Social Investment Principles - Sudan Divestment
Parnassus Investments does not invest in companies supporting the current government of Sudan.
There is clear evidence that the Sudanese government, which seized power by military coup in 1989, is committing genocide against the people of Sudan's Darfur region. The carnage includes over 400,000 killed and 2.5 million displaced, with 50% of Darfur's population now reliant on humanitarian aid. Companies, primarily in the oil, gas, construction and telecommunication industries, provide the government of Sudan with substantial financial resources and infrastructure to continue the sponsorship of genocide.
Darfur is located in western Sudan and borders on the neighboring countries of Chad, Libya and the Central African Republic. Relations between Arab and non-Arab inhabitants have been tense during much of Darfur's history. Inhabitants have differing economic needs: the non-Arab peoples are primarily sedentary farmers, while the local Arabs are primarily nomadic herdsmen, bringing them into conflict over access to land and water. Long-held ethnic antagonisms were exacerbated in clashes between black rebel groups from Darfur and the government-allied military. To avoid further clamor for autonomy and challenges to centralized power, the Sudanese government, working with nomadic Arab militias known as the Janjaweed, began sponsoring wholesale ethnic cleansing of black Darfurians.
Since the first oil was pumped in Sudan in 1999, the government has been using oil revenues to build a domestic arms industry. More than half of the government's revenues are derived from oil. The military is heavily dependent on direct foreign investment and revenues from extractive industries, and the government relies on the military to keep control of its populace. Because of this interdependence between foreign investment, military stability and political alliance, the government of Sudan has previously shown a willingness to change policies in response to external economic pressure rather than jeopardize oil revenues.
American companies are already barred from doing business in Sudan. Economic sanctions, aimed at reducing Sudanese-sponsored terrorism, were already in full effect before the Darfur genocide started, therefore further economic pressure to stop the Darfur genocide can only come from wide-scale divestment by investors. Divestment will do minimal harm to ordinary Sudanese, because the economy outside of Khartoum is largely based on subsistence agriculture, and the current government spends little revenue on social programs.
Parnassus believes strongly in the ethical responsibilities of institutional investors, in the leverage of economic sanctions and divestment pressure, and that divestment is warranted in the case of genocide.