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Analysis

US states’ fully baked anti-BDS laws could put the freeze on Ben & Jerry’s

Legislation doesn’t differentiate between Israel and settlements, and states could now be forced to pull contracts, along with pension funds invested in parent company Unilever

Jacob Magid

Jacob Magid is The Times of Israel's US correspondent based in New York

Two patrons enter the Ben & Jerry's Ice Cream shop in Burlington, Vermont, on, July 20, 2021. (AP Photo/Charles Krupa)
Two patrons enter the Ben & Jerry's Ice Cream shop in Burlington, Vermont, on, July 20, 2021. (AP Photo/Charles Krupa)

In a 2018 announcement similar to the one made by Ben & Jerry’s this week, Airbnb said that it would no longer be offering listings in Israeli settlements.

Airbnb insisted that it was not boycotting Israel and that it opposed the Boycott, Divestment and Sanctions movement, which does not differentiate between Israel proper and the West Bank, as Airbnb was seeking to do. But that was not enough to prevent the vacation rental giant from being inundated with lawsuits by plaintiffs in the United States who alleged discriminatory practices.

In a court settlement reached less than five months after its press-stopping announcement, Airbnb decided to walk back the decision to remove listings in the settlements.

With its Monday announcement that it would cease selling its ice cream in the “Occupied Palestinian Territory,” Ben & Jerry’s ostensibly aims to take the anti-settlement cause a step further than Airbnb was able to carry it.

But the ice cream giant is slated to face similar legal challenges by pro-Israel activists and lawmakers in the US who do not accept efforts to differentiate between Israel and the West Bank when it comes to boycotts. They maintain that the refusal to sell a pint in Efrat is no different from refusing to sell one in Tel Aviv.

Israel has not wasted any time, with its ambassador to the US, Gilad Erdan, penning letters to each of the governors of the over 30 states that have passed legislation targeting BDS, urging them to act against Ben & Jerry’s in line with those laws.

That legislation includes requirements for states to pull their pension fund investments from firms that boycott Israel and strip those companies of any contracts signed with said states.

Richard Goldberg, who drafted one of the first anti-BDS laws while working for former Illinois governor Bruce Rauner in 2015, said that in addition to the discrimination lawsuits, Airbnb’s decision to walk back its settlement boycott followed notices from states such as Illinois, Florida and New Jersey that they planned to pull their pension funds as a result of the announcement.

“Those states took action and got Airbnb’s attention very quickly, partly because they were looking forward to an IPO, and state pension divestment actions would likely have been pretty tough for them in that environment,” Goldberg told The Times of Israel.

According to Bloomberg investment data, Florida, Texas, New Jersey, Arizona, Illinois and Mississippi all have pension funds currently invested in Unilever, the parent company of Ben & Jerry’s. They are also six of the 12 states that have passed legislation requiring them to divest their pension funds from companies that participate in a boycott of Israel.

“In this case, you have a decision by a large corporation to inflict economic harm on a company based in Israel for political motivations, which is not just a textbook definition of BDS, but a legal definition within the criteria of the state laws against it,” said Goldberg, who is now a senior adviser to the Foundation for Defense of Democracies. He was referring to the Ben and Jerry’s plant in Israel, which lost its contract to produce the ice cream due to the company’s decision.

Lara Friedman, who tracks anti-BDS legislation as president of the Foundation of Middle East Peace, said she expected states to act swiftly.

“For legislators trying to make a really political statement, I don’t see them saying, ‘Well let’s wait and see,'” she said, adding that settlement boycott opponents will likely be “scrubbing the books in the states that have these laws to see if they can take some punitive action.”

Targeting pension investments appears to be a more surefire way of exacting revenge on Ben & Jerry’s than blacklisting the company from contracts with states.

Following a series of First Amendment challenges to the laws, many states now set a minimum amount of $100,000 in trade before anti-BDS measures can be triggered against a contractor. That would mean that smaller Ben & Jerry’s contracts would remain unaffected, even in states with anti-BDS laws. But Friedman and Goldberg still said that future contracts with Ben & Jerry’s could be in jeopardy.

The third track of punishment that Ben & Jerry’s will likely face is reputational harm. Foreign Minister Yair Lapid set the tone of the onslaught went he claimed that the ice cream company “caved to antisemitism.”

The West Bank settlement of Beitar Illit, with the Palestinian village of Wadi Fukin in the valley below, June 17, 2015. (Nati Shohat/Flash90)

“Trying to slander these companies as antisemitic on the national and international stage is not a small thing,” Friedman said. “The question is how long will companies and shareholders be willing to hold the line against that.

“The folks who oppose this will pull out all the stops to push Ben & Jerry’s to reverse the position like Airbnb did or to punish them so badly that no one else will dare go there,” she added.

Goldberg noted the effort by Ben & Jerry’s to differentiate between its West Bank ban and its willingness to continue selling its products in Israel, in an apparent effort to skirt legal repercussions.

“Differentiation is a comfortable place for those who want to say this is about settlements and not about the State of Israel, which elides the fact that the policy of settlements in the West Bank is a policy of the State of Israel,” Friedman said.

Goldberg noted that states’ anti-BDS legislation makes no such differentiation between the West Bank and Israel proper, “because in the end you are punishing an Israeli company and not one that is only operating in the West Bank.”

The laws appear to have been written with the intention of including boycotts of settlements within the broader framework of Israel boycotts. In Illinois’s anti-BDS law for example, Israel boycotts are defined as “engaging in actions that are politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel.”

More than targeting the boycotters of Israel proper, Friedman maintained that anti-BDS legislation is designed to go after the relatively more moderate firms that urge targeted boycotts of the settlement enterprise. She referred to a recent blacklist compiled as a result of New York’s anti-BDS legislation where the majority of firms listed were ones that engaged in settlement boycotts and added that no major company has pursued a boycott of both Israel and the settlements in the past decade.

JTA contributed to this report.

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