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For almost a half a century, Israeli settlements in the Palestinian territories occupied during the Six Day War have grown, imposing a two-tiered system—one that not only discriminates against Palestinians but deprives them of basic rights and adversely impacts their society’s economic viability. Proponents of a two-state solution have watched with dismay as every new apartment and settlement erected in occupied territory created new stumbling blocks on the path to peace and ending the conflict. And yet Israel has faced few consequences. On Tuesday morning, however, New York–based Human Rights Watch released a report calling for an end to this impunity, at least where the international business community is concerned. Ad Policy

The new 162-page report, “Occupation, Inc.: How Settlement Businesses Contribute to Israel’s Violations of Palestinian Rights,” calls for businesses operating in and dealing directly with Israeli settlements to end their endeavors there. “In Human Rights Watch’s view, the context of human rights abuse to which settlement business activity contributes is so pervasive and severe that businesses should cease carrying out activities inside or for the benefit of settlements,” the report says. “They should also stop financing, administering, trading with or otherwise supporting settlements or settlement-related activities and infrastructure.”

The report coincides with recognition from an unlikely place of just how bad Israeli discriminations and rights abuses have gotten. On Monday, US Ambassador to Israel Dan Shapiro, a fluent Hebrew speaker who is well liked in the Jewish state, told an audience in Tel Aviv that “at times it seems Israel has two standards of adherence to rule of law in the West Bank: one for Jews and one for Palestinians.” Though Israeli Prime Minister Benjamin Netanyahu decried Shapiro’s statement as “unacceptable and untrue,” the settlement enterprise—which is illegal under international humanitarian law—patently imposes different standards on many aspects of life in the West Bank. "Israel has two standards of adherence to rule of law in the West Bank: one for Jews and one for Palestinians."

“Occupation, Inc.” leverages case studies to demonstrate just how businesses contribute to discrimination, rights abuses, and violations of humanitarian law. It divides businesses into two broad categories: those that directly contribute to supporting settlements—such as construction of settlements and the infrastructure needed to establish and maintain them—and those that are based in settlements, which don’t necessarily directly bolster the inherently rights-abusive enterprises, but nonetheless provide benefits to exclusive Jewish Israeli communities in Palestinian territories.

“We’re trying to be very strongly based in law,” says Sari Bashi, HRW’s Israel-Palestine country director. “Under international law, businesses have responsibilities. Our position is doing business in the settlements is inconsistent with those responsibilities.”

The move will no doubt be seen as controversial. “Israel is not going to care about this distinction that Human Rights Watch is making,” said Ali Abunimah, an activist and journalist who advocates for boycotting Israel. “As far as Israel is concerned, it’s a call for a boycott.” "As far as Israel is concerned, it's a call for a boycott."

The Israelis are almost certain to view the report as part of the growing movement to Boycott, Divest, and Sanction Israel, known by its initials BDS. As BDS has gained traction, it has been met by increasingly fierce resistance from the Israeli government and many pro-Israel groups in the United States. In his 2014 speech to the most influential American pro-Israel lobby, AIPAC, Netanyahu focused on the fight against the movement, but said it was doomed to fail. By last summer, Israeli rhetoric against BDS grew more intense and the government poured $25 million into anti-BDS efforts. “We are in the midst of a great struggle being waged against the state of Israel, an international campaign to blacken its name,” said Netanyahu. The issue has even percolated into American presidential politics: in a letter to megadonor Haim Saban, an Israeli-American businessman, Democratic front-runner Hillary Clinton pledged to “make countering BDS a priority.”

Even while BDS most often targets Israel as a whole, some peace activists, both from the pro-Palestinian and liberal pro-Israel camps, prefer to single out settlements. Not only is the occupation viewed as a humanitarian and human-rights disaster, but settlements impede chances for a two-state solution, the thinking goes. Calls outside the BDS movement for boycotting settlements have even caused rifts among liberal pro-Israel groups: Some, like Americans for Peace Now, support settlement boycotts while others, such as J Street, oppose settlements, but don’t call on their membership to boycott.

