Disinvestment

Disinvestment refers to the use of a concerted economic boycott to pressure a government, industry, or company towards a change in policy, or in the case of governments, even regime change. The term was first used in the 1980s, most commonly in the United States, to refer to the use of a concerted economic boycott designed to pressure the government of South Africa into abolishing its policy of apartheid. The term has also been applied to actions targeting Iran, Sudan, Northern Ireland, Myanmar, and Israel.

Goals

Industries

Environment

There is a movement to disinvest from coal, oil and gas companies. It is a social movement which urges everyone from individual investors to large institutions to remove their investments (to divest) from publicly listed oil, gas and coal companies, with the intention of combating climate change by reducing the amount of greenhouse gases released into the atmosphere, and holding the oil, gas and coal companies responsible for their role in climate change.

Founder of the movement Bill McKibben, a researcher and academic from University of Victoria, and creator of the webpage 350.org stated: “If it is wrong to wreck the climate, then it is wrong to profit from the wreckage. We believe […] organizations that serve the public good should divest from fossil fuels”

Companies

  • Talisman Energy - because of its status as the main Western oil company in Sudan in the early 2000s.

Nations

Iran

Eighteen American states have passed laws requiring the divestment of state pension funds from firms doing business with Iran.[10]

South Africa

The most frequently-encountered method of "dis-investing" was to persuade state, county and municipal governments to sell their stock in companies which had a presence in South Africa, such shares having been previously placed in the portfolio of the state's, county's or city's pension fund. Several states and localities did pass legislation ordering the sale of such securities, most notably the city of San Francisco. An array of celebrities, including singer Paul Simon, actively supported the cause.

Many conservatives opposed the disinvestment campaign, accusing its advocates of hypocrisy for not also proposing that the same sanctions be leveled on either the Soviet Union or the People's Republic of China. Ronald Reagan, who was the President of the United States during the time the disinvestment movement was at its peak, also opposed it, instead favoring a policy of "constructive engagement" with the Pretoria regime. Some offered as an alternative to disinvestment the so-called "Sullivan Principles", named after Reverend Leon Sullivan, an African-American clergyman who served on the Board of Directors of General Motors. These principles called for corporations doing business in South Africa to adhere to strict standards of non-discrimination in hiring and promotions, so as to set a positive example.

Northern Ireland

There was also a less well-publicized movement to apply the strategy of disinvestment to Northern Ireland, as some prominent Irish-American politicians sought to have state and local governments sell their stock in companies doing business in that part of the United Kingdom. This movement featured its own counterpart to the Sullivan Principles; known as the "MacBride Principles" (named for Nobel Peace Prize winner Sean MacBride), which called for American and other foreign companies to take the initiative in alleviating alleged discrimination against Roman Catholics by adopting policies resembling affirmative action. The effort to disinvest in Northern Ireland met with little success, but the United States Congress did pass (and then-President Bill Clinton signed) a law requiring American companies with interests there to implement most of the MacBride Principles in 1998.

Cuba

Though in place long before the term "disinvestment" was coined, the United States embargo against Cuba meets many of the criteria for designation as such — and a provision more closely paralleling the disinvestment strategy aimed at South Africa was added in 1996, when the United States Congress passed the Helms-Burton Act, which penalized owners of foreign businesses which invested in former American firms that had been nationalized by Fidel Castro's government after the Cuban revolution of 1959. The passage of this law was widely seen as a reprisal for an incident in which Cuban military aircraft shot down two private planes flown by Cuban exiles living in Florida, who were searching for Cubans attempting to escape to Miami.

Sudan

During the late 1990s and early 2000s several Christian groups in North America campaigned for disinvestment from Sudan because of the Muslim-dominated government's long conflict with the breakaway, mostly Christian region of Southern Sudan. One particular target of this campaign was the Canadian oil company, Talisman Energy which eventually left the country, and was supplanted by Chinese investors.[11][12]

There is currently a growing movement to divest from companies that do business with the Sudanese government responsible for genocide in Darfur. Prompted by the State of Illinois - the first government in the U.S.A. to divest - scores of public and private-sector entities are now following suit. In New York City, Councilman Eric Gioia recently introduced a resolution to divest City pension funds from companies doing business with Sudan.

