CalSTRS' trustees would not be protected from fiduciary claims if the fund were to divest itself of Sudan-related investments, according to a staff memo to the board.
The California Legislature had indemnified trustees and their agents after the state required the $140 billion California State Teachers' Retirement System, Sacramento, to divest itself of holdings in companies that had ties to South Africa in 1986, the memo said. "This legislation violated the prudent person rule," it noted.
Staff plans to continue its policy of monitoring portfolio companies doing business in Sudan, the memo said. CalSTRS, along with a coalition of other public pension funds, first made contact with officials at ABB Ltd., Alcatel SA, Royal Dutch Shell PLC, Siemens AG and Total SA in 2004 to address their activities in the Sudan. Separately, CalSTRS sent letters recently to PetroChina Co. Ltd. and Marathon Oil Corp. officials about their Sudanese ties.
