JERUSALEM Jan 8 A major pension fund manager
based in the Netherlands said on Wednesday it will divest from
five Israeli banks over their dealings with Jewish settlements
on occupied land.
The decision by PGGM reflects tension between Israel and the
European Union over doing business with Israeli institutions
involved in settlements in the West Bank and East Jerusalem.
Its step was swiftly welcomed by the Palestinians.
PGGM did not immediately provide a figure for its
investments in the five banks. Israel's Ha'aretz newspaper
estimated its dealing with Israeli banks to amount to tens of
millions of Euros.
The lenders involved - Bank Hapoalim, Bank Leumi, First
International Bank of Israel, Israel Discount Bank and Mizrahi
Tefahot Bank - declined comment.
"For several years, PGGM has been in dialogue with these
banks. The reason for this engagement was their involvement in
financing Israeli settlements in the occupied Palestinian
territories," PGGM said in a statement.
"This was a concern, as the settlements in the Palestinian
territories are considered illegal under international
humanitarian law," PGGM said.
PGGM is among the Netherlands' largest pension fund
managers, with assets in excess of 153 billion Euros ($210
"Boycotts must be used to put pressure on the occupation
state (Israel) so that it pays a dear price for its continuing
occupation of Palestinian land and violation of international
law," Palestinian MP Qais Abdul Kareem said in a statement.
Palestinian officials, who despite engaging with Israel in
difficult U.S.-backed peace talks to establish an independent
state, have warned Israel that they may soon bring Israel before
the International Criminal Court over its settlement policies.
The officials welcomed PGGM's move, and the decision in the
last two months of two Dutch companies to suspend dealings with
Israeli counterparts to build water facilities on occupied land.
The settlements are built in areas Israel captured in a 1967
war and which are now home to more than 500,000 Israelis.
Palestinians want the land for part of a future state.
Israel, citing security concerns and historic and Biblical
links to the territory, says it intends to keep some settlements
in any future peace deal.
Relations between Israel and the EU, its biggest economic
partner, have grown rockier in recent years, with the EU
becoming more vocal in its criticism of Jewish settlements,
saying they imperil the chances of peace with the Palestinians.
Tensions mounted in July when the EU's Executive Commission
announced it would bar financial assistance to any Israeli
organisation operating in the West Bank from 2014.
The announcement threatened to disqualify Israel from a
prestigious EU scientific research project, but it joined after
the two sides reached a compromise in November which allowed
Israel to say it rejected the new guidelines.
Some Palestinians have championed what they call the
Boycott, Divestment and Sanctions Movement to convince
international institutions to cut ties with Israel in criticism
for its treatment of Palestinians.
Israeli officials reject those efforts, saying they apply a
double standard Israel and are aimed at delegitimising it as a
Palestinian president Mahmoud Abbas said in December he
backed a boycott of the settlements, but not of Israel itself.
But top Israeli peace negotiator Tzipi Livni last month
described the conflict with the Palestinians as "the glass
ceiling of Israel's economy," saying it would start with Israeli
settlements but could move to other Israeli business interests.
"It won't end there. The boycott is moving and advancing
uniformly and exponentially," Livni was quoted as saying by the
Israeli Yedioth Ahranoth newspaper.
(Additional reporting by Sara Webb in Amsterdam; Editing by