Norwegian government fund divests another Israeli construction firm

Fund cites company’s involvement in occupied Palestinian territory.

The NOK3.5trn (€464.4bn) Norwegian Government Pension Fund has divested shares in yet another Israeli firm for its involvement in developing settlements in occupied Palestinian territory.

In a statement, Norway’s finance ministry said it had sold all of its shares in leading Israeli construction and infrastructure firm Shikun & Binui, which at the end of 2011 were worth NOK8.5m.

Shikun & Binui is part of Israeli billionaire Shari Arison’s Arison Investments empire which also includes Bank Hapoalim, Israel’s largest bank.

The fund’s decision in 2009 to divest Israeli defence technologies company Elbit Systems over its role in supplying surveillance systems on the West Bank led to a diplomatic incident.

The latest announcement comes six months after the Council of Ethics, the ministry’s advisor on sustainable investing, had recommended it do so.

According to the Council, Shikun & Binui has helped build three settlements on occupied Palestinian territory, notably the Kibbutz Ramat Rachel in East Jerusalem that is to be completed in January.

“The Council emphasises that the construction of such settlements on occupied territory represents a violationof the Fourth Geneva Convention – the convention for the protection of civilian persons in time of war,” the ministry said.

It added that it had earlier excluded Israeli firms Africa Israel Investments and Danya Cebus for similar reasons (RI coverage).

The Council said that prior to making its recommendation, it had contacted Shikun & Binui for comment about its involvement in the settlements in East Jerusalem and on the West Bank.

“The company has not responded to any of the Council’s approaches,” it said.

Blachar Doron, Chief Financial Officer of Shikun & Binui, told Responsible Investor that the firm is an Israeli public company that operates according to all applicable laws, adding: “Without expressing or relating to any political views we would like to note that based on our understanding Ramat Rachel is not a ‘settlement in East Jerusalem’.”

Founded in 1924, Shikun & Binui is Israel’s leading infrastructure and real estate group. The firm prides itself on its sustainable credentials. According to its website, the firm is a “multi-faceted and socially responsible international group that produces balance between the business, social and environmental accomplishment.”

Finance Ministry statement