Pension Board Votes to Divest from Oil and Natural Gas Corporation Ltd. (ONGC)

For Immediate Release
January 7, 2009

Contact: M. Colette Nies, Managing Director, Communications
(847) 866-4296 or cnies@gbophb.org

Evanston, IL—The General Board of Pension and Health Benefits of The United Methodist Church (General Board) has divested its shares in the Oil and Natural Gas Corporation Ltd. (ONGC) of Dehradun, India. The decision to divest was made at the November 2008 meeting of the General Board’s board of directors.

In May, General Conference 2008 passed a resolution calling upon United Methodist investors “to prayerfully consider divestment of the personal and pension assets under their control from any company doing business with the government of Sudan.”

The General Board’s investment portfolio held 67,350 shares in the Oil and Natural Gas Corporation which is engaged in Sudanese oil exploration and production through its foreign exploration arm, ONGC Videsh Ltd. The company also owns shares in several Sudanese oil-producing ventures with an interest in purchasing additional shares, and helped build a pipeline connecting a refinery in Khartoum with export terminal facilities in Port Sudan.

In October 2007, the General Board sent a letter to ONGC expressing concern over the situation in Sudan and requesting that the company provide information on its operations, policies and practices in countries where governments have been accused of human rights violations. The General Board’s investment manager holding ONGC shares also requested that the ONGC shareholder relations group contact the General Board. There was no response by ONGC to these requests.

Directors of the General Board determined that divestment was the most appropriate action because ONGC provides no public disclosure about its business operations in Sudan, has declined requests by investors for information and has been identified as one of the companies doing business with the Sudanese government. The investment manager holding ONGC shares on behalf of the General Board was instructed to sell all shares following the November 2008 board of directors’ meeting. The sale for approximately $1million was completed in December 2008.

The General Board also receives information on companies doing business in Sudan from the Sudan Divestment Task Force. The Task Force (a project of the Genocide Intervention Network) has developed a divestment model for companies whose operations directly benefit the Sudanese government and its abuse of basic human rights. Companies identified as “highest offenders” have been, in large part, unwilling to provide public disclosure on their policies and practices and are unresponsive to shareholder engagement efforts. The Sudan Divestment Task Force reports that ONGC “thus far has been unresponsive to … inquiries and requests for dialogue” and has placed ONGC on its “highest offender” list of companies.

The General Board uses divestment infrequently and believes that constructive engagement with companies on important social issues is the most powerful tool for change. Divestment is an action to be considered only after other avenues of engagement have proved to be unsuccessful.

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About the General Board

The General Board of Pension and Health Benefits is a not-for-profit administrative agency of The United Methodist Church, responsible for the general supervision and administration of the retirement, health and welfare benefit plans, programs and funds for more than 74,000 clergy and lay employees of the Church.