Jewish Peace News on 'Who Profits from the Occupation?'

July 13, 2010
Richard Kuper
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In this blog post to the highly informative Palestine Note website Merav Amir and Dalit Baum, both members of the Coalition of Women for Peace, describe their project ‘Who Profits from the Occupation?’.

The project collects specific information about the full range of economic involvement in the occupation of the West Bank and Gaza Strip. Many people already engage in ‘ethical shopping’ practices by refusing to buy products made by settlers in the occupied territories. But Amir and Baum show that the economic penetration of the occupation goes much further than this relatively modest consumer market, including banks (like Dexia) that provide loans to local settlement governments, those involved in the security/repression industrial complex (constructing and maintaining the wall, checkpoints, providing surveillance equipment, fencing for Israeli-only roads etc.) and also Israeli producers that benefit from the violent elimination of Palestinian economic activity either through the removal of potential competitors or through the exploitation of the Palestinian consumer market as a dumping ground for low grade produce.

‘Who Profits?’ is already making waves in Israel itself, landing an uncritical review with the new Israel business paper Calcalist (according to the British Observer newspaper ). The project shows how the privatization of government services (including government repression) that has been so characteristic of the neoliberal era in Israel as elsewhere can, with a good information source like ‘Who Profits?’ open up new avenues for activist engagement. The sheer scale of the commercial sector’s investment in the occupation of Palestine provides another argument in favor of selective divestment as an activist tool to end the occupation.

Alistair Welchman

Merav Amir is a scholar and activist. She is a PhD candidate at the Tel Aviv University and the research coordinator of Who Profits from the Occupation in the Coalition of Women for Peace.

Dalit Baum PhD, is a feminist activist and scholar. She teaches classes in gender studies, the global economy and activism in Beit Berl College and in the Haifa University. She is the project coordinator of Who Profits from the Occupation in the Coalition of Women for Peace.

palestine-noteWorking from Within

A Political Compromise

Dalit Baum and Merav Amir, 9 July 2010

Ever since the outbreak of the Al-Aqsa intifada, the Israeli anti-occupation movement has been reinventing itself in new forms of action and solidarity work. Facing hostile denial from Israeli public opinion, large protests have first been met by a complete lack of media attention, and then by a wave of public sympathy for police and army violence towards protestors. The movement, further marginalized and radicalized, has found itself reorganizing as a network of small groups, each specializing in a different form of direct action, public education or resistance work. In this network, the feminist anti-occupation movement has found a central and leading role, both in keeping visible opposition in the Israeli street, and in creating ad-hoc as well as long term coalitions for broader efforts.

Who Profits from the Occupation is one such specialized project of the Coalition of Women for Peace (CWP). It came into being in 2006 as a political compromise in a deep on-going discussion inside the organization concerning our response to the July 2005 Palestinian call for Boycott, Sanctions and Divestment (BDS), a call also specifically directed toward Israeli activists. CWP is an organization comprised of Jewish and Palestinian women activists from within 1948 Israel, and affiliated left-feminist groups such as Women in Black, New Profile, Bat Shalom, Machsom (Checkpoint) Watch and Tandi.  As a radical feminist organization, CWP has been haunted from its inception by dilemmas of economic justice with respect to the occupation, and by the challenges of solidarity and respective privilege in the joint movement, all of which led to the BDS discussion.

What is the role of Israelis in a movement that calls for international pressure? How can an Israeli organization continue to try to communicate and change Israeli public opinion in such a setting? What is the responsibility of Israeli Ashkenazi middle class women who advocate economic measures that might further impoverish the poor, Mizrahi Jews or Palestinians living in Israel? The discussion raised valid and important questions, and in the tradition of consensus decision-making, it focused on existing agreements: to promote economic activism in all forms against the 1967 occupation both in Palestine/Israel and internationally. The decision included a plan for action – the initiation of a grassroots research effort, both to educate ourselves about the economy of the occupation and to serve the broader movement, using our access to this information.

Three years later, in November 2009, the general body of CWP reconvened to review the BDS discussion. Strikingly, this time support for the general call for BDS was unanimous. Throughout those three years we witnessed the attacks and the siege on Gaza; the occupation in the West Bank has further entrenched itself as a form of apartheid regime; this was all done with the support of Israeli public opinion. At the same time, the BDS movement has grown globally, and CWP has played an important part in it through its three-year research project entitled Who Profits from the Occupation. Through the project we have studied new facets of the economy of the occupation, and the results of our three year study have played an important part in showing how the use of boycott, divestment and sanctions is justified, necessary, and potentially very effective in our work for a just peace in Israel/Palestine.

