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January 05, 2005
To Divest or Not to Divest: Ethical Considerations of Addressing the Israel-Palestine Conflict
by William Baue
Part one of this two-part article examines across-the-board divestment from companies profiting off
Israeli policies that harm Palestinians, and the case against divestment.
SocialFunds.com --
Palestinian suicide bombers killing innocent Israeli citizens. Israeli troops bulldozing
Palestinian homesteads in disputed West Bank and Gaza Strip territories. Perhaps the strongest
ties between Israel and Palestine are the legitimacy of claims of victimization and charges of
unethical aggression on both sides. In the absence of political solutions to this Middle Eastern
quagmire, many activists have turned to financial mechanisms to advocate for solutions.
Divestment, whereby investors cash in their stakes in companies with practices that contradict
their values, is the strongest statement available, though some stakeholders believe that
shareowner advocacy with companies may prove more effective at effecting change.
 The most prominent divestment efforts are student-led
campaigns at college campuses throughout the US calling on their administrations to implement
across-the-board divestment from companies profiting from Israeli policies that harm Palestinians,
for example by bulldozing their homes. In July 2004, the Presbyterian Church USA (PCUSA) became one of the first institutional
investors to consider divestment by ratifying the "phased, selective divestment" from such
companies. This process starts with shareowner dialogue with companies, escalates to resolution
filing if the company is unresponsive, and ultimately ends in divestment if the company stonewalls
all engagement on the issue.
At the same time other investors, such as the Episcopal Church, have
opted against divestment in favor of shareowner action with companies doing business with the
Israeli government. And Jewish organizations such as the Shefa Fund are calling for balanced approaches, criticizing
one-sided divestment as ineffective in solving the problems.
The Divest from Israel Campaign encompasses
action on campuses throughout the US, including Ivy League schools such as Yale, Princeton, and
Harvard as well as large state schools such as the Universities of Massachusetts, Michigan, and
Minnesota. Campus activists are a step removed from direct negotiations with companies, so instead
of advocating for the more nuanced approach of shareowner action, they must resort to campaigning
for administrations to implement the blunt tool of divestment.
"On campuses, the first
step is making the decision to divest; [shareowner advocacy] would happen after there is a moral
commitment by the administration to divest," said Christopher Cantor, a spokesperson for the University of California Divestment Campaign.
"Generally speaking, we do very much support shareholder advocacy dialogue with companies--the
campaign at Caterpillar is a good example of this."
In November 2004, Jewish Voice for
Peace (JVP) re-filed a shareowner
resolution calling on Caterpillar (ticker: CAT) to review whether the sale of
its bulldozers to the Israeli army (which uses them to raze Palestinian homes) violates its own
Code of Worldwide Business Conduct.
The Shefa Fund, a Jewish community investment and
shareowner advocacy nonprofit, favors shareowner dialogue with companies over divestment, which it
considers ineffective.
"We believe that ultimately, the divestment movement's
one-sidedness will undercut its moral legitimacy," states Rabbi Mordechai Liebling, torah of money
director at the Shefa Fund, in a recent position paper entitled Divestment from
Israel: Is it an Effective Strategy?. "Just as Israel must be held accountable for its
actions, so too must Palestinian and Muslim groups which explicitly or implicitly support suicide
bombings against civilians."
The University of California Divestment Campaign maintains
that the one-sided approach is predicated on the fact that US corporate and governmental support is
one-sided, propping up Israel while ignoring Palestine.
"Palestine has no independent
economy to speak of, and [ . . . ] we don't have any investments in companies that sell weapons or
weapons technology to the Palestinians, nor do we have investments in companies that have
subsidiaries, branches, partners, or sizeable operations in Palestine," states the UC Divestment
Campaign website.
Rabbi Liebling also argues that divestment is impractical, a viewpoint
he supports by quoting prominent members of the Israeli peace movement.
"We think
divestment is not the right way to change the situation," states Yariv Oppenheimer, the head of
Peace Now, the largest peace organization in Israel. "If anything, it may have the opposite effect
of the one intended."
"Israelis feel the entire world is against them, so the immediate
response to such measures is always anger and mistrust," he continues. "They will not convince the
Israelis that the occupation is a bad thing."
However, campus activists consider such
occupation a severe enough transgression (likening it to Apartheid South Africa) as to preclude the
possibility of shareowner dialogue.
"The situation in the occupied territories is
apartheid," Mr. Cantor told SocialFunds.com.
Rabbi Liebling deconstructs this analogy
in his paper.
"The analogy between South Africa's apartheid regime with Israel has a
fundamental flaw: It obscures the moral complexity of the Israeli-Palestinian struggle," writes
Rabbi Liebling. "In South Africa there was no moral ambiguity: Clear lines could be drawn, so
broad-stroked strategies [such as divestment] could be effective."
"Israeli-Palestinian
relations, by contrast, are defined by moral legitimacy and immoral outrages on both sides,
resulting in a long, painful cycle of war, occupation, and terrorism," he continues. "Here, more
nuanced strategies are required."
Mr. Liebling points out that South African apartheid was
predicated on the exploitation of labor and the removal of native populations by non-natives.
While he contends that the Israeli situation does not exhibit these same dynamics, the UC
Divestment Campaign argues that it does.
"Israel's settlements in the West Bank and Gaza
are Jewish-only . . . [t]he only time Palestinians are allowed in them is to either to work on
their construction or for other forms of menial labor," the UC Divestment Campaign maintains. "The
settlements are built on land illegally expropriated from Palestinians."
"The
Palestinians are the native population," it continues, pointing out that in 1890, Palestine was
only seven percent Jewish. White South Africans who justified apartheid and Israelis who
rationalize the occupation also correspond in that they both "believed their claim to land to be
superior to that of the natives, and that co-existence based on equality was not possible,"
according to the UC Divestment Campaign.
While Israeli divestment campaigns have been
characterized as anti-Semitic by some critics, Rabbi Liebling does not share this belief.
"I do not consider the divestment campaigns anti-Semitic--it's not a useful label," he told
SocialFunds.com. "We all want the same outcome of peace between Israel and Palestine, it's just a
question of how to get there."
Part two of this two-part
article examines the Presbyterian Church USA's policy of "phased, selective divestment" and the
Episcopal Church's decision not to divest.
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