The recent divestment of assets implicated in funding the government of Sudan, in acknowledgment of acts of terrorism and genocide perpetrated in the Darfur conflict. In the United States, this divestment has taken place at the state level (including Illinois, which led the way, followed by New Jersey, Oregon, and Maine). It has also taken place at many North American Universities, notably Cornell University, Harvard University, Case Western Reserve University, Queen's University, Stanford University, Dartmouth College, Amherst College, Yale University, Brown University, the University of California, the University of Pennsylvania, Brandeis University, the University of Colorado, American University, University of Delaware, Emory University, and the University of Vermont. The Sudan Divestment Task Force [13] has organized a nationwide group which advocates a targeted divestment policy, to minimize any negative effects on Sudanese civilians while still placing financial pressure on the government. The so-called 'targeted divestment approach' generally permits investment in Sudan, and is thus radically different from the comprehensive divestment that ended apartheid in South Africa. Because targeted divestment permits investment in hundreds of multinational corporate and private-equity firms that support, lend legitimacy to, and pay taxes and graft to the government of Sudan, policy experts suggest that this "feel good" approach will have little impact on the Sudanese government's sponsorship of terrorism and genocide. Because of the massive deficiencies in the so-called 'targeted divestment approach,' human rights advocates recommend the more comprehensive approach to divestment that has been taken by the State of Illinois. Under this approach, sponsored by State Senator Jacqueline Collins, public pensions are prohibited from investing in any corporation or private equity firm that conducts business in Sudan, unless authorized to do so by the U.S. Government.

Others

Myanmar (formerly Burma) has also been the target of disinvestment campaigns (most notably the Massachusetts Burma Law initiated by the state of Massachusetts.) Divestment campaigns have also been directed against Saudi Arabia due to allegations of "gender apartheid." The University of California, Riverside's Hillel chapter has a Saudi Divestment petition circulating as of 2007.

In 2007, several major international and Canadian oil companies threatened to withdraw investment from the province of Alberta because of a proposed increase in royalty rates.[14]

Criticism

Some hold that divestment campaigns are based on a fundamental misunderstanding of how stock markets work. John Silber, former president of Boston University, observed that while boycotting a company's products would actually affect their business, "once a stock issue has been made, the corporation doesn't care whether you sell it, burn it, or anything else, because they've already got all the money they're ever going to get from that stock. So they don't care." [15]

Regarding the more specific case of South Africa, John Silber recalled:

...when the students were protesting the South African situation, I met with them, and they said BU must divest in General Motors and IBM. And I said, "Why should we do that? Is it immoral to own that stock?" Absolutely immoral to own it. And I said, "So then, we're supposed to sell it to somebody? We can't divest unless we sell it to somebody. And if we burn the stock, that just helps General Motors, because it reduces the amount of stock outstanding, so that can't be right. If we sell it to somebody, we have just gotten rid of our guilt in order to impose guilt on somebody else." [15]

One criticism of divestment focuses on the belief that institutional selling of a certain stock lowers its market value. Therefore, the company's net worth becomes devalued and the owners of the company may lose substantial paper assets. In addition, institutional divestment may encourage other investors to sell their stocks for fear of lower prices, which in turn lowers prices even further. Finally, lower stock prices limits a corporation's ability to sell a portion of their stocks in order to raise funds to expand the business.

This assumption about the intent behind many divestment movements is often incorrect. Divestment executions are often forms of denouncement and delegitimization of an industry, such as in the fossil-fuel divestment movement. Negative public perception can lead to reform and changes in policy, both privately for the company and in the public sphere.

