Frequently Asked Questions

  What is divestment and how does it work?

  What is the status of divestment across the country?

  Has the University of California divested from anything before?

  Won't divestment hurt University of California finances?

  Won't divestment hurt ordinary Sudanese citizens?

  Won't divestment from Sudan trigger an onslaught of divestment requests to the UC concerning a whole range of social concerns?

  How do you know divestment will change the government of Sudan's behavior?

  Why not pressure Sudan with government sanctions instead of divestment by US institutions?

For general sudanese divestment questions, you can go to here or here.

What is divestment and how does it work?

Divestment is the removal of the University's invested money from companies that are directly or indirectly helping the Sudanese government perpetuate genocide. When the UC divests from companies that do business with Sudan, demand for offending companies' stock falls and the price of shares decline. Share price is further reduced by the possibility that UC divestment would inspire additional divestment campaigns, many of which are already in progress. To protect the value of shareholder investments, offending company executives would convey to the Sudanese government that perpetuation of genocide in Darfur is making the country an undesirable place to do business. As a result, either government behavior would change (in order to keep businesses in Sudan) or offending companies would leave Sudan, thereby withdrawing money that has been used to purchase military equipment for the genocide. Withdrawal of business investments from Sudan would simultaneously create an economic penalty for genocide and reduce Khartoum's ability to fund the campaign.

What is the status of divestment across the country?

Harvard, Stanford, Amherst, Dartmouth, Yale, Brown, and Samford Universities have imposed varying levels of restrictions on their Sudan-related investments. The states of New Jersey, Oregon, and Illinois have passed divestment legislation and are currently in the implementation phase. There are numerous other divestment campaigns at the state and university levels across the country. For an update on these campaigns, please see our State of Divestment Report and updates since report release on 12/24/05.

Has the University of California divested from anything before?

Yes, UC divested from South Africa in 1986 to protest the Apartheid system of that country. It is widely acknowledged that divestment by US institutions was a major factor contributing to the fall of Apartheid. The UC also decided in 2001 to not invest in tobacco companies.

Won't divestment hurt University of California finances?

The short answer is no. Certainly in comparison to the potential risks and costs of UC's decision to divest from Apartheid South Africa in 1986 and to abstain from investing in tobacco companies in 2001, divestment from Sudan caries minimal risk. We have developed a comprehensive argument for why this is so in section VII of our proposal. Additionally, as the nationwide divestment movement grows, the investment management community (which handles UC's investments) has begun researching and offering Sudan-free investment tools. The current status of Sudan-free investment tools is documented in our Options and Resources for Sudan Divestment Report.

Won't divestment hurt ordinary Sudanese citizens?

Since the ultimate intent of Sudanese divestment is humanitarian, it is important to tailor divestment to have maximal impact on the government of Sudan's behavior and minimal harm to innocent Sudanese. To this end, the divestment criteria specifically enumerated in Section VIII of our proposal excludes any company engaged solely in the provision of goods and services intended to relieve human suffering or to promote welfare, health, religious and spiritual activities, and education for humanitarian purposes or otherwise. These goods and services specifically include agricultural commodities, medicine, and medical devices. Since agriculture remains Sudan's most important economic sector, employing 80% of the workforce, exclusion of agricultural commodities from divestment is especially critical to minimizing harm to ordinary citizens.

Even without carefully targeted criteria that exclude companies engaged in welfare promotion, divestment is still likely to disproportionately affect the government since Khartoum is already stingy on allocating government revenue towards social needs. In contrast to the concordance of increased direct foreign investment into Sudan, improved oil revenue, and a growing military budget since 1999, there has been a gaping disparity between increased oil returns and spending on development projects. According to a UK-based Christian Aid Society report:

"Increase of [GOS] funding for the [North-South civil war, partially financed by rising, FDI-sponsored oil revenue from 1999-2001, was] not matched by an increase in funding for southern development. In August 2000, Khartoum announced that it had allocated approximately US$3 million for development in the south. This is the equivalent of one per cent of military spending. When [Taban] Deng, [the former Sudanese Minister of State for Roads turned defector], resigned, he accused the government of investing its oil wealth in the army rather than in development projects for southern areas affected by oil: 'When I was governor I never received a single penny from the oil so I could build a school,' he said."

While Khartoum's revenue disproportionately funds its military, development programs in Sudan are largely financed by international assistance. For example, a donor conference hosted by Norway in April of 2005 generated pledges of US$1.9 billion for development assistance over the next three years. Annually, this pledge alone is 44% larger than Khartoum's 2004 social spending. Divestment will not limit the flow of this crucial development aid to the Sudanese people.

Even with a targeted divestment campaign and despite evidence that GOS revenue rarely gets funneled into important social/development projects, there is a small chance that divestment will have some impact on Sudanese citizens. However, the petitioners argue that any negative impact from divestment would be more than offset by the benefits of a change in regime behavior in response to economic pressure.

Won't divestment from Sudan trigger an onslaught of divestment requests to the UC concerning a whole range of social concerns?

Clearly, historical precedent has demonstrated UC's willingness to consider socially-conscious investing under certain circumstances. However, the UC currently faces a multitude of calls for divestment from a variety of offending targets, and we fully recognize that heeding every call is impractical, imprudent, and often downright controversial. We argue that the overwhelmingly and uncontroversially heinous nature of our concern, combined with validation of our concern by official, non-biased, and highly trustworthy sources, makes our call for divestment truly singular among divestment campaigns recently presented to the Board of Regents.

It should also be noted that this is the first time in history that a genocide has been declared while atrocities are still ongoing. This clearly makes a Sudanese divestment decision unique.

How do you know divestment will change the government of Sudan's behavior?

Divestment represents a leverage US citizens have against the Sudanese government. Divestment, on a large enough scale, will place substantial economic pressure on the Sudanese government to end the genocide. Sudan's genocidal military campaign against Darfurians relies heavily on foreign direct investment (FDI) from companies the UC invests in. If the UC divests from these companies, they will have an incentive to leave the country, taking away this investment. The companies will also have an incentive to pressure the Sudanese government to end the genocide. The government of Sudan has historically demonstrated substantial positive changes in its behavior due to this kind economic pressure. For examples of Sudan's response to past economic pressure, see section V of our proposal.

Why not pressure Sudan with government sanctions instead of divestment by US institutions?

In the 1990's, Sudan was placed on the list of countries supporting terrorism. To induce a change in Sudan's support of terrorism, the Clinton administration imposed economic sanctions. These sanctions were very effective, triggering a 180 degree turnabout in Sudanese behavior. However, because sanctions have not been removed, the US government doesn't have the ability to sanction Sudan further. As a result, the main economic tool of influence available to US citizens for changing Sudan's behavior is divestment; with a successful nationwide divestment campaign, we can effectively remove both US governmental and non-governmental money from Khartoum's hands.

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