Unocal Investment Draws Ire

While Harvard announced last week that it will divest from PetroChina, the University has maintained investments in other companies that have drawn fire from activists for alleged ties to human-rights abuses, including oil and gas company Unocal Corp.

The firm has been criticized in the past for its connections to the Burmese military, which provided security for a pipeline project there in the mid-1990s.

The army has been accused of egregious violations of human rights during the construction of the pipeline.

On campus, the Burma Action Movement (BAM) released a statement yesterday calling upon the University to divest from Unocal.

Harvard has held Unocal shares at least since March 31, 1999, when the University reported owning 141,616 shares in the company, valued at over $5 million at the time. Online Securities and Exchange Commission (SEC) records for Harvard do not extend past this time.

At the end of 2004, the University owned 37,974 shares of Unocal, according to filings with the SEC. If the University holds the same stake today, its value would exceed $2.1 million based on its share price at the close of trading yesterday.

“We would like to hope that a university leading human-rights initiatives and teaching its students to become responsible global citizens would divest from companies complicit in crimes against humanity,” read a statement provided by group President Ohnmar Khin ’07.

The group charged that the proceeds of Unocal’s pipeline project “fuel a brutal military dictatorship that has committed systematic rape, ethnic cleansing, and imprisonment of over a thousand political prisoners.”

BAM said it wants to help the University prevent what it called “hypocritical and unethical investment practices that threaten to taint Harvard’s reputation.”

A University spokesman said that Harvard does not comment on its investments.

LOOKING BACK

In 1996, a consortium began work on a natural gas pipeline in Burma, called Myanmar by the military junta that took control in 1988 and disregarded the results of a subsequent democratic election.

A Unocal subsidiary was one of four investors in the pipeline project.

Many activists have said that the Burmese military­, which provided security for the project, committed human rights abuses—including forced labor, rape, torture, murder, and forced relocation­—against peasants in the pipeline area.

In 1996, human rights group EarthRights International brought Unocal to federal court in Los Angeles on behalf of Burmese villagers suffering from the alleged violations during pipeline construction, which ended in 1998. The suit, Doe v. Unocal, was filed under the Alien Tort Claims Act, a 1789 law that allows aliens to sue in U.S. courts for violations of international law. The group pursued a separate suit in California state court.

Each party recently announced a settlement of both suits. While the terms were not disclosed, EarthRights said Unocal will compensate the plaintiff villagers and pay to help them establish improvement programs in the region.

“Unocal has never condoned, encouraged or participated in human rights violations in any project,” Unocal said in a statement posted on its website. The company also stated that all workers on the pipeline project were voluntarily employed and compensated for their work and that no villages were relocated. On April 4, two weeks after Unocal announced the settlement, ChevronTexaco Corp.—the second-largest American oil company after ExxonMobil—revealed its plans to purchase Unocal for about $16.8 billion.

Some analysts expect ChevronTexaco will sell Unocal’s Burmese assets to avoid drawing calls for divestment, according to Reuters News Service.

ChevronTexaco has drawn criticism from several activist groups for its own actions in the developing world. EarthRights International is suing the company for alleged human-rights violations in Nigeria though the firm denies responsibility.

At Harvard, BAM has also questioned the University’s investment in ChevronTexaco. At the end of 2004, Harvard owned 305,689 shares of the oil conglomerate’s stock, according to SEC filings.

—Staff writer Nicholas M. Ciarelli can be reached at ciarelli@fas.harvard.edu.

—Staff writer Daniel J. T. Schuker can be reached at dschuker@fas.harvard.edu.