From Cost to Profit

This is not the first time that the Israeli anti-occupation movement has tried to engage with the economic aspects of the occupation. The well-worn Peace Now slogan “Money to the [inner-city] neighborhoods and not to the settlements” was coined about thirty years ago. It has been criticized since for its simplistic formation and presented as proof of this movement’s disregard for “real” class and poverty issues. This slogan was developed into a solid argument by researchers such as Shlomo Swirski of the Adva Center, who conduct periodic studies estimating the cost of the occupation to the Israeli economy and society.  Arguing that the occupation is very costly aims to undermine the Israeli-Jewish support for the settlements and for the ongoing occupation,  but a closer look at the same figures shows that much of the same economic cost (to the Israeli public) can also be viewed as income (to certain parties). This new perspective also calls for another line of political intervention:
it is not enough to rhetorically inform the Israeli public about the costs of the occupation, it is also necessary to directly influence their economic interests by applying pressure to raise the price of the occupation.

Israeli control of the West Bank and Gaza has changed over the years, but from the start and throughout it has remained a system of economic-military control. Economic exploitation and repression have been used as tools to control the Palestinian population, and the terms of this control have been dictated by the interests of the Israeli economic elite. A potentially competitive Palestinian economy was actively de-developed, the movement of Palestinian workers and goods was regulated to the benefit of the Israeli market, and the Palestinian consumer market has become a captive market for Israeli goods. Israeli manufacturers, employers and merchants have used this economic-military control to secure profits.

During the 1990’s the Israeli economy underwent very rapid neoliberal reforms, which included cuts in social services and support; increased exposure to global investors, markets and corporations; and the privatization of public services, national projects and governmental assets and companies. These dramatic changes in the Israeli economy have significantly increased the economic activity of private companies in the occupied territory, in the settlements, at the checkpoints, providing security services, technologies and weapons. As is the case in similar global settings, such as the American military interventions in Afghanistan and Iraq, with the rise of the occupation business, the corporate sector has a higher stake in maintaining the occupation.

As grassroots activists, we tackle political arguments and religious/nationalistic beliefs in the Israeli public arena, but economic interests are often more hidden and intricate, and Who Profits was set up as an effort to expose and study these interests, in order to influence them. Corporate complicity with the occupation is a dangerous influential force that can stifle peace initiatives or set them back. On the other hand, corporations are profit-oriented, and their involvement in these controversial endeavors can become costly for them: public campaigns could tarnish their public image, important clients or investors could choose to leave them due to ethical concerns, and complicity with human rights violations could even have legal repercussions in some countries. In a way, this increased corporate involvement can be used to enhance civil society’s reach and influence, if we can effectively demand corporate accountability.

Who Profits from the Occupation focuses on exposing these corporate interests, in order to provide accurate, reliable and well-documented information for such corporate accountability campaigns. As Israeli activists, living inside 1948 Israel, who speak Hebrew, have freedom of movement in the occupied territory and are well acquainted with the Israeli economy and the occupation, we are at a useful vantage point for such research. Almost all of our information comes from the companies’ own publications or from regular visits to sites in the occupied West Bank and Golan Heights. We have set up a database listing specific corporations, launched a website,, and have become an information center, aiding dozens of initiatives and providing on-going support by checking information for campaigns, both internationally and locally.

Beyond the boycott of settlement products

When we started our mapping of the occupation industry, the main focus of economic activism against the occupation was on settlement production. Long lists of settlement companies and products were distributed by Gush Shalom, Bat Shalom and some student organizations, as tools for consumer boycotts. The lists themselves were mostly based on the companies’ main address, leaving out most of the distributors of agricultural goods, products partially manufactured in the settlements or companies registered elsewhere. Hence, these boycotts included only a small number of well-known products; they were carried out by a small group of Israeli, mostly Jewish, activists; at best, they were implemented as individual concerns, framed within the language of ethical shopping practices.

Besides being an easy, perhaps even a much too easy route for Israelis to seemingly distance themselves from the settlements, these initiatives did not provide the tools for taking on specific companies with sustained campaigns, in order to change corporate policies. More significantly, our research shows that settlement industries are few, the revenues from them are very limited and for all but a handful of agricultural settlements, they do not contribute substantially to the settlements’ economic sustainability. Consequently, we have decided to broaden the focus of our mapping, and include, under the headline “settlement industry”, the entire economic sustenance of the settlements. In addition to settlements’ agricultural and industrial production, we investigate real estate deals, construction of settlements and infrastructure and the provision of all vital services and utilities to the settlements. Israeli and international corporations build roads and housing units, provide
services such as public transportation, waste management, water, security and telecommunication, provide loans and market goods.

