Mr. Buffet, my name is Judith Porter, and I am the shareholder who introduced the proxy resolution involving Berkshire Hathaway's divestment of PetroChina, which is implicated in the genocide in Darfur, Sudan. I want to thank you for allowing us to speak to this resolution. In many countries, it would be impossible for us to do so, but we are indeed fortunate to live in a country where we can express our opinion without fear or recrimination.  Before my husband formally presents the resolution, I want to explain to you why I have introduced it. 

My family is no stranger to genocide. My grandparents were murdered in 1941 in the Nazi genocide, as were other members of my family.  I will never forget the despair my father expressed when my aunt, who was released from Bergen Belsen concentration camp, sent him a letter telling him what happened to his family.  It deeply affected him for the rest of his life, and I was raised to believe that genocide should never again happen. Never again!

The world was silent when my grandparents were murdered.  But genocide has continued.  In the genocide in Cambodia, the world was silent.  In the genocide in Bosnia, the world was silent until late in the slaughter.  The world was again silent in the horrible genocide in Rwanda.  How many times must we say "Never Again."

Now there is the first genocide of the twenty-first century in Darfur.  Two and one half million civilians have been driven from their homes, More than 400,000 have been killed, and 1600 villages have been destroyed.  Berkshire Hathaway can play a role in ending this slaughter by divesting in PetroChina, as we will shortly describe.  As an exemplar of both business ethics and personal integrity, your support of divestment will send a signal to China and the Sudan that there are costs to continuing the destruction, and lead other corporations to follow your ethical actions. 

Genocide is never a good investment.

I can think of no greater tribute to my grandparents than introducing this resolution.  As Elie Weisel said in his Nobel Prize speech, 'We must take sides.  Neutrality helps the oppressor,. Never the victim.  Silence encourages the tormentor, never the tormented.  Sometimes we must interfere.'

My husband will now present the proxy resolution. He will be followed by Jason Miller, who will speak about the relationship between CNPC and PetroChina. AbdelMagid, who is from Darfur, will speak about the genocide taking place, and Bob Edgar, secretary general of the National Council of Churches, will conclude our discussion of the resolution.

Good Afternoon:

My wife and I understand that as the owner of 10 shares of B stock she is not a major investor in the company, but she is still part of the Berkshire family.  In Berkshire's owner's manual, it states that you, Mr. Buffett, think of the shareholders as owner-partners and hope that we  visualize ourselves as a part owner of a business that we expect to stay with indefinitely.

As an owner-partner my wife believes that she has a responsibility for the actions of the company and a responsibility to try to influence the company to act in an ethical manner.  Consistent with this responsibility she filed the following shareholder resolution and I am pleased to formally present it today.

Resolved that Berkshire Hathaway Inc. shall not invest in the securities of any foreign corporation or subsidiary thereof that engages in activities that would be prohibited for U.S corporations by Executive order of the President of the United States.

On November 3, 1997 President Bill Clinton issued Executive Order 13067 which imposed a trade embargo prohibiting most American businesses from operating in the Sudan.  This executive order was expanded on April 27, 2006 by President George W. Bush. 

While it is true that American companies can not do business in the Sudan, Americans can invest in Asian and European companies that do business in the Sudan.  Such investments do not violate the "letter of the law," but they certainly do violate "the spirit of the law" and are counter to the stated policy of the United States. 

The facts of the genocide are not in dispute. Berkshire's management has stated that it agrees with our analysis of the conditions within the Sudan and sympathizes with the desire to remedy these. 

We also believe that there is general agreement that the Chinese National Petroleum Company, CNPC, plays a major role in funding the genocide,  in providing weapons to the Sudanese, in cooperating with the Sudanese military,  in forcibly displacing local populations, and in myriad other ways facilitating the killing of hundreds of thousands of Darfuris. CNPC is the largest foreign investor in Sudan's oil industry and fully 70% of the revenues Khartoum generates from CNPC's operations goes to its military which, in turn, conducts the genocide in Darfur.  We are here today because Berkshire Hathaway is the major non-Chinese investor in CNPC's  subsidiary, PetroChina. 

You, Mr. Buffet, have stated that you believe that we are wrong both in our analysis of PetroChina's connections to the genocide and the belief that divesting the company's PetroChina holdings would in any way have a beneficial effect on Sudanese behavior.

WE DISAGREE.

