Is Fidelity Investing in Darfur Genocide?

On the news last night I saw this commercial which criticizes Fidelity for making investments that indirectly fuel the genocide in Darfur. According to those that created the commercial, the ubiquitous SaveDarfur.org and Get Fidelity Out of Sudan, Fidelity invests in two Chinese oil companies that do business in the Sudan -- PetroChina and Sinopec. Financial details on these investments ($1.3 Billion in stock), as well as other companies' investments, can be found at Get Fidelity Out of Sudan's website.

While I had vaguely heard about the rally here in Manhattan last month, I didn't realize it was tied to Fidelity. Nor did I know that Harvard stopped investing with PetroChina two years ago for this reason. Warren Buffett's Berkshire Hathaway is also being pressured to divest from PetroChina ($2.8 Billion according to Get Fidelity Out of Sudan). It is amazing what you don't see on the news -- and then catch during the commercials. I have investments with Fidelity and I am considering ending them in light of this information.

Do you think investment decisions should be motivated by political and moral issues? And should such socially-minded investing (or divesting in Harvard's case) be considered social capitalism?

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6 Comments

  • Tom Franks

    I am delighted to see the previous three comments that agree with my belief that the moral decision should precede where we put our money. I've encountered many people who "don't give a damn" about this whole issue.

    Slavery was once a very profitable, accepted business activity until some moral men convinced the populace, lawmakers and businessmen otherwise. (I am thinking of the story of William Wilberforce in the movie "Amazing Grace".)

    My basic belief about morality in investing is related to my religious belief that our possessions are not truly our own. Instead, all we have is "on loan" from God. Our job is to manage our assets well, in line with the high standards of our Creator. We will be judged on how well we managed our Master's property.

    Tom Franks
    President & Founder
    MoralInvestors.com

  • CCT

    I take precisely the contradictory view.

    Politically, I firmly believe that a solution to Darfur can only come through economic development that eventually leads to better governance. I believe in the positive, revolutionary powers of wealth in the hands of the Sudanese.

    Practically, I believe pulling out investment will do little to improve governance. There are numerous African nations without oil resources and subsequent international oil investment that are equally violent and mismanaged.

    Morally, while I agree that financial results should be placed subservient to morality issues, I believe the "morals" and intelligence espoused by those behind this campaign are highly suspect. Sudan is not Apartheid South Africa. Sudan is more akin to Haiti, a country which the United States militarily intervened in recent decades... and yet in which poverty and death remain pervasive. Sudan deserves economic development paired with social stability, not one at the cost of the other.

    Media coverage today states that Fidelity has recently significantly downsized its holdings in PetroChina... (but PetroChina remains 10% up for the year.) I currently have just under $1m in Fidelity brokerage accounts and mutual funds. Fidelity has refused to confirm whether its actions were motivated by this campaign. I for one plan to vote with my dollars, and divest from Fidelity if they're indeed found to be supportive of this campaign.

  • STB

    Someone quite famous once said, "You cannot serve God and Money." Whether one views this issue from a religious or a moral standpoint, the bottom line is that one's morals must guide one's actions. That includes one's investment decisions. Furthermore, democracy is not just the availability of voting; we support democracy everywhere by voting with our feet. And our $$.

  • Dennis

    We need to have a public discussion about investment and responsibility. The degree that we invest in hurtful agency is the degree that we know we are hurtful. And eventually, sooner or later, we hurt ourselves and our loved ones. The discussion should be about what responsibility means and what is hurtful. There are many more shades of gray than there is black or white. Shifting more toward loving kindness and generosity of spirit yields an immediate reward in how we feel about ourselves.
    After all, what is the point of making money if not to use it to be happy. Happiness can not exist where its root is the misery of others. Lonliness and separation are the consequences of that kind of investment.

  • aaron

    thanks for the info. i just sold all of my Fidelity Contrafund holdings. This was my largest mutual fund holding. And yes, morals and values must guide even our money!

  • Bob McInnis

    I not only believe that we should be making personal investment decisions based on financial gain and social/environmental implications. When investors expect huge dividends and an annual ROI of 15% is seen as inadequate corporations are being pushed to accept the primacy of the shareholder as their imperative. What if the expression " As you sow, so shall you reap" took on a new meaning? What if my investment in Corporation CCC was providing me with 25% return because of immoral, unethical, illegal or environmentally damaging practices? Every year that I accept the gain, I should be held responsible for the practices, to an equal proportion. I know there is a limited liability argument but if we are just being shielded from our responsibility ( while raking in huge benefits) - this no longer seems reasonable.