's Berkshire Hathaway Inc. (BRKa.N) (BRKb.N) on Saturday overwhelmingly defeated a proposal to divest a $3.31 billion stake in PetroChina Co. (0857.HK) because of its parent's ties to Sudan.
Less than 2 percent of votes were cast in favor of the proposal by Berkshire shareholder Judith Porter, which Buffett opposed. Berkshire ended 2006 with a 1.3 percent PetroChina stake, making it the company's largest foreign shareholder.
In a separate protest, two speakers allowed into the meeting called on a Berkshire utility unit to destroy two dams they say harm the environment.
The criticisms marked rare calls for Buffett, lauded for his charitable giving and vigorous advocacy of good corporate governance, to do more to push for societal and environmental change.
Calling Darfur "the first genocide in the 21st century," Porter told Buffett at the meeting that "your support of divestment will send a signal to China and Sudan that there are costs to continuing this destruction."
Critics say PetroChina, through its government-owned parent China National Petroleum Corp. (CNPC), is too closely linked to Sudan, whose government has been blamed for what the White House calls genocide in the Darfur region.
They say CNPC supports the Sudan government through its 41 percent stake in Petrodar Operating Co., an oil and gas company whose main office is in Khartoum.
Buffett acknowledged the conditions in Darfur, but said PetroChina does not control CNPC, and that Sudan's government might even benefit if CNPC quit the country, likely entailing a sale of its Petrodar stake to the government.
"We have no disagreement with what PetroChina is doing," Buffett said. "There may be disagreement about what the Chinese government is doing.... I see no effect whatsoever in Berkshire Hathaway trying to tell the Chinese government how to conduct their business."
The United Nations estimates that 200,000 people have died in the Darfur region since 2003 as a result of the conflict.
Separately, Buffett said it was beyond his power to compel Berkshire's PacifiCorp utility unit to demolish two Klamath River dams in northern California.
Some American Indians, commercial fishermen and environmentalists filed a federal lawsuit on Wednesday calling for a clean-up of toxic algae blooms in reservoirs behind the Iron Gate and Copco dams.
"We will not make the determination in the end," Buffett said. "That is entirely a question for FERC (Federal Energy Regulatory Commission) and the state commissions.... PacifiCorp will do exactly what they say."
