Questions and Answers: Establishing a Screen to Remove and Avoid Investment in Illegal Settlements

What are settlements? 
In most cases, settlements are segregated colonies, built on occupied land in violation of international law. 

Why are some settlements illegal? 
Article 49 of the Fourth Geneva Convention forbids an occupying power from moving its own population onto land it occupies. When a country establishes colonies for its own people on occupied land, it is violating this important law. Many settlements also violate the Hague Conventions of 1907, which forbids the exploitation of natural resources in occupied territory. The body of international law developed in the 20th century was designed to end the colonial wars that had dominated previous centuries. 

In what countries do illegal settlements exist? 
UMKR has identified three situations where an occupying power has moved its own people onto occupied land after the Geneva Conventions made this illegal. These are Morocco’s occupation of the Western Sahara, which began in 1976,Turkey's occupation of northern Cyprus, which began in 1975, and Israel’s occupation of the Palestinian territories, which began in 1967. 

What is the impact of settlements on native peoples? 
Settlements often seize land and water from the occupied people. In both cases described above, the occupying power sends soldiers to provide “security” for the members of the occupying population in these settlements, builds segregated roads to serve them, and install checkpoints, walls and fences throughout the area, dividing indigenous villages from each other. Settlers often pollute groundwater with sewage and industrial waste and dump their garbage on occupied land. 

Theft of land: Much of the land on which settlements are built is privately owned by indigenous families. The rest has been used for centuries as agricultural and grazing land that sustains communities and forms the backbone of the local economy. Hundreds of thousands of trees have been uprooted and destroyed to make way for settlements, robbing whole villages of their livelihoods. 

Theft of water: Occupying powers often divert water from the indigenous people to the illegal settlements, and prohibit natives from drilling new wells 

Theft of Resources: In some cases the settlements extract resources from the occupied land in violation of the Hague Conventions of 1907. 

Violence: Armed settlers frequently descend on native villages and farms and destroy water supplies, burn orchards and fields, and attack farmers while they work. Settlers have also attacked places of worship and schools. Settler violence is real and alarming. 

Segregated roads: Settlements are often connected to each other by a network of segregated roadways that cover thousands of kilometers of occupied land and divide the indigenous areas into isolated pockets of poverty, cut off from each other and unable to sustain their economies. Local roads are often blocked. 

Walls and fences: Some settlements are surrounded by walls and fences that further divide and confiscate the occupied land. In many cases, native peoples must wait for hours at checkpoints to reach schools, hospitals, and other towns. These checkpoints and barriers are built to separate indigenous people from each other, impeding trade, travel, education and medical care. 

Evictions and demolitions: Indigenous people often cannot obtain permits to build additions onto their homes, or to build structures such as solar panels and water cisterns on their own property. When they do so, these structures are demolished. In 2011 alone, the Israeli military destroyed more than 620 structures belonging to Palestinians in the West Bank. In 2012, eight villages received notice to evacuate their homes so Israel’s military could establish a firing range and conduct military exercises on their property. 

Frustrated peace efforts: While publicly urging Palestinians to “negotiate,” the Israeli government has continued to confiscate Palestinian land and water, providing subsidies to the settlements and to companies locating there. As Palestinians hear about a “peace process,” they watch the settlements expand and their own space in the land of their ancestors shrink. This inhuman and illegal situation has been condemned by countries around the world, and the US government has called the settlements “illegitimate.” It would be absurd to engage in peace talks while this theft is ongoing. No Palestinian leader can convince his people to accept a document filled with words when their daily reality is filled with loss and despair. 

Why do companies locate in the settlements? 
Companies locate in the settlements for several reasons: (1) the occupying government provides them with subsidies and lower tax rates as incentives to locate there (2) environmental laws that apply in other settings are not applied to companies operating in the settlements (3) labor laws that apply elsewhere are not enforced consistently in the occupied territories. Companies can hire people for very low wages in the settlement industrial zones, and working conditions are often hazardous to employees. Discrimination in hiring practices and pay is common. 

Companies that would have to spend large sums disposing of hazardous waste byproducts from production often escape those costs by locating in the settlements, where hazardous waste is either discharged onto local farmland or disposed of in ways that do not meet international standards. For this reason, many of the companies locating there are those that use chemicals in their production processes or produce hazardous byproducts. 

What is the impact of settlement industry on native populations? 
Agricultural land is often polluted by runoff from these factories. United Methodist researchers have photographed untreated waste water being discharged onto Palestinian land from settlement industrial zones. Palestinians whose families may have farmed the land for generations where the settlements have been built have lost their income, and must often work in settlement factories in dangerous working conditions and without recourse if their employers do not pay them for hours worked. 

