Soros fund drops shares in
Israel’s SodaStream
The National
August 2,
2014
Soros Fund
Management, the family
office of the billionaire investor George Soros, has sold its
stake in
SodaStream, the soda making appliance producer that profits from
the Israeli
occupation of Palestinian territories and was made popular by
actress Scarlett
Johansson’s endorsement.
The
decision comes as a number of
big international investors, including the fund linked to the
Microsoft founder
Bill Gates, join in a burgeoning financial boycott of Israel
amid a push by the
boycott, divestment and sanctions (BDS) movement and other
groups seeking more
rights for Palestinians.
SodaStream,
headquartered in the
Israeli city of Lod, has its main factory in the West Bank
settlement of Ma’ale
Adumim.
“Soros Fund
Management does not own
shares of SodaStream,” Michael Vachon, a spokesman for the fund,
told The
National, declining to comment further on when and why it sold
the shares.
In a May
filing with the US markets
regulator, the fund said it had bought 550,000 shares of
SodaStream during the
first quarter. Bloomberg reported that the fund acquired the
shares for $24.3
million, with the new holding making up 0.3 per cent of the
fund’s $9.3 billion
stock portfolio.
“After
pressure from Soros partners
in the region and the world, they dropped SodaStream and
promised, in private
letters so far, to issue guidelines similar to those adopted by
the EU to
prevent any investment into companies that sustain the Israeli
occupation and
settlements in particular,” said Omar Barghouti, the Palestinian
activist and
co-founder of the BDS movement.
Several
western investors said
earlier this year that they had sold off holdings in companies
that make money
from business in occupied territories. Norway’s $810bn sovereign
wealth fund,
the world’s largest, a Dutch pension fund, and the Presbyterian
Church in the
US are among those that have excluded some Israeli and US
companies from their
portfolios this year. The companies operate in the occupied
territories, where
settlements built by Israel have been deemed illegal by the UN
Security Council
and the International Court of Justice among others.
Financial
and economic boycotts have
been tried before, most notably when Saudi Arabia and other Opec
members
stopped selling oil to the West in 1973 in reaction to the
support given by the
US and other nations to Israel during its war with Egypt.
But with
the 1979 peace agreement
that heralded a political and economic rapprochement with Egypt
and eventually
other Arab nations, the momentum fizzled away.
It is only
in the past decade that
there has been a revival of the boycott movement looking to end
the Israeli
occupation of land captured during the 1967 Arab-Israeli war,
allow
Palestinians refugees to return home and end discrimination
against
Palestinians.
Analysts
say that as the two-state
solution – the framework in which peace negotiations have been
undertaken for
the past two decades – flounders, a growing anti-apartheid
movement is filling
its shoes.
This year
has been a strong one for
BDS. The Gates Foundation Asset Trust, which manages investments
for the $40bn
Bill and Melinda Gates Foundation, said in June that it sold its
stake in the
UK security services firm G4S, one of the companies targetted by
BDS. The
movement has also been in focus during the Israeli assault on
Gaza and the
widespread anti-war protests against the killing of hundreds
there.
Earlier
this year, Israel’s finance
minister acknowledged the impact that a European-wide boycott
could have on the
country, depriving the economy of $5.7bn and putting almost
10,000 people out
of work immediately. The prime minister Benjamin Netanyahu has
also
acknowledged the threat posed by BDS. In a March speech in the
US, Mr Netanyahu
launched an attack on the movement, branding them as racists.
“In
America, BDS has really started
to pick up in the last year, and there are a couple of other
examples apart
from the Presbyterian church, such as universities that have
taken positions against
Israel,” said Andrew Hammond, a Middle East analyst at the
European Council on
Foreign Relations. “The whole movement is picking up not so much
because the
BDS movement is so powerful, but because people want Israel to
come to a peace
agreement.”
In January,
Norway’s sovereign
wealth fund decided to ban Africa Israel Investments (AFI Group)
and its
subsidiary Danya Cebus from its portfolio because of their
involvement in
building settlements in the West Bank.
In the same
month PGGM, the
second-largest Dutch pension fund, which manages more than
$200bn in assets,
said it had liquidated holdings in five Israeli banks for their
role in
financing settlement building.
In June,
the US Presbyterian church
said that it excluded three companies – Caterpillar,
Hewlett-Packard, and
Motorola – from its investment portfolios because they were used
by the Israeli
government in the occupied territories and were not in
compliance with its
policy on socially responsible investing.
Norway is
one of the few countries
that have an ethics oversight council to review investments made
by its
sovereign wealth fund. In January, the finance minister, on
advice from the
council, told its sovereign wealth fund to sell its holdings in
AFI Group and
Danya Cebus.
Since the
outbreak of fresh violence
in Gaza, there have been no new announcements of boycotts by big
investors, but
funds such as Norway’s are constantly reviewing their
investments according to
the ethics council that monitors its holdings.
“We cannot
comment on companies or
cases that we are working on presently,” said Pia Goyer, senior
adviser at the
secretariat of the ethics council to Norway’s government pension
fund. “You
have to wait until we issue a recommendation. It takes some time
to get all the
facts on the table, the involvement of a company in any
particular situation.
The council only meets once a month and discusses what we should
proceed with.”
Lisa
Stonestreet, the programme
director at the London-based UK Sustainable Investment and
Finance Association,
a non-government trade body that promotes sustainable
investment, said that
institutional investors were increasingly focused on ethical
factors.
“First of
all there is a public
demand for it in terms of people calling into account larger
organisations across
the board to look at what the impact is in terms of
sustainability, in terms of
what the impact is and social issues,” she said. For some
investors, the main
aspect is profitability.
The
Canadian Pension Plan Investment
Board, which manages more than $200bn, has investments in a
number of Israeli
companies, including SodaStream and Bank Halpolim, as part of
its foreign
portfolio of stocks. Those holdings were part of its indexing
investment
strategy and the fund had no plans to sell them as it focused
only on potential
for profit, said its spokeswoman, Linda Sims.
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