Dutch companies lead the way in divestment decisions

January 30, 2014
Sarah Benton

Articles on divestment decisions and Israel’s responses are from 1) Times of Israel, 2)AFP/Al Arabiya, 3) Financial Times, 4)RT. Plus Notes and links at foot.

Added on 28 March – EJJP Letter in support of PGGM’s decision to divest

PM Netanyahu meets Dutch Prime Minister at The Hague. Mr. Rutte has been under heavy pressure to disown a critical report on Israel and to prevent Dutch companies divesting from settlement business. Photo by Amos Ben Gershom/GPO/Flash90

BDS in The Netherlands: A case study of failed Israeli public diplomacy

By Yochanan Visser, blog Times of Israel
January 15, 2014

A diplomatic row has erupted between Israel and The Netherlands concerning the decision by certain major Dutch companies to join the Boycott Divestment and Sanctions movement.

These divestment decisions were taken after the companies took advice from the Dutch Ministry of Foreign Affairs. The Dutch ambassador was summoned twice by the Israeli Ministry of Foreign Affairs over the issue.

What is now clear is that the lobbying efforts of pro-Palestinian NGOs and confusing political signals by the Foreign Ministry of The Netherlands were highly influential. It has also has become evident that the intensifying BDS campaign is connected to the abject failure of Israel’s public diplomacy activities in The Netherlands and elsewhere in Europe.

PGGM divests

A week ago, PGGM – the largest of the Dutch pension fund giants – announced it will divest from Israeli banks. Ha’aretz reported that PGGM’s decision to withdraw all its investments from Israel’s five largest banks came because they operate branches in the West Bank and are involved in financing construction in the settlements.

An informed source says that over the past few months, the Dutch pension giant contacted Bank Hapoalim, Bank Leumi, Bank Mizrahi-Tefahot, First International Bank of Israel and Israel Discount Bank and informed each of them that in PGGM’s view their settlement-related connections pose a problem from the standpoint of international law.

PGGM told the banks its stand was based on the advisory opinion issued by the International Court of Justice in The Hague in 2004, which held that settlements in occupied Palestinian territory violate Article 49 of the Fourth Geneva Convention are illegal.

Article 49 provides: “The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies.”

PGGM’s move, it now appears, comes in the wake of relentless pressure by several NGO’s that receive funding from the Dutch Government.

Peter Borgdorff, director of PFZW, an affiliate of PGGM and the second-largest of the Dutch funds, disclosed in a blog posting that PGGM has for years been criticized and subjected to pressure by Dutch NGO’s over its investment in Israeli banks. Most of these NGO’s, including Cordaid, Oxfam Novib and ICCO, are funded by the Dutch government.

NGO Monitor reports that at least 9 Dutch NGOs endorsed the 2005 “Palestinian Civil Society Call for BDS.” This discriminatory, anti-peace initiative calls for “the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era” wrote NGO Monitor in a report about Dutch support for BDS campaigns.

Meanwhile ABP, the Dutch pension fund for employees in the government, public and education sectors. has said it will not follow PGGM and will continue to invest in Israeli banks.


In December 2013, Dutch water company Vitens cancelled a cooperation agreement with Mekorot, Israel’s water utility. This marked the second time in a month that a Dutch company had joined the BDS campaign against Israel. The Vitens decision came barely a month after the agreement with Mekorot had been signed and after a Dutch governmental delegation led by Lilianne Ploumen, Dutch Minister for Foreign Trade and Development Cooperation canceled a visit to Mekorot.

Vitens said the decision was taken after consultation with the country’s foreign ministry. Dutch Foreign Minister Frans Timmermans denied having pressured Vitens to cancel the agreement with the Israelis but declined to answer questions about the aborted Ploumen/Mekorot meeting.

The Rights Forum

Meanwhile, it has emerged that a key driving force behind the Vitens decision and the lobby for BDS in the Dutch parliament is a well-connected, pro-Palestinian NGO, The Rights Forum (TRF) led by former prime minister Andreas van Agt.

Several other former senior ministers are on its board, including former Dutch Foreign Minister and EU commissioner Hans van den Broek who is said to have been the driving force behind the EU’s recently announced critical guidelines on Israeli settlements.

