By Lily Jamali
Daily Bruin Contributor
As the UC Board of Regents’ vote nears on whether to
invest in tobacco stocks, some members of the UCLA community
advocate divestment from corporations with poor records in other
controversial areas such as the environment and sweatshops.
Over the past several months, the regents have been investing in
stocks in two index funds. Both include stocks of several
corporations that have come under attack for everything from
irresponsible oil drilling to the operation of sweatshops in
developing countries.
Although the regents have yet to decide on tobacco, since last
year they have invested $11.6 billion in all other corporations
within the Russell 3000 and Morgan Stanley Capital International
fund indexes, according to DeWitt F. Bowman, interim-treasurer of
the UC.
This means the regents currently invest in corporations such as
British Petroleum, Gap and Nike, all of which have been criticized
for what have been called socially irresponsible practices.
“By investing in companies such as these it’s like
sharing their philosophy because with their investment, they are
actually helping these companies do more damage,” said
Samantha Gatmaitan, a fourth-year sociology student.
A controversial point some students and campus groups raised has
been whether financial gain should override social responsibility
when considering investments for the university.
Additionally, some regents raised concerns at their last meeting
that if they were to divest in additional stocks, their financial
oversight could become exceedingly difficult.
“We have to be guided by the financial aspects,”
said Bowman. “It’s almost impossible to make a
financial decision based on social issues.”
According to UC Regents spokesman Trey Davis, excluding
corporations from either index fund would undermine the purpose of
investing in such funds.
Companies invest in indexes to make following tracking stocks
easier because their status is measured on an overall basis.
“The problem with making exclusions is that the index
doesn’t do what it’s supposed to do,” Davis said.
“Such exclusions throw the whole tracking out of
whack.”
“What the regents have to look at is the health of their
financial investment, which the UC retirees depend on,” Davis
added. “That consideration would hold regardless of what the
social issue is.”
Nonetheless, students and campus organizations have expressed
concern that investments being made by the regents do not reflect
the spirit of research and development for which the UC has come to
be known.
“The university is a place where we think critically about
how we are impacting the world,” said Merriah Fairchild, an
organizer with Ecopledge.com. “We would like the way the
university invests to represent the ideas that are being generated
at the campus.”
Ecopledge.com, whose mission is to encourage companies in all
economic sectors to take simple steps toward protecting the
environment, has launched a campaign against British Petroleum, a
company listed on the Morgan Stanley index. The group plans to
gather 25 percent of the students at the top 50 schools to pledge
not to work for, invest in, or buy gas from BP.
“We want to make sure that the shareholders, who the
regents are a part of, vote at their shareholders meeting in April
to stop all plans to drill in the Arctic National Wildlife
Refuge,” Fairchild said. “That’s why we are
calling on BP to cancel their plans to drill in the Arctic as a
simple way that they can protect the refuge from environmental
destruction.”
While Ecopledge.com proposes that the regents use their
shareholder power to check these corporations, other campus
organizations would rather see divestment until these corporations
change their practices.
United Students Against Sweatshops, an organization with more
than 200 chapters across the country, has brought a great deal of
public attention to alleged sweatshop abuses by Gap and Nike.
“One major thing that’s going on with the Gap right
now is their involvement in the Mariana Islands, a U.S. territory
that doesn’t fall under basic civil rights laws, minimum wage
laws, and labor practice laws upheld in the U.S.,” said Arlen
Benjamin-Gomez, founder of the UCLA chapter of USAS.
“They put the label as made in United States,” added
Benjamin-Gomez, a third-year international development studies and
Latin American studies student. “That gives people the false
impression that the clothes are being made under the same standards
as in the US.”
Like the Gap, Nike has a record of unresponsiveness to USAS and
other sweatshop watchdog groups, according to Benjamin-Gomez.
“They exploit workers around the world,”
Benjamin-Gomez said. “When anti-sweatshop activists have
approached Nike to change, they have resisted.”
But Bowman said the situation is more complicated than that.
“The definition of a sweatshop is difficult,” Bowman
said. “In many countries, what we would perceive as sweatshop
conditions are better than the conditions that may have previously
existed in that country.”
Although the exact definition of a sweatshop may not be clear,
Benjamin-Gomez argues that the regents could invest in corporations
that have been cooperative with sweatshop-watch groups.
“There are a lot of other clothing companies and shoe
companies that are stable and have at least been responsive to
anti-sweatshop activism,” Benjamin-Gomez said. “The
regents could put pressure by saying “˜We are not going invest
in your company unless you improve conditions.'”