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BlackRock divests from the West Bank

Erik Hagen | Norwatch

20 August 2009

The British bank BlackRock has divested from Lev Leviev settlement projects on West Bank. The divestment follows pressure by three Norwegian banks marketing BlackRock funds. BlackRock was second biggest shareholder in the controversial Israeli firm.

When the British Embassy in Tel Aviv was looking for new premises and was offered the opportunity of occupying a building owned by the investment company Africa-Israel Investments, the ambassador refrained. The reason was that the company was also responsible for settlements on the occupied West Bank. Africa-Israel Investments’ main owner is Israeli diamond magnate Lev Leviev.

Now the UK bank BlackRock has followed in the footsteps of the ambassador.

The bank was for a while the second largest shareholder in the Israeli investment company. Africa-Israel Investments is, among other things, in on the construction of the settlement Ma’aleh Adumim (above). The construction of settlements on occupied Palestinian territory is in conflict with international law.

It was Norwatch who this past spring revealed BlackRock’s investments in the controversial company and how private investors in Norway could invest in the project by means of the fund BlackRock Emerging Europe.

This was possible through Norwegian insurance company Storebrand, Norwegian-Swedish bank Skandiabanken, and the Norwegian-Danish Danica Pensjon.

But after all 3 banks have taken action, the British bank has now announced its divestment from the Israeli company. This must have happened sometime between June and August, possibly as late as this week.

“We have received confirmation from BlackRock that Africa-Israel Investments no longer is part of their portfolio,” Johnny Anderson, Information Manager of Skandiabanken, confirmed to Norwatch. The confirmation of the divestment was sent to Skandiabanken the day before yesterday, on 18 August.

“The way I interpret the e-mail I have received, Africa-Israel is no longer to be found in any of BlackRock’s funds,” Anderson said.

The e-mail from BlackRock to Skandiabanken was sent after the Swedish-Norwegian bank had approached BlackRock with regard to the controversial Israel involvement. That is the first time that Skandiabanken had contacted BlackRock about the case. Also the bank Danica Pensjon end of last week contacted BlackRock about the matter, confirmed Geir Wik, Sales and Marketing Director of Danica Pensjon to Norwatch yesterday.

Met BlackRock

It was, however, Storebrand who was the first bank to really take action.

In April and May – a few weeks after Norwatch’s first coverage on the matter – they met with BlackRock with regard to the investment.

“We brought up our concerns with regard to Africa-Israel Investments. So far their response has been satisfactory,” Christine Tørklep Meisingset, Head Storebrand SRI investments at Storebrand Investments, wrote to Norwatch last week.

The fact that Storebrand was satisfied with the meetings they had with BlackRock already before the summer may indicate that the British bank promised either sale or active ownership.

“Each quarter we carry out checks on the external funds that Storebrand offers its customers, including this BlackRock fund. In case a fund is in breach with our ethical guidelines, we do what we can to make the manager change course. We ask them to a) contact the company in question to perform active ownership, or b) divest from the company in question. If our demands are not complied with, we may stop offering the fund in question,” Tørklep Meisingset wrote.

As late as at the end of last week, Tørklep Meisingset explained that they do not know whether BlackRock had brought up the problems with Africa-Israel Investments.

Silent Bank

BlackRock is not very communicative about its investments.

Norwatch has several times tried to obtain an answer from BlackRock about the extent of its investment in Africa-Israel Investments and asked whether the bank has been in communication with the controversial settlement constructor. The last e-mail we received was from BlackRock press contact Karen Hazelwood on Thursday of last week.

“We do not comment on individual stocks or securities. I am therefore unable to help you further with your enquiry,” Hazlewood stated.

This ambiguous answer leaves it unclear whether BlackRock at that point had still invested in Africa-Israel.

It is not known whether BlackRock dropped the investment of financial or ethical reasons.

According to information that the web site Electronic Intifada has obtained, BlackRock was the second largest shareholder in Africa-Israel Investments in the middle of June.

This position they got after buying Barclays Global Fund Advisors –which at the time was the second biggest shareholder in Africa-Israel Investments. Before this, BlackRock was already the seventh biggest shareholder alone.

The Pension Fund Next?
The Norwegian Government Pension Fund has also invested in Africa-Israel Investment, and its related firm Africa-Israel Properties. The investment is for a total of 6.6 million Norwegian kroners (760,000 euros). According to the sums from Electronic Intifada, the Norwegian government is thus the fifth largest shareholder in the company.

Many Israeli and Palestinian organisations and villages have in the course of the summer written to Norway’s Minister of Finance, Kristin Halvorsen, and requested that the Norwegian government sell its investment in the two related firms.

The government’s decision has not yet been made.