Following the Vitens move to terminate cooperation with Mekorot, TRF issued a statement lauding the decision. The TRF website publishes extensively on water issues in the West Bank and Gaza. It ascribes to Israel the entire blame for Palestinian water supply problems. TRF even blames Israel for polluting the Gaza aquifer and for the absence of waste water treatment capability in the Hamas-controlled Gaza Strip.

A week ago, Dutch NGO Missing Peace published a report contradicting TRF’s claims, basing itself on two scientific studies. The first is a dissertation by the Swiss scientist Lauro Burkhart that provides convincing evidence of the Palestinian Authority’s strategy of turning water into a political weapon, and misleading the international community about the underlying causes of Palestinian water supply and management problems.

FM Timmermans

It remains unclear what the role of Dutch FM Timmermans is in the escalating BDS campaign in The Netherlands against Israel. Formally, Timmermans denies all involvement in the campaign. He says he objects to sanctions and boycotts against Israel. But the Israeli government and Several Dutch MP’s, along with parts of the government of Israel, think this is not the entire truth.

Last week, the Dutch ambassador was again summoned by the Israeli Foreign Ministry over the pro-boycott activities in The Netherlands. Israel’s Deputy Director General for European Affairs, Raphael Schutz, told the ambassador that the PGGM pension fund decision to divest from Israel is unacceptable and relies on false premises.

Israel, he emphasized, “expects the Government of the Netherlands, in the spirit of the friendship between the two countries, to take an unequivocal stance against such steps, which only serve to damage the relations between Israel and the Netherlands”.

Something similar happened in December 2013 when Israel first summoned Ambassador Veldkamp and protested against “ambiguous statements by the Dutch Foreign Ministry that created a pro-boycot atmosphere in The Netherlands”.

Van der Staay

Dutch MP Kees van der Staay and the Dutch Christian Democratic party (CDA) have called for a parliamentary debate about the Vitens decision and the confusion over Timmermans role in the Mekorot boycott. The debate is now scheduled to take place on January 16.

During a general assembly meeting of the Dutch parliament on January 13, Timmermans again failed to respond to a question by MP Voordewind (CU) seeking clarification over the cancellation of Ploumen’s visit to Mekorot.

Whatever the final analysis, it is absolutely clear that Timmermans holds a very different view on Israel’s presence in the West Bank compared with his predecessor, Uri Rosenthal. Rosenthal vehemently opposed boycotts against Israel and has said that they do not contribute to peace.

Timmermans’ policy is to actively discourage Dutch companies from doing business with Israeli enterprises that are active beyond the so-called Green Line. He does not view the West Bank as a part of Israel and has defended the double standard in the EU’s treatment of Israel.

Christians for Israel

The Dutch NGO Christians for Israel (CVI) has begun taking action against the boycott of Israeli companies in The Netherlands. On Tuesday, CVI activists held a protest demonstration outside PGGM headquarters in Zeist. The NGO vowed to continue its protests until PGGM revises its decision to divest from Israeli banks.

Such measures will not stop the increasingly pro- boycott atmosphere developing in The Netherlands. So long as well-funded pro-Palestinian NGO’s can dominate the accepted narrative about the ongoing Palestinian Israeli conflict, the situation will continue to deteriorate.

Israel must realize that it should change its attitude in the field of public diplomacy and start to provide pro-Israeli NGO’s with the means to combat Palestinian propaganda and to influence the lobby effort on behalf of the Jewish state.

In this respect, the current developments in The Netherlands are a case study illustrating the degree of influence wielded by NGO’s with the means and the determination to change government policy and public opinion, and the damaging consequences of such campaigns.

Israel summons Dutch envoy over bank boycott

By AFP/ Al Arabiya
January 10, 2014

Israel summoned the Netherlands’ ambassador on Friday, expressing anger at a decision by Dutch pension asset manager PGGM to divest from Israeli banks over settlement building in the West Bank.

Ambassador Caspar Veldkamp was summoned “for clarification” over the decision, the foreign ministry said.

The ministry “told the Dutch ambassador that the decision of the PGGM pension fund to divest from Israel is unacceptable and relies on false pretense,” it said.

“We expect the government of the Netherlands… to take an unequivocal stance against such steps, which only wreak damage to the relations between Israel and the Netherlands.”