Nonetheless, such distinctions are lost on Israel’s right-wing government, where settlers rule the roost. Netanyahu has overseen a massive boom in settlement growth, and his government coalition is populated by pro-settlement parties and even many politicians who disavow the two-state solution altogether. Over the holidays, Israel’s Ambassador in Washington gave gifts produced in settlements to foreign officials, ironically mimicking the erasure of the Green Line that hardcore BDS activists push for. LIKE THIS? GET MORE OF OUR BEST REPORTING AND ANALYSIS

Those BDS activists, for their part, welcome the Human Rights Watch report. Omar Barghouti, a founding member of the BDS movement, calls the report “ground-breaking—even courageous, given the current environment of increased repression and McCarthyism in the US.” Abunimah, also a strong supporter of BDS, says it was “a very good step in the right direction,” adding, “This report will be a really useful tool for BDS activists.”

The report calls on third-party states to deny settlement products the benefits afforded by trade agreements to Israeli products, therefore subjecting those goods to full tariffs. In accordance with that, HRW calls on countries to impose strict protocols for labeling the origins of settlement products as such. The European Union is working through its own origin labeling regulations with regards to the settlements and, on Monday, stated that any EU deals with Israel must exclude the occupied territories, a move Israel opposed. Israel reportedly softened the language from European foreign ministers, an outcome one activist, who works on EU and Israeli-Palestinian issues and asked to remain anonymous, says that an earlier release of the HRW report could perhaps have forestalled.

Abunimah, the pro-Palestinian activist, also lauds HRW for having made “a big shift form their previous position and accept[ing] that any and all business is abusive and helps Israel in grave violations of Palestinian rights and international law.”

In 2010, Human Rights Watch released a report on discrimination against Palestinians in the West Bank that called on businesses to “to prevent and mitigate any corporate involvement” in rights abuses, only cutting off business entirely when the activities were inextricable from abuses. The shift occurred in part because the new report and the recommendations it makes to businesses active in the settlements, Israel, and third-party states relies heavily on the United Nations Guiding Principles on Business and Human Rights, which was not adopted by the UN Human Rights Council in June 2011, says Arvind Ganesan, who directs the Business and Human Rights division at HRW. “It’s very clear that if a company is contributing to violations or operating in a place where there is a high risk of exacerbating or contributing to violations, you shouldn’t do that,” says Ganesan. “The whole nature of settlements and way land is seized and the nature of who benefits makes it hard to see how you can operate there.”

“Occupation, Inc.” makes this case through meticulous research and careful attention to the consequences of Israel’s illegal actions in the West Bank. One particularly strong section deals with one of the most common pro-Israel defenses of settlement business: that it supports Palestinian economic life. Settlement businesses claim to bring jobs for Palestinians, but HRW’s report shows that the discriminatory legal system makes labor abuses possible. And as the report and countless others have pointed out, the World Bank has estimated that with an end to restrictions on Palestinian economic activity in Area C (some 60 percent of the West Bank that is controlled exclusively by Israel), the Palestinian GDP could jump by more than a third, making way for more Palestinians to be employed by Palestinian companies.

“There is an ongoing and concerted Israeli pushback against the compelling logic of acting on the illegality of settlements and the illegality of Israeli actions beyond the Green Line by way of more than rhetorical condemnation,” says Daniel Levy, the head of the European Council on Foreign Relations’ Middle East and North Africa program. “That Israeli pushback rests on very weak legal and substantive grounds. The flimsiness of those grounds is being further exposed by this Human Rights Watch report.”

Ultimately, settlements and settlement business don’t account for a huge portion of Israeli economic activity, but liberals like Levy who work on Israel-Palestine issues welcome the renewed focus. Levy says the “the major propelling factor for the status quo, the impunity that Israel feels in the face of its actions toward to the Palestinians” needs to give way to “the obvious consequences that have been called for by this Human Rights Watch report.”

“We’re a long way from that being addressed,” he adds, “but this takes us in the right direction for those who want to see peace between Israel and Palestine.”