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April 17, 2009

Vanguard Funds Agrees to Proxy Vote on Investing in Companies Complicit in Darfur Genocide
    by Robert Kropp

Shareowner action led by Investors Against Genocide proceeds to proxy ballot after Vanguard is found to have increased its holdings in PetroChina. -- A shareowner proposal that Vanguard Funds institute procedures to prevent holding investments in companies that contribute to genocide or crimes against humanity has been included in the proxy ballots mailed to shareowners of record of thirty of Vanguard's funds, with combined net assets of $597 billion.

Visit the
Prospectus Ordering CenterThe shareowner action was coordinated by Investors Against Genocide, a non-profit organization working to change investing strategies by investment firms so as to avoid complicity in genocide. Proxy voting for genocide-free investing at Vanguard is scheduled for July 2.

In its Securities and Exchange Commission (SEC) filing, the Vanguard trustees announced their opposition to the proposal, stating that Vanguard has been directed by them "to implement a formal procedure for regular reporting to the trustees on portfolio companies whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment."

However, Investors Against Genocide noted that during the first quarter of 2009, Vanguard increased its holdings of PetroChina and the other large oil industry partners of the government of Sudan which help fund the genocide in Darfur. Furthermore, Vanguard has declined to make public the policy adopted by its Board of Trustees.

Investors Against Genocide found support for its concerns regarding the reputational risks of funds that invest in companies which may be complicit in genocide in a 2007 report from KRC Research, a communications research firm. In its report, KRC found that 71% of Americans believe that companies should take human rights abuses such as genocide into account when investing overseas.

Furthermore, 77% of respondents said they would switch their investments to a different company if they learned that those managing their funds had significant investments in firms that were active in Sudan, and 84% said they would withdraw their investments from American companies that do business with companies that directly or indirectly
support genocide.

According to Investors Against Genocide, the government of Sudan uses as much as 70% of its oil revenue to provide arms and funding for genocide in Darfur, where hundreds of thousands have been killed and 2.7 million people have been driven from their homes.

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