Norwegian pension fund divests from Cemex & HeidelbergCement over concerns about their operations in the occupied West Bank

Boy_and_soldier_in_front_of_Israeli_wall_Credit_Justin_McIntosh

In June 2015, Norwegian pension fund KLP excluded Cemex and HeidelbergCement from its investment portfolio.  The decision was taken due to their operations in the occupied West Bank.  We invited both companies to respond which they did. See HeidelbergCement's response and Cemex's response in Spanish (unofficial English translation provided) below.

We subsequently received 2 rejoinders which argued that CEMEX had misinterpreted international law in its response in relation to the legality of Israeli settlements.  In addition the Electronic Intifada also published an article criticising the responses by CEMEX & HeidelbergCement.  All of the materials can be accessed below.

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Article
14 December 2015

Who Profits Research Center launches an inquiry to check validity of Cemex’s announcement over its operations in the occupied Palestinian territories

Author: Who Profits Research Center

"Cemex’s New West Bank Policy: Drops Mining activity, Continues Production in Settlements", September 2015

A letter (link is external) recently sent by Cemex to the Business and Human Rights Resource Center (BHRRC) described significant changes in the company’s policy and operations in the occupied Palestinian territories. In this letter, which was published by BHRRC on 9 September 2015, Cemex announced that it had sold its holdings in the Yatir quarry, a mining site located south of the Palestinian city of Dhahiriya in the West Bank. Cemex explained the move in the following words: “As part of the general strategy of Cemex that includes the sale of assets, CEMEX is no longer associated to the third party that manages and exploits the [Yatir] quarry” (the unofficial translation to English was provided by BHRRC). The company tried to further distance itself from the illegal mining preformed on site by claiming that “during the last decade CEMEX was not involved in the management of that particular quarry. The production, operation, logistics, sales, etc. were managed and operated exclusively by a local partner.” Following the publication of this response on BHRRC’s website, the Who Profits Research Center launched an inquiry in order to check the validity of Cemex’s announcement. Our findings confirm that Cemex has indeed sold all of its holdings in the Yatir quarry to its former partner, Kfar Giladi Quarries...

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Article
14 September 2015

Mexican firm distorts law to justify plunder of Palestinian resources

Author: Adri Nieuwhof, Electronic Intifada

A Mexican firm has tried to justify supplying building materials to Jewish-only settlements in the occupied West Bank by pointing to how those colonies have been authorized by Israel. While all Israeli settlements in the West Bank violate international law, the corporation Cemex has argued that many of them are legal. In a letter sent recently to the Business and Human Rights Resource Centre, the Mexican firm admits that its subsidiary Cemex Israel operates concrete production plants in the West Bank. According to the firm, these plants “are located in legal settlements that have been approved by the Israeli government” and “validated” by Israel’s high court. Cemex claims that it does not deal with “illegal settlements” — which it defines as “settlements not approved by the Israeli government.” The arguments used by the firm mirror those employed by the Israeli authorities in their attempts to explain the theft of Palestinian land. They overlook how all of Israel’s settlements breach international law...I contacted the Palestinian human rights group Al-Haq, asking it for a response to Cemex’s claims. In an email message, the group accused Cemex of “a gross misrepresentation of the law on settlements.”

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NGO rejoinder
10 September 2015

Lawyers for Palestinian Human Rights statement responding to CEMEX's position on legality of settlements

Author: Lawyers for Palestinian Human Rights (LPHR)

CEMEX's claim that settlements approved by the Israeli government are accordingly legal is based on wholly inadequate reasoning which must urgently be reviewed and overturned. CEMEX appears to have ignored that it has been the consistent position of the international community that establishment of settlements by the Government of Israel is incompatible with Israel’s obligation under Article 49, paragraph 6 of the Fourth Geneva Convention not to transfer part of its civilian population into the Occupied Palestinian Territory. This position was confirmed by the International Court of Justice in its Advisory Opinion on Legal Consequences of the Construction of a Wall....The...claim made by CEMEX that Israel's settlements are legal because they are in areas outlined in the interim agreement between Israel and the Palestinian Authority as areas under the control and the responsibility of Israel until both parts reached a permanent agreement, ignores the basic legal principle, as set out in the KLP decision dated 1 June 2015, that no agreement can override the rules relating to occupation set out in the Hague Regulations and the Fourth Geneva Convention. The full decision by KLP to exclude the companies HeidelbergCement AG and Cemex SAB de SV from their investment portfolios is an exemplary model of ethical and legal reasoning in support of the general corporate responsibility to respect human rights and international humanitarian law. LPHR would urge CEMEX to urgently review and overturn its current position so that it is compatible with the immaculately considered position set out by KLP, and with the overwhelming international consensus that Israel's settlements are illegal. 

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NGO rejoinder
10 September 2015

Rejoinder to CEMEX by Dr Shane Darcy, lecturer at the Irish Centre for Human Rights, National University of Ireland Galway

Author: Dr Shane Darcy, lecturer at the Irish Centre for Human Rights, National University of Ireland Galway

“There is no question that companies can be put in a challenging position when policies and practices which may be lawful according to domestic law are considered to be unlawful under international law. Much discrimination in apartheid-era South Africa was carried out pursuant to national legislation then in force, while at the same time being clearly contrary to fundamental norms of human rights. It is for this reason that the United Nations Guiding Principles on business and human rights have set out that the corporate responsibility to respect human rights “exists over and above compliance with nationals laws and regulations protecting human rights”. In the case of CEMEX, the company considers as illegal only those Israeli settlements which have not been approved by the Israeli government. However, Israel’s opinion as to the legality of settlements is firmly at odds with that of the International Court of Justice, the United Nations Security Council, and almost every State in the world. The transfer of Israeli civilians into occupied territory and the building of settlements is a clear violation of the applicable rules of international humanitarian law, and decisions of the Israeli Supreme Court or arrangements provided for under the Oslo Accords do not alter this. In assessing whether its operations are in “strict compliance” with local and international law, as it claims, CEMEX could have heeded the position of Mexico, its country of origin, which recently reiterated its “rejection of the ongoing expansion of Israeli settlements in the Occupied Palestinian Territories, which ran counter to international law”. Companies are well-advised to look beyond domestic laws when assessing the legality of policies and practices in which they may be implicated. Divestment by the Norwegian pension fund KPL from CEMEX and HeidelbergCement is ample proof of this