See also

Notes and references

  1. ^ Bradsher, Keith (1999-12-07). "Ford Announces Its Withdrawal From Global Climate Coalition". The New York Times. Retrieved 2013-07-21.
  2. ^ "GCC Suffers Technical Knockout, Industry defections decimate Global Climate Coalition".
  3. ^ "Canvassing Works". Canvassing Works. Retrieved 2013-07-19.
  4. ^ "Page not found - ASH Scotland". www.ashscotland.org.uk. Retrieved 18 October 2018.
  5. ^ "Archived copy". Archived from the original on 2005-02-25. Retrieved 2007-12-04.CS1 maint: Archived copy as title (link)
  6. ^ "Stop the War Coalition". www.stopwar.org.uk. Retrieved 18 October 2018.
  7. ^ "Liverpool City Council votes to disinvest in arms trade". www.labournet.net. Retrieved 18 October 2018.
  8. ^ "Fossil Free". Retrieved 18 October 2018.
  9. ^ http://www.wearepowershift.org/campaigns/divestcoal Power Shift
  10. ^ Elis, Niv. "The Pension Fund Attack On Iran". Retrieved 18 October 2018.
  11. ^ http://findarticles.com/p/articles/mi_m1058/is_6_117/ai_60026681. Missing or empty |title= (help)
  12. ^ "Archived copy". Archived from the original on 2008-03-03. Retrieved 2007-12-04.CS1 maint: Archived copy as title (link)
  13. ^ http://www.genocideintervention.net/
  14. ^ Editorial, Reuters. "EnCana says still studying Alberta royalty change". Retrieved 18 October 2018.
  15. ^ a b "The Lion in Winter: Full Transcript". 15 May 2006. Retrieved 18 October 2018.
Allegheny West, Philadelphia

Allegheny West is a neighborhood in the North Philadelphia section of Philadelphia. It is named after an association formed by Pep Boys and Tasty Baking Company, among others, and the community bordering East Falls, Strawberry Mansion and Tioga-Nicetown. Its location in the vicinity of Allegheny Avenue on the western side of Broad Street.

Like many neighborhoods in North Philadelphia, Allegheny West is primarily a poor African-American enclave that has suffered post-industrial decline and disinvestment. It faced one of the largest population losses of any neighborhood in Philadelphia between the 1990 and 2000 census. Vacant industrial sites, such as those once used to build commuter rail trains by Budd Steel (later obtained by Krupp), have in recent years been used in film productions. The former Tasty Baking Co. food production facility is undergoing renovation as a mixed-use site; The former headquarters has been leveled to make way for a 75000 sq. ft grocery-anchored outlet mall.

Housing in Allegheny West is very affordable. In 2005, the 19132 zip code, which contains sections of Allegheny West and North Central, had a median home sale price of $26,450. This was the lowest median price of any zip code in Philadelphia. Housing appreciated by 9% between 2004 and 2005. Allegheny West, per modern definition of the area, also contains sections of the 19129 zip code which is disputably East Falls.

CUPE Ontario and disinvestment from Israel

The Ontario wing of the Canadian Union of Public Employees (CUPE) has supported the Boycott, Divestment and Sanctions (BDS) campaign against Israel since 2006. Their stance has encountered opposition from the Canadian Jewish Congress and parts of the press but also widespread support from university professors, Independent Jewish Voices,Palestine House, Canadian Arab Federation and labour unions. In 2009 the CUPE Ontario university workers' committee proposed to extend the campaign to boycott any joint work with Israeli institutions that carry out military research. That resolution became the focus of extensive controversy and was modified in response to pressure from the CUPE national president; the amended version was brought before the CUPE Ontario conference in May 2009 and passed with a 2/3 majority.

Disinvestment from Iran

Disinvestment from Iran is campaign primarily in the United States that aims to encourage disinvestment from the state of Iran.

Disinvestment from Israel

Disinvestment from Israel is a campaign conducted by religious and political entities which aims to use disinvestment to pressure the government of Israel to put "an end to the Israeli occupation of Palestinian territories captured during the 1967 military campaign." The disinvestment campaign is related to other economic and political boycotts of Israel.

A notable campaign was initiated in 2002 and endorsed by South Africa's Desmond Tutu. Tutu said that the campaign against Israel's occupation of the Palestinian territories and its continued settlement expansion should be modeled on the successful historical, but controversial, disinvestment campaign against South Africa's apartheid system.

Disinvestment from South Africa

Disinvestment (or divestment) from South Africa was first advocated in the 1960s, in protest of South Africa's system of apartheid, but was not implemented on a significant scale until the mid-1980s. The disinvestment campaign, after being realized in federal legislation enacted in 1986 by the United States, is credited by some as pressuring the South African Government to embark on negotiations ultimately leading to the dismantling of the Apartheid system.

