TWN Info Service on WTO and Trade Issues (Feb18/09)
5 February 2018
Third World Network

OHCHR reviews some 206 companies linked to Israeli settlements
Published in SUNS #8613 dated 2 February 2018

Geneva, 1 Feb (Kanaga Raja) - The Office of the United Nations High Commissioner for Human Rights (OHCHR) has identified 206 business enterprises that were involved in specific activities related to Israeli settlements in the occupied Palestinian territory, and is now in the process of reviewing the nature of their activities.

In a report released on 31 January 2018, the OHCHR highlighted its work on producing a database of business enterprises engaged in certain specified activities in the occupied Palestinian territory that are linked to Israeli settlements.

The OHCHR work is in pursuant of a mandate given to it by the Human Rights Council.

In its report (A/HRC/37/39), the UN Human Rights Office said it had reviewed a total of 321 companies by the end of 2017, of which it had identified 206 enterprises as engaged in specific activities in the settlements.

Of the 206 screened companies, OHCHR said, 143 were domiciled in Israel or Israeli settlements, with the second largest group being based in the United States (22).

This is followed by Germany with 7, Netherlands with 5 and France with 4. The rest are domiciled in 16 other countries, mostly European.

The Human Rights Office however did not disclose the names of these companies, but said it was in touch with all 206 companies, and subject to its determinations, it expects to release the names of those companies engaged in the listed activities.

"I am satisfied, given the resource constraints and the unprecedented nature of such a request from the UN Human Rights Council, that significant progress has been made in the Office's efforts to operationalize the Guiding Principles on Business and Human Rights," UN High Commissioner for Human Rights Zeid Ra'ad Al Hussein said in a UN news release.

"I urge all sides to avoid misrepresenting the contents of this report, which has been produced in good faith on the basis of the mandate laid down by the Human Rights Council. We hope that our work in consolidating and communicating the information in the database will assist States and businesses in complying with their obligations and responsibilities under international law," Zeid added.

[The report, and its stated intention to make public the names of the enterprises after the OHCHR has completed its review and assessment, appears to have rattled Israel, and was denounced by the Israeli ambassador to the UN, as also by the US Ambassador to the UN, Ms. Nikki R. Haley. Though the OHCHR has undertaken this work in pursuance of a mandate to it by the Human Rights Council, Ms Haley, according to the New York Times, claimed the "whole issue is outside the bounds of the High Commissioner for Human Rights office's mandate and is a waste of time and resources." SUNS]

The report of the United Nations High Commissioner for Human Rights was submitted to the Human Rights Council pursuant to resolution 31/36, adopted by the Council on 24 March 2016, on Israeli settlements in the Occupied Palestinian Territory, including East Jerusalem, and in the occupied Syrian Golan.

In paragraph 17 of resolution 31/36, the Council requested the United Nations High Commissioner for Human Rights to produce a database of all business enterprises engaged in certain specified activities related to the Israeli settlements in the Occupied Palestinian Territory, in consultation with the Working Group on the issue of human rights and transnational corporations and other business enterprises, and to transmit the data therein in the form of a report to the Council at its thirty-fourth session.

The Council also requested that the database be updated annually.

On 13 February 2017, the Human Rights Council, pursuant to the recommendation of the High Commissioner, decided to defer consideration of the report to allow for additional time to consider the inputs received in the context of an open call for submissions, and to ensure a fair process for concerned stakeholders.

The report is now before the thirty-seventh session of the Human Rights Council, which is being held from 26 February to 23 March 2018.

BACKGROUND

According to the report, Human Rights Council resolution 31/36 establishing the database follows up the report of the independent international fact-finding mission to investigate the implications of the Israeli settlements on the civil, political, economic, social and cultural rights of the Palestinian people throughout the Occupied Palestinian Territory, including East Jerusalem (A/HRC/22/63).

