The first quarter of 2014 has been an interesting time for the Boycott Divestment Sanctions (BDS) campaign, with a number of promising developments – particularly in Europe – and indications that the Israeli government is taking the 'threat' posed by boycott initiatives more seriously than before.
One significant development has been a rash of decisions by European pension funds to divest from or blacklist Israeli banks and corporations on the grounds of those entities' complicity in violations of international law. The first came In early January, when it was announced that Dutch pension fund giant PGGM had withdrawn its investments from Israel's five largest banks because of their involvement in West Bank settlements.
Israeli newspaper Haaretz noted at the time that the decision would be "liable to damage the banks' image, and could lead other business concerns in Europe to follow suit". Significantly, the €131 billion fund cut ties with Israeli entities that are not strictly settlement-based enterprises because of the realisation "it would be impossible to create a firewall between its investments in Israeli banks and the banks' activities in the territories".
Other similar announcements followed. A Norwegian finance ministry-run $810 billion oil fund divested from Israeli firms Africa Israel Investments and its subsidiary Danya Cebus, due to their involvement in settlement construction. Denmark's largest bank, Danske Bank, blacklisted Bank Hapoalim because of settlement complicity, while Scandinavian investors Nordea Investment Management and and DNB Asset Management announced they are reviewing their own holdings in Israeli banks.
In mid-February, a leading Dutch association of investors issued a report claiming that many of Israel's pension funds, insurance companies and banks "fail to adequately apply guidelines on international law and human rights" with respect to investments linked to the Occupied Palestinian Territories. Then at the end of the month came the news that Luxembourg state pension fund FDC had excluded nine major Israeli banks and companies, as well as US company Motorola, on account of their involvement in violations of international law. Five major banks, Elbit Systems, and Africa Israel Investments were among those blacklisted.
A second development of note was success with regards to public awareness of BDS, with Scarlett Johansson's role as Oxfam global ambassador ending as a result of the actress' contract with SodaStream. While pro-Israel groups spun Johansson's preference for a lucrative contract with the Israeli company as a 'failure' for BDS campaigners, this assessment simply showed their lack of understanding about the nature of the battle they face.
The story gave BDS campaigners the opportunity to promote their message in ways not seen since Stephen Hawking refused an invitation to Shimon Peres' conference. Many were sceptical or even scornful of the claim that SodaStream's employment of Palestinians could mitigate the plant's location in an illegal settlement. The Financial Times called Johansson's defence "naive", while The Economist noted that "Israeli financial institutions" and "infrastructure companies" are unable to "separate themselves from activities" in the occupied territories.
Furthermore, the narrative of the controversy from the general public's point of view was 'Hollywood actress forced to choose between Israeli company and internationally-respected development charity'. In other words, it was Israel vs. human rights – and no matter what Johansson herself picked, that constituted a blow to 'brand Israel'. Shortly after Johansson and Oxfam parted ways, Omar Barghouti of the Palestinian Boycott National Committee published an op-ed in The New York Times on 'Why Israel Fears the Boycott'.
Thirdly, there have been reports this year showing that a boycott of settlement-based businesses is already having an impact, with the income of Israeli farmers in the occupied Jordan Valley falling by 14%, or around $29 million. David Elhayani, head of the settlers' Jordan Valley Regional Council, described "the damage" as "enormous". Meanwhile, lawmakers are taking steps to provide financial compensation to businesses in the occupied territories harmed by international boycotts, and in mid-January, an Israeli television report on the boycott campaign featured a leading Tel Aviv-based attorney who said that
Israeli businesses were turning to him in increasing numbers because of cancelled contracts, conflicts with international boards, lost investments and all kinds of other boycott-style pressures stemming from international opposition to Israel's presence in the West Bank and settlement policies
In January, the EU's Ambassador to Israel warned of a "price to pay" in the case of the failure of peace talks, and subsequently, EU officials confirmed that measures such as the labelling of settlement products and the issuing of guidance to businesses on settlement trade are prepared and ready to be implemented. Germany, meanwhile, conditioned grants for high-tech and science research "on the inclusion of a territorial clause stating that Israeli entities located in West Bank settlements or East Jerusalem will not be eligible for funding".
Finally, the pushback against the American Studies Association vote for boycott showed signs of backfiring, with efforts to legislate against academic boycott condemned by critics of BDS as an attack on academic freedom. The Modern Language Association conference in January meanwhile hosted a panel discussion on BDS, one of the best-attended sessions of the gathering, prompting anger from the likes of the Anti-Defamation League and other boycott opponents. In February, 138 Irish academics pledged their support for the academic boycott call. In respect to these developments, note that chair of Israel's Council for Higher Education's planning and budget committee Prof. Manuel Trajtenberg recently described the country's scientists as "ambassadors for Israel" and "an army…facing attempts to boycott us".
