Harvard's timber investments under spotlight as college newspaper reveals US Ivy League university owns Chilean logging company facing government lawsuits for allegedly engaging in illegal, damaging forestry practices
April 30, 2013
(Industry Intelligence Inc.)
– Harvard University’s overseas timber investment activities are under scrutiny this week, as the university’s own newspaper revealed a Chilean logging company owned by the Massachusetts Ivy League school is facing government lawsuits related to its forestry practices.
According to a 2011 university tax filing, Harvard owns 99.99% of logging firm Agrícola Brinzal through Phemus Corp., an investment company wholly owned by Harvard Management Co. (HMC), which manages Harvard’s endowment, The Harvard Crimson reported on April 29.
Chile’s Ministry of Agriculture’s National Forestry Corporation, CONAF, has reportedly brought multiple lawsuits against Agrícola Brinzal, alleging the company’s logging practices are illegal and devastating to Chile’s natural forests.
Two investigative reporters in Chile last month released a report--subsequently published by the Center of Investigative Journalism of Chile--on the allegedly exploitative logging practices of Chilean companies owned by Harvard, The Harvard Crimson noted.
Among the allegations are that Agrícola Brinzal engages in forestry practices harmful to the environment and local communities, including felling native forest and reforesting with water-intensive eucalyptus. Farmers are reportedly concerned about water availability and the potential impact on animal and milk production.
Formed in 1974 to manage Harvard University’s endowment and related financial assets, HMC began investing in Chile in 2004 and, according to Harvard’s 2011 tax filing, now owns at least 11 companies there, through subsidiaries such as Phemus.
Harvard’s endowment, in fact, directly owns more than 100 companies, many of them involved in timber and natural resources in the developing world, according to The Harvard Crimson.
The college daily newspaper quoted HMC President and CEO Jane Mendillo, writing in Sept. 2012, that HMC employees “fully vet potential investments and investment partners for long-term viability” and perform due diligence for every investment decision.
The article—authored by Sandra Y. L. Korn and Krishna Dasaratha, part of the Responsible Investment at Harvard Coalition--concluded that HMC should “review, revise, and publish its due diligence policies and processes before the end of the semester,” urging the university to ensure its approach to natural resource investment does not have negative impacts.
The primary source of this article is The Harvard Crimson, Cambridge, Massachusetts, April 29, 2013.