EU boycotts China oil firm over funding of Darfur regime

The European Parliament has disinvested in a firm accused of being one of the chief bankrollers of the Sudanese regime's military campaign in Darfur after pressure from MEPs and human rights activists.

The Independent can reveal that, in a significant step in boycotting firms whose revenues are said to fuel the genocide, the EU has sold its shares in the Chinese oil giant PetroChina/ CNPC. The move follows revelations that MEPs' pension funds continued to be invested in the company, despite widespread criticism of Chinese support for the regime in Khartoum.

The decision strengthens the international campaign to apply pressure on the Sudanese government over the continuing killings, rapes and forced evictions in Darfur by its own troops and the Janjaweed militia which colludes with state forces.

China is the foremost foreign investor in Sudan and a main supplier of weapons. It buys two thirds of Sudanese oil output.

Eighty Nobel laureates, politicians and artists have written to the Chinese President Hu Jintao urging greater action on Darfur. The actors George Clooney and Mia Farrow, as well as the film director Steven Spielberg, who recently withdrew from his role as artistic director of the Beijing Olympics, have been among those highlighting the suffering resulting from some of the Chinese-linked revenue.

The Independent revealed last week that the conflict in Darfur had entered a violent and deadly new phase. Internal reports by humanitarian agencies operating in the region reveal that the active Sudanese government-backed military phase of the conflict, thought to have ended early in 2005, has resumed, with horrifying consequences.

The Aegis Trust, a human rights group which has played a leading part in exposing the violence in Sudan, said it hoped that other governments and official bodies would follow the EU example.

Its chief executive, James Smith, said: "CNPC/PetroChina have resisted attempts to engage with them for four years. Instead they've continued to bankroll the Sudanese regime while it has attacked its own citizens. The message is that mass atrocities must stop now."

Glenys Kinnock, who led the campaign among MEPs, said: "The sale of the stockholdings in PetroChina sends a very clear signal that the European Parliament abhors that company's links with a regime which does little to end the violent conflict in Darfur."

Sudan has been helped in warding off international pressure over Darfur thanks to its oil revenues which have increased from $62m (£31m) in 1999 to $4.5bn in 2006. Oil accounts for up to 60 per cent of the government's income and the increase in its oil exports has enabled Khartoum to more than triple its formal military expenditure from $132m in 1997 to $587m in 2004. The International Criminal Court found evidence that the Sudanese government is involved in recruiting, funding, arming and directing the Janjaweed militia.

Large pension funds which have divested from companies because of Darfur include PGGM (Netherlands), Berkshire Hathaway (Warren Buffett – USA), Fidelity Investments (USA) and CalPers (USA).

PetroChina and CNPC are sister companies, with CNPC operating in Sudan.

PetroChina was created to avoid US sanctions on Sudan – but the firms have substantially overlapping boards of directors and conduct transfer payments between each other.