A Case for Divestment from Caterpillar

This briefing will detail how investments in Caterpillar contradict the ‘socially responsible’ investment policy of the University of Manchester (UoM), and require the immediate attention of the university in order to create an investment portfolio which is in accordance with their long standing policy.

The University of Manchester “socially responsible” investment policy states:

“Environment and Social Governance (ESG) Issues

The University is particularly concerned about the following key ESG issues and will adopt investment strategies that seek to minimise or, ideally, eliminate, irresponsible corporate behaviour leading to:

• Environmental degradation
• Armament sales to military regimes
• Human rights violations
• The institutionalisation of poverty through discriminatory market practices
• Racial or sexual discrimination
• Tobacco production, cultivation and manufacture
• The exploitation of workers
• Giving or Receiving of Bribes”

Caterpillar

UoM invests approximately £2,113,435.79 in Caterpillar – according to the no. of shares (24900) invested and the share price ($107.49) at the end of Fiscal year 2016. 

Why Caterpillar?

1. Caterpillar actively supplies the Israeli Defence Force (IDF) with equipment used to commit violations of international law. For example, Caterpillar designs weaponised bulldozers for the IDF which are used for the specific purpose of demolishing Palestinian homes, factories, agricultural land and civilian infrastructure, including water pipes and networks on Palestinian territory assigned by the UN. Despite violating international law, these armoured bulldozers continue to be manufactured and supplied from 1967 to date.
2. International organisations including the UN, Amnesty International and the International Red Cross have condemned the practice of housing demolitions in Palestine. They form part of a practice of collective punishment for Palestinians, as part of a process of “demographic engineering” to displace Palestinians from regions Israel deems of interest.
3. The UN Human Rights Council list has included Caterpillar in their Blacklist of companies operating in occupied territories. This list is due to be published in whole in early December.

 

University of Manchester’s ESG

By knowingly and consistently providing equipment used to enact systematic human rights violations, Caterpillar is complicit in these violations, as a co-actor in Israel’s actions. In doing so, Caterpillar are a company that exhibit corporate behavior that amount to:

• Human rights violations
• Racial or sexual discrimination
• The institutionalisation of poverty through discriminatory market practices. 
• Armament sales to military regimes

 

Constructive engagement (a tactic supposedly adopted by the university)

As illustrated, Caterpillar is a company that violates UoM investment policