Economic Retaliation Against Israel

The movement to isolate Israel economically from the world market has grown stronger as a result of the Gaza operation of last December-January. Calls for boycotts, sanctions and divestment grow - as do reactions against these activities.

By Willy Jackson
First Published 2009-09-06
Courtesy Of The Middle-East-Online

The boycott, divestment and sanctions (BDS) campaign against Israell has gained momentum after four years of near silence. It was launched on 9 July 2005 by a group of Palestinian organisations, a year after the International Court of Justice (ICJ) ruled, in an advisory opinion, that the wall built in the occupied Palestinian territories was illegal. It is a protest against Israel’s failure to honour its international obligations.

The Israeli army’s latest operation in the Gaza Strip (27 December 2008-18 January 2009), which aimed to annihilate the military potential of the Islamist movement Hamas and end the firing of rockets at Israeli civilian targets, was important to this resurgence. Media images created the impression that this war was meant to annihilate an entire people. Palestinian solidarity organisations, and many others around the world, immediately felt a moral obligation to take action and make up for the failings of the international community. A huge civil movement grew up around the Palestinian cause. Its weapon was the boycott, which had helped to dismantle the structures of racial discrimination in South Africa. Political figures and opinion leaders such as Nelson Mandela, Archbishop Desmond Tutu and Jimmy Carter have compared the plight of the Palestinian people to that of black South Africans under apartheid.

On 30 March 2008 the BDS movement organised a global day of action, a move decided a few weeks earlier at the World Social Forum in Belém, Brazil. Calls to support this day of action were heard from Jewish communities everywhere and even from within Israel.

The boycott, within this non-violent resistance strategy, calls on consumers not to buy products made in Israel (whether by local or foreign companies) or in Israeli settlements in the occupied Palestinian territories. Lists of goods (fruit, vegetables, fruit juice, cut flowers, tinned fruit, biscuits, pharmaceuticals, cosmetics) and their barcodes have been published, especially in Europe. Other tactics include publicity campaigns, petitioning of store managers to withdraw blacklisted products, awareness campaigns directed at central purchasing agencies, and disruption operations in supermarkets.

There are also campaigns by organizations for the suspension of the EU-Israel association agreement, on the grounds that Israel has failed to observe article 2, which requires “respect for human rights and democratic principles.” This agreement, which was signed in 1995 and came into force in 2000, exempts Israeli goods from EU customs duties. There is a traceability problem: many goods declared by Israel as Israeli are produced in Jewish settlements in the occupied territories.

A survey reveals that 21% of Israeli exporters have had to cut their prices as a result of the boycott, after a significant loss of market share, especially in Jordan, the UK and Scandinavia.

Although a boycott is based on individual freedom of choice, it may fall foul of the law if it becomes a call to collective action. In France, article 225, paragraph 2, of the criminal code provides that any act of discrimination “obstructing the normal exercise of any given economic activity” is punishable by three years’ imprisonment and a fine of €45,000 ($64,350). So, while consumers are free to choose and to advertise their choice as a personal position, a call for a boycott might fall foul of this legislation.

The rulings of the highest levels of the French judiciary, the Conseil d’Etat (the highest administrative court) and the Cour de Cassation (the highest civil and criminal court), have condemned such acts, notably in regard to trade relations with Israel. This is also the position taken by the European Court of Human Rights (ECHR) in its judgment of 16 July 2009 in the case of Willem v France. Jean-Claude Willem, mayor of Seclin, near Lille in northern France, had been accused of inciting a boycott, first at a meeting of the town council on 3 October 2002, where he announced that he had asked the municipal catering services not to use Israeli products, and later via the municipal website. He was acquitted by the Lille criminal court, but sentenced on appeal on 11 September 2003 and fined €1,000 ($1,430). The ECHR, to which Willem then applied in the name of freedom of expression, judged that the call for a boycott was “a discriminatory act, and therefore punishable.”

These judgments set out the legal limits on the use of boycotts: They can be implemented by government authorities, either in execution of a decision of the UN Security Council or, on their own initiative, as part of coercive measures.

