Israeli Companies Leaving West Bank in Apparent Response to Boycott Pressure

A soon-to-be-released report by peace group obtained by Haaretz suggests that international pressure may have affected companies' decisions to move within the Green Line.

An employee packages carbon dioxide (CO2) cylinders at the SodaStream International Ltd. factory in Mishor Adumim, near Jerusalem, Israel, on Wednesday, Aug. 17, 2011.
Bloomberg

Responding to international boycott pressures and other constraints, a growing number of Israeli companies operating in the West Bank are moving their facilities to locations within the country’s internationally recognized borders, according to a report prepared by Gush Shalom, an anti-occupation organization that monitors such activities.

The report, obtained by Haaretz, shows that aside from the recent high-profile cases of Ahava, the Dead Sea skin care product company, and SodaStream, the seltzer-machine manufacturer, other prominent Israeli companies have also been part of this trend, even if they have managed to evade publicity. 

The last time Gush Shalom compiled a list of companies operating in the West Bank was 20 years ago. Roughly 20 to 30 percent of the companies that appeared on that original list are no longer there, according to Adam Keller, a spokesman for the organization. Some have shut down completely and others have relocated.

“This is a very rough estimate,” he said, “and clearly there are other businesses that have sprouted up in their place, but when it comes to big companies that export their goods and are interested in building international connections, the trend is very clear. There has been a sharp decline in their number.”

Among the Israeli companies whose moves back inside the so-called “Green Line” have not been widely reported, according to the Gush Shalom report, are the following: 

-    Delta Galil Industries, a major clothing exporter, which transferred its warehouse from the Atarot industrial zone outside Jerusalem to Caesaria
-    Teva Pharmaceuticals, the world’s largest manufacturer of generic drugs, which moved its biological laboratories from Atarot to Beit Shemesh
-    Adanim Tea, which relocated from the settlement of Ofra to the Galilee
-    The Intercosma cosmetics company, which moved from Atarot to Ashdod
-    The Ikoo Designs children’s furniture manufacturer, which moved from the Barkan industrial zone near Ariel to Ashdod and Nesher
-    The United Seats chair maker, which moved from Barkan to Tel Aviv
-    Yardeni Locks, which moved from Barkan to Misgav in northern Israel
-    Modan Bags, which moved its headquarters from the settlement of Shaked in the northern West Bank to a moshav outside Petach Tikva and transplanted its manufacturing facility to China. 

Some of these companies, like Teva, Delta and Adanim, rely heavily on export markets. Gush Shalom was unable to ascertain in all cases when exactly all these companies moved their operations back into Israel’s internationally recognized borders, but in several instances, the impetus was clearly the second Palestinian uprising of the early 2000s, which increased risks for Israeli businesses operating in the West Bank. 

In more recent cases, however, relocation activities appear to be connected to growing international calls to boycott Israeli products made in the settlements. In some cases, it would appear that pressure has been put on the companies from foreign investors or prospective foreign investors ideologically or otherwise opposed to operating businesses in contested territory. The owners of Ahava, for example, are in the preliminary stages of negotiating the company’s sale to a Chinese consortium.

Earlier this month, Ahava announced plans to open a new manufacturing facility at Kibbutz Ein Gedi. Although it would not comment on whether it would be moving its existing plant located in the West Bank settlement of Mitzpeh Shalem to the new location, that is presumed to be its intention. A major exporter, Ahava has been a key target of the international boycott movement against Israel.

Under international boycott pressure, SodaStream last year relocated from the Mishor Adumim industrial zone to the Negev.

Misleading labels

Other well-known cases of Israeli companies that have made similar moves since Gush Shalom published its original report 20 years ago are the Bagel Bagel pretzel factory, which moved from Barkan to Safed in northern Israel; the Mul-T-Lock lock manufacturer, which relocated from Barkan to Yavneh after being bought by a Swedish company; and the Barkan winery, which moved from the industrial zone that bears the same name to Kibbutz Hulda.

