TWN Info Service on WTO and Trade Issues (Apr18/04)
11 April 2018
Third World Network

United Nations: Palestinians denied the right to development, says UNCTAD
Published in SUNS #8656 dated 6 April 2018

Geneva, 5 Apr (Kanaga Raja) - A number of practices by Israel with regard to the Occupied Palestinian Territory have imposed economic costs on the Palestinian people, either by obstructing their economic activity or impeding economic advancement and development, a new study by the United Nations Conference on Trade and Development (UNCTAD) says.

According to the study, many of these practices contravene the obligations of Israel under the law of belligerent occupation (humanitarian law) or under the law of human rights.

Israel, the study says, bears a legal obligation to remedy the economic costs of its occupation of the Palestinian territory, while the international community has a responsibility to ensure that Israel satisfies that obligation.

The obligations of Israel are well grounded in international law and precedents.

While Israel also bears an obligation to terminate its occupation, that obligation is without prejudice to its obligation to compensate for harm caused to any party.

This includes harm to individuals, to business, trade or agricultural under takings and to governmental entities.

"The international community should shoulder its responsibility to promote development in the Occupied Palestinian Territory and ensure that the occupation and its enduring harm to the welfare of the Palestinian people is ended," said Mr Mahmoud Elkhafif, Coordinator of the Assistance to the Palestinian People U nit at UNCTAD, in a press release.

The study by the UNCTAD Secretariat was prepared in response to four UN General Assembly resolutions (69/20, 70/12, 71/20 and 72/13) on the role of UNCTAD in reporting on the economic costs of the Israeli occupation for the Palestinian people.

The study, released on 3 April, is titled "The Economic Costs of the Israeli Occupation for the Palestinian People and their Human Right to Development: Legal Dimensions."

According to the study, in normal situations, a State can act to facilitate the development of its population, and the population can participate in setting policy. In a situation of belligerent occupation, neither the State that holds sovereignty nor its population is in a position to undertake this task.

It becomes especially important for the international community as a whole to promote development and, if the belligerent occupant fails in its economic obligations, the international community must ensure that the belligerent occupant provides compensation and remedy.

The study said such compensation can materially assist the population of an occupied territory in overcoming the years of non-development and de-development imposed upon it by the belligerent occupant.

With regard to the Occupied Palestinian Territory, this means an obligation for Israel, in the first instance, to avoid action that impedes development. The significant violations by Israel of property rights and other rights have impeded development.

In the second instance, the right to economic development means that Israel must take affirmative steps to foster development. "Israel has failed to do this," the study said.

The right to development, being a right erga omnes, implies that the failure of Israel in both instances brings into focus an obligation for the international community as a whole to ensure that Israel complies with its obligations.

"For the harm already caused by Israel - both harm caused by actions impeding economic development, and harm caused by a failure to take affirmative steps - Israel may owe economic compensation. It is incumbent on the international community to ensure that remedy is in place," said UNCTAD.

According to the study, the economic cost of the Israeli occupation of the Palestinian territory falls on the population of that territory.

To the extent that the population is deprived of resources, deprived of the ability to gain from economic activity and deprived of the ability to promote future economic development, damage is inflicted on them, collectively and individually.

"This cost carries a price tag for which Israel is responsible. The costs for the Palestinian population may result from practices that impede the Palestinian economy and may also result from a failure to promote economic development. "

Under international law, a regime has been established for a situation in which a foreign power assumes control of a territory by military means against the will of the government of that territory.

Such a regime is termed "belligerent occupation", meaning that the foreign power has entered into occupation in a situation of belligerency. There need not be any actual hostilities if the forces of the territory in question are unable to oppose the occupation.

Under international law, a foreign power may not acquire sovereignty over a territory by military means. The presumption is that the foreign power will withdraw, typically upon conclusion of a treaty of peace.

While the foreign power is in control of the territory, it is regarded as holding a role comparable to that of a trustee, as referred to in the domestic law of many nations.

The foreign occupant is considered to be holding the territory as a temporary replacement of the legitimate sovereign, under an obligation to carry out policies that promote the well-being of the population.

It is responsible for the welfare of the population, in particular for safe guarding the capacity of the population to engage in normal economic activity.

The study noted that a body of law has been developed by the international community to regulate the actions of a belligerent occupant with regard to the population of the territory it occupies. It is part of a larger body of law called jus in bello, the law related to actions taken in the context of war.

Given the status of Israel in the Occupied Palestinian Territory as that of belligerent occupant, the Security Council, as reflected in resolution 446, regards the Fourth Geneva Convention as applicable to the territories occupied since 1967. The Fourth Geneva Convention is a treaty to which Israel is a party.

