The Wrath of Netanyahu: What does Orange Telecom’s departure from Israel really Mean for BDS?

By Juan Cole | (Informed Comment) | – –

Stephane Richard, the CEO of the French telecommunnications company Orange embroiled himself in an international incident on Wednesday during a visit to Cairo, when he said that his company would withdraw its logo from the Israeli market “tomorrow” if he could. The reason is that the Israeli firm Partner, to which Orange licensed its brand name, has built 100 telecommunication antennas on confiscated Palestinian land. Partner telecom has about 28% of the Israeli market. Richard did also say that he understood that the investment in the settlements was also an issue in the Arab world, into which Orange wants to expand further.

The issue is not boycotting Israel proper. Richard would have had no problem with doing business with a Tel Aviv firm that had no West Bank presence. The issue is profiting from a vast project of illegal theft of an occupied people’s property. But the controversy signals something I predicted: As mainstream Israeli companies become more and more intertwined with West Bank settler investments and partners, all Israeli businesses risk getting caught up in BDS (the campaign to boycott, sanction and divest from Israeli firms implicated in the settlements). A similar dilemma hurt the Sodastream company, which suffered economic reversals after it advertised at this year’s Superbowl, drawing attention to itself. Many American consumers were disturbed to discover that one of the company’s factories was in the West Bank (it has since been closed), and they launched a boycott campaign against it.

Since the French foreign ministry (like those of the UK, the Netherlands and other European countries) has advised the country’s corporations not to partner with Israeli firms doing business in Israeli squatter settlements on the Palestinian West Bank, critics had argued that Orange is contravening French policy.

The reason for the foreign ministry warning is that European firms making money from the illegal Israeli squatter settlements on the Palestinian West Bank could theoretically be sued in European courts under the Rome Statute and under a 2004 finding of the International Criminal Court that the squatter settlements contravene international law. Orange’s Richard is eager to avoid such a lawsuit now that Partner has dragged the company’s brand into the settlement controversy.

Richard’s comment was vehemently denounced by Israeli Prime Minister Binyamin Netanyahu.

In 1998, when Orange was owned by the Chinese corporation Hutchison, it did a deal to lend its brand to the Israeli firm “Partner,” a cell phone company. Two years later, Orange was acquired by France Telecom, which is partially government-owned. Orange doesn’t actually have any operations of its own in Israel and owns nothing there, it just allows Partner to display its brand. Presumably Israeli cell phone subscribers are more impressed by a global brand like Orange than they would be by “Support,” which actually provides their communications. A controlling interest in Partner telecom was bought by billionaire Haim Saban last December.

Richard is therefore between Scylla and Charybdis. If he broke the brand licensing agreement with Partner before it ran out, he could be sued for breach of contract. But if he continues to make money from Partner as it expands into the settlements, he could be sued in Europe for profiting from illegal squatting and expropriation. He said, according to The Guardian, “If you take those amounts on one side and on the other side the time that we spend to explain this, to try to find a solution and the consequences that we have to manage here but also in France, believe me it’s a very bad deal. . .”

In short, Richard’s comment has nothing to do with “boycotting the Israeli state,” contrary to what Netanyahu maintained. It is about the squatter settlements and their illegality. It is about profiting from an epochal crime.

I wrote last winter regarding the Sodastream controversy:

“The European Union has decided to use its economic clout to push back against the clear Israeli determination to annex the whole West Bank while keeping its indigenous Palestinian population stateless and without the rights of citizenship.

The European Union has insisted that Israeli institutions and companies based in the Palestinian West Bank be excluded from any Israeli participation in a program of the European Union. (The EU treats Israel like a member, offering it many perquisites, opportunities for technology interchange, and access to EU markets; Brussels is saying, however, that none of that largesse can go to Israelis in the Occupied Weat Bank.)

About a third of Israel’s trade is with Europe (the US and China are its biggest trading partners, and Turkey comes after the EU). The EU imports $300 million a year from the settlements, but is clearly moving toward cutting that trade off.