In resolution 31/36, the Council defined the parameters of activities to be reflected in the database by reference to the list compiled by the mission in its report, which comprised:

(a) The supply of equipment and materials facilitating the construction and the expansion of settlements and the wall, and associated infrastructures;

(b) The supply of surveillance and identification equipment for settlements, the wall and checkpoints directly linked with settlements;

(c) The supply of equipment for the demolition of housing and property, the destruction of agricultural farms, greenhouses, olive groves and crops;

(d) The supply of security services, equipment and materials to enterprises operating in settlements;

(e) The provision of services and utilities supporting the maintenance and existence of settlements, including transport;

(f) Banking and financial operations helping to develop, expand or maintain settlements and their activities, including loans for housing and the development of businesses;

(g) The use of natural resources, in particular water and land, for business purposes;

(h) Pollution, and the dumping of waste in or its transfer to Palestinian villages;

(i) Use of benefits and re-investments of enterprises owned totally or partially by settlers for developing, expanding and maintaining the settlements;

(j) Captivity of the Palestinian financial and economic markets, as well as practices that disadvantage Palestinian enterprises, including through restrictions on movement, administrative and legal constraints.

OHCHR noted that six of the 10 listed activities - (a), (b), (d), (e), (f) and (i) - refer to activities that are explicitly linked to the settlements, while the remaining four - (c), (g), (h) and (j) - refer to activities that may not be geographically connected to settlements, but form part of the processes that "enable and support the establishment, expansion and maintenance of Israeli residential communities beyond the Green Line".

For example, it noted that a company that is operating a quarry on Israeli-confiscated land in the West Bank will be considered to fall under category (g) regardless of whether it is located in or connected to a defined settlement community.

Its presence in the Occupied Palestinian Territory and the use of its natural resources for business purposes is sufficient to fall within the scope of the database, as required by resolution 31/36.

According to the report, the parameters of the database encompass local and international companies, whether domiciled in Israel, the Occupied Palestinian Territory or abroad, carrying out listed activities in relation to the Occupied Palestinian Territory.

Companies engaged in activities related to the occupied Syrian Golan do not fall within the mandate.

The OHCHR underlined that the mandate for producing the database established by resolution 31/36 is strictly confined to the 10 activities listed above.

The database does not cover all corporate activity related to settlements, nor does it extend to all corporate activity in the Occupied Palestinian Territory that may raise human rights concerns.

In addition, while there may be other types of entities engaged in significant corporate activity related to the settlements, only those entities established as business enterprises are considered; non-governmental organizations, charities, sports associations or federations, and other entities are therefore excluded from consideration.

The work conducted by OHCHR in producing the database is in full compliance with resolution 31/36 and does not purport to constitute a judicial process of any kind. OHCHR is mandated to make factual determinations of whether business enterprises are engaged in the listed activities, it said.

OHCHR said that it examined information relevant to the mandate that was available to it, initially gathered through the following methods:

* A desk review of publicly-available information, including reports by the United Nations, civil society organizations (Israeli, Palestinian and international), media reports, academic writings.

* Information received in response to notes verbales sent on 11 October 2016 to all Member States inviting them to provide inputs relevant to the implementation of resolution 31/36.

* Information received in response to an open invitation to all interested persons, entities and organizations to submit relevant information and documentation.

Of the 307 companies reviewed, 115 companies were excluded on the basis of the criteria set out (in paragraph 13 of its report).

The 192 remaining companies formed the initial group of "screened" companies that were subject to further research and consideration.

The majority of these 192 companies are domiciled in Israel or the settlements, followed by the United States of America, Germany, the Netherlands and France.

The report said that further research by OHCHR revealed relevant business entities, such as parent companies or subsidiaries, that were not initially named in the submissions received in notes verbales from Member States or through the open call for submissions from interested stakeholders.

This necessitated adding 14 companies to the initial list of 192 screened companies, resulting in a total of 206 companies reviewed at the time of writing.

OHCHR said it was given limited resources to carry out the mandate within the anticipated time frame, which required it to calibrate its research and engagement with companies accordingly.

Not all companies about which OHCHR had received information could be contacted by the time of submission of the present report.

At the time of writing, OHCHR said it had contacted 64 of the 206 companies involved in 33 different situations concerning the listed activities.

According to the report, of the 206 screened companies, 143 were based in Israel or Israeli settlements and 22 were based in the United States.

This was followed by Germany with 7, Netherlands with 5 and France with 4. The rest were divided among 16 other countries, mostly European.

In the letters addressed to the companies concerned, OHCHR said it informed them of the listed activities that they appeared to be engaged in (based on the totality of information reviewed by OHCHR), and set out the basic facts of the companies' involvement in the listed activity or activities.

