Merav Amir, The Cohn Institute for History and Philosophy of Science and Ideas, Tel Aviv University
August 11, 2009
Who profits from Israeli occupation?
Boycotted by activists, the Israeli company AHAVA is backed by one of Israel's most powerful families
After the Israeli attack on Gaza earlier this year, the international Boycott, Divestment, and Sanctions Campaing (BDS Movement) escalated all around the world. Now, activists are targetting AHAVA, an Israeli cosmetics company founded by and based in an Israeli settlement in the Occupied West Bank. The AHAVA company, as many others in Israel that are based in the Palestinian Territories or profit from their occupation are owned by the powerful Israel family - the Livnat family. The Real News investigates how the family's dynasty is invested in the economy of the occupation.
Who Profits from the Israeli Occupation?
TARACHANSKY, LIA, JOURNALIST, THE REAL NEWS: Four years ago, in the summer of 2005, over a hundred Palestinian social justice and human rights organizations joined under the banner of Palestinian Civil Society. Together they sent a callout to groups and individuals all around the world “to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era.”
The campaign took off around the world as the Boycott, Divestment, Sanctions Movement, or BDS and has sharply escalated since Israel’s recent attack on Gaza last Christmas.
Unions, faith groups, NGOs and other organizations began targeting local companies that profit from the Israeli economy, pressuring them to divest. They’ve also launched boycotts against Israeli products, and are particularly targeting businesses that produce or profit in the Occupied Palestinian Territories. The campaign has claimed responsibility for the recent announcement of Belgian-French financial group Dexia of its divestment from providing loans to Israeli settlements in the West Bank. Another claimed victory was the abandonment of French company, Veolia Rail Transportation of a controversial light-rail project in Jerusalem that was meant to connect West Jerusalem with Jewish settlements in Occupied East Jerusalem.
Now, activists are ramping up a campaign against Israeli cosmetics firm AHAVA. During the Gaza attack, British activists shut down a Central London store that carried AHAVA products. In July, French activists picketed a Parisian store, and most recently, U.S. – based group Code Pink protested in front of stores selling AHAVA products in Israeli and in the American cities. The Real News caught up with them in Washington D.C.:
ABILEAH, RAE CODE PINK: I’m Rae Abileah, I work with Code Pink. When I was in high school I went to Israel with my synagogue and I, like everybody else on my trip came home with my AHAVA beauty souvenirs to give to friends and family. I didn’t know at the time or understand the horrible occupation of Palestine. And now that I understand that AHAVA is produced in the occupied territories and that they are profiting from the illegal occupation of Palestine, I have stopped buying AHAVA and I’ve joined the Boycott and will do everything I can to let my friends, family, and folks that I know and work with know that this is a product that’s breaking international law and they shouldn’t buy it and we want to send a clear message to Israel that they can’t continue business as usual
AHAVA’s processing plant and welcoming center are indeed located in the Palestinian territories in an Israeli settlement on the Dead Sea called Mitzpe Shalem. According to a 2004 ruling of the International Court of Justice, Israeli settlements in the Occupied Territories are illegal as the West Bank is still occupied territory, captured by Israel in the war of 1967. But Israeli settlers continue to move to the West Bank, doubling in recent years to almost half a million.
Beside having been established ten years after the occupation of what was then the West Bank of Jordan, making it an illegal settlement by International law, Mitzpe Shalem, was also part of a project of the Israeli army. It was established in 1977 by Nahal, an infantry brigade engaged in social and agricultural development, mostly in occupied areas.
West Bank Israeli settlements established the AHAVA company, and control nearly half of its shares. The other half is split between two investment firms, the lion’s share belonging to powerful Israeli Livnat family’s – Hamashbir Holdings.
The family is listed in the Israeli Daily Ha’aretz list of 100 most influential people in Israel. Besides its investment in AHAVA, the Livnat family profits in various ways from the economy of the occupation.
It began its ascension to power before the State of Israel was even created with a modest transport company, Taavura. Founded by Livnat brothers Yitzhak and Avraham, Taavura is today Israel’s largest transport company, and its founder is described by the editor of Israeli daily Yediot Ahronot as “a real estate, vehicle, commerce, communications, insurance, and banking tycoon, and a major shareholder in IDB Holdings Corporation.”
Besides its ownership in Ahava, the Livnat Family sits on the board of IDB Holdings Corporation, Israel’s largest investment enterprise. Many of the family’s subsidiaries and firms are also part of the IDB enterprise. Many benefit directly from the Occupation by either placing their factories in the West Bank or building the infrastructure of the settlement network.
For example, some of the Livnat Family’s biggest investments is in agricultural firms that grow produce in the West Bank and the Occupied Golan Heights. Their IDB companies also (Nesher Israel Cement Enterprises) produce cement for construction of the Segregation Wall, and other companies, such as fiberglass manufacturer, FiberTech, base their factories in the Occupied West Bank.