Norway’s enormous sovereign wealth investment fund has just blacklisted Israeli firms with settlement ties.

This follows on a Netherlands’ investment fund divesting from five Israeli banks that fund squatter settlements on Palestinian territory.

European governments are increasingly warning their companies not to invest in or do business with Israeli firms in the Palestinian West Bank, since they might well be sued in Europe by the Palestinians so harmed. The recognition by the UN General Assembly of Palestine as a non-member observer state (on the same footing at the UN as the Vatican) has given Palestine more standing, even in national courts. Palestine is increasingly being upgraded diplomatically in Europe. The issue is also affected by European Union human rights law and a halo effect from the enactment of the Rome Statute in 2002 and the establishment of the International Criminal Court.

Here’s the problem for Jews in Europe and the United States who, like Ms. Johansson, do business with Israeli companies: It is increasingly difficult to distinguish between West Bank firms and Israeli ones. As the Israeli annexation of the West Bank accelerates, the hundreds of thousands of Israelis there bring along with them banks, factories and other economic activities from the metropole. Sodastream isn’t primarily a West Bank company, but it has a West Bank factory and so is embroiled in controversy.

That is, the growing international movement to divest, boycott and sanction the squatter institutions on the Palestinian West Bank is unlikely only to affect the latter over time. There is increasing danger of Israel proper being subjected to boycott because it is so tightly intertwined with the settlers.”


Related video added by Juan Cole:

Wochit News: “Orange’s Pullout From Israel Gives Lift to Boycott”

19 Responses

  1. An important piece of this puzzle is that 2004 AO from the International Court of Justice, which not only advised that these Israeli colonies are illegal but also advised that states are under a LEGAL obligation not to support that colonial enterprise.

    Zionist supporters crowed that the AO was “rejected”, but I have argued for a decade now that they are deluding themselves I.e. what happened *then* was that states simply ignored that court because they didn’t want to hear its message

    But that AO is still out there, and when attitudes change (and they are) then nothing stops a state from ” rediscovering ” that AO and saying “Gosh! They’re right! Why wasn’t I told about this!).

    That court laid out a cudgel for anyone to use. It’s still there, and countries are beginning to eye it off.

    France in particular looks to be verrry tempted to pick it up.

      • AO = Advisory Opinion.

        But don’t be fooled by the word “opinion”.

        The Intl Court of Justice sits for:
        a) Contentious Issues, where two states bring their dispute before the ICJ, and the court rules that “International law says that *you* are wrong and *he* is right”.
        b) Advisory Opinions, where the UN (but not individual states) refer a question of int’l law to the court, and the court then tells the UN “what int’l law says”.

        Obviously (b) does not involve an adversarial case (there is no “plaintiff” and no “defendant”).

        It involves A Question Of Law, and the court sits on that matter because the ICJ is regarded as *the* authoritative interpreter of What Int’l Law Says.

        But regardless of wether the issue under deliberation comes to the court via (a) or via (b) the rules of the court are the same, as are its methods of deliberation.

        The 2004 case involved the UN GA asking the court what int’l law had to say about the “security wall”, and therefore the case involved an “Advisory Opinion”.

        And the full court was all-but-unanimous: Int’l Law says that the wall is illegal because it exists to “protect” an illegal colonial enterprise, and as a consequence all states are under a legal obligation to refuse to have anything to do with either.

        The one hold-out was the sole Jewish judge on the court, who didn’t quibble about that conclusion but argued instead that the court should have simply refused to answer the question.

        A Jewish judge going in to bat for The Tribe? Go figure, heh?

    • T,R: very good point. I believe (or at least hope) that there is a momentum growing, starting with people and moving slow-as-molasses to governments, to sanction Israel (or, in some cases, only businesses operqating in OPTs. the ICJ’s advisory opinion is, indeed, sitting there waiting to be “noticed” by governments.

