Companies doing business in Israeli settlements contribute to and profit from land confiscations and the violation of Palestinian workers' rights - and support the settlements which are illegal under international law, according to a Human Rights Watch report.

The report, published on Tuesday by the rights group, is titled Occupation, Inc: How Settlement Businesses Contribute to Israel's Violations of Palestinian Rights. It called on businesses to cease all activity in Israeli settlements, including trading with, servicing, financing or operating in them, in order to comply with their human rights responsibilities. It also called on governments to withhold aid to Israel, stating that they should "avoid offsetting the costs of Israeli government expenditures on settlements by withholding funding given to the Israeli government in an amount equivalent to its expenditures on settlements and related infrastructure in the West Bank".

The report explains how Israeli and international companies engaged in business activities in the West Bank are inextricably linked to Israel's discriminatory policies in the occupied territories, which deprive Palestinians of their natural resources.

The Palestinian town of Beit Fajar, near the occupied West Bank city of Bethlehem, is one example of an affected area mentioned in the report.

Beit Fajar is heavily dependent on the stone industry for its livelihood. Its 150 stone workshops and 40 quarries employ around 80 percent of its workforce.

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But according to Ahmad, who spoke to Al Jazeera under a pseudonym, running a quarry in Beit Fajar is no easy feat.

"We work on Shabbat [Saturday, the Jewish rest day] and other holidays in order to avoid getting our equipment confiscated. When we do work on regular days, we are always on guard. My equipment has been confiscated three times since 2007," he told Al Jazeera, adding that this cost him about $81,000 including $17,700 in fines.

Ahmad was denied permits to run the several quarries he owns in Area C, the area comprising 60 percent of the occupied West Bank considered by the Oslo Accords to be "under full Israeli control".

According to HRW's report, none of the Beit Fajar quarries located in Area C has been granted a permit by the Israeli Civil Administration, a unit of the Defense Ministry. The applications have, for the most part, been left pending.

According to the Palestinian Union of Stone and Marble, no new permits have been issued to Palestinians for quarries in Area C since 1994. By contrast, Israel has licensed 11 quarries to Israeli and international companies in Area C.

The West Bank was divided into three areas as part of the Oslo Accords in 1995. The aim of the interim agreement was to incrementally cede control of the West Bank to the Palestinian Authority, and was meant to end within five years.

Instead, an estimated 547,000 settlers live in about 125 settlements and 100 outposts (settlements not officially recognised by the Israeli government) in the occupied West Bank, excluding East Jerusalem.

Palestinian development and construction in Area C is all but banned, with 94 percent of Palestinian building-licence requests denied between 2000 and 2012.

Al Jazeera contacted the Civil Administration for a comment on the apparent discriminatory basis in which permits are issued. "Every year, the Civil Administration examines the renewal of the quarry permits in order to ensure the security measures are determined for the safety of the quarry workers as maintaining the natural view of [the West Bank]," a representative of the Civil Administration said.

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The 162-page report, which focuses on five case studies to show "the wide range of business involvement in Israeli settlements", highlights several cases including: RE/MAX, an American real estate company that sells and markets properties in illegal settlements, which Palestinians from the occupied West Bank are effectively not allowed to buy.

Another is an unnamed Israeli textile manufacturer that supplies an American retailer and has since relocated to Israel; an Israeli bank financing construction in the illegal Israeli settlement of Ariel; a landfill site that facilitates the use of confiscated land in the occupied West Bank to dump waste from Israel and the settlements; and the case of German multinational company Heidelberg Cement.

The bottom line is no settlement business should be operating and profiting from land and resources illegally taken from the Palestinian people. Arvind Ganesan, Director of the business and human rights division at Human Rights Watch

Heidelberg owns a quarry in Nahal Raba, in the western region of the occupied West Bank, through its subsidiary, Hanson. The quarry is located on 60 hectares of land which belong to the nearby Palestinian village of Zawiyah but which were declared state land and cut off from the village with the unlawful construction of the separation wall inside Palestinian territory.

The report points out that companies doing business in the settlements also contribute to making Israel's settlement enterprise sustainable.

In 2014, Heidelberg Cement, through its subsidiary, paid $467,000 in taxes to the Samaria Regional Council, as well as $3.53m in royalties to the Israeli Civil Administration for use of the Nahal Raba quarry.

The company defended its operations by arguing that in the same year, 60 percent of workers at the Nahal Raba quarry were Palestinians from the West Bank.

"We are convinced that the Palestinian population benefits from our operations due to the payment of royalties [to the Israeli Civil Administration] and provision of well-paid long-term employment opportunities," Andreas Schaller, its director of Communication and Investor Relations, wrote in a statement.

When the EU moved to issue guidelines for its member states to label some products made in the settlements last November, Israel similarly argued that the move would harm Palestinian workers.

But Palestinian analysts have debunked that argument, saying that the expansion of settlements contributes to choking the Palestinian economy, creating a situation of dependence whereby Palestinians have no choice but to join the ranks of cheap settlement labourers.

According to World Bank estimates, Israeli restrictions in Area C cost the Palestinian economy $3.4bn a year, or 33 percent of its GDP. And despite the fact that Israeli labour law should apply to Palestinian settlement workers, in practice this is not enforced.

Workers depend on Israeli-issued work permits and many are afraid to sue abusive employers for fear of losing them.

Human Rights Watch said that according to the United Nations Guiding Principles on Business and Human Rights, companies are responsible for identifying and mitigating any adverse human rights effect their business may cause.

"The circumstances under which business is conducted in the West Bank are intrinsically problematic under international law," Arvind Ganesan, director of the business and human rights division at Human Rights Watch, told Al Jazeera.

"Companies are responsible for knowing where their supply chain is and where they are investing. International rules on the human rights conduct of companies require them to not do business there," he added.

"The bottom line is that no settlement business should be operating and profiting from land and resources illegally taken from the Palestinian people," Ganesan said.