It turns out that the one of the BDS movement’s biggest alleged successes is a colossal failure. Thanks to the new wave of state anti-boycott laws, it has emerged that far from boycotting Israel, the security giant G4S plans to continue doing business there indefinitely.
Last year, Illinois became the first state to pass a law restricting investments in companies that boycott Israel. Since then, about 11 states have followed suit with laws limiting either pension investment, contracting, or both.
But as the first state to legislate, Illinois was also the first to make a determination about what companies qualified as boycotting Israel as defined under the State’s law. G4S had been heavily harassed by the boycott movement; the huge British company was one of their main targets. When it announced earlier this year that it was looking for a buyer for its Israeli arm, BDS proponents claimed victory. And Illinois sent the company a notice that it might find itself subject to divestment by the state.
Of the 11 companies on the state Pension Board’s preliminary list of boycotters, G4S most vigorously objected to the characterization of its actions. (Boycott supporters claim that the need for pension funds to keep lists of companies they cannot invest in amounts to McCarthyism, a silly accusation for many reasons.)
At first, G4S claimed that any action to sell its Israel operations was not a “boycott” because it was merely a business decision. Yet despite mounting a significant PR and lobbying campaign, the company did not present any actual evidence for its claims.
Given circumstantial evidence of a boycott, a company needs to provide some real evidence to the contrary to avoid the operation of the law. At first G4S appeared reluctant to do this. However, recently, G4S finally produced significant evidence, leading the Illinois Pension Policy board to unanimously decide to delist it.
The evidence G4S produced for the Board is far stronger than their original claims–and reveals a great deal about the pressures placed on companies by the boycott movement.
In particular, G4S revealed that regardless of whether it sells its Israel operation–which is currently far from a done deal–it will continue doing very active business in Israel. Arguing for its delisting from the boycott registry, the Board emphasized that the company has “ongoing commitments and relationships in Israel,” and there do not appear to be plans to terminate them. In other words, it seems G4S wanted to have the best of both worlds–to end harassment by boycott activists by appearing to fold to their demands, while at the same time continuing to do business in Israel in other less visible, but lucrative, ways.
As a result of Illinois’ anti-BDS law, the company has had to publicly clarify that far from pulling out of Israel, “G4S will maintain a significant presence in Israel for decades to come, and will continue to be a key contributor to the security of Israel,” as the company put it in a press release last month. (emphasis mine)
This is even bigger news for opponents of boycotts than the company’s original claim, that their move to sell some Israeli operations was just a business decision. Instead, it turns out that G4S is not leaving Israel at all, though they are significantly reorganizing their presence there in ways to make their brand less “public” in the country.
The story of the anti-boycott laws and G4S reveals many interesting lessons. Firstly, G4S–one of the BDS movement‘s greatest alleged “victories“–is not only not “boycotting” Israel, it has committed to keeping an operational presence there for decades to come. In short, one of BDS’s biggest successes is a colossal failure. This also shows something about how the BDS campaign works.
It is not about convincing companies to change their views about Israel. Rather, it is about pestering and harassing them. G4S obviously saw great value–and no moral problem–in continuing to operate in Israel. However, even such companies face pressure to appease boycott activists: this shows that boycott activity by companies is typically not political, but simply a response to pressure. That is important to keep in mind when boycott activists attack anti-BDS laws for limiting “corporate speech” about Israel.
This story also shows that state anti-boycott laws with teeth have, in the first months of their operation, proven themselves valuable. The laws also provide for a full and fair and thorough process for companies to present evidence about whether they are boycotting Israel.
This also establishes an important precedent for companies going forward. It is not enough to merely claim that one is not boycotting to avoid the operation of the state law. Actual hard evidence is required. G4S, for example, provided the Pension Board with “written submissions, business documents, and live testimony from G4S management.”
Indeed, the G4S CEO and General Counsel submitted an affidavit, certifying under penalty of perjury, that they have neither boycotted Israel, nor have they “succumbed to pressure from others to boycott Israel.” Such a statement signed by top executives is no small thing.
Related: Can States Fund BDS?
Eugene Kontorovich is a professor at the George Mason University Scalia Law School and the director of its Center on the Middle East and International Law. He is also the head of the international law department at the Kohelet Policy Forum, a think tank in Jerusalem.