Management is correct in stating that PetroChina does not do business in the Sudan.  However, as management agrees, PetroChina's parent company CNPC is a major investor in the Sudan and funds from that business relationship help provide the instrumentalities of genocide.  Management claims that the relationship between PetroChina and CNPC is similar to that between Fanny Mae and the US government.  That argument is fallacious.  The Harvard University Advisory Committee on Social Responsibility exanmined  the management of the two companies.  The results of that review were striking.   There was almost total management overlap between the two companies.

Andrew Leonard writing for Salon.com commented:

The management structure outlined by Harvard does not appear to be a typical parent company/subsidiary relationship. To declare that a subsidiary has no ability to control the policies of the parent, when the two entities are run by the exact same people, is an exercise in specious obfuscation. 

That still leaves open the question of whether Berkshire's divestment would contribute to a cessation of the genocide taking place in Darfur.

Two US Presidents have stated clearly that it is against the national interest of the United States for US companies to do business in the Sudan.  It is the position of the US Government that a targeted economic boycott of the Sudan will help end the genocide in Darfur.  For a US company to invest in a foreign company, such as PetroChina,  that engages in business in the Sudan is a circumvention of Executive Order 13067 and weakens the U.S. sanctions. 

Economic sanctions against the Sudan have worked in the past.  For example, Talisman Oil's sale of its assets in the Sudan helped bring about the end of the civil war in the Sudan. 

Sudan's main protector in the United Nations is the government of China.  China will be hosting the 2008 Olympics and is very sensitive about negative publicity that could be aimed at that event.  In response to the recent criticism of the Chinese support of the Sudan by Mia Farrow and Steven Spielberg, a senior Chinese official traveled to Sudan to push the Sudanese government to accept a United Nations peacekeeping force.

Mr. Buffett, you have said, that neither you nor Berkshire has the power to influence the government of China.  However, you and the company are viewed as exemplars of ethical behavior.  If Berkshire were to take the lead and divest, others would follow.  If Mia Farrow can cause change then so too can Warren Buffett. No one divestment in South Africa brought about the end of apartheid but if we all act together we have tremendous power to bring pressure on the Sudanese government to stop the genocide.

During the last two decades, beginning with the tearing down of the Berlin Wall in October 1989, we have seen events that no person could ever have anticipated: the breakup of the Soviet Union and democratization of Eastern Europe, and an unbelievable transition in South Africa. 

What we have learned is that all things are possible.  There are important issues in our society that desperately need our attention.  Remember the words of Hillel: "If I am not for myself, who will be for me?  If I am for myself alone, what am I?  If not now, when?" 

Thank you
__________________________

* The comments above were abbreviated at the meeting when we were told that our allocated time was limited.
 

CNPC is a detrimental presence in Sudan:
 

• By far and away, the largest investor in Sudan's oil industry, with over $5 billion already invested by the company in Sudan and a 40% plurality stake in Sudan's two largest oil consortiums; CNPC employees are Presidents of both of Sudan's largest oil consortiums and therefore bear ultimate responsibility for consortium behavior.
• Production sharing agreements send 60-80% of consortium profits to the Government of Sudan
• In turn, Government of Sudan spends 70-80% of oil revenues on military, the very same instrument being used to prosecute Darfur's genocide
• China sends arms to Sudan to protect its oil assets, but those arms also make their way to Darfur- most government military equipment in Darfur is from China.
• CNPC has participated in widespread and officially documented abuses including forced displacement of local populations, facilitation of Sudanese military operations by use of company grounds, gross contamination of community drinking water and myriad other environmental problems, rampant graft, and labor abuses; both government officials off the record and NGOs in Sudan unambiguously paint CNPC as the most irresponsible oil player in the country.
• Most Importantly: Business with CNPC comes with China's protection of Sudan against international outrage, especially on the UN Security Council where China, as a permanent member with veto power, has rejected sanctions on Sudan, a UN peacekeeping force into Darfur, and even an arms embargo on the entire country.

PetroChina and CNPC*:
 

• Firewall created at PetroChina's IPO to ensure that PetroChina would have no connection to CNPC's problematic Sudan operations
• Firewall has completely broken down for two basic reasons- management overlap between the two companies and substantial and subsidized asset transfers between PetroChina and CNPC.

• Slew of other management irregularities we've documented call into doubt just how distinct these two entities are in terms of management; while Mr. Buffett has rightly pointed out that Nebraska Furniture Mart has no control over Berkshire policies or that Fannie Mae or Freddie Mac have no control over US government policies, in neither of these examples does management overlap at all.

