The Israeli Exploitation of Palestinian Natural Resources: Part II: Heidelberg CementNov 2016
As part of the series on the Israeli Exploitation of Palestinian Natural Resources, this update discusses the illegal mining activities of HeidelbergCement. Through its subsidiary Hanson Israel, the company owns and operates four plants in illegal settlements in the West Bank, which brings the company immense profits with the full support of the Israeli Civil Administration.
HeidelbergCement is a multinational corporation headquartered in Heidelberg, Germany with subsidiaries in 40 countries. The company is among the world’s largest producers and suppliers of cement and ready mix concrete. In 2007, HeidelbergCement acquired the British company Hanson plc, with its wholly owned subsidiary, Hanson Israel.
Exploitation of Natural Resources
Through its subsidiary Hanson Israel, HiedelbergCement owns and operates four plants in illegal settlements in the occupied West Bank. These plants include an asphalt plant and an aggregates quarry south of Elkana near Nahal Raba; concrete plants in Modi'in Illit; and a plant in Atarot Industrial zone.
Raw Materials for Construction in West Bank Settlements
Materials of stone and gravel extracted from Palestinian land have been providing the raw material needed for the Israeli expansionist construction industry, without which the construction sector could not have thrived economically, generating profit for many Israeli companies. Both HeidelbergCement in Nahal Raba, and Ashtrom in Netivei Adumit and Netivei Beitar (on which we will elaborate further in the next update of this series) extract raw materials from the oPt and supply them to Israel proper and to Israeli settlements in the West Bank.
The production of raw construction material enabled the building of Israeli settlements since the first few decades of their existence, and to this day it constitutes an important cornerstone of the physical expansion and the economic activity of the industry of the occupation.
According to the Israeli Ministry of Interior’s National Outline Plan for mining and quarrying sites, the raw material extracted from quarries in the West Bank are used predominantly for the expansion of prominent industrial and residential regions, such as the industrial settlements of Modi’in Illit, Barkan Industrial Zone, Mishor Adumim near Ma’ale Adumim settlement, etc.
In addition to the exploitation of raw material for the benefit of the Israeli construction sector, the remaining value of quarrying production is derived from imposing the raw material on the Palestinian captive markets in both the West Bank and Gaza Strip. In the region of the Gaza Strip for example, as there are no quarries (with the exception of sand), it is seen as an additional consumer of aggregates originating in Israel, the region of Mount Hebron.
Hanson Israel, as all companies operating illegally in the West Bank quarries, sells nearly all of the quarried stone to the Israeli market, including the settlements. In June 2013, Who Profits documented a Hanson concrete truck leaving Nahal Raba quarry to supply concrete for construction projects and the expansion of the settlement Industrial Zone of Barka. Additionally, on the 20th of June 2016, a Hanson truck was documented delivering raw material to a construction site in the Ofarim settlement in the occupied West Bank, located near the Palestinian village al-Lubban al-Gharbi, 3.8 km kilometers east of the Green line.
Nahal Raba Quarry
Nahal Raba quarry is a 600 Dunam aggregate quarry, owned and operated by Hanson Israel. The quarry is located in Area C of the West Bank and is licensed by the Israeli Civil Administration. The adjacent Palestinian village of Alzawiyah owns the Palestinian land on which the quarry is situated.
This land was taken by Israel’s Civil Administration after declaring it to be state land, despite the fact that it was privately owned by the Palestinian villagers in the adjacent town of Al-Zawiyah. As mentioned by Human Rights Watch in its recent report, Occupation Inc., in 2004 Israel built the separation wall in the area to encompass the quarry from the east, unlawfully diverting the route of the wall into occupied territory beyond the pre-1967 armistice line. Today, the quarry is enclaved into Israeli territory, while the separation wall separates the village of Zawiyah and its rightful owners from their land and quarry. Article 55 of the Hague Regulations (1907) establishes that “the occupying State shall be regarded only as administrator and usufructuary” of the natural resources of the occupied territory, and therefore it is prohibited from exploiting them for commercial purposes. Moreover, Article 43 of the Hague Regulations has been interpreted as obliging the occupying State to exercise its powers for the benefit of the residents of the occupied area.
According to HeidelbergCement's recent financial report (2015), the company generates profit of 13.46 billion Euro in yearly revenues, corresponding to a growth rate of 6.7%. In fact, according to HeidelbergCement’s annual report, 2015 was considered “by far the best year for HeidelbergCement since the financial crises in the previous year. All other key financial ratios also improved considerably in comparison with the previous year”.
While Hanson Israel’s income reached 17 million Euros by the end of 2015, Hanson Quarry Products’ income was 13 million Euros through the operation of Nahal Raba quarry. According to the company, its asphalt operating line in Israel achieved an increase of 2.7% to 0.4 million tons in sales volumes. Revenues of the ready-mixed concrete-asphalt business line rose by 7.0% to €221 million (previous year: 207).