Beyond the law regulating the activity of a belligerent occupant, Israel is also bound by the law of human rights.

This body of law, found in customary rules that have developed through the practice of States worldwide, as well as in treaties, binds a belligerent occupant as it binds all States.

In many situations, said UNCTAD, obligations under humanitarian law and under human rights law are identical.

Obligations on economic and social issues fall on Israel as a belligerent occupant under the law of human rights.

These obligations are found both in the customary law of human rights and i n treaties that prescribe rights, said the study, adding that economic and social issues find significant reflection in the law of human rights.

An occupant is bound to respect rights found in the law of human rights, a body of law that applies in both peace and war.

UNCTAD said that human rights obligations are undertaken by States under specific treaties. The International Covenant on Economic, Social and Cultural Rights is one such treaty.


The study noted that a number of practices by Israel with regard to the Occupied Palestinian Territory impose economic costs on the Palestinian people, either by obstructing their economic activity or by impeding economic advancement and development.

It said that many of these practices contravene the obligations of Israel under the law of belligerent occupation (humanitarian law) or under the law of human rights.

The norms of humanitarian law and of human rights law give rise to liability for a range of actions that have been undertaken by the Government of Israel during the period of occupation.

A belligerent occupant is prohibited from transferring population into the occupied territory. This prohibition stems from article 43 of the Hague Regulations, which requires an occupant to maintain the civic life of the population. Bringing new populations into the territory violates that obligation.

According to the study, the prohibition is also stated in specific terms in article 49 (6) of the Fourth Geneva Convention, which states that "the Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies".

The International Court of Justice (ICJ) has found Israel to be in violation of this provision with regard to its settlements in the West Bank.

The seriousness of the prohibition is accentuated by the fact that "transfer", as defined in the Fourth Geneva Convention, constitutes a war crime for any individual who engages in that activity.

As further indication of the seriousness of this act, wilful commission is characterized as a "grave breach" on the part of an individual, meaning that States parties to the Fourth Geneva Convention have an obligation to prosecute.

Israel has not confined itself to permitting civilians to settle in the Occupied Palestinian Territory, but promotes the economic activities of the settlements, said the study.

The transfer of civilians as settlers imposes economic costs on the Palestinian population in a variety of ways.

Land is taken for the area of the settlements, thereby depriving Palestinians from using the land for productive purposes.

This economic cost is borne whether the land taken is held in private owner ship or as State land that is available for use for productive purposes by the Palestinian population.

Further, substantial tracts of land have been confiscated to build roads to connect the settlements with roads in the territory of Israel. In addition, goods produced in the settlements compete with Palestinian produced goods.

Moreover, the character of the civilians transferred as settlers has imposed further economic costs on the Palestinian people.

Settlers believe that it is their right to own land and reside in the Occupied Palestinian Territory, and therefore consider that Palestinians are not entitled to reside in the territory and adopt a hostile attitude towards them, to the point of attacking them physically and sabotaging their economic activity.

Considerable economic loss has been caused to the Palestinian people by violence committed by settlers. This violence is attributable to the Government of Israel for two reasons, said the study.

The first is that the settlers should not be present in the Occupied Palestinian Territory. The second is inaction by Israel in intervening to prevent such violence or to prosecute vigorously those who perpetrate it.

The study said violence by settlers contributes to a climate of uncertainty that is not conducive to entrepreneurial activity.

More directly, violence by settlers is often aimed at Palestinian agriculture, in particular the uprooting of olive and other trees and interference with harvesting. Israel has prevented settlers from being subject to Palestinian courts, thereby preventing prosecution.

The construction by Israel of a separation barrier in the West Bank is related to the transfer of civilians, as it is on a route that protects settlements.

The construction has caused major disruptions to economic activity and involved the taking of significant tracts of land. The construction has particularly affected economic activity in the "seam zone", that is, areas on the western side of the wall within the West Bank.

"The takeover of land by Israel for settlements, for the separation barrier and for related purposes violates the law of belligerent occupation and human right s law."

An occupant may make use of land only for limited purposes. It may make use of land for stationing its military forces, but may not make use of land for other purposes. For instance, it may not take land to house civilians in settlements or to build roads for the convenience of settlers. The losses to Palestinian industry and agriculture as a result of the takeover of land constitute a cost of occupation for the inhabitants.

The study also pointed out that States are required to ensure a right to development. This obligation falls on Israel by virtue of its status as a belligerent occupant, in particular in the light of the length of its occupation.

If Israel fails to ensure this right over a long period of time, the negative economic consequences are serious.