Asked to comment, Yigal Dilmony, a spokesman for the Yesha Council, an umbrella organization representing the Jewish settlements of the West Bank, said he would not trust any report published by Gush Shalom. “They earn a zero in credibility and a 100 in manipulation,” he said when presented with the key findings.

Dilmony did acknowledge, however, that several companies had moved their facilities out of the settlements in recent years, succumbing to pressure from the boycott movement. “It just goes to prove that the BDS is an anti-democratic movement,” he said. “But for every factory that moves out, there are many others jumping on the opportunity to come in,” he said. 

According to Dilmony, the number of Israeli-owned businesses operating in industrial zones located over the Green Line has grown over the past five years from 700 to 890.

The Israeli Manufacturers Association has put the number at roughly 600.

The Gush Shalom report, which will be published as a Wiki entry on the Internet, has not yet been translated into English. In addition to names of companies that have relocated, the report also provides a list of 16 companies operating over the Green Line that have closed or declared bankruptcy.

It also includes an updated list of close to 80 businesses operating in the settlements that manufacture products widely known and available to the average Israeli consumer, according to Keller. These include Betili furniture maker, Shamir pre-packaged salads producer, Abadi cookie company, Tekoa Farms (a major distributor of mushrooms and ginger) and Kravitz office supplies and stationary company. 

The list does not include businesses such as small grocery stores that operate in the settlements, or products made over the Green Line that mostly stay there. The latter category, said Keller, would apply to many of the small “boutique” wineries that have opened in the settlements in recent years and are primarily consumed in the settlements.

Israeli products made in West Bank settlements are not eligible for duty-free status in the European Union as are other Israeli products. According to the Gush Shalom report, not all companies operating over the Green Line fully disclose their location on their packaging. Some examples include: 

-    Achva-Achdut, a manufacturer of sesame-based products, which moved from Tel Aviv to Barkan, does not always indicate its new address on the labels of products sold in Europe, according to the report. 
-    Yahalom Industries, a manufacturer of cleaning products based in Karnei Shomron, which does not always indicate its West Bank address on its labels, according to the report. 
-    Keter Plastics, a manufacturer of garden furniture, does not indicate on its website, according to the report, that it also owns, among other facilities, a plant in Barkan. 
-    The Frid blanket manufacturer, for example, only publishes the address of its main outlet store in Petach Tikvah on its website, according to the report, and not that of its manufacturing plant in the West Bank town of Ariel.
-    Pillsbury chocolate brownies, which are manufactured by the Israeli subsidiary of American foodmaker General Mills. The package indicates that the company’s address is the town of Ramle, inside the Green Line, when in fact, according to the report, they are made in Atarot.

Owners of Jewish-run businesses in the West Bank have long insisted that the main victims of the boycott movement are the Palestinian workers who inevitably lose their jobs when facilities close or move. To counter this argument, Gush Shalom has compiled a special list of close to three-dozen businesses that operate over the Green Line that take pride in advertising that they employ Jewish workers exclusively. 

Asked to respond, the Yesha Council spokesman said none of the businesses on this list, to the best of his knowledge, qualified as major industrial employers.

The Gush Shalom lists, said Keller, were compiled by a team of organization volunteers, based on information available in the public domain, on telephone interviews, and on research compiled by other anti-settlement organizations, such as Peace Now and Who Profits. 

Unlike the previous list compiled 20 years ago, he said, the current list was not based on actual fieldwork. 

The so-called “anti-boycott law,” passed by the Knesset in 2011, penalizes individuals or organizations that call for a boycott of Israel or the settlements. Concerned that it might be sued for heavy damages under this law, Gush Shalom had removed from its website the original list of companies operating over the Green Line.

Anticipating possible legal challenges with the publication of its latest findings, the organization notes the following in its report:  “Considering the legal situation, Gush Shalom clarifies, in order to cast away any doubt, that in gathering information on factories and businesses in the settlements and in publishing it in the ‘Wiki Settlements Product’ project, there is no intent to call for a boycott of settlement products. The purpose of gathering this information and publishing it is to provide reliable and precise consumer information, to the best of our ability, in order to allow consumers – each by him or herself – to make a wise and knowledgeable decision based on personal considerations.”