The reason why the Livnat Family´s AHAVA and other Israeli companies choose to hold their factories in the Occupied territories and not in Israel proper, says Merav Amir of Who Profits? Is because of government incentives.
AMIR, MERAV WHO PROFITS: There is a considerable reduction in real estate prices when you move to the Territories, most of the area in the West Bank is considered, “Priority Area A” which means there are very significant tax reductions there and different benefits they get from the government. They get a significant tax reduction, for the employees and the businesses themselves. Although businesses in the West Bank were supposed to pay taxes, they were never collected. In 2002 there was a report by the internal critic of the government and in the report they exposed that the tax revenues weren’t collected in the West Bank, but now they have to. The third thing that makes opening in the West Bank very attractive is that although there are different kinds of regulations, such as environmental regulations, there is very lax implementation of these regulations. Many times businesses move to the West Bank because they won’t get objections from their neighbors because if you are in an area which is populated by Palestinians, they have no say about who can open a business around their houses. An additional incentive for many businesses is having access to very cheap labor by the Palestinians.
But the Livnat family doesn’t just produce cement for the construction of the Segregation Wall. It actually helped build it. In the 1980s one of the Livnat Family sons moved to the Netherlands and became a major shareholder in Riwal, a crane company that helped build the Segregation Wall.
An Electronic Intifadah report from 2006 exposed that “In a statement, the company admitted its involvement in the building of the Wall and argued that the related activities were accepted and executed purely as a “commercial order.”
The same International Court of Justice decision that ruled the Israeli settlements in the Occupied West Bank were illegal, also ruled that the Segregation Wall Israel is building is also illegal.
The Dutch government then warned Riwal to cease construction, but even in 2007 Ha’aretz reported that the peace group that led the campaign against Riwal, United Citizens for Peace, “submitted evidence showing that Riwal was still providing equipment for the Wall’s contractors.”
The Real News contacted Riwal asking whether they were still engaged in construction of the Wall. In an e-mail response, Rik Maaskant who does public relations for Riwal-Israel and its Dutch sister company denied any involvement “Neither Riwal Holding Group nor Riwal-Israel is involved in the construction or maintenance of the safety barrier in Israel nor do either of them have the intention to be in the future.”
But besides benefiting from the territory of the Occupied West Bank, the construction of the Occupation infrustructure, and supplying products and services to the illegal settlements under International Law, the Livnat Family is facing some serious challenges. Activists are pushing for the company’s divestment from the occupation economy.
BENJAMIN, MEDEA, CO-FOUNDER, CODE PINK: Here we are in front of this pharmacy in Washington D.C. that carries a product called AHAVA. On the product it says that it’s “Made in Israel” but we were just in Israel and we visited the factory. It’s not made in Israel, it’s made in Occupied Palestine. It’s made with land stolen from the Palestinians, this mud that we have on is stolen mud from Palestinian Territories. So we’ve launched a boycott to ask people to stop buying AHAVA products.]
But the Israeli government doesn’t see the problem. Daniel Seaman, the Director of the Government Press Office spoke to The Real News about the settlement in which AHAVA is based. In his view, there is no difference between companies producing in Israel or in the Occupied Territories because in his view, they are all part of a greater Israel.
SEAMAN,DANIEL DIRECTOR, ISRAELI GOVERNMENT PRESS OFFICE: “Mitzpe Shalem is in the Territories. It doesn’t matter, Mitzpe Shalem is in Israel. It’s not in the territories, it’s in the Jordan Valley, it’s part of the Land of Israel, what difference does it make, I don’t understand what their problem is. Anything produced by an Israeli company is Israeli.”
But according numerous resolutions of the United Nations General Assembly, and even those of the Security Council, settlements established after 1967 in the Occupied West Bank, Gaza, East Jerusalem or the Golan Heights “have no legal validity and constitute a serious obstruction to achieving a comprehensive, just and lasting peace in the Middle East”
So however they label their products, Israeli companies have been feeling the crunch of the economic downturn coupled with the international Boycott campaign. The Israeli business newspaper, The Marker, reported in March the results of its survey, revealing that a fifth, or 21% of Israeli businesses are directly impacted by the international Boycott, Divestment, and Sanctions campaign.
The Cellular Companies and the Occupation
By Who Profits from the Occupation
email newsletter, Aug. 10
In a much criticized television commercial for an Israeli cellular communication service provider, a group of Israeli soldiers play soccer with unseen (presumably Palestinian) partners over the separation wall. 'All we want, after all, is to have some fun', the commercial exclaims. As distasteful and offensive as this commercial may be, on some level it calls on us to expose the ties of these cellular companies to the occupation. As the following report from Who Profits from the Occupation can show, for all we know it might be that the invisible players behind the wall are just the Israeli cellular company workers, at work deep inside the Palestinian territory.
