Who Profits From Israeli Occupation?

ahavaco0803

After the Israeli attack on Gaza earlier this year, the international Boycott,
Divestment, and Sanctions Campaign (BDS Movement) escalated all
around the world. Now, activists are targeting AHAVA, an Israeli
cosmetics company founded by and based in an Israeli settlement in the
Occupied West Bank. The AHAVA company, as many others in Israel that
are based in the Palestinian Territories or profit from their occupation are
owned by the powerful Israel family – the Livnat family. Lia Tarachansky
investigates how the family’s dynasty is invested in the economy of the
occupation.

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Story Transcript

Who Profits from the Israeli Occupation?

TARACHANSKY, LIA, JOURNALIST, THE REAL NEWS: Four years ago, in the summer of 2005, over a hundred Palestinian social justice and human rights organizations joined under the banner of Palestinian Civil Society. Together they sent a callout to groups and individuals all around the world �to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era.�

The campaign took off around the world as the Boycott, Divestment, Sanctions Movement, or BDS and has sharply escalated since Israel�s recent attack on Gaza last Christmas.

Unions, faith groups, NGOs and other organizations began targeting local companies that profit from the Israeli economy, pressuring them to divest. They�ve also launched boycotts against Israeli products, and are particularly targeting businesses that produce or profit in the Occupied Palestinian Territories. The campaign has claimed responsibility for the recent announcement of Belgian-French financial group Dexia of its divestment from providing loans to Israeli settlements in the West Bank. Another claimed victory was the abandonment of French company, Veolia Rail Transportation of a controversial light-rail project in Jerusalem that was meant to connect West Jerusalem with Jewish settlements in Occupied East Jerusalem.

Now, activists are ramping up a campaign against Israeli cosmetics firm AHAVA. During the Gaza attack, British activists shut down a Central London store that carried AHAVA products. In July, French activists picketed a Parisian store, and most recently, U.S. � based group Code Pink protested in front of stores selling AHAVA products in Israeli and in the American cities. The Real News caught up with them in Washington D.C.:

ABILEAH, RAE CODE PINK: I�m Rae Abileah, I work with Code Pink. When I was in high school I went to Israel with my synagogue and I, like everybody else on my trip came home with my AHAVA beauty souvenirs to give to friends and family. I didn�t know at the time or understand the horrible occupation of Palestine. And now that I understand that AHAVA is produced in the occupied territories and that they are profiting from the illegal occupation of Palestine, I have stopped buying AHAVA and I�ve joined the Boycott and will do everything I can to let my friends, family, and folks that I know and work with know that this is a product that�s breaking international law and they shouldn�t buy it and we want to send a clear message to Israel that they can�t continue business as usual

AHAVA�s processing plant and welcoming center are indeed located in the Palestinian territories in an Israeli settlement on the Dead Sea called Mitzpe Shalem. According to a 2004 ruling of the International Court of Justice, Israeli settlements in the Occupied Territories are illegal as the West Bank is still occupied territory, captured by Israel in the war of 1967. But Israeli settlers continue to move to the West Bank, doubling in recent years to almost half a million.

Beside having been established ten years after the occupation of what was then the West Bank of Jordan, making it an illegal settlement by International law, Mitzpe Shalem, was also part of a project of the Israeli army. It was established in 1977 by Nahal, an infantry brigade engaged in social and agricultural development, mostly in occupied areas.

West Bank Israeli settlements established the AHAVA company, and control nearly half of its shares. The other half is split between two investment firms, the lion�s share belonging to powerful Israeli Livnat family�s � Hamashbir Holdings.

The family is listed in the Israeli Daily Ha�aretz list of 100 most influential people in Israel. Besides its investment in AHAVA, the Livnat family profits in various ways from the economy of the occupation.

It began its ascension to power before the State of Israel was even created with a modest transport company, Taavura. Founded by Livnat brothers Yitzhak and Avraham, Taavura is today Israel�s largest transport company, and its founder is described by the editor of Israeli daily Yediot Ahronot as �a real estate, vehicle, commerce, communications, insurance, and banking tycoon, and a major shareholder in IDB Holdings Corporation.�

Besides its ownership in Ahava, the Livnat Family sits on the board of IDB Holdings Corporation, Israel�s largest investment enterprise. Many of the family�s subsidiaries and firms are also part of the IDB enterprise. Many benefit directly from the Occupation by either placing their factories in the West Bank or building the infrastructure of the settlement network.

