The UN “blacklist” of Israeli commercial enterprises: Should It be taken seriously?
By Amb. Alan Baker
web posted August 17, 2020
With the February 2020 publication by the UN High Commissioner for Human Rights of a “blacklist” of Israeli and other commercial enterprises functioning in the territories, several questions have arisen as to whether such a blacklist has any legal basis, and if it is not incompatible with accepted norms and principles of international law.
What is familiarly termed “the UN blacklist of Israeli companies” is more fully defined in formal UN terminology as a “database of all business enterprises involved in certain specified activities related to the Israeli settlements in the Occupied Palestinian Territory, to be updated annually.”
Background – UN Human Rights Council
The database originated in a series of documents generated by the UN Human Rights Council, an intergovernmental body made up of 47 member states, including such “paragons of international humanitarian virtue” as Libya, Mauritania, Sudan, Indonesia, Qatar, Somalia, Togo, Angola, Senegal, Bahrain, Pakistan, Afghanistan, Bangladesh, Venezuela, and Cameroon.
The few democratic countries in the Council – a small minority – are Germany, Netherlands, Austria, Denmark, Italy, Australia, Spain, Brazil, Argentina, Mexico, Poland, Bulgaria, Czech Republic, and Slovakia.
The Council was established in 2006 following the failure and dissolution of its predecessor, the UN Human Rights Commission, which became discredited due to its ineffectiveness, its politicization, and the inclusion of human rights violators among its membership.
Regrettably, the present Human Rights Council appears to be following in the same politicized footsteps of its predecessor, after having resolved, upon its establishment in 2006, to devote a specific agenda item to only Israel as a permanent feature of every Council session, entitled “Human rights situation in Palestine and other occupied Arab territories.”
One might have expected that such a potentially vital and central UN organ would function according to the aims set out in its constitutive General Assembly resolution 60/251 of April 3, 2006:
be responsible for promoting universal respect for the protection of all human rights and fundamental freedoms for all, without distinction of any kind and in a fair and equal manner (paragraph 2);
and
address situations of violations of human rights, including gross and systematic violations, and make recommendations thereon. It should also promote the effective coordination and the mainstreaming of human rights within the United Nations system (paragraph 3).
One might also have expected that the precise instructions set out in paragraph 4 of this constitutive resolution as to how the Council should function, would have served as a beacon for its performance:
the work of the Council shall be guided by the principles of universality, impartiality, objectivity and non-selectivity, constructive international dialogue and cooperation, with a view to enhancing the promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development;
Regrettably, and based on the motley collection of non-democratic states comprising the main bulk of its membership, this UN organ, despite its declared and noble aim, as proclaimed on its internet home page of being “responsible for the promotion and protection of all human rights around the globe,” has become utterly compromised politically.
This places in question its very credibility and integrity as the leading human rights agency in the UN system of organizations. In fact, such politicization prejudices its capability of genuinely protecting human rights anywhere.
The HRC’s evident political fixations with singling out Israel and minimizing and even ignoring real human rights issues throughout the world are major factors in rendering the Council as a defective and ineffective body, lacking any credibility or professional integrity.
Development of the Database/Blacklist
The 2012 UN Fact-Finding Mission to Investigate Implications of Settlements
By its resolution 19/17 dated March 19, 2012, the Human Rights Council decided to dispatch an “Independent International Fact-Finding Mission to Investigate the Implications of the Israeli Settlements on the Civil, Political, Economic, Social and Cultural Rights of the Palestinian people throughout the Occupied Palestinian Territory, including East Jerusalem.” The resolution was sponsored by a curious and motley group of “democratic” and “humanitarian-conscious” states including the “Plurinational State of Bolivia,” Cuba, Palestine, Mauritania (on behalf of the Arab Group), Pakistan (on behalf of the Organization of Islamic Cooperation) and the “Bolivarian Republic of Venezuela.”
Thirty-six states supported the resolution, including Austria, Belgium, Chile, China, India, Jordan, Mexico, Norway, Nigeria, Peru, Philippines, Russia, Switzerland, and Thailand. Ten states abstained, including Hungary, Italy, Poland, Czech Republic, Cameroon, Costa Rica, Moldova, Romania, and Spain.
Only the United States voted against it.
The fact-finding commission’s report was subsequently published on February 7, 2013, and sets out in its paragraph 96 a list of activities carried out by business enterprises in the territories that it considers “have, directly and indirectly, enabled, facilitated and profited from the construction and growth of the settlements,” and that “raise particular human rights concerns.”