      The BDS movement does not limit its recommendations to OPT-connected businesses, since Israel itself (government and all else) are promoterrs of [1] occupation an settlements [2] anti-Palestiniansism inside Israel-48, and [3] refusal to allow return of the Palestinian exiles of 1948.

      • Juan makes the very good point Israel is making it harder and harder to make the distinction between businesses that operate inside Israel and businesses that operate in the West Bank.

        That is deliberate, and is (in part) a deliberate reaction to the EU’s demand that products and services in the “settlements” be clearly marked as such.

        It will therefore be Israel’s own fault if BDS hurts “Israeli businesses” as well as “settlement businesses”, precisely because Israel is making it impossible to distinguish one business activity from the other.

        If so then it serves Israel right, if you ask me, because it’ll be their own fault.

  2. Back in the day, we practical leftists who were capturing up to 15% of the vote in our metropolitan county, spent many hours arguing over whether “the big social change” would come from political action, seeking out citizens’ and media attention, or from “changing people’s attitudes,” the more subtle process of long-term attitudinal changes, as most recently exemplified in the American case of acceptance of gay marriage over the last five or so years. My argument was that yes, historically it was indeed mostly through attitudinal change over time, but that that came about with the necessary assistance of the retail politics of of street-corner petitioning and grassroots media attention-seeking. Both are necessary for meaningful social change.

    This story shows the gears grinding through the sand, so to speak, to produce such meaningful social change on the ground …

    And BTW, used sustainably with current USA pricing, IMHO Sodastream can be a very pleasant product for home use. For me I just need something neither caffeinated nor alcoholic to drink thru the day. With a little bit of fruit (that my family is wasting anyway) run thru the blender and a tiny scoop of stevia powder, and a very gentle touch on the Soda stream button, I get a vaguely fruitish, lightly-carbonated water, about a 10 on the scale where American commercial soft drinks are 100, I can drink it all day (which I can’t do with commercial products) and I use maybe three Sodastream recyclable canisters a year, for about 15 cents a day. I’m glad I found it.

  3. Morals and profit extend to opposite ends of the same scale, maintaining them in acceptable balance is what keeps the flux flowing evenly and that is a CEO’s responsibility. Conflict with EU legislation is a perfect illustration of what Mr Richard is paid his doubtless enviable salary to avoid.

  4. ” all Israeli businesses risk getting caught up in BDS (the campaign to boycott, sanction and divest from Israeli firms implicated in the settlements).”

    Are we redefining BDS now?

    • Why not, Peter, since Israel appears determined to redefine what “an Israeli business” means.

      Mr Cause, meet your friend Mr Effect.

  5. On 3rd December 2013, the UK Government published a paper through the Foreign Office together with the UK Trade and Industry’s business risk register-Israel. In it, they warn that financial transactions, purchases, procurements as well as other economic activities prospective purchasers might make carry clear risks, and that those involved in buying products from settlements deemed illegal under International law should beware, because this may result in disputed titles to land, water, mineral or other natural resources which might be the subject of purchase or investment, and that those contemplating any economic or financial involvement in such purchases should seek appropriate legal advice.

  6. There’s a battle brewing to define BDS–is it just anti-occupation, or also pro 1-state with Palestinian right of return? Opponents (e.g. JStreet) seem to be painting it as broadly as possible. A narrower focus is assured of much greater support and is much easier to justify on international law grounds.

  7. Yes, this story is relevant to what I was thinking about at three AM last night.

    I am confused about what food is still Kosher (meaning not affiliated with very bad karma) to buy, and it affects my shopping. I mistakenly got some Kedem grape juice 2 weeks ago, and thought it was from Brooklyn but upon further inspection it was from Israel.

    That is to bad I can no longer buy any, it was good and at a discount. But afterwards I felt like I had just kissed a smoker.

    I also thunk twice when buying some matzo yesterday, but that indeed is made in the USA.

