The Unexpected Trade and Business Implications of Israel’s Attack on Al Haq

[Tara Van Ho is a Senior Lecturer at the University of Essex School of Law and Human Rights Centre, and served as a Visiting Fellow for Al Haq in 2015.]

Last Friday, the Israeli Minister of Defense Benny Gantz designated six Palestinian human rights NGOs, including Al Haq, terrorist organisations. He has provided no evidence to support this determination. Al Haq is the leading business and human rights NGO in the Middle East, and seemingly the only NGO with that specialisation within Palestine itself. As the U.N. High Commissioner for Human Rights Michelle Bachett has noted, it is one of the U.N.’s most trusted NGO partners in the region and has played an important role in documenting, analysing, and disseminating information about human rights abuses in the West Bank since its founding in 1979. Gantz’s designation effectively criminalizes Al Haq employees for this human rights work. Eliav Lieblich and Adam Shinar have already unpacked the broad legal consequences of the designations. 

In this post, I consider a further, indirect but potentially wide-reaching consequence of the designation: it limits the ability of businesses and third-party states to conclude adequate and effective human rights due diligence in Israel and Palestine, as required by both the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the Arms Trade Treaty (art. 7) (ATT). A free, independent civil society is key to ensuring due diligence under both regimes. By attacking and foreclosing civil society space, Gantz has undermined the ability of businesses and states to continue trading with or within Israel while respecting human rights. This has the potential to transform the ‘divestment’ movement in the ‘BDS’ campaign from a political choice to a legal necessity, which is a serious problem for Israel and its allies. 

Due Diligence, the ATT, and the UNGPs: the Necessary Role of Civil Society

Under the ATT and UNGPs, states and businesses, respectively, need to undertake due diligence to avoid causing or contributing to violations of IHRL and IHL. The regimes are, in many ways, complementary. Both require relevant actors to investigate the IHRL and IHL impacts of their conduct, to take steps to mitigate any adverse impacts, and to stop activities that breach internationally recognised rights.

Under the ATT, states agree to limit the sale and transfer of weapons if there are risks of serious IHRL and IHL violations. States are obligated to, ‘in an objective and non-discriminatory manner, taking into account relevant factors … assess the potential’ for exported arms to be used to commit such violations (art 7(1)). The state can consider effective mitigation techniques, but if there remains an ‘overriding risk’ of a serious violation, ‘the exporting State Party shall not authorize the export’ (art 7(3)). 

The UNGPs, unanimously endorsed by the Human Rights Council, have a broader remit. They apply to all businesses, in all contexts and all industries, at all times. They are the most authoritative international statement on businesses’ responsibilities towards human rights and have been incorporated into domestic statutes, public policy commitments, and court decisions in numerous countries. According to the UNGPs, all businesses must respect human rights by conducting due diligence to identify and mitigate any harms they cause or contribute to. While the ATT considers only ‘serious’ breaches of IHRL and IHL, the UNGPs require businesses to account for any reduction in the realization of human rights. The responsibility on businesses operates independently of any state’s willingness or ability to meet its own IHRL and IHL obligations. If mitigation efforts are ineffective or incomplete, a business will owe reparations for any harms it causes or contributes to (Principle 22). 

The ATT requires due diligence but is vague as to what that entails. The UNGPs are clearer in this regard and given their alignment it makes sense to apply the UNGPs approach to due diligence to the ATT. For the UNGPs, adequate due diligence in complex environments (such as Israel and Palestine) requires a competent, credible, and independent civil society (UNGPs, Principles 18 and 23; and authoritative guidance here at paras 84(c), 94, here at page 11, and here at pages 25, 43, 51, 55, 59, 80-81). This is because the purpose of due diligence is to ensure an independent assessment of potential harms caused by a host or importing state. It is trite to acknowledge that states are often incapable or unwilling to admit their own human rights impacts, so having an independent assessment of what is happening on the ground is necessary for due diligence to be effective. A trusted and effective civil society provides valuable data for human rights due diligence. 

Adequate and effective due diligence under the ATT and the UNGPs requires a specific ecosystem. A free and competent civil society, capable of raising the alarm over IHRL and IHL violations, is a necessary component of that ecosystem. Their reporting helps highlight areas of concern. In turn, third-party states and international organisations can focus their energies. Collectively, the reports of civil society, diplomatic, and international organisations should feed into a business’s own assessment of the risks it poses to human rights. It is the ecosystem as a whole, rather than any one data point within it, that allows for an appropriate assessment of the IHRL and IHL risks associated with a transaction or operation. Without a free and competent civil society, that ecosystem is incomplete and States and businesses simply cannot, ‘in an objective and non-discriminatory manner,’ understand the IHRL and IHL risks of a transaction. Any resulting due diligence is tainted, inadequate, and ineffective.

