NGO Monitor Submission to the Committee to review the Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global

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This submission was written by Anne Herzberg, NGO Monitor Legal Advisor and UN Liason.

 

 

The Institute for NGO Research1 presents this submission to the Committee in advance of its review of the Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global (GPFG). We hope this submission provides the Committee with information to aid in its review process and corrects several inaccuracies in some of the recent inputs provided to the Committee.

We understand that the review process is intended to be general in focus and not aimed at addressing specific conflict situations. Therefore, we are concerned that several NGOs are using this process to advance a narrow and discriminatory anti-Israel BDS (boycott, divestment, and sanctions) agenda in Committee policymaking. In particular, we wish to respond to a 3 March 2020 submission by UNI Global Union and the International Trade Union Confederation (UNI/ITUC). The UNI/ITCU submission, as well as an April 2019 input from Norwegian People’s Aid and the Norwegian Union of Municipal and General Employees (NPA/NU), seeks to push the Committee to adopt standards that are inconsistent with international business and human rights guidelines and international law. We urge the Committee to reject this effort.

In addition, given the on-going economic devastation caused by the Covid-19 global pandemic, and the potentially lengthy period of uncertainty, we believe the Committee should take into account the altered economic landscape and the potentially serious human rights impacts that would result from adopting and implementing major policy shifts at this time.2

Business and Human Rights Principles in Conflict Situations

In the Norwegian National Contact Point 2018 Annual Report, Chair Ola Mestad stated, “The requirements made of Norwegian enterprises should be in line with the requirements set out in other Western countries, reflecting the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises (MNE Guidelines) with pertaining guidance documents.”

Unfortunately, UNI/ITUC advocates that the Pension Fund adopt a much more radical approach than applied by either UNGPs or the OECD MNE Guidelines. In particular, UNI/ITUC, quoting an obscure paragraph from a 2018 report by the Palestine department at the UN Office of the High Commissioner for Human Rights (OHCHR), claims that “it is difficult to imagine a scenario in which a company could engage in listed activities [activities purportedly linked to Israeli settlements] in a way that is consistent with the Guiding Principles and international law.”

This claim marks a radical and unsupported departure from international guidelines, including the UNGPs, the OECD, and Principles for Responsible Investment, as well as from international law.  Such an approach is not applied in any conflict zone, and despite the ubiquity of situations of occupation and settlements globally (the legal paradigm UNI/ITUC applies to the Palestinian-Israeli conflict),3 UNI/ITUC does not advocate for this standard elsewhere.

In addition, the term “settlements” is not defined in this report, and the “listed activities” referred to are arbitrary, exceedingly broad, discriminatory, and often contradictory.  Several of these activities are unconnected to settlements. None of them is illegal in and of itself. The report makes no distinctions as to the purpose of the business activity, nor the types of services provided.  It also ignores the potential human rights impacts that might occur due to the cessation of business activity. Essentially, this report equates any business activity whatsoever occurring over the 1949 Armistice lines with “illegal settlement activity” and calls for it to be prohibited.4

In contrast to the extreme standard advanced by UNI/ITUC, the UNGPs, OECD MNEs, and other international guidelines (as well as case law, NCP decisions, and business due diligence reviews) wholly reject the adoption of broad exclusionary criteria based solely on location of operations in a conflict zone. Instead, these widely accepted instruments advise case-by-case evaluation of human rights impacts; balancing of applicable and competing human rights, IHL, domestic, and international regulations; consultation with stakeholders; engagement with host governments; and development of mitigation strategies. They do not recommend a blanket cessation of or barring of economic activity in either areas of occupation or settlements.5

It should be noted that under international law and specifically IHL, the lex specialis governing conflict zones and occupied territory, there is no prohibition to conducting business therein. Importantly, whether the economic or business activity is directly linked to state conduct or not, the reason for such standard is clear: adopting such an approach would mean the blocking of all economic activity, which would inherently deprive civilians of employment and vital services such as water, gas, food, transport, and medicine.  Doing so, besides the practical implications and the unmitigated suffering such situation would cause, is a violation of international human rights law and IHL. Under human rights law, people have the right to food, water, medical care, and the right to livelihood. Under the law of occupation (e.g. 1907 Hague Convention Articles 43, 55; 1949 Fourth Geneva Convention Articles 55, 56), the Occupying power is required to maintain public order and safety as well as public infrastructure. How is an Occupying Power supposed to provide such goods and services if not through business and economic activity?

In fact, despite the claim by UNI/ITUC, many courts, administrative bodies, and regulators have explicitly rejected the claim that “it is difficult to imagine” a way in which a company could operate over the 1949 Armistice lines in keeping with international standards and law. Not only have these judicial bodies imagined it, they have found that such is the case with regards to businesses operating in these areas.

For example, in March 2013, a French appellate court dismissed a lawsuit brought by the Palestine Liberation Organization (PLO) and the Palestinian activist group Association France-Palestine Solidarité (AFPS) against three French companies: Alstom, Alstom Transport, and Veolia Transport.6 The PLO and AFPS accused the companies of violating international law, in particular complicity in “war crimes” due to violations of Article 49(6) of the Fourth Geneva Convention, by participating in contracts to build the Jerusalem light rail, which the claimants alleged was settlement activity in occupied territory. In addition, they claimed that these contracts violated Israel’s obligations under the Hague Convention and the UN Global Compact. The plaintiffs sought the cancellation of the contracts.