    But, I am thinking of not buying any Jewish products at all. It may be that as a participant in BDS I don’t think it should boycott all Israeli or Jewish products, but with my confusion I will stop even buying Macaroons when they are on sale, even if it says made in New Jersey.

    Oh well, as a chosen person, I was raised to like matzo, and I do, but I bet I can make it myself. I can definitely make Herring myself. Need Capers I think.

    Anyways I am Glad Netanyahoo freaked out about the statement from Orange, it is always interesting to see what craiziness he is up to on a daily basis.

    But what would jerry do if he owned Orange? Whatever makes sense businesswise.

    If one is a businessman the market that is calling is the 1.5 Billion Muslims on the planet, not a few hundred thousand in Israel.

    But it is interesting to see and know that some progress is being made even when things seem like its moving sideways or getting worse.

  8. It sounds a bit as though Orabge licensed its logo to an Israeli firm which was not, at the time of licensing, an Israeli firm operating in OPTs (IFOiOPTs). And it sounds as if the terms of the license did not prohibit later involvement with OPTs. I suppose European investors will be more careful about that now.

    Back to Juan’s prediction. Since as he says the tendancy is for Israeli companies to get involved with OPTs, wise European companies will be well advised simply to steer clear of Israeli companies — or (as suggested by me above) to agree contractually that the Israeli company will steer clear of OPTs (not something which may be easy to say in a contract: what does “steer clear” mean? Can the Israeli company purchase from or sell to IFOiOPTs? Can it have subsidiaries which are IFOiOPTs?

  9. Why must we also hear what the criminal Netanyahu thinks of anyone else, when his refusal to follow international law, his cruelty and unfairness to all Palestinians and his lies about Iran show his complete lack of care for anyone but his bigoted followers?

    • We must because both of America’s political parties woo Netanyahu’s favor. It is called politics. Most Christians and Mormons believe in Israel as divine destiny, and many (but not all) American Jews do too.

  10. What i fail to understand is why doesn’t some group step forward and proceed with a settlement summit ‘tween Israel and the Palestinians. The U.S. has tried it a few times, and failed miserably the last few outings. Obama is unable or unwilling to personally mediate. Kerry was so humiliated when he tried, he is quite literally effete as a diplomat in that venue.
    Why can’t we see the EU, NATO, UN, or some august body step forward and take up the mission? Bear in mind that Netan-yahoo (sic) has recently declared he wants to engage in settlement talks. It is time to call his bluff—and America can’t do it.

    • The Israelis don’t want peace. They are annexing more and more of historic Palestine while oppressing the indigenous population into total capitulation. See the terms offered at Taba.

      It has been 48 years since the 1967 war. What makes you think the Israelis have ever genuinely wanted peace?

  11. Perhaps this is a little off the point of the legal issues, but why is BDS only directed towards businesses in the West Bank? Are the troops only from West Bank Settlements? Is the money for Settlement construction and subsidies from the West Bank Administration? Are the West Bank resources utilized solely for West Bank Israelis?

    Clearly not. So why shouldn’t BDS target all Israeli firms?

    • Because at this moment in time imposing a boycott on All Things Israeli will simply play into Netanyahu’s hands. He will say that this is driven entirely by anti-Semitism, and therefore he will allow his constituents to rationalise their behaviour.

      By taking aim only at settlements then the proponents of BDS keep the focus where it belongs i.e. it makes this an issue about Israel’s colonial enterprise, and not an issue about Israel’s “Jewishness”.

      Netanyahu will attempt with all his might to obfuscate that difference. Sure, he will, since that’s all he’s got to argue against BDS.

      Maybe he will fail, in which case the BDS campaign will succeed in one of its aims, which is to bring home to the Israelis themselves that there are serious negative consequence to this colonial enterprise.

      But maybe he’ll succeed, and therefore convince all the Israelis that it’s nothing to do with “settlements”, it’s just that the whole world hates them.

      OK, in that case it’s on to Plan B, which is to impose BDS on everything to do with Israel. Because – du’oh! – the Israelis will have brought that down on themselves.

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