A landmark decision by a major Scottish pension fund to divest from Israel's Bank Hapoalim could trigger a massive financial withdrawal by other funds in Scotland. The Falkirk Pension Fund is unhappy at the bank's activities in occupied Palestine and its approach to human rights.
The fund, which manages £2.3 billion for Stirling, Falkirk and Clackmannanshire Councils, sold off its £6 million holding in Bank Hapoalim after its officials concluded that the political and reputational risks "were significant".
This is not the first time that Bank Hapoalim has been blacklisted because of its involvement in funding illegal settlement construction in the occupied Palestinian territories. In February 2014, Denmark's largest bank, Danske Bank, added the Israeli financial institution to its list of companies in which it could not invest due to its corporate accountability rules.
In an announcement posted on its website, Danske Bank stated that Bank Hapoalim was acting against the rules of international humanitarian law. It had already decided to pull its investments from Africa Israel Investments Ltd. and Danya Cebus due to their involvement in settlement construction at the time.
According to documents seen by Middle East Monitor, Falkirk Pension Fund management had earlier "challenged [Bank Hapoalim] on several occasions regarding their activities in the Occupied Territories and their approach to human rights." The Israeli bank "admits that it provides mortgages to customers in the occupied territories" despite the fact that, as the Falkirk team remarked, "business activity in the occupied territories is generally considered a breach of international law."
Fans of Mel Gibson's "Braveheart" will know that Stirling was the site of the first great victory for William Wallace against the army of Edward I — "Longshanks" — of England. The fact that Stirling is one of the three councils to have divested thus carries with it some degree of historical significance in the struggle for freedom from oppression.
The move has been welcomed by the Scottish Palestine Solidarity Campaign, which says that it will now exert pressure on both Lothian and Tayside Pension Funds to offload their stock in Bank Hapoalim.
"Pension funds are a major engine of capitalist investment but, uniquely, they are accountable to democratically elected institutions such as local authorities," explained SPSC co-founder Mick Napier. "Nothing will fall into our laps but a sustained campaign can overcome the numerous obstacles which governments erect to prevent democratic accountability by local authority pension funds."
The veteran campaigner pointed out that the BDS movement is growing worldwide but Divestment sometimes lags behind the Boycott aspect. "This is the case, even though it has the potential, as happened with apartheid South Africa, to exert enormous pressure on Israel via the corporations which sustain its murderous capability."
Meanwhile, Sam Macartney of Unison Scotland's International committee, welcomed Falkirk Pension Fund's action: "In the week that we have witnessed the disgraceful actions taken by the Israeli state in removing recognition and rights to self-determination of the Palestinians, which now confirms this government as an apartheid regime, it is refreshing to see a Scottish authority take such action on local government pensions."
The union official noted that a pension scheme for some of Unison's members is divesting from companies which are unethical and support apartheid regimes. "I would hope that other authorities will take similar actions and follow Falkirk Council's stance."
SPSC has been campaigning with partners, including Unison Scotland and Scottish Friends of Palestine, in the Time to Divest campaign across the country to put pressure on local authority pension funds to withdraw their investments from companies complicit in Israel's crimes. The decision by Falkirk Pension Fund, they believe, will be the first of many.
"We can do little in the short term to inhibit the genocidal killing sprees of the Israeli regime but we can channel the rising worldwide anger at Israel's crimes into support for the BDS call from Palestine," added Napier. "BDS is the only force that the Israeli regime fears. We have won some victories in the 'B' for Boycott fight; now we ask everyone to help us build on the 'D' for Divestment front and clean up all Scottish pension funds."
Human Rights Watch has published a report on how some Israeli banks operating in the occupied West Bank contribute to and benefit from serious violations of human rights and international humanitarian law. They violate the prohibition on transferring an occupying power's civilians into occupied territory, for example, and are located on land that has been taken unlawfully from Palestinians; settlements exploit natural resources that belong to Palestinian society but are allocated in a discriminatory manner in favour of non-Jewish Israelis; and are part of a discriminatory system that privileges Israeli businesses while inhibiting the development of Palestinian businesses, social and cultural institutions, and infrastructure.
Settlements also trigger serious abuses such as restrictions on Palestinian freedom of movement, unlawful seizure of Palestinian land, home demolitions and displacement. Transferring an occupying power's civilian population into occupied territory is so serious that it is classed as a war crime.
Both SPSC and Unison have set up a website to enable voters to find out if their local authority pension funds conflict with BDS and to campaign against investments which are regarded as unsafe under international law. If the good people of Scotland do this, they have the power to make sure that the Falkirk Pension Fund will indeed be "the first" after which many others will follow.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.