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US: States Use Anti-Boycott Laws to Punish Responsible Businesses

Laws Penalize Companies that Cut Ties With Israeli Settlements

Outside the office of New York State Governor Andrew Cuomo, demonstrators protest against a law that bars the state from investing in companies that support boycotts of Israel, New York City, June 9, 2016. © 2016 Mark Apollo/Pacific Press/LightRocket via Getty Images

(Washington, DC) – Many United States states are using anti-boycott laws and executive orders to punish companies that refuse to do business with illegal Israeli settlements in the West Bank, Human Rights Watch said today. More than 250 million Americans, some 78 percent of the population, live in states with anti-boycott laws or policies.

Twenty-seven states have adopted laws or policies that penalize businesses, organizations, or individuals that engage in or call for boycotts against Israel. The laws or policies in 17 of those states explicitly target not only companies that refuse to do business in or with Israel, but also those that refuse to do business in Israeli settlements. Some states whose laws do not explicitly apply to settlements have also penalized companies that cut settlement ties.

“States with anti-boycott laws are effectively telling companies that if you do the right thing and disentangle yourselves from settlement abuses, you can’t do business with us,” said Andrea Prasow, deputy US advocacy director at Human Rights Watch. “States should encourage, not sanction, companies that avoid contributing to rights abuses.”

Many states have anti-boycott laws or policies that extend to individuals and companies that enter into business contracts with states. These laws and policies require people entering into contracts to assert that they will not engage in any boycott activity.

In January 2019, the US Senate passed a bill that endorsed state anti-boycott legislation, including those that encompass settlement business activity. In March, federal lawmakers introduced resolutions in both the Senate and House to condemn boycotts of Israel. None of these initiatives has yet to become US law.

It is impossible to do business in the settlements without contributing to or benefitting from human rights abuse and violations of international humanitarian law, Human Rights Watch has said. Anti-boycott laws aim to deter companies from cutting ties to settlements and thereby ending their involvement in human rights abuses there. States should scrap anti-boycott laws that penalize companies for taking action that ends their involvement in rights abuses.

The Foundation for Middle East Peace published a chart listing the 17 states whose anti-boycott laws or implementing guidelines penalize businesses that boycott Israel or the territories controlled by Israel, a phrase that applies to the Israeli settlements in the occupied West Bank.

Israeli authorities have facilitated the transfer of more than 600,000 Israeli citizens to the occupied West Bank, including East Jerusalem, in violation of the 1949 Geneva Conventions that prohibit transferring civilians into occupied territory. Israeli settlements are inextricably bound up with serious rights abuses, including forcing Palestinian inhabitants of the occupied territories off land seized for settlers, and restricting their freedom of movement. The two-tiered discrimatory system in the occupied territory treats Palestinians separately and unequally, undermining their livelihoods and economy.

Business activities help to sustain illegal setlements and make them more economically viable. As set out in the UN Guiding Principles on Business and Human Rights, companies have a responsibility to take steps to identify and mitigate serious human rights risks across their operations. A business enterprise that contributes to human rights abuse should take the necessary steps to cease or prevent that contribution, and use its leverage to mitigate any remaining harm to the greatest extent possible. If a company cannot prevent or mitigate this harm, the only responsible path may be to terminate or refrain from entering into these operations. Doing business with Israel’s illegal settlements is an example of a situation in which companies cannot do business without contributing to serious human rights abuses.

In November 2018, the global tourism company Airbnb announced it would stop listing properties in settlements, as part of a new policy to bar listings that, among other things, contribute to “existing human suffering.” The day after it announced its decision, Israeli strategic affairs minister Gilad Erdan wrote to the governors of Illinois, New York, Florida, Missouri, and California, encouraging them to take action “in relation to commercial dealings” with Airbnb. After several states took action against Airbnb, it changed course and said it would not remove settlement listings from its platform.

Some states have targeted companies that refuse to do business in settlements even if their laws do not explicitly extend to Israeli-controlled territories. Some of these businesses have said they will do business in Israel, but not in settlements. For example, New York, under a 2016 executive order issued by Governor Andrew Cuomo, published a list of 11 “institutions or companies determined to participate in boycott, divestment, or sanctions activity targeting Israel,” in which the state cannot invest. The blacklists includes two grocers concerned with products originating in settlements and two European pension funds that divested from Heidelberg Cement, whose subsdiary operates a quarry in a settlement.