• Soft
• After IPO, PetroChina took on $15 billion in debt from CNPC; 10% of IPO proceeds also went to CNPC- both debt relief and IPO proceed transfers give CNPC capacity in Sudan, which is, by far and away, CNPC's largest oversees endeavor.
• In 2005, company placed $3.15 billion of its cash in CNPC's finance arm, money that could then be freely used to finance CNPC's projects in Sudan
• PetroChina receives unsecured loans at below market interest from CNPC, a clear form of subsidy
• 50% of CNPC's profits are generated from PetroChina's dividend payments to the company- this money can then clearly be used for any purpose, including Sudan
• 64% of CNPC's total assets are accounted for by its shareholder equity in PetroChina.
• Hard
• Tens of billions of dollars in hard asset transfers have taken place between the companies since PetroChina's IPO
• Most of these have taken place with highly questionable valuation techniques given that PetroChina and CNPC are connected parties. These questionable techniques include valuations based solely on non-public, un-audited data, undisclosed valuation methodologies, and undisclosed "adjustments" to valuations agreed to by connected parties. This almost guarantees that hard asset transfers are taking place outside of market rates, created de facto cross-subsidies between the two companies
• Most recently, PetroChina has begun construction of a $1.6 billion Chinese refinery dedicated to refining Sudanese crude extracted by its parent company- construction of the refinery will be supported by CNPC 

PetroChina is a legitimate target for shareholders concerned about CNPC's operations in Sudan:

1. 1. PetroChina wields tremendous influence over CNPC

• Complete management overlap- when you talk to PetroChina's President, you are talking to CNPC's President; hard to imagine any more influence than that
• CNPC would fail to survive without PetroChina- 50% of profit, 64% of assets, most of CNPC's revenue comes from provision of goods and services to PetroChina, etc.
• Investing in PetroChina is equivalent to investing in CNPC's primary financial supporter
• So pressure on PetroChina will register in the management decision-making at CNPC
• 2. PetroChina is creeping as close as it can get to CNPC's Sudan assets while still maintaining the mirage of separation.

 
• New refinery dedicated to Sudanese crude
• PetroChina and CNPC's CFO claiming that PetroChina has the preemptive right to acquire CNPC's Sudan assets
• Director of PetroChina is former head of Sudan's largest oil consortium at a time when the Canadian government had documented gross human rights abuses by the consortium.
•  3. Given CNPC's abusive history in Sudan and its role in perpetuating Darfur's genocide, even the faintest whiff of connection between PetroChina and CNPC should trigger at least initial action. 

•  4. Berkshire Hathaway has tremendous market influence
• PetroChina shareprice has dropped on potential selling news by Berkshire in the past
• PetroChina and CNPC care about having the world's greatest investor as their top investor
• The power of prominent individuals to influence China to change its behavior in Sudan has already been shown this year with Ms. Farrow and Mr. Spielberg 

Most likely outcome if pressure on PetroChina increases:
 

• Growing consensus among US and European officials, think tanks, and NGOs that China is feeling and responding to international outrage regarding its support of Sudan, which in large part is carried out through CNPC.
• Not a single Sudan expert among the dozens we have talked to think CNPC will give up its oil asset in Sudan- CNPC's operations in Sudan is one of the most critical parts of China's energy policy and it would rather change its behavior than abdicate these assets, which account for almost 10% of China's oil imports.
• So most likely outcome is a shift in CNPC's behavior in Sudan and a shift in China's approach towards absolute protection of Sudan on the UN Security Council
• In the EXTREMELY UNLIKELY event that CNPC does decide to sell off its assets in the country, the state-owned oil firms of Malaysia and India, which are the other two big oil players in Sudan, have expressed eagerness to expand their operations in Sudan and will almost assuredly snatch up CNPC's assets. Importantly, every expert we have talked to that is familiar with Sudan's oil industry state that the Malaysian and Indian oil firm's operations in Sudan, while still highly problematic, are not nearly as irresponsible as CNPC's operations.More importantly, Malaysia and India can not afford Sudan the international protection or the free flow of arms that China can.
• Sudan does not have the money to afford nor the capacity to operate CNPC's operations. They would lose money if they bought CNPC's assets since their technical capacity is dwarfed by CNPC's and they already receive 60-80% of all profit generated by CNPC in Sudan.

_______________________
*The slides shown above were prepared for the meeting.  However, shortly before the meeting, we were informed that we would not have access to the projection facility.  These remarks were also abbreviated because of the limited time available.

