Brownback Adds Powerful Senate Voice to Public, Congressional Calls on S.E.C.’s Levitt to ‘Deny or Suspend’ PetroChina Listing

(Washington, D.C.): Senator Sam Brownback (R-KS), the
Chairman of the Near Eastern and
South Asian Affairs Subcommittee of the Senate Foreign Relations Committee, today lent his
considerable influence to the campaign to prevent American investors from unwittingly aiding
genocide, slave-trading and terrorism in Sudan — a prospect looming thanks to a Chinese
government-owned company’s multi-billion dollar Initial Public Offering, expected to be issued
on the New York Stock Exchange next month. The Senator weighed in via a letter to the
Chairman of the Securities and Exchange Commission, Arthur Levitt, Jr., asking him
“to
recommend either a listing denial or, at the very least, a cooling down period of at
least 90
days, providing ample time for Congress to review the full implications of a PetroChina entry
into the U.S. capital markets.” (Emphasis added.)

Sen. Brownback’s letter comes on the heels of letters on the same subject sent over the
past ten
days by two other influential Members of Congress — Representatives Michael
Oxley (R-OH),
Chairman of the House Commerce Subcommittee on Financial and Hazardous Materials (which
has direct oversight over the SEC — and Spencer Bachus (R.-AL), Chairman
of the House
Banking Subcommittee on Domestic and International Monetary Policy.

The following text of the Brownback letter concludes with a powerful admonition:

“The brief window presently planned [for SEC review of the PetroChina IPO]
would
provide little time for adequate scrutiny by possible investors, particularly in light of
the growing controversy surrounding this proposed listing. American capital markets
should not service Khartoum’s destructive ambitions. At the least, American
investors should be fully informed of the dire consequences for millions of people
associated with this prospective stock purchase.” (Emphasis added.)

March 17, 2000

Mr. Arthur Levitt
Chairman
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20001-2739

Dear Mr. Levitt:

This is the letter promised in our previous phone conversation regarding the imminent listing
of
PetroChina on the New York Stock Exchange. Many of my colleagues in Congress are troubled
by the prospect of PetroChina entering U.S. equity markets with a multi-billion dollar initial
public offering. I am writing to ask you to disapprove this listing for the following reasons, or at
the very least, delay this listing for at least 90 days pending a serious review of the consequences.
In short, I am gravely concerned that such approval would cause American investors to
unwittingly empower a terrorist and genocidal regime in Sudan.

PetroChina, as you are aware, is the newly-created subsidiary of China National Petroleum
Company (CNPC). In turn, CNPC is a Chinese government company and the largest shareholder
(40%) in the Sudanese government’s oil joint venture, the Greater Nile Petroleum Operating
Company (GNPOC).

The brutal conduct of the government of Sudan has triggered comprehensive U.S. trade and
financial sanctions. The recently installed Religious Liberty Commission designated the
Khartoum regime as an “egregious” religious persecutor. The GNPOC joint venture was itself
specially designated as a sanctioned entity by the U.S. Treasury Department on Feb. 16th. My
colleagues and I are concerned that America’s sanction regime could be critically undermined by
the listing of PetroChina.

Seventeen years of ruthless war sponsored by the National Islamic Front government has laid
waste the Sudanese people, particularly in the South which is occupied by Christians and African
traditional believers. The devastation is extraordinary, with two million dead in the last decade,
five million internally displaced, countless sold into slavery, and millions brought to the brink of
starvation by what my colleague Senator Bill Frist characterized as “calculated starvation.”

The death toll in Sudan is more than twice that of Rwanda and greater than that of Rwanda,
Bosnia, Kosovo and East Timor combined. After reviewing detailed reports of the Sudanese
government’s deliberate policies of starvation, enslavement, civilian bombardment, rape, water-
supply poisonings, religious persecution, torture, and the mass destruction of unarmed villages,
churches and refugee camps, Nobel laureate and holocaust survivor Elie Wiesel wrote, “I am
haunted by what I know of Sudan.”

