Israel jittery over global boycotts

U.S. Secretary of State John Kerry is expected to unveil a framework for negotiations between Israel and the Palestinians within weeks. Amid growing pressures from economic boycotts, Kerry said the current status quo in the West Bank is “illusionary” and unsustainable. He had warned Israel of a glum response should it reject his peace plan.

“For Israel, there’s an increasing delegitimization campaign that has been building up. People are very sensitive to it,” Kerry told a security conference in Munich on Feb. 1. “There are talk of boycotts and other kinds of things. Are we all going to be better with all of that?”

His comments drew angry responses from Israeli politicians. “I would advise John Kerry and some Israeli leftists to at least hide their smiles when they talk about threats of boycotts on Israel,” Dani Dayan, Israel’s chief foreign envoy to the Yesha Council, an umbrella organization of Israeli settlement municipal councils, wrote on Twitter. In a veiled reference to Kerry’s comments, Naftali Bennett, who heads the pro-settler Habayit Hayehudi party, added, “We expect our friends around the world to stand beside us, against anti-Semitic boycott efforts targeting Israel, and not for them to be their amplifier.”

This is not the first time Kerry warned about impending boycotts. Last August, he cautioned that Israel could face a boycott campaign “on steroids” if it continues the current settlement campaign that is entrenching Israelis on the occupied West Bank.

But never has the issue of boycotts caused so much vexation inside Israel’s corridors of power. Israeli politicians have been trading barbs about who is fueling the situation. Bennett accuses Justice Minister Tzipi Livni of fanning the flames of boycott by warning about its potential risks. Livni rejects the charge, saying it’s rather Bennett and his right-wing governing coalition’s support for the construction of settlements that is inciting boycotts and threatening Israel’s economy.

The internal debate has also reached Israel’s highest court, which on Sunday heard arguments for and against an existing anti-boycott legislation. Approved in July 2011, the law targets individuals or entities that call for boycotting Israel or its settlements with monetary sanctions. While the state defended the law, human rights groups called for its annulment, saying it violated freedom of expression. The court initially froze the law in December 2012 amid protests, asking the state to explain why it should be upheld.  

Officials are warning against the potential economic consequences of boycotts linked to Israel's settlements. On Jan. 30, Israel’s Finance Minister Yair Lapid told the local Army Radio that the implications will be felt by all Israelis alike. Even a limited boycott that reduces exports to Europe by 20 percent could cost the economy nearly $5.7 billion annually, Lapid added, saying it would ensure that every “Israeli citizen will feel (the consequences) straight in the pocket.”

Israel’s mainstream media have also caught up to the issue. “It is beginning to have an impact on Israeli consciousness,” Dahlia Scheindlin, a Tel Aviv–based public-opinion researcher and political analyst, told Al Jazeera in an email interview last week. “It will help push Israelis towards (peace negotiations), because it is now coming from such diverse and mainstream sources, including governments, not just radical Palestinian activists.”

In the past, Prime Minister Benjamin Netanyahu brushed off boycotts as unethical and unjustified. But now he appears to be eyeing these latest developments more carefully. On Feb. 9, he convened a high-level ministerial meeting to discuss the growing threat of boycotts and sanctions against Israeli entities linked with the settlements. Livni and Lapid, who had openly voiced their concerns about boycotts, were excluded from the meeting. The ministers reportedly discussed possible courses of action, including how to encourage anti-boycott legislation in “friendly” countries. Nonetheless, the meeting — the first of its kind convened to discuss the economic ramifications of boycott initiatives — signals a sea change in the government's collective psyche.

The ministerial meeting was prompted by the decision last month by PGGM, the second largest pension fund in the Netherlands, to divest from five of Israel’s largest banks, citing their financial dealings with companies involved in settlement construction. PGGM is the second Dutch company to sever ties with Israeli businesses in the past three months. In December, the Dutch water company Vitens began divestment from its Israeli counterpart, Mekorot, because of Mekorot’s operations in settlements. And the Dutch bank ING has asked Israeli banks to provide information about their dealings with illegal settlements.

