Fine Print: Bill Would Prohibit NJ Stake in Firms that Boycott Israel
Legislation call for ban on investment of pension fund assets in companies linked to pro-Palestinian movement
What it is: Athat passed the state Senate with bipartisan support last month seeks to bar New Jersey public-employee pension system assets from being invested in companies that participate in a movement that uses boycotts to protest Israel’s treatment of Palestinians, both in Israel and in territories it has occupied since 1967.
Launched 10 years ago by nonviolent Palestinian activists, the Boycott, Divestment and Sanction movement generally follows the same approach that was used to apply economic pressure on apartheid-era South Africa in the 1980s.
As the latest negotiations toward a two-state solution have stalled between Israeli and Palestinian leaders, the movement known as BDS has begun to pick up steam in Europe and among some U.S. academic and religious institutions concerned about human rights and international law amid prolonged occupation.
The Associated Press reported in July that French mobile-phone company Orange decided to cut ties with an Israeli communications partner and last year the Presbyterian Church in the U.S. moved to end business relations with companies located in the occupied territories.
Israel’s government and its supporters have been aggressively pushing back against the movement, saying it is divisive and counterproductive to the peace process. They’ve also said the movement harkens back to Holocaust-era boycotts and have raised concerns about undercurrents of anti-Semitism, though BDS supporters say they oppose Israeli government policies, not Jews.
Legislation as a response: Language added into federal trade legislation in June discouraged companies from participating in boycotts against Israel -- and official U.S. policy opposes BDS boycotts altogether. In July, Illinois adopted a law directly responding to the BDS movement, joining South Carolina as the first states to formally wade into the issue. The Illinois law, championed by Republican Gov. Bruce Rauner, forces managers of the state’s public-employee pension system to get rid of investments in companies that are participating in economic boycotts against Israel. The South Carolina measure applies to trade partners.
New Jersey’s legislation, sponsored by state Sens. Jim Beach (D-Camden) and Loretta Weinberg (D-Bergen), was introduced in late June and won full approval from the Senate in a 30-0 vote on Aug. 13. The bill takes the position that the BDS movement is not intended to boost the human rights of Palestinians, but to punish Israel.
“Punitive economic measures targeting Israel do not contribute to the economic cooperation and political reconciliation between Israelis and Palestinians, both of which are necessary for building mutual trust and foundations for a lasting peace in the Middle East,” the bill says.
“Both Israelis and Palestinians have the right to live in their own safe and secure states, free from fear and violence, with mutual recognition, trade, and normalization,” the bill says.
The legislation gives the state Division of Investment, which manages the $80 billion pension system on a day-to-day basis, up to 18 months to get rid of stakes in any company that “boycotts the goods, products or businesses of Israel.”
It also includes an exception for companies that are working to provide humanitarian assistance to Palestinians through a government agency or private organization.
Aprepared by nonpartisan legislative analysts said the impact of the legislation, if passed, cannot be determined accurately because it’s unclear exactly how much the pension system has invested right now in companies that are boycotting Israel in response to the BDS movement. The fiscal note also makes clear that the timing of any divestment amid constantly fluctuating market conditions would also determine what, if any, impact the selling of pension assets would have on the overall pension system.
Other New Jersey pension-investment bans: New Jersey already has in place two similar prohibitions to prevent state pension funds from being invested in companies with ties to countries that have raised international concern.
In 2008, the state banned pension-fund investments in companies. That decision came after then-Pres. Mahmoud Ahmadinejad restarted the country’s nuclear program and began making a series of inflammatory statements, including threats to “wipe Israel off the face of the map.”
And in 2005, New Jersey was among the first of many states that enacted pension-fund divestment laws in response to the brutal actions of Sudan’s Khartoum regime against villagers in the Darfur region. As many as 480,000 deaths and the displacement of more than 2 million refugees have been blamed on violence in the region.
What happens next: Though the state Senate has passed the legislation calling for the investment ban for companies participating in the BDS movement, an Assembly version of the bill that was introduced in June has yet to advance. The measure isn’t expected to face much opposition, but with all 80 seats in the Assembly up for grabs in November, the lower house isn’t expected to do much on legislation in Trenton until after the election. The Christie administration, meanwhile, has declined to take a position on the bill, citing general policy to not comment on pending legislation.