In Victory for BDS, U.K. High Court Lets Councils Opt Out of Investing in Israel

Local councils in the United Kingdom will be able to choose pension schemes that refuse to invest in Israel, following a June 22 decision by the High Court.

Last September, the government issued guidance to local councils warning them that they could not choose so-called ethical investment schemes that boycotted sectors such as defence and fossil fuel or refused to invest in Israel.

This guidance was in turn challenged in court by the Palestine Solidarity Campaign, and High Court judge Sir Ross Cranston this week ruled that the government had erred in seeking to use pension law to pursue its own policies.

The government’s move had reflected “broader political considerations, including a desire to advance U.K. foreign and defence policy, to protect U.K. defence industries and to ensure community cohesion,” he wrote.

Activists supporting the Boycott, Divestments and Sanctions (BDS) were jubilant over the decision, which they portrayed as a major win.

“Today is a victory for Palestine, for local democracy, and for the rule of law,” said PSC chair Hugh Lanning. “Absolutely everyone has a right to peacefully protest Israel’s violation of Palestinian human rights. This ruling upholds the right of local councils and their pension funds to invest ethically without political interference from the government of the day.”

Pro-Palestinian campaigners now predict an upsurge in local council divestment motions and requests for pension scheme investment options that include an Israel-related element.

But while BDS activists depict last year’s government guidelines as an attempt to specifically target their activism, the move was equally focused on deterring local authorities from refusing to trade or invest with companies involved in the defence industry – a major U.K. sector – as well as tobacco or fossil fuels.

The Quakers for instance – which supported the legal challenge along with War on Want and the Campaign Against the Arms Trade - were the first Christian denomination to divest from fossil fuel enterprises.

Tory minister Sajid Javid promised a Jewish community hustings in May that if re-elected, the Conservative government would make the local government guidance mandatory.

“Local government cannot and should not have their own foreign policy,” Javid said.  

Jonathan Turner, chair of U.K. Lawyers for Israel, a voluntary organization whose members combat attempts to attack or delegitimize Israel, said that the decision was indeed a victory for BDS campaigners.

“Although as to how significant it is, we will have to wait and see,” he added.

“I don’t think it’s as great a success as the PSC claim it is,” he continued. “It’s certainly not carte blanche for pension trustees to adopt BDS policy, but it might have some impact.”

Councils had to operate in the best financial interests of pensioners, he explained, and it would be illegal for a council to adopt an investment policy that had a significant impact on its return.

“Trustees of pension funds tend to be generally very professional people and recognize the need to regard financial issues first and foremost,” he said.

“But the more this happens the more impact it has. The Israeli economy is very strong and successful but these tactics have some effect.”

The PSC commissioned an opinion poll earlier this month which found that 43 percent of British citizens thought the Palestinian call for BDS was reasonable. Forty-five percent of respondents thought that the U.K. should review its trade and financial relationships with Israeli settlements.

A handful of local councils in the U.K. have passed motions supporting some measure of divestment from Israel.

In November 2014, for example, Leicester City Council announced a boycott of settlement goods in protest at "the continuing illegal occupation" of Palestinian territory. Nearly 20 students’ unions have also passed pro-BDS motions in recent years.

Turner said that the BDS movement was very active in the U.K., describing his organization’s work as “trying to shoot back against a juggernaut with a pea shooter.”

U.K. Lawyers for Israel nonetheless claim some successes in this field, including a case in 2014 in which the Royal Institute of British Architects reversed its call for their Israeli counterparts to be suspended from an international union.

“We pointed out that this policy could create problems with its charitable status, and in any case the way the motion had been presented was contrary to the rules,” Turner said.

The government may now appeal the High Court decision.