Swedish chain kicks out drink machines made in Israeli settlements

29 August 2011

110829-sodastream.jpg

Sodastream lists pressure on companies to leave the West Bank as a “risk factor” in its SEC filing.

(Anna Wester / The Electronic Intifada)

The summer of 2011 has been a long, hot one for Israeli and international companies complicit in human rights violations in the occupied West Bank.

Facing an intense Europe-wide boycott campaign, Israel’s largest produce exporter, Agrexco, filed for bankruptcy. French multinational Veolia, an urban systems corporation contracted with the Israeli government to provide light rail services for Israeli settlers in the West Bank, announced massive losses due to sustained pressure by activists around the world.

Meanwhile, in Sweden, the Israeli maker of home carbonation devices, Sodastream, took a direct hit when the Coop supermarket chain announced on 19 July that it would stop all purchases of its products due to the company’s activity in illegal Israeli settlements. This marked another important victory for the boycott, divestment and sanctions (BDS) movement, as Sweden is Sodastream’s largest market, with an estimated one in five households owning a Sodastream product (“Coop Sweden stops all purchases of Soda Stream carbonation devices,” 21 July 2011).

The Israeli company has been the target of a two-year campaign by Swedish activists who seek to highlight the company’s complicity with the Israeli occupation. The main production facilities for Sodastream are located at Mishor Adumim, the industrial zone of the Israeli settlement Maaleh Adumim in the occupied West Bank.

Sodastream, whose products are sold in 41 countries, has repeatedly attempted to deflect attention from the factory in the occupied West Bank, claiming that it is just one of many around the world.

In an interview last March with the Israeli financial daily The Marker (published by Haaretz), Sodastream CEO Daniel Birnbaum went so far as to say that “all Sodastream products sold in Sweden are made in China, not Israel” (“Sodastream setting up plant within Green Line,” 3 March 2011).

Sodastream’s documents disprove its claims

Sodastream’s own annual report demonstrates Birnbaum’s claims to be patently false. On 30 June, the company filed a report with the US Securities and Exchange Commission (SEC), as required for publicly traded companies (Sodastream is listed on NASDAQ). That report describes that the 164,214-square-foot facilities at Mishor Adumim include “a metal factory, plastic and bottle blowing factory, machining factory, assembly factory, cylinder manufacturing facility, CO2 refill line and cylinder retest facility,” while two subcontractors in China produce nothing more than “certain components” for Sodastream products (“Sodastream International Ltd.; Annual report,” 30 June 2011 [PDF]).

The widely-trumpeted “factories around the world” — namely Australia, Germany, the Netherlands, New Zealand, South Africa, Sweden and the United States — are shown in the annual report to be limited to carbon dioxide refilling services.

Coop Sweden initially tried to defend its ties with Sodastream, repeating claims that the products on Swedish retailer shelves were made in China. However, as highlighted in a report presented to Coop by the Palestine Solidarity Association of Sweden (PGS) last January, the main issue was that the company had partnered with Israeli firms complicit in violations of international law (“PGS urges Coop to stop supporting the occupation,” 14 January 2011 [Swedish]).

As the PGS report emphasizes, “[A] product is part of a firm, and if you buy a product from a firm with an unethical operation, then you support the firm’s operation.”

The decision by Coop Sweden, with 21.5 percent of the Swedish grocery retail sector, came after a nationally televised report covering Sodastream’s ongoing operations in Mishor Adumim aired on 4 July. Using information from Israeli journalists and human rights organizations as well as Sodastream’s own corporate data, the TV4 report showed that despite claims to the contrary by both Sodastream and its Swedish distributor, Empire, products sold in Sweden were produced in an illegal settlement in the occupied West Bank. Promises had been made by Empire three years ago that production in the settlement would cease (“TV report: Continued production on occupied land,” 4 July 2011 [Swedish]).

Sodastream taxes finance settlement

Sodastream was a natural choice for the case study in corporate activity in illegal Israeli settlements in the detailed report released in January 2011 by the Who Profits project of the Coalition of Women for Peace in Israel (“Sodastream: A case study for Corporate Activity in Illegal Israeli Settlements,” January 2011 [PDF]).

The report underscores how purchasing Sodastream products directly supports the Maaleh Adumim settlement. In its report Who Profits states that the municipal taxes the company pays are used exclusively to “support the growth and development of the settlement.”

