PSC campaign exposes the absurdity of divestment

People campaigning to boycott Israel (Jewish News)
People campaigning to boycott Israel (Jewish News)

Disappointingly the Palestine Solidarity Campaign (PSC) won a Supreme Court case in April that overturns the Government’s regulations preventing Local Government Pension Schemes – the huge pension funds for all council staff in the UK – from divesting from companies on the basis of their connections to Israel.

In practice I expect the Government will now look at reintroducing the ban on divestment via primary legislation, and that in any case there will be very little appetite to pursue anti-Israel divestment among local authority pension fund committees, but there is already political pressure from local PSC groups to do so.

Chairs of local Pension Fund Committees are receiving campaign letters from the PSC urging them to divest from a range of companies they claim are “complicit in Israel’s war crimes”.

The basis for this alarmingly worded claim is extremely tenuous, and examination of the list of companies they are demanding councils divest from reveals it includes a wide range of both Israeli companies and large multinationals, either because they supply the Israeli government or they simply have a presence in Israeli settlements in the West Bank (e.g. banks with branches or ATMs in settlements). The target list therefore includes major UK high street banks (HSBC and Barclays), Israeli banks, defence and aerospace companies including ones like Airbus, Boeing, GE and Rolls-Royce whose dominant business is civil aircraft, IT companies like Intel, Samsung, Siemens, Sony, Microsoft and HP, travel companies like Booking.com and Expedia, insurance companies AXA and Phoenix Holdings, civil engineering suppliers like Caterpillar, medical and scanner manufacturer Smiths Group, Israeli pharmaceutical company Teva (which supplies one seventh of the NHS’s drugs), energy companies, telecoms company Beseq, government contractors like G4S and Serco, and sportswear company Puma. Divesting from all of them would seriously diminish the investment options open to pension funds.

PSC are claiming council pension funds have over £2bn invested in companies they are blacklisting.

Almost all pension funds already have an ethical investment policy that will have deemed these investments compliant and ethical. In many cases they employ expert advisers on ethical investment, who do not advocate divestment from Israeli-connected firms.

Whatever the arguments about the legal status or merits of Israel’s settlements in the West Bank, there is no legal prohibition on trading with them, supplying civilians or government institutions there, or investing in them.

The divestment demand is part of the BDS (Boycott, Divestment and Sanctions) movement. BDS is opposed by all the main Jewish communal organisations in the UK.

Local authorities should not be engaging in any way in the BDS campaign, as this negative campaign demonises Israel, falsely compares it to Apartheid South Africa, and drives the Israelis and Palestinians further apart.

The BDS movement singles out the world’s only Jewish state for punishment and attempts to place itself into all aspects of daily life. When local councils impose BDS they import foreign conflicts and divide communities. Jews and other people who feel an affinity will recoil from the idea that the local council they depend on for the equal provision of schools, social care, and other public services to the benefit of all communities would be targeting Israel in this way.

It is therefore important that the BDS movement is weakened and not emboldened.

Calls to divest from Israel will be perceived among the Jewish community as an endorsement of BDS. To focus such activity on settlements does little to help this, given that although this blacklist is framed as relating to settlements in practice it includes an array of major Israeli and multinational companies, which are not focused on the settlements, they just happen to operate there. A list that requires divestment from every Israeli bank is effectively divestment from Israel full stop.

If local authorities are going to take stances on the Israeli-Palestinian conflict it should be to encourage greater peaceful cooperation and coexistence between the sides.

This extensive and frankly absurd PSC blacklist gives the lie to any claims of a targeted approach to divestment. Major pillars of the Israeli economy are targeted as are global businesses for having the temerity to supply Israel or trade there.

The issues at stake this summer over Israel’s next steps in the West Bank are serious and deserve proper debate that doesn’t demonise Israel.

Attempts to piggyback BDS back into prominence on the back of legitimate and heartfelt opposition to the annexation proposals need to be resisted.

In the unlikely event that a local council goes down the divestment path it wouldn’t be helping bring peace to the Middle East, it would be alienating a small community here in the UK and fanning the flames of the conflict.

The sooner the Government closes this legal loophole with new legislation and stops the possibility of councils using their investment clout to make clumsy interventions in a complex conflict, the better.

About the Author
Luke Akehurst has been the Director of We Believe in Israel since 2011. We Believe in Israel is a broad coalition of over 19,000 supporters of Israel. Outside of work he was a Councillor in Hackney in East London for 12 years, has stood for Parliament twice and served on the Labour Party National Executive Committee. He was previously an award-winning Director at global PR company Weber Shandwick.
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