Tag Archives: Chile

Press Release: 39 Civil Society Leaders Condemn Harvard University Land Investment Practices

Re-posted from the Croatan Institute~~FOR IMMEDIATE RELEASE

Civil Society Leaders Condemn Harvard University Land Investment Practices:

Open letter to Harvard president demands transparency and responsible investment practices

 Cambridge, MA – April 24th, 2014 – In a letter addressed to Harvard University President Drew Faust, 39 civil society organization leaders express concern about Harvard’s large-scale investments in farmland, plantation forests, and other natural resources across the developing world.

Harvard University’s $32 billion endowment is managed by Harvard Management Company, which has come under criticism for unsustainable management of investments made through wholly-owned, opaque shell companies. Earlier this year, a manager at a Harvard-owned Romanian timber company was arrested for accepting over $1 million in bribes to acquire timberland. Harvard-owned companies have been accused of unsustainable plantation forestry in Brazil, Chile, and Argentina, facing lawsuits for destroying native forest and community protests from local farmers’ associations.

“The impact of Harvard’s endowment extends far beyond the gates of Harvard Yard, into communities and ecosystems around the world where the university has secretively acquired hundreds of thousands of acres of land,” noted Joshua Humphreys, president and senior fellow at Croatan Institute.  “With this letter,” he continued, “civil society leaders from across five continents are demanding much greater transparency and accountability for Harvard’s aggressive investments in farmland, forests and natural resources.”

“As leaders of civil society organizations,” said Dan Apfel, Executive Director of the Responsible Endowments Coalition, “we are calling upon Harvard, the largest educational endowment in the world, to be a leader in providing a positive model for sustainable and responsible investing in land and across all of their assets.”

The letter states, “Given the lack of transparency of Harvard’s endowment and Harvard Management Company’s deliberate strategy of investing directly in emerging markets using these kinds of surreptitious tactics, we are concerned that these incidents constitute merely the tip of the iceberg.”

Blake McGhghy, a first-year Harvard student in the Responsible Investment at Harvard Coalition, commented on the letter: “As students who benefit directly from Harvard’s endowment, we demand that our education not be funded by exploitation or environmental degradation. This show of solidarity from civil society groups legitimizes our concerns. It is time that Harvard respond with transparency, accountability, and responsible investment.”

Harvard University has invested over $3 billion of its endowment in direct natural resource holdings, including dairies in New Zealand, timber plantations in Argentina, farmland in sub-Saharan Africa, industrial agriculture in the Brazilian cerrado, and vineyards in California.

Two weeks ago, Harvard became the first university endowment in the United States to sign the United Nations-backed Principles for Responsible Investment. According to these leaders it is essential that these recent developments are translated into more sustainable and responsible practices in the communities and ecosystems directly impacted by your land investments.

The full text of the letter can be seen here or downloaded as a PDF here.

For more information, contact Josh Humphreys at josh@croataninstitute.org or (910) 292-9590, or Dan Apfel at Dan@endowmentethics.org or (718) 673-8669.

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Coalition Obtains Information that Pokes Holes in Faust’s Argument

The Responsible Investment at Harvard Coalition has obtained information detailing the pernicious business practices of a Harvard-owned foreign subsidiary. This information describes the environmental, economic, and social costs that Harvard’s irresponsible investment imposes on low-income communities.

This new information contradicts a letter from Harvard University President Drew Faust last week that states the Harvard endowment “fulfills a university’s distinctive responsibilities to society.”

Harvard University has a history of investments that seek financial returns at the expense of poor communities. In 2011, the University announced – under mounting public pressure –  that it would not invest in Emergent Asset Management, a firm linked to large-scale land grabs in Africa. In 2012, the Harvard Management Corporation, which oversees Harvard’s $32 billion endowment, declined to reinvest in HEI Hotels following outcry over labor rights violations. In 2012 and again this past summer, Chilean courts fined a Harvard-owned company for environmental violations.

Over the past year, the administration has made progress to ensure the sustainability of its investments. However, the Coalition has documentation that these steps are profoundly insufficient and that immediate action must be taken to review and redress ongoing hazards to communities and the environment.

RI@H Responds to Faust’s Divestment Letter

In her recent letter dismissing fossil fuel divestment, President Faust instead articulates a clear case for responsible investment, the same case our Coalition has been making to Harvard for several years.

Faust writes that “we should think about how we might use our voice” to promote responsibility. We couldn’t agree more: Harvard must engage companies and asset managers to address risks and abuses. But President Faust offers no evidence that Harvard actually engages its investments in this way.

