The largest Dutch pension fund is now boycotting Israeli banks over settlement ties. Citing policy of 'social responsibility', PGGM, the Netherlands' largest pension fund management company, decides to divest millions of euros from Israeli banks that have West Bank branches and offer financing for settlement construction.
PGGM’s investments in Israeli banks amount to only a few tens of millions of euros. But its decision is liable to damage the banks’ image, and could lead other business concerns in Europe to follow suit.
A source involved in the issue said that over the past few months, the Dutch pension giant contacted Bank Hapoalim, Bank Leumi, Bank Mizrahi-Tefahot, the First International Bank of Israel and Israel Discount Bank and informed them that their ties with the settlements, and/or companies involved in building in the settlements, created a problem from the standpoint of international law.
The Israeli banks responded that Israeli law doesn’t allow them to cease providing service to entities connected to the settlements. Nor, given the daily reality in which the banks operate, would this even be feasible, they added.
Therefore, PGGM informed the banks that since it had not managed to alter their conduct with regard to the settlements via dialogue, and since no change in the situation seemed likely in the foreseeable future, it had decided to divest from them. This decision took effect on January 1, 2014.
PGGM is the Netherlands' largest pension management company and one of the leading such companies in the world, with some 150 billion euros of pension money under management. Last year, as it reviewed its investment policy for 2014, it considered divesting from several banks and companies worldwide in accordance with its policy of “social responsibility.” At the end of this review, it concluded that it would be impossible to create a firewall between its investments in Israeli banks and the banks’ activities in the Israeli territories (ed: Biblical lands of Judea and Samaria).
The company also cited its “responsible investment policy,” which excludes investing in bodies involved in “violations of fundamental human rights and labor rights.”
But according to a document released by the company in 2013, PGGM investments abroad include two Chinese banks –Bank of China and China Construction Bank – with offices and activities in Tibet, which is widely seen internationally as land occupied by China. PGGM invests in China Petroleum & Chemical Corporation, or Sinopec, which is exploring for oil in Tibet.
PGGM’s international investments also include the Malaysian palm oil producer Sime Darby, which last year paid a million dollars in reparations to villagers in Liberia amid accusations that the firm had violated their human rights and confiscated their property.
PGGM spokesman Maurice Wilbrink declined to answer questions on the scope of his company’s investments in Chinese firms active in Tibet, explaining that the figures were confidential.
Holding back the water: finger in the dike
It is the latest in a string of large Dutch companies that have cut off ties with Israeli entities.
During December, 2013, Dutch firms have engaged in a wave of boycotts, divestments and sanctions against Israeli firms.
The Dutch water company Vitens, the largest drinking water company in Holland, announced that it was suspending cooperation with Israel’s national water company, Mekorot, given the latter’s operations in West Bank settlements, citing the "political context" of Israel's West Bank settlements, which "cannot be separated from future projects." A few weeks earlier, another Dutch company canceled a contract to build a sewage treatment plant that it had signed with Jerusalem’s water company, Hagihon, because the plant was to be located over the Green Line.
Vitens, the Netherland's largest drinking water supplier, decided it will not do something both the Palestinians and Jordanians made abundantly clear the day before they are willing to do: work with Mekorot, Israel's national water corporation.
Vitens explained its decision by saying that it had to do with Israel's alleged violations of international law. The firm said that it places great emphasis on moral standards and abiding by international rules, and as a result could not continue cooperative projects with its Israeli counterpart.
The Foreign Ministry is very worried by the trend in the Netherlands. Officials in Jerusalem believe the background to this recent wave of boycotts is a new policy adopted by the Dutch government under which it encourages commercial enterprises to avoid any business dealings with the settlements. But in PGGM’s case, the pension company decided to boycott even Israeli banks with only indirect ties to the settlements.
Not all Dutch pension funds agree
Dutch pension fund ABP, one of the largest pension funds in the world, announced on Wednesday that after looking into the matter it sees no reason to end its relationship with three Israeli banks. It sees no reason to boycott Israeli banks.
The fund’s announcement runs firmly against the grain of the increasing public perception that Israel is on the verge of wholesale boycotts by European financial institutions.
ABP posted an announcement on its website on Wednesday saying that publicity about boycotts of Israeli banks has led the fund to explain why it does not exclude Israeli banks from its investments.
The fund said that its environmental, social and corporate governance policy – a catchall phrase for what is known as socially responsible investing – is based on two objective criteria: international law and the principles laid down in the UN Global Compact.
The compact is a policy initiative for businesses that want to align their operations with 10 universally accepted principles in the areas of human rights, labor, environment and anti-corruption.
The fund said its directorate discusses these matters each year and it has concluded that the Israeli banks – Bank Hapoalim, Bank Leumi and Mizrahi- Tefahot – “do not act contrary to international law and regulations,” and that there are no court rulings indicating a need to end investments in them.