Kav LaOved, the leading Israeli labor rights group, states: “Israeli employers in the settlements and industrial zones in the West Bank continue to routinely deny the rights of their Palestinian workers on a much larger scale than they do their Palestinian brethren working in Israel. The vast majority of workers earn less than the minimum wage, their wages are withheld from time to time, their social rights are denied and they are exposed to dangers in their workplaces, as the State Comptroller has als pointed out.” i 

Israel’s Coalition of Women for Peace states: “Palestinian workers lost their land and livelihood to the Israeli occupation. 11% of Palestinian workers in settlements work on confiscated lands originally owned by their families or one of their relatives. Providing Palestinians with jobs on their own stolen land is another humiliating insult that they are forced to bear in order to provide for their families. The settlement industry's revenues are a direct result of shameless exploitation of Palestinian land, labor and resources. The industry's existence on occupied land enables, deepens and perpetuates the Israeli occupation.” ii (WhoProfits web site) 

In Western Sahara, Moroccan settlers have taken jobs formerly held by native Sahrawis. According to Western Sahara Resource Watch, “In 1968 there were 1600 Sahrawis employed in the phosphate industry in what is today occupied Western Sahara. Today, most of them have been replaced by Moroccans that have settled in the territory. The industry now only employs 200 Sahrawis of a total work force of 1900 employees. The Sahrawi employees experience discrimination relative to their Moroccan colleagues.”iii

How can avoidance of investment in firms that support the settlements help? 
Most occupations continue because they have become so profitable for companies around the world which benefit from lower costs of production in the subsidized settlements, where environmental and labor laws can be easily ignored. This gives companies in the settlements a competitive edge over companies that refuse to support the occupation. Withdrawal of investment by large institutional investors can discourage them from continuing this practice. Investment screens, along with boycott and divestment, can make companies rethink the wisdom of remaining in settlements that violate international law. As Archbishop Desmond Tutu has said, “If international courts and governments refuse to deal with this matter, we in the churches and in the rest of civil society really have no choice but to act in small ways and big ways.” Boycott is one of those ways we can make a difference. 

Is an investment screen an appropriate Christian action? 
In December 2009, the Christians of the Holy Land issued a powerful and urgent plea to churches of the world to put actions behind their words to end the occupation. Boycotts and divestment were two methods called for by these Christians. In 2012, the United Methodist General Conference, the Presbyterian General Assembly and the United Church of Canada called for a boycott of settlement products. They join British Methodists, the World Council of Churches and the South African Council of Churches in urging a settlement boycott. Friends Fiduciary Committee, the investment arm for the Quakers, and the Presbyterian Church USA have voted to divest funds from specific companies that support settlements and occupation. 

What does the Bible say about making profit from the oppression of the poor? 
Job 20 - He will not enjoy the profit from his trading. For he has oppressed the poor and left them destitute; he has seized houses he did not build.” 

Companies that operate in the illegal settlements have “oppressed the poor and left them destitute.” They pay low wages to indigenous people after taking away their traditional livelihood by seizing their land. Many settlement companies offer poor and dangerous working conditions, and often they pollute the agricultural land around the settlements with untreated waste. 

Palestinian property, and Palestinian homes are often seized and destroyed to make way for industrial zones where companies operate in the settlements. In the Book of Job, we read that the person who cooperates in these things is not to enjoy the profit from his trading. 

Isaiah 3: 13-15 - The LORD enters into judgment against the elders and leaders of his people: ‘It is you who have ruined my vineyard; the plunder from the poor is in your houses. What do you mean by crushing my people and grinding the faces of the poor?’

Is the plunder of the poor in our houses? Are profits from companies which have helped to crush so many Palestinians in our Pension Fund?? 

Will a screen for companies that profit from illegal settlements make a difference? 
Yes. A screen means our Pension Fund will avoid investment in these companies. The threat of divestment and boycott has already convinced some larger companies to leave the illegal settlements in the West Bank. Examples are Mul-T-Lok, Barkan Wineries, Unilever, Achva, and Intercosma. Sodastream has announced it will soon leave its settlement location, following international boycotts. When companies find that the reputational and financial risk of remaining in the settlements outweighs the subsidies provided by the Israeli government, they will end their involvement. Settlers living illegally on Palestinian land will find it less convenient without jobs in the settlements. They may then begin to move elsewhere, weakening the settlements. Companies that have avoided the settlements will no longer be at a competitive disadvantage. 

Will a settlement screen harm the occupying powers? 
Only those who are profiting from violations of international law will be affected. There are many companies that operate within the legal borders of the occupying powers and do not provide material support to the settlements. They will not be affected. 

Will screening out companies involved with the settlements harm native peoples? 
No. Though some jobs could be lost if companies leave the settlements, many more will be created once the occupations that are strangling native economies comes to an end. The campaign for boycott, divestment and sanctions was launched by Palestinians themselves. It was reiterated in the Kairos Palestine Document issued by Palestinian Christians in 2009. The three main Palestinian labor unions - The Palestinian General Federation of Trade Unions, the General Union of Palestinian Workers and the Palestinian Federation of Independent Trade Unions - have all endorsed boycott and divestment, as well as sanctions. Israel’s claims that some union leaders did not favor these measures have been denied by the leaders themselves. Palestinians had a long and proud history of economic independence, and once provided food for much of the Middle East and Europe. Once occupation ends they can do so again. They value their freedom more than any jobs they are offered in the settlements. 

