Activists push banks to help end Darfur woes

"For the crisis to end in Sudan, a whole lot of levers have to be pushed. This is potentially the greatest lever and it has to be tried," said Shelly Alpern, director of social research at Trillium Asset Management, a Boston manager of socially responsible funds.

Last August, Amnesty International USA, fund manager Calvert Group and the Genocide Intervention Network assembled a coalition of investors that submitted resolutions at Morgan Stanley, Merrill Lynch & Co Inc, money manager T. Rowe Price Group Inc and commercial banks Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co.

The coalition called on the six to adopt policies that would limit investments linked to countries, such as Sudan, where genocide or mass atrocities take place.

In the case of Darfur, the strategy is getting four foreign oil companies -- China National Petroleum Corp, Malaysia's Petronas, Oil & Natural Gas Corp Ltd of India and China's Sinopec Corp -- to pressure Sudan.

"We want these banks to make a public statement to the crisis in Sudan, use their connections with the oil companies and we look for an ongoing commitment to the issues," said Amy O'Meara of Amnesty International USA. "As the primary revenue generating agents for Sudan's government, (the oil companies) have a unique and powerful influence."

In recent weeks, resolutions were withdrawn at Merrill, Price and Morgan Stanley for making some requested changes.

It is the latest in a series of social and environmental campaigns by activists who use token stakes to urge Wall Street to support any number of causes, from fighting deforestation in emerging markets and limiting greenhouse gasses to funding more sustainable development.

Morgan Stanley provided one illustration for how concern for public image can slowly win the day.

The second-largest investment bank initially resisted making changes, but as the April 8 meeting approached, Morgan Stanley executives agreed to meet. It was not until the night before shareholders gathered to vote on the proposal that it vowed to issue a statement and adopt some changes.

During the meeting, Amnesty's O'Meara announced the proposal had been withdrawn and outlined Morgan's promise to make human rights a consideration when weighing business matters and investments, and to submit letters to the four oil companies expressing concern about Darfur.

The Morgan resolution received the support of 8 percent of shares in an informal vote. A Morgan Stanley spokeswoman declined to comment.

"That is a great step forward," Alpern said.

The campaign also scored some points at the other banks. Brokerage and investment bank Merrill Lynch in a written statement said it does not conduct business in Sudan, nor does it fund other companies' operations there.

"It is our firm's policy not to enter into business relationships with companies we believe profit from genocide," Merrill said. "We are deeply concerned by the devastation in Darfur."

Merrill was one of four financial groups that helped fund relief airlifts to the region over the past year.

JPMorgan, which holds its annual meeting on May 20, has met human rights advocates, although it has not made any public commitments.

"We have met with them and listened carefully to learn about their concerns and the issues. We are considering them carefully," a JPMorgan spokeswoman said.

T. Rowe Price, one of the largest U.S. mutual fund companies, has unloaded its 55 million Petrochina shares earlier this month and adopted a policy for analyzing risks and engaging with companies with business ties to Sudan.

Still Citigroup, which in February issued a statement on Sudan and human rights, did not promise to engage with the companies they invested in, O'Meara said.

At its annual meeting last week, Citi shareholders rejected a human rights proposal, which received 7 percent of shares voted. Wells Fargo, advocates added, have declined to discuss the proposal.

The range of responses shows how getting banks to weigh social issues when considering lending and advisory business remains a tough fight.

"I don't think these companies are in the habit of raising sensitive issues with clients," Trillium's Alpern said.

Editing by Andre Grenon