Human rights groups gain 'disclosure' victory on Wall Street
Religious and human rights groups seeking to halt the world's most deadly war in Sudan have made their first inroads on Wall Street, in a campaign to use capital markets to curb rights abuses abroad.
After months of pressure, the Securities and Exchange Commission has agreed to increase scrutiny of foreign firms listed on US markets that do business in countries under US sanctions. The SEC said
May 8 that it would demand greater disclosure from firms about their ventures and require them to file electronically so that the information would be readily available to investors.
This marks the first time the SEC has officially expressed concern for "issues of national security, human rights, and religious freedom" as a basis for examining firms' applications.
"This is a giant step forward, because they are now seeing religious freedom and human rights issues as a risk factor," says Nina Shea, director of Freedom House's Center for Religious Freedom. "Now there can be effective consumer action because information will be available."
For more than a year, rights activists and their allies in Congress and the national security community have tried to restrict market access of firms participating in new Sudanese oil ventures. The oil ventures, they say, have enabled Khartoum to greatly boost military expenditures in a genocidal war against groups in the country's southern regions. Talisman Energy of Canada and Beijing's huge oil company, PetroChina, have been the principal targets.
While the Clinton administration and the SEC rejected limiting access to US financial markets, saying it would harm the free flow of capital and possibly cause a backlash, both foreign companies have been affected by the campaign.
Major pension funds pulled monies out of Talisman, depressing its share price, and PetroChina had to scale back considerably its offering on the New York Stock Exchange.
Now, the SEC has taken limited action, announced in a letter to US Rep. Frank Wolf (R) of Virginia, an advocate on Sudan and religious freedom issues. The action will also affect firms doing business in other countries targeted by US sanctions, such as Iraq, Iran, Libya, North Korea, Cuba, and Burma.
"This acknowledges the centrality of the overall human rights situation in a particular place. It is going to open a whole new world of divestment campaigns," predicts Ms. Shea, also a member of the US Commission on International Religious Freedom, which has joined nongovernmental groups in pressing for capital-market sanctions.
Another key ally is the Casey Institute at the Center for Security Policy, which promotes strengthening disclosure requirements so US investors can avoid contributing unwittingly to foreign entities that directly or indirectly sponsor terrorism, arms smuggling, money laundering, hostile militaries, or flagrant rights abuses.
Casey Institute chairman Roger Robinson said after the SEC action that an important question will be "whether public pension and private mutual funds plan to incorporate these new risk factors into their due diligence assessments of foreign entities."
(c) Copyright 2001. The Christian Science Monitor