|
 t looks as if George
W. Bush is ready to give the odious government of Sudan the comeuppance
it so richly deserves.
In sharp contrast with his predecessor, President Bush and others
in his administration have begun signaling a determination to oppose
a regime in Khartoum responsible for genocide, slave trading, terrorism,
and the proliferation of weapons of mass destruction.
The question is: As President Bush embarks on this strategically
desirable and morally imperative initiative, will he make use of
what may be the single most effective tool available to him to undermine
the Sudanese government and prevent its further predations? Or will
he be dissuaded from limiting the access to the U.S. capital markets
to foreign energy firms that are currently providing financial life
support to what is, arguably, the quintessential rogue-state regime?
A new report concerning Sudan issued by the highly respected, congressionally
chartered United States Commission on International Religious Freedom
(USCIRF) underscores just how central foreign investment is to Khartoum's
ability to perpetrate crimes against its own people and others:
The
connection between oil development (and oil revenues) and the Sudanese
government's human rights abuses has become increasingly apparent
over the last year. First, the discovery and the drilling of oil
reserves in the Upper Nile province has led to a 'scorched earth'
policy by the government to remove civilian populations from areas
surrounding oil installations. Second, the government reportedly
uses the oil facilities themselves (e.g., airstrips and roads) in
staging military operations. Third, according to the State Department,
oil revenues have allowed the government to increase its investment
in military hardware.
Despite growing international awareness of this connection, oil
development has attracted significant foreign investment in Sudan.
U.S. economic sanctions prohibit U.S. companies from investing
or doing business in Sudan. Current sanctions, however, do not
prohibit foreign companies from doing so, and the U.S. Department
of Energy reports that the [virtually all the big multinational
energy companies] are active in Sudan's oil and gas industry.
In light of this appalling situation, the USCIRF vainly recommended
to President Clinton last year that "companies active in Sudan's
petroleum industry not be allowed further access to U.S. capital
markets and that American investors be informed if the proceeds
of their investments in foreign corporations will help finance that
industry." In doing so, the Commission built upon the path-breaking
work by Roger W. Robinson Jr., chairman of the Center for Security
Policy's William J. Casey Institute, who has long warned about the
growing tendency of "global bad actors" to exploit the lack of transparency
and discipline in the American debt and equity markets. In its most
recent analysis prepared for the benefit, among others, of a new
administration committed — as President Bush put it at the
christening of the U.S.S. Ronald Reagan on March 4 —
to "stand by those…moving toward freedom" and "stand up to
those…who deny freedom and threaten [their] neighbors or our
vital interests," the USCIRF declared:
Given
the close connection between development of Sudan's oil resources
(which would be minimal without foreign investment) and the Sudanese
government's human rights abuses, the Commission continues to believe
that the U.S. should not grant access to its capital markets to
any foreign company involved in Sudan's oil industry, and in general
should require greater disclosure by all companies doing business
in Sudan so that U.S. investors are apprized of the nature and extent
of that business.
Under the leadership of Commission Chairman Elliott Abrams, its
members have taken note of "the current debate both internationally
and in the U.S. on the effectiveness of economic sanctions generally."
In their latest report, they ruefully acknowledge that "Unilateral
economic sanctions by the U.S. have not prevented foreign investment
in Sudan's oil business, which has, in turn, provided the Sudanese
government with significant financial support for its egregious
human rights and humanitarian abuses."
The USCIRF nonetheless observed that "It has not been established
that U.S. sanctions have been completely ineffective. They can continue,
for example, to slow the rate of increase of foreign investment
in Sudan and oil revenues to the Sudanese government. In the absence
of multilateral economic sanctions, however, preventing access to
U.S. capital markets by foreign companies engaged in the oil-development
business in Sudan targets a specific weakness in the current U.S.
sanctions regime."
The Commission concludes by recommending that "Foreign corporations
doing business with Sudan's petroleum industry be prohibited from
issuing or listing [their] securities on U.S. capital markets….
Expanding U.S. sanctions in the area of capital markets' access
specifically targets what is likely the most significant resource
that the Sudanese government has to prosecute the war."
President Bush appears poised to do the right thing on Sudan. We
can only hope that he will maximize the effectiveness of his initiative
by ensuring that U.S. investors are not unwittingly underwriting
and enabling those who are doing the wrong thing there.
|
