How Businesses Profit from Israeli Settlements

Image credit: 31774. Public Domain/CC0 license.

Image credit: 31774.
Public Domain/CC0 license.

In the Occupied Palestinian Territories, the growing Israeli settlement enterprise is not limited to residential dwellings, but also includes vast industrial and agricultural settlements. Israeli and international businesses play a large role in sustaining the settlement enterprise, both through building, financing, and servicing the settlements, and operating out of them. These businesses are therefore benefitting from settlement expansion and maintenance of the status quo. Business interests are the pillars that support the occupation.

Israel lures businesses to lands it occupied in 1967 with many benefits, including government subsidies, tax exemptions, and preferential access to infrastructure, permits, and export channels. Over the years, settlement businesses have mushroomed. Once small enterprises catering to local settlers, they now include large multinationals that export their products worldwide. In 2013, the Israeli Finance Ministry stated that Israel exported more than $600 million worth of industrial goods manufactured in Israeli settlements.

Settlement businesses benefit substantially from the illegal settlement enterprise, and are complicit in the perpetuation of the occupation. Many of the business operate on private land that was illegally confiscated from Palestinian owners without compensation. Others consume vast quantities of limited natural resources like water.

Meanwhile, discriminatory Israeli restrictions on Palestinian access to resources such as farmland and water in the West Bank cost the Palestinian economy more than $700 million each year, according to the World Bank. This hinders Palestinian economic progress. In 2013, the World Bank estimated that the occupation cost the Palestinian economy about $3.4 billion per year.

Palestinians bear witness to the ongoing pillage of their resources and the violations of their most basic rights on a daily basis. These violations are difficult to monitor from the outside because they occur in isolated and often inaccessible locations. At Al-Haq, we have been striving to expose the link between these businesses and the violations of the Palestinians’ human rights. One method we use is organized field visits for local and international delegations, ranging from students to policy makers, to show them firsthand how these businesses violate Palestinian human rights.

Often, these delegations are unable to participate in field visits due to restrictions on access imposed by Israel. To overcome this, we created the Virtual Human Rights and Business Tour. Combining Google Earth, interactive maps, and personal videos, these virtual tours recreate the experience of a field visit, providing everyone with the opportunity to see the on-the-ground reality of the occupation and hear from people directly affected by it.

Through these field visits, along with research and advocacy, Al-Haq strives to persuade the international community to hold Israel and its businesses accountable for violating international law.

Agriculture is the main source of income for Israeli settlements in the occupied Jordan Valley, with the estimated value of goods in the region of $128 million. To expose this industry, the Business and Human Rights Field Visit takes participants to the main Israeli produce companies in the West Bank. These companies grow, pack, and sell produce to European markets with “Made in Israel” labels.

Under international law, states have a responsibility not to condone or render support to Israel’s illegal practices in Palestine. By allowing the import of illegally produced Palestinians goods and produce into their markets, states are breaching their duties.

Along with many civil society organizations, Al-Haq has worked hard during the last decade to increase transparency about the origin of these goods and show consumers how their seemingly harmless purchases are perpetuating the occupation of Palestine. These efforts factored recently into the European Union’s decision to introduce new labeling guidelines for fresh fruit and vegetables, wine, honey, olive oil, eggs, poultry, organic products, and cosmetics originating from Israeli-owned businesses and farms outside the state’s recognized borders.

Under the guidelines, settlers have to label their goods as coming from an “Israeli settlement,” while Palestinian businesses must use the phrase “Product from Palestine” or “Palestinian product.” “Made in Israel” labels enter the EU with little or no tariff; products coming from the settlements should not benefit from this preferential treatment.

The EU is Israel’s top trading partner, with overall trade between the two amounting to around $30 billion annually. Israel’s economy ministry estimated that around $50 million in trade would be lost as a result of the EU’s recent decision. The new guidelines are making European companies rethink the consequences of doing business in the Occupied Palestinian Territory, but more efforts are still needed to dismantle the business pillars underpinning the occupation and violating the rights of Palestinians.

Shawan Jabarin wrote this piece for Open Society Foundations. Mr. Jabarin is director of the Palestinian human rights group Al-Haq, the largest, oldest and best known human-rights organization in the West Bank.