This wider settlement industry includes most large Israeli retailers and service providers. These companies claim a policy of “nondiscrimination”, meaning that they provide equal services inside the official borders of Israel and in the occupied territory – to the Jewish-Israeli settlers. Their intended services map does not include the Palestinian residents of the West Bank. In other words, their policy is not only a policy of systematic discrimination; it is a facet of the ethnic segregation between Palestinians and Jews in the occupied West Bank.

Dexia Israel: from public to private and back

The increasing privatization of governmental services in Israel has not skipped over local governance and municipalities. International corporations offer local authorities anything from waste management and public transportation services to management and financial services, and many of the public tenders for these services in Israel cover services to regional councils and municipalities of settlements in the West Bank, East Jerusalem and the Golan Heights. This provides new opportunities for activist intervention, as exemplified by the quick success of the campaign against Dexia Bank.

In 2001, Israel privatized the Israeli Municipality Treasure Bank, a governmental institution providing credit and financial services to local authorities. The bank was bought by the Belgian-French financial group Dexia and renamed Dexia-Israel, while retaining most of its former functions.

In June 2007, the bank’s CEO David Kapah was summoned to the Knesset Finance Committee by representatives of the settlement movement, after making allegations that Dexia-Israel refrained from providing loans to West Bank settlements. Kapah claimed that Dexia had no such “discrimination” policy, and he listed, for the record, at least seven Israeli settlements and three regional authorities of settlements that had received long term loans from his bank since 2003. Little did he know that Who Profits and the Belgian solidarity group Intal had been looking for such proof of direct involvement for many months.

The loans provided by Dexia are used for the development of infrastructure, the construction of public buildings and for municipal services. Further investigation has proven that the bank provides services to additional local authorities of settlements; it operates as a financial channel transferring government funds to settlements and it provides them with loans using future public income as collateral. Moreover, the bank regularly transfers funds from the Israeli National Lottery (Mif’al HaPa’is) to settlements, funds which are used for the construction of schools, community centers and for other projects of local development.

Intal and other Belgian groups, working with the Coalition of Women for Peace, launched a campaign called “Israel colonizes – Dexia finances”, calling Dexia to break all economic ties to Israeli settlement activity. This demand gained much public credence after September 2008, when Dexia bank was bailed out by the governments of Belgium, France and Luxembourg, governments that officially oppose construction of Israeli settlements and view them as illegal. Thus, privatization of financial services has come almost full circle: from the Israeli government-assured support for its own controversial colonization projects, to a seemingly indifferent international publicly-traded corporation, and back to substantial national ownership, this time on the part of a European public very much opposed to the same projects.

In June 2009, the management of the Dexia Group stated that financing Israeli settlements was contrary to the bank’s code of ethics, and that it would stop providing new loans to West Bank settlements; furthermore, the bank announced that it had not given any new loans to settlements since June 2008. However, our research exposed records that show that the bank had continued to provide new loans to local authorities of settlements during 2009. The campaign continues, demanding from the bank both accountability for its actions and the complete divestment from all settlement-related activities.

The business of repression

The settlement industry does not exhaust the different ways in which corporations benefit from the 1967 occupation; our mapping adds two more categories of corporate involvement. The second category studies corporations involved in Israeli control over the Palestinian population in the occupied territory. This includes the construction and operation of the Wall and the checkpoints and, in general, the supply and operation of means for surveillance and control of Palestinian movement inside the occupied territory and between the occupied territory and the State of Israel. Aware of our own limited capacities, we decided not to directly investigate the military industrial complex and the weapons industry, but they would fit nicely into this category as well. Since 9/11 and the terror attacks in Europe, the growing market of the homeland security industry has contributed significantly to the growth of the Israeli high-tech market. Often, the Israeli-controlled area is perceived as a
testing ground or a laboratory for new innovations to be “tested on Palestinians”. We have seen this used by sales representatives of Israeli homeland security products as a blunt marketing strategy.