Companies were requested to respond in writing within 60 days for an initial response, providing any clarification or update of the information.

Responses from companies included those that (a) objected to the mandate of OHCHR and declined to provide a substantive response to the information presented; (b) rejected the information presented and objected to being included in the database; (c) confirmed the information presented concerning their involvement in one or more of the listed activities, and provided explanations; (d) provided updated information that indicated they were no longer engaged in one or more of the listed activities; and (e) provided additional information and clarifications that will require further discussion and analysis before a determination can be made.

OHCHR said that more resources are required for it to continue its dialogue with and issue communications to relevant business enterprises, adding information to the database and updating existing information in the database as required by resolution 31/36.

Once OHCHR has been in contact with all 206 companies, and subject to determinations of their responses and non-responses, OHCHR expects to provide the names of the companies engaged in listed activities in a future update.

Before the determinations on the companies are made public, OHCHR will notify the companies concerned, it said.

INVOLVEMENT OF BUSINESS IN SETTLEMENT ACTIVITY

The report noted that the extensive human rights impact of settlements on the human rights of Palestinians has been well documented in successive reports of the High Commissioner, the UN Secretary-General and the fact-finding mission.

The reports detailed how the settlements are extensively altering the demographic composition of the Occupied Palestinian Territory and fundamentally threatening the Palestinians' right to self-determination.

"The violations of human rights associated with the settlements are pervasive and devastating, reaching every facet of Palestinian life," said OHCHR.

Owing to settlement development and infrastructure, Palestinians suffer from restrictions on freedom of religion, movement and education; their rights to land and water; access to livelihoods and their right to an adequate standard of living; their rights to family life; and many other fundamental human rights.

OHCHR noted that, considering the weight of the international legal consensus concerning the illegal nature of the settlements themselves, and the systemic and pervasive nature of the negative human rights impact caused by them, "it is difficult to imagine a scenario in which a company could engage in listed activities in a way that is consistent with the Guiding Principles [on Business and Human Rights] and international law."

Businesses play a central role in furthering the establishment, maintenance and expansion of Israeli settlements.

They are involved in constructing and financing settlement homes and supporting infrastructure, providing services to the settlements, and operating out of them, said OHCHR.

In doing so, they are contributing to Israel's confiscation of land, facilitate the transfer of its population into the Occupied Palestinian Territory, and are involved in the exploitation of Palestine's natural resources.

The Government of Israel actively encourages economic development of and for the settlements through the Israeli and international private sector by creating an attractive financial business market, by providing key financial incentives to companies to operate in the settlements.

Ninety settlements have been designated as "national priority areas", which allows businesses operating within them to benefit from reductions in the price of land, grants for the development of infrastructure, and preferential tax treatment.

Businesses in settlements can also take advantage of functional immunity from labour law with respect to the treatment of Palestinian workers.

Furthermore, Israeli authorities use their permit and licensing regime to encourage international and Israeli business engagement with the settlements.

Permits and licenses are readily provided to businesses operating in or servicing settlements, but are rarely granted to companies engaged in providing similar services to Palestinians.

According to the report, domestic laws and regulations in Israel also play a role in inducing businesses to serve individuals in the settlements.

The Consumer Protection Law (1981) was amended in 2017 in response to alleged discrimination against consumers living in settlements.

The revised law makes it mandatory for businesses to state clearly before any transaction is finalized whether they are not willing or able to provide services to settlements.

OHCHR noted that businesses play a key role in facilitating the overall settlement enterprise, contributing to Israel's confiscation of land and the transfer of its population through commercial development.

Some are directly involved in the confiscation of land by carrying out demolitions that make way for settlement residential communities or associated infrastructure, or by financing or executing settlement construction itself.

Others provide services that ensure the sustainability of residential settlement communities, such as transport services that connect the settlements to Israel proper, tourism activities that contribute to the profitability of the settlements, and telecommunication services.

Those that are located in the settlements help to perpetuate their existence through the payment of taxes to settlement regional councils and Israeli authorities and the provision of jobs to settlers, and by occupying confiscated land.