Danske Bank, the largest in Denmark, recently said on its website that it is boycotting Bank Hapoalim for “legal and ethical” reasons.
The Stockholm-headquartered Nordea Bank, the largest in Scandinavia, has asked for clarifications from Bank Leumi and Mizrahi- Tefahot regarding their activities beyond the Green Line.
It was later reported that Danske Bank featured unflatteringly in a State Department cable from May 12, 2009 – released byWikiLeaks – which said that the bank had a “correspondent account” with Tanchon, a North Korean trading company that has been involved in financing a ballistic missile sale to an Iranian group.
ABP is a pension fund for some 2.8 million government, public and education workers, with invested capital last year of some €292 billion.
Meanwhile, Prime Minister Binyamin Netanyahu on Wednesday again slammed countries for applying a double standard to the country, saying Israel is “a light unto the nations, but only for those in the international community who want to see the light, because there is a lot of hypocrisy.”
Netanyahu, speaking at a ceremony recognizing fighters against human trafficking, said that Israel battles for human rights and does everything to preserve human dignity amid a “struggle against us with endless cruelty.”
Israel is characterized as a war criminal and serial violator of human rights, while “around us the most horrible things are taking place,” he said.
“This hypocrisy harms efforts to eradicate the evil and promote the good. But we will not be deterred, we will continue our efforts to be a light among the nations, if only they want to see the light,” the prime minister said.
Israel and the Netherlands have enjoyed a warm relationship until recently when Dutch companies have begun to actively boycott and place sanctions on Israeli firms involved in the West bank.
In December, 2013 Prime Minister Benjamin Netanyahu said that the financial contributions and investments of the Netherlands in both the Palestinian territory and in Israel, play an important role in the peace process.
The European Union has adopted a series of moves designed to deter dealings with Israel as a result of its settlement policy, including the labeling of products made in settlements and sold in Europe and restrictions on grants for companies or institutions with operations in the West Bank and East Jerusalem, territory claimed by the Palestinians for a future state.
In return, Dutch Jews boycott anti-Israel firm
Dutch Jewish group calls for boycott of PGGM, the Dutch pension fund that divested from Israeli banks.
Dutch Jews are making it clear they don't intend to take the economic assault on Israel quietly. A group of young Jewish activists in the country have started a counter-boycott movement to make local firms feel the pinch for their discrimination against the Jewish state.
A group of young Dutch Jewish professionals called Tradition is Our Future (TOF) have have launched a boycott of their own. The group, whose goal is to defend Jewish life in the Netherlands, decided to take action after the PGGM divestment while noting a recent wave of anti-Israel fomentation.
In early January, the premier Dutch soccer team Vitesse left for training in the United Arab Emirates (UAE), leaving behind its best defender Dan Mori after UAE authorities refused to allow him into the country for being an Israeli.
"We are afraid that this is just the beginning, and therefore we need to take counter measurements. We call upon you to help us to boycott those who boycott Israel," declared TOF.
The counter-boycott being proposed targets PGGM's CEO Else Bos, who holds an advisory position on the board of Emory University located in Atlanta. Her profile can be seen among board members of the university's Center for Alternative Investments.
"We kindly ask for your co-operation and efforts to demand the resignation of Bos from her position in the board," requests the group, noting that doing so will send a message to PGGM and other Dutch firms considering to boycott Israel "that their policy is internationally unacceptable."
The Dutch Jewish group highlights the hypocrisy of PGGM in limiting "their moral crusade to only include Israel." They report the firm has invested in the Bank of China "while China occupies Tibet" and despite the bank's funding of terrorism, as well as Turkey which "has been occupying Northern Cyprus since 1974."
TOF summarizes, saying "it seems that PGGM believes that Israel and the Jews should be treated differently from other countries and other people."
The response of Dutch Jews fighting back brings to mind recent reports from France, where young Jews have begun taking matters into their own hands to defend their communities from a rising wave of anti-Semitism. In particular the French Jewish Defense League has been actively opposing public demonstrations of Jew hatred.
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The Netherlands officially opposes a boycott against Israel
The Dutch foreign minister said on Friday that the Netherlands still objects to settlements after several firms sever ties with Israeli companies, according to a report by Dutch News. But, the Netherlands rejects boycotts or sanctions against Israel, Dutch Foreign Minister Frans Timmermans told local media, Dutch News reported.
Timmermans qualified his statement, and said that the Netherlands is committed to its anti-settlements stance and discourages Dutch companies from doing business with them. "That has been the policy for years," the foreign minister said.
Timmerman's comments were made after several high-profile divestments by Dutch firms in recent months, such as PGGM's. The Dutch government said it had nothing to do with PGGM's decision.
The Netherlands and Israel recently had a disagreement following Israel's refusal to view a Dutch container scanner meant to be used in Israel's border with the Gaza Strip.
