Responding to a shareholder proposal from the New York City Police and Fire Pension Funds, the Halliburton Company has agreed to establish a Board of Directors' committee to review the corporation's operations in Iran. The decision comes just days after the U.S. Securities and Exchange Commission said it refused to state that it would take no action against Halliburton if the company omitted the pension fund proposal from its 2003 proxy materials.

New York City Comptroller William C. Thompson. Jr. submitted the proposal on behalf of the Police and Fire Pension Funds last Fall amid heightened concerns about corporate ties to states sponsoring terrorist activity. In February 2000, Halliburton opened an office in Iran under the name Halliburton Products and Services Ltd., its Cayman Islands subsidiary.

"The Iranian government has actively supported and funded terrorist operations against innocent civilians outside its own borders," the resolution read. "These activities led to the imposition of government sanctions that provide that virtually all trade and investment activity with Iran by U.S. corporations is prohibited."

Following the SEC's decision, Halliburton would have had to put the resolution before shareholders at its May 21 meeting. The Comptroller's Office has recommended that the Funds withdraw the resolution.

"I am pleased that Halliburton has agreed to review its offshore operations," Comptroller Thompson said. "In the current global climate, it is important that shareholders have full and complete confidence that companies with which they do business are not, in any indirect way, supporting terrorists. Halliburton has taken the correct path to instill shareholder confidence."

The two pension funds, which have more than $18 million in holdings in Halliburton, submitted similar resolutions with ConocoPhillips and the General Electric Company. General Electric conducts business operations with the Iranian government through its Canadian subsidiary, General Electric Hydro. ConocoPhillips has operations in Iran and Syria through its UK subsidiary, Conoco, Ltd. The two funds have more than $31 million in holdings in ConocoPhillips, and $205 million in General Electric.

Talks have been scheduled between the funds and ConocoPhillips, although the company has requested that the SEC block the funds' resolution for this year's proxy season. General Electric plans to include it in their proxy at this year's shareholder's meeting.

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