Boycotts and divestment initiatives are spreading across continental Europe. In January, Nordea and Danske Bank, two of Europe’s largest financial institutions, announced their boycott of Israeli banks that maintain branches in the West Bank. Norway’s multibillion Government Pension Fund Global (GPFG) has for the second time blacklisted Africa Israel Investments and its construction subsidiary Danya Cebus because of their ties to West Bank settlements. The Norwegian fund, which invests the country’s oil revenue surplus, first severed relations with the two companies in 2010. Two other Norwegian financial entities, DNB and KLP, are reviewing their holdings with Israel.

These initiatives follow collective measures taken by the European Union last July to block funds, including grants, to Israeli entities operating in the West Bank. The EU ambassador to Israel, Lars Faaborg-Andersen, recently warned that individual countries within the bloc are closer to taking steps to single out and add identifying labels for goods manufactured in the settlements.

The boycotts are not affecting only companies that operate across the Green Line — the de facto border between Israel and the occupied Palestinian territories prior to the 1967 war. Even firms inside Israel proper involved with groups that operate in or have commercial ties with the settlements are feeling the pressure. “More European companies are beginning to realize that settlements are the biggest obstacle to a negotiated solution,” said Elisabeth Koek, a senior legal researcher at the Palestinian human rights group Al Haq. “This is only the tip of the iceberg when it comes to corporate entities extending their due diligence to include international humanitarian law considerations.”

The rise in boycott and divestment initiatives highlights, in part, the success of the BDS (boycott, divestment and sanctions) movement, a grassroots-based Palestinian campaign that calls for the end of occupation and equal treatment of Palestinian citizens of Israel. “The BDS movement [has] reached a tipping point in the Western mainstream,” said Omar Barghouti, a Palestinian human rights activist and co-founder of the movement. “A growing number of Western artists and bands now refuse to perform in Israel.”

Barghouti also pointed to growing support for academic boycott of Israel in the U.S., Germany and Ireland as key indicators of this “qualitative leap.” Germany recently withdrew from all research and technology agreements with Israeli companies and research entities that are linked to settlements.

Last month, a controversy over actress Scarlett Johansson’s role as a “brand ambassador” for the Israeli appliance maker SodaStream threw the boycott movement into the limelight. Johansson’s association with the anti-poverty charity Oxfam America gave the BDS movement a huge publicity boost, forcing her to resign from Oxfam, where she served as a global ambassador for the last eight years.

Israel understands the potential impacts of the growing divestment initiatives. About 33 percent of its exports go to the EU. Exports from the settlements to Europe are estimated to be around $300 million annually.

Tel Aviv faces an important dilemma on how to deal with a growing boycott movement. It can ignore it and risk having the popular debate dominated by BDS supporters, or it can engage with the boycotts, possibly giving the movement a broader platform. In the meantime, Israel has chosen to remain silent. In response to emailed queries on Feb. 3, the Foreign Ministry said it has “no comment on this issue.”

Even if the boycotts don’t force Israel to accept Kerry’s framework deal, its belligerent attitude is increasingly untenable. According to a global public opinion poll by BBC’s GlobeScan, in the last few years Israel consistently trailed only North Korea as the most unpopular country in the world. Barghouti attributes the “erosion” of Israel’s worldwide standing to two factors: the BDS movement and the dramatic rise of a fanatic right in Israel. Some Israeli politicians are now coming to grips with this waning global influence. “Let’s not kid ourselves ... the world listens to us less and less,” Lapid told a Tel Aviv security conference.

Whatever Kerry has planned, the economic and educational boycotts may not be enough to pressure Israel into accepting his peace plan. But the cascading threats of boycotts and international isolation have already left Israel more frazzled than ever. “The rise of the boycott has planted in the national consciousness: that for Israel as the oppressor of the Palestinians, there’s nowhere to go but down,” Larry Derfner, former columnist for The Jerusalem Post, wrote in the blog +972 about the psychological effect of the boycotts. “There’s nothing to look forward to but more rejection, further isolation. And that’s something Israelis can’t live with."

For now, this may just prove to be more of an incentive for change than the actual economic ramifications of the boycott.