What companies would be affected by a settlement screen? 
A list of companies involved in various ways with illegal settlements in Palestine is included on the web site of United Methodists for Kairos Response. This research has been under way for more than a decade. A handful of public companies (see notes) profit from Morocco’s occupation of the Western Sahara.iv Most have been divested for this reason by several large institutional investors. Others (see notes) are oil companies drilling in Western Sahara or its territorial waters.v UMKR welcomes information about public companies that may profit from Turkey’s occupation of northern Cyprus, though it appears that most companies there are private or government owned. UMKR believes that if profiting from illegal settlements in one case is wrong, it is wrong in all cases, and will continue to study companies that may profit from these illegal occupations. 
_________________________
i  
https://www.scribd.com/doc/111205869/Employment-of-Palestinians-in-Israel-and-the-Settlements-Restrictive-Policies-and-Abuse-of-Rights Employment of Palestinians in Israel and the Settlements: Restrictive Policies and Abuse of Rights 

ii 
http://www.whoprofits.org/sites/default/files/palestinian_workers_in_settlements_wp_position_paper.pdf Palestinian Workers in the Settlements, a WhoProfits Position Paper 

iii
http://www.wsrw.org/a117x521 

iv
http://afrika.dk/sites/afrika.dk/files/p_for_plunder_2014_web.pdf 

Potash Corp/Saskatchewan Inc. (TSE:POT, NYSE:POT), Agrium (NYSE:AGU), Incitec Pivot Ltd. (ASX:IPL), Innophos Holdings (NASDAQ:IPHS), and FMC Corp. (NYSE:FMC) are among the companies 

v
http://www.wsrw.org/a117x520 Oil companies accused of profiting from Morocco’s occupation of Western Sahara are Kosmos Energy  




Questions and Answers: Avoiding Investment in Companies Producing Goods or Services in Illegal Settlements 

What are illegal settlements? 
Illegal settlements are segregated colonies built in violation of international law on land that is occupied by a foreign power. 

Why are Israel’s settlements in Palestinian occupied territories illegal? 
Article 49 of the Fourth Geneva Convention forbids an occupying power from moving its own population onto land it occupies. Israel has occupied the West Bank, including East Jerusalem, since 1967. Since this occupation began, Israel has moved more than half a million of its own people onto land it occupies. This land lies beyond Israel’s internationally recognized border. 

What is the impact of Israeli settlements on Palestinians? 
Settlements seize land and water from the Palestinian people inside the West Bank. The Israeli government sends thousands of soldiers to provide “security” for these settlements, builds segregated roads to connect them to Israel, and installs checkpoints, walls and fences throughout the area, dividing Palestinian villages from each other. Settlers often pollute groundwater with sewage and industrial waste and dump their garbage on Palestinian land. Cancer rates in villages below these hilltop settlements are increasing. 

Theft of land: According to a well documented study by the respected Israeli group Peace Now, much of the land on which settlements are built is privately owned by Palestinian families; the rest has been used for centuries by Palestinian villages as agricultural and grazing land that sustains communities and forms the backbone of the Palestinian economy. Often when Palestinian farmers go to their fields they find notices telling them to stop cultivating their land to make way for settlement expansion, or telling them the land now belongs to Israel. This is happening to Christian families as well as Muslims. (86.6% of Bethlehem’s land has been confiscated.) Owners can contest this in Israeli courts, but the process costs tens of thousands of dollars, well beyond the means of most Palestinians. Hundreds of thousands of Palestinian olive trees have been uprooted and destroyed, robbing whole villages of their livelihoods. 

Theft of water: According to the World Bank, Israeli settlers have access to four times as much water as Palestinians, though the major aquifer lies beneath the West Bank. Israeli forces have destroyed water wells and cisterns on which whole villages depend. Because Israel prohibits them from drilling new wells, Palestinians are often forced to buy expensive water by the truck load from Israeli companies or collect scarce rainwater for survival. 

Theft of Resources: In some cases the settlements extract resources from the land and from the Dead Sea in violation of the Hague Conventions of 1907. Two publicly held companies in the Pension Board’s portfolios (Cemex and Heidelberg Cement through its subsidiary Hanson Israel) are involved in illegally extracting and profiting from Palestinian resources. Ahava is a private company profiting from resources illegally extracted from Palestinian territory. 

Violence: Armed settlers frequently descend on Palestinian villages and farms and destroy water supplies, burn orchards and fields, and attack farmers while they work. In 2012-14 these incidents have increased, and have involved the slaughter of sheep in front of their shepherds. Settlers have also attacked churches and mosques. These events are rarely covered in the US, but Israeli and international newspapers often report them. Settler violence is real and alarming. 

Segregated roads: The settlements are connected to each other by a network of segregated roadways that cover thousands of kilometers of Palestinian land and divide the Palestinian areas into isolated pockets of poverty, cut off from each other and unable to sustain their economies. Palestinian roads are often blocked. 

Walls and fences: The settlements are surrounded by walls and fences that further divide and confiscate Palestinian land. Palestinians must wait for hours at checkpoints to reach schools, hospitals, and other Palestinian towns. These checkpoints and barriers are built throughout the West Bank to separate Palestinians from each other, impeding trade, travel, education and medical care. For many Palestinians, the sun no longer sets over the valley, but disappears early behind a three story concrete wall. 

Evictions and demolitions: Palestinians cannot obtain permits to build new homes, additions to existing homes, or structures such as solar panels and water cisterns on their own property. When they build anyway out of necessity, these structures are targeted for demolition. In one analysis of the first 40 years of the occupation, 95% of the over 18,000 house demolitions had nothing to do with terrorism or security. In 2011 alone, the Israeli military destroyed more than 620 structures belonging to Palestinians in the West Bank. In 2012, eight villages received notice to evacuate their homes so Israel’s military could establish a firing range and conduct military exercises on their property. 

