Warren Buffett, the “Sage of Omaha” and the third richest man in the world, is the CEO and founder of Berkshire Hathaway (owner of Geico, Dairy Queen and many other companies). He is known as an ethical investor, and he has recently pledged his fortune to the Gates Foundation, which is a major funder of world public health. I am a shareholder in Berkshire Hathaway, and I was appalled when I received Berkshire’s annual report and found that Berkshire owned 11 percent of the shares of PetroChina Corporation, a subsidiary of the China National Petroleum Company (CNPC) that provides revenue to the government of Sudan.
China is heavily invested in oil fields in Sudan. CNPC is the major corporation—both in terms of extraction and purchase—involved in oil in Sudan. According to the U.S. Department of Energy, 70 percent of the income for Sudan comes from oil revenue, primarily paid by Chinese corporations. This revenue is used by the Sudanese government to fund the slaughter in Darfur, a region in western Sudan where there has been a long-standing conflict between Arab herders and black African farmers over land. A rebel movement among the black farmers challenged the Arab-led government. The government responded by arming the Arab herders (called janjaweed) and encouraging their raids on black African villages, which has led to ethnic cleansing of the African farmers that is now considered the first genocide in the 21st century. It is estimated that over 200,000 have been murdered, 2.5 million are homeless, and 1,600 villages have been destroyed. The Sudanese government protects the janjaweed with bombing and air cover. China not only provides the Sudanese government with money and arms, but it also supports Sudan in the United Nations Security Council.
Presidential executive orders impose a trade embargo prohibiting most American businesses from operating in Sudan; however, Americans can invest in European and Asian companies that do business there. When CNPC tried to make a public offering of its shares in the United States, there was a large protest by Human Rights Watch and other activist groups because of the company’s involvement in Sudan. To overcome this, CNPC created an “independent” subsidiary, PetroChina. PetroChina claimed it only did business in China; thus, the shares of PetroChina were successfully offered in the United States. In fact, PetroChina is simply a capital surrogate for CNPC. They have overlapping Boards of Directors, cash flows freely between the two companies and in China they even share the same logo.
Appalled by the conflict between Buffett’s ethical reputation and his investment in PetroChina, a facilitator of genocide, my husband and I introduced a shareholder’s resolution for the annual meeting of stockholders stating that Berkshire Hathaway could not invest in any foreign corporation or subsidiary that engages in activities that would be prohibited for U.S. corporations. Buffett issued a statement on the Web advising shareholders to vote no on our resolution. He argued that PetroChina did not control its parent company, CNPC.
When the shareholders’ proxy information was mailed and Buffett’s defense of his PetroChina investment appeared on the Web, the press became aware of the story and called us incessantly. Since the annual meeting is known as “Woodstock for Capitalists” and usually attracts 27,000 shareholders who are treated to barbecues, sales of products from Buffett’s corporations and a six-hour session where they can ask him questions, it is a media circus. The shareholders revere him, so any personal attack on Buffett would undercut our mission. Thus, we consistently repeated to the press how much we admired Buffett and thought him an ethical man. We maintained that we only wanted to present the facts to him and appeal to his well-known moral sensibility. We did not veer from the “educate, don’t attack or confront” line of argument and kept stressing the urgency of the situation in Darfur in our discussions with the press in the weeks before the meeting.
We headed for Omaha, Nebraska, the site of the annual meeting, in May 2007. The six-hour question-and-answer session with Mr. Buffett was attended by 27,000 shareholders. We were amazed that 17,000 people remained for the business meeting where we were to present our resolution, since usually only 500 stay. The Save Darfur Coalition and the Sudan Divestment Task Force played an important role in creating awareness of our proposal by leafleting outside the meeting site on our challenge to Buffett. They also did an enormous amount of work putting up billboards and doing all the background work on the relationship between PetroChina and CNPC. Their backup support for our resolution and their publicity of Berkshire Hathaway’s investment in PetroChina were extraordinary.
As the proposers of the resolution, we were entitled to speak on its behalf. I began by thanking Buffet for allowing us to speak and then I explained that I had introduced the resolution because my family was personally affected by the Nazi genocide. The world was silenced when my grandparents were murdered, but genocide has since occurred in Rwanda, Bosnia, Cambodia and now Darfur. It was time to act. My husband, Jerry, introduced the resolution and spoke about the relationship between CNPC and PetroChina. We brought three other speakers with us: Jason Miller from the Sudan Divestment Task Force, an expert on Chinese investment in Sudan; a Darfuri who was personally affected by the genocide; and Bob Edgar, then head of the National Council of Churches, who cited ethical reasons for divestment. We only received 2.5 percent of the vote, due, in part, to the fact that most people had voted by mail prior to the meeting. Despite this, we each got a big round of applause, and many people afterwards told us that they had been unaware of the situation and were disturbed by the conflict between Buffett’s ethical reputation and his investment in a company that was helping to perpetuate genocide.
Although our proxy lost, we had a far larger impact than we anticipated. First, we had a chance to directly educate 17,000 people about the situation in Darfur. We also, in a small way, embarrassed Buffett. Over 700 articles mentioning our resolution appeared in presses around the world. Despite differences in points of view, most of them mentioned Buffett, Sudan and genocide in the same article. Although Buffett denies that he divested in response to our resolution, Berkshire Hathaway has recently sold all of its PetroChina stock. As The Wall Street Journal stated on October 12, 2007, “Even some longtime Berkshire watchers suspect the controversy over Darfur … had some impact on Buffet’s decision to sell.”
It seems that the odds of a few people making a difference are insurmountable, but it’s important to try. It is clear, moreover, that if no one makes an effort, change will not occur. As Elie Weisel stated in his 1986 Nobel Peace Prize acceptance speech, “We must take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented. Sometimes we must interfere.”
Judith Porter is professor emeritus and research professor of sociology. She is currently teaching “Sociology of AIDS” and advising “Sociology of AIDS Internship.” Her research focuses on AIDS risk behavior and service utilization among injection drug users.