Company response
9 September 2015

CEMEX response (unofficial translation by Business & Human Rights Resource Centre)

Author: CEMEX

CEMEX and, specifically, CEMEX Israel, does not supply building materials to the illegal settlements in the West Bank. Illegal settlements are settlements not approved by the Israeli government. CEMEX operates under a strict policy of compliance with local and international laws, including those related to human rights, and all the rules, standards and legislation of each country where the company operates. In this context, and as a member of the Global Compact of the United Nations, the company supports and follows its 10 principles and values.  As a result, in 2014, CEMEX, in collaboration with Shift (an independent nonprofit centre specialized in business and human rights), issued its corporate policy on Human Rights which in turn led to changes in the Ethic Code and an improvement in the respect of Human Rights...Under this framework of CEMEX policies –including compliance with laws and regulations- CEMEX Israel is committed to not supplying construction materials to the illegal settlements and fulfills this commitment. The concrete plants are located in legal settlements approved by the Israeli government and validated by the Supreme Tribunal of Justice of Israel. Those areas were delimitated in the agreement between Israel, the Palestinian Authority signed in Oslo, in 1993, as areas under the control and the responsibility of Israel until both parts reached a permanent agreement. Regarding the quarry “Yatir”, as part of the general strategy of Cemex that includes the sale of assets, CEMEX is no longer associated to the third party that manages and exploits the quarry. In any case, during the last decade CEMEX was not involved in the management of that particular quarry. The production, operation, logistics, sales, etc. were managed and operated exclusively by a local partner.

 This is an unofficial translation by the Business & Human Resource Centre. Please see the original response in Spanish here

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Company response
9 September 2015

HeidelbergCement response

Author: HeidelbergCement

...From HeidelbergCement’s perspective, the quarrying activity is compatible with international humanitarian law as it produces substantial advantages for the local Palestinian population and at the same time it hardly affects the raw material reserves. In addition to royalties and leasing fees that are used by the civil administration for local projects, for example infrastructure projects, in Area C of the West bank, the local Palestinian population benefits especially from the creation of attractive jobs in a region that is otherwise characterized by high unemployment and long-term economic stagnation. Significantly more than 50% of employees and contractors working in the quarry are local Palestinians. Palestinian and Israeli employees are treated the same and receive equal payment that is several times higher than the average wages paid in the West Bank. In addition, employees benefit from state-of the-art trainings, which open up new career opportunities and from healthcare organized by Hanson Israel. Palestinian and Israeli employees work together in intercultural teams, which also open up informal channels of cultural exchange that foster mutual understanding. This is especially important in a situation where contact between the different ethnic groups has become very limited, if not non-existent, throughout the last decade with increasing anti-normalization campaigns worsening the situation...

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Company response
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2 September 2015

Antwort von HeidelbergCement

Author: HeidelbergCement

...Aus Sicht von HeidelbergCement ist der Steinbruchbetrieb mit dem humanitären Völkerrecht vereinbar, da dieser wesentliche Vorteile für die lokale palästinensische Bevölkerung erzeugt und die Rohstoffreserven dadurch kaum beeinträchtigt werden. Neben Abbaugebühren, die von der Zivilverwaltung für lokale Projekte in Area C des Westjordanlandes, zum Beispiel im Bereich Infrastruktur, verwendet werden, profitiert die lokale palästinensische Bevölkerung insbesondere durch die Schaffung von attraktiven Arbeitsplätzen in einer sonst von hoher Arbeitslosigkeit und wirtschaftlicher Schwäche gekennzeichneten Region. Der Anteil im Steinbruch beschäftigter lokaler palästinensischer Mitarbeiter und Dienstleister liegt bei deutlich über 50%. Palästinensische und israelische Mitarbeiter werden absolut gleich behandelt, insbesondere auch bei der Entlohnung, die um ein Mehrfaches über dem Durchschnittslohn im Westjordanland liegt. Darüber hinaus profitieren die Mitarbeiter von Weiterbildungsmaßnahmen, die ihnen weitere Karrieremöglichkeiten erschließen sowie einer von Hanson Israel organisierten Gesundheitsversorgung. Palästinensische und israelische Mitarbeiter arbeiten zusammen in interkulturellen Teams, was den kulturellen Austausch und das gegenseitige Kennenlernen und Verständnis füreinander fördert...

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Article
1 June 2015

Decision to exclude from investment HeidelbergCement and Cemex

Author: KLP

 …KLP and the KLP Funds have decided to exclude the companies HeidelbergCement and Cemex from their investment portfolios with effect from 1 June 2015.Through its subsidiaries, the companies HeidelbergCement and Cemex operate quarries in Area C of the West Bank, an area under complete Israeli civilian and military control. The companies pay licence fees and royalties to the state of Israel. It is not clear how Israel uses these funds. The products deriving from the quarries are sold primarily for use in Israel’s domestic construction market. In a letter published through the Business and Human Rights Resource Centre, Cemex confirms that its subsidiary Lime & Stone is engaged in a joint venture with Kfar Giladi Quarries, and that the latter operates the Yatir quarry…

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