Frustrated peace efforts: While publicly urging Palestinians to “negotiate,” the Israeli government has continued to confiscate Palestinian land and water, providing subsidies to the settlements and to companies locating there. As Palestinians hear about a “peace process,” they watch the settlements expand and their own space in the land of their ancestors shrink. This inhuman and illegal situation has been condemned by countries around the world, and the US government has called the settlements “illegitimate.” It is absurd to engage in peace talks while this theft is ongoing. No Palestinian leader can convince his people to accept a document filled with words when their daily reality is filled with loss and despair. 

Why do companies locate in the settlements? 
Companies locate in the settlements for several reasons: (1) the Israeli government provides them with subsidies and lower tax rates as incentives to locate there (2) environmental laws that apply inside Israel are not applied to companies operating in the settlements (3) labor laws that apply inside Israel are not enforced consistently in the occupied territories. Companies can hire people for very low wages in the settlement industrial zones, and working conditions are often hazardous to employees. Discrimination in hiring practices and pay is common. 

Companies that would have to spend large sums disposing of hazardous waste byproducts from production often escape those costs by locating in the settlements, where hazardous waste is either discharged onto Palestinian farmland or disposed of in ways that do not meet international standards. For this reason, many of the companies locating there are those that use chemicals in their production processes or produce hazardous byproducts. 

What is the impact of settlement industry on Palestinians? 
Palestinian agricultural land is polluted by runoff from these factories. United Methodist researchers have photographed untreated waste water being discharged onto Palestinian land from settlement industrial zones. Palestinians whose families may have farmed the land for generations where the settlements have been built have lost their income, and must often work in settlement factories in dangerous working conditions and without recourse if their employers do not pay them for hours worked. 

Kav LaOved, the leading Israeli labor rights group, states: “Israeli employers in the settlements and industrial zones in the West Bank continue to routinely deny the rights of their Palestinian workers on a much larger scale than they do their Palestinian brethren working in Israel. The vast majority of workers earn less than the minimum wage, their wages are withheld from time to time, their social rights are denied and they are exposed to dangers in their workplaces, as the State Comptroller has also pointed out.” i 

Israel’s Coalition of Women for Peace states: “Palestinian workers lost their land and livelihood to the Israeli occupation. 11% of Palestinian workers in settlements work on confiscated lands originally owned by their families or one of their relatives. Providing Palestinians with jobs on their own stolen land is another humiliating insult that they are forced to bear in order to provide for their families. The settlement industry's revenues are a direct result of shameless exploitation of Palestinian land, labor and resources. The industry's existence on occupied land enables, deepens and perpetuates the Israeli occupation.” ii (WhoProfits web site) 

How can a screen to avoid investment in settlement companies help? 
The occupation continues because it has become so profitable for companies around the world which benefit from lower costs of production in the subsidized settlements, where environmental and labor laws can be easily ignored. The awareness that institutional investors may avoid their stock if they continue to support the settlements can make companies rethink the wisdom of remaining involved with settlements that violate international law. 

As Archbishop Desmond Tutu has said, “If international courts and governments refuse to deal with this matter, we in the churches and in the rest of civil society really have no choice but to act in small ways and big ways.” Refusing to invest in settlement companies is one of those ways we can make a difference. 

The threat of economic measures like divestment and boycott has already convinced some large companies to leave the illegal settlements in the West Bank. Examples are Mul-T-Lok, Barkan Wineries, Unilever, Achva, and Intercosma. When companies find that the reputational and financial risk of remaining in the settlements outweighs the subsidies provided by the Israeli government, they will leave. Settlers living illegally on Palestinian land will find it less convenient without jobs in the settlements. They may then begin to move elsewhere. Companies that have avoided the settlements will no longer be at a competitive disadvantage. 

Will a settlement screen harm Israelis? 
Only those Israelis who are profiting from violations of international law will be affected. It is only those products that are produced in the illegal settlements that the churches have condemned. The goal is to have companies leave these settlements so the occupation will end. If the companies relocate inside Israel’s legitimate borders, this may actually provide more job opportunities for Israelis. 

Will a settlement screen harm Palestinians? 
Though some Palestinian jobs could be lost if companies leave the settlements, many more will be created once the occupation that is strangling Palestine’s economy comes to an end. The campaign for boycott, divestment and sanctions was launched by Palestinians themselves. It was reiterated in the Kairos Palestine Document issued by Palestinian Christians in 2009. The three main Palestinian labor unions - The Palestinian General Federation of Trade Unions, the General Union of Palestinian Workers and the Palestinian Federation of Independent Trade Unions - have all endorsed boycott and divestment, as well as sanctions. Israel’s claims that some union leaders did not favor these measures have been denied by the leaders themselves. Palestinians had a long and proud history of economic independence, and once provided food for much of the Middle East and Europe. Once occupation ends they can do so again. They value their freedom more than any jobs they are offered in the settlements. History has shown that it is important to give credence to what native peoples say will and won’t help them, and not presume to know what’s best for their situation. 

What companies would be affected by this screen? 
A list of publicly held companies that produce goods or services in illegal Israeli settlements is published on the UMKR web site, at www.kairosresponse.org. 

