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Dutch pension fund PFZW's concerns about Israeli occupation
Adri Nieuwhof en Guus Hoelen - 30.01.2011 13:22
After The Electronic Intifada disclosed Dutch pension fund PFZW divestment from Israeli companies, CIDI accused the news site of 'fantasizing' about the reasons. However, CIDI took a superficial answer of PGGM spokesperson Bram van Els for granted. Meanwhile, PFZW's concerns about the Israeli occupation of Palestine are crystal clear.
In an article published in The Electronic Intifada in November 2009, we reported that activists had questioned the PFZW about investments in companies that profit from the occupation of Palestine.1 We broke the news that PFZW had divested from 13 Israeli companies, and reported that PFZW's fund manager, PGGM, adopted new guidelines for social responsible investment in companies operating in conflict zones. Lastly we reported that PGGM discusses with Motorola, Veolia and Alstom concerns about human rights issues.
Within three days, CIDI accused The Electronic Intifada of inaccurate reporting in an attempt to delegitimize the boycott, divestment and sanctions movement. According to Cnaan Lipshiz, who worked for CIDI and Haaretz, CIDI is a pro-Zionist group. Indeed, CIDI's Zionist views seep from its official position on the peace process: 'The Palestinian Authority has to recognize Israel as a Jewish state without any reservation' and 'the Palestinian refugee issue can only be solved in the context of the creation of a Palestinian state.'2
CIDI's accusations of false reporting were based on a claim of new research. CIDI had contacted PGGM spokesperson, Bram van Els, who stated that PFZW divested because Israel was moved to the category of developed markets. 'Israeli companies are simply too small' to fulfill PGGM criteria for investments. CIDI added that this was linked to Israel's recent OECD membership. The explanation Van Els gave to CIDI did not make sense. PFZW's overview of investments lists many 'small' companies in other countries with developed markets. When we asked for clarification, Van Els wrote that he had 'simplified the reality' to CIDI. He informed us that PGGM uses an external adviser, the FTSE Index Company, to define criteria for investments. FTSE wrote in an email that Israel was moved to the category developed market in September 2008. Two year later, Van Els told CIDI that Israel is now a developed market.
One week before Van Els spoke with CIDI, PGGM spokesperson Diana Abraham was not prepared to provide us further details about the reasons behind divestment from 'almost all Israeli companies.' Moreover, Abrahams referred for additional information to PGGM's report on responsible investment third quarter 2009.3 The report mentions the divestment from Israeli companies in the paragraph 'Dialogue on conflict zones'. This classification shows that PGGM links Israeli companies with conflict zones. In addition, PGGM seems aware that operations of companies in conflict zones can have a negative impact on a conflict. It participated in the development of new 'UN Global Compact guidelines for companies and investors on responsible business in conflict areas'.4 The Global Compact is a strategic policy initiative aimed at aligning business operations and strategies with ten universally accepted principles on human rights, labor, environment and anti-corruption.
PGGM applies the new guidelines in its dialogue with companies operating in the Occupied Palestinian Territory (OPT). Key elements that follow from the new Global Compact guidelines for such a dialogue are:
- take all necessary measures to avoid complicity in human rights violations
- do no harm and put mechanisms in place to deal with disputes and community grievances
- engage with stakeholders on the operations to avoid that people feel they are not consulted
- engage proactively with civil society organizations and international organizations.
The guidelines warn companies that the exclusion of the community may lead to an increase in tensions between the company and community. This 'may escalate into obstructive behavior against the company and a possible shutdown of business activities.' If PFZW applies the new guidelines, it necessarily will lead to the exclusion of companies that profit from the occupation in the OPT, including Veolia, Alstom, Motorola, Dexia.
Furthermore, the paragraph on conflict zones in PGGM's third quarter report discloses that 'due to a change in the benchmark it almost no longer invests in Israeli companies.' A benchmark is a set of criteria that are used to decide upon investments. The fact that the change in the benchmark is mentioned in the paragraph on conflict zones creates at least the suggestion that it is related to business in conflict zones.
While CIDI tries to downplay PFZW's concerns about the Israeli occupation of Palestine, our documents show a different picture. In 2008, several Dutch activists asked PGGM to divest from Veolia and Alstom. Both companies play a key role in the Jerusalem light rail project that will connects West Jerusalem with several illegal settlements in occupied East Jerusalem. The activists repeated their request one year later, asking PGGM to withdraw also from Bank Hapoalim and Bank Leumi. Both Israeli banks provide part of the funding to the light rail project.
In response, PGGM wrote on 16 November 2009, 'We understand your concern about these investments. As you probably know, Israel has our attention. Last year we began to call Veolia and Alstom to account for their role in Israel. We are currently engaged in a dialogue with these two companies. Israel is a recurring topic that we discuss with the ethical advisers of PFZW.'
In addition, PGGM would take divestment decisions on 'Bank Hapoalim, Bank Leumi and other companies' in a structural manner by developing 'new policies on how to deal with investments in companies in the Israeli-Palestinian conflict.' The new benchmark saved the pension fund of difficult divestment decisions on Israeli companies.
Moreover, PFZW expressed its deep concern about the long time Israeli occupation of the OPT in a letter to the Russell Tribunal on Palestine, 12 November 2009.5 The Tribunal dealt with corporate complicity in Israeli violations of international law. The board of PFZW acknowledged in its letter the BDS efforts of activists, Werkgroep Keerpunt, and the Nederlands Palestina Komitee. Furthermore, it expressed its concerns 'about ongoing violations of international law in this context, and about possible complicity in such violations by companies that are active in Israel and the occupied territories.' PFZW confirmed it no longer invested in any of the Israeli companies that Who Profits had listed as tainted PFZW investments. The list included Bank Hapoalim, Bank Leumi, Israeli Discount Bank, Mizrahi Tefahot Bank, Elbit Systems, Bezeq Israel Telecommunication, and CLAL Group.
On top of that, PFZW informed the Tribunal about the engagement approach towards companies operating in Israel and the OPT that are involved in violations of international law. It can lead to the exclusion of the company. The fund wrote it will focus on 'companies:
- that contribute to sustaining the occupation (for example banks providing loans to finance Israeli settlements in occupied territory)
- whose product or services are directly associated with the occupation or suppression (for example custom-made bulldozers involved in the destruction of Palestinian homes)
- that contribute to activities that can be seen as in direct violation of international law (for example companies involved in controversial tramway).'
One can conclude from the information that PFZW refers to Dexia, Caterpillar, Veolia and Alstom.
CIDI's allegation that The Electronic Intifada fantasized about pressure from the BDS movement on PGGM is false. The attack should be seen in the context of the strategy of the right wing NGO Monitor, the Israeli REUT Institute and some members of the Israeli government, to delegitimize and silence human rights organizations and the BDS movement. However, the BDS movement will continue its activities as long as governments fail to hold Israel to account for its violations of international law.
Adri Nieuwhof, independent consultant and human rights advocate, and Guus Hoelen, secretary of Werkgroep Keerpunt, involved in campaigns for divestment in the Netherlands
1. http://electronicintifada.net/v2/article11621.shtml
2. http://www.cidi.nl/info/standpuntcidi.html
3. http://www.pggm.nl//Images/10-3850%20PGGM%20Kwartaalverslag%20Q3%20AA-05-LoRes_tcm21-173011.pdf
4. http://www.unglobalcompact.org/docs/issues_doc/Peace_and_Business/Guidance_RB.pdf
5. http://www.russelltribunalonpalestine.com/en/wp-content/uploads/2010/11/PFZW.pdf
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