Disinvestment of Public Sector Units in India

Disinvestment in Public sector units in India, is process of public asset sales by President of India on behalf of Government of India, directly (offer for sale to public) or indirectly (bidding process) in capitalized market. The Public Enterprises Survey (2015-16), brought out by the Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, Government of India on the performance of Central Public Sector Enterprises was placed in both the Houses of Parliament on 21st March, 2017. There were 331 CPSEs in 2017-18, out of which 257 were in operation. Rest (74) of the CPSEs were under construction.As in need of Economic Liberalism and Infrastructure development, in Union Budget of India Total Expenditure of Government of India increased from ₹ 1,13,422 crore (1991-92) to ₹ 21,46,735 Crore(2017-18). To raise the funds partially for these Expenditures and also to minimize fiscal deficits in union budgets, Indian Government started divestment in public sector undertakings. Conceding to demands of privatization and with tough resistance from labour unions, government of India is slowly divesting from PSUs. The below table provides the data for divestment which started from 1991(Barring 2 small units CMC Limited and Patherele Concrete).

Major divestment steps were taken in past by BJP-led NDA government (1999-2004), made four strategic disinvestment's - in Bharat Aluminium Company (BALCO) and Hindustan Zinc (both to Sterlite Industries), Indian Petrochemicals Corporation Limited (to Reliance Industries) and VSNL(to the Tata group), While track record and future of these companies were good. BJP led NDA Government (1999-2004) has also been criticized for divestment of IPCL, in which Reliance industries bid very high as compared to other competitors.Again in starting from 2014 to 2018 BJP led NDA government divested total ₹ 1,94,646 crore, which also includes minority and majority stake sale of most profitable Public sector undertaking companies, like ONGC-HPCL deal worth ₹ 36,915 crore. in budgetary announcement of financial year 2017-18 The Finance Minister noted that the government initiated strategic disinvestment in 24 PSUs, including Air India, this fiscal. This would be the first year when the government is on course to hit the divestment target. Since financial year 1991-92 to 2017-18 government led by political parties sold total public assets of ₹ 3,47,439 Crore. In past recent years Public sector undertaking units performed well as compared to other private competitors and paid huge dividends to government. Net Profit of all 257 operating CPSEs during 2016-17 stood at ₹ 1,27,602 crore compared to ₹ 1,14,239 crore during 2015-16 showing growth of 11.70%, while Loss of loss incurring CPSEs minimized to ₹ 25,045 crore in 2016-17 compared to ₹ 30,759 crore in 2015-16 showing a decrease in loss by 18.58%.

Total Sum Till 2017-18 ₹ 3,47,439

Divestment

In finance and economic, divestment or divestiture is the reduction of some kind of asset for financial, ethical, or political objectives or sale of an existing business by a firm. A divestment is the opposite of an investment.

Downs–Thomson paradox

The Downs–Thomson paradox (named after Anthony Downs and John Michael Thomson), also known as the Pigou–Knight–Downs paradox (after Arthur Cecil Pigou and Frank Knight), states that the equilibrium speed of car traffic on a road network is determined by the average door-to-door speed of equivalent journeys taken by public transport.

It is a paradox in that improvements in the road network will not reduce traffic congestion. Improvements in the road network can make congestion worse if the improvements make public transport more inconvenient or if it shifts investment, causing disinvestment in the public transport system.

East Side, Buffalo

The East Side is a large district of Buffalo, New York, and the city's physically largest neighborhood. It is bordered by Main Street to the north and west, I-190 and the Kaisertown neighborhood to the south, and the town of Cheektowaga to the east. Large, ornate 19th-century churches, most of them Roman Catholic, and modest ​1 1⁄2-story wood-frame cottages, often with progressively smaller rear additions that give a telescoping effect, characterize the district. The East Side was once the second largest Polish-American community in the United States. Jefferson Avenue, and the intersection of Broadway and Fillmore, serve as its most heavily used commercial districts.