Dutch Prime Minister Mark Rutte said that PGGM’s decision “was their own and has nothing to do with the Dutch government.”

“We are against a boycott and against sanctions (against Israel),” he told journalists at his weekly news conference in The Hague. “But we are against the settlements.”

Dutch “companies are free to do business within the settlements, but we would not support that,” Rutte added.

PGGM, one of the largest pension asset managers in the Netherlands, said on Wednesday it was divesting from five Israeli banks because they finance Jewish settlements in the occupied Palestinian territories.

The announcement came a month after a major Dutch water supplier ended a partnership with an Israeli water company which supplies Israeli towns and Jewish settlements in the occupied West Bank.

“PGGM recently decided to no longer invest in five Israeli banks,” said the company, which manages about 153 billion euros ($208 billion) in funds.

“The reason for this was their involvement in financing Israeli settlements in occupied Palestinian territories.

PGGM said there was “a concern, as the settlements in the Palestinian territories are considered illegal under humanitarian law,” and regarded by international observers as an “important obstacle to a peaceful (two-state) solution of the Israel-Palestinian conflict.”

Senior Palestinian official Hanan Ashrawi commended PGGM for “translating its corporate social responsibility policy into practice.”

“Steps by corporations such as PGGM, as well as practical measures that European governments have been taking, finally make Israel realize that it is not above the law,” she said in a statement.

The foreign ministry statement came as Israel unveiled more than 1,800 new settler homes in the West Bank and east Jerusalem, in a move Palestinians said would scupper US efforts towards reaching a Middle East peace deal.

Pressure on Israeli banks from investors intensifies

By Madison Marriage, Financial Times
January 19, 2014

Investors want more information from Israeli banks over finance for settlements in Palestinian-occupied territories

ABP, the world’s third-largest pension fund, and two major European investors are reviewing their holdings in Israeli banks over concerns that the banks finance illegal Israeli settlements in Palestinian-occupied territories.

As well as ABP, the Dutch pension fund with €300bn of assets under management, the investors include Nordea Investment Management, a €130bn Scandinavian fund house, and DNB Asset Management, a €60bn Norwegian fund group.

All three want more information from the Israeli banks about their involvement in financing the settlements, which contravene international human rights laws established under the Fourth Geneva Convention in 2004.

A spokesperson for KLP, one of the biggest Norwegian pension funds, with €45bn of assets, also confirmed that “dilemmas linked to financing [of Israeli settlements] will be discussed at KLP”.

Palestinians see the settlements as an obstacle to achieving a viable state, and most countries consider the settlements illegal.

The reviews come after PGGM, the second-largest Dutch pension fund, two weeks ago became the first big investor to dump its holdings in five large Israeli banks : Bank Hapoalim, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Mizrahi Tefahot.

PGGM said in a statement: “Given the day-to-day reality and domestic legal framework they operate in, the banks have limited to no possibilities to end their involvement in the financing of settlements in the occupied Palestinian territories.

“Therefore it was concluded that engagement as a tool to bring about change will not be effective in this case.”

ABP has held talks with three of the banks over the settlement issue for a year. The pension fund might exclude the stocks “as a last resort” if the banks fail to act on ABP’s complaints, a spokesperson said.

Nordea Investment Management has sent letters to Leumi and Mizrahi “regarding concerns about the violation of international norms”, Sasja Beslik, Nordea’s head of responsible investment, told FTfm.

The Scandinavian fund house plans to meet these banks in March before taking a decision on whether to withdraw their investment at a committee meeting in May.

DNB Asset Management’s external consultancy GES is engaging with several Israeli banks on this issue.

Israel Discount Bank declined to comment. Banks Hapoalim and Leumi did not respond to requests for comment.

Mr Beslik expects other large investors to start looking at their investment policies on the Israeli settlement matter shortly.

He said: “Very few asset managers have a policy [on this issue], which means that the banks are not under pressure regarding these violations. The pressure on asset owners to live up to their values when it comes to these issues will increase, I am certain about that.” ING Investment Management, the fund arm of Dutch Bank ING, said that it has requested research on the settlement issue from an independent third party.

