Rolls-Royce Pulls Away From Sudan

For groups hoping to stop the violence in Darfur with economic pressure, Rolls-Royce's announcement that it was withdrawing from Sudan was a milestone.

Rolls-Royce PLC was high up on a hit list drawn up by activists who believe that foreign money is fueling a crisis that has killed more than 200,000 people and driven 2.5 million from their homes. The company, which supplies diesel engines to the oil and gas industry in Sudan, announced last month it was starting a gradual pullout.

Armed with the kind of tactics that helped end apartheid in South Africa a generation ago, the Sudan divestment campaigners believe they will succeed where politicians have failed. It is part of a growing movement to bring citizen pressure to bear that saw protests around the world on Sunday.

The campaign, focusing on the lucrative oil industry, is pressuring certain companies to leave Sudan, where the government is accused of arming militias known as janjaweed who are blamed for widespread rapes and killings of Darfur civilians. Campaigners also are encouraging investors across the globe, from banks to retired teachers with pension funds invested in companies doing business in Sudan — to take their business elsewhere.

In the U.S., officials with the Save Darfur Coalition unveiled Tuesday the Divest for Darfur campaign, urging Fidelity Investments and Berkshire Hathaway Corp., based in Omaha, Neb., to cut off their relationships with PetroChina Co., China's No. 1 oil producer. PetroChina is known to be a major investor in government-owned oil exploration in Sudan.

Anoushka Marashlian of Global Insight, an independent market analysis firm, said Rolls-Royce's decision shows that companies are worried about the negative publicity of doing business in Sudan.

"I think at a private level (Sudanese government officials) are worried this could produce a ripple effect and deter others from Sudan," she said. "It doesn't necessarily mean they are going to amend their conduct."

The U.S.-based Sudan Divestment Task Force started its campaign in 2005. The idea has come more recently to Europe. The new global edge, activists say, has helped give it powerful momentum.

"It is four years since the beginning of the Darfur crisis," says Nick Donovan, head of policy and research at the U.K.-based Aegis Trust, an independent organization that campaigns against genocide. But the international community's approach of peacekeeping and prosecutions in the International Criminal Court has failed to stop the violence, he said.

"The government of Khartoum has never felt under sufficient pressure," Donovan said.

During the anti-apartheid movement in South Africa, the African National Congress and other campaigners called for an international boycott of South African products as a form of protest. Donovan said campaigners want something similar for Sudan, but also want to be careful not to hurt ordinary Sudanese.

Instead of a broad boycott, the Sudan Divestment Task Force has drawn up a list of around 50 companies to pressure to withdraw from Sudan. Most are in the oil, energy and construction sectors.

According to Donovan, between 40 percent to 60 percent of Sudanese government revenue comes from oil.

From 1999 to 2005, the government's oil revenue rose from $61.1 million to $2.3 billion, according to the Aegis Trust. In the same period, the Sudanese government's military expenditure rose from $248 million to $452 million, according to figures from the International Institute for Strategic Studies in London.

Rolls-Royce was one of the "top dozen" targets of the divestment campaign. The British company has not publicly acknowledged that the campaign spurred it to withdraw, but cited "international humanitarian concerns" in its decision.

"We just felt that this was the time to review the position and that prompted the decision we made," said Martin Brodie, a company spokesman.

French oil services company Schlumberger Ltd., another on the activists' hit list, was discussing the nature of its involvement in Sudan with the Sudan Divestment Task Force, according to Schlumberger spokesman Stephen Whittaker.

Maria Hamilton, spokeswoman for Lundin Petroleum AB, a Swedish company on the list that is involved in exploratory drilling in Sudan, argued that oil revenues were helping to rebuild the country. She noted that war-battered southern Sudan, just emerging from its own war with Khartoum, depended on oil revenue for reconstruction.

Helped along by the involvement of celebrity actors George Clooney and Mia Farrow, and links between evangelical churches in the United States and southern Sudan, to date, 10 U.S. states and more than 40 universities have agreed to divest their funds from Sudan, according to Adam Sterling, Task Force director.

Sudan Divestment U.K. started in November 2006 and since then campaigns have been initiated in Australia, South Africa and Italy, and are being developed in Brazil, France, Germany and Malaysia.

"There is an increasing awareness on the part of institutional investors of what is going on which comes from investors in the U.S. approaching investors in the UK," said Ebba Schmidt, spokeswoman for the U.K. Local Authority Pension Fund Forum.

Smuts Ngonyama, a spokesman for South Africa's ANC, said divestment was a powerful weapon against apartheid, but could not say whether it would work in Darfur.

"Divestment is an important tool in any struggle to put pressure," he said. "But it is applied when all other means have been exhausted."