Deindustrialization and disinvestment in the second half of the twentieth century damaged the East Side more than other Buffalo neighborhoods; much of the Polish community fled to Cheektowaga in that time frame. The current ethnic composition of the East Side is predominantly black. A disproportionate number of the city's vacant and abandoned houses are located here, as are many acres of urban prairie.

Notable destinations include the Broadway Market, St. Stanislaus - Bishop & Martyr Church, St. John Kanty's R.C. Church, St. Adalbert's Basilica, Corpus Christi R. C. Church Complex, Buffalo Central Terminal, the Adam Mickiewicz Library and Dramatic Circle, and the Matt Urban Human Services Center.

Housing segregation in the United States

Housing segregation is the practice of denying African American or other minority groups equal access to housing through the process of misinformation, denial of realty and financing services, and racial steering. Housing policy in the United States has influenced housing segregation trends throughout history. Key legislation include the National Housing Act of 1934, the GI Bill, and the Fair Housing Act. Factors such as socioeconomic status, spatial assimilation, and immigration contribute to perpetuating housing segregation. The effects of housing segregation include relocation, unequal living standards, and poverty. However, there have been initiatives to combat housing segregation, such as the Section 8 housing program.

Hyde Park, St. Louis

Hyde Park is a neighborhood of St. Louis, Missouri. A historic North St. Louis neighborhood, Hyde Park is bound by Ferry to the North, I-70 to the East, Palm Street and Natural Bridge Avenue to the South, and Glasgow to the West.

The community has the name of William Hyde.The neighborhood lost its prosperity to industrial disinvestment following World War II. Harland Bartholomew included Hyde Park among the neighborhoods destined for "slum clearance," and with the departure of General Motors, the North Side fell on its way to becoming a "ghost town." Racial conflicts were apparent. The mostly Caucasian leadership referred to the plans for Hyde Park and other neighborhoods in the urban core as "urban renewal," while the African-American leaders within the community referred to it as "Negro removal."

Indian Petrochemicals Corporation Limited

Indian Petrochemicals Corporation Limited (IPCL) was a petrochemicals company in India. It was established on 22 March 1969, with a view to promote and encourage the use of plastics in India. Its business consists of polymers, synthetic fibre, fibre intermediaries, solvents, surfactants, industrial chemicals, catalysts, adsorbents, and polyesters. The Company operated three petrochemical complexes, a naphtha based complex at Vadodara and gas based complex each at Nagothane near Mumbai and at Dahej on Narmada estuary in bay of Khambhat. The Company also operates a catalyst manufacturing facility at Vadodara. Its turnover for the financial year 2005-06 has crossed the US $2 billion mark.

In June 2002, the Government of India as a part of its disinvestment programme divested 26% of its equity shares in favour of Reliance Petroinvestments Limited (RPIL), a Reliance Group Company. RPIL acquired an additional 20% equity shares through a cash offer in terms of SEBI (Takeover Regulations) and held 46% of Company's equity shares. IPCL merged with Reliance Industries Ltd. in 2007.The Board of IPCL consists of ten directors led by Mukesh Ambani as Chairman, five independent and five non-independent directors.

Effective 1 April 2005, the six polyester companies namely Appollo Fibres Limited (AFL), Central India Polyesters Limited (CIPL), India Polyfibres Limited (IPL), Orissa Polyfibres Limited (OPL), Recron Synthetics Limited (RSL) and Silvassa Industries Private Limited (SIPL) have been amalgamated with IPCL. This marks the entry of the Company in the polyester sector. The polyester units are based in Hoshiarpur (Punjab), Nagpur (Maharashtra), Barabanki (Uttar Pradesh), Baulpur (Orissa), Allahabad (Uttar Pradesh) and Silvassa (Dadra and Nagar Haveli).

Ministry of Finance (India)

The Ministry of Finance is an important ministry within the Government of India concerned with the economy of India, serving as the Indian Treasury Department. In particular, it concerns itself with taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget.

The Ministry of Finance is the apex controlling authority of the Indian Revenue Service, Indian Economic Service, Indian Cost Accounts Service and Indian Civil Accounts Service.

Piyush Goyal is the Finance Minister of India.

