Bush poised to head off oil sanctions in Sudan bill
Financial Times, August 8
By EDWARD ALDEN
The Bush administration is set to oppose legislation that would bar foreign oil companies doing business in Sudan from listing on US stock exchanges, fearing that it could set a damaging precedent for political interference in US capital markets.
A draft statement of administration policy warns that the sanctions provisions in the legislation would "set a dangerous precedent for future political interference in capital markets based on labour, environment, non-proliferation or other issues", according to a US official familiar with the document.
The Sudan Peace Act, which passed the House of Representatives on a 422-2 vote in June, is aimed in part at punishing a handful of foreign companies that are pumping oil from southern Sudan, including PetroChina, the Chinese oil company, and Talisman Energy of Canada. Various independent reports have found that the oil revenue is helping the Khartoum regime finance a brutal war against southern rebels.
The House bill also contains a less severe alternative, also opposed by the administration, that bars from US stock exchanges any company doing business in Sudan unless it fully discloses to investors all its activities in that country.
The Senate last month quietly passed a companion measure favoured by the administration that dropped both of those controversial provisions. A House-Senate conference to iron out the differences is expected to be convened after legislators return in September.
The administration has made ending the war in Sudan one of its foreign policy priorities, and President George W. Bush has promised to name a special envoy to Khartoum. But if Congress approves the House version of the bill when it returns in September, Mr Bush could be forced into the awkward position of vetoing a bill that has strong support from a range of important constituencies, including religious conservatives and the congressional black caucus.
Nina Shea, the director of the Centre for Religious Freedom, a Washington human rights group, said that "Sudan is the litmus test for human rights policy under the Bush administration". Without the capital markets provisions, she argued, the US would have no leverage to try to force the regime in Khartoum to end the war against Christians in southern Sudan.
Rep. Donald Payne, who chairs the international relations task force of the congressional black caucus, said the provisions were the most powerful tool available to the US. The caucus's 36 members sent a letter last Friday to Tom Daschle, the Senate majority leader, urging him to accept the House version of the bill.
The measures have drawn strong opposition from Wall Street investment banks, which fear that the sanctions would set a precedent that could drive foreign companies to seek listings outside the US.
The administration's draft critique argues that the measures would do nothing to curb the flow of oil revenue to the regime in Khartoum but its largest concern is the potential effect on US capital markets. |
