Published by Boston Globe from Bloomberg News.
By Christopher Condon
Bloomberg News / April 14
Vanguard Group Inc., the largest US manager of stock and bond mutual funds, has been accused by an advocacy group of misleading investors with its policy aimed at curbing human rights abuses.
Investors Against Genocide, a Boston group that pressures mutual fund firms to make socially responsible investments, said Vanguard increased its holdings in Beijing-based PetroChina Co. in the three months ended Jan. 31. Vanguard said March 11 that it had begun a policy in the previous six months to identify companies linked to rights abuses.
“Ordinary investors would be misled into thinking Vanguard was taking appropriate action,” Investors Against Genocide chairman Eric Cohen said in an interview yesterday.
Cohen’s group succeeded earlier this year in putting proposed screening guidelines on the agenda for 30 Vanguard funds at the firm’s July 2 annual shareholder meeting. Trustees of Vanguard, based in the Philadelphia suburb of Valley Forge, Pa., have recommended shareholders reject the motions because they already had adopted a “substantially identical” policy.
Cohen singled out investment in PetroChina by the $6.41 billion Vanguard Emerging Markets Stock Index fund. It increased its stake in PetroChina to 155.7 million shares as of Jan. 31 from 149.6 million on Oct. 31, according to the latest data filed with regulators.
PetroChina explores for oil in Sudan, whose government has been accused of orchestrating genocide in its Darfur region. Trade publication Alexander’s Gas and Oil Connections called Sudan the “key overseas upstream investment region” for PetroChina’s parent, China National Petroleum Corp.
Vanguard spokesman John Woerth, referring to the company’s March policy statement, said in an interview yesterday that the fund company will identify and monitor companies whose “direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment.”
Woerth declined to comment on PetroChina.