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It has been more than a year since the Washington State Investment Board (WSIB) made its first public declaration that public pension funds should not be used to promote
violence and terrorism in countries that have been designated as terrorist-sponsoring nations.
In April 2007 the WSIB adopted a Sudan resolution memorializing its commitment to ensure that public funds are not being used to facilitate violence and genocide in the region of Darfur. In
March 2008 the Board adopted a similar resolution as to how it will address investments in international or non-U.S. companies doing business in Iran.
But it has been almost three years since the WSIB first began its efforts to limit its exposure to companies doing business in Sudan. Since its initial inquiry in August 2005, the
WSIB had been asking fund managers on a semi-annual basis to review the WSIB's public equity portfolio and report on any holdings with companies identified as having business ties in Sudan.
In February 2008 the WSIB began making similar inquiries of its fixed income portfolio for companies with business ties to Iran.
Staff has used these opportunities to encourage fund managers to look for comparable alternatives to investments with companies operating in Sudan. Since these efforts began, one fund
manager sold it holdings in Petrochina, a Chinese oil company, based largely on the concerns of institutional investors and ongoing negative publicity surrounding the company's ties
to the Sudanese government. For much the same reasons, WSIB staff for the internally managed fixed income portfolio sold bonds issued by Petronas, a Malaysian oil company.
WSIB staff works closely with members of the Sudan Divestment Task Force (SDTF) and the American Israel Public Affairs Committee (AIPAC) to coordinate its engagement activities with
companies operating in Sudan and Iran. The WSIB uses the SDTF's list of "highest offender" companies to check its portfolio for companies doing business in Sudan. WSIB staff also relies on
AIPAC to identify companies operating in Iran's oil and natural gas sector.
The Board has taken a position that it will oppose any proposals that would impose mandates or restrictions on the Board's investment and independent decision-making authority. As an
alternative to divestment, WSIB staff has repeatedly expressed a willingness to work cooperatively with groups or individuals concerned about the political or social nature of the WSIB's investments.
It is the Board's continuing belief, demonstrated by the WSIB staff's good-faith efforts, that constructive engagement, rather than divestment, is a more realistic and meaningful way to exert
pressure on companies operating in what have been designated as terrorist-sponsoring nations. |
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