What is the church’s policy on Israeli settlements? 
Three United Methodist general conferences in a row have passed resolutions entitled “Opposition to Israeli Settlements in Palestinian Land.” In 2012, the conference added language calling on all nations to boycott goods produced in illegal settlements on Palestinian land. A screen that would keep the church from profiting through companies that produce goods or services on Palestinian land is not only consistent with church policy, but essential to demonstrate that the denomination means what it says in its resolutions. 

_________________________________________
i https://www.scribd.com/doc/111205869/Employment-of-Palestinians-in-Israel-and-the-Settlements-Restrictive-Policies-and-Abuse-of-Rights Employment of Palestinians in Israel and the Settlements: Restrictive Policies and Abuse of Rights 

iihttp://www.whoprofits.org/sites/default/files/palestinian_workers_in_settlements_wp_position_paper.pdf   Palestinian Workers in the Settlements, a WhoProfits Position Paper 

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Questions and Answers: Divestment from Caterpillar 

Why single out Caterpillar? 
Caterpillar has refused a request from the General Board of Pension and Health Benefits to sign the U.N. Guiding Principles on Business and Human Rightsi, also known as the Ruggie Principles. These principles outline company behavior in regard to human rights. 

The Caterpillar D9 bulldozer used in the Israeli occupation has been described by Israeli army officers as a “key weapon” in enforcing the occupation. In the Gaza Strip where the occupation takes the form of a giant prison, these have been used in advance of army invasions to destroy everything in sight, including civilian homes and infrastructure. Caterpillar’s sole distributor in Israel, Zoko Enterprises, provides specially trained employees to service these bulldozers on the battlefield. 

Since 2005, church agencies have asked Caterpillar to end its sales of equipment used in Israel’s occupation of Palestinian land. Corporate engagement over 10 years has not led to change in company business practices. Our Book of Discipline recommends that divestment be considered when requests for change have failed. 

How are Caterpillar machines maintaining the Israeli occupation? 
Caterpillar machines are used to bulldoze Palestinian homes, businesses, schools, infrastructure, olive trees, orchards and gardens. They are used to clear land for illegal Israeli-only settlements and roads, and to erect the illegal Separation Wall. 

What is the difference between Caterpillar’s Code of Conduct and the Ruggie Principles? 
When asked to sign the Ruggie Principles, Caterpillar responded that its own Code of Conduct is adequate. It is not. Caterpillar's Code of Conduct simply encourages its employees to abide by broad principles: “Integrity, Excellence, Teamwork, Commitment and (in a recent addition) Sustainability.” In its original form it made no mention of human rights.  A newer version declares “We conduct our business in a manner that respects human rights,” and states that the company expects its suppliers to “conduct activities in a manner that respects human rights.” Yet it provides no means of evaluating or correcting violations. 

The Ruggie Principles articulate a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. These are based on three pillars: “protect, respect, and remedy.” They encourage states to set clear expectations that businesses respect human rights abroad. They provide mechanisms for companies to learn about, prevent, and address their adverse human rights impacts. Most important, they emphasize corporate responsibility to remediate any infringement of rights to which they have contributed. . 

How can Caterpillar be held responsible if it sells to the US government, which then sells equipment to Israel? 

Caterpillar, like almost all military contractors, sells to Israel through the US government’s Foreign Military Sales Program. Under this program each contract is negotiated with the company on behalf of the foreign buyer and may be declined. Generally, specifications and designs for different uses are discussed with the company in advance. In fact, every military company on the United Methodist “Do Not Invest” list sells products through the same Foreign Military Sales (FMS) program used by Caterpillar. Percentage of sales and other benchmarks are used, but weapons firms have never been exempted from United Methodist divestment because they use the vehicle of FMS sales. 

Is it true that Caterpillar has no control over how its products are used?
Not entirely. Caterpillar can decline contracts or instruct its dealers to avoid sales to parties involved with illegal settlements. Caterpillar has already instructed its dealers to avoid sales to Iran. There is strong legal precedent for holding companies accountable if they knowingly provide any party with a product repeatedly used to violate human rights. Caterpillar is fully aware that its products are used to support the occupation and to violate human rights. 

Why should the church get involved in this conflict? 
We are already involved, through our ownership of companies that provide products to keep the occupation going. 

Why should we change UM policies? 
This is not a change in policy. It is aligning our investments with existing church policy, which opposes the occupation and discourages investments that “directly or indirectly support the violation of human rights.” (Para. 717, 2012 Book of Discipline; Res. #6111, 2012 Book of Resolutions) 

Is it true that the new General Board of Pension and Health Benefits “Equities Social Values Plus Fund (ESVPF)” omits Caterpillar? 

Yes. Caterpillar is excluded because it falls into the bottom 40% of companies independently rated for their performance on human rights and/or the environment. The new fund, an alternative for those who prefer additional criteria focused on human rights and/or environmental practices, excludes the bottom 40% of companies in the Morgan Stanley Capital International (MSCI) Environment, Social and Governance ratings. The new ESVPF represents only $46.5 million of Pensions’ $21 billion holdings. This means that while Caterpillar is recognized as having a record of human rights and/or environmental violations, only a tiny portion of the Pension Board’s investments will be held to this higher standard. 

Won’t the church lose money by divesting from Caterpillar? 
Actually, church funds are protected when they are removed from companies that are widely condemned for their actions. Some companies have lost billions of dollars in contracts as a direct result of their involvement with the occupation. One of these, Veolia Environnement, lost $9 billion in contracts and two thirds of its value while in UM Pension Board portfolios. 