The French appellate court rejected these claims.  The court looked to whether the legal norms relied upon provided non-state entities with a private right of action and decided that the obligations of the Geneva and Hague Conventions only apply between state parties. In addition, the court considered whether an unlawful act had even been claimed.  The court noted that building the Jerusalem light rail was not illegal because military occupation itself is not illegal, and Article 43 of the Hague Convention allows for the governance of occupied territory, including the building of transportation infrastructure.

The court also discounted the claims that use of the light rail was illegal because it would entrench “illegal settlements.”  Importantly, the court emphasized that the determination of the purpose of a contract and its legality cannot hinge on “the individual assessment of a social or political situation by a third party.”  Moreover, the alleged “political motive attributed to the State of Israel” in the court’s opinion, could not “be applied by ‘contamination’ to the purpose of the contracts.”7

Importantly, as stressed in the “Guidance on Responsible Business in Conflict-Affected and High-risk Areas: A Resource for Companies and Investors”, jointly issued by the UN Global Compact and the Principles for Responsible Investment Initiative,8 business operations in conflict zones can bring substantial benefits to conflict-affected areas including “economic development and/or recovery”; “generating tax revenue,” “creating job opportunities,” “fostering coexistence and mutual beneficial development,” creating local value; and improving infrastructure.9 We believe these principles should guide the Committee.

Footnotes

  1. The Institute for NGO Research is a Jerusalem-based research organization. Members of the Institute have published multiple studies and policy papers on international human rights and humanitarian law, business and human rights, the UN system and NGOs, and fact-finding in situations of armed conflict. Members of the Institute’s Advisory Board include Elliott Abrams, Senior Fellow for Middle Eastern Studies at the Council on Foreign Relations; former Canadian Ambassador to Israel, Amb. Vivian Bercovici; Hon. Michael Danby, former MP Australian Labor Party; Harvard Professor Prof. Alan Dershowitz; Canadian Senator, Hon. Linda Frum; Colonel Richard Kemp, former commander of British forces in Iraq and Afghanistan; Douglas Murray, Director of the Centre for Social Cohesion; former Member of Italian Parliament, Hon. Fiamma Nirenstein; UCLA Professor and President of the Daniel Pearl Foundation, Prof. Judea Pearl; US Jurist and former Legal Advisor to the State Department Judge Abraham Sofaer; Dr. Einat Wilf, former member of Knesset and advisor to Shimon Peres; Harvard Professor Prof. Ruth Wisse; R. James Woolsey, former US Director of Central Intelligence; and Israeli Supreme Court Justice, Justice Elyakim Rubinstein.  
  2. See statement of David Beasley, Executive Director of the World Food Programme, to the UN Security Council, “The economic and health impacts of COVID-19 are most worrisome for communities in countries across Africa as well as the Middle East, because the virus threatens further damage to the lives and livelihoods of people already put at risk by conflict.” https://www.wfp.org/news/wfp-chief-warns-hunger-pandemic-covid-19-spreads-statement-un-security-council; OECD, https://read.oecd-ilibrary.org/view/?ref=132_132646-g8as4msdp9&title=Foreign-direct-investment-flows-in-the-time-of-COVID-19.
  3. Eugene Kontorovich, “Unsettled: A Global Study of Settlements in Occupied Territory,” Northwestern Public Law Research Paper 16-20, 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2835908
  4. https://ngo-monitor.org/wp-content/uploads/2017/01/Submission-to-HRC-on-Blacklist.pdf at 4-7.
  5. For a more in depth discussion see Anne Herzberg, Submission to the Working Group on Business and Human Rights Project on Business in Conflict and Post-conflict Contexts: Corporate Due Diligence in Situations of Armed Conflict, available at https://ngo-monitor.org/submissions/submission-on-business-in-conflict-and-post-conflict-contexts-corporate-due-diligence-in-situations-of-armed-conf/
  6. Cour d’appel [CA] [regional court of appeal] Versailles, 3 ch., March 22, 2013, 11/05331 (Fr.), available at http://fr.slideshare.net/yohanntaieb3/decision-de-lacourdappel [hereinafter Cour d’appel],  translated at http://blog.eur.nl/iss/hr/files/2012/02/Decision-Versailles-Appeal-Court-22-March-2013.pdf). Anne Herzberg Submission to OHCHR, Remedies Project, 2014 https://ngo-monitor.org/submissions/submission_of_the_amuta_for_ngo_responsibility_to_the_office_of_the_high_commissioner_for_human_rights_for_the_study_of_domestic_law_remedies_for_corporate_involvement_in_gross_human_rights_abuses/#easy-footnote-bottom-30;
  7. For more examples, see Anne Herzberg, “Kiobel and Corporate Complicity: Running with the Pack,” American Journal of International Law Special Kiobel Agora, (January 2014);When International Law Blocks the Flow:  The Strange Case of the Kidron Valley Sewage Plant,” 10 Regent J. of Int’l L. 71 (2014); NGO ‘Lawfare’: Exploitation of Courts in the Arab-Israeli Conflict, (September 2008, 2d edition December 2010). See also, Jesner v. Arab Bank, 584 U.S. __ (2018), slip opinion at 24 (active corporate investment in conflict zones “contributes to the economic development that so often is an essential foundation for human rights.”)
  8. https://www.unpri.org/download?ac=1724
  9. https://www.unpri.org/download?ac=1724 at 10

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