Gates Foundation Concerned About Berkshire Hathaway's Investments in Sudan
Gates Foundation Concerned About Berkshire Hathaway's Investments in Sudan
In Darfur, where more than 200,000 people have perished because of the activities of government-sponsored militias, the killing has been supported in part by payments from companies helping the government of Sudan tap its vast reserves of oil. The firms include China's Sinopec Corp., Malaysia's Petronas, and Schlumberger, based in the Netherlands Antilles — whose investors include the Bill & Melinda Gates Foundation, the Los Angeles Times reports.
The foundation's most significant connection to the Sudanese oil industry, however, is through Berkshire Hathaway, which holds a $3.3 billion stake in PetroChina Co., a subsidiary of the China National Petroleum Corp., the biggest player in Sudanese oil. Warren E. Buffett, a trustee of the Gates Foundation, is chairman of Berkshire Hathaway; Bill Gates is a director.
Since April 2004, the Gates Foundation has been funding CARE, Save the Children, the International Rescue Committee, and other groups operating in the El Flasher camp, which houses refugees who have been pushed from their homes by janjaweed militias. According to Monica Harrington, a senior policy officer with the foundation, "Bill and Melinda have initiated a process to assess the asset trust investments in Sudan." While Harrington did not address the seeming conflict with the foundation's mission caused by Berkshire's holdings in PetroChina, she did note that Buffett serves as a trustee for the foundation's grant programs and has no involvement in its investment decisions, "including decisions that might be made about the disposition of Berkshire Hathaway stock."
In a rare open letter to his shareholders in February, Buffett said the firm would retain its holdings in PetroChina, arguing that it was PetroChina's parent company, CNPC, that had oil operations in Sudan, and that the subsidiary bore no responsibility for the actions of its parent. However, Buffet allowed a shareholder resolution challenging the PetroChina holdings to be placed on the agenda for the firm's annual meeting earlier this month.
While Berkshire's positions in Sudan and in other controversial industries would appear to undermine the foundation's efforts to improve human welfare and global public health, Buffett retains a rare authority that could shift the debate on some of those issues, including the violence in Darfur. "Buffett has a tremendous power and influence," said Timothy Smith, president of the Social Investment Forum, an association of more than six hundred financial institutions, research companies, and foundations. "He has the platform of the Gates Foundation and its incredibly important mission to speak from. His voice would be heeded."
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