Sudan Engagement Group

The Sudan Engagement Group (SEG) is made up of 22 institutional investor signatories with approximately US$ 2.1 trillion total assets under management. These signatories recognise that their international investments include companies with operations in, or exposure to, Sudan – a country whose human rights record, weak governance, and history of violence is a subject of ongoing public and political concern.

The SEG believes that company exposure to Sudan poses additional risks to business and local society. As fiduciaries, the Group wants to better understand these risks and the steps companies need to undertake in order to avoid activities that exacerbate or fuel instability and a negative business environment.

The SEG is aware of ongoing calls for international companies to withdraw from Sudan. However, the Group recognises that withdrawing from a country may not be the most viable or constructive solution for protecting human rights and promoting the strong governance, long-term stability, and economic development that benefits ordinary citizens. The SEG is therefore involved in ongoing engagement with selected companies operating in Sudan. The aim of the engagement has been to encourage these companies to disclose more information on their activities in the country, act responsibly, respect the UN Global Compact Principles, recognise their role and show leadership to trigger a stable and sustainable business environment and therefore contributing to lasting peace in the region.

For example, over the past 18 months, the SEG has issued formal correspondence and held private meetings with target companies operating in Sudan to discuss investors’ concerns related to their long-term performance. In addition, the Group has commissioned an independent research study with the goal of acquiring more information on the current practices of selected companies on the ground. The findings of the research have also guided representatives of the SEG who visited Sudan from 27 February to 4 March 2010 and met with local and international representatives of target companies, oil consortia, other international and local companies operating in the country, NGOs, communities, diplomats, international experts and government representatives. In addition to bilateral meetings, representatives of the Group presented at the event: 'Responsible Investment and Responsible Business Practices in Conflict-Affected Countries' organised by the PRI Initiative and the UNGC in Khartoum on 1 and 2 March. The event was an occasion to discuss with other stakeholders the role of the private sector in fostering peace and development in post-conflict contexts and provide input to the development of a Guidance document for companies and investors regarding responsible business practices in conflict-affected regions.

Meeting representatives of the companies and communities, commissioning a research study and visiting Sudan have been invaluable opportunities for investors to learn more about the business practices of companies operating in the country. Going forward, the Group hopes to continue its dialogue with companies to encourage and monitor concrete actions to address remaining areas of business risk. The Group will also encourage companies to enhance their corporate disclosure on social, environmental and governance issues given their importance to sustainable development in Sudan.