Created in 1974, the illegal industrial park at Mishor Adumim was integral to the establishment of the Maaleh Adumim settlement. The ministerial committee tasked with executing the plan to create the industrial park expropriated an area seven times that originally recommended, stealing lands from the surrounding Palestinian towns of Abu Dis, Azarya, al-Tur, Issawiya, Khan al-Ahmar, Anata and Nabi Moussa. The Who Profits report notes this is “considered the largest single expropriation in the history of the Israeli occupation.”

In addition to the industrial park, the ministerial committee also added a camp to the plan “for workers whose work is in the area.” One year later, the workers’ compound was erected and declared the settlement of Maaleh Adumim, and in 1977 as the Likud party gained power, the Israeli government officially recognized Maaleh Adumim as a “civilian community,” according to a report by Israeli human rights groups B’Tselem and Bimkom (“The Hidden Agenda: The Establishment and Expansion Plans of Ma’ale Adummim and their Human Rights Ramification,” December 2009 [PDF]).

Today, it is Israel’s largest settlement in terms of geographical area and, with 35,000 settlers, third in population. Strategically positioned to link settlements in East Jerusalem to the Jordan Valley, Maaleh Adumim effectively bisects the West Bank, cutting off the north from the south.

Sodastream whitewashes exploitation of Palestinian workers

Meanwhile, the company’s leadership has attempted to paint Sodastream as an attractive place at which Palestinians would be lucky to work.

Sodastream Italy’s marketing director, Petra Schrott, responded with corporate talking points to a question posted on Yahoo Answers last June regarding the company’s West Bank location. Schrott described Sodastream as “a wonderful example of peaceful coexistence” where “160 Palestinians are employed and receive full social and health services” not to mention “daily hot meals” (“A question about Sodastream” [Italian]).

As the Who Profits report points out, Palestinian workers, left with few choices other than working in settlements due to high unemployment in the West Bank, are “occupied subjects and thus they do not enjoy civil rights, and depend on their employers for work permits.” Efforts by Palestinian workers to organize and demand their due rights often result in the revocation of work permits, leading few to make any requests of their employers at all.

According to the Israeli workers rights organization Kav LaOved, Palestinian workers in Israeli settlements are underpaid, subjected to extensive security checks, exposed to workplace hazards and are left to fend for themselves if injured on the job (“Palestinian Workers in Israeli West Bank Settlements - 2009,” 13 March 2010).

Kav LaOved has assisted workers at the Sodastream factory in their struggle to obtain improved working conditions, better salaries and, at times, unpaid wages.

In 2008, workers complaining of pay far below the required minimum wage and twelve-hour workdays organized a protest at the factory after their appeals for better wages had met with no results. Seventeen workers were fired. It was only after Kav LaOved intervened via letters and meetings with Sodastream management and after Sodastream earned itself unflattering publicity in the Swedish press that the company — begrudgingly — rehired the Palestinian workers and granted them their due rights. However, as Kav LaOved noted, they remain “at the bottom of the hierarchy in the factory and constantly fear their dismissal.”

The story repeated itself in April 2010, when 140 Palestinian workers were fired and not paid their wages for the previous month. Kav LaOved again succeeded in obtaining back pay and in having the workers rehired, except for the two who led the struggle. Since that time, Kav LaOved has been unable to gather any information on working conditions at the Sodastream factory (“Employees at Soda Club fired without wages (follow up report),” 27 April 2010).

Unsurprisingly, the Palestinian workers at the Sodastream factory come from some of the very villages whose land was stolen to create Maaleh Adumim, including Abu Dis and Azarya — Azarya alone lost 57 percent of its village lands.

Greenwashing the occupation

Sodastream markets its products as “eco-friendly.” That’s an idea that is difficult to reconcile with the fact that the very settlement the company financially supports is responsible for “managing” the infamous Abu Dis landfill. That landfill is built on expropriated land from the village of the same name, where garbage from areas in Jerusalem and the surrounding settlements is dumped.

In June 2011, the Jerusalem municipality finally agreed to comply with an order from the Ministry of the Environment filed in October 2010 to reduce the 1,100 tons of waste per day being sent to Abu Dis because the dump was “polluting nearby streams and land” (“J’lem trash crisis solved, Abu Dis dump to be phased out,” The Jerusalem Post, 17 June 2011).

The Abu Dis landfill sits atop the Mountain Aquifer, the primary water source in the occupied West Bank. Under the Oslo accords, the agreement signed by Israel and the Palestine Liberation Organization in the mid-1990s, Israel is granted four times more of the water from the aquifer than are Palestinians.

