Goods produced in Israeli settlements are not “Made in Israel,” says European Court of Justice

“European Court of Justice” by Gwenaël Piaser is licensed under CC BY-NC-SA 2.0

The European Court of Justice (ECJ) ruled today France properly applied European Union (EU) law by requiring exporters of goods made in Israeli settlements to label their products accordingly. Israel is present in the territories it has held since 1967 as an occupying power under international humanitarian law. Therefore, the court reasoned, labeling products from those areas as “Made in Israel” would mislead consumers as to (a) the goods’ place of origin, and/or (b) Israel’s status as an occupying power, and not a sovereign entity, in those territories. 

The ECJ took note that settlements “give concrete expression to a policy of population transfer conducted by [Israel] outside its territory, in violation of the rules of general international humanitarian law.” Without specific language identifying products from the settlements, consumers in Europe would lack information they require to make “ethical considerations and considerations relating to the observance of international law.” Labeling must therefore specify, the court held, whether goods are made in Israeli settlements in addition to whether they originate in the territories Israel occupies. The court’s decision binds all EU member-states, and cannot be appealed. 

The labeling dispute has been ongoing since the European Commission issued an EU-wide notice in November 2015 interpreting a 2011 regulation on consumer food information promulgated by the European Parliament. Under the 2015 notice, EU member governments were advised to require goods imported from Israeli settlements in the West Bank, Golan Heights, and East Jerusalem to carry special labeling language, and to bar such goods from being labeled simply “Made in Israel.” (The Commission cannot impose new legal obligations on EU member states, but its interpretations of EU law serve as guidance for European governments.) Such regulation was necessary, the Commission reasoned, to apply the 2011 parliamentary rule in accordance with the EU’s position that Israel’s pre-1967 borders define its sovereign territory.

Critics were quick to condemn the interpretive notice as anti-Semitic and anti-Israel. Prime Minister Netanyahu and others in his administration analogized the European Commission’s analytical distinction between Israel and its settlement outposts to Nazism. “In the past Jews were marked with a yellow patch, and today they are looking to mark our products,” Vered Ben-Sadon, a wine producer in a West Bank settlement, told Israel Radio. The American right-wing blogger Robert Spencer published an article titled “Nazism Returns: European Union to Put Warning Labels on Jewish-Made Products.” But many within Israel and abroad applauded the notice as a step toward curbing the settlement enterprise and reducing tensions in the region.  

France implemented the Commission’s notice one year later with a regulation directing that goods produced in Israeli settlements be labeled as such. The Organisation Juive Européene (European Jewish Organization) (OJE) and Psagot Winery, which “sources its grapes from five vineyards located near the [West Bank] settlements of Psagot, Kida, Har Bracha, Gush Ezion and Alon Moreh,” challenged the French rule as discriminatory before the Council of State. The French council referred the matter to the ECJ because it would turn on interpreting EU law, which is the ECJ’s purview. 

There, the case first came before Advocate General Gerard Hogan, who advised the court that “EU law requires for a product originating in a territory occupied by Israel since 1967, the indication of the geographical name of this territory and the indication that the product comes from an Israeli settlement if that is the case.” The Grand Chamber of the ECJ then received the case for consideration. 

The Israeli government has opposed this challenge from the outset. It urged Psagot and OJE to withdraw their complaints, fearing they would backfire by precipitating an ECJ ruling that would “create a more difficult reality” for settlement producers who have, until now, not been required by many European governments to comply with the EU labeling rule.  

“We expect European countries that value the peace process and that deem the relationship with [Israel] important not to implement the ruling in a manner that would damage our relationship,” an Israeli diplomatic source told the Times of Israel last month, anticipating the court’s decision. After the 2015 EU notice was issued, Israel temporarily suspended ties with EU bodies involved in the peace process with the Palestinians. Israel may respond with similar diplomatic measures should additional European governments issue labeling requirements in line with today’s ruling. Israel has also prepared a diplomatic and public relations campaign to mitigate the fallout from the case, encouraging EU members “to adopt a loose interpretation and implementation of the ECJ decision.” In the past the country has even lobbied U.S. lawmakers and policymakers to weigh in with the EU on its behalf. 

The EU and its members have taken a range of steps to differentiate between Israel’s sovereign, “Green Line” territory and the Palestinian territories it occupies. Some EU governments, Ireland for example, have discussed a ban on products from settlements as a next step to advance pressure on Israel’s settlement policy. Israel has long sought to brand such efforts, however, as the equivalent of rejecting Israel’s right to exist. Businesses like the home rental platform Airbnb have faced serious backlash for seeking to distinguish between Israel and Israeli settlements, including private legal challenges, threats of litigation by Israel’s Justice Minister, and blacklisting by U.S. state governments. Many U.S. states have enacted laws prohibiting boycotts of Israel, 17 of which specifically ban boycotts aimed at the territories Israel illegally occupies. 

And last week the Israeli Supreme Court upheld the government’s deportation of Human Rights Watch’s Israel Palestine director Omar Shakir under a theory holding criticism of business activity in settlements to constitute advocacy for boycotting Israel, which is grounds for deportation under a 2017 amendment to Israel’s Law of Entry. “By the logic of the Israeli Supreme Court, EU officials promoting [the ECJ] ruling or supporting labeling of settlement goods should also be deported from Israel,” said Shakir on Twitter today.

Today’s ruling provides the French Council of State with a binding interpretation of EU law, according to which it must dispose of the complaints brought by OJE and Psagot. All other courts in EU member states will be likewise bound by the ECJ’s finding that labeling language identifying goods from the occupied Palestinian territories and Israeli settlements is mandatory.

