One of the Netherlands largest pension funds, ABP, announced Wednesday that it does not intend to divest from its investments in Israeli banks because it had concluded that they had not done anything contrary to international law or regulations.
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ABP has investments in Bank Hapoalim, Bank Leumi, Israel's two largest banks, and Bank Mizrahi-Tefahot. The pension fund's announcement came several weeks after the second largest Dutch pension fund PGGM said it was divesting its holdings in Israel's five largest banks. PGGM justified its decision because of what it described as the banks involvement in financing Israeli settlement activity in the Palestinian territories or their establishment of branches in the West Bank.
In its statement, ABP said that media coverage of recent efforts to divest from Israeli banks had led it to clarify and explain its position. The pension company said that its investment policy was determined in line with certain environmental, social and governance guidelines that are discussed each year by its Board of Trustees. The company said that it used two objective reference points for determining its guidelines, international laws and regulations and the principles of the United Nations Global Compact.
"ABP has concluded that these banks themselves do not act in breach of international laws and regulations, and that there are no judicial rulings that should lead to their exclusion," the pension fund said in the statement on its website. "Furthermore, ABP has concluded that the stipulations in the UN Global have not been violated and do not give cause to start a formal engagement process (that possibly could lead to exclusion)."
PGGM’s divestment from Hapoalim, Leumi, Mizrahi-Tefahot, the First International Bank of Israel and Israel Discount Bank was not expected to have a significant impact on the banks because its investments in them amounted to only a few tens of millions of euros. However, there were worries that the move would lead other European funds to follow suit.
The Dutch fund told the banks its opinion was based on an advisory opinion issued by the International Court of Justice in The Hague in 2004, which said that settlements in occupied Palestinian territory are illegal and violate Article 49 of the Fourth Geneva Convention. That article states that “The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies.”