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Israel gets $171bn in European investment for illegal settlements

US dollars [ Yousuf Khan - Anadolu Agency ]
US dollars [ Yousuf Khan - Anadolu Agency ]

Investment by European firms in companies benefiting from Israel's illegal settlements in the occupied Palestinian territories has increased by $30 billion in a year, according to a report by the campaign group Don't Buy into Occupation. The group is a joint initiative by 24 Palestinian, regional and European organisations to investigate and expose the financial relationships between businesses involved in illegal Israeli settlements and European financial institutions.

The group's second report — "Exposing the financial flows into illegal Israeli settlements" — found that between January 2019 and August 2022, 725 European financial institutions, including banks, asset managers, insurance companies and pension funds, had financial relationships with 50 companies that are actively involved with Israeli settlements. All Israeli settlers and settlements are illegal under international law.

In the three-year period covered by the report, $171.4 billion was provided in the form of loans and underwriting. The figure represents a $30 billion increase since last year when $141 billion was invested by European firms in illegal settlements. As of August 2022, European investors are also said to be holding $115.5 billion worth of shares and bonds of companies benefitting from the settlements.

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Palestinians regard the settlements as a continuation of the ethnic cleansing which began in 1947/48; they are one of the main drivers of Israel's takeover of Palestine. Formally, the European position accepts that all settlements in the occupied Palestinian territory are illegal under international law. Furthermore, the EU will not recognise any changes to the pre-1967 borders, including in Jerusalem, other than those agreed by both sides. However, in practice, that position is clearly undermined.

The report warned that business enterprises that are directly or indirectly involved in Israeli settlements run a high risk of involvement in grave violations of international humanitarian law, complicity in war crimes and crimes against humanity, and contributing to human rights violations. The companies are thus urged to consider "responsible disengagement" with the settlements. "Responsible disengagement is a global standard of expected conduct for all companies wherever they operate, and exists independently of States' ability and willingness to fulfil their own human rights obligations," explained Don't Buy into the Occupation.

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The group argued that international financial institutions, including banks and pension funds, have a responsibility under the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines to use their leverage and ensure their investee companies act responsibly and in line with international law standards, and to divest from those who do not.

In recent years several financial institutions have taken up their responsibility, by divesting from business enterprises linked to Israeli settlements due to risks of being involved in serious violations. Three relatively recent examples cited in the report are those of Kommunal Landspensjonskasse (KLP), Storebrand and the Norwegian Government Pension Fund Global (GPFG). It also mentioned that ABP, the biggest pension fund in the Netherlands, divested from two Israeli banks in June 2020 (Bank Leumi and Bank Hapoalim).

In 2020 the UN launched a database of business enterprises that are involved in Israeli settlements. Don't Buy into the Occupation urged the UN Office of the High Commissioner for Human Rights to fulfil its mandate to update and publish the UN database of business enterprises annually, and to add the firms that are involved in one or more of the "listed activities that raise particular human rights concerns."

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