Israel-Norway diplomatic spat follows fund exclusion of West Bank barrier surveillance company

A diplomatic stand-off has developed between Israel and Norway after the €276bn Norwegian Government Pension Fund blacklisted Elbit Systems, the Israeli defence technologies company, from its investment portfolio for human rights breaches. In a statement, Michael Eligal, Israel’s Ambassador to Oslo, reacted angrily to the findings of the Norwegian fund’s Council on Ethics that said Elbit had contributed to serious violations of “fundamental ethical norms” by supplying surveillance equipment for the separation fence in the West Bank on occupied territory between Israel and Palestine. Following a meeting at the Norwegian Ministry of Foreign Affairs, Eligal said: “We were deeply disappointed by Finance Minister Kristin Halvorsen’s decision on withdrawing the investments made by the State Pension Fund in the Israeli company “Elbit”. Israel has great respect for the State Pension Fund and the Ethics Council, and has had a good and open cooperation with these two. The security fence was built as a defense measure against the terror emanating from the Palestinian areas that has taken hundreds of Israeli civilian lives.” Announcing the sale of NOK 35.8m (€4.2m) of Elbit shares, Halvorsen said: “We do not wish to fund companies that so directly contribute to violations of international humanitarian law.”Haaretz, the Israeli daily newspaper, reported that the Israeli foreign ministry had avoided using strong language in its reaction to avoid a diplomatic crisis, but had nonetheless released a statement saying: “Israel will consider further protest measures in the future.” The reaction from the Israeli embassy recalls similar outrage in 2006 by Benson Whitney, US Ambassador to Norway, after the Norwegian fund sold off more than $400m worth of Wal-Mart shares over child-labour violations by its suppliers in the developing world as well as obstructing union representation for its workers in the US. Whitney accused the fund of a “national judgment of the ethics of these companies,” and took up the issue with the Norwegian government. The Norwegian fund’s Council on Ethics said its decision to blacklist Elbit was based on a ruling by the International Court of Justice in the Hague from 2004 that the construction of the Israeli separation barrier contravenes international law – a ruling that Israel has challenged. The Council’s report said: “The freedom of movement of the people living in the occupied territory has been unacceptably restricted. The International Court of Justice has pointed out the obligation of all State parties to the Fourth Geneva Convention to prevent breaches of the Convention such as the construction of the barrier. Norwegian authorities act in accordance with this.”
The report said the surveillance system for the barrier supplied by Elbit to the Israeli authorities was one of its main components, had been specially designed and had no other applications. It said: “Elbit is clearly aware of exactly where and how the system is intended to be used.” The ethics committee said Elbit had refused for months to respond to questions sent to the company to clarify its position. The Norwegian government fund is believed to have investments in about 40 Israeli companies.The report acknowledged that the Norwegian Government Pension Fund portfolio probably contained subcontractors working on the separation barrier in the West Bank, the biggest infrastructure project in Israel. However, the Council on Ethics said it did not find that all types of contribution to the barrier’s construction provided grounds for a recommendation to exclude and that these had to be evaluated individually.