Settlement businesses weigh Palestinian ban impact

MISHOR ADUMIM, West Bank (Reuters) - Israeli entrepreneurs at an industrial park in the occupied West Bank are rethinking their business strategies to deal with a Palestinian boycott of goods made in Jewish settlements.

Concurrently, businesses are furious at the Israeli government, saying a stricter enforcement of labor law that forces them to pay Palestinians the minimum Israeli wage is more damaging than Palestinian trade and labor sanctions.

The Mishor Adumim industrial complex and other factories built in or near settlements in the West Bank, is one of the targets of a new Palestinian ban on goods produced in occupied territory and on commercial ties with their manufacturers.

"The damage from a Palestinian boycott is not such that it could force a factory to close, but the industrial zones beyond the Green Line (Israel's pre-occupation frontier) have sustained several blows lately," Avi Elkayam, a restaurateur who chairs the Mishor Adumim manufacturers' committee, told Reuters.

Although some factories lay derelict in Mishor Adumim, on the road from Jerusalem to the Jordan valley and Dead Sea, Elkayam said it was not due to the Palestinians.

The local settlement authority, he said, was not providing tax breaks to counter the anticipated loss in revenue from any boycott and Israel's minimum wage law, which was applied to Palestinian laborers had raised overheads.

"Factories moved here because the labor was cheap, as it used to be Jordanian-administered land and they could pay workers 150 shekels (about $40) per day. But now the law forces them to pay a minimum wage, even retroactively," he said.

Hanna Zohar, who runs an Israeli organization that looks out for workers' rights said the employers had never adhered to the minimum wage law which was enacted in the 1980s and only a recent supreme court ruling has forced a change.

"The Palestinian workers have always been entitled to employment conditions under Israeli law, they can now claim those rights and retroactive payment up to seven years back," Zohar told Reuters.

MOVING BUSINESS

Assi, a partner in a family-owned stone and marble works who declined to be identified beyond his first name, said Jewish industrialists were weighing a transfer to Israel because it was becoming too problematic to operate in settlements -- even under Prime Minister Benjamin Netanyahu's pro-settler government.

"We have to do what we can to survive, we don't believe in government support because we don't get any and we don't expect to get any," he said. "The government has abandoned us. We have received no tax breaks and life is getting harder for us here."

Elkayam said that one factory had already relocated to an industrial zone in central Israel, but Assi voiced confidence there were ways to stay put and circumvent boycotts by both Palestinians and in some of Israel's foreign export markets.

"We will simply move our products to Jerusalem and package them in such a way so that nobody will think they have come from areas beyond the Green Line," he said.

"Both sides know the truth and they know also that nobody will be able to enforce a law that neither side wants."

After 1948, the Green Line separated the new state of Israel from the Jordanian-held West Bank and East Jerusalem. Both were captured and occupied by Israel in the Six Day War of 1967, along with the Gaza Strip. Palestinians want to establish a state in those areas and say settlements are an obstacle.

The Palestinian Authority hopes its boycott will undermine the viability of Jewish enclaves on occupied land. It has given Palestinian workers until the end of the year to quit their jobs in Israeli businesses in the West Bank.

Some 4,500 Palestinians work in the Mishor Adumim industrial park, which has dozens of factories and workshops making products that include construction materials, plumbing fixtures and aluminum frames. None agreed to be interviewed.

Palestinian officials say some 25,000 Palestinians are employed in settlements in the West Bank and East Jerusalem, where 500,000 Jews live among 3 million Palestinians.

Citing tough economic realities, Elkayam predicted Palestinians would find a way to stay and work at Mishor Adumim because "they need to support their families."

(Additional reporting by Tom Perry in Ramallah, Editing by Jeffrey Heller and Samia Nakhoul)