Activists Pressure Bulldozer Shareholders To Stop Sales To Israel

by Emad Mekay

(IPS) WASHINGTON -- Activists are calling on fellow shareholders of U.S. heavy-equipment maker Caterpillar to press officials to probe the sale of company machinery to the Israeli Army, saying it violates an internal code of conduct and a U.S. ban on sales of products that target civilians.

Their shareholder resolution, seen by IPS, says that since 1967 the Israeli Army has used Caterpillar machinery, including specially-modified D9 and D10 bulldozers, to level more than 7,000 Palestinian buildings in the West Bank and Gaza Strip, leaving 50,000 men, women and children homeless.

Over the past two years alone the Israeli army used Caterpillar equipment to rip up hundreds of thousands of olive trees as well as orchards of dates, prunes, lemons and oranges, causing widespread economic hardship and environmental degradation in rural areas of Palestine, it adds.

The resolution, however, does not call on Caterpillar to stop selling bulldozers to the Israeli military but to probe how it uses the machines.

"The shareholders request that the board of directors appoint a committee of outside directors to issue a report by Oct. 1, 2004," says the resolution.

It also argues that the transactions bring Caterpillar negative "economic and public relations costs, especially in the United States, Europe and Arab countries," for "an evidently small amount of revenue derived from these sales."

The resolution throws doubts on "whether Caterpillar's directors can reconcile acquiescence" to the Israeli Army's use of the equipment for military purposes and against civilians, with the company's 'Code of Worldwide Business Conduct', which states that it "accept the responsibilities of global citizenship."

The resolution was filed by Caterpillar shareholders belonging to the Catholic groups Sisters of Loretto and the Ursuline Sisters.

"We believe that (the Israeli actions) are a violation of the Palestinians' human rights," said Sister Valerie Heinonen of the Ursuline Sisters in a statement.

The move is unique and almost unprecedented, according to the Washington-based Investor Responsibility Research Centre (IRRC), an independent firm that advises shareholders and institutional investors on voting decisions.

"The thing that's interesting about this resolution is that we really haven't seen shareholder proposals dealing with the Mideast conflict for at least the last two decades," said Meg Voorhes, director of the IRRC's social issues service.

"So this proposal is, kind of, one of a kind. We do not have a whole lot of precedent to go on."

The Illinois-based company has responded in a statement ahead of its Apr. 14 annual meetings that it has no way of controlling the nearly two million Caterpillar machines and engines at work in most countries around the world..

"We have neither the legal right nor the means to police individual use of that equipment. We believe any comments on political conflict in the region are best left to our governmental leaders, who have the ability to impact action and advance the peace process," says the company statement.

"I think they are absolutely right that Caterpillar is not going to help resolve the conflict," said Liat Weingart of the group Jewish Voice for Peace..

"However, they are fuelling the conflict right now by selling weapons to Israel. So in that way, they are contributing to the cycle of violence. There's no question about it. They are profiting from the cycle of violence."

Caterpillar's profits last year rose to 1.1 billion dollars, up from 798 million in 2002. With annual sales of more than 22.8 billion dollars, more than one-half of which comes from overseas business, the firm has been reluctant to divulge how much money it makes from its dealings with Israel.

The company's stance on its sales to Israel has also earned it the ire of other peace groups, corporate accountability monitors, Jewish activists, church groups and human rights organizations, many of which back the resolution.

The groups include Jewish Voice for Peace, Rabbis for Human Rights, the U.S.. Campaign to End the Israeli Occupation, Stop U.S. Tax Aid to Israel Now (SUSTAIN), and the New-York based Centre for Economic and Social Rights.

According to Rabbis for Human Rights and the Israeli human rights group B'Tselem, most Palestinian homes are demolished not for security reasons but for minor permit violations. Less than five percent of buildings destroyed are linked, directly or indirectly, with suicide bombers, they argue.

Activists also complain that Caterpillar bulldozers sent to Israel are not sold as civilian goods but as military equipment, under the U.S. Foreign Military Sales Program.

That violates U.S. law, they argue, including the U.S. Arms Export Control Act, which theoretically prohibits the use of military aid against civilians.

Caterpillar came under fire after its equipment destroyed an entire neighbourhood in the Jenin refugee camp in April 2002. Company bulldozers razed more than 140 houses and severely damaged another 200.

New York-based Human Rights Watch (HRW) reported that a Caterpillar bulldozer buried a paralysed man alive in his home during the raid, despite pleas from the family to stop to let them evacuate him.

The firm came under further public attack when 23-year-old U.S. peace activist Rachel Corrie was crushed to death by a Caterpillar bulldozer Mar. 16, 2003. Though the machine's driver claimed he did not see her, eyewitnesses say she was wearing a bright orange vest and used a bullhorn to yell at the driver to stop.

Hundreds of Caterpillar bulldozers and earth movers are now helping build a gigantic wall -- that Israel calls a "security barrier" -- in the West Bank, which will annex large chunks of Palestinian territory. It is the largest national project in Israel's history.

"We realise that we need to have some leverage on the corporation from the inside to let them know that it is just not good business to sell weapons to the Israeli military," said Weingart.

"We chose this campaign because it's an American corporation. The bulldozers are being bought with American taxpayer funds and there's simply no accountability as to who they are being used (by)," she added.

The Caterpillar meeting coincides with an April 14 visit to the White House by Israeli Prime Minister Ariel Sharon.