Don’t we need to keep a place at the table with Caterpillar to influence them on issues of human rights? 
That place at the table has not enabled our Pension Board to convince Caterpillar to sign the Ruggie Principles or to end its involvement with Israel’s occupation over ten years of corporate engagement. The UMC will have more influence with all companies if they know that divestment is a real possibility when change is not achieved. 

Will divestment hurt Caterpillar employees? 
No. The Presbyterian Church USA, Friends Fiduciary Committee, the Church of England and many other large organizations have divested from Caterpillar without harming the company’s employees. When one shareholder divests, others purchase the stock. Our intent is to align our church’s investments with its beliefs. Our denomination is opposed to the occupation and to the settlements, and we should not be profiting from something against which we have taken a moral stand. 

Is Divestment really effective? 
Yes. Some companies are already moving out of the settlements because of targeted economic actions like divestment. Divestment has worked in the past, and it can work again. In the 1980s, the UM Pension Board divested $77 million from companies doing business in South Africa. Bishop Desmond Tutu has said: “In South Africa, we could not have achieved our freedom and just peace without the help of people around the world, who through the use of non-violent means, such as boycotts and divestment, encouraged their governments and other corporate actors to reverse decades-long support for the Apartheid regime.” 

Would United Methodists be the first religious group to divest from Caterpillar due to its role in the occupation? 
No. The Church of England divested from Caterpillar in 2009. The American Friends Service Committee divested from companies involved with Israel’s occupation in 2011. Friends Fiduciary Committee (Quakers) voted to divest from Caterpillar in 2012. The Mennonite Central Committee voted to divest from Caterpillar in 2013. The Presbyterian Church USA voted to divest from Caterpillar in 2014. 

Shouldn’t we study this more? 
Eternal study is often a tactic to avoid taking effective action. Palestinians are out of time. Unless the global churches step forward now there will be no meaningful Christian indigenous presence in the Holy Land in a few years. The UMC has to decide now whether it will be a bystander or be true to its tradition of prophetic justice by cutting its ties to a situation it has declared often and overwhelmingly that it wants to end. 

Should corporate engagement be given more time to work? 
A long list of meetings and contacts with Caterpillar is on the web site of United Methodists for Kairos Response.ii In February 2012, investment managers of many denominations met in New York and concurred that further engagement with Caterpillar would not lead to changes in the company’s policies regarding the occupation. 

Will divestment from Caterpillar harm interfaith relations? 
No. The movement to hold companies accountable is actually strengthening interfaith relationships among many people of conscience. Struggles for equality and human rights have always been interfaith endeavors, and this one is building deep friendships and mutual respect among people of every faith who work for justice. We have heard from many Israelis, Holocaust survivors and rabbis who support selective divestment and have asked our church to divest from companies supporting the occupation.iii 
__________________________________
http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf 

ii
https://www.kairosresponse.org/Corporate_Engagement_04-11.html 

iii
https://www.kairosresponse.org/Group_Endorsements.html, https://www.kairosresponse.org/Endorsement_Statements.html




Questions and Answers: Divestment from Caterpillar, Motorola Solutions, and Hewlett Packard 

Why focus on these three companies? 
Caterpillar, Hewlett Packard and Motorola Solutions were selected because United Methodist annual conferences, general boards, agencies, and ecumenical partners have been asking them for between 7 and 10 years* to end their involvement in Israel’s occupation of Palestinian land. We have detailed records of this engagementi. In addition, Caterpillar has refused to sign the Ruggie Principles, or UN Guiding Principles on Human Rights, after being asked to do so by our General Board of Pension and Health Benefits. Our Book of Discipline describes corporate disinvestment as one aspect of shareholder advocacy which boards and agencies are to consider.ii Divestment from these companies is a natural conclusion of a lengthy engagement process which has produced no meaningful change. These companies are fully aware that their products are used to support the occupation, to discriminate, and to violate human rights. Yet they continue to provide them for these purposes and to profit in numerous ways from Israel’s occupation. 
*(CAT 10 years; Motorola, which became Motorola Solutions and Motorola Mobility, 9 years; HP 7 years) 

Didn’t General Conference reject this proposal in 2012? 
A similar proposal was rejected in 2012. Since then, these companies have become even more involved with Israel’s occupation. In addition to its other settlement connections, Hewlett Packard has admitted that it leases office space in the illegal settlement of Beitar Illit, where it provides segregated employment for settlers.iii In 2013, Israeli researchers learned that Hewlett Packard provides printers, servers and technological services to the Israeli Prison Service, as well as the military. In 2014, Motorola Solutions signed a new $100 million, 15-year contract to supply Israel’s occupation forces with encrypted smartphones.iv In 2014, Caterpillar bulldozers were used in another Israeli assault on Gaza that killed more than 2,000 Palestinians. Corporate engagement has had three more years to produce results, and has failed to do so. In 2014, the Presbyterian Church USA responded to this corporate intransigence by divesting its funds from these three companies. This followed action by the Quaker investment management group Friends Fiduciary, which divested its holdings from Caterpillar in 2012 and Hewlett Packard in 2013, and the Mennonites, which took similar action in 2013. 

