CalPERS requests UN roundtable on ‘responsible investing in the Middle East’ as it begins to engage Veolia and Elbit over ties to occupation

ActivismIsrael/Palestine
on 11 Comments

More big news on the BDS front as the California Public Employees’ Retirement System (CalPERS), the country’s public largest pension fund, has responded to activist pressure to divest from companies benefiting from the occupation. Industry newspaper Pensions and Investments reports the fund has begun to engage Veolia and Elbit Systems over ties to the Israeli occupation, and is pushing for a discussion of “responsible investing” in Israel/Palestine at an upcoming U.N. Principles for Responsible Investment meeting in October, 2013:

Institutional investors increasingly are inserting themselves into the Israel-Palestine dispute as they grapple with the thorny question of divesting their stock in some companies doing business in the occupied territories.

The new thrust comes as the controversy over Israel’s occupation of the land it seized from its Arab neighbors after the 1967 Six-Day War is heating up. On Jan. 31, United Nations human rights investigators called on Israel to halt its program to build Jewish settlements in the occupied territory and withdraw settlers, saying Israel was violating international law.

Recent examples of action by institutional investors include:

Staff at the $253.2 billion California Public Employees’ Retirement System, Sacramento, the nation’s largest defined benefit plan, have an ongoing dialogue with French conglomerate Veolia Environnement SA and Israel-based military and electronics company Elbit Systems Ltd. about their operations in the occupied zone. CalPERS owns $31 million of Veolia stock and $2.4 million of Elbit.

Veolia has operated a landfill catering to Jewish settlements in the occupied zone and built a light rail system that connects the settlements to Jerusalem. It also operates buses in the occupied territories that have excluded Palestinians under the orders of the Israeli military.

Elbit has installed monitoring equipment on a wall more than 400 miles long in the occupied territory that Israel says is designed to stop suicide bombers by limiting Palestinian access to the area through checkpoints. Palestinians say the wall prevents them from having free access to their land. . .

“It is an entanglement of foreign policy (which is) beyond us being able to solve,” said Anne Simpson, CalPERS’ director of global governance. Ms. Simpson said given the complexities of foreign policy issues in the Middle East, she has asked officials at the U.N. Principles for Responsible Investment to hold a round table on responsible investing in the Middle East at its next signatory meeting, to be held in Cape Town, South Africa, in October.

Ms. Simpson said PRI officials have been receptive, but the final agenda has not yet been set.

The PRI’s guidelines on corporate behavior in war-torn or conflict-driven areas, posted on the organization’s website, say companies should act as responsible corporate citizens and do no harm in their dealings there.

Ms. Simpson said CalPERS’ staff began discussions with Veolia and Elbit after the Israel Divestment Campaign, an activist group of CalPERS and CalSTRS participants concerned about Israel’s occupation of the West Bank and Gaza Strip, asked the CalPERS board in December 2011 to divest the pension fund’s holdings in those companies.

Ms. Simpson said both Veolia and Elbit have given detailed responses to allegations of human rights violations and “state that their operations in Palestine are consistent with international law.”

She said CalPERS is continuing the engagement process with the companies and is in the process of giving them an opportunity to respond to the Israel Divestment Campaign’s contention that they continue to violate the rights of Palestinians.

The Israel Divestment Campaign which has been working to pressure CalPERS issued the following statement:

Campaign Update:
CalPERS Responds to Divestment Petition

Asks UN Body to Consider Mideast Investment Concerns

In December 2011, more than 5,000 California taxpayers, including almost 900 members of the California Public Employees’ Retirement System (CalPERS), appealed to CalPERS to divest its holdings in corporations that enable and profit from Israel’s illegal occupation of the West Bank, including East Jerusalem, and the Gaza Strip.

Following the Israel Divestment Campaign (IDC) petition presentation, CalPERS initiated a yearlong series of discussions with IDC and began its own policy-driven “engagement process” with two of the five companies targeted by IDC: Elbit Systems Ltd. and Veolia Environnement‡.