This list refers to enterprises dealing in the following fields:
- The supply of equipment and materials facilitating the construction and the expansion of settlements and the wall, and associated infrastructure;
- The supply of surveillance and identification equipment for settlements, the wall and checkpoints directly linked with settlements;
- The supply of equipment for the demolition of housing and property, the destruction of agricultural farms, greenhouses, olive groves, and crops;
- The supply of security services, equipment, and materials to enterprises operating in settlements;
- The provision of services and utilities supporting the maintenance and existence of settlements, including transport;
- Banking and financial operations helping to develop, expand or maintain settlements and their activities, including loans for housing and the development of businesses;
- The use of natural resources, in particular water and land, for business purposes;
- Pollution, and the dumping of waste in or its transfer to Palestinian villages;
- Captivity of the Palestinian financial and economic markets, as well as practices that disadvantage Palestinian enterprises, including through restrictions on movement, administrative and legal constraints;
- The use of benefits and reinvestments of enterprises owned totally or partially by settlers for developing, expanding, and maintaining the settlements.
The concept of publishing a database emanates from a recommendation in paragraph 117 of the report:
Private companies must assess the human rights impact of their activities and take all necessary steps – including by terminating their business interests in the settlements – to ensure that they do not have an adverse impact on the human rights of the Palestinian people, in conformity with international law as well as the Guiding Principles on Business and Human Rights.
The mission calls upon all Member States to take appropriate measures to ensure that business enterprises domiciled in their territory and/or under their jurisdiction, including those owned or controlled by them, that conduct activities in or related to the settlements respect human rights throughout their operations.”
2011 Report of Special Representative of the Secretary-General on Guiding Principles on Business and Human Rights
The ideological basis for the database emanates from a 2011 UN report urging commercial enterprises to adhere to human rights norms as set out in a non-obligatory “Guiding Principles” document presented to the Human Rights Council by Prof. John Ruggie. Ruggie is a Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government and serves as Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises.
These Guiding Principles are based on an expectation, set out in the introduction that states should
respect, protect and fulfill human rights and fundamental freedoms; that business enterprises as specialized organs of society performing specialized functions, should comply with applicable laws and respect human rights; that rights and obligations are to be matched to appropriate and effective remedies when breached; and that these Guiding Principles apply to all States and to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership, and structure.
However, as to the legal nature of the Guiding Principles, the introductory paragraphs state:
Nothing in these Guiding Principles should be read as creating new international law obligations, or as limiting or undermining any legal obligations a State may have undertaken or be subject to under international law with regard to human rights.
These Guiding Principles should be implemented in a non-discriminatory manner, with particular attention to the rights and needs of, as well as the challenges faced by, individuals from groups or populations that may be at heightened risk of becoming vulnerable or marginalized, and with due regard to the different risks that may be faced by women and men.
Interestingly, during the initial attempts to draft “norms for transnational corporations and other business enterprises,” there was considerable debate and controversy as to whether it was legally possible, or advisable, to impose on commercial companies, directly under international law, the same range of human rights duties that states have accepted for themselves under treaties they have ratified “to promote, secure the fulfillment of, respect, ensure respect of and protect human rights.”
Ultimately the Human Rights Council preferred to draft the above non-binding “guiding principles.”
The Database Itself
Based on the recommendations of the fact-finding mission and the abovementioned “Guiding Principles on Business and Human Rights,” the Human Rights Council, in its resolution 31/36 of March 24, 2016, entitled “Israeli settlements in the Occupied Palestinian Territory, including East Jerusalem, and in the occupied Syrian Golan,” requested the UN High Commissioner for Human Rights to produce the database.
In the resolution’s operative paragraph, the Council requested:
the United Nations High Commissioner for Human Rights, in close consultation with the Working Group on the issue of human rights and transnational corporations and other business enterprises, in follow-up to the report of the independent international fact-finding mission to investigate the implications of the Israeli settlements on the civil, political, economic, social and cultural rights of the Palestinian people throughout the Occupied Palestinian Territory, including East Jerusalem, and as a necessary step for the implementation of the recommendation contained in paragraph 117 thereof, to produce a database of all business enterprises involved in the activities detailed in paragraph 96 of the afore-mentioned report, to be updated annually, and to transmit the data therein in the form of a report to the Council at its thirty-fourth session.
The listed co-sponsors on the resolution creating the blacklist were virtually all tyrannies or other non-democracies with egregious records on human rights, who oppose any positive human rights mechanisms at the UN. These countries include Kuwait on behalf of the 22-member Arab Group, Pakistan on behalf of the 56-nation Organization of Islamic Cooperation, Sudan, Venezuela, Algeria, Bahrain, Bolivia, Chad, Cuba, Djibouti, Ecuador, Egypt, and Libya.
