A legal argument resting on sand – pension fund divests from cement firms operating in the West Bank

The Business and Human Rights Resource Centre has been tracking the story of the divestment by Norwegian pension fund KLP from two international companies, CEMEX and HeidelbergCement, because of their operations in the occupied West Bank. CEMEX offered an especially weak legal argument in its defence, claiming that the company is not acting unlawfully, as the settlements in the West Bank are legal under Israeli law. I reprint here the short response I was asked to provide by the Centre:

There is no question that companies can be put in a challenging position when policies and practices which may be lawful according to domestic law are considered to be unlawful under international law. Much discrimination in apartheid-era South Africa was carried out pursuant to national legislation then in force, while at the same time being clearly contrary to fundamental norms of human rights. It is for this reason that the United Nations Guiding Principles on business and human rights have set out that the corporate responsibility to respect human rights “exists over and above compliance with nationals laws and regulations protecting human rights”. In the case of CEMEX, the company considers as illegal only those Israeli settlements which have not been approved by the Israeli government. However, Israel’s opinion as to the legality of settlements is firmly at odds with that of the International Court of Justice, the United Nations Security Council, and almost every State in the world. The transfer of Israeli civilians into occupied territory and the building of settlements is a clear violation of the applicable rules of international humanitarian law, and decisions of the Israeli Supreme Court or arrangements provided for under the Oslo Accords do not alter this. In assessing whether its operations are in “strict compliance” with local and international law, as it claims, CEMEX could have heeded the position of Mexico, its country of origin, which recently reiterated its “rejection of the ongoing expansion of Israeli settlements in the Occupied Palestinian Territories, which ran counter to international law”. Companies are well-advised to look beyond domestic laws when assessing the legality of policies and practices in which they may be implicated. Divestment by the Norwegian pension fund KPL from CEMEX and HeidelbergCement is ample proof of this.

** It is reported on Electronic Intifada that CEMEX has sold its shares in a company which manages a quarry in the West Bank, although the not all business links have been severed with the occupied Palestinian territories.

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