"I'd like a sausage biscuit, please." "I'm sorry, sir, but sausage is haram. Here is a plain biscuit and a complementary copy of the Holy Qur'an."
"Will Caribou's Shari'ah Affect Shares?," from the Motley Fool, with thanks to Susan:
When my Foolish colleague W.D. Crotty recently gave investors a good look at the newly public Caribou Coffee (Nasdaq: CBOU - News), there was one interesting detail he omitted. And this detail, if misunderstood by the investing public, could cause some rather significant problems in the future. After the deal is done, Caribou Coffee will still be controlled by its primary investor -- Arcapita Bank, formerly known as First Islamic Investment Bank. Those who run Arcapita (and its subsidiaries) do so according to Islamic principles collectively known as shari'ah (or shariah or sharia). Shari'ah encompasses a wide range of rules and customs, including some that directly impact the running of a business.Specifically, shari'ah influences how the company borrows or lends money, how it may engage in derivative transactions, and what sorts of products it may sell. On the subject of borrowing and lending, shari'ah can be a bit confusing, and there is disagreement within the Islamic community as to what constitutes acceptable or unacceptable transactions. While Caribou has borrowed money in the past, investors should realize that negotiating future borrowings that comply with shari'ah could take a little time and might impair the company's access to quick sources of capital.
Other areas are decidedly clearer. Caribou will not engage in derivative transactions, which could impair the company's ability to hedge future coffee prices. Elsewhere, the company will not be engaging in activities pertaining to alcohol, gambling, pornography, or pork. I don't see how any of the first three will have any bearing on running a coffee shop to compete with the likes of Starbucks (Nasdaq: SBUX - News) or Peet's Coffee (Nasdaq: PEET - News), but I suppose it's conceptually possible that not being able to sell pork products (like a ham sandwich or bacon wrap) could hurt Caribou's standing with some customers.
The bigger risk in my view, though, is ignorance. Islam is not exactly well understood in this country, and there are a lot of people who go into knee-jerk reactions when they hear the word. Accordingly, companies in the U.S. like Caribou and its sister company Church's Chicken that run themselves according to shari'ah may be the unfair targets of malice, bias, and flat-out ignorance from time to time.
Um, shouldn't that be Mosque's Chicken? After all, if a Church's Chicken burns down, will they be allowed to rebuild it according to Sharia?
(Yes, Ibrahim, yes, Stephen, that's a joke.)
Seriously, I think the biggest risk is ignorance, too: I think people should inform themselves thoroughly about Sharia and its implications. No one should act out of malice or bias, but they should know that the same Sharia by which Caribou and Church's are run mandates second-class status for women and non-Muslims. And that is not just an issue of a sausage biscuit, but of basic human rights.
For those who may not know about Arcapita Bank, here is the first paragraph of a message from the CEO:
I would be interested in a boycott of all sharia business' After all, sharia is unconstitutional and distinctly un-American.
http://divestterror.org/
Here is a good news story - an Academic tells PM that his Polically Correct version of the latest Bali Bombings on the weekend is crap:-
Read it all at: http://www.optusnet.com.au/news/story/abc/20051004/08/domestic/1473775.inp
Expert says PM's wrong on Bali motivation
7:02 AM October 4
An expert on Jihadist extremism in Indonesia has disagreed with the Prime Minister's view on the motives of the Bali bombers.
The South-East Asian director of the International Crisis Group, Sidney Jones, has also warned of a new Islamic special forces unit.
Prime Minister John Howard says Saturday night's bombings in Bali were aimed at destabilising the Indonesian Government.
But Dr Jones has told ABC TV's Lateline she does not agree.
"I don't think they think in those political kinds of terms," she said. "Nor do I think that their aim is to undermine a democratic system per se.
"I think they very much see the world in a black and white way, us against them, Muslims against infidels.
Thank you Stephen Simpson for pointing out who now owns Church's Chicken. My families boycott of this chain will not come as a result of "malice, bias, and flat-out ignorance". No, it will come from a conscious decision not to support a company that would allow a pre-modern legal system be embedded in it's core business values. Damm, that was good chicken too. I guess it's just Popeye's and the Colonel from here on out.