Dutch pension giant divests millions from Israeli banks involved in settlement construction

By RT (Russia Today)
January 08, 2014

The largest Dutch pension fund company, PGGM, has reportedly chosen to withdraw all its investments from the five largest Israeli banks, whose branches are involved in financing construction in the settlements in the West Bank.

Over the past few months the Dutch pension giant has informed some of Israel’s top banks, such as Bank Hapoalim, Bank Leumi, Bank Mizrahi-Tefahot, the First International Bank of Israel and Israel Discount Bank, that their ties with the settlements, and/or companies involved in construction there, were an obstacle from the standpoint of international law, a source told Haaretz.

PGGM’s stance is based on an International Court of Justice ruling, which in 2004 concluded that the barrier being built around the West Bank was illegal and should be pulled down, with the “security wall” violating the rights of Palestinians.

The Israeli law doesn’t allow local banks to stop providing their services to parties connected to the settlements, however. Even if it did, as things stand now it would be highly impractical. With the situation unlikely to improve in the near future, the Dutch giant said it had decided to divest from the banks. According to the Israeli daily, this decision took effect on January 1.

PGGM manages over 140 billion euros in pension assets on behalf of five pension funds representing some 2.6 million people and is one of the leading such companies in the world. Last year the company said it takes a new step in “responsible investment”. According to PGGM’s advanced policy, “the aspects of people, the environment and society are all included in investment decisions, and dialogue is sought with companies on corporate social responsibility.”

“PGGM does not invest its clients’ funds in companies that produce or deal in controversial weapons. Nor are funds invested in companies that violate human rights or labor rights and who are unwilling to discuss making improvements,” the Dutch pension fund provider stated on the company’s website.

Therefore, investing in the Israeli banks’ involved in financing construction in the settlements in the West Bank would go against the Dutch company’s fastidious policy.

Last year PGGM stopped investing in the world’s largest retailer, the American supermarket group Walmart. PGGM has repeatedly spoken against the policy pursued by Walmart in the US, which restricts employees’ opportunities to organize themselves into trade unions. Walmart, however, was “not prepared to take PGGM’s concerns about the company’s tense labor relations in its domestic market into consideration.” In the long run, PGGM added Walmart to its exclusion list.

It’s not the first time a Dutch company has pulled out of Israel. In December, the Netherland’s largest drinking water supplier, Vitens, decided to cut ties with Israel’s national water corporation, Mekorot, also citing alleged violations of international law. An Amnesty International 2009 report claimed that Israel was denying the West Bank and Gaza access to adequate water supplies through a “discriminatory” control that enables its own people to consume four times as much as the Palestinians; Israel argued the shortages are caused by Palestinians stealing water. Vitens, which is part owned by the Dutch state, signed the co-operation deal with Mekorot only two months ago. The company had a near-monopoly on water supplies in Israel and the Palestinian territories, including Israeli settlements on the West Bank.

Vitens came to the conclusion that the provision of water in the Palestinian territories became too politicized. The company’s spokesman said the firm had decided to cut ties because it “preferred to remain neutral”. The decision was announced during Prime Minister Mark Rutte’s official visit to Israel. Foreign Ministry spokesman called the decision “absurd”, pointing out that the Palestinians will cooperate with Mekorot, while the Dutch firm has refused.

“It is more than strange that this Dutch company should boycott an Israeli peer that works with the World Bank on a very important regional cooperation project, which includes the Jordanians and Palestinians,” Yigal Palmor said. “This only shows that by caving in to boycott pressures, one makes absurd decisions that result in a topsy-turvy situation.”

Israeli officials believe that the recent series of boycotts is part of a new policy adopted by the Dutch government, which allegedly recommends local businesses to avoid commerce with the controversial settlements.

Notes and links
Wiesenthal Center blasts ‘flawed’ Dutch Mideast report, Times of Israel October 2013.

Between Words and Deeds: Prospects for a sustainable peace in the Middle east , pdf, report by the Dutch Advisory Council on International Affairs, March 2013

Dutch fund giant PGGM plans to intensify engagement activities, report in Responsible Investor on PGGM’s 2012 decision to boycott Israeli defence firm Elbit Systems and plans to scrutinise investment decisions more closely.

Dutch water giant severs ties with Israeli water company due to settlements, Haretz Deceember 2013.

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