News & Reviews

Move to stop local councils boycotting Israeli companies, an article by Shimon Goldwater on Alondon

The article was published in Hebrew and can be found on  Alondon online issue. See the English Version below

When you type the word “boycott” on Google’s UK version, the second suggested search is “boycott Israel”. The “Boycott, Divestment and Sanctions” (BDS) movement seems to gain ground year by year in the UK.

One especially worrying trend is local councils passing motions boycotting Israeli companies or denying them access to tender processes for public service contracts. At least eight local councils in the UK have passed motions boycotting Israeli goods, either country-wide or from the West Bank.

Until now it has been up to pressure groups such as UK-based Jewish Human Rights Watch to campaign against such local councils’ boycotts, for example by starting judicial review actions against Swansea and Leicester City Councils.

But on 17 February the UK Government itself took a stand against local boycotts, publishing guidance to local authorities which reminds them of their obligation not to discriminate between service providers from countries which are signatories to the GPA, an international treaty governing public contracts – Israel and the EU are both signatories to the GPA.

Local authorities who breach the relevant regulations, for example by refusing to allow Israeli companies to bid for contracts, face legal action from the companies causing fines and damages to be incurred. The UK Government press release says that breach of the regulations could trigger “severe penalties”.

The timing of the publication was not a coincidence. Cabinet minister Matthew Hancock MP visited Israel last week, shortly after the guidance was published by his department. A key feature of the visit was discussion of the new guidance, which generated some positive headlines in the Israeli press and was welcomed by Binyamin Netanyahu.

But the Government’s “guidance” is just that; it does not create any new obligations, it merely reminds local authorities of their existing obligations under UK legislation. Of course, the guidance was predictably mischaracterised by the media – the Independent newspaper ran the headline “Shunning Israeli goods to become criminal offence” which would perhaps be welcome, but was not what was announced.

It might be thought that local authority boycotts, unsavoury though they are, are not a significant threat to Israel: most of the boycotts are against West Bank settlements, which are almost impossible for local authorities to identify, and the boycotts cannot cause any serious loss to Israeli companies – there are not many firms based in the West Bank vying to secure waste-disposal contracts with Swansea City Council.

But there is a real threat posed by local authorities discriminating against companies which do business in Israel or invest there. French firm Veolia has in the past had its contracts with Tower Hamlets and Birmingham councils threatened because of its work on the Jerusalem light railway, which crosses the green line. Those threats were allegedly the reason why Veolia sold its Israeli operations in 2015.

So although it is boycotts against Israeli banks and on the high street which are of real concern, tackling discrimination in local UK councils is an important weapon in the fight against the BDS movement.

The difficulty comes in enforcing the law when a council does try to deny an Israeli company from bidding for a local contract. A claim has to be brought by the company impacted by the council’s action. And there are very tight time limits on bringing a claim – usually it must be started within 10-30 days of the council’s decision being received.

My firm has been approached on a number of occasions by Israeli companies which have been the target of anti-Israeli discrimination – but in no case was there a clear legal remedy available. But if an Israeli company is the victim of discrimination by a local authority, the time might now be ripe for a claim, provided that it can be started quickly enough.

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