Fifteen UNHRC members refused to support the blacklist, including Belgium, France, Germany, Netherlands, and United Kingdom.
The European Union opposed the blacklist provision and attempted unsuccessfully to persuade the Palestinians to remove that paragraph in return for EU support of the rest of the resolution.
Likewise, most of the 32 countries who voted for the resolution were also non-democracies, including Algeria, Bangladesh, Bolivia, Burundi, China, Congo, Côte d’Ivoire, Cuba, Ecuador, El Salvador, Ethiopia, Indonesia, Kyrgyzstan, Maldives, Morocco, Qatar, Russia, Saudi Arabia, United Arab Emirates, Venezuela, and Viet Nam.
After considerable delays in devising the list, the former UN High Commissioner for Human Rights, Jordanian Prince Zeid Ra’ad Al Hussein, an avowed opponent of Israel, completed the actual database, which was submitted by his successor, Dr. Michelle Bachelet Jeria, former president of Chile, to the UN Human Rights Council on February 12, 2020.
In its press release announcing the publication of the database, the UN human rights office stated very clearly:
The report makes clear that the reference to these business entities is not, and does not purport to be, a judicial or quasi-judicial process. While the settlements as such are regarded as illegal under international law, this report does not provide a legal characterization of the activities in question, or of business enterprises’ involvement in them. Any further steps with respect to the continuation of this mandate will be a matter for the Member States of the Human Rights Council….”
The database identifies 112 business enterprises, including such companies as Airbnb; Angel Bakeries; banking institutions including Hapoalim, Leumi, Mizrachi-Tfachot and Israel Discount Bank; Bezeq telecommunications corporation; the Café-Café restaurant chain; Delek fuel group; the Egged bus company; Hot and Yes telecommunications; Israel Railways; Mekorot water company; Motorola; Paz oil company; Rami Levy supermarkets; and others.
Legal Aspects of the Database
- As stated above, the database is not an obligatory mechanism. It is nothing more than a series of recommendations to states as to how to advise or direct commercial enterprises registered in their countries, in respect to activities in the territories that might be perceived as contributing to Israel’s settlement policies, and as such, to allegedly violating Palestinian human rights.
- The Human Rights Council has no jurisdiction or standing vis-à-vis private entities/business enterprises, and its recommendations regarding commercial activities in the territories are nothing more than suggestive guidance. The Council cannot oblige the states to boycott Israeli companies. It is acknowledged by Western diplomats that such a selective and discriminatory database could set a harmful precedent by blurring the lines between business and human rights on issues that are better left to trade policy than the Human Rights Council.
- Under the UN Charter Article 41, the sole international authority authorized to impose sanctions on a UN member state, including “complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations” is the UN Security Council.
Such authorization can only be exercised in the event of a Security Council resolution pursuant to Chapter VII of the UN Charter dealing with threats to the peace, breaches of the peace, and acts of aggression. This chapter has never been invoked regarding Israel.
As such, the creation of the blacklist calling for economic sanctions against commercial enterprises functioning in the territories, specifically designed to pressure Israel economically, is beyond the authority and jurisdiction of the Human Rights Council, being a UN body.
- The blacklist is discriminatory inasmuch as it exclusively targets Israel. The creation of a database of companies doing business in Israeli settlements, while ignoring all companies doing business in other territories considered to be occupied, such as Turkey’s occupation of North Cyprus, Moroccan occupation of Western Sahara, and Russian occupation of parts of Ukraine. Such a measure is a form of selective discrimination, contrary to the Human Rights Council’s own foundational principles of “universality, impartiality, objectivity, and non-selectivity,” as set out in its founding General Assembly Resolution 60/251.
- In a 2002 legal opinion, the UN legal adviser Hans Corell concluded that foreign companies taking Moroccan contracts to do business in Western Sahara do not violate international law, even when such plans are opposed by the “protected persons,” so long as the business in question does not ‘disregard’ the interest of those protected persons. The EU has relied on this opinion in allowing its businesses to operate in Western Sahara.”
- Prof. Eugene Kontorovich, in a 2015 article on “Economic Dealings with Occupied Territories,” observed:
The international law of belligerent occupation regulates the exercise of sovereign power by an occupying power. It does not regulate activities of private entities conducting business or academic programs in occupied territories. This is amply demonstrated in both formal sources of international law (legal texts and opinions) and extensive state practice, including the EU’s own official activities – funding Turkish and Moroccan occupiers of Northern Cyprus and Western Sahara.”
