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Dutch business giants join boycott, causing Israel concern

January 24, 2014 at 2:19 am

In the wake of the recent termination of cooperation with Israeli companies linked to settlements in the Occupied Palestinian Territories by three Dutch business giants, Dutch Foreign Minister Frans Timmermans has declared that the Netherlands rejects boycotts and sanctions against Israel.

Despite Israel being responsible for the settlements and the creation of the settlement enterprise, deemed illegal under international law, on Friday, according to Dutch News, Timmermans told local media, that while the Netherlands is committed to its anti-settlements stance and discourages Dutch companies from doing business with them, it does not support a boycott of the state itself.

According to Timmermans, the anti-settlement stance has been a Netherlands “policy for years.” He previously summarised the Dutch position in a letter to Parliament in July, “The Dutch government discourages economic relations between Dutch firms and businesses in settlements in the Occupied Territories. Dutch government institutions do not provide services to any businesses established in Israeli settlements. The Netherlands embassy in Tel Aviv advises Dutch firms on the international law implications of doing business in occupied territories. Dutch firms are, where necessary, called to account.”

Despite the launch in December of the Netherlands-Israel Cooperation Forum in an attempt to strengthen bi-lateral ties between the two nations, their relationship was tested in the same week, when Dutch Prime Minister Mark Rutte cancelled a gala ceremony planned to inaugurate a new container scanner donated by the Netherlands to Israel’s border crossing with the Gaza Strip.

The scanner was a gift intended to provide a solution to Israel’s security concerns regarding Gazan exports. However Israel’s refusal of the Netherlands request for the resumption of exports from the blockaded Gaza Strip to the occupied West Bank, despite the cutting edge technology donated, angered the Dutch PM. The Dutch ministry responded to Israel’s refusal, saying that “positive, practical measures are needed to stimulate the ailing Gazan economy” and to “alleviate the worsening humanitarian situation for the people in Gaza.” The scanner “is in place and ready to use.”

Timmerman’s comments on Friday may be hoping to quell Israel’s concern over the recent divestments by the high profile Dutch companies.

Also in December, Dutch water giant, Vitens, the Netherlands largest supplier of drinking water, employing round 1,700 people and with annual revenues of around 450 million euros, severed ties with Israel’s national water company Mekorot, stating the “political context” of Israel’s West Bank settlements. Only a month ago Vitens had reportedly signed a memorandum of understanding to cooperate on projects with Mekorot.

The launch of the Cooperation Forum led to a hike in criticism regarding Dutch companies doing business with certain Israeli companies, especially following the Tel Aviv Dutch embassy’s publication of Israeli companies registered as participants in the launch event on their website. Despite the Dutch government’s anti-settlement stance some of the names on the list were companies which are known to have links to settlements. One of the companies reportedly included, Mekorot. Following this Vitens terminated the co-operation.

Mekorot, the Israeli public water company which supplies 90 per cent of Israel’s drinking water, operates some 42 wells in the West Bank, mainly in the Jordan Valley region, annexing water resources that should be under the control of the Palestinians and pumping them to the settlements.

Palestinian consumption in the OPTs is about 70 litres per day per person, falling well below the World Health Organisations recommendations, while Israeli settlers consume six times as much. Many hold Mekorot responsible for what is defined as “water apartheid.”

In regard to their cooperation with Mekorot, Vitens said in a statement that it, “attaches great importance to integrity and abides by national and international law and regulations.” According to Vitens, “Following consultations with the parties involved, including the Ministry of Foreign Affairs, the company concluded that would be very difficult jointly to develop possible future projects, considering that these projects cannot be seen separately from the political context.”

At the beginning of this year another Netherlands giant terminated co-operation with Israeli firms citing the political context. The Netherlands largest pension fund management company, PGGM, which manages over 150 billion euros of pension money worldwide, withdrew all its investments from Israel’s five largest banks based upon its “social responsibility” policy. PGGM withdrew the funds from Bank Hapoalim, Bank Leumi, Bank Mizrahi-Tefahot, the First International Bank of Israel and Israel Discount Bank stating the reason being because they branches in the West Bank and/or are involved in financing construction in the settlements.

According to Haaretz, PGGM told the banks its opinion was based on an advisory opinion issued by the International Court of Justice in The Hague in 2004, which said that settlements in occupied Palestinian territory are illegal and violate Article 49 of the Fourth Geneva Convention. In response, Israel’s Foreign Ministry has summoned the Dutch ambassador to Israel for a meeting on Friday.

Vitens and PGGM’s boycott allies them with the Dutch company Royal HaskoningDHV, who cancelled their municipal wastewater project which was to be located in occupied East Jerusalem, in September 2013.

A statement issued on 6 August explained that “[i]n the course of the project, and after due consultation with various stakeholders, we came to understand that future involvement in the project could be in violation of international law.”

Human rights organisation Al-Haq welcomed the decision in a press release. It stated, “The proposed wastewater treatment plant will serve the Israeli settlements in East Jerusalem, thereby solidifying their existence and perpetuating violations of international law. Furthermore, the wastewater treatment plant will primarily benefit the settlement enterprise at the expense of the occupied Palestinian population and its economy.”

The press release drew attention to the UN Global Compact (2000). It read, “The first two principles of the UN Global Compact (2000) state that businesses should support and respect the protection of international human rights within their spheres of influence and make sure that they are not complicit in human rights abuses.” This means that companies have a duty to ensure they do not support or legitimise the settlement enterprise by providing services to settlements or doing business with Israeli companies connected to settlements.

Officials in Jerusalem believe the current divestments are to be understood in the context of a new policy of the Dutch government to discourage Dutch companies from doing business with companies that are directly linked to settlements. In March, the Dutch government announced that it would introduce new guidance calling on retailers to label fresh produce from illegal Israeli settlements in a way that distinguishes it from products originating inside Israel.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.