According to OHCHR, the involvement of businesses in the settlements extends across all main industries and sectors, including:

* The banking industry, which helps to finance construction and infrastructure projects in settlements, provide loans and financial services to settlement councils, and provide mortgage loans to home buyers;

* The tourism industry, including tour companies, online accommodation and travel booking sites, and rental car companies, all of which help to make the settlements profitable and sustainable;

* The private security industry, which includes companies involved in providing security for companies or residences in settlements, as well as those involved in the checkpoints throughout the West Bank, including East Jerusalem;

* The technology industry, which provides surveillance and identification equipment for use in the settlements, the wall and checkpoints;

* The construction and demolition industries, including heavy machinery suppliers, which help to facilitate and entrench Israel's confiscation of Palestinian land for settlements and associated infrastructure;

* The real estate industry, including companies involved in marketing, renting and selling properties in settlements, which helps settlements to function as viable housing markets, enabling the transfer of Israel's population;

* The extractive industry, including mining and quarrying, which contribute financially to the sustainability of settlements through the payment of fees to settlement municipalities and the Israeli Civil Administration;

* The telecommunications industry, which includes mobile networks and Internet providers servicing settlements;

* The agricultural industry, which includes companies involved in crop and livestock production, the wine industry and export companies;

* The transportation industry;

* The manufacturing industry, which includes companies that use raw materials from occupied territory; and

* Others.

In addition to the financial benefits provided by the Israeli authorities for operating in the settlements, businesses engaged in certain sectors are able to take advantage of captive Palestinian markets for Israeli goods.

According to the United Nations Conference on Trade and Development (UNCTAD), the Occupied Palestinian Territory operates as a captive market for Israeli exports due to the imbalanced customs arrangements enshrined in the Paris Protocol on Economic Relations and restrictions on movement and other obstacles to trade.

With regard to the economic consequences of situations of occupation, UNCTAD had noted that they always involved the exploitation, impoverishment, marginalization, displacement and appropriation of resources of the occupied indigenous people.

Such acts often deprived the people under colonial rule of the internationally recognized human right to development by confiscating their national resources, preventing them from accessing and utilizing those resources, depriving them of the ability to produce and thus forcing them to consume products produced by the occupier.

RESPONSES OF BUSINESS ENTERPRISES

According to the report, a major argument used by companies to explain their involvement in listed activities is that they provide jobs to Palestinian families and help to support the Palestinian economy.

OHCHR observed that this argument does not recognize that the presence of the settlements in the Occupied Palestinian Territory, which is unlawful, serves to depress the Palestinian economy and to reduce opportunities for Palestinian businesses to thrive.

The depressed Palestinian economy has had a direct effect on the job market in the Occupied Palestinian Territory.

According to UNCTAD, Israel's full control over Area C, which accounts for over 60 per cent of the area of the West Bank, has contributed to a "permanent unemployment crisis" in the Occupied Palestinian Territory that forces thousands of unemployed Palestinians to seek employment in Israel and in settlements in low-skill, low-wage manual activities.

OHCHR noted that the employment of Palestinians, even on favourable terms, does not exempt businesses of their responsibilities under the Guiding Principles concerning their overall engagement in or with the settlements.

The Guiding Principles make clear that, while business enterprises may undertake certain commitments or activities to support and promote human rights, these "do not offset a failure to respect human rights throughout their operations."

Another argument used by some business enterprises to explain their involvement in listed activities was that they did not take a political position in the conflict between Israel and the Occupied Palestinian Territory, nor did they actively support Israel's occupation of Palestine.

OHCHR recalled, however, that the political position of business enterprises is not a relevant consideration in determining whether their actions are consistent with the Guiding Principles or whether their business activities fall within the ambit of Human Rights Council resolution 31/36.

Some companies indicated that they had no knowledge or control over the actions of other entities with which they had business relationships, such as distributors, partners or other entities in their value chains, and therefore they should not be held responsible for any harm caused by those entities.

According to the Guiding Principles, said OHCHR, the responsibility of businesses to respect human rights extends to their business relationships.

Guiding Principle 13 states that businesses are responsible for preventing or mitigating adverse human rights impacts directly linked to their operations, products or services through their business relationships, even if they have not contributed to them; this includes impacts caused by both actions and omissions.

The responsibility to conduct due diligence - and in the occupied territory this involves enhanced due diligence - entails taking active steps to identify and assess any actual or potential adverse human rights impacts made as a result of business relationships, said OHCHR.