Dutch Member of Parliament: "Boycotting Israel is wrong"
A member of the Dutch Parliament recently condemned the decision by a large Dutch pension investment company to divest from five Israeli banks.
MP Kees Van Der Staaij – who was in Israel for a four-day visit – said the move was very wrong and that most Dutch did not agree with the idea of a boycott.
He told The Jerusalem Post that he would ask for a debate in the Dutch Parliament on the matter and would do everything in his power to “encourage the Ministry of Foreign Affairs to issue a strong statement against the boycott.”
He also said he would push for his country’s government to intervene in the case.
During his visit to Israel, Van Der Staaij – the leader of theReformed Political Party in Holland – met with national water corporation Mekorot’s CEO, Shimon Ben-Hamo. He handed Ben-Hamo a shofar, to represent a new beginning and to symbolize the noise he planned to make in Holland to support Israel.
As mentioned above, Dutch water giant Vitens canceled cooperation with Mekorot because of alleged infractions of international law. The Dutch Foreign Ministry subsequently issued a statement saying it “opposes any boycott of Israeli companies or institutions, in line with its standing policy.”
As part of Holland's MP trip, the delegation met with the minister in charge of water in the Palestinian Authority, came to see the “Save a Child’s Heart” project at Holon’s Wolfson Medical Center, and talked to inmates at the Ofer Prison.
Van Der Staaij said he opposed any sort of boycotting, stressing that the settlements were a political issue and that Dutch companies needed to work together with Israeli and Palestinian ones, not disengage from them.
“The purpose of this whole visit was to undermine this type of action,” he said.
Israel Foreign ministry summons Dutch ambassador over ‘pro-boycott atmosphere’ in Holland
The Foreign Ministry summoned Dutch Ambassador Casper Veldkamp in December, 2013, to protest what it said were “ambiguous” statements by the Dutch Foreign Ministry creating a pro-boycott atmosphere of Israel in the Netherlands.
Ministry spokesman Yigal Palmor condemns "self-righteousness" of decision by PGGM to cut ties with 5 banks over settlements issue.
The decision by a large Dutch pension investment company to divest from five Israeli banks is a “sanctimonious move intended to pander to a certain nefarious trend in public opinion,” Foreign Ministry spokesman Yigal Palmor said.
“It appears that people who make the decisions for the fund care more about showing an excess of self-righteousness than any sense of reality.
Catering light-headedly to the Israeli-bashing fashion could quickly backfire,” he said. Palmor explained that if the company followed “one trend,” there would be many other causes that others would seek to promote.
The official protest came a day after the Dutch water-giant, Vitens, canceled cooperation with Israel’s water corporation Mekorot because of alleged infractions of international law.
Israel protested that unclear language by the Dutch Foreign Ministry about doing business with Israeli firms was feeding a pro-boycott environment in the country.
Israel said vague statements warning of possible legal problems stemming from doing business with Israeli companies working beyond the Green Line – even though there is no legal precedent for that claim – were scaring away companies, who do not want to take any chances.
A spokesperson for the Dutch foreign minister in The Hague said the Ministry did not insist on the termination of the Vitens-Mekorot cooperation, and that the decision was taken by Vitens itself.
Is Britain next?
A similar problem is likely to erupt with Britain. As it too issued written guidelines recently warning businesses that economic activity in the settlements entails “legal and economic risks stemming from the fact that the Israeli settlements, according to international law, are built on occupied land and are not recognized as a legitimate part of Israel’s territory.”
Those contemplating any economic or financial involvement in the settlements, the guidelines read, “should seek appropriate legal advice.”
A spokesman at the British embassy said that these guidelines were “voluntary guidance” and not a boycott.
“The British Government firmly opposes calls to boycott Israel,” the spokesman said.
“We are deeply committed to promoting the UK’s trade and business ties with Israel, a vital element of the flourishing partnership between the two countries. We do not recognize the Occupied Territories, including the settlements, as part of Israel.”
The Trade and Investment website explained Israel’s presence in the West Bank as follows: “Israel’s armed forces occupied the West Bank, the Syrian Golan Heights and the Gaza Strip(along with the Sinai Peninsula) in 1967.” It provided no context whatsoever as to why or how this occurred, or what prompted the Six Day War.
Pro-Palestinian pressure on European parliaments
Meanwhile, Regional Cooperation Minister Silvan Shalom told Israel Radio that Vitens wrote that it was compelled to break off the cooperation with Mekorot because of heavy political pressure from Dutch Parliamentarians and Amnesty International.
Shalom advised not to “blow out of proportion” the Vitens decision, saying that a recent memorandum of understanding it signed with Mekorot dealt with the exchange of information and consultations.
He said the company, which wrote that it was sorry about cutting cooperation with Mekorot, said there was heavy pressure on stock holders from parliament members and anti-Israel organizations.
