MuseumDESCRIPTION:
Jason Miller is the national policy director for the Sudan Divestment Taskforce which is involved in nearly 100 divestment campaigns around the country, and he is also pursuing a dual MD/PHD degree at University of California, San Francisco. Jason discusses the various types of divestment campaigns the taskforce handles, the challenges and obstacles the group faces, and the impact of divestment on the fight to end genocide in Darfur.
TRANSCRIPT:
JERRY FOWLER: My guest today is Jason Miller. He is the national policy director for the Sudan Divestment Taskforce which is involved in nearly 100 divestment campaigns around the country. Jason is also pursuing a dual MD/PHD degree at University of California, San Francisco, and he joins us from San Francisco. Jason, welcome to the program.
JASON MILLER: Thank you; it is a pleasure to be here.
JERRY FOWLER: Jason, just briefly explain what is the goal of the Sudan Divestment Campaign?
JASON MILLER: The general goal is to exercise whatever pressure we can on the Sudanese government for them to change their calculus about the value of restoring security to the Darfur region. In our case, we feel that there is strong historical evidence to suggest that Sudan is very responsive to economic pressure, and as a result, the divestment campaign is one way to pull an economic lever on the Sudanese government and convince them that they have a buy-in to solving the Darfur crisis, otherwise they suffer the financial fall out of the divestment campaign.
JERRY FOWLER: Exactly how does the divestment campaign put pressure on the government of Sudan?
JASON MILLER: Because the United States, as you know, already has sanctions on Sudan dating back to the Clinton Administration on account of Sudan being a state-sponsor of terrorism. The United States government is in some ways sort of maxed-out on its economic pressure, nevertheless—
JERRY FOWLER: And the sanctions prevent any United States’ companies from doing business in Sudan?
JASON MILLER: That is correct. There are a few exceptions and exemptions, but for the most part, those are nominal exemptions, so the only way United States investors can be invested in Sudan is through the stock market and bonds, etcetera, invested in companies that are doing business in Sudan that operate abroad, and it turns out that the United States, through state pension funds and city pension funds and university endowment has trillions of dollars invested in securities, and some of those are invested in companies that are providing substantial benefit revenue, and in some cases even arms, to the Sudanese government. If these shareholders are able to engage the companies, they have a strong lever to try to change company behavior. If the companies are unresponsive to shareholder engagement, then we advocate that institutions here in the United States sell their stocks in those companies. As soon as they sell stocks, there is a decreased market for those stocks that depreciates shareholder price, and once shareholder price depreciates, the company pays attention, and then their choice is to either go to the Sudanese government and say, “Look, what you are doing is bad for business, so change your behavior,” or the company decides to pull out of the country because they cannot take the depreciation in their share price, in which case they remove that important source of revenue that the Sudanese government is largely funneling into the military.
JERRY FOWLER: Not to sound overly skeptical, but it is kind of a long line that you have drawn there from investors in the United States, to companies, to the companies’ share prices, to then the companies being willing to put pressure on Sudan, to then changing the calculus—as you say—of the Sudanese government.
JASON MILLER: I agree, and I think that that is one of the most valid and important criticisms of the divestment campaign, and actually, before I just answer that question, I want to emphasize that our group very much believes that economic investment is critical in Sudan, and so we are not advocating for divestment from any company operating in Sudan; we are only advocating for divestment from a very select few set of companies that have the most contributions to the Khartoum government, least substantially contribute to overall economic development in the country, and have no corporate governance policy regarding doing business in a genocidal country. With that clarification in mind, I think the best way to answer your “how far removed are we from applying pressure to Sudan?” is to say that this divestment movement has already actually created palpable changes, or at least, signs of success. In the case of Sudan, we know that they are paying attention because they have released press releases condemning the divestment movement, and on a conference call, members of our organization communicated with the Sudanese ambassador to the United States, and there were a variety of topics on the conference call, and yet the Sudanese ambassador continually came back to the issue of development, so there is a clear perception of threat by the Khartoum government for this divestment campaign, and of course, perception is a really critical part of changing Khartoum’s calculus.
JERRY FOWLER: What did he say about divestment? Give us a few more details about how this conversation unfolded.
JASON MILLER: Sure; I think he emphasized the need for a reinvestment in the country, which we actually agree with as well. Right now, the South has been devastated by a civil war and desperately needs roads, electricity, any sort of commerce in the South of Sudan. I think where we differed was we feel that we can allow those types of companies to operate and still target these very few companies that are really providing substantial revenue and cover to the Khartoum government. Not surprisingly, he being a representative of the Khartoum government felt that even those investments were important.
JERRY FOWLER: What are the key companies that you are targeting?
JASON MILLER: Most of these companies are oil and energy companies from critically China, India, Malaysia, Russia, and to some degree, France, and a few other countries, and these are the exact same countries that have also played an impeding role in international action on the Darfur issue. They are essentially protecting many of their commercial interests.
JERRY FOWLER: I guess, one thing that is a little difficult to understand is how the effects of investors in the United States could influence the decisions of say, an oil company in China who I imagine also is run by the government of China.
