The International Campaign for Tibet (ICT), part of a coalition that cost Chinese oil company PetroChina as much as $7 billion last year because of its poor record in Tibet, has endorsed the “China Free Enterprise Act,” introduced today by Senators Jesse Helms (R-NC) and Jon Kyl (R-AZ).
“Lacking the bluntness of trade sanctions, capital market restrictions can target entities with far greater precision and fewer consequences to the larger economy,” said Bhuchung Tsering, Director of the International Campaign for Tibet.
“The sponsors of this bill understand that capital markets restrictions could emerge as a formidable foreign policy tool,” said Tsering.
“If such controls had been in place before April of 2000, an entity like PetroChina Ltd. might not have been able to raise the capital needed to fund its destructive activities in Tibet.”
This measure is seen partly as a response to a lack of transparency in securities forms disclosure arising from the April 2000 listing of PetroChina Ltd on the NYSE. PetroChina and its principle underwriter, Goldman Sachs, failed to disclose material facts regarding the use of proceeds and their operations and assets in Sudan and Tibet.
In response to these serious concerns, ICT participated in a powerful coalition effort to oppose PetroChina’s IPO. The results were tangible: PetroChina’s offering raised less that $3 billion – far short of the $7-10 billion which Goldman Sachs and the other underwriters had originally projected.
Opposition surrounded the use of IPO proceeds destined for construction of a natural gas pipeline in Tibet. Oil giant BP, Italian-based Agip, and underwriter Goldman Sachs have all come under fire for their involvement.
“Tibetans are gravely concerned that exploitive oil and gas extraction in Tibet, funded by outside investors, will only serve to consolidate Chinese control in Tibet while exploiting its resources for energy-hungry centers in China,” said Tsering.
According to the Tibetan Government in Exile, “these investments are clearly harmful to Tibetans and will be actively opposed.”
More generally, questionable reporting standards and lack of accountability for China’s state-owned enterprises undermine the accuracy of financial disclosures, and there are concerns that large portions of foreign-sourced funds will be directed through state channels to China’s so-called “Great Western Development” scheme, initiated in 1999 as a political tool to integrate Tibet more tightly into China’s economic and cultural framework and further undermine the national identity of the Tibetan people.