For example, some of the Livnat Family�s biggest investments is in agricultural firms that grow produce in the West Bank and the Occupied Golan Heights. Their IDB companies also (Nesher Israel Cement Enterprises) produce cement for construction of the Segregation Wall, and other companies, such as fiberglass manufacturer, FiberTech, base their factories in the Occupied West Bank.

The reason why the Livnat Family�s AHAVA and other Israeli companies choose to hold their factories in the Occupied territories and not in Israel proper, says Merav Amir of Who Profits? Is because of government incentives.

AMIR, MERAV WHO PROFITS: There is a considerable reduction in real estate prices when you move to the Territories, most of the area in the West Bank is considered, �Priority Area A� which means there are very significant tax reductions there and different benefits they get from the government. They get a significant tax reduction, for the employees and the businesses themselves. Although businesses in the West Bank were supposed to pay taxes, they were never collected. In 2002 there was a report by the internal critic of the government and in the report they exposed that the tax revenues weren�t collected in the West Bank, but now they have to. The third thing that makes opening in the West Bank very attractive is that although there are different kinds of regulations, such as environmental regulations, there is very lax implementation of these regulations. Many times businesses move to the West Bank because they won�t get objections from their neighbors because if you are in an area which is populated by Palestinians, they have no say about who can open a business around their houses. An additional incentive for many businesses is having access to very cheap labor by the Palestinians.

But the Livnat family doesn�t just produce cement for the construction of the Segregation Wall. It actually helped build it. In the 1980s one of the Livnat Family sons moved to the Netherlands and became a major shareholder in Riwal, a crane company that helped build the Segregation Wall.

An Electronic Intifadah report from 2006 exposed that �In a statement, the company admitted its involvement in the building of the Wall and argued that the related activities were accepted and executed purely as a �commercial order.�

The same International Court of Justice decision that ruled the Israeli settlements in the Occupied West Bank were illegal, also ruled that the Segregation Wall Israel is building is also illegal.

The Dutch government then warned Riwal to cease construction, but even in 2007 Ha�aretz reported that the peace group that led the campaign against Riwal, United Citizens for Peace, �submitted evidence showing that Riwal was still providing equipment for the Wall�s contractors.�

The Real News contacted Riwal asking whether they were still engaged in construction of the Wall. In an e-mail response, Rik Maaskant who does public relations for Riwal-Israel and its Dutch sister company denied any involvement �Neither Riwal Holding Group nor Riwal-Israel is involved in the construction or maintenance of the safety barrier in Israel nor do either of them have the intention to be in the future.�

But besides benefiting from the territory of the Occupied West Bank, the construction of the Occupation infrustructure, and supplying products and services to the illegal settlements under International Law, the Livnat Family is facing some serious challenges. Activists are pushing for the company�s divestment from the occupation economy.

BENJAMIN, MEDEA, CO-FOUNDER, CODE PINK: Here we are in front of this pharmacy in Washington D.C. that carries a product called AHAVA. On the product it says that it�s �Made in Israel� but we were just in Israel and we visited the factory. It�s not made in Israel, it�s made in Occupied Palestine. It�s made with land stolen from the Palestinians, this mud that we have on is stolen mud from Palestinian Territories. So we�ve launched a boycott to ask people to stop buying AHAVA products.]

But the Israeli government doesn�t see the problem. Daniel Seaman, the Director of the Government Press Office spoke to The Real News about the settlement in which AHAVA is based. In his view, there is no difference between companies producing in Israel or in the Occupied Territories because in his view, they are all part of a greater Israel.

SEAMAN,DANIEL DIRECTOR, ISRAELI GOVERNMENT PRESS OFFICE: �Mitzpe Shalem is in the Territories. It doesn�t matter, Mitzpe Shalem is in Israel. It�s not in the territories, it�s in the Jordan Valley, it�s part of the Land of Israel, what difference does it make, I don�t understand what their problem is. Anything produced by an Israeli company is Israeli.�

But according numerous resolutions of the United Nations General Assembly, and even those of the Security Council, settlements established after 1967 in the Occupied West Bank, Gaza, East Jerusalem or the Golan Heights �have no legal validity and constitute a serious obstruction to achieving a comprehensive, just and lasting peace in the Middle East�

So however they label their products, Israeli companies have been feeling the crunch of the economic downturn coupled with the international Boycott campaign. The Israeli business newspaper, The Marker, reported in March the results of its survey, revealing that a fifth, or 21% of Israeli businesses are directly impacted by the international Boycott, Divestment, and Sanctions campaign.