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Disinvestment, sometimes referred to as divestment, refers to the use of a concerted economic boycott, with specific emphasis on liquidating stock, to pressure a government, industry, or company towards a change in policy, or in the case of govennments, even regime change. The term was first used in the 1980s, most commonly in the United Statesmarker, 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 Iranmarker, Sudanmarker, Northern Irelandmarker, Myanmarmarker, and Israelmarker.




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

South Africa

The most frequently-encountered method of "disinvesting" 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 Franciscomarker. 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 Unionmarker or the People's Republic of Chinamarker. 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 Pretoriamarker 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 Irelandmarker, 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 Kingdommarker. 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.


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 Floridamarker, who were searching for Cubans attempting to escape to Miamimarker.


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 Sudanmarker. One particular target of this campaign was the Canadian oil company, Talisman Energy which eventually left the country, and was supplanted by Chinese investors.[68492][68493]

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 Sudanmarker, 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 Universitymarker, Harvard Universitymarker, Case Western Reserve University, Queen's Universitymarker, Stanford Universitymarker, Dartmouth Collegemarker, Amherst Collegemarker, Yale Universitymarker, Brown Universitymarker, the University of California, the University of Pennsylvaniamarker, Brandeis Universitymarker, the University of Coloradomarker, American Universitymarker, University of Delawaremarker, and Emory Universitymarker. The Sudan Divestment Task Force [68494] 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.



Myanmarmarker (formerly Burmamarker) has also been the target of disinvestment campaigns (most notably one initiated by the state of Massachusettsmarker.) 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.

Since 2007, several major international and Canadian oil companies had threatened to withdraw investment from the province of Albertamarker because of a proposed increase in royalty rates.[68495][68496]



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


Some hold that divestment campaigns are based on a fundamental misunderstanding of how equity markets work. John Silber, former president of Boston Universitymarker, 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."

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."

The common perception about the effectiveness of divestment lies in the belief that institutional selling of a certain stock lowers its market value. Therefore, the company's networth 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.


  1. The Pension Fund Attack On Iran, Niv Elis, 10.16.09, Forbes, [1]
  2. The Lion in Winter - Boston Magazine

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