New Report Exposes Billions in European Financial Support to Companies in Settlements
Editor’s Note: Much of the recent debate about US or European companies doing business in settlements, from Ben and Jerry’s to Airbnb, or more broadly about business-focused campaigns such as BDS, misses a different part of the financial picture underlying the settlement system and structure. Specifically, although we hear a lot about tax incentives provided to settlers and military support to settlements, there is an overlooked debate about the financing and banking enabling business in settlements. So, when we read recently about a new report discussing these issues, we invited a post in order to learn more about the findings. The following post comes from Willem Staes of Belgian NGO 11.11.11 (bio at the end):
672 European financial institutions have financial relationships worth US$ 255 billion with 50 businesses that are actively involved with illegal Israeli settlements. These financial institutions need to take urgent action to stop providing Israeli settlements with the economic oxygen they require to grow and thrive.
Israeli settlements are illegal under international law and constitute acts which incur individual criminal liability as war crimes and crimes against humanity under the Rome Statute of the International Criminal Court (ICC). Yet European financial institutions continue to invest billions into companies that are actively involved with the Israeli settlement enterprise.
That’s why my organisation 11.11.11, together with 25 other organisations in Palestine, Belgium, France, Ireland, the Netherlands, Norway, Spain and the UK, came together to form the Don’t Buy into Occupation (DBIO) coalition.
Our research, published on 29 September 2021, shows that between 2018 and May 2021, 672 European financial institutions, including banks, asset managers, insurance companies, and pension funds, had financial relationships with 50 businesses that are actively involved with Israeli settlements. US$ 114 billion was provided in the form of loans and underwritings. As of May 2021, European investors also held US$ 141 billion in shares and bonds of these companies.
These businesses and financial institutions play a critical role in facilitating the economic viability and growth of the Israeli settlement enterprise. In the words of the UN Special Rapporteur on the situation of human rights in the Palestinian Territory occupied since 1967, Michael Lynk: “The involvement of these corporations with the settlements – through investments, banking loans, resource extraction, infrastructure contracts and equipment and product supply agreements – provides them with the indispensable economic oxygen they require to grow and thrive.”
These businesses, creditors and investors have a responsibility to ensure that they are not involved in violations of international law and are not complicit in international crimes, and to address any adverse human rights impacts arising from their business activities and financial relationships.
Companies are expected to have a rapid response and to consider responsible disengagement. International financial institutions, including banks and pension funds, have a responsibility to use their leverage to ensure their investee companies act responsibly and in line with international law standards, and to divest from those who are unable or unwilling to do so.
Recently, several financial institutions and companies have taken up their responsibility by divesting from business enterprises linked to Israeli settlements. The two most recent and important examples are those of Kommunal Landspensjonskasse (KLP) and the Norwegian Government Pension Fund Global (GPFG). KLP is Norway’s largest pensions company, who in July 2021, divested from 16 companies linked to Israel’s settlement enterprise. In a similar vein, GPFG announced in September 2021 that it will exclude three companies that are actively involved with Israeli settlements. The 19 companies excluded by KLP and GPFG were listed in the UN database of businesses involved in certain activities relating to Israeli settlements in the OPT, mandated by the Human Rights Council in 2016, and published in February 2020.
European financial institutions should take up their responsibility and follow the example of KLP and GPFG. They should end all investments and financial flows into Israeli settlements, and not buy into the Israeli occupation.
Willem Staes is policy and partnership adviser Middle East at 11.11.11, an umbrella organization of 60 Belgian CSOs based in Brussels. 11.11.11, together with local CSO partners, does research and advocacy on issues related to Israel/Palestine, Syria, Lebanon and Turkey. Prior to working at 11.11.11, Willem lived and worked in Turkey and Palestine. He has a master’s degree in international relations and in conflict and development studies.