Recent assessments by the United States States, the Canadian government, and the United
Nations have all found links between these human rights atrocities of the Khartoum regime with
the Greater Nile oil project.

Since the oil pipeline revenues began flowing several months ago, the Khartoum regime has
escalated its ruthless assaults on the southern civilian populations. Those areas immediately
surrounding the pipeline are targeted with particular savagery. Recent eyewitness accounts from
international aid workers assert that the Sudanese military is carrying out a scorched-earth
program. This scorched-earth warfare includes the killing, enslaving, and torturing of those with
the misfortune of having homes in the oil regions, mostly the Dinka and Nuer tribes. This
involves the bombing and burning of villages. This involves the deliberate destruction of crops
and cattle to induce starvation and flight.

This region is quickly becoming uninhabitable because of the oil development. At a recent
hearing on this subject, it was observed that, “The scorched-earth warfare of the Government of
Sudan and its local military allies has the clear goal of creating a ‘sanitized’ security corridor for
the Greater Nile project in all its forms: the pipeline, the rigs in the oil fields, the attendant
infrastructure, and the concessions where future development and extraction will take place.”

The international press, as well as a recent report commissioned by the Canadian
government,
have concluded that oil development resources are being used for military purposes, including
roads, airstrips and aircraft. Helicopter gun ships and Antonov bombers, routinely employed by
the Khartoum regime against civilians, reportedly use the airstrip of the oil partners. On March
1, the Khartoum regime bombed the Samaritan’s Purse hospital, run by the family of Rev. Billy
Graham, in Lui near Juba in southern Sudan, where four American doctors have treated over
100,000 patients since 1998. In this tragic bombing, at least two patients died. A few weeks
before, the government had deliberately bombed a Catholic primary school in the Nuba
mountains, killing 14 children. It should be noted that bombing of the hospital in Yei, sponsored
by Norwegian People’s Aid, is common practice. I personally witnessed the destruction to the
hospital in a trip to Sudan last year.

The war and the oil development were explicitly linked in a the February 14^th
report by John
Harker, which was petitioned by the Canadian government to review this nexus. The Harker
Report concluded that, “It is difficult to imagine a cease-fire while oil extraction continues, and
almost impossible to do so if revenues keep flowing to the GNPOC partners and the Government
of Sudan as currently arranged.” A report by the UN Special Rapporteur on Sudan last October
reinforces these assessments, “The oil issue and the extremely volatile situation prevailing in
western Upper Nile are clearly at the core of the armed conflict in the Sudan and have
particularly dire consequences for peace.”

PetroChina was hastily created as a subsidiary of China National Petroleum Corporation
(CNPC)
in November, after CNPC came under intense criticism for seeking a listing in U.S. equity
markets. The draft prospectus fails to adequately disclose the extraordinary human rights abuses
associated with this oil development, as well as the war generally. Also, the draft inadequately
informs shareholders of the lack of legal recourse in China. Most problematic, I fear that U.S.
investor proceeds will invariably flow to Khartoum. In short, this sanctioned and unprincipled
government will be strengthened by oil wealth provided by unwitting American investors.

For these reasons, I am asking you to recommend either a listing denial or, at the very least, a
cooling down period of at least 90 days, providing ample time for Congress to review the full
implications of a PetroChina entry into the U.S. capital markets. The brief window presently
planned would provide little time for adequate scrutiny by possible investors, particularly in light
of the growing controversy surrounding this proposed listing. American capital markets should
not service Khartoum’s destructive ambitions. At the least, American investors should be fully
informed of the dire consequences for millions of people associated with this prospective stock
purchase. Thank you for considering this request for denial or delay of the PetroChina listing.

Sincerely,

Sam Brownback
United States Senator

Cc: Mr. Richard Grasso, President, New York Stock Exchange