No islamic chicken for me.
"The bigger risk in my view, though, is ignorance." Steven doesn't know how very correct he is!
I visited their website and left this message:
"I read Stephen D. Simpson's article "Will Caribou's Shariah Affect Shares?" It reflects a profound misunderstanding of shariah law in Islam. Shariah laws are the laws that a devout Muslim must live by, and they cover ALL aspects of one's life. This is why Muslims think of their religion as "having all the answers" and being a "total religion." For business, shariah law typically means that no interest can be charged. Instead of charging interest, business loans have a front end charge.
Shariah law covers many other aspects of life. Under shariah law, homosexuality and adultery are punishable by 80-100 lashes and death by stoning. Such sentences are unfortunately carried out today in several Muslim countries. Under shariah inheritance law, daughters inherit half of what their brothers do. Under Shariah law, a woman who is raped must have four male witnesses who were present at the rape. A woman's testimony is worth half that of a man. Non-muslims do not have the same protection under shariah law as Muslims do. I could go on, but maybe you get the picture. Shariah law covers a great many things, and much of it is completely antithetical to the basic tenets and values of our Western society.
I disagree that anyone who refuses to do buy stock in an Islamic business committed to fully imeplementing shariah law is full of "malice, bias and flat-out ignorance." I think it's a sound decision with a healthy amount of self-preservation. Why would anyone WANT to support a business model that is counter to our most basic Western Enlightenment values?
Robert, thank you for publishing this article. I'm signing on to William's boycott, even though I like Church's Chicken. I made up my mind months ago not to support muslim enterprises. It cost me a good source of feta cheeze and olives, but, then, there are some higher principles involved, like staying alive.
Eschwapp's link shows that this Arcapita outfit has a return on assets of 5.85 percent, and a return on equity of around 25 percent. These are very respectable numbers. Actually, they're scary. Islamic finance is a strong emerging trend. Take a look at www.islamicfinancetraining.com for another insight into the subject.
Great letter Kelley!
So Church's Chicken is muslim-owned?! That's a real shocker, not that I eat it; it's way too greasy. Isn't it a franchise operation like KFC? How could a muslim-owned restaurant chain be called "Church's?" That's too funny.
A realtor friend told me that Church's builds restaurants only in areas with a high concentration of African-Americans. I like their fried okra but I can live without it. I wonder if their chickens are slaughtered by a halal butcher, or maybe they buy them from Tyson's, which seems to love muslim labor despite all the hassles. I heard 300 of them went on strike last week over "prayer breaks." Disgusting.
"Caribou" coffee? Why? Is there an actual association with any North American aboriginal groups here or is this just a cheesy attempt at sounding "native" despite the corporate Sharia compliance?
Arcapita is an invenstment firm, not a legislative body. They are not enforcing shariah accross the world. They simply are following a specific set of financial rules which their investors would like to respect. The irony is that shariah finace laws are meant to give leverage to the poor and underserved! I cant comment of the fiscal details of this or if it works well or not, I'm not an expert. But the explicit reason for these laws is as such, so its supposed to be morally commendable.
So I dont see what supposed evil Arcapita is doing. Now, if you dont like them because they are muslim, and thats all, then you have other issues, and should just admit that you are a racist. In this case, not against a race, but a group of people who follow a certain religion. Muslims number close to 1 billion people, and the "other 99.9%" (who arent on the evening news making video tapes, etc) do not support the murders and all that. The western press did not cover, at all, a major conference of international islamic shariah scholars recently in Cairo where they unanimously condemned all acts of terror against civilians.
As for women's issues, theres a huge variation of how women are treated accross the muslim world, and people's cultures end up projecting onto the religion what they see fit. Covering your hair by itself is not oppression. Less than one hundred years ago, most women in this country still covered their hair when they went outside. All accross rural europe this is still done today. So be careful in what you mean by oppression, true oppression surely exists in the muslim world, but not as much as you would think.
The most populous muslim country is indonesia, by the way, not saudi arabia.