NEWS ANALYSIS: UMC Will Not Invest in 5 Israeli Banks

FlagBy Walter Fenton-

The New York TimesThe Washington Post, and the United Methodist News Service reported this week that the UM Church’s General Board of Pension and Health Benefits (GBPHB) will not invest in five major Israeli banks.

According to the Times article ,the pension board, which manages assets valued at $20.9 billion, represents the “first time that a pension fund of a large American church had taken such a step regarding the five Israeli banks” that finance settlements in the disputed territory of the West Bank.

According to a December 2015 statement released by Wespath, GBPHB’s investment management division, the Israeli banks were among a list of 39 world wide companies the board listed as ineligible for investment.

GBPHB is charged with the tasks of maximizing return on the investment of pension funds while simultaneously honoring the Book of Discipline’s demand for socially responsible investing practices that conform with the Church’s Social Principles.

The five Israeli banks and the 34 other companies made GBPHB’s blacklist based on guidelines it implemented in 2015. It identified 14 countries/regions in the world that Freedom House, a human rights advocacy organization, ranked as the “worst of the worst” in terms of “political rights and civil liberties.”

In addition to the Israel-Palestinian Territories, countries like North Korea, Syria, and Somalia made the list as well. The 39 banned companies are either based in or do business with the 14 countries/regions cited in the board’s Human Rights Guideline.

According to its statement, GBPHB’s general strategy regarding investing and human rights is to “actively influence the promotion and protection of human rights through constructive engagement by using our voice as shareholders to change company practices.” However, it also notes there are instances when a “company is very unlikely-or unable-to discontinue activities in certain parts of the world that we have classified as ‘high risk.'”

Despite the fact that GBPHB declared 39 companies ineligible for investment, its decision to include the Israeli banks is what drew the national media’s attention, and is sure to engender dismay and debate among rank-and-file United Methodists.

United Methodist Kairos Response (UMKR), an advocacy group for wider divestment in Israel and companies doing business with it, welcomed the announcement, but also said it was disappointed that the board did not go further. It noted that GBPHB’s investments in approximately 18 other Israeli companies are incompatible with a resolution in the Church’s 2012 Book of Resolutions.

Still other United Methodists regard Israel as a staunch U.S. ally, and note that it is the only democracy in the volatile Middle East where autocrats and military dictatorships largely reign. They believe calls for divestment unfairly target Israel, and are driven by some European countries and faculty and student activist groups at some U.S. colleges and universities.

At the 2012 General Conference in Tampa, Florida, delegates soundly rejected, by a 2-1 margin, a petition calling on the UM Church to divest funds from three companies whose products are used by the Israeli military in the disputed West Bank territory. UMKR and the UM Board of Church and Society have submitted petitions to the 2016 General Conference calling for divestment from Israeli companies doing business in the territory.

In 1947 a United Nations resolution partitioned territory along the eastern Mediterranean coast that was formerly governed by the United Kingdom. The aim was to create two independent countries, a Palestinian state and a Jewish one.

Shortly after the UN resolution was adopted the Palestinians and other existing Arab nations rejected the partition and went to war with Israel in a failed bid to circumvent its formation. By the end of the war the state of Jordan had gained control of the now disputed West Bank territory, and it annexed the region in 1950. Israel then gained control of the West Bank during the Six Days War fought in June 1967.

The Palestinian Authority (PA) regards the West Bank as part of the State of Palestine and many nations recognize its claim. Israel maintains a military presence there and has built settlements in the territory. Since the Palestinians never accepted the partition plan in 1947, and Jordan relinquished its claim to the territory in 1988, Israel does not necessarily regard the territory as occupied, even though a majority of Israelis acknowledge that all or most of the disputed territory should be handed over to the Palestinians as part of negotiated peace treaty resulting in a two state solution.

Hamas, a Palestinian terrorist group that controls the Gaza Strip, another section of the UN partitioned land, is frequently at odds with the PA, and is also dedicated to the elimination of the State of Israel. In recent years, it has launched indiscriminate rocket attacks against Israel that have resulted in punishing military responses.

Israel regards Hamas as an existential threat to its existence, and the infighting between Hamas and the PA has only exacerbated the difficult negotiations between Israel and the PA regarding a two-state solution. Despite the effort of the U.S. and European powers to broker a settlement, the peace process remains deadlocked.

Given that negotiations for a definitive peace settlement between Israel and the PA wax and wane, observers are not of one mind about the productivity of the UM Church blacklisting Israeli banks, other Israeli companies, and companies that do business with Israel. To many United Methodists, attempts by the denomination to economically punish Israel seem very unlikely to lead to a just and peaceful settlement in the region.

Blacklisting Israeli banks also raises questions by investment observers as to why other countries and companies are not included. For example, in the past ten years Russia has seized or abetted the seizure of territory in the countries of Georgia and Ukraine. Through its proxies, Russia continues to either hold sway in the territories, or, as in the case of the Crimean Peninsula, has annexed it. Russia is not listed as one of the 14 countries/regions on the list and it does not appear that any Russian company is among the 39 companies blacklisted by GBPHB.

When it comes to dealing with Israel, the only democracy in the volatile Middle East, many concerned United Methodists believe GBPHB is much better off adhering to its strategy of “influenc[ing] the promotion and protection of human rights through constructive engagement by using [its] voice as [a] shareholder,” not placing it on a list with the likes of North Korea, Syria and Somalia.

Walter Fenton is a United Methodist clergyperson and an analyst for Good News.

 

Comments

  1. Ian McDonald says

    Wow! The United Methodist Church now aligns itself with Anti Semitism. If the United Methodist Church continues in its biased views it only has itself to blame for decreasing membership. If only the leadership could look at both sides of an issue and remember scripture they might make better decisions.

  2. Susanne Hoder says

    I would like to correct an important factual error in Mr. Fenton’s article above. United Methodist Kairos Response did not say that “investment in approximately 18 other Israeli companies are incompatible with a resolution in the church’s 2012 Book of Resolutions.” The investments our organization is concerned with are, as our press release states clearly, “ten companies located inside the illegal settlements and …. several others that lend important support to Israel’s occupation. A list of those companies is available on the UMKR website.” Most of those other companies are not Israeli. UMKR has never asked the church to divest from Israeli companies unless they are located in the settlements or providing demonstrated support to Israel’s occupation. Of the current investments in Israel, we are focused only on those that are located inside the illegal settlements which the General Conference has repeatedly condemned,

  3. Theresa Strait says

    God has an eternal covenant with the Jewish people (Abraham, Isaac, Jacob) and the land of Israel. He will save Israel for His namesake. We are grafted in to the original roots of the Jews through Abraham’s covenant. Let’s bring our love for the God of Abraham, Isaac and Jacob to the Jews first, as Jesus did. The Palestinians are Gentiles too, just as we are. When the Gentiles accept Jesus (Yeshua) as the Holy One, the Annointed One, then they (we) become children of God. It is our time to make the Jews jealous, not curse them. We must love them and the land of Israel (Gen 12:3 & Num 24:9). We must love Judea Samaria. We must love all of God’s creation and bring them to His Son. Then, at the sound of the trumpets, those who believe… Do not be blinded, for you will fall asleep when the bridegroom comes knocking and your door will be locked… If you continue to curse Israel, it will not go well for you. His face will turn from you…

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