The billion-dollar industry of Israeli illegal settlements

NAJLA M. SHAHWAN
Published 03.01.2020 02:00
A view of Palestinian houses in the village of Wadi Fukin with the Israeli settlement of Beitar Illit in the background, the occupied West Bank, June 19, 2019. REUTERS
A view of Palestinian houses in the village of Wadi Fukin with the Israeli settlement of Beitar Illit in the background, the occupied West Bank, June 19, 2019. REUTERS

The EU Court of Justice recently ruled that products from settlements must provide an "indication of that provenance" to better inform consumers. The ruling pertains to products imported from settlements in the occupied east Jerusalem, West Bank and the Golan Heights, all captured by Israel in the 1967 Six-Day War.

The ruling will pass into law the labeling of settler products, which had previously been only advisory by the EU and left to the individual purview of its 28 member states. "Foodstuffs originating in territories occupied by the state of Israel must bear the indication of their territory of origin, accompanied – where those foodstuffs come from a locality or a group of localities constituting an Israeli settlement within that territory – by the indication of that provenance," the Court of Justice of the European Union said.

It clarified that the word "settlement" would now have to be included on consumer labels for Israeli goods produced in east Jerusalem, the Golan Heights and the West Bank settlements.

The judicial decision strengthens the legal argument in Europe against settlements, particularly the stance that settlements exemplify "population transfer," something that is illegal under international humanitarian law.

After Israel's military occupation of East Jerusalem and the West Bank in June 1967, the Israeli government began establishing settlements in the occupied Palestinian territories. From the outset, private businesses have been involved in Israel's settlement policies, benefiting from and contributing to them.

In fact, the physical footprint of Israeli business activity in the West Bank is larger than that of residential settlements. In addition to commercial centers inside settlements, there are approximately 20 Israeli-administered industrial zones in the West Bank covering about 1,365 hectares, and Israeli settlers oversee the cultivation of more than 9,300 hectares of agricultural land. In comparison, the built-up area of residential settlements covers 6,000 hectares – although their municipal borders encompass a much larger area.


Violation of international law

Israeli settlements in the West Bank violate the laws of occupation as the Fourth Geneva Convention prohibits an occupying power from transferring its citizens into the territory it occupies and from transferring or displacing the population of an occupied territory within or outside the territory. Besides, the Rome Statute, the founding treaty of the International Criminal Court, establishes the court's jurisdiction over war crimes including the crimes of transfer of parts of the civilian population of an occupying power into occupied territory and the forcible transfer of the population of an occupied territory.

Israel's confiscation of land, water and other natural resources for the benefit of settlements and residents of Israel also violates the Hague Regulations of 1907, which prohibit an occupying power from expropriating the resources of occupied territory for its own benefit. In addition, Israel's settlement project violates international human rights law as Israel uses its discriminatory policies against Palestinians that govern virtually every aspect of life in the area of the West Bank under Israel's exclusive control, known as Area C, and forcibly displace Palestinians by encouraging the growth of Jewish settlements.

Human Rights Watch's views are that by virtue of doing business in or with settlements or settlement businesses, companies contribute to one or more of these violations of international humanitarian law and human rights abuses. Settlement businesses depend on and benefit from Israel's unlawful confiscation of Palestinian land and other resources and facilitate the functioning and growth of settlements.

Settlement-related activities also directly benefit from Israel's discriminatory policies in planning and zoning, the allocation of land, natural resources, financial incentives and access to utilities and infrastructure. These policies result in the forced displacement of Palestinians, placing them at an enormous disadvantage in comparison with settlers. Israel's discriminatory restrictions on Palestinians have harmed the Palestinian economy and left many Palestinians dependent on jobs in settlements – a dependency that settlement proponents then cite to justify settlement businesses.


Discriminative policies

Israel operates a two-standard system in the West Bank as it provides preferential treatment to Jewish Israeli settlers while it imposes harsh conditions on Palestinians. Israeli courts apply Israeli civil law to settlers, affording them legal protections, rights and benefits not enjoyed by their Palestinian neighbors, who are subject to Israeli military law, even though under international humanitarian law, military law governs the occupied territories regardless of citizenship.

On the one hand, Israel provides settlers, and in many cases settlement businesses, with land, water infrastructure, resources and financial incentives to encourage the growth and development of settlements.

On the other hand, Israel confiscates Palestinian land, forcibly displaces Palestinians, restricts their freedom of movement, precludes them from building in most of the West Bank under Israeli administrative control and strictly limits their access to water and electricity.


Besides, Israel's ongoing confiscation of land for settlements and settlement businesses violates international law, regardless of whether the land was previously privately held, "absentee land" or so-called "state land." Settlement businesses also play a vital role in sustaining the settlements, thereby facilitating and benefitting from Israel's violation of international law and contributing to Israel's discrimination against Palestinians in the West Bank.

Labor abuse

While all settlement-related business activity conflicts with international standards on the human rights responsibilities of businesses, regardless of labor conditions, the lack of clear labor protections for Palestinians working in settlements creates a high risk of discriminatory treatment and other abuses. Israeli courts apply Israeli civil law to settlers, while Palestinians are subject to Jordanian law, as it existed at the start of the occupation in 1967, except as amended by military order. In 2007, Israel's Supreme Court ruled that, in the case of labor laws, this two-track legal system is discriminatory, and Israeli law should govern employment conditions of Palestinians in settlements, giving Palestinian employees the right to sue their employers in Israeli courts for violations of Israeli labor laws. However, the government did not implement this ruling and claims it cannot investigate and enforce compliance with these laws.