The American Civil Liberties Union has challenged the constitutionality of several states’ laws as violations of freedom of expression. In Texas, it represents two university students who want to judge high school tournaments, a freelance writer and a reporter. These individuals were required to sign a certification that they are not engaged in boycotts of Israel or settlements or forgo opportunities and lose income.

US federal courts issued preliminary injunctions blocking the enforcement of anti-boycott laws in Kansas and Arizona following similar suits, leading legislators in both states to scale back their laws. An Arkansas federal court dismissed an analogous challenge to its similar law, which has been appealed. The Texas case remains pending.

Individuals have the right under international human rights law to express their views through non-violent means, including participating in boycotts. Authorities may restrict speech, but only under narrow and stringent conditions. David Kaye, the UN special rapporteur on the promotion and protection of the right to freedom of opinion and expression, has stated that “Boycott…has long been understood as a legitimate form of expression, protected under Article 19(2)” of the International Covenant on Civil and Political Rights (ICCPR). Kaye has argued that the anti-BDS legislation of US states “appears clearly aimed at combatting political expression” and that “economic penalties designed to suppress a particular political viewpoint” would not meet the conditions under the ICCPR for permissible restraints on speech.

The US has a history of peaceful boycotts, sometimes controversial and divisive, to challenge human rights abuses and seek political change, including the 1960s NAACP boycott of white-owned businesses in Mississippi and a 2018 boycott of the National Rifle Association. Boycotts also played key roles in international campaigns against apartheid in South Africa and atrocities in Darfur.

“Activists worldwide use boycotts to challenge rights abuses,” Prasow said. “But many US states have signaled a disturbing intolerance for boycotts that push back against Israel's abusive and illegal settlements.”

States That Have Passed Anti-BDS Laws (those whose language clearly targets companies that boycott settlements, in addition to Israel are listed in italics)

Alabama, Arizona, Arkansas, California, Connecuit, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,  Louisiana, Maryland, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Wisconsin

Global Context

Anti-boycott laws in the US are part of an increasingly global campaign by Israel and its supporters to combat perceived supporters of the Boycott, Divestment and Sanctions (BDS) movement. The BDS movement calls for boycotting Israel until it ends its occupation, treats Palestinian citizens equally, and honors the internationally recognized right of Palestinian refugees and their descendants to return to the homes they were expelled from or fled during Israel’s creation.

In 2011, the Israeli Knesset passed a law allowing people to file lawsuits and seek damages against anyone who publicly called for boycotts of Israel, defined to include settlements. In March 2017, an amendment to the country’s Law of Entry authorized the authorities to refuse entry into Israel to activists who publicly call for or have committed to participate in a boycott against Israel.

Under the law, it revoked the work visa of a Human Rights Watch official in May 2018, based on allegations that the official supported boycotts of Israel. In April 2019, an Israeli court rejected a Human Rights Watch legal challenge to the revocation, stating that the country’s anti-boycott law applies to both boycotts directed at Israel and those directed at only West Bank settlements.

The ruling cites as “boycott-promoting activities” Human Rights Watch research on the activities of businesses such as Airbnb and its recommendation that they halt their activities in settlements because of their harm to the rights of Palestinians. Human Rights Watch said it will appeal the decision to Israel’s Suprerme Court.

Anti-BDS initiatives have also gained traction in Europe: French prosecutors, for example, have brought criminal charges against activists engaging in activities to promote boycotts of Israel, some of which resulted in convictions.

The Airbnb Response

Several states took punitive measures against Airbnb following its announcement that it would stop listing properties in settlements.

In December, the Illinois Investment Policy Board, tasked with ensuring that state funds are not invested in companies prohibited by Ilinois law (currently entities doing business in Iran or Sudan or boycotting Israel), determined that Airbnb had violated its state anti-boycott laws and gave it 90 days to respond before adding it to a list of companies in which Illinois prohibits investment. (Airbnb is not publicly traded, but is expected to go public soon.) The Illinois governor at the time, Bruce Rauner, said he sought “to exert pressure on Airbnb to end its prejudicial policy against the Jewish state.”