Faust argues against fossil fuel divestment because, as she wrote, “as shareholders, I believe we should favor engagement over withdrawal.” Yet Harvard has a poor history of engaging substantially with the responsible practices of companies that it owns shares in–and even of companies that it owns fully.

A letter dated August 6 from President Faust to the Coalition shows how out of touch the Harvard administration is with its investments. Timber plantations that Harvard fully owns in Chile have repeatedly been sued for violating environmental laws. Faust wrote that the University was “confident” the courts would find that Harvard’s timber plantation company, Agricola Brinzal, “has acted in compliance with the law.” In reality, the company had already been found guilty in court for violating its environmental commitments.

This Coalition has publicized – and will continue to publicize – the outrage of communities negatively impacted by Harvard’s current investment practices.

Responsible investing requires clear standards, transparency, and accountability to stakeholders who include students, staff, alumni and communities where Harvard’s investments operate.

If Harvard is making any effort to this end, it is falling short. We ask that Harvard adhere to the standards of transparency and engagement that President Faust herself extolls.

President Faust responds, won’t discuss Chilean investments

On August 6, 2013, Harvard President Drew Faust emailed the Responsible Investment at Harvard Coalition regarding our concerns with Harvard’s investment practices. She declined our invitation to talk about responsible investing but said she will continue to remain aware of discussions taking place on campus.

We are glad that our president is paying attention to those who are calling for investment transparency and accountability at Harvard. Yet we are disappointed that President Faust has again declined to investigate and mitigate risks to the environment, workers, and communities.

In order to learn about what is really happening in communities where Harvard is investing, members of our Coalition are in contact with individuals and local organizations at home and abroad. We intend to release findings shortly, as this information is critical to assessing Harvard’s investments.

We expect that President Faust will not only listen to these findings but take action.

  • Read the full letter from President Faust to RI@H below.

Dear Members of the Responsible Investment at Harvard Coalition,

Thank you for sharing your perspectives on Harvard’s investment practices.  As you are aware, there has been a robust conversation on campus over the past year about the University’s holdings, including students meeting with members of the Corporation Committee on Shareholder Responsibility, panel discussions, and vigorous debate in the Crimson and other venues.  I look forward to following these continuing campus conversations with interest.  With regard to climate change–a concern I know we share–I wanted to be sure that you knew I had dedicated a portion of my Commencement speech this year to characterizing some of the ways in which Harvard seeks to counteract, and develop solutions for, climate change. You can find the text of my speech here: http://www.harvard.edu/president/2013-commencement-speech.

You have written me, too, about Harvard Management Company investments in Chile.  Sustainability is a key element of our natural resources investment strategy, and we all share the goal of responsible stewardship of forests.  I am aware of the cases that you referred to, and HMC is confident that the courts, once they have reviewed all the facts of each case, will conclude that the company overseeing Harvard’s properties in Chile has acted in compliance with the law.

I am not able to join you for your event on September 17, but look forward to learning about the discussions that take place.

With best wishes for the rest of the summer and the upcoming semester,

Sincerely,

Drew Faust

NEW Spotlight on Harvard’s Finances

For the first time ever, Harvard University’s and Harvard Management Company’s tax filings are available in searchable form in the “Resources” section of our website.

We’ve just posted Harvard University’s latest tax return (FY 2012, IRS Form 990) there – with highlights below. Find something else noteworthy? Please let us know!

Spotlight on Harvard’s Finances for Tax Year 2011-2012:

  • Confirmed 100% ownership of Agricola Brinzal, a forestry company facing multiple lawsuits filed by the Chilean government for illegal logging and violating forest management plans.
  • Confirmed 100% ownership of Agricola Duramen, LTDA, a forestry company fined by the Chilean government for violating environmental protection laws.
  • Reveals a large Cayman Islands presence, including a 70% stake ($177 million) in Round Table Asset Recovery Master Fund – a Cayman Island-based hedge fund founded in 2007 by Ian Banwell, former CIO for Bank of America.
  • From 2008 to 2009, the endowment plummeted from $35.9 billion to $25.3 billion – a $10.5 billion loss in a single year.
  • Fundraising power: The University receives $200 – $300 million per year in contributions.
  • In addition to HMC, Harvard employs the following tax-exempt investment management groups: Blue Marble Holdings, Demeter Holdings, Phemus, and Shipping Venture Corp.C

Harvard, Be a Responsible Owner!

