"Israeli Settlement Businesses under the Scrutiny of International Law"
Socialize: Share | Tweet | Whatsapp | Mail | Print | Link
Norwegian State Fund Prohibits Collaboration with Israeli Firm Due to Settlement practices
The Norwegian State Fund, a significant financier of Norway's future growth, has kicked out an Israeli company, Paz Retail and Energy, from its investment pool due to the company's involvement in the controversial Israeli settlements in the Palestinian West Bank. According to the Norwegian central bank, their decision to sell off shares in Paz was due to the company's management of gas stations in nine settlements and providing fuel to these territories, which is deemed a violation of international law.
The settlements, situated on occupied Palestinian lands, are connected to Israel via special access roads, and their continuation is partially supported by Paz's operations of these infrastructures, as explained by the committee. During times of conflict, the Norwegian State Fund fears that this connection could lead to severe human rights violations.
The State Fund collects revenue from Norway's oil and gas sector and is intended to finance the welfare state for future generations. Investing abroad, the Fund currently supports nearly 9,000 companies worldwide, holding around 1.5% of all listed companies. The fund operates on strict ethical, human rights, and environmental guidelines.
Insights on the Regional and International Context
- Illegal Occupation: The International Court of Justice (ICJ) has repeatedly stated that Israeli settlements in the West Bank are patently illegal under international law, as they violate Article 49(6) of the Fourth Geneva Convention, which prohibits the transfer of civilians into occupied territories.
- Unlawful Occupation and Settlements: The ICJ's 2024 Advisory Opinion confirmed Israel's occupation of the West Bank, including East Jerusalem, and Gaza as unlawful. It also called for the end of Israel's unlawful presence and the dismantling of settlements.
- Annexation Threats: Recent Israeli efforts to formalize property rights for settlers in Area C of the West Bank are thought to be steps toward annexation, a move that is also illegal under international law.
Commercial and Ethical Implications
- Legal Consequences: Businesses active in settlements may encounter legal challenges and damage to their reputation due to the illegality of the settlements, potentially resulting in lawsuits and investor divestment.
- Ethical Ramifications: Operating in settlements is often perceived as aiding the Israeli occupation, raising ethical concerns that could lead to consumer or investor boycotts.
- Fund Exclusions: The exclusion of companies like Paz by the Norwegian State Fund highlights how businesses involved in settlements can be omitted from investment portfolios due to ethical and legal issues. This practice mirrors UN resolutions and international law, emphasizing states' obligations not to aid or assist in maintaining illegal situations.
In Conclusion
Business activities in Israeli settlements in the West Bank present a maelstrom of legal and ethical concerns. As it becomes more apparent that such actions support an illegal occupation, businesses could face legal and financial consequences. The global investment community is increasingly focused on screening out companies involved in these activities to comply with international law and ethical norms.
- The Norwegian State Fund's decision to exclude Paz Retail and Energy from its investment pool, due to the company's involvement in Israeli settlements, highlights the potential financial and ethical risks associated with business activities in these territories.
- As the International Court of Justice has repeatedly declared, Israeli settlements in the Palestinian West Bank are illegal under international law, which could lead to legal challenges and reputational damage for companies operating in these territories.
- The exclusion of Paz Retail and Energy by the Norwegian State Fund also symbolizes a growing trend in the global investment community to screen out companies involved in Israeli settlements to adhere to international law and ethical norms, potentially impacting other businesses operating in these regions as well.
