Report Profundo
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Doing Business with the Occupation Economic and Financial Relationships of Foreign Companies with Israel’s Settlement Enterprise 26 June 2018 About this report This report has been commissioned by 11.11.11 and CNCD 11.11.11. About Profundo With profound research and advice, Profundo aims to make a practical contribution to a sustainable world and social justice. Quality comes first, aiming at the needs of our clients. Thematically we focus on commodity chains, the financial sector and corporate social responsibility. More information on Profundo can be found at www.profundo.nl. Authorship This report was researched and written by Barbara Kuepper, with contributions by Ward Warmerdam. Correct citation of this document: Kuepper, B. and W. Warmerdam (2018, June), Doing Business with the Occupation - Economic and Financial Relationships of Foreign Companies with the Settlement Enterprise, Amsterdam, The Netherlands: Profundo, commissioned by 11.11.11 and CNCD 11.11.11.. Front page cover photograph: Dreamstime ID 16960704 | Rodrick Beiler - Gilo, Occupied Palestinian Territories. Disclaimer Profundo observes the greatest possible care in using information and drafting publications but cannot guarantee that this report is complete and assumes no responsibility for errors in the sources used. The report is provided for informational purposes and is not to be read as providing endorsements, representations or warranties of any kind whatsoever. Opinions and information provided are made as of the date of the report issue and are subject to change without notice. Profundo will not accept any liability for damage arising from the use of this publication. Acronyms EU European Union and its 28 member states Fact-finding Mission Independent International Fact-Finding Mission by the UN Human Rights Council to investigate the implications of the Israeli settlements on the civil, political, economic, social and cultural rights of the Palestinian people throughout the Occupied Palestinian Territory (FFM), including East Jerusalem, from February 2013. IMOD Israeli Ministry of Defense OHCHR Office of the United Nations High Commissioner of Human Rights oPt Occupied Palestinian Territory, including the West Bank (including East Jerusalem) and the Gaza Strip. UNCTAD United Nations Conference on Trade and Development UNGP United Nations Guiding Principle on Business and Human Rights (a.k.a. Ruggie Framework after Professor John Ruggie who proposed the framework) UN OCHA United Nations Office for the Coordination of Humanitarian Affairs Table of contents Summary ........................................................................................................................ 1 Introduction ................................................................................................................... 4 Chapter 1 Background .......................................................................................... 5 1.1 The unlawful status of Israeli settlements in the oPt ............................... 5 1.1.1 50 years of occupation ......................................................................................................... 5 1.1.2 Settlements and separation wall in violation of international law ...................... 5 1.1.3 Continued expansion of settlements and separation wall ..................................... 6 1.1.4 Calls for sustained peace settlement .............................................................................. 7 1.2 Impacts on the humanitarian and economic situation of Palestinians .. 7 1.2.1 Discriminatory legal system ............................................................................................... 7 1.2.2 Restricted movement and access to natural resources ........................................... 8 1.2.3 Constricted economic development............................................................................... 8 1.2.4 Economic costs of the occupation ............................................................................... 10 1.3 The role of business enterprises in the occupation ................................ 10 1.3.1 Facilitating and strengthening the occupation ........................................................ 10 1.3.2 Territorial differentiation .................................................................................................. 11 1.3.3 The role of Israeli banks .................................................................................................... 11 1.3.4 The role of international law and accepted guidelines and standards ........... 11 1.4 Using the UN Guiding Principles as a benchmark .................................. 12 1.4.1 Companies´ responsibility to respect human rights .............................................. 12 1.4.2 Different levels of involvement ...................................................................................... 13 1.4.3 Relevance for financial institutions ............................................................................... 13 1.5 Database of business enterprises engaged in settlement activities ..... 14 Chapter 2 Methodology ..................................................................................... 16 2.1 Business sector selection criteria .............................................................. 16 2.2 Proximity .................................................................................................... 17 2.3 Country selection criteria .......................................................................... 18 2.4 Information sources ................................................................................... 18 2.5 Analysis of financial relationships ............................................................ 19 2.5.1 Identification of financial links ....................................................................................... 19 2.5.2 Definition of financing activities .................................................................................... 20 2.6 Due hearing ................................................................................................ 21 Chapter 3 Exploitation of natural resources .................................................... 22 3.1 Corporate responsibility in the oPt .......................................................... 22 3.2 Hanson Israel (Israel) / HeidelbergCement Group (Germany) .............. 22 3.2.1 Profile ....................................................................................................................................... 22 3.2.2 International relationships ............................................................................................... 23 3.2.2.1 Banks providing loans and credits ................................................................................ 23 3.2.2.2 Banks providing underwriting services ....................................................................... 24 3.2.2.3 Shareholders ......................................................................................................................... 25 3.2.2.4 Bondholders .......................................................................................................................... 26 3.3 Readymix Industries (Israel) / Cemex (Mexico) ...................................... 27 3.3.1 Profile ....................................................................................................................................... 27 3.3.2 International relationships ............................................................................................... 27 3.3.2.1 Banks providing loans and credits ................................................................................ 27 3.3.2.2 Banks providing underwriting services ....................................................................... 28 3.3.2.3 Shareholders ......................................................................................................................... 28 3.3.2.4 Bondholders .......................................................................................................................... 29 Chapter 4 Heavy machinery ............................................................................... 30 4.1 Corporate responsibility in the oPt .......................................................... 30 4.2 Carasso Group (Israel) ............................................................................... 30 4.2.1 Profile ....................................................................................................................................... 30 4.2.2 International relationships ............................................................................................... 31 4.2.2.1 CNH Industrial (United Kingdom) ................................................................................. 31 4.3 Comasco (Israel) ......................................................................................... 31 4.3.1 Profile ....................................................................................................................................... 31 4.3.2 International relationships ............................................................................................... 31 4.3.2.1 JCB (United Kingdom) ....................................................................................................... 31 4.4 Efco Equipment (1991) (Israel) ................................................................. 32 4.4.1 Profile ......................................................................................................................................