The study noted that the General Assembly has called on Israel to withdraw from the Palestinian territory to terminate the occupation.

It has said that the right of the Palestinian people to self-determination extends to a right to "their independent State of Palestine".

Belligerent occupation is thus regarded by the General Assembly as restrictive of the right to development. This is particularly true for an occupation that extends over a period of decades. For this length of time, the population is deprived of the capacity to formulate its own policies for development.

Moreover, said the study, a foreign army is far less capable than indigenous political institutions of identifying goals for economic development and of setting policy that will realize such goals.

UNCTAD said: "In order to comply with its obligation to promote the economic development of the Palestinian territory it occupies, Israel needs to withdraw from the territory and allow the population to devise its own approaches."

Instead, however, it has solidified its entrenchment and progressively subsumed more of the territory under the control of its settlers, whose aim is their own self-betterment, to the exclusion of the economic aspirations of the Palestinian people.

The maintenance of control over territory by a foreign settler population i s fundamentally inconsistent with the obligation of Israel as belligerent occupant to promote the economic development of the Palestinian people.

As it continues its occupation, many United Nations studies and reports indicate that Israel has failed to promote economic development.

The totality of its policies has resulted in economic constriction rather than advancement, said UNCTAD. One specific issue is the use of taxes Israel collects from the population of the Occupied Palestinian Territory. Israel must use such tax revenue for the benefit and economic wellbeing of the population.

If Israel does not use the tax revenue it collects for such purposes or uses the money to exert political pressure, this represents yet another case of economic hardship and financial loss for the Palestinian people.

Withholding of revenue that is due to the Palestinian government impairs its ability to carry out development programmes and to pay the basic operating expenses of a government. The withholding and appropriation of Palestinian fiscal revenue by Israel constitute obstacles to economic development.

"Thus, far from promoting economic development, Israel impedes it. The withholding of revenue as a reaction to Palestinian political decisions cannot be justified. If Israel, as the occupying Power, maintains control over goods entering from abroad, it must facilitate their entry, including the fiscal aspects of that entry."

According to the study, military action by Israel in the Occupied Palestinian Territory is inconsistent with the obligation of Israel to promote economic development. In a report, UNCTAD had assessed the economic loss caused by the military operation in Gaza between December 2008 and January 2009 as in the order of $4 billion.

Several military operations by Israel in Gaza since the disengagement of Israel from Gaza in 2005 have all been assessed for the economic losses they caused.

In each instance the operation involved a violation of international law, j us ad bellum. As a result, Israel could be found liable for the economic losses inflicted by the military operations.

Practices by Israel affecting numerous sectors of the Palestinian economy arguably violate the legal obligations of Israel under the law of belligerent occupation and/or the law of human rights.

The study said these obligations may be violated by policies of Israel in the Occupied Palestinian Territory that inhibit productive activity in all sectors, including industry, trade and agriculture, both through taking control of the use of land and through restrictions that impede productive activity.

In particular, restrictions by Israel on the flow of goods in and out of Gaza have created economic circumstances that put Israel in a position of violation of these obligations.

The study noted that Israel has taken control of large swaths of land for the construction of settlements, for the construction of roads for settlers and for the construction of the separation barrier.

It has also closed off tracts of land, claiming a security need, in particular in Gaza. Since the onset of occupation in 1967, Palestinians have lost access to more than 60 per cent of West Bank land and more than two thirds of grazing land. In the Gaza Strip, half of the cultivable area is inaccessible to Palestinian producers.

In the waters off Gaza, 85 per cent of fishery resources are inaccessible to Palestinian fishers. According to the study, fisheries constitute part of the economic wealth of a country.

Under international rules on fisheries, a coastal State has exclusive right s for its nationals to harvest fish and other maritime resources within a territorial sea extending 12 nautical miles seaward from the low-water line along the coast. Additionally, a coastal State may declare a fishery zone extending another 188 nautical miles seaward.

In this zone, the coastal State may exclude the nationals of other States if nationals of the coastal State have the capacity to harvest the maximum allowable catch as determined unilaterally by the coastal State. Beyond this fishery zone, nationals may venture out to the high seas and fish in distant waters.

However, Israel has imposed, through the use of armed forces, strict limits on the distance that fishing boats may sail off the coast of Gaza. These restrictions have varied over time, and have severely limited fishers in Gaza from accessing traditional fishing waters.

At times, Israel has enforced these restrictions with the use of force, sometimes resulting in injury or death to members of the Gaza fishing workforce.

The international rules on coastal fishing are contained in the United Nations Convention on the Law of the Sea. The State of Palestine acceded to this Convention on 2 January 2015.