Even as this engagement process and the conversations with IDC continue to unfold, CalPERS has responded meaningfully to IDC’s concerns by requesting that the United Nations Principles of Responsible Investment (UN PRI) network of investors convene a session on responsible investing in the Middle East during the October 2013 Signatory General Meeting in Capetown, South Africa. This gathering will bring together many of the 1,144 investment managers, asset owners and professional service partners from around the world who have committed to the general principles embodied in the UN PRI initiative.
(See http://www.unpri.org/)

We are pleased that CalPERS, which was one of the original, “drafting” signatories of the UN PRI in 2005, has initiated this proposal and that the UN PRI staff has committed to include the session on the forthcoming Capetown agenda. Although this may not bring immediate investor sanctions against corporations complicit in the violation of Palestinian human rights, it places the issue before this international body. It also puts corporations like Caterpillar, Elbit and Veolia on notice that citizens of California are watching, along with others from around the world.

Indeed, the international community is not only waiting and watching, but as reflected in the UN Human Rights Council report of January 31, 2013, has called on private companies to assess “the human rights impact of their activities and take all necessary steps — including by terminating their business interests in the settlements — to ensure they are not adversely impacting the human rights of the Palestinian People.” One way of doing that, of course, is to call on investors like CalPERS and Cal STRS to use their standing to pressure these corporations, which is precisely what the Israel Divestment Campaign has been doing.

Be sure to check back regularly to follow IDC developments as we plan the next stage of our campaign. You can help us expand the campaign by bringing divestment discussions to your social justice and faith–based organizations, your campuses, your children’s schools, and even your next door neighbors.

‡ For information about the complicity of Elbit and Veolia in human rights violations, visit the WhoProfits website (http://www.whoprofits.org/)

About Adam Horowitz

Adam Horowitz is Co-Editor of Mondoweiss.net.

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11 Responses

  1. seafoid
    February 6, 2013, 12:05 pm

    Sounds very positive. The deliberate strangling of the 2SS will be seen as utter stupidity by posterity. Some very interesting news happening now after years of virtually nothing.

    “companies should act as responsible corporate citizens and do no harm in their dealings there.”

    The medical sector needs to look at Israeli doctors and their hypocritical hippocratic oaths as well. Who signs off on torture?

    • sardelapasti
      February 7, 2013, 2:48 am

      “The medical sector needs to look at Israeli doctors and their hypocritical hippocratic oaths as well. Who signs off on torture?”

      That might be a bit awkward, as we’d have, in most US medical organizations, a case of Physician Heal Thyself: the majority of them have not yet endorsed a strong censure of our own torturers, and generally it all ends with a totally toothless resolution –no censure, no boycott, no clamorous expulsions.

      Interesting: the Israel Medical Association has defended torture and its torturing members, and viciously attacked Physicians for Human Rights. Major scandal: the president of the IMA, Yoram Blachar, was at the time also president of the World Medical Association, the international body most concerned with medical ethics, war crimes, etc. I believe the current IMA president is the WMA finance VP.

      So it seems that the official Zionist MD association is at least indirectly involved in torture while directing, or substantially influencing, the main international anti-torture body.

  2. seafoid
    February 6, 2013, 12:19 pm

    Israel bonds should also be targeted. We know some of the money goes to yesha but not how much. Time for transparency. If not, Israeli homeowners pay more for their mortgages.

    • Walid
      February 7, 2013, 1:51 am

      seafoid, have you been following the Minnesota Break the (Israel) Bonds Campaign and lawsuit against the state?

      From Consortium News:

      Minnesota Battle Over Israeli Bonds
      March 31, 2012
      A legal fight is underway in Minnesota over the state’s investment in Israeli bonds that are used to support settlements and other Israeli actions in the West Bank deemed illegal under international law. Sylvia Schwarz, a plaintiff in the lawsuit, explains why she’s demanding the state’s divestiture.

      By Sylvia Schwarz

      “I do not think this is a radical call,” says Ronnie Barkan, of Boycott From Within (BFW), an Israeli human rights group that advocates boycott, divestment and sanctions (BDS) of Israel until it complies with international law and human rights consensus.

      “Simply by investing in the State of Israel, Minnesota inadvertently supports the criminal policies of the State [of Israel], which are detrimental to both the Palestinians and the Israelis.”

      Boycott From Within is one of three organizations and 24 individuals listed as plaintiffs in a lawsuit against the State of Minnesota for illegally investing in Israel bonds, bonds which are used to fund projects such as the Separation Wall (ruled illegal in 2004 by the International Court of Justice) and illegal settlement construction and infrastructure (a violation of Article 49 of the Fourth Geneva Convention.

