Last month Human Rights Watch published Occupation Inc: How Settlement Businesses Contribute to Israel’s violations of Palestinian Rights. This is the first time a major international NGO has ventured onto ground previously trodden only by smaller, more local and more die-hard groups, such as the Israeli organisation Who Profits, which collates exhaustive data on the economy of the occupation, and the Palestinian Campaign for the Academic and Cultural Boycott of Israel. It is certainly the first time an organisation of HRW’s status has directed the spotlight not only at settlement-based businesses that export to Europe, but at businesses headquartered outside the occupied territories which make money in them.
Even advocates of the European Union’s recent move to distinguish settlement products from those made elsewhere in Israel admit that the economy of the settlements is virtually indiscernible from that of Israel as a whole. No major Israeli company has openly refused services to settlers, or declined to open a branch or chapter in a settlement (with the peculiar exception of McDonald’s, whose Israeli franchise is run by a founding member of Peace Now).
The settlements are attached to the Israeli electrical grid and serviced by Israeli public transport companies. Israeli banks lend money to construction companies building the settlements, and offer mortgages to Israelis wishing to buy houses there. As the HRW report observes, industrial zones and agricultural areas run by settlers occupy more than 10,000 hectares in the West Bank, compared to the 6000 hectares of residential settlements.
HRW stops short of naming most of the businesses whose activity it investigates, and in terms of coercive potential its recommendations are rather mild. In effect, whether or not to abide by international law is left at the discretion of the businesses themselves, with the report taking care not to explicitly invite states or individuals to put pressure on entities that profit from the occupation. At most, it encourages states to issue guidelines recommending businesses spare themselves the reputational damage that might arise from their complicity in violating international law.
In doing so, HRW implicitly distances itself from the Boycott, Divestment and Sanctions movement, and from other groups that called for punitive economic measures against Israel and Israeli interests. It’s also careful not to fall foul of Israel’s anti-boycott law, which gives companies and individuals the right to sue anyone calling for a boycott if they feel they have been disadvantaged by it. By withholding the names of the companies, HRW protects itself from legal wrangling with corporate lawyers that could have crippled or delayed the report. But it also shields the companies from the kind of public pressure that could make operating in the Occupied Territories more trouble than it’s worth.
The report is a warning shot across the bow: we know who you are, the report tells these companies, and the way things are going, your clients and business partners are going to know too, whether we are the ones to turn the light on you or not. Such discretion has its advantages, especially in a sector as publicity-averse as finance. An increasing number of companies, pension funds and investors have been quietly seeking the advice of experts on international law regarding their involvement with Israeli businesses in the Occupied Territories. In some cases, such as that of the United Methodist Church, the consultations resulted in loud public divestments. In others, companies pulled back quietly, without offering any political explanation of their divestment. It wouldn’t be far fetched to suggest that some of the companies covered by the report will already be reconsidering their interests.
Seventeen European states have issued guidelines advising companies against investment in the Occupied Territories, and the European Union’s mounting frustration with the occupation – half a century old next year, with no end in sight – is gradually putting an operational edge on its rhetoric. Already, Israel has agreed that no money from European research grants will end up beyond the Green Line, as well as selling farm produce from the settlements domestically rather than exporting it to Europe. The labelling of settlement products may not affect the economy of the occupation very much, but it sets a precedent: requiring Israeli banks to differentiate between their operations on either side of the Green Line no longer seems impossible.