Shalom said that these incidents prove hollow the claim that, whenever Israel engages in negotiations with the Palestinians the Europeans will “get off our backs.”
“We are in the middle of negotiations, but it does not stop the anti-Israel organizations from acting.
They will act even if there is peace between us and the Palestinians,” he said.
Silvan Shalom: “I say to the Europeans, you cannot cry and whine all the time that you are not part of the diplomatic process, and that the U.S. leads it alone, when you take one sided, unbalanced and sometimes even hostile polices,” he said. “You want to be part of the process? Those who want to be part of the process have to come with a balanced policy toward the conflict, and only then come and demand to be part of the process.”
The day before in Washington, under the auspices of the World Bank, Israel, Jordan and the Palestinian Authority signed a trilateral memorandum of understanding on water exchanges and allocation, an agreement that will obviously involve Mekorot.
Although the official company statement did not divulge exactly what regulations Mekorot violated, Dutch media reports said that Vitens decided to cancel collaborations due to Mekorot's presence in the West Bank, following consultations with the Dutch Foreign Affairs Ministry.
Foreign Ministry spokesman Yigal Palmor, noting that the Palestinians will cooperate with Mekorot, while the Dutch firm will not, said "what we see here is an urgent need for a little common sense."
"It is more than strange that this Dutch company should boycott an Israel peer that works with the World Bank on a very important regional cooperation project, which includes the Jordanians and Palestinians," he said. "This only shows that by caving in to boycott pressures, one makes absurd decisions that result in a topsy-turvy situation."
Dutch Foreign Minister: Europe judges Israel by a different standard than other Middle East countries
Europe judges Israel by a different standard than other countries in the region because it is seen as a “European country” that should be judged by European standards, Dutch Foreign Minister Frans Timmermans said here on a visit to Israel.
“There is no way we can disentangle the destiny of Europe from that of Israel, and we better face that fact,” said Timmermans during a lecture at Beit Hatfutsot, sponsored by the Israel Council on Foreign Relations, which operates under the auspices of the World Jewish Congress.
Timmermans said that it was hard for some in Europe to deal with a strong Israel. “It is easy to be Israel’s friend as an underdog,” he said, adding that was something “cultural, part of our heritage.”
What is harder for some Europeans, he said, is to be Israel’s friend when it is “top dog,” and perceived as “not relenting, not giving in to the requests of other people.”
Everyone, he said, would benefit from a “closer cooperation” with Israel given its position in the region, its intelligence information and security analysis.
Asked about a recent Dutch government recommendation to the giant Royal HaskoningDHV engineering company to cancel its participation in building a sewage treatment plant, because it was across the Green Line, Timmermans said that “all territories beyond the Green Line don’t belong to Israel, and if you start a project, you need the agreement of local [Palestinian] authorities.”
He said that the Palestinians were not involved in the project, and as a result the government discouraged the Dutch company’s participation.
He said the Dutch government discourages companies from economic involvement beyond the Green Line.
Palestinians hail Dutch firm's decision to pull out of east Jerusalem sewage project
The Dutch engineering firm Royal HaskoningDHV was pressured by the Dutch government to withdraw participation from an Israeli sewage treatment facility initiative. The firm that was slated to participate in the construction of the sewage treatment facility in east Jerusalem, yet announced in September, 2013 that it was pulling out of the project.
In a move that drew praise from the Palestinians, the company, Royal HaskoningDHV, released a statement saying that it decided to terminate its involvement in the project “after due consultation with various stakeholders.”
“Royal HaskoningDHV has today advised the client it has decided to terminate the contract for the Kidron waste water treatment plant project,” the firm announced on its Web site. “The project is in the early stages of the preliminary design phase.”
The move was applauded by the Palestinian Authority. Hanan Ashrawi, an executive committee member of the Palestine Liberation Organization, hailed the Dutch firm’s decision. According to Ashrawi, the Dutch government had pressured the company to withdraw from the project.
“This project deepens Israel’s annexation of East Jerusalem, consolidates its occupation of the West Bank, and constitutes another obstacle to the establishment of an independent and sovereign Palestinian state on 1967 borders with east Jerusalem as its capital" said Ashrawi.
In July, 2013 the European Union enraged the Israeli government after its controversial decision to institute new guidelines limiting interaction with Israeli entities beyond the pre-1967 lines.
PLO Executive Committee member Dr.Hanan Ashrawi also issued a statement welcoming the Dutch pension fund PGGM's divestment decision.
“I commend PGGM for translating its corporate social responsibility policy into practice,” she said.
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Sources: Reuters, Jerusalem Post, HaAretz, i24news, Arutz Sheva
Quite a decision to boycot investments in the Israeli banks but difficult to give my opinion. Both parties could have some good arguments.