Should corporate engagement be given more time to work? 
Corporate engagement is productive when companies listen to shareholder concerns and take actions to change policies in question. When companies ignore shareholder concerns, prolonged engagement is a sign of tacit support of the status quo. Engagement with these three companies has taken place over 7-10 years with no change in company policies regarding the occupation; therefore it is time for them to be removed from our investment portfolios. A long list of meetings and contacts with these companies is on the UMKR web site.v Investment managers of many denominations met in February 2012, and concluded that further engagement with Caterpillar, HP and Motorola Solutions would not lead to changes in their policies regarding the occupation. 

Will this harm interfaith relations? 
It is actually strengthening interfaith relationships among many people of conscience. Struggles for equality and human rights have always been interfaith endeavors, and this one is building deep friendships and mutual respect among people of every faith who work for justice. We have heard from many Israelis, Holocaust survivors and rabbis who support divestment and have asked our church to divest. (www.kairosresponse.org) 

Will this harm Palestinians? 
The global divestment campaign was launched by Palestinians themselves in 2005 to help achieve their freedom. It was affirmed in the Kairos Palestine Document of 2009, signed by over 3,000 Palesinian Christians. We are responding to their urgent call to stop our resources from supporting the occupation. All Palestinian labor unions have endorsed divestment as a tool to end their oppression. History has shown that it is important to give credence to what native peoples say will help them most, and not presume to know what’s best for their situation. 

Will this harm Israel’s economy? 
This action will not affect the economy of Israel. It will simply remove three US companies from United Methodist portfolios. 

Will this violate the Board’s fiduciary responsibilities? 
This action will not harm investors. Investment managers actually protect investors when they switch money away from companies receiving global criticism. The Pension Board has done this in the past without violating its fiduciary role. Similar action taken by other denominational pension funds in recent years has had no harmful effect on beneficiaries. Caterpillar and HP have already been excluded from the Pension Board’s new ESVPF portfolio, which emphasizes socially responsible investments. With the engagement that has taken place with these companies, and the lack of significant change in policies, the Pensions Board actually has a fiduciary and moral responsibility to remove these companies from all its portfolios. 

Is it true that these companies have no control over how their products are used? 
Each of the companies we’ve recommended for divestment can decline contracts or instruct their dealers to avoid sales to parties involved with illegal settlements. Caterpillar has already instructed its dealers to avoid sales to Iran. There is strong legal precedent for holding companies accountable if they knowingly provide any party with a product repeatedly used to violate human rights. 

How can Caterpillar be held responsible if it sells to the US government, which then sells equipment to Israel? 
Caterpillar, like almost all military contractors, sells to Israel through the US government’s Foreign Military Sales Program. Under this program each contract is negotiated with the company on behalf of the foreign buyer and may be declined. Generally, specifications and designs for different uses are discussed with the company in advance. In fact, every military company on the United Methodist “Do Not Invest” list sells products through the same Foreign Military Sales (FMS) program used by Caterpillar. Percentage of sales and other benchmarks are used, but weapons firms have never been exempted from United Methodist divestment because they use the vehicle of FMS sales. 

Are Caterpillar products really used as weapons? 
Yes. An Israeli officer called the D9 bulldozer a “key weapon” in Israel’s occupation in the prestigious military magazine Janes Defense Weekly. Israeli business publication Globes carried an article saying, “Israel Aircraft Industries (IAI) and Zoko Enterprises Ltd. (TASE:ZOKO), the importer of the Caterpillar D9 bulldozer, are developing an unmanned military D9 for combat missions.” The author continues, “The IDF Engineering Corps have used the D9 bulldozer for combat missions since the 1948 War of Independence. Since the IDF's intermittent presence in Lebanon, ….the D9 has been considered a combat vehicle.” As Caterpillar has confirmed, many of its machines are sold to Israel through the U.S. Foreign Military Sales program, which handles weapons contracts  between foreign governments and US firms. Zoko subsidiary Israel Tractors and Equipment, 

Caterpillar’s sole Israeli dealer, is providing employees to service these weapons on the battlefield. 

Armored and weaponized Caterpillar bulldozers were used to clear the way for ground troops in Israel’s 2008-09 assault on the Gaza Strip, which killed more than 1400 Palestinians, including women and children. They were used in a similar way during Israel’s 2014 assault on Gaza, which killed more than 2200Palestinians, including 501 children and 257 women.vi Former Israeli soldiers in a group called “Breaking the Silence” have testified about the immense destruction of civilian property that D-9s produced during the Gaza assaults. 

Isn’t Motorola just a telephone company? 
Communications giant Motorola divided into two companies in 2011. Its military and government contracts are now handled by a separate company called Motorola Solutions. The company provides surveillance systems around many illegal settlements inside the West Bank. Its surveillance equipment is used on portions of the separation wall built inside the West Bank on Palestinian land in violation of international law. For years it has provided the Israeli occupation forces with an advanced mobile communications system used to coordinate operations against Palestinians. It recently announced a new $100 million, 15-year contract to supply Israel’s occupation forces with encrypted smart phones. Motorola also subcontracts information technology services to settlers in the illegal settlement of Modi’in Illit through a company called Matrix. 

