The Corner

Energy & Environment

Fossil Fuel Divestment versus Institutional Neutrality: A North Carolina Test Case

Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas, August 22, 2018. (Nick Oxford/Reuters)

An important test of “institutional neutrality” — a pillar of campus free speech — is now playing out in North Carolina, where the University of North Carolina Asheville (UNCA) recently chose to divest a portion of its endowment from companies selling “fossil fuels” (coal, oil, and natural gas).

Institutional neutrality means that universities should avoid taking official political stands at the institutional level, such as divestment from fossil fuels, since such actions tend to pressure faculty and students holding contrary views into silence. This is particularly true for public universities such as UNCA, for they belong to every citizen of the state.

What makes the UNCA test case especially important is that two years ago North Carolina passed HB 527, one of the first comprehensive campus free-speech laws in the country. HB 527 not only affirms institutional neutrality as a foundational principle of campus free speech at UNC schools, it mandates that an annual report by a committee of the UNC Board of Governors (which oversees the entire state university system) weigh in on any “difficulties, controversies, or successes in maintaining a posture of administrative and institutional neutrality with regard to political or social issues.”

The question now is how the annual report, due in September, will handle this decision by a public university to throw in its lot with the fossil-fuel-divestment movement. More broadly, the question is whether the UNC Board of Governors will act to halt and reverse this clear violation of institutional neutrality by UNC Asheville. Students and administrators at UNCA intend their move to pressure the entire UNC system to divest. That means the UNC Board of Governors’ response to UNCA’s divestment bandwagon will have an enormous impact on the survival of institutional neutrality at every public campus in the state.

Students and faculty at public universities have every right to take whatever stand they like on issues like fossil-fuel divestment, climate change, and the Green New Deal. It is precisely the neutrality of public universities at the official institutional level that supports and guarantees the ability of individual faculty and students to freely speak their minds on these issues. Public universities shouldn’t have an official political line. We wouldn’t tolerate a public university endorsing Bernie Sanders, Kamala Harris, or Donald Trump for president. Nor should a public university throw its official institutional weight behind a thoroughly political movement whose aims are the subject of active, widespread, and unresolved public debate, particularly when state law cites the principle of institutional neutrality as an essential component of campus free speech.

True, UNC Asheville is known to lean heavily to the left, but that does not matter. After all, there are conservative students there as well; there is no political litmus test required and UNCA must remain open to all points of view. An institutional decision to divest from fossil fuels is like a neon sign flashing: “Conservatives need not apply.” Divestment purports to settle a political argument that students ought to be having with each other.

Determining whether a particular policy stand violates institutional neutrality always entails a degree of judgement. HB527 doesn’t ban institutional policy stands outright, because complete neutrality is impossible. Universities have to be able to advocate for a tuition increase, for example. That’s why North Carolina’s campus free speech law leaves it up to the system’s Board of Governors to weigh in on potential violations of neutrality. Nonetheless, it’s tough to see how a state that has enshrined the principle of institutional neutrality in law can fail to condemn fossil fuel divestment by a public university.

HB 527 begins by citing the University of Chicago’s famous 1967 Kalven Report as the classic articulation of the neutrality principle. While the Kalven Report acknowledges that there may be rare exceptions, it establishes a “heavy presumption against the university taking collective action or expressing opinions on the political and social issues of the day.” Such a stand, the report says, comes “at the price of censuring any minority who do not agree with the view adopted.” The Kalven Report emphasizes that the university “is not a lobby,” but instead must “maintain an independence from political fashions, passions, and pressures.” And universities do this precisely because they are obligated “to provide a forum for the most searching and candid discussion of political issues.” In other words, neutrality at the official institutional level encourages and makes possible free debate by members of the campus community. Or, as the Kalven Report puts it, “the instrument of dissent and criticism” is not the university but “the individual faculty member or the individual student.”

In 2015, President Robert Zimmer of the University of Chicago, renowned for his support of campus free speech, invoked the Kalven Report to explain why his school would not divest from fossil fuels. When student advocates of divestment pointed out that even the Kalven Report allows for exceptions in certain circumstances, Zimmer said fossil fuel divestment was not such a case.

