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By David Hallerby

Most people have heard about Israeli settlements in the West Bank. What many people have not heard of however, is that in these settlements hundreds of companies — both Israeli and foreign — are currently operating. They are all based in Area C of the West Bank, an area considered to be under full Israeli control. Encompassing around 60-65 percent of the total area of the West Bank, it is home to around 400 000 Israeli settlers and 150 000 Palestinians. The plants located in the West Bank number around 1 000 and are employing somewhere between 20 000-30 000 people, two thirds of whom are Palestinian.

The issue of Palestinians working in Israeli factories is more complicated than it might seem at first glance. Despite the factories being located in what are considered to be illegal settlements, they employ thousands of Palestinians who would otherwise have difficulty finding work. Amongst the Palestinian population, rates of unemployment are high and the economic situation is dire. On top of this, Israeli companies in the West Bank offer as much as double or triple the salary of Palestinian companies, making them attractive employers despite their controversial legal and political status.

This poses a significant dilemma for those Palestinians who work in Israeli companies in the West Bank. On the one hand, working conditions are good and salaries are high, often including some form of health insurance. An article in the Palestinian Authority’s’ official newspaper, Al-Hayat Al-Jadida, even went as far as to praise the working conditions provided by Israeli companies and condemned Palestinian companies for not doing the same. On the other hand, whether they like it or not, they are indirectly supporting the settlements. Many of the Palestinians working in Israeli factories feel that they have no choice but to stay where they are. According to some polls, 80 percent of Palestinian workers would prefer not to work for Israeli companies if similar opportunities working for a Palestinian employer were available.

A notable case demonstrating the complexity of the current situation was the closure of the Soda Stream factory near the Israeli settlement of Ma’ale Adumim, which employed around 600 Palestinians. Following international pressure, especially from the controversial Boycott, Divestment, Sanctions movement (BDS), the company decided to close its factory in the West Bank and relocate inside Israel’s internationally recognized borders. This was hailed as a victory by the BDS movement but was met with criticism from both Israel and Soda Stream. It was also a huge blow for hundreds of Palestinian workers who were left unemployed, with only a handful of them being able to acquire the permits needed to work in the new factory. Many Palestinians themselves spoke out against the boycott, arguing that these sanctions were counter-productive, hurting Palestinians more than Israelis.

From a broader perspective, however, given that the West Bank is mostly under Israeli control, the opportunities for Palestinian companies to establish themselves and develop are very limited. The Israeli government cripples the Palestinian economy by controlling land, transport, and resources. According to Human Rights Watch (HRW), the Israeli government consistently favours Israeli settlements and restricts Palestinian business expansion. Palestinian land is confiscated and settlement growth is encouraged, while Palestinians are granted only one percent of Area C for development. The World Bank estimates that the Palestinian economy is losing $3.4 billion every year because of Israeli restrictions and confiscations in Area C. Furthermore, HRW reports that, despite some notable exceptions, Israeli employers often underpay Palestinian workers and fail to provide adequate working conditions.  

Given the fact that Palestinian business development is severely constrained by the Israel’s dominance in the West Bank, it is no wonder that Israeli companies are able to provide their employees with higher salaries and better working conditions. If Palestinian employers had the opportunity to increase their industrial capacity, it seems plausible that they would provide better salaries and working conditions for their workers as well. However, there is reason to carefully consider the effectiveness of economic sanctions against Israeli companies when it is Palestinians that are most affected by these measures. What is clear is that the dilemma faced by thousands of Palestinian workers in West Bank factories is unlikely to be solved soon. These workers will continue to be forced to choose between what is economically viable and what they believe to be morally right.

By David Hallerby

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