The complete lack of government oversight as well as Palestinian workers' dependency on Israeli-issued work permits, which can be annulled at any time, creates an enabling environment for settler employers to pay Palestinian workers below Israel's minimum wage and deny them the benefits they provide to Israeli employees of settlers.

The World Bank estimates that discriminatory Israeli restrictions in Area C of the West Bank, most of which are directly linked to Israel's settlement and land policies, cost the Palestinian economy more than $3.4 billion a year. These restrictions drive up unemployment and drive down wages in areas of the West Bank. Farmers in Area C are particularly hard hit by Israel's unlawful and discriminatory land and water policies, causing many to lose their traditional livelihoods. As a result, many Palestinians are left with no choice but to seek employment in settlements, providing a steady source of cheap labor for settlement companies.

Settlement industry

Israeli agriculture in the West Bank centers around three areas: between Qalqilya and Tulkarm, between Jenin and Qabatiya and in the occupied part of Jordan Valley. Nearly 63% of the agricultural land in the West Bank is located in Area C, the part of the West Bank that is controlled solely by Israel, in which it prevents Palestinian construction and carries out the majority of its demolitions and land confiscations.

The occupied area of the Jordan Valley is about 2,400 square kilometers. It is situated in the eastern part of the West Bank and accounts for some 28.5% of its size. With its favorable climate, fertile land and plentiful water supply, the occupied Jordan Valley is the main agricultural area in the West Bank and the whole of the occupied Palestinian territories. Although the Israeli settlements in the Jordan Valley have a relatively small population, 86% of the land falls under the jurisdiction of their regional councils.

Palestinian communities, which had been involved in agricultural production in the occupied Jordan Valley and Dead Sea area before 1967, have since been expelled from their lands and are currently unable to reach them.

The occupied part of the Jordan Valley is one of the most restricted areas of the West Bank in terms of freedom of movement. It is almost entirely cut off from many Palestinian cities by checkpoints, roadblocks and dozens of kilometers of trenches and earth walls. Palestinian farmers also have restricted access to east Jerusalem and Gaza Strip markets.

According to the Palestinian Ministry of Agriculture, the overall productivity loss in Jordan Valley due to these measures is around 30%. The cultivated area of Jordan Valley is approximately 32 square kilometers, cultivated by settlers from the 21 settlements in the occupied part of the valley, 17 of which are villages and kibbutzim that make their living from agriculture, and the other four are communal settlements that have also been granted land for agricultural cultivation by the Israeli state.

There are many Israeli and international companies actively operating from settlements and openly accessing the world market.

The Israeli Industrial Zones (IZs) either situated inside or in close proximity to illegal Israeli settlements in the occupied Palestinian territories are special zones planned for the purpose of industrial development and manufacturing. These IZs house a wide spectrum of export-oriented Israeli manufacturers and a smaller number of international corporations.

Israeli IZs constitute a foundational pillar of the economy of the occupation and contribute to the economic development of the settlements relying on the de-development of the Palestinian economy and the exploitation of Palestinian land and labor.

EU trade with settlements

Although the EU is very clear that settlements are illegal and an obstacle to peace, it continues to trade with Israeli settlements. The main part of settlement exports are fruits and vegetables, but they also export processed foods, wine, flowers, toiletries, cosmetics, textiles, plastic products, metal products and chemicals.

Although official export and import statistics do not reveal the value of settlement trade with the EU, Israel estimates that the EU imports products from the settlements to a value of more than 300 million euros ($336 million) per year.

Trade boosts the settlement economy and producers, solidifying the position of these illegal Israeli towns in the occupied West Bank. For years there has been in Europe growing concern that such economic links exacerbate the situation created by settlements.

In 2005, Israel and the EU agreed that the customs documents for goods imported into the EU would bear the name of the city, village or industrial zone where production took place and that products from those areas brought under the Israeli administration since 1967 will not receive preferential treatment.

In 2010, the European Court of Justice (ECJ) ruling backed up this measure.

As the main export of Israeli settlements is agricultural products, EU legislation is very clear on the labeling of fruit and vegetables sold in Europe, including that which is imported into the common market.

The EU says that the country of origin must be clearly marked on fresh fruits and vegetables. There also exists more general EU legislation, which prohibits unfair commercial practices and the misleading of consumers. These regulations are not restricted to fruits, vegetables and foodstuffs and concern all products sold in the EU.

In November 2015, the EU issued guidelines on labeling products from settlements requiring mandatory labeling of agricultural products and cosmetics produced in Israeli settlements. Some countries including the U.K., Denmark and Belgium already have voluntary labeling guidelines in place. Outside of the EU, South Africa adopted a regulation to prevent the labeling of goods from settlements as being produced in Israel.

However, this step alone was not sufficient to tackle the root cause of many violations and to fulfill states' obligations vis a vis the illegality of settlements. The latest ruling of the European Court of Justice (ECJ) in November 2019 reaffirmed the recommendations issued by the European Commission in 2015, which said products could not be labeled as "Made in Israel "if it had been made outside Israel's 1967 borders, in the occupied Palestinian territories.

The EU's position has always been firm considering that the lands, including east Jerusalem, the West Bank and the Golan Heights, Israel had occupied since the 1967 Six-Day War are not part of the internationally recognized borders of Israel.

* Palestinian author, researcher and freelance journalist; recipient of two prizes from the Palestinian Union of Writers

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