Furthermore, Palestinians are required to obtain approval for the development and maintenance of their own water resources from the Joint Water Committee. This joint Israeli-Palestinian committee, however, deals only with water and sewage-related issues within the West Bank, effectively giving Israel exclusive veto power on all decisions on water resource and infrastructure development, including in Oslo-designated areas A and B, areas of the West Bank ostensibly under Palestinian administrative control.

Since Oslo, not one new permit for agricultural wells has been issued and 120 existing Palestinian wells are not functioning for lack of approval for repairs, according to water rights organization Ewash. Palestinians are forced to purchase their own water from the Israeli water utility, Mekerot (“Water resources in the West Bank” [PDF]).

Settlement investment a “risk factor”

In disclosing risk factors as required in SEC filings, Sodastream listed both remaining in and transferring from Mishor Adumim as potential liabilities. The risks associated with staying include “negative publicity, primarily in Western Europe, against companies with facilities in the West Bank” and “consumer boycotts of Israeli products originating in the West Bank.”

Complying with international law and leaving the illegal settlement, on the other hand, would “limit certain tax benefits” enjoyed by companies in industrial parks in illegal settlements.

However, for more and more companies, those tax incentives fail to compensate for the negative publicity. On 19 July, the multinational corporation Unilever, after unsuccessfully attempting to sell its shares in the company, formally announced plans to move its Bagel and Bagel pretzel factory from the Barkan industrial zone in the Ariel settlement bloc to within the green line, Israel’s internationally-recognized armistice line with the occupied West Bank (“Bagel Bagel leaving territories,” 19 July 2011).

And while the Israel Lands Administration announced tenders for six new factories in Mishor Adumim, Israeli settlement watchdog group Peace Now points out that this is a recycled tender issued under the Olmert administration in 2008, which failed to find any takers (“Boycott Law Passes Knesset - Now Govt Establishes New Factories in Settlements,” Peace Now, 14 July 2011).

Sodastream itself has exhibited signs of bowing to international campaigns against the company. A press release on 6 July announced the groundbreaking of a new factory within the green line. The new facility is expected to begin operations in 2013, the same year the lease on the Mishor plant is due to expire (“SodaStream Announces the Groundbreaking of a New Primary Manufacturing Facility,” 6 July 2011).

In the press release, CEO Birnbaum says the company looks forward to leveraging “free trade agreements with the EU and North America.” In 2010, Sodastream was at the center of a European Court of Justice ruling that declared products originating in the settlements in the occupied Palestinian territories ineligible for preferential trade tariffs under the EU-Israel Agreement. Though several other legal actions were included in Sodastream’s SEC filings, this particular case was conspicuously missing.

Sodastream looking to expand but meets protest

Sodastream is largely an export company with only three percent of sales made in Israel, according to an article published last February on the Israeli promotional site Israel 21c (“Putting the ‘pop’ back into soda pop,” 22 February 2011).

While Sweden is currently Sodastream’s largest market, the advertising blitz taking place in several European countries and the US indicates the company is looking to expand. On 12 July Sodastream announced a 3.4-million euro ($4.9 million) TV ad campaign in the UK, and in Italy a 1.8-million euro ($2.6 million) campaign was announced in June.

Sodastream’s annual report shows its advertising budget more than doubled from 10.5 million euros ($15 million) in 2009 to 21.5 million euros ($31 million) in 2010.

Sodastream identifies the US as its “most important target market” in its annual report and US activists are gearing up to meet the challenge. In a coordinated action last March, a petition with more than 2,500 signatures calling on Bed Bath & Beyond to stop selling Sodastream products (as well as products from Ahava, the settlement-based cosmetics company), was delivered to 15 locations up and down the West Coast, from Seattle to Los Angeles (“Tell Bed Bath & Beyond to Stop Carrying Illegal Settlement Products!”, CodePink).

Earlier this month, a group of activists dressed as brides held a mock wedding inside Bed Bath & Beyond in Los Angeles calling on concerned brides everywhere to strike Sodastream (and Ahava) off their bridal registries (“BDS Brides Boycott SodaStream and Ahava Sales at Bed Bath & Beyond,” YouTube, 12 August 2011).

The recent decision by Coop Sweden, as well as the financial woes of occupation-complicit companies, will give BDS campaigns around the world a boost. And the comments sections for online Sodastream promotional pieces provide a prime space for activists to get the word out on Sodastream’s complicity in human rights violations.

Stephanie Westbrook is a US citizen based in Rome, Italy. Her articles have been published on Common Dreams, Counterpunch, The Electronic Intifada, In These Times and Z Magazine. She can be reached at steph AT webfabbrica DOT com.