Good afternoon, and thank you for inviting me to speak about Darfur.

My name is Abdelmagid Yousif and I am speaking today as a proxy for Etta and James Friend who are the holders of 4 shares of class B stock.  I am from western Darfur. My parents still live in Darfur.

I fled from Sudan to Egypt in September 2002 after being expelled from Sudan University in Khartoum for speaking out on the situation in Darfur.

I had been in the university for 3 years, majoring in Electrical Engineering. Also I was the Secretary of Media for the Association of Darfurian Student in Universities of Khartoum. The government targeted any Darfurian group in the University. Me and my friends in the Association were arrested by the government security forces.

We were detained for a few weeks and we suffered from abuse physically and physiology every day,  until they released and told us we were not allowed to go to any university and we had to stay away from any activities for the Association. 

I went back to my home in Darfur to be with my family on April 2002.  That was about the time the genocide started in Darfur. The Arab Militia "janjaweed" with support of Sudan government attacked the villages and cities in Darfur by burning, killing, cut the transportation between the villages. The situation was getting worse every day.

I thought about my family, my education, and my safety.  I fled to Egypt and I applied for refugee status with the United Nation High Commission for Refugees office in Cairo. 

I gained Refugee status in the United State and I moved to Des Moines Iowa on March 2005. Since that time I have been working as a nursing assistant and studying to improve my English so I can go back to the university and finish my education.

The "janjaweed" attacked my family's home in Darfur on January, 8, 2007. Four armed  men from the "janjaweed" attack our home in the early morning. At that time there was a guest in my family home. The "janjaweed" left him without attention so he ran away to get help from our neighbor. The "janjaweed" started by taking all the money and jewelry from my family. When the "janjaweed" found out that someone had run to get help they left my family but they promised them they were going to come back. Even though my family escaped injury, my neighbor Alteeb Hassan and his entire family of 5 were murdered by the "janjaweed". The "janjaweed" also took their horses. And their activities were ongoing in my town. For a while everyday in my community someone was murdered or raped by the "janjaweed". My Mom told me "everybody wakes up everyday and the first thing they do is check the neighbors and the relatives to see if they are alive or not and so do I."

The "janjaweed" are still in my town. Now they work as gangs who kill and rape.  Every family is affected and nobody can stop them.

Even though I live in safety and peace here in USA I still worry about my family back home in Darfur. Please try to do anything to help my family and all people in Darfur. I need your help. If you do the simple thing like tell your friend about the genocide in Darfur or join an organization or talk or send letter to your member of congress or do not invest in any companies that help genocide in Darfur.

Please, Mr. Buffett and Berkshire-Hathaway shareholders, get involved to bring the hope and peace to the children and women and all of us in Darfur.  Whatever you do to stop the genocide in Darfur it is saving the lives of human beings.

Thank you for listening.

My name is Bob Edgar. 

I am General Secretary of the National Council of Churches USA and a former member of the United States Congress.  I am speaking today in support of this shareholders resolution on Darfur as a proxy for Doris Gluck who holds ten shares of the company's Class B stock.

Dr. Martin Luther King Jr. reminds us that "our lives begin and end the day we become silent about things that matter.  We will not be silent."

I am here representing millions of faithful Americans who will not be silent on the issue of genocide in Darfur.

This morning, Mr. Buffet, you said, and I quote, "I find it reprehensible when a government preys on the weaknesses of its citizens rather than protecting them." 

You were talking about gambling and you were right. 
We urge you to think the same about the genocide in Darfur.

On a document you distributed to your shareholders in opposition to this resolution you said this: "Proponents of the Chinese government's divesting should ask the most important question in economics, '...and then what?'"

We are prepared to answer that question - AND THEN WHAT?

Then the world would finally focus on the issue of genocide in Darfur.

Then other international investors would follow behind Berkshire Hathaway's moral leadership and call on all governments to stop the genocide NOW.

Then the world would finally focus on the issue of genocide in Darfur.

Then other international investors would follow behind Berkshire Hathaway's moral leadership and call on all governments to stop the genocide NOW.

Then the children of Darfur would not be killed. 
The mothers and daughters would not be raped. 

It was Pope John Paul who reminded us that:  "I dream of a world where none will be so poor that they have nothing to give and none will be so rich that they have nothing to receive."

I think when Jesus said we should love our neighbors as ourselves, he meant we should probably try every means available to stop those neighbors from being killed.  This is just one way we can follow those words of Jesus.