One example of a seemingly benign company deeply involved in the restriction and control of Palestinian movement in the occupied territory is the South African steel and wire producer, Cape Gate, whose Israeli affiliate Yehuda Welded Mesh  has supplied security fencing for separation barriers in the “seam line” zone, around settlements and Israeli-only roads and railroads, settlement industrial zones and the besieged Gaza Strip. It is perhaps ironic that the late founder and owner of this company, Mendel Kaplan, former President of the World Zionist Congress, wrote extensively about his opposition to Apartheid in his own country and called upon all Jews in South Africa to “give leadership in the movement to abolish all discriminatory practices” as a lesson from Jewish history.

Last but not least: exploitation

The third category of involvement points to corporations that directly benefit from systemic advantages stemming from the Israeli control of Palestinian land, people and market. This category includes the companies that plunder natural resources in the occupied area, use it as a dumping ground for waste, profit from the exploitation of Palestinian labor and benefit from access to the captive Palestinian consumer market.

For example, many Israeli food manufacturers and distributors benefit from selling low-grade products in the West Bank, while Palestinian competitors are denied free movement through Israeli military checkpoints. Similarly, telecommunication service providers exploit Israeli control of land and airwaves in the occupied area to illegally penetrate the Palestinian market.

Perhaps it is appropriate to give one example of a company involved in all three categories. The giant transnational corporation Cemex is one of the largest suppliers of building materials globally and is controlled by the Mexican tycoon Lorenzo Zambrano. Through its Israeli subsidiary, Readymix Industries,  the company has several plants in Israeli settlements in the occupied West Bank, in which it uses Palestinian labor. It is a partner in an aggregates quarry in the West Bank, exploiting Palestinian non-renewable natural resources for the needs of the Israeli construction industry. Furthermore, the company has provided ‘concrete elements’ for the construction of security walls and military checkpoints in the West Bank.

Who Profits has prepared the corporate research for a Supreme Court petition submitted by Yesh Din in March 2009, demanding a halt to all Israeli mining activity in West Bank quarries, including the Yatir quarry, co-owned by Cemex. Israeli quarries operating in the occupied territory transfer most of their output back into Israel. As stated in the petition, this type of activity violates the laws of occupation and in some cases it may be considered pillage. In May 2010, the government of Israel informed the court that it would stop all new land allocation for Israeli quarrying purposes in the West Bank and would cease to approve any expansion of existing quarries there as well. As of June 2010, the petition is still pending before the court.

Israel and the occupation: where is the Green Line?

As we complete our mapping, one fact becomes very clear: any clear-cut distinction between the Israeli economy as a whole and the economy of the occupation can no longer be justified. The Green Line border has all but disappeared from the corporate activity map. Even if we only look at the Israeli settlements, and then again only focus on settlement construction, we will discover that the major players in the Israeli economy are deeply complicit. For instance, our findings show that all major Israeli banks have funded and supervised construction projects in the settlements.

According to Israeli regulations, every construction project has to have an “accompanier” bank, which not only provides funding and loans, but acts as an active partner and supervisor of the project on the ground. Thus, all major Israeli banks are not only aiding in the construction of settlements, but are actively involved in this activity. Moreover, all of the Israeli banks provide mortgage loans for homebuyers in settlements; provide financial services to Israeli business activities in the occupied territory and to local authorities of settlements.  Most large retailers have branches in settlements, service providers provide their services, importers and exporters exploit the uneven trade agreements.

The Israeli economy is highly centralized; it is often claimed that a handful of tycoons control a third of private sector revenues, as well as most media, telecommunications, banking and infrastructure industries.  Our research shows that each of these central economic players is implicated in the occupation industry in more ways than one.

Thus, we can safely say that most of the Israeli economy is involved in the economy of the occupation and, from an economic perspective; the Green Line is long gone. Choosing to call for economic activism against Israeli corporations directly complicit in the Israeli occupation, rather than calling for economic activism against all significant Israeli corporations, should be regarded as a strategic decision, since this distinction is almost only a semantic one. However, tracing the occupation involvement of corporations broadens our perspective, since, as our database shows, many of the culprit companies are international corporations.

Who Profits today

In 2010, the Who Profits database holds over 1000 companies in the three categories of involvement, with specific information about their direct complicity in at least one of the aspects of the military-economic control system. The details are crucial for the effectiveness and success of any campaign, be it legal or educational, using public advocacy or economic pressure.

The BDS movement aims to put pressure from the outside on Israel and its economy. Using corporate accountability for the occupation is a powerful tool, both legally and politically. The targets for economic activism should be chosen with care, because this budding movement needs to educate and recruit, and, most of all, because it needs to make a difference. For that purpose, we continue to investigate and document corporate involvement in the occupation.

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