Harvard President Drew Gilpin Faust effectively made the same point as Zimmer and the Kalven Report when she rejected fossil fuel divestment in 2013:

We should … be very wary of steps intended to instrumentalize our endowment in ways that would appear to position the University as a political actor rather than an academic institution. Conceiving of the endowment not as an economic resource, but as a tool to inject the University into the political process or as a lever to exert economic pressure for social purposes, can entail serious risks to the independence of the academic enterprise. The endowment is a resource, not an instrument to impel social or political change.

UNC Asheville, in contrast, touts its decision to divest from fossil fuels as a “groundbreaking” move designed to lend “momentum” to a “movement” that it hopes will sweep the entire UNC system. UNCA Chancellor Nancy J. Cable called the decision “a defining moment” for the university. That’s the problem. Fossil-fuel divestment sends out a message that identifies the university on the official institutional level with a political movement that excludes — and is even directly at odds with — roughly half the taxpayers and potential students in North Carolina.

UNC Asheville is open about the fact that its decision was a direct response to student pressure for divestment. And the political nature of the UNCA student fossil fuel divestment movement is evident. An opinion piece by leaders of UNCA Divest three months before the school’s final divestment decision, for example, positioned divestment as a repudiation of President Trump. Meanwhile, the UNCA school paper reports that many conservatives “feel like outcasts on campus.” How can UNC Asheville’s divestment decision fail to intensify and confirm that feeling, further chilling conservative speech? If anything, the school ought to be making of point of welcoming a wide range of student views on political issues.

Has UNC Asheville even thought about how its divestment decision might endanger free speech by creating an official university ideological line? Has it contemplated its decision in light of the new state law? Is the very concept of institutional neutrality and its importance for free speech even on the UNCA administration’s radar? Apparently not. In an excellent account of the UNCA neutrality controversy, Jay Schalin of North Carolina’s James G. Martin Center for Academic Renewal reports that when asked whether divestment was at odds with the principle of institutional neutrality, UNCA issued a bland statement that failed even to address the question. It’s evident that UNC Asheville’s decision to divest from fossil fuels was taken without any regard for the neutrality issue in general, or for the new state law in particular.

At this point, it’s tough to see how the forthcoming annual report mandated by HB 527 can fail to condemn UNC Asheville’s decision to divest from fossil fuels. The committee of the UNC Board of Governors charged with issuing the report is legally obligated to address controversies over institutional neutrality, and this is certainly such a controversy. On the face of it, fossil fuel divestment violates the principles of neutrality set forth in the University of Chicago’s Kalven Report, which is cited as authoritative by the new law. After all, the University of Chicago itself currently cites the Kalven Report to explain why it won’t divest from fossil fuels, and Harvard has made effectively the same argument. How much more is it vital for a public university to uphold institutional neutrality, given that the UNC system serves citizens in a state where the full range of American political views is robustly represented? Why should the taxpayers of North Carolina support institutions that turn themselves into political actors? It’s also perfectly clear that UNCA’s divestment decision was taken without any serious regard to the neutrality issue, much less the new law. In short, to allow UNC Asheville’s divestment decision to pass without condemnation in the annual oversight report would be to violate the fundamental intent of HB 527.

The more serious question is whether UNC’s Board of Governors should go further than mere condemnation.  Should and could the UNC Board of Governors actually reverse UNC Ashville’s decision to divest from fossil fuels? While the matter bears further investigation, the answer appears to be yes.

Appendix 1 of Chapter 100 of the Code and UNC Policy Manual gives boards of trustees of the individual constituent institutions of the UNC system power over endowments, “subject to applicable provisions of state law and to such terms and conditions as may be prescribed from time to time by the [statewide] Board of Governors.” This would appear to give the statewide UNC Board of Governors the authority to block fossil fuel divestment by constituent institutions. If it has such authority, the UNC Board of Governors needs to use it now.

North Carolina must prevent the thoroughgoing politicization of an important state university system by upholding institutional neutrality — one of the central pillars of campus free speech and a principle now enshrined in North Carolina state law. If UNC Asheville’s fossil fuel divestment decision holds — or worse, spreads as planned through the entire UNC system — the clear intent of HB 527 will have been violated, and the system’s Board of Governors will have failed to protect the state’s students from unwanted, unneeded, and thoroughly inappropriate ideological pressure. If, on the other hand, the UNC system reverses Asheville’s divestment decision and literally lays down the law on institutional neutrality, it will confirm North Carolina’s reputation as a leader of the movement to restore free speech at America’s public colleges and universities. We should know more by September, when the Board of Governors’ committee report is due.

Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center.

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