JASON MILLER: Right, so many of the oil companies, especially out of China and India, are so called parastatal which means that they are majority owned by the government, nevertheless, they do have minority shares available to be traded on public markets like the New York Stock Exchange, and they would not have issued any of those shares unless they needed the critical capital from issuing those shares, and so there still is leverage to be gained by United States investors in gauging those companies—and for the most part we expect them to be unresponsive—and then actually selling those shares which was cause the depreciation in share price and make those companies think a bit more about how they are doing their operations in Sudan.
JERRY FOWLER: How broad does the divestment effort have to be before it has an affect on the share price?
JASON MILLER: At this point, we do not have any evidence—actually, I should say that we have some nominal evidence that there has been a very modest affect on share price—but we estimate that certainly a majority of states in the United States would have to be on board before we would really see a dramatic change in share price, and I guess the optimist in me says, “Because we have this model of divestment on Governor Schwarzenegger’s desk here in California and fifteen other states ready to approach it next year, we are rapidly approaching that type of target within the next six months to a year.”
JERRY FOWLER: When you say a majority of states, do you mean the pension investments and state investments of state governments?
JASON MILLER: Correct; they hold somewhere between forty and fifty percent of all money in the stock market here in the United States.
JERRY FOWLER: I see. Tell me a little bit about the campaign in California. You mentioned you have a bill on Governor Schwarzenegger’s desk. What is the status of that?
JASON MILLER: That bill, AB-2941, passed out of both the California Assembly and Senate on an overwhelming and bipartisan basis after we went through multiple rounds of negotiations with the state’s pension funds, and it now sits on Governor Schwarzenegger’s desk. While we have met with Governor Schwarzenegger and sent him thousands of postcards and gone through the whole arguments on why the bill is necessary, and at the same time protects the state’s pension funds from any unintended consequences, we have no indication at this point about whether Governor Schwarzenegger will sign it. We do have some hints that there might be some pro-business lobbyist groups that are advocating against the bill, but those are unconfirmed so we do not know the exact source.
JERRY FOWLER: How many funds are at stake here? How much would be divested if this bill were signed by Governor Schwarzenegger?
JASON MILLER: California has the two largest pension funds in the country, the California Public Employment/Retirement System, where CalPERS has well over 200 billion dollars in assets, and the California State Teachers Retirement System (CalSTRS) has over 160 billion, so of that combined assets of about 360 or so billion, we estimate that hundreds of millions are invested in the offending companies that we are talking about. A very minor fraction—a miniscule fraction—of California’s portfolio, but a significant dollar amount when you talk about Sudanese government revenue.
JERRY FOWLER: Have you had direct contact with the companies themselves?
JASON MILLER: We have; in fact, I had forgotten to mention this as one of the palpable signs that the divestment movement has had an affect. We know, for example, one of the oil firms that has operated in Sudan, Totale, which is a French oil and petroleum firm, has actually contracted—because of shareholder engagement—has contracted with a non-profit that helps to evaluate the company’s business on the ground, how it can be integrated into local communities and be culturally sensitive, and what types of impact the operations might have on a larger scale, the kind of scale that Totale might not consider when it is thinking about its day to day operations. We know several other companies have decided to curtail certain contracts that they had in Sudan and instead focus more on humanitarian and development projects that they had in Sudan, on account of the divestment movement.
JERRY FOWLER: Do you think that they are really doing that, or is this kind of a PR move to try to stunt the growth of the divestment movement?
JASON MILLER: That is the million dollar question: is it window dressing or is it substantive? In the case of a few of these companies, in talking with the non-profits that have worked with these companies in the past, we are pretty convinced that they really are committed to understanding the operations and at least considering change. Now, whether they fully implement change, I suppose is another question, but we are convinced on some of these companies. Now, on the other hand, we know several other companies, and these are particularly Indian, Chinese and Malaysian companies, have no real interest in changing their behavior and, in fact, the attitude of many of the Indian, Malaysian and Chinese, and for that matter, Russian companies that are operating in Sudan is that politics is politics, business is business, and you do not really mix the two.
JERRY FOWLER: I would think that that is going to be an attitude that is very difficult to change.
JASON MILLER: Very difficult, so in that case, that is where the stick of divestment, rather than engagement comes into play. So our model, more precisely is, we do an expedited engagement, try to ask the company to change its behavior as a shareholder—not we, but the institutions we interact with—and then if they are unwilling to change the behavior, the economic stick that they suffer is the actual divestment of those shares.
JERRY FOWLER: I kind of jumped off the topic of your campaign and the states that are involved prematurely there. Can you talk about some of the other states where there is going to be legislation under consideration coming up?
JASON MILLER: We have bill sponsors and groups that have kind of rallied around our targeted divestment model in numerous states, and they are kind of in varying degrees of certainty, but they stand in red and blue states. They are states like Indiana and New York and Texas and North Carolina and Ohio and Michigan and Washington and the list kind of goes on, and there is no real unique pattern to it which I think is actually pretty heartening, that it spans red and blue states, it is not in the northeast only or on the west coast only; it is really quite spread across the whole country.
