Bulldozers manufactured by Caterpillar “were being used by Israeli authorities in the widespread unlawful destruction of Palestinian property” [GETTY]
Norway’s $2 trillion wealth fund, the world’s largest, said on Monday it has divested from US construction equipment group Caterpillar, as well as five Israeli banking groups, on ethics grounds.
The five banks are Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel, and FIBI Holdings, the fund said in a statement.
The six groups were excluded “due to an unacceptable risk that the companies contribute to serious violations of the rights of individuals in situations of war and conflict”, said the fund, which Norway’s central bank operates.
Caterpillar, Hapoalim, First International Bank of Israel and Bank Leumi did not immediately reply to emailed requests for comment.
Mizrahi Tefahot and FIBI Holdings were not reachable outside of normal business hours.
Before its divestment, the fund held a 1.17 percent stake in Caterpillar valued at $2.1 billion as of 30 June, its records showed.
The stakes in the five Israeli banks were valued at a combined $661 million, also as of 30 June, according to fund data.
Caterpillar
The fund’s ethics watchdog, called the Council on Ethics, said that “in the council’s assessment, there is no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law”.
Bulldozers manufactured by Caterpillar “were being used by Israeli authorities in the widespread unlawful destruction of Palestinian property”, it said.
The violations were taking place both in Gaza and the West Bank, the council said, adding that “the company has also not implemented any measures to prevent such use”.
“As deliveries of the relevant machinery to Israel are now set to resume, the Council considers there to be an unacceptable risk that Caterpillar is contributing to serious violations of individuals’ rights in war or conflict situations.”
The council, a public body set up by the Ministry of Finance, checks that firms in the portfolio of the fund meet ethical guidelines set by Norway’s parliament. The fund is invested in some 8,400 companies worldwide.
It makes recommendations to the board of the central bank, which has the final say. The board agreed with the council’s recommendation.
The Norwegian fund announced on 18 August that it would divest from six companies as part of an ongoing ethics review over the war on Gaza and developments in the West Bank, but declined at the time to name any groups until the stakes were sold.
Banks
On the banks, the ethics watchdog had initially been scrutinising Israeli banks’ practice of underwriting Israeli settlers’ housebuilding commitments in the region.
On Monday, the council said all the banks excluded had, “by providing financial services that are a necessary prerequisite for construction activity in Israeli settlements in the West Bank, including East Jerusalem…contributed to the maintenance of Israeli settlements”.
Around 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem.
Many settlements are adjacent to Palestinian areas, and some Israeli firms serve both Israelis and Palestinians.
The United Nations’ top court last year found that Israeli settlements built on territory seized in 1967 were illegal, a ruling that Israel called “fundamentally wrong”, citing historical and biblical ties to the land.