Doesn’t HP make computers? 
Hewlett Packard is also a defense contractor. It has a contract to manage the biometric identification systems used at Israeli checkpoints in the West Bank and Gaza Strip through 2015. HP also supplies printers to the Israeli military, which enforces the occupation. The Israeli Navy has chosen HP Israel to manage and operate the Israeli Navy’s IT infrastructure, including computer and communications centers. With the aid of these communications centers, the Israeli Navy has attacked ships carrying humanitarian aid to the people of Gaza. It regularly attacks Gaza’s fishermen within Gaza’s own territorial waters, and has often shelled civilian areas in the Gaza Strip, killing Palestinians. HP provided a municipal data storage system for the illegal settlement of Ariel and presented an award to a company in the illegal settlement of Modi’in Illit. A Hewlett Packard subsidiary, HP Invent, has outsourced IT services to a company called Matrix, which employs settlers in Modi’in Illit to do much of its IT work. HP also provides printers and technological services to the Israeli prisons authority, which holds many Palestinians without charge or access to attorneys. 

Why should the church get involved in this conflict? 
We are already involved through our ownership of companies that are providing products to keep the occupation going and that allow the United Methodist Church to profit from decades of suffering in the Holy Land as well as multiple violations of international law. 

Wouldn’t investing in Palestine’s economy be a better approach? 
No economy can prosper without freedom of movement for workers and goods, reliable affordable water, and access to markets and raw materials. The occupation denies all these to Palestinians. While companies we invest in are helping to strangle the opportunity for growth and stability in the occupied territories, putting more money into businesses there is largely futile. It is designed to make us feel good while avoiding the fundamental issue of occupation. 

Would this change UM policies? 
No. This is not a change in policy. It is aligning our investments with existing church policy, which opposes the Israeli occupationvii and discourages investments that “directly or indirectly support the  violation of human rights.”viii The new Human Rights Guideline developed by the Pension Board in consultation with other UM agencies states, “We always reserve the right to decline ownership of the stock of any company whose actions or activities are not compatible with the values or beliefs of the denomination.” 

Will the church lose money by divesting from companies that sustain Israel’s occupation? 
Actually, church funds are protected when they are removed from companies that are widely condemned for their actions. Some companies have lost billions of dollars in contracts as a direct result of their involvement with the occupation. One of these, Veolia Environnement, lost $9 billion in contracts and two thirds of its value while in UM Pension Board portfolios. United Methodists in the New England Conference had alerted the Board to Veolia’s involvement before most of these losses occurred. 

Don’t we need to keep a place at the table with these companies to influence them on issues of human rights in the Congo and elsewhere? 
The UMC will have more influence with all companies if they know that divestment is a real possibility when change is not achieved. The Pension Board staff failed to sign a letter by many religious shareholders seeking change in corporate activity in the Congo. They have also failed to sign other letters and shareholder resolutions written to companies by ecumenical partners. They do not list Motorola Solutions as a company with which they are engaged. Apparently, they are not using that “place at the table” now. 

Is divestment really effective? 
Yes. Some companies are already moving out of the settlements because of targeted economic actions like divestment and boycott. Divestment has worked in the past, and it can work again. In the 1980s, the UM Pension Board divested $77 million from companies doing business in South Africa. Bishop Desmond Tutu has said: “In South Africa, we could not have achieved our freedom and just peace without the help of people around the world, who through the use of non-violent means, such as boycotts and divestment, encouraged their governments and other corporate actors to reverse decades-long support for the Apartheid regime.” Bishop Tutu has long supported divestment from Israel’s occupation. 


Would United Methodists be the first denomination to divest from these companies ? 
No. The Church of England divested from Caterpillar in 2009. The American Friends Service Committee divested from companies involved with Israel’s occupation in 2011. Friends Fiduciary Committee (Quakers) and Mennonites voted to divest from these companies in 2012 and 2013. The Presbyterian Church USA voted to divest from Caterpillar, HP, and Motorola Solutions in 2014. 


Shouldn’t we study this more? 
Eternal study is often a tactic to avoid taking effective action. Palestinians are out of time, and the world is out of patience. Unless the global churches step forward now there will be no meaningful Christian indigenous presence in the Holy Land in a few years. The UMC has to decide now whether it will be a bystander or be true to its tradition of prophetic justice by cutting its ties to a situation it has declared often and overwhelmingly that it wants to end. 

_________________________________________
i
https://www.kairosresponse.org/Corporate_Engagement_04-11.html 

ii "The boards and agencies are to give careful consideration to shareholder advocacy, including advocacy of corporate disinvestment." Paragraph. 717, United Methodist Book of Discipline. 

iii See HP letter at
http://electronicintifada.net/blogs/adri-nieuwhof/hp-spins-israeli-checkpoints-role-reducing-friction-palestinians 

iv
http://www.whoprofits.org/company/motorola-solutions-israel 

v
https://www.kairosresponse.org/Corporate_Engagement_04-11.html 

vi
http://imeu.org/article/50-days-of-death-destruction-israels-operation-protective-edge 

vii UM Book of Resolutions, Resolution #6111 - "
Opposition to Israeli Settlements in Palestinian Land”  

Dec. 2016 – Please note that these documents have been updated with UMKR's new name: United Methodists for Kairos Response.

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Divestment     Q & A for Resolutions for GC 2016


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Q & A: Avoiding Companies Producing Goods or Services in Illegal Settlements

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Q & A: Divestment from Caterpillar, Motorola Solutions and Hewlett Packard

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