NGOs carry an additional responsibility in human rights due diligence. Trusted and respected human rights NGOs are able to help businesses and third-party states negotiate tricky compromises when diligence reveals tension between the host state and rights-holders. The NGOs can explain and advocate for victims and can, in turn, bring proposals from businesses back to affected stakeholders. By limiting civil society, states limit the potential for creative and legitimate mitigation efforts in complex environments like Israel and Palestine. 

In light of the role NGOs play in identifying potential risks and mitigating potential harms, states that target and harass civil society—by, for example, designating them terrorist organizations without clear and compelling evidence, criminalizing their employees’ conduct, and seizing their assets—undermine the ability of businesses and third-party states to conduct the due diligence they are required to under the UNGPs and the ATT. This is not only true for Israel, but is a serious issue currently in states like China, Turkey, and Myanmar. In such a circumstance, it can be impossible for businesses and third-party states to comply with human rights while operating in, or selling weapons to, that state. 

The Due Diligence Impact of Targeting Al Haq

When it comes to business and human rights in Palestine, there is simply no substitute for Al Haq. I know of no other NGO based in Palestine with the knowledge and competency it has evidenced over the years. The impact of designating Al Haq a terrorist organisation is that the due diligence ecosystem is compromised. Al Haq cannot continue to operate as its assets and its employees are under threat.

While technically other NGOs are allowed to continue operations, the targeting of Al Haq in such an arbitrary and untransparent manner is likely to have a wider chilling effect. Without clear and persuasive evidence to support his designations, Gantz’s conduct suggests effective and competent NGOs will be targeted. Even legitimate documentation, criticism, and analysis of Palestine can—arbitrarily, capriciously, and without due process—result in the criminalisation of a human rights organisation and its employees. Consequently, Palestinian NGOs will need to be cautious about the topics they advocate on and how effective they are with that advocacy. 

That means additional data points necessary for human rights due diligence are also gone.

This has knock-on effects. Since the UN, the Swedish government, and others use Al Haq, and the other NGOs, as trust partners the ability of those entities to adequately and effectively feed into due diligence is also compromised. 

It is no longer one data-point that is compromised. The entire system for due diligence is undermined. There is simply no way for businesses or states to get the comprehensive picture needed for human rights due diligence. 

The Consequence of Compromised Due Diligence

Gantz has turned what was already a fragile human rights due diligence ecosystem into a completely ineffective one. This carries legal consequences for businesses and third-party states under the UNGPs and the ATT. 

In a forthcoming article for Human Rights Quarterly, I explain that inadequate due diligence increases business’s responsibility for harms that result directly and indirectly from their operations and business partnerships within a region. In the article, I focused on the consequence of businesses continuing to operate in Xinjiang, China, but unfortunately those lessons are now applicable in Israel and Palestine. Without a free and competent civil society, businesses cannot get an adequate picture of the risks they pose to Palestinians when operating in Palestine or Israel. 

The legal consequence of that under the UNGPs is that most businesses will need to leave Israel. Only business that are hyper-localized can have the knowledge and insights necessary, meaning the business is certain that no construction materials or minerals are coming from occupied territories or illegal settlements, they are not facilitating discrimination of Palestinians in East Jerusalem, and they are not providing weapons, or security or telecommunications information to the Israeli government that could be used to against Palestinians and in breach of IHRL and IHL. Businesses that choose to continue operations in Israel or Palestine—and businesses whose supply chains extend to Israel or Palestine—will be doing so with the knowledge that their due diligence is inadequate and that knowledge and recklessness increases their responsibility for reparations under the UNGPs. 

What is true for businesses under the UNGPs is true for states under the ATT. States cannot adequately understand the likelihood of harms if organisations like Al Haq are prevented from monitoring and reporting on human rights concerns. While one might argue that the ATT has long required states to suspend weapons sales to Israel, that debate is now moot. Third-party states, like France, Germany, and the U.K., simply cannot meet the obligation to assess the potential of weapons to facilitate IHRL and IHL violations, as required in the ATT. As such, they must suspend any sale or transfer to Israel, at least until the unfounded designation of Al Haq and the other NGOs as terrorist entities is lifted.