Scandinavian financial institutions drop Elbit due to BDS pressure

Adri Nieuwhof, February 2010

Despite Israel's oppressive tactics against it, the boycott, divestment and sanctions (BDS) movement has marked additional victories with many institutional investors divesting from or blacklisting Israeli military contractor Elbit Systems. One of the largest Dutch pension funds told The Electronic Intifada today that it is selling off its shares in Elbit.

The wave of divestment follows campaigning by Palestinian organizations and international solidarity activists to divest from companies profiting from the Israeli occupation.

A crucial role was played by the Palestinian Stop the Wall Campaign in convincing the Norwegian State Pension Fund to divest from Elbit Systems last September. In response, Israel detained campaign activist Mohammad Othman after he returned from a trip to Norway where he met Minister of Finance Kristin Halvorsen. Subject to office raids and its activists arrested, Stop the Wall has become a key target of Israeli attempts to suppress the nonviolent movement BDS. However, these repressive tactics haven't stopped the BDS momentum.

In early September, Norway's Minister of Finance Kristin Halvorsen announced that the Norwegian State Pension Fund had sold its shares in Elbit, worth $5.4 million. The pension fund's Council on Ethics assessed that investments in Elbit constitute an unacceptable risk of contributing to serious violations of fundamental ethical norms because of the company's involvement in the construction of Israel's wall in the occupied West Bank. "We do not wish to fund companies that so directly contribute to violations of international humanitarian law," Halvorsen explained.

According to the Who Profits from the Occupation? website, a subsidiary of Elbit also supplies the Israeli army with unmanned aerial vehicles (UAV) to the Israeli army. These UAVs, better known as drones, are used during Israeli military attacks in the occupied West Bank and Gaza Strip.

Following the decision by the Norwegian State Pension Fund, Kommunal Landspensjonkasse (KLP), one of the largest life insurance companies in Norway, also divested from Elbit. The move by heavyweights Halvorsen and KLP to divest led Danwatch, the Danish financial watchdog, to add last month Elbit to its blacklist of 35 companies that are disqualified from investments due to ethical considerations.

The largest bank in Denmark and a leading player in the Scandinavian financial markets, Danske Bank followed suit a week later. "We handle clients' interests, and we do not want to put customers' money in companies that violate international standards," said Thomas H. Kjaergaard, the staff member responsible for socially responsible investment at Danske Bank. The bank also blacklisted Africa-Israel, a company led by diamond mogul Lev Leviev which has been involved in the illegal construction of Israeli settlements in the occupied West Bank. Kjaergaard noted that the bank is determining whether other companies with activities in the Israeli settlements qualify for exclusion.

In yet another blow to Elbit, Danske Bank's decision was followed by PKA Ltd., one of the largest Danish pension funds, selling its shares in Elbit worth $1 million. The PKA's investment director Michael Nelleman was quoted by the Stop the Wall campaign explaining that "the International Court of Justice stated that the barrier only serves military purposes and violates Palestinian human rights" ("Two Danish funds exclude Wall-building companies," 27 January 2010).

Other major institutional investors in Scandinavia have also excluded Elbit from their portfolios due to ethical concerns. Folksam, Sweden's largest asset manager, responded to an inquiry regarding its investments in either Elbit or Africa-Israel, that the fund did not have holdings in either company. Folksam's Head of Corporate Governance Carina Lundberg Markow wrote to The Electronic Intifada: "We have a strict policy regarding activity on occupied land." She noted that KPA Pension, a leading Swedish pension company in the public sector, also did not have holdings with either Elbit or Africa-Israel. Lundberg Markow also referred to discussions with Swedish company Assa Abloy about these policies and the company's decision to remove a factory from the occupied West Bank in October 2008. Folksam influenced Assa Abloy's decision to remove the factory.

The movement by Scandinavian institutional investors to divest from or exclude Elbit Systems will influence other European investors to do the same. The two largest Dutch pension funds, ABP and PFZW are the focus of a coalition of Palestine solidarity activists, organizations and concerned citizens who are currently pressuring the two pension funds to follow the Scandinavian example and divest from Elbit and other companies profiting from the Israeli occupation.

This pressure seems to be paying off. ABP informed The Electronic Intifada today that it has sold its US $2.7 million shares in Elbit Systems.

Adri Nieuwhof is a consultant and human rights advocate based in Switzerland.