Humanitarian Organizations Should Reject Airbnb’s Occupation-Donations

Airbnb, the global short-term rental platform, has announced a new policy under which it will donate the profits it earns from listings in territories under foreign occupation, with the understanding that business operations in such territories contribute to ongoing human rights violations. This policy contravenes Airbnb’s legal obligations under the UN business and human rights framework, and is unprecedented in the history of corporate donations in the United States. Organizations committed to human rights should reject these donations.

In November 2018, Airbnb announced a new framework for assessing whether its “listings in occupied territories . . . contribut[e] to existing human suffering” and/or are connected to territorial disputes. Airbnb would remove listings with these negative human rights impacts from its platform, the company said, starting with properties in Israeli settlements in the West Bank.

Months later, in the course of settling several lawsuits challenging the new policy before the company’s upcoming IPO, Airbnb reversed its decision to delist settlement properties. Under a modified policy, the company would preserve the listings—as well as rentals in South Ossetia, Abkhazia, and other occupied and contested areas around the world—but would donate the proceeds of those problematic listings:

The company will rely upon our previously identified framework to evaluate these areas. If Airbnb determines [our business activity is] central to ongoing tensions, we will adopt the […] approach of allowing listings and donating Airbnb’s profits generated by Airbnb host activity in the region to non-profit organizations dedicated to humanitarian aid that serve people in different parts of the world.

In other words, Airbnb plans to continue its rights-violating activity but donate the proceeds. The extent to which this policy violates human rights law is particularly striking in the context of the Occupied Palestinian Territories.

Rights violations are not a function of Airbnb’s profits; they are a function of its activity.

Under the UN Guiding Principles on Business and Human Rights (GPBHR), organizations including the United Nations, the Eiris Foundation (which has produced a helpful guide for companies operating in occupied territories), and Human Rights Watch (HRW) have advocated that companies end all operations in places like Israeli settlements to avoid contributing to ongoing human rights violations.

The GPBHR do not permit any business operations in Israeli West Bank settlements. The UN High Commissioner for Human Rights has found that “[b]usinesses play a central role in furthering the establishment, maintenance and expansion of Israeli settlements,” noting that “violations of human rights associated with the settlements are pervasive and devastating, reaching every facet of Palestinian life.” According to HRW, “any adequate due diligence would show that business activities taking place in or in contract with Israeli settlements or settlement businesses contribute to rights abuses, and that businesses cannot mitigate or avoid contributing to these abuses so long as they engage in such activities.”

Even if Airbnb were to operate at a loss in the occupied territories, its presence facilitating property rentals on lands that are illegally held would still contribute to rights abuses. It is the service Airbnb offers, not any profit the company earns from that service, that supports Israel’s settlement enterprise, its illegal occupation, and the attendant violations of Palestinians’ rights.

Airbnb’s policy is unprecedented in the history of corporate donations in the United States.

In three types of exceptional situations—during crises, to counteract greenhouse gas emissions, and when required to pay for past damage—companies have donated profits associated with harmful activity. Airbnb’s new policy is unprecedented in that it imagines counteracting ongoing harmful activity. Persistent activity in occupied territory is not like any of these exceptional circumstances in which forfeiting profits relieves a company of legal liability, earns reputational benefits, or justifies a temporarily harmful course of conduct.

Donations of profits made in occupied territory (“occupation-donations”) are not like donations of profits generated during emergencies and natural disasters. Airbnb donates profits and facilitates individual private donations after major storms, and Uber caps surge pricing and donates its surge fare commissions during crises to avoid profiting from situations of emergency and natural disaster. By doing so these companies provide needed services to communities in crisis, taking temporary measures so as not to benefit from others’ misfortune. Airbnb cannot analogize occupation-donations to this approach: its business in occupied territories is not temporary, and does not provide an emergency service. Rather, its business in Israeli settlements sustains a crisis situation by contributing to ongoing, devastating human rights abuses.

Occupation-donations are not like environmental offsets. Companies sometimes purchase carbon offsets to counteract the effect of their greenhouse gas emissions. Offsets are meant to balance the global emissions total by supporting projects that capture carbon, and to further a global transition toward renewable energy resources. Offering occupation-donations to unspecified “non-profit organizations dedicated to humanitarian aid that serve people in different parts of the world” is not analogous to carbon offsets. A better analogy would be a clothing company operating a sweatshop and promising to donate proceeds linked to the sweatshop’s low labor costs to global humanitarian causes. The global balance of human rights is not like the global balance of carbon emissions. Airbnb’s business in occupied territories cannot be offset by donations.

Occupation-donations are not like returned profits or damages paid for past harm. Many companies have returned fees or profits or have paid compensation as the result of public pressure or legal or regulatory action to address harm caused by their prior (discontinued) business practices. Courts have entered judgments for billions of dollars against oil companies like BP and Exxon after major spills. The consulting firm McKinsey & Company has returned fees following unseemly business practices in South Africa and insufficient disclosures in recent bankruptcy work in the United States. Airbnb’s business in occupied territories, however, is ongoing, as are the contributions to human suffering it admits to furthering in those regions. Airbnb cannot wash its hands while persisting in dirtying them.

Emergencies and natural disasters, offsets supporting the transition to renewable energy, and compensation for past wrongdoing each relate to harm and adverse impacts that are bounded in time. Because Airbnb’s occupation-donations are unprecedented and because they represent, by the company’s own assessment, complicity in ongoing rights abuses, humanitarian organizations should reject them. Airbnb cannot cloak itself in one of these models of corporate beneficence to justify ongoing contributions to human rights violations as indefinite as the Israeli occupation itself. While Airbnb continues to operate in Israeli settlements in the West Bank, and in other occupied territories, humanitarian organizations should refuse the company’s donations.