JERRY FOWLER: In addition to state governments, there have been efforts to get universities to divest as well. How does that figure into the campaign?
JASON MILLER: In fact, I guess like with a lot of things with the Darfur activism movement, things tended to start at the student level, and in this case, the divestment movement did start at the student level. In fact, the very first institution to decide to divest was Harvard, way back in, I believe, January of ’05, or right around the start of ’05. Universities have played a prominent part in the divestment campaign. First, because they decided to divest, although universities have less assets than state pension funds, it is still important symbolically, and then it was the students from those universities that decided, “What should we do next?” and they turned to their respective states; in fact, that is exactly what happened here in California. We first started this whole campaign with the University of California system which is the ten public schools that span the state of California, and we were successful in getting the whole UC system to divest its sixty-four billion in assets in March of 2006, and it was immediately following that with all of the press and notice that we got that the state bill for divestment started to gain momentum.
JERRY FOWLER: Is there much push back, whether from boards of trustees or the pension funds themselves against the very idea of divestment, that this week it is Darfur, next week it is going to be some other situation?
JASON MILLER: That is exactly the argument I heard time and again, and you are right. I think to be fair to pension fund managers and trustees, there are, I would say, at least two major concerns. The first is Darfur today, environment tomorrow, Burma the next day; and the second is, by law, every pension fund has to manage its assets in accordance with what is called prudent investor guidelines which means they have to maximize their return for the benefit of those that are receiving the fund, and so social considerations like Darfur can only come into play if they are incidental and do not have a material impact on financial returns. That is exactly what part of the crux of the problem was: How do we design a model that really pushes and encourages the pension funds to look at financially equivalent alternatives to these offending companies, but at the same time, gives the pension funds the out in case they really cannot find a financially equivalent alternative. As for the first argument about Darfur today, Burma tomorrow, environment the next day, I think we made a pretty solid case that is pretty hard to imagine a more egregious investment than one that is directly helping genocide, and so if anything, we are in some way worried that we raised the benchmark for divestment since previous divestment campaigns, popular divestment campaigns, included South Africa apartheid and tobacco, and certainly not to make a macaw comparison, but genocide certainly ranks up there as just as important as those other issues.
JERRY FOWLER: It certainly is a high bar, and not that often the United States government declares a situation to be genocide.
JASON MILLER: And I would argue with never has been the case.
JERRY FOWLER: Let us change gears a little bit. This sounds like it takes a lot of effort to get a divestment campaign up and running, and you are also studying to get both a MD and a PHD. How did you get involved in this, and how are you continuing to do both of these things at the same time?
JASON MILLER: In terms of, how did I get involved in this, I think the history is that I am Jewish, and I had family members that perished in the Holocaust, and so, like all American Jewry, I think there is an indelible imprint of the Holocaust in even our everyday lives and how we approach things and how we think about things, but it was not until I saw the Rwandan genocide when I was, I was probably in eighth grade or so during the Rwandan genocide—probably eighth or ninth grade—that I realized that this is truly something that keeps happening. I think that at the time that Rwanda happened, I was old enough to realize that this ugly monster of genocide could keep happening, but I did not think I was empowered enough to do anything yet, and I actually kind of feel a bit silly now because I see these terrific high school groups working on the Darfur genocide, and I feel quite embarrassed about my lack of action on Rwanda. Nevertheless, when I did my undergraduate degree, I was fascinated then with, how could genocide continue to rear its ugly head in the twentieth century when we had the rise of institutions like the United Nations and the Genocide Convention and a variety of other international laws and norms that were supposed to exactly prevent this from happening, and yet the twentieth century was arguably the bloodiest century in terms of state-sponsored murder in the history of the world. I did a lot of studying at Stanford, my undergraduate institution, and I came to the, I think reluctant, but based upon my investigations, realistic conclusion that many people—I would argue the majority of people—are capable of either committing heinous acts or being kind of passive participants in heinous acts if they are put in the wrong position at the wrong time, under the wrong circumstances. That really changed my attitude from one of, it is not enough to just be aware, you must be proactive against, and the phrase, upstanders to genocide as opposed to a bystander to genocide, and I know this sounds a bit like I am glorifying myself, but that was a really strong and firm commitment in my own heart, and the next time I saw a genocide happen, in Darfur, it did not matter what I was doing at the time, it really did not. I felt compelled to do something. Of course, my action started with the simple letter to my congressperson, and as I got increasingly frustrated, it kind of escalated into this eventual position that I am in right now with the divestment movement.
JERRY FOWLER: If people want to find out more about the divestment campaign, is there a place on the web that they can go?
JASON MILLER: We have created a centralized source at this point, and it is rather interactive; indeed to find out about the divestment campaign and our model of targeted divestment, and that is at www.sudandivestment.org.
JERRY FOWLER: We have been talking to Jason Miller. He is that National Policy Director for the Sudan Divestment Taskforce. Jason, thanks for being with us.
JASON MILLER: Sure, it has been a pleasure.