Accordingly, HeidelbergCement’s subsidiaries in Israel did not see any decline in profit due to the high level of construction investments and “thanks to numerous infrastructure projects and a slight increase in residential construction”.
Indeed settlement construction, in the West Bank especially, rose sharply in 2015 with a 219% rise in completed housing units and a 93% increase in planning initiatives. Yigal Dilmoni, the deputy head of council of Jewish Communities of Judea and Samaria has celebrated these numbers in saying “We are pleased that there is growth and we are happy for every home that is built”.
On May 4th 2016, HeidelbergCement declared in its general assembly that it is searching for a new site in the occupied West Bank. Following long-standing criticism from investors and other stakeholders about its corporate operations in the occupied Palestinian territory, the company founded the subsidiary of "HeidelbergCement Palestine", an immaterial corporate entity that is yet to generate a reportable income. This newly established subsidiary was used in the general assembly to satisfy questions about the illegality of its operation in Nahal Raba quarry, likely to imply that an equal footing between the operation of both subsidiaries, Hanson Israel and Heidelberg Palestine, will now be achieved. Yet, even if a Palestinian subsidiary operates in area B, it would not in any way end Hanson Israel’s illegal exploitation of Palestinian natural resources for the benefit of the Israeli occupier. New Palestinian subsidiaries established by HeidelbergCement, whether functional or not, do not absolve the company’s activity in the Nahal Raba quarry, which remains a grave violation of International Law and corporate code of conduct.
The ongoing exploitation of Nahal Raba quarry by HeidelbergCement continues until this day. As the chief executive, Bernd Scheifele, stated: “The quarry will not be sold due to buyers’ lack of interest and it will remain under the ownership of Hanson Israel.”
The Israeli mining companies in the West Bank operate under Israeli military jurisdiction and the Civil Administration, which issue mining permits and in return collect royalties (licensing fees for the operation of the quarries). Corporate royalties are then redistributed to the Israeli settlement construction sector and to directly fund the settlements’ regional councils, a viscous cycle that reproduces the illegality of the occupation, sustaining it economically while facilitating its physical expansion as well.
In the case of HeidelbergCement, the company has stated in a letter to Human Rights Watch that in 2014 Hanson Israel paid approximately 3.2 million Euros in royalties to Israel’s Civil Administration and an additional 430,000 Euros directly to the Samaria Regional Council for the operation of Nahal Raba quarry.
As mentioned above, any financial benefits reaped from an occupied territory without serving the occupied population, constitute a violation of International Humanitarian Law. Such practices also come in contrast with the Oslo accords specific provisions. According to article 31 of the second annex of the Oslo accords, the rights to operate “mines and quarries” should be gradually transferred to Palestinian jurisdiction, including “licensing and supervision of the establishment, enlargement, and operation of quarries, crushing facilities and mines”. In reality, all this remains under Israel's direct and exclusive control, through the executive arm of the Israeli Civil Administration that continues to collect royalties for the exploitation of Palestinian land and resources.
Construction in Illegal Settlements in the West Bank
In the occupied Palestinian territory, including East Jerusalem, Israeli housing and infrastructure projects effectively serve two purposes: annexing more land and resources to Israel and at the same time cutting off the local Palestinian residents from such resources. While the fenced or patrolled areas of settlements cover approximately 3% of the West Bank - 43% of the West Bank area is off-limits for Palestinians because it is allocated to the local and regional councils of settlements. There are nearly 150 settlements established by Israel in the West Bank, in addition to some 100 outposts built without the official authorization of the state but with generous assistance and support from government ministries.
The settlements themselves are prohibited under international law, as they constitute the transfer of civilian population of the occupying power into the occupied territory, according to Article 49 of the Fourth Geneva Convention (1949). Under international humanitarian law, specifically Article 43 of the Hague Regulations (1907), the occupying power is prohibited from constructing permanent infrastructure in the occupied territory unless it serves military purposes or advances the interests of the occupied population.
A recent UN report, published on 9 March 2015, concludes that the state of Israel played a leading role in the construction and expansion of settlements, using public funds, grants, and benefits as incentives to settlers. According to this report, Israel continues to expand existing settlements and approve the establishment of new outposts and settlements in both the West Bank and East Jerusalem. The settler population in the West Bank and East Jerusalem continues to grow and is currently estimated at 500,000- 650,000.
 In Israel, economic growth remained flat at 2.6% in 2015 compared with the previous year. See: HeidelbergCement Financial Annual Report, 2015, page 73.
 “Israel does not have to be afraid to build in Judea and Samaria. When Israelis are absent, terror reigns,” said Yigal Dilmoni, the deputy head of Council of Jewish Communities of Judea and Samaria. Data released by Israel’s Central Bureau of Statistics on October 2015, The Jerusalem Post, October 6th 2015, http://bit.ly/1MGEKpY.
 OCHA oPt, “The Humanitarian Impact of Israeli Settlement Policies,” January 2012; B’Tselem, “Land Appropriation and Settlements,” 23 January 2014.