      Minnesota is one of more than 75 state and municipalities which holds Israel bonds. Most of these bonds were purchased in the last decade, when the Development Corporation of Israel made a major sales push.

      link to consortiumnews.com

      • seafoid
        February 8, 2013, 5:26 am

        Shukran ya Walid. I hadn’t seen that.

        If interest rates were to go up by 200 basis points the Israeli housing boom would crash overnight.

  3. American
    February 6, 2013, 1:15 pm

    This is an area of the Israel issue/problem that I have talked/thought about for a long time.
    Besides CalPERS there are a large number of pension funds of both Unions and city and state employees retirement contributions invested in Israel–some directly into Israel ‘bonds’. A year or so ago there was fight over this about the city employees retirement funds in Boca or some Fla city, don’t remember which one exactly, where the comptroller of the retirement funds had been investing the money in Israel bonds. Some members of the city board were not aware of this and tired to put a stop to it. Last I saw on it there was some legal challenge being mounted against it but I didn’t follow to see how it turned out.
    NYC also does this–invest city employees retirement funds in Israel bonds and directly into private Israeli companies. There was also some scandal surrounding this and the NYC comptroller also but I forget the all the details. The comptroller I do remember was later indicted on some related charges of his taking kick backs from the investment house handling these investment transactions.

    I have thought that part of the Israel problem for some in gov or the US political and business circles might be pressure from both these investment pensions and from companies that have been induced to set up plants in Israel.
    “If” Israel fails or falls into chaos or war there will be that ‘huge sucking sound” of lots of US pension and investment and corporate money going down the drain. It would not be recoverable…all that retirees money and corporation money would be lost.
    Besides the obvious US-Isr problem what we have is a situation much like a bank that has made a ‘risky’ loan that looks to be going south and the bank is trying to intervene with other creditors and help the loanee to avoid losing all the money the bank loaned.
    I posted on here a while ago a article about a company withdrawing from a planned expansion/ or set up in Israel and they cited their concerns about instability and possible chaos as the reason for their decision.

    It may well be that companies in or considering Israel will become concerned enough about Israel’s security-aggression problems that they will withhold any investment or ties ….or in light of the recent UN warning some might pull out.

    One aspect related to that UN warning and the possible ICC action ….Palestine eventually suing Caterpillar and some other companies who have done occupation business, furnished materials/equipment for Isr occupation…..in the same way the Holocaust agencies have sued IBM, railroads, banks, anyone that had any biz relationship or provided any service to the nazis.
    If Palestine goes to the ICC on the war crime of Isr transferring their population to Palestine land they might have a legal case to do just that.

    • Walid
      February 6, 2013, 2:02 pm

      American, the ugliest part of those bonds is that they are tax-deductible, which means a loss of tax income for the US. A few years back, the amount Americans were investing annually in these was $500 million. Canada too provides the same sweetheart deal. All of Israel should be boycotted and not only the settlements activity.

  4. Walid
    February 6, 2013, 1:18 pm

    It’s good to see Veolia’s and Elbit’s cages being rattled and every little BDS success is welcomed but the bells and whistles have to be put in perspective. The last time I was excited about the Norwegian Pension Fund divesting from Elbit 2 or 3 years back, it turned out that the divestment (because of the Elbit surveillance cameras on the wall) was of only $6 million and at that time, Elbit’s statements showed the company had back orders valued at something like $10 billion. That $6 million divestment hardly make a ripple for a company of that magnitude and the CalPER $2.4 million discussed here wouldn’t either. Worse than that, it turned out that despite its divestment from Elbit, the Norwegian fund still maintained its investments in about 500 other Israeli companies, so its divestment of $6 million in Elbit was something of a joke.

    Investors like the Norwegian and other European funds as well as American ones should be lobbied to divest in all Israeli companies and not just the ones involved in the occupation. The BDS effort based only on the occupation is a diversion.

  5. thetumta
    February 6, 2013, 8:53 pm

    I would remind you that there was never a Jewish Government presence contemplated by the Truman Administration(Jewish Lobby) or any of the UN(League) resolutions. It’s supposed to be an International City, not in the hands of any ethnic fanatics.

    Hej! Tumta

    P.S. Works best for us.

  6. Pamela Olson
    February 7, 2013, 2:23 pm

    I wonder if I could give a presentation of some kind for CalPERS (and any skeptical people who might need a nudge) while I’m in the Bay Area on a book tour March 14-23.

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