Why Human Rights Watch Is Urging Companies to Pull Out of Israeli Settlements

Firms doing business in Israeli settlements in the West Bank and East Jerusalem are violating international law by harming the rights of the Palestinians who live in the area and should pull out, Human Rights Watch (HRW) says in a report released today. The New York-based advocacy group stops short of calling for a boycott of such businesses in the 162-page report, titled “Occupation, Inc: How Settlement Businesses Contribute to Israel’s Violations of Palestinian Rights.” HRW urges companies to fulfill their obligations to respect the human rights of populations living where they operate—and for companies, rather than consumers that buy their products, to confirm their goods have not come from the 1,000 companies doing business in Israeli-owned industrial zones, on plantation-style farms and quarries on Palestinian land.

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The report is still sure to enrage officials in Israel, which has been slowly taking over the West Bank since the territory fell under Israeli military occupation with the lightning defeat of an array of Arab armies in the 1967 Six-Day War. In the 49 years since, a half million Jewish Israelis have taken up residence in the hills and desert valley above the west bank of the Jordan River, as well in East Jerusalem (which Israel said it annexed, rather than military occupied, after the Six-Day War). Along with the Gaza Strip, the crowded coastal enclave from which Israel pulled settlers and troops in 2005, the West Bank was to form a nation-state for millions of Palestinians, in the “two-states for two-peoples” formulation that has been the ostensible diplomatic solution to a conflict that dates back a century, when Jews began arriving in the region to build a homeland for themselves.

But as diplomacy has faltered—the 1994 Oslo Accords produced high hopes followed by nearly a decade of terror and fighting — activists both in Palestine and the West have turned to economic pressure, hoping that boycotts and international opprobrium would force concessions from Israel. But the effort itself is splintered. The umbrella term for the movement—BDS, for Boycott, Divestment and Sanctions—in fact is a specific organization based in Ramallah that aims to do much more than pressure Israel out of the West Bank. BDS would turn the clock back to 1948, by requiring Israel to surrender the very land on which it was founded. The approach supports Israeli allegations that the larger boycott movement amounts to a “strategic threat” to Israel’s existence as a Jewish homeland; Prime Minister Benjamin Netanyahu has likened boycotts to the actions of Nazi Germany.

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That leaves activists who want to pressure Israel on the occupation but don’t question the entire existence of the country in a difficult spot. “We’re doing it different,” says Sari Bashi, a HRW researcher in Jerusalem. “We’re taking a legal norm—corporate social responsibility.” The U.N. Guiding Principles on Business and Human Rights calls on firms to identify and mitigate any adverse human rights impacts their operations may cause, “and in the case of the settlements, they can’t mitigate,” she says. “The only things companies can do to maintain their human rights responsibilities is to pull out. And I think that’s a powerful statement, because over the past many years compliance with human rights responsibilities has increased. Consumers and shareholders have demanded it.”

This more surgical approach—targeting not all of Israel, but only the specific elements it uses to encroach on Palestinian territory—has been embraced by some Jewish Israeli activists (who list companies active in settlements at the data-rich site whoprofits.org), as well as by a small but growing number of Western organizations. Norway’s immensely wealthy pension fund, for instance, bars investments in companies supporting Israel’s settlement project. And on Jan. 12 the United Methodist Church excluded investments in five Israeli banks because they support Jewish settlements on Palestinian land. Airbnb came under fire for listing rentals in settlements as if they were inside Israel—an ideological position, rather than a geographic one, in the eyes of activists. In November, the E.U. prohibited settlement goods and produce from being labeled “Made in Israel,” as much of it is.

The HRW paper largely stops short of identifying offending companies by name. Its report does note that the German company Heidelberg Cement quarries Palestinian stone to build in Israel and on settlements, while the Israeli military denies a Palestinian quarry permission to operate at all (business as usual on most of the West Bank, where between 2000 and 2012 Israel denied 94 percent of Palestinian requests for building permits, a policy that that the World Bank in 2013 estimated costs Palestinians $3.4 billion a year in lost economic activity.) The report also noted that the Israeli franchise of Colorado-based RE/MAX real estate firm markets residences in West Bank settlements. But HRW declined to single out by name any Israeli bank—because all the major banks do business in the settlements, Bashi noted. On the other hand, it left out the name of a textile firm active on the West Bank because the Israeli-owned company had re-located its factory into Israel proper, presumably because of international pressure. To those exasperated by stymied diplomacy and depressed by the violence that since September has left dead at least 21 Israelis and 132 Palestinians, that might look like progress.

“I think the strength of the tool is that it’s law-based,” Bashi tells TIME. “I think that’s part of the reason we’re starting to see companies really pull out.”