All Israeli cellular communication companies are commercially involved in the Israeli occupation of the West Bank and the Golan Heights. These companies build infrastructure, maintain property and equipment in illegal Israeli settlements, much of it on privately owned Palestinian lands. They all provide services to the Israeli military and to all Israeli settlers, and some provide specially designed services. They use the Israeli control of the Palestinian territory to exploit the Palestinian frequencies and to impose their services on the Palestinian captive market.
Currently there are four Israeli cellular communication service providers: Cellcom, Partner (Orange), Pelephone and MIRS. Cellcom is part of the IDB group, a conglomerate of Israeli and international companies, one of the major players in the Israeli market; Partner is a subsidiary of the Chinese Hutchison Telecommunications International (HTIL); Pelephone is fully owned by Bezeq, the Israeli Telecommunication Corporation; MIRS is a subsidiary of Motorola Israel.
All four have dozens of antennas, transmission stations and additional infrastructure erected on occupied Palestinian land: MIRS holds at least 86 antennas and communication facilities on occupied territory, Cellcom at least 191, Pelephone 195 and Partner 165. As a survey by Yesh Din reveals, many of these antennas and communication facilities were erected on confiscated privately owned Palestinian land. Often, these devices are guarded by Israeli guards, and at least in one occasion, they were used as seeds for a new settlement outpost. Using this infrastructure, the companies provide services to Israelis in these areas, both to the settlements and to the Israeli soldiers operating in the occupied West Bank.
All four, Cellcom, Partner, MIRS and Pelephone, operate service stores in West Bank settlements. Additionally, MIRS is the exclusive provider of cellular phone services to the Israeli army (since 2005 and at least until 2011). This company installs communication units in army vehicles and it builds communication facilities in army bases throughout the West Bank and Golan Heights. The company also offers special rates for service personnel and their family members.
Cellcom, Partner and Pelephone are also operating in the Palestinian market. The conditions of the occupation ensure several advantages for these companies over the Palestinian cellular communication providers. The Israeli authorities do not provide permits for Palestinian companies to install antennas and transmission infrastructure in area C, which is under full Israeli control and constitutes 59% of the entire West Bank, making it virtually impossible for Palestinians to provide cellular coverage in many areas of the West Bank. Additionally, the frequency allocation granted by the Israeli authorities to Palestinian providers is very limited, and the Israeli authorities impose significant limitations on the Palestinian providers when it comes to the import of devices or the on ground installation of communication transmission devices. Even when the Israeli authorities do allow equipment into the Palestinian territory - it is often delayed by months or years, and by the time it arrives to the Palestinian providers it is outdated. Together, these limitations restrict the reception ranges and the overall quality of service by Palestinian providers, and the Palestinians turn to services provided by the Israeli companies, especially when traveling outside of the major Palestinian cities.
The Israeli control of frequencies and the implications of this control have been evident in the case of Wataniya Palestine. In 2007 Wataniya Palestine, a joint venture of Palestine Investment Fund and Wataniya Telecom of Kuwait, was licensed to become the second Palestinian cellular communication provider. On July 28, 2008 an agreement was signed by the Israeli government and the Palestinian Authority, allocating frequencies for Wataniya's use. The frequencies were supposed to be released by April 1 of 2009. As of August of 2009, none were released due to ongoing delays from the Israeli government. Consequently, Wataniya Telecom announced that it would back out of its initiative to operate cellular communication services in the occupied Palestinian territory.
According to a World Bank report issued in January of 2008, 20% to 45% of the Palestinian cellular market at that time was in the hands of Israeli companies. In breach of the Oslo Agreements, the Israeli companies do not pay taxes to the Palestinian Authority (PA) for their commercial activity in the Palestinian market. The World Bank report estimated that the lost annual PA tax revenues due to unauthorized Israeli operations amounted to $60 million. Additionally, the PA claimed that these Israeli companies have been targeting West Bank clients and actively selling to the Palestinians in the West Bank although they were never licensed to do so by the PA.
Surprisingly, even when using Palestinian providers, Palestinian customers have to rely on the Israeli companies because of the restrictions on Palestinian construction of telecommunication infrastructure. The Israeli companies collect a percentage surcharge on all interconnection revenues from calls between Palestinian landlines and cellular phones as well as calls between cellular phones of Palestinian operators and Israeli operators. Similarly, Palestinian operators have to depend on the costly services of Israeli companies for any international call, for calls connecting the West Bank and Gaza and for calls between different areas in the West Bank.
For more information, see the Who Profits website at: www.whoprofits.org