The boycott of Israeli goods is the aspect of the BDS campaign that has received most coverage, but other attempts have been made to isolate and bring pressure to bear on Israel. There have also been cultural, academic, diplomatic and sporting boycotts. And an Israeli tourism fair in Paris in January was cancelled; Israeli tourism posters were removed from the London underground in May; Hertz, the car rental market leader, declined to have its name associated with a promotional offer by El Al; and Sweden refused to join international air manoeuvres because Israel would be taking part.

The divestment element of the campaign, aimed at companies doing business in the Middle East, is beginning to take effect. A campaign to force the Franco-Belgian bank Dexia to withdraw from Israel, with the slogans “Dexia, get out of Israel!” and “Israel Colonises, Dexia Finances”, led 14 Belgian municipalities to leave the bank, which was financing Israeli settlements in the occupied territories through its Israeli subsidiary.

The French power and transport group Alstom has also been targeted and was excluded from Sweden’s AP7 national pension fund portfolio in early 2009. The fund’s decision followed the example of the Dutch financial institution ASN Bank, which took action against another French firm, Veolia Transport, in 2006. Participating in the construction of a tramway in Jerusalem has deprived these multinationals of a number of contracts: in France, the Greater Bordeaux urban community cancelled Veolia’s contract for waste management, worth $53.3m; in the UK, Sandwell borough council excluded Veolia from the bidding for a waste collection and recycling contract worth $1bn; and in Sweden, Stockholm council cancelled its contract for operating the city’s metro system, worth $2.5bn.

Some companies have not wasted time in conforming to the demands of “socially responsible” investment. The Dutch firm Heineken’s subsidiary Tempo Drinks has relocated part of its operations from the West Bank to inside Israeli territory; the Swedish electromechanical security systems firm Assa Abloy has resolved to move one of its factories out of the West Bank.

What of sanctions against the Israeli state? Bogged down in arguments, the UN has difficulty in acting as a guarantor of the international rule of law. Although many other states are subject to sanctions, and though they proved their worth during the struggle against apartheid, sanctions have yet to be applied to Israel.

The desire for justice must be satisfied via other (notably judicial) channels. An example is the suit that the Association France Palestine Solidarité (AFPS), supported by the Palestine Liberation Organisation (PLO), has been pursuing in the French courts, since 2007, against Alstom, Alstom Transport and Veolia Transport. In 2004 CityPass Limited, a consortium governed by Israeli law in which Veolia Transport and Alstom Transport had minority interests of 5% and 20% respectively, signed a concession contract with the Israeli government for the construction and operation of the tramway that would serve Jerusalem and part of the West Bank, as mentioned above. The court case aims to prove that the contract is illegal.

The companies contested the subpoena, arguing that the Nanterre high court, before which the case had been brought, was materially and territorially incompetent; and that the petitions were not admissible since the AFPS and PLO were not qualified to act as complainants, and their interests were not affected by the contract. The court still ruled on 15 April that the AFPS could bring a valid action against the three French companies, since the execution of the contract would harm the collective interests that it defends. The court also dismissed the argument that Israel fell outside its jurisdiction. Israel is not a party to the court proceedings but is considered as an occupying power in the area of the West Bank where the disputed tramway is being built and will be operated. Alstom decided to appeal, Veolia decided not to.

Israel faces the threat of other judicial sanctions following petitions to national and international courts. But, in view of the instrumentalisation of criminal justice by the great powers and the way that individual states are retreating on universal jurisdiction, it is doubtful that these proceedings will ever be successful.

A counter-attack, based on persistent lobbying, has been launched against the BDS movement: A number of organizations have joined the fray in a bid to prevent Israeli products from disappearing or being pushed to the back of the shelf. The BDS campaign and the counter-attack it has provoked are the results of the failure of conventional mechanisms for the resolution of international differences. -- translated by Charles Goulden

Willy Jackson is an associate researcher at Sedet (Paris Diderot University).

© 2009 Le Monde diplomatique

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