As a result, the State of Palestine has a treaty right to use coastal water s. Israel is one of only a handful of States that are not a party to this Convention. As a result, the State of Palestine has no treaty-based rights towards Israel with regard to the use of coastal waters.

However, the rules on coastal waters are part of the customary law of nations. Thus, the restrictions imposed by Israel represent a violation of the right s of the Occupied Palestinian Territory and, thereby, the rights of the population.

The study also found that the Palestinian industry has been stunted as a result of restrictions imposed by Israel.

Through its control of borders, Israel is able to limit the domestic production and importation of input materials needed in Palestinian manufacturing.

It also said that Israel has restricted Palestinian telephone providers with respect to the bands they can use. As a result, Palestinian providers cannot compete with providers in Israel, leading many Palestinians to use the latter.

This restrictive practice limits Palestinian economic development by placing Palestinian firms at a disadvantage.

A recent study by the World Bank of the Palestinian telecommunications sector concluded that the total revenue loss for the Palestinian mobile telephone sector in 2013-2015 was in the range of $436 million to $1,150 million, including a value added tax fiscal loss for the Palestinian National Authority (PNA) of between $70 million and $184 million; a direct cost of about 3.0 per cent of the economy (GDP).

The State of Palestine contains sites important to world history, potentially making tourism a major industry. As part of its general obligations under article 43 of the Hague Regulations, Israel is required to allow tourism to flourish in a way that benefits the Palestinian economy.

The study said Israel has damaged the Palestinian capacity to take advantage of tourism by occupying areas with valuable tourism assets, such as East Jerusalem, among other areas, and by taking control of the entry of foreign visitors.

Israel has discouraged foreign tourists from visiting the Occupied Palestinian Territory by denying entry to Israel if accommodations are booked there in advance.

The study also pointed out that Israel bears special obligations with regard to sites that are important for tourism, as a member of the United Nations Education al, Scientific and Cultural Organization (UNESCO) and under the Convention Concerning the Protection of the World Cultural and Natural Heritage adopted by the General Conference of UNESCO on 16 November 1972. Both Israel and the State of Palestine are parties to the Convention.

UNCTAD also noted that Israel has granted leases for drilling in gas fields off the coast of Gaza, in violation of Palestinian rights to the continental shelf. As a result, Palestinians have not been able to develop the gas field known as Gaza Marine.

Israel confiscates 82 per cent of Palestinian groundwater for use inside it s borders or in its settlements, and Palestinians must import over 50 per cent of the ir water from Israel.

A study by the World Bank has stated that only 35 per cent of irrigable Palestinian land is actually irrigated, costing the economy 110,000 jobs per year and 1 0 per cent of GDP.

UNCTAD said agricultural activities have therefore become less viable and m any farmers have been forced to abandon cultivation.

Underground waters constitute part of the natural resources of a territory. An occupying Power is therefore precluded from appropriating them for use in its own territory.

Such appropriation represents a violation of article 43 of the Hague Regulations, as a disruption of the civic life of the territory under occupation. It may also be in violation of article 55, as an appropriation of public assets, said UNCTAD.

Compliance by Israel with its obligation to promote employment is complicated by the fact that many Palestinian workers are forced to resort to employment in Israel and its settlements, which themselves are violations of the obligations of Israel as an occupying Power.

Certain measures imposed by Israel on the Occupied Palestinian Territory suggest that Israel has not complied with its obligation to ensure adequate nutrition. Measures targeting Palestinian agriculture have hampered food production, and policies on labour and employment have limited the income available for the purchase of food.

Restrictions by Israel on economic activity have also negatively impacted the housing situation in the Occupied Palestinian Territory. The housing situation is rendered worse by demolitions of housing, which are carried out as a punitive measure or for failure to obtain permits, which are often withheld for insubstantial reasons.

Furthermore, the practices of Israel in the Occupied Palestinian Territory have negatively impacted the medical sector and the quality of medical care available to the Palestinian public.

The prolonged blockade of Gaza has impeded the importation of medical equipment. Checkpoints operated at many points in the Occupied Palestinian Territory have also prevented patients from gaining access to medical facilities, with numerous documented deaths as a result.

The refusal of Israel to withdraw, and the insertion of its civilians as settlers and building up of an infrastructure for them, could represent unlawful acts, said UNCTAD.

According to the study, an occupant may not continue its occupation unduly in order to extract more favourable terms in a peace settlement. Israel may not continue its occupation in order to extract a commitment that, as a condition of withdrawal, other rights must be foregone, such as the right of Palestinian s displaced from the territory of Israel to be repatriated.