Alongside these developments, the first two months of 2014 also witnessed an uptick in the amount of discussion of boycott and divestment initiatives in the Israeli media and amongst leading politicians. After having initially been ignored, "boycott concerns", in the words of the Associated Press, have now "become central to Israel's public discourse".
A contributing factor were high-profile comments made by U.S. Secretary of State John Kerry, who in early February noted what he called "an increasing de-legitimization" campaign and "talk of boycotts", especially in the event of the failure to deliver a negotiated settlement. A month later, President Obama warned that should peace talks fail, the U.S. would have limited ability to protect it from "international fallout."
Justice Minister and chief negotiator Tzipi Livni has frequently referred to a boycott of Israel, warning of South Africa-style isolation, and attacking construction in more isolated West Bank settlements as contributing towards an "international boycott". This week, Labor party leader MK Herzog lamented that the boycott movement "is turning into a strategic threat". From the other side of the Israeli political spectrum, Jewish Home hardliner MK Ayelet Shaked described "the cultural and academic BDS campaign" as "the greatest threat faced by [Israel]", while Deputy FM Ze'ev Elkin labelled BDS one of Israel's "most serious strategic threats".
A significant proportion of the noise about BDS in Israel over recent months has been focused on potential economic damage. Israel's Finance Minister Yair Lapid made waves when he warned of an economic crisis that will "hit each [Israeli] in the pocket" should peace talks break down and boycotts increase. Lapid also referred to "an unsettling list of organizations already joining the BDS movement against Israel", and, referencing Apartheid South Africa, warned "that the tipping point could come unexpectedly".
President Shimon Peres has proclaimed "the danger of an economic boycott" to be "far more palpable than a security threat", given how Israel "live[s] on exports". MK Moshe Gafni offered a similar message: "a decision has to be made about priorities: Judea & Samaria [West Bank] or joining the world economy". Even the bullish and defiant Economics Minister Naftali Bennett has spoken of the need to reduce dependence on Europe when it comes to trade, due to the concerns over boycott.
Alongside the politicians, a number of leading Israeli business figures – such as the 'Breaking the Impasse' group – have also warned about the potential impact of boycott, and have thus urged the political leadership to secure a peace deal that would thwart such a possibility. Similar fears are being echoed by those within pro-Israel lobby groups in the West – see, for example, a warning by Mick Davis of the UK's Jewish Leadership Council of the threat posed by "BDS and other punitive measures", if "current talks falter".
This is the context then for plans being mooted by the Israeli government to intensify efforts to combat BDS campaigns. Just this week, Israeli PM Benjamin Netanyahu repeatedly referred to BDS in his speech at AIPAC – and as Haaretz correspondent Barak Ravid pointed out, "the more [he] elaborated on the issue [of BDS], the more he revealed just how worried he is". The Financial Times, reporting Netanyahu's condemnation of BDS campaigners as anti-Semites, said his comments "marked one of the clearest signs yet that the movement is making an impact at the highest level of his government."
In early February, against a backdrop of reported divisions between the Strategic Affairs Ministry and Ministry of Foreign Affairs about how best to respond to BDS campaigns, Netanyahu convened a closed-doors meeting of senior ministers to "seriously discuss boycott for the first time". Meeting participants were presented with a proposal by Yossi Kuperwasser, Director of the Ministry for Strategic Affairs.
Ideas under discussion apparently included propaganda initiatives, lawsuits in Western courts, promoting anti-boycott legislation in "friendly capitals", using spies to "dig up intelligence linking [BDS] supporters…to terrorists", and boosting intelligence about pro-BDS organisations through the combined resources of the Israel Defense Forces' intelligence department along with the Shin Bet and Mossad (representatives of the latter two organisations attended the meeting).
In parallel to these steps, FM Lieberman announced on 3 February that "a new interministerial team" had been established "to fight efforts to boycott Israel and products manufactured beyond the Green Line". The state has also been defending the anti-boycott law in front of the High Court, on the grounds that "freedom of expression in Israel is not absolute".
Until recently, Israel and its lobbyists have been caught between trying to downplay BDS campaigns as ineffectual and useless, while simultaneously condemning boycott strategies and mobilising to oppose them. It would appear that there is now sufficient momentum behind boycott and divestment campaigns that many in the Israeli government and in West-based lobby groups now prefer to have an open, direct confrontation. It is, in other words, a sign of desperation.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.