In January, Florida also announced that it would add Airbnb to its list of “scrutinized companies that boycott Israel,” subject to a 90-day review period, and ban state employees from using the site to book accommodations for work-related trips. Florida’s governor said he wanted to make Airbnb “feel the heat.” Texas followed suit in March, initiating a similar 90-day review period before adding Airbnb to a list of companies from which the state would be required to “sell, redeem, divest, or withdraw all public traded securities.” The University of Texas administration also told faculty and students that state money cannot be used to stay in a property booked on Airbnb.

On April 9, Airbnb reversed course and announced that it would not remove settlement listings from its platform, as part of a settlement reached in several lawsuits challenging its decision. Airbnb did not, though, retract its policy against doing business in “disputed territories around the world,” nor its determination that settlement listings fall afoul of it. Instead of delisting, it said it would donate profits generated via settlement listings to “non-profit organizations dedicated to humanitarian aid that serve people in different parts of the world.”

The New York State Response

New York has targeted companies that stopped doing business in settlements, even though their anti-boycott laws do not explicitly extend to Israeli-controlled territories.

The state has not explained how each of the 11 companies it said it would not invest in falls afoul of its stated criteria. Two are grocers. The Co-operative Group, a UK business, stopped doing business with suppliers known to buy produce from Israeli settlements, while saying it “remained committed to sourcing products from and trading with Israeli suppliers that do not source from settlements.” Cactus Supermarkets of Luxemburg suspended offering Israeli produce until suppliers demonstrated that the goods do not come from settlements, while continuing to offer other Israeli imports, according to a statement by an activist group following negotiations with the company.

The New York State list also includes two European pension funds (Norwegian KLP Kapitalforvaltnin, Danish PFA Pension Forskikrings AS) that divested from Heidelberg Cement, a German company whose subsidiary operates a quarry in a West Bank settlement. KLP has said that Heidelberg’s “exploitation of natural resources in occupied territory… constitutes an unacceptable risk of violating ethical norms,” while PFA said “it does not wish to contribute to any illegal activities in relation to the occupation of the West Bank.”

In addition to facilitating the extraction of natural resources from occupied territory for the benefit of the Israeli market, which violates international humanitarian law, Heidelberg directly benefits from rights abuses, operating on land confiscated from Palestinians and under a discriminatory permit system whereby the Israeli military authorities grant permits to settlement-affiliated quarries but almost never to Palestinian-owned quarries. It also contributes to a discriminatory regime by employing workers who have different rights and protections depending on whether they are Israeli or Palestinian. Heidelberg also pays royalities to the Israeli Civil Administration and taxes to the regional settlement council, which do not benefit the local Palestinian population.

Effect on Human Rights: A Case Study

The following case study illustrates the way that some companies facilitate abuses in settlements by doing business there.

Anwar Abu Khalil, a 75-year-old Palestinian farmer, lives in the village of Isleh, in the northwestern West Bank. In the 1980s, the Israeli military authorities began establishing Alfei Menashe, a civilian settlement, on lands belonging to his village and the nearby village of Azzun. The Israeli military authorities seized 17 dunams (four acres) of his family’s land for settlement homes and blocked his access to another 31 dunams (eight acres), eventually building a fence between his home and his land, ostensibly to protect the settlement.

Not only is Abu Khalil prohibited from building on his land, he has had to stop cultivating the wheat, barley, fava beans, lentils, watermelons, and tomatoes that his father grew there, because he can only access the land infrequently, using hard-to-get permits and special agricultural gates that are usually closed and require a long detour.

Airbnb and affiliates of the Colorado-based company Re-Max list properties for rent or sale in Alfei Menashe, built on lands unlawfully seized from Palestinian villages. In so doing, they directly profit from the unlawful seizure of private property and contribute to the travel restrictions that prevent Abu Khalil and his neighbors from accessing roads that are designated for settlers only. A local Palestinian like Abu Khalil could not even pay to rent an Airbnb located on their own land, because the Israeli military authorities prohibit West Bank Palestinians from entering settlements except as laborers bearing special permits. 

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