This post was originally published in The Harvard Crimson on May 17, 2013

By KEVIN S. WANG, ALEXI WHITE, and CAROLINE T. ZHANG

Harvard University owns companies around the world and is a controlling stakeholder—that is, a majority shareholder, majority owner, or full owner—of over 100 companies. As a center of higher education and a leader of the community, Harvard holds itself to principles of environmental sustainability, non-discrimination, and labor rights. Its pledges to reduce emissions and to pay its workers a living wage are just a few examples. Our commitment to transparency, fairness, sustainability, and human dignity should not end at Harvard’s gates. Harvard must be a responsible owner of all its investments, particularly of the companies in which it owns a controlling stake. It has special ability, and special responsibility, to work with these companies to improve their practices.

There are numerous inconsistencies between Harvard’s policies on campus and those of its companies. Last year, food service workers at Harvard Law School asked the University for a fair process to unionize. Harvard agreed, remaining neutral in their unionization process and respecting the majority of workers’ request to form a union. However, at the DoubleTree Hotel in Allston, also owned—but not managed—by Harvard, workers have not been granted a fair process to create and join a union without intimidation or interference from managers, despite repeated requests. In fact, workers at the DoubleTree even filed suit with the National Labor Relations Board in April 2013, alleging that management illegally interfered with their unionization process. Why should the workers at a hotel directly owned by Harvard be treated any differently than workers on this campus?

Harvard directly owns at least 11 companies in Chile. One, Agrícola Brinzal, is currently being sued by CONAF, the National Forestry Corporation of the Ministry of Agriculture of Chile, for multiple violations of Chilean law against deforestation. Another Chilean company owned by Harvard, Agrícola Duramen Limitada, was fined by Chilean courts for similar activity. A company owned entirely by Harvard should not be engaging in alleged illegal logging practices.

As members of the Responsible Investment at Harvard Coalition, we ask that Harvard University and Harvard Management Company be responsible owners with all funds and companies in which it holds a controlling stake—that is, in which it is a majority shareholder, majority owner, or full owner. We demand that Harvard act to ensure that the policies of these companies comply with basic standards of responsibility.

First, Harvard’s companies must comply with all local, national, and international laws and treaties in all areas where the company is operating, whether or not these laws are rigorously enforced by local authorities.

Second, Harvard must ensure that its companies are acting as sustainably as possible, as Harvard has committed to do on campus. The University’s website states, “Harvard University believes universities have an accountability to the future—a special role and a special responsibility to address global challenges as large as climate change and environmental sustainability.” Harvard’s Sustainability Principles note, “The University has an affirmative record of responsible compliance with environmental and safety regulations and a proven effective system of environmental management accountability.” Harvard’s companies should embody these principles too.

Third, Harvard’s companies must recognize workers’ right to collective bargaining and union representation, as well as promise neutrality and a fair process for unionization, even if these rights are not enshrined in local legislation. They must also guarantee parity in wages and benefits between directly hired and sub-contracted employees.

Fourth, Harvard’s companies must respect land rights, including the rights of small farmers and indigenous people. They must not infringe on any legitimate land tenure rights, including where such rights are not formally recorded, and they must seek to prevent all violent conflict over land tenure rights.

Fifth, Harvard’s companies must adhere to Harvard’s hiring and employment policies. The University’s own published non-discrimination policy states that “Any form of discrimination based on race, color, sex, sexual orientation, gender identity, religion, age, national or ethnic origin, political beliefs, veteran status, or disability unrelated to course requirements is contrary to the, principles and policies of Harvard University.” The same policy must apply for all of Harvard’s companies.

Finally, Harvard’s companies must be transparent and accountable. They must produce and publish online annual reports disclosing all political contributions, lobbying activities, the position and compensation of the top 10 highest-compensated employees, and conflicts of interest.

We have laid out these principles—and a way for Harvard to enforce and remain accountable for them—on the website of the Responsible Investment at Harvard Coalition. We demand that Harvard become a responsible owner now, by working toward a fair unionization process for the workers at the DoubleTree, by rectifying any alleged illegal deforestation in Chile, and by adopting our proposed Standards for Responsible Ownership for all of its companies.

Harvard’s companies should not be harming the environment, their workers, or the world. Harvard has the ability to bring about change in the companies it controls, and the moral obligation to do so.

Kevin S. Wang ’16 lives in Stoughton Hall. Alexi White, MPP ’13, is a student at the Harvard Kennedy School. Caroline T. Zhang ’16, a Crimson news writer, lives in Wigglesworth Hall.