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UK anti-divestment bill to single out boycott of Israel

16 June 2023

Legislation to be tabled next week, exclusively viewed by MEE, will prohibit British public bodies from investment decisions based on 'moral disapproval' of foreign states.

A UK parliamentary bill set to be tabled next week will seek to prevent public bodies from divesting in companies based on the conduct of a foreign government, specifically singling out Israel and occupied Palestine, Middle East Eye understands.

MEE has exclusively seen a draft of the Economic Activity of Public Bodies (Overseas Matters) bill, which will be presented to parliament on Monday by Communities Secretary Michael Gove.

If passed, the bill would prohibit procurement and investment decisions made by public bodies that are “influenced by political or moral disapproval of foreign state conduct”.

The bill sets out that the government can “specify a country or territory” for which the bill “does not apply”.

However, the text explicitly states that such exemptions “may not specify” decisions or considerations “relating specifically or mainly to Israel, the Occupied Palestinian Territories, or the Occupied Golan Heights”.

It is the only reference to any specific countries or territories in the 17-page draft document.

Investment decisions mostly relate to those made by managers of “local government schemes for which a pension fund is maintained”.

Meanwhile, procurement decisions refer to the purchase of goods, or the procurement of services by public bodies.

Last year, the UK parliament voted in favour of an amendment banning public sector employees from boycotting Israeli investments within their pension pots.

The government later announced during the Queen’s Speech opening of Parliament that further bills would be introduced to “prevent public bodies engaging in boycotts that undermine community cohesion”.

Human rights groups at the time called on the government to halt the legislation, stating that it would prevent public bodies from “disentangling themselves from human rights abuses”.

The moves appear to be an attempt to target the Boycott, Divestment, Sanctions (BDS) movement, which seeks to pressure Israel into ending the illegal occupation of Palestinian territories, and is itself modelled after the successful boycott of apartheid South Africa.

Gove has previously said that BDS had "fuelled antisemitism".

Higher education targeted

If the anti-divestment bill passes into law, those who contravene it will be given a written notice, followed by potential fines if there is further failure to comply.

Higher education providers in England will be among the public bodies subject to the legislation, enforceable by the Office for Students.

The UK's intelligence and security services, as well as defence contractors, will be exempt.

There are also exceptions on the grounds of national security, international law breaches, cases of bribery, labour-related and competition law infringements, and environmental misconduct.

Last year, the UK applied a wide range of sanctions and boycotts against Russian businesses and cultural programmes following Moscow’s invasion of Ukraine.

The UK government has also enacted measures to ensure that British organisations and companies are not profiting from human rights abuses in Xinjiang, where the Chinese government is accused of detaining and abusing Uyghurs and other Muslim minorities.

Legislation in relation to pension funds was put forward by the UK government after it was taken to court by the Palestine Solidarity Campaign over efforts to prohibit local government schemes from divesting in companies complicit in Israeli human rights violations.

The Supreme Court ruled against the government in 2020.


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