UBS: Underwriting Bloodshed in Sudan

UBS — the firm formerly known as Union Bank of Switzerland before it merged and decided that its three empty initials conveyed a sleek hipness — is coming to the Nassau Inn on Nov. 12. From 5 p.m.to 6:30 p.m., recruiters will woo Princetonians to apply for plum summer internships at the bank. No doubt the recruiters will repeat the bank's focus-group-tested slogan: "UBS: You and Us." But perhaps a more apt slogan would be "You, and Me, and the Janjaweed."

No, UBS doesn't deal directly with the gunmen guilty of slaughter in Sudan's Darfur region. But UBS is the banker and consigliore to PetroChina, the biggest backer of the genocidal Sudanese regime. PetroChina is the public face of the China National Petroleum Corporation (CNPC), and earlier this month, UBS helped PetroChina/CNPC raise $8.9 billion on the Shanghai Stock Exchange. Meanwhile, CNPC is cozying up to the Sudanese dictator, Omar al-Bashir. It's a match made in heaven — and it's allowed Bashir to turn Darfur into a living hell.

The marriage between CNPC and Bashir works like this: The Sudanese dictator gives CNPC access to his country's vast oil fields, and CNPC maintains a no-questions-asked policy on Darfur. One joint venture between CNPC and the Bashir regime generates 300,000 barrels of oil — that's close to $30 million — every day. For every barrel of oil sold, Bashir gets a generous cut. A former Sudanese finance minister says that more than 70 percent of the Bashir regime's oil export revenues go toward military expenditures. Some of that cash has been used to buy guns for the Janjaweed; some of it has been used to buy the planes that strafe Darfuri villages. On occasion, CNPC and its partners participate even more directly in Bashir's violence against ethnic minorities. A Human Rights Watch report revealed that CNPC and its in-country associates have let their airfields and roads be used by the military to target civilians.

CNPC and Bashir aren't about to split up anytime soon. This summer, CNPC signed onto a 20-year project to exploit Sudan's offshore oil reserves. But CNPC's association with Bashir has created all sorts of headaches for the oil company. After all, investors don't want to have anything to do with one of the world's deadliest dictators.

To solve this problem, in 1999 CNPC and its then-banker Goldman Sachs cleverly created a sanitized subsidiary called "PetroChina." CNPC's Chinese assets — but not its overseas operations — would be shifted to PetroChina's name. So technically, UBS, which has replaced Goldman Sachs as CNPC's investment banker du jour, can say that it "does not do business with companies in Sudan or those that generate substantial revenues in Sudan."

Of course, no one is fooled by the distinction. Even after this month's stock offering, CNPC owns 87 percent of PetroChina. Tellingly, PetroChina still hasn't bothered to remove the CNPC red-and-orange rising-sun logo from its website or its station signs.

For this reason, PetroChina stands in disrepute among many. Since June 2006, the University has taken steps to ensure that it had no stock holdings — direct or indirect—in PetroChina because of the company's involvement in Darfur. Princeton was rather late in getting aboard the divestment bandwagon: Five of the eight Ivies did so before the University.

But corporate responsibility has never been a priority at UBS, where genocide hasn't stopped business-as-usual in the past. For over 60 years, UBS prevented Holocaust survivors from retrieving their pre-World War II deposits. In the late 1990s, even as it was negotiating with Jewish groups, the bank began to shred Nazi-era archives.

Of course, UBS is not "just following orders": It has a choice about where to do business, and so do you. The frenetic pace of the recruiting season is a testament to the fact that the financial industry runs on the brainpower of elite college graduates. But you can save your brainpower for investment banks that aren't in bed with Bashir. Until UBS severs ties with PetroChina, Princeton students should sever ties with UBS. By refusing to attend recruiting events, submit internship applications or accept job offers, Princeton students can send a strong message to the bank that they will not underwrite genocide — or work for anyone who does.

Even if you're not a fledging financier, you can visit UBSpetition.org and sign a public letter telling UBS Chairman Marcel Ospel that you will not work for his bank until it breaks its ties to PetroChina — or until PetroChina implements a corporate governance policy in Sudan. Petition signers will be in good company. Three Nobel Peace Prize winners — including Holocaust survivor Elie Wiesel — have signed a similar letter outlining steps that UBS can take to minimize the harm it does in Darfur. More than 650 Oxford students, 100 Harvard students and 50 Cambridge students have already signed onto the UBS petition. It's time for Princeton to tell UBS that business can mean more than just making a killing. Sarah Milov is a history graduate student from Orlando, Fla. She can be reached at smilov@princeton.edu. Daniel Hemel is a graduate student in international relations at Oxford University.