WASHINGTON (BP)–By a 422-2 vote, the U.S. House of Representatives passed a bill June 13 to bar foreign oil companies that operate in Sudan from selling stock or other securities in the United States, according to a report by Newsroom-online.com.
Backers of the bill said it was aimed at five companies whose securities are traded in the United States: China National Petroleum Co., Lundin Oil Corp. of Sweden, Talisman Energy Corp. of Canada, Totalfina of France and Petroliam Nasional Berhad of Malaysia.
The legislation is not final because the Senate has not yet taken up a similar bill. If the Senate acts, the two versions would then have to be reconciled. The House passed similar legislation last October, but there was insufficient time before the legislative session ended for a conference committee of the two houses of Congress to resolve differences with the Senate version, passed 11 months earlier.
In its annual report issued in April, the U.S. Commission on International Religious Freedom (USCIRF) recommended “foreign companies investing in Sudan’s oil and gas development should be closed out of U.S. capital markets.” The panel, an independent body established by Congress, charged that “in the midst of an 18-year civil war, Sudan’s Islamic regime continues to inflict widespread human rights abuses, including the bombing of civilian targets.”
Some U.S. leaders, however, including former President Bill Clinton, have argued that capital market deterrents likely would not have the desired impact on affected companies due to the global nature of economic markets. Other countries would take up the slack in investment, they argue, and only the U.S. economy would be hurt. “The commission is aware of those arguments and did not lightly make this recommendation,” USCIRF spokesman Lawrence Goodrich told Newsroom-online. It was made only with regard to Sudan, he pointed out. “The situation in Sudan is so severe that the commission felt that some radical steps were needed to bring a halt to the fighting.”
Advisers to the USCIRF contend that U.S. capital markets sanctions likely will increase the cost of raising funds elsewhere and point to the success of private U.S. and Canadian campaigns to divest in companies operating in Sudan. Clinton barred American companies from doing business with Sudan in a 1997 executive order that remains in force.
Sudanese officials have been quoted in the media as declaring that the country’s new oil wealth will go toward building up the military. The war between the Islamic Khartoum regime and the mostly Christian and animist south has caused more than 2 million deaths, mostly from war-induced famine. Christians in the south charge that Khartoum is trying to spread Islam to the entire country by force.
Human rights activists claim that since 1998 Sudan has expelled massive numbers of civilians from areas in which it is developing oil reserves. Oil production, which brought the regime $500 million last year, is expected to double over the next two years, according to a February report released by the Center for Strategic and International Studies, a Washington-based think tank.
The Khartoum government, which has been engaged in talks with southern rebels for nearly four years, insists it is working toward peace.
In addition to its strictures on oil companies, the bill would require other companies to fully disclose their dealings with Sudan to the Securities and Exchange Commission (SEC). President George W. Bush’s administration opposes that requirement because of its “potential to damage U.S. and international capital markets and to undermine the independence and prerogative of the SEC.”