- In a 2007-2013 case before the Court of Appeals of Versailles in France, two French transport companies, Veolia and Alstom that were contracted to construct a light railway connecting points throughout Jerusalem and serving Arab and Israeli residents, were sued by the PLO and a French pro-Palestinian advocacy group “Association France-Palestine Solidarité.” In 2013, the Court of Appeals at Versailles ruled in favor of the French companies and ordered the Palestinian groups to pay $117,000 in legal costs to the French companies.
In its 32-page verdict, the court held that a company doing business or establishing infrastructure (a light railway) in east Jerusalem in no way violates international law. The court affirmed that while an occupying power is bound by certain restrictions, private entities are not, even when they are in contractual arrangements with occupation authorities. The court found that the international agreements in question create obligations between states, and could not be used to hold two private companies liable.
- A recent study by the Foundation for Defense of Democracies, entitled “Occupied Elsewhere: Selective policies on Occupations, Protracted Conflicts and Territorial Disputes” by Svante Cornell and Brenda Shaffer, examined business policies of states and companies in occupation situations in Crimea, Donbas, Northern Cyprus, Kashmir, Armenia – Azerbaijan, the West Bank, South Ossetia, Abkhazia, Transnistria, and Western Sahara.
The study asserts that “policies are selective and often reveal biases that underscore deeper problems in the international system.” “Such standards not only create confusion and reveal biases, but also constitute a business and legal risk. “
- Finally, the UN Human Rights Council’s blacklist undermines the very basis of the peace negotiation process between the PLO and Israel, and specifically the 1993-1995 Oslo Accords.
Private companies may find themselves in especially difficult positions, since they are often ill-equipped to navigate such complex geopolitical disputes. Yet they are often forced to take a stand when deciding whether to do business in conflict zones. NGOs or even the United Nations may pressure a company to join a boycott, yet doing so can create legal liabilities. Increasingly, the parties to another conflict are inclined to take legal action to counter disparate treatment. There is a growing need for a new professional field that can help businesses make informed decisions and understand the far-reaching consequences of their policies.
The 1993 Declaration of Principles on Interim Self-Government Arrangements (Oslo 1), in its third annex – the Protocol on Israeli-Palestinian Cooperation in Economic and Development Programs – calls for cooperation in fields of finance, transport, trade, industrial development, and regional development programs.
These fields of cooperation were encapsulated into reciprocal commitments in the 1995 Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip (Oslo 2), and specifically in its sixth annex – the Protocol concerning Israeli-Palestinian Cooperation Programs. The Annex includes principles for economic cooperation in fields of environment, science and technology, tourism, energy, transport, and industry.
This agreement also includes an article, inspired by the Norwegian government, devoted to “People-to-People Programs” aimed at enhancing dialogue, interchange, and interaction between the two peoples.
Clearly, the UN blacklist advocating boycott and economic sanctions is the very antithesis of the signed agreements and peace negotiation process between the Palestinians and Israel. It serves to undermine that process and, in effect, renders the United Nations as a destructive and damaging factor in the process, rather than as the uniting and constructive framework that it was intended to be.
Above all, it runs contrary to the fact that the UN, the EU, and other states and leaders all signed the Oslo Accords as witnesses and also supported UN resolutions endorsing the peace negotiation process.
Conclusion
While, as stated above, the UN blacklist has no legal teeth, nevertheless, by publicizing a listing of companies maintaining commercial relations in the territories and in calling to boycott such companies, it is blatantly attempting to harm such companies, and in so doing, to harm Israel.
Each company listed is urged to examine its business relationships with companies in the EU and other countries, especially those member-states of the UN Human Rights Council that supported the blacklist, with a view to checking if the blacklist is being activated against them.
Since, in many instances, acts of commercial boycott are prohibited by national law in the respective countries, those companies listed should check local legislation to see if the blacklist violates local anti-boycott legislation. (In the United States, there exists such legislation.) The companies might wish to seek appropriate local legal advice as to possible legal remedies and actions that may be taken against any state or company that implements the blacklist and cancels transactions or other financial relationships.
On the national level, the government of Israel should directly appeal to state members of the UN Human Rights Council and other UN bodies with a view to prevent activation of the blacklist by companies registered in their territory.
Such an appeal should reflect and stress the politicized nature and ulterior political motivation behind the blacklist, as well as the damage that an organized boycott against Israel could do, both to the peace process as well as to individual bilateral relations between Israel and the states concerned. 
Amb. Alan Baker is Director of the Institute for Contemporary Affairs at the Jerusalem Center and the head of the Global Law Forum. He participated in the negotiation and drafting of the Oslo Accords with the Palestinians, as well as agreements and peace treaties with Egypt, Jordan, and Lebanon. He served as legal adviser and deputy director-general of Israel’s Ministry of Foreign Affairs and as Israel’s ambassador to Canada.