McGill University's board of governors has voted to require managers of its endowment fund to divest stocks of any companies doing harm in Myanmar.

It is the first time McGill has taken such a stand since it divested stocks of companies operating in South Africa in the mid-1990s.

The decision, in response to pressure from students and faculty members, shows how the socially responsible investment movement is gaining traction on university campuses.

Myanmar, formerly known as Burma, has become one of the world's worst human-rights abusers. Its military rulers have clung to power after refusing to accept the results of a 1990 democratic election in which the National League for Democracy won an overwhelming majority.

Since then, they've waged a campaign of systematic repression and have kept NLD leader and Nobel laureate Aung San Suu Kyi under house arrest.

McGill's decision won't change its endowment holdings for now, acknowledges Ian Soutar, a Montreal investment manager who advises the university on matters of social responsibility.

Soutar said the university reviewed the portfolios run by its investment managers and determined it didn't own stocks in two companies that do business with the military regime: French oil giant Total and Canadian-owned company Ivanhoe Mines.

"As it turns out, to the best of our knowledge, none of (our) accounts own shares in these two companies.

"But at the same time, if we identify other companies in Burma that are aiding and abetting this quite illegitimate military regime that's taken over from a democratically elected government, we might (take action) as well.

"We think it's a bad place and we think it's important that McGill stands up and makes a statement here."

The interesting question is whether the Myanmar decision will set a precedent that's difficult to live with for those who manage the university's more than $700-million endowment.

Everybody has a favourite crusade on a university campus, whether it's tobacco, gambling, pharmaceuticals, Third World sweatshops or clear-cutting.

Indeed, the next cause gaining support at McGill is for the university to divest shares of companies operating in war-torn Sudan.

Soutar admits while this is the first time McGill has adopted a divestment policy since the South Africa issue came to a head, it's unlikely to be the last, given the growing strength of the corporate-responsibility movement.

Portfolio managers, by and large, do a good job of investing in a responsible manner, he says.

"But we've got to be careful in terms of tying the hands of our portfolio managers.

"I know, being an investment manager myself, if your clients start to tell you too much about how you're going to run your portfolios, it's not going to help, because you can't run them all differently.

"We want to be realistic."

"The other question is whether divestiture really does anything in terms of helping people in those countries," he says, and "there's two sides to that story."

The presentation to the board by McGill's Myanmar group noted that several universities in the U.S. have already taken action on the issue.

Harvard and Stanford both cancelled contracts with Pepsi because of that company's involvement in Myanmar.

The University of Minnesota divested from Total, and the University of Virginia sold off shares in Unocal, another oil and gas company operating in the country.

McGill's decision concerns two controversial projects under fire from Myanmar activists: the Yadana gas pipeline and the Monywa copper mine.

Total is participating in the Yadana project in partnership with the state-owned Myanmar Oil and Gas Enterprise.

"The Burmese Army provided security for this project, which resulted in serious violations of human rights," stated the presentation by the McGill activists.

Vancouver-based Ivanhoe Mines is a joint-venture partner with the Myanmar regime in the Monywa copper mine, where "forced labour was used to construct rail and power infrastructure," the McGill group says.

On Ivanhoe's website, the company claims the project is either "misunderstood or deliberately misrepresented" and says it has many supporters in Myanmar whOWN it to remain there.

phadekel@videotron.ca