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Palestinian women collect scrap timber in the Mishor Adumim industrial zone near the Jewish West Bank colony of Maaleh Adumim. Image Credit: AP

Tel Aviv, Israel: There is a budding movement by foreign investors and activists to join a Palestinian campaign against companies doing business in the West Bank — aimed at hitting their pockets.

Pension funds in Norway and Sweden have divested themselves of holdings in some firms involved in building of colonies or helping to erect Israel's contentious West Bank separation barrier.

European activists are cranking up pressure on companies by exposing the West Bank ties and picketing stores that sell goods from the colonies. And some major US churches are questioning companies as a precursor to possible divestment.

The economic impact is still negligible. Jewish groups are pushing back and key institutions, including US universities, have rejected calls to divest. But in business, where image is all-important, it's tough to shrug off potentially negative publicity.

Israel accuses boycott advocates of trying to delegitimise the Jewish state. It also argues that plenty of companies with ties to states with horrendous human rights records are not similarly targeted.

The focus on corporate involvement comes against the backdrop of a wider Palestinian movement of divestment and boycott, inspired by the economic assault on apartheid-era South Africa.

Failed negotiations

The Palestinians hope such pressure will achieve what years of negotiations have not — end Israel's occupation of the West Bank and occupied east Jerusalem, lands they want for a state. Israel withdrew all forces and colonisers from the Gaza Strip, the other territory claimed by the Palestinians, in 2005.

While the Palestinians seek a blanket boycott of Israel, many foreign supporters do not.

"This is not divestment from Israel. It's divestment from companies supporting the occupation," said William Aldrich, head of the divestment task force at the New England Conference of the United Methodist Church.

Divestment is meant to make a moral statement, said Aldrich, whose group recommends that Methodists sell stock in 29 foreign and Israeli companies, though that call has not been adopted by his church at the national level.

"The big success is that it has become an issue," added Merav Amir of the Tel Aviv-based Coalition of Women for Peace, whose database of companies has become a resource for investors and activists.

Israeli opposition leader Tzipi Livni, a former foreign minister who supports a West Bank pullout, said Israel should be concerned. "There is a trend of ideological consumerism in some of the world's countries, in addition to a delegitimisation campaign against the state of Israel," she told a business conference on Wednesday. "I believe we have to light a few warning lights."

Foreign and Israeli companies operating in the West Bank have benefited over the years from cheap land, tax incentives and low-cost Palestinian labour. A growing coloniser population — 500,000 in the West Bank and occupied east Jerusalem — has made it increasingly worthwhile for Israeli banks, supermarket chains and others to set up branches on war-won land.

With scrutiny intensifying, foreign companies and investments could be more vulnerable to pressure.

Results are still modest.

Norway's $500-billion (Dh1.84 trillion) oil fund, Europe's largest institutional investor, and Swedish pension funds managing more than $100 billion in assets have dropped the Israeli defence contractor Elbit Systems, which provides surveillance equipment for the separation barrier.

Ethical norms

The funds say Elbit violated ethical norms because of its involvement in the barrier, ruled illegal in a nonbinding decision by the International Court of Justice. Israel says it built the barrier to keep out Palestinian resistance forces, but it swerves through the West Bank to incorporate Jewish colonies on the "Israeli" side.

Norway's investment in Elbit was $6 million, negligible for a company valued at $2 billion. Elbit will not discuss the divestments. The Norwegian fund also sold its $1.2 million in shares in Africa Israel Investments, which has a real estate holding that builds in the colonies.

The Brussels-based bank Dexia, targeted by Belgian activists for lending to colonies, said its Israeli subsidiary is phasing out the colony business. Assa Abloy, a Swedish lock maker, said it would move its Israeli factory from a industrial park in a colony to Israel proper within a year.

SodaStream, a maker of home carbonating systems, said some of the $109 million raised in a public offering in November is to be used to build a new factory outside the West Bank, though it will not say whether it would eventually close an existing facility in a colony.