Municipal disinvestment

Municipal disinvestment is a term in the United States which describes an urban planning process in which that a city or town or other municipal entity decides to abandon or neglect an unproductive zone. It can happen when a municipality is in a period of economic prosperity, and it seeks to improve its communities and infrastructure, and sees that its poorest and most blighted communities are both the cheapest targets for revitalization as well as the areas with the greatest potential for improvement. When a city is facing urban decay, and has to compromise in allocating its resources, the poorest communities are the least profitable and investing in them seems unwise from a long term perspective, and so these communities are neglected as a matter of choice. Disenfranchised neighborhoods are slated for demolition, relocation, and eventual replacement. According to one view, disinvestment in urban and suburban communities tends to fall strongly along racial and class lines, and intensifies and perpetuates the cycle of poverty exerted upon the space, since more affluent individuals with social mobility can leave the disenfranchised areas. According to one view, municipal disinvestment is a direct consequence of local, state, and federal urban planning and urban renewal projects.

Pradip Baijal

Pradip Baijal is an officer of the Indian Administrative Service (IAS) who retired as the chief of the Telecom Regulatory Authority of India (TRAI).

Baijal held several senior administrative positions in the Ministry of Finance and Industries at state level but first came into prominence as the disinvestment secretary in 1999 and was part of the team that was involved in the disinvestment of various Govt companies like BP, VSNL, IPCL and Maruti. He is credited for the sale of Maruti which resulted in a Rs 1000 crore control premium for the government). He retired as the Chairman of the Telecom Regulatory Authority of India (TRAI) in March 2006.Post retirement, Baijal setup Noesis Strategic Consulting Company.

Presbyterian Church (U.S.A.) disinvestment from Israel controversy

The General Assembly of the Presbyterian Church (U.S.A.) adopted a policy of "phased, selective divestment" from certain American corporations operating in Israel beginning in 2004, as a means of influencing the government of Israel. This policy has been controversial both within and outside of the denomination, even resulting in charges of antisemitism. The policy was changed in 2006 by another vote of the General Assembly.

Profit taking

In finance, profit taking (or taking profits) is the practice of selling an asset, mostly shares, when the asset has risen in price. This allows investors to convert the increase of an asset's market value into cash.

Profit taking by a number of investors normally causes the price of the asset in question to fall temporarily. Nevertheless, the occasion of profit taking itself indicates an upward market trend.

Sullivan principles

The Sullivan principles are the names of two corporate codes of conduct, developed by the African-American preacher Rev. Leon Sullivan, promoting corporate social responsibility:

The original Sullivan principles were developed in 1977 to apply economic pressure on South Africa in protest of its system of apartheid. The principles eventually gained wide adoption among United States–based corporations.

For more, see #The Sullivan principles below.

The new global Sullivan principles were jointly unveiled in 1999 by Rev. Sullivan and United Nations Secretary General Kofi Annan. The new and expanded corporate code of conduct, as opposed to the originals' specific focus on South African apartheid, were designed to increase the active participation of corporations in the advancement of human rights and social justice at the international level.

Swampoodle, Philadelphia

Swampoodle is an older neighborhood in North Philadelphia. Swampoodle was defined as the vicinity of the junction of three railroad lines near Lehigh Avenue and 22nd Streets. The neighborhood was the home of the Connie Mack Stadium, previously called Shibe Park. The stadium was located at 21st Street and Lehigh Avenue. Connie Mack Stadium was once the home of the Philadelphia Athletics of the American League (AL) and the Philadelphia Phillies of the National League. Owners of homes bordering the stadium would make money parking cars or renting porch and roof space. Formerly an Irish neighborhood, as of 2012 it had been absorbed into Allegheny West, a poor African-American enclave that had suffered post-industrial decline and disinvestment.

There are several accounts of how the neighborhood came to be named Swampoodle. One source says that the name refers to the swampiness and frequent formation of puddles near 22nd Street and Lehigh Avenue, which is similar to explanation given for the name of the Swampoodle neighborhood in Washington, D.C. The term is also slang for low-lying land and may have been used because Cohocksink Creek ran through the area. Others have countered that the area is actually elevated.

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