Activists say Sudan divestment campaign working

By Jeremy Pelofsky

WASHINGTON (Reuters) - The campaign to persuade U.S. companies and investors to halt the flow of dollars to war-torn Sudan through China and other countries is making significant progress, activists say.

U.S. sanctions on Sudan, where conflict in the Darfur region has been branded "genocide" by President George W. Bush, already limit most transactions, though humanitarian aid and agricultural assistance have been allowed.

But U.S. institutional investors, mutual funds, and Warren Buffett's Berkshire Hathaway have billions of dollars invested in companies that operate in -- or have ties to -- Sudan, particularly the oil business.

Activists have lobbied for investors to dump shares and bonds in PetroChina Co. Ltd., whose parent company China National Petroleum Corp. is helping Sudan tap its oil reserves, as well as India's Oil and Natural Gas Corp. Ltd. and Malaysia's Petronas

"The burgeoning Sudan divestment movement has already facilitated a response from companies operating in Sudan, institutional investors and mutual fund managers," said Adam Sterling, director of the Sudan Divestment Task Force.

He cited 19 U.S. states, nine cities including Los Angeles, and 54 universities that are beginning to divest from Sudan. Sterling also noted major companies, such as Britain's Rolls-Royce, have withdrawn.

Some $3.5 billion of foreign direct investment flowed into Sudan last year, a jump of 53 percent over 2005.

However, after the first quarter of 2006 when almost $1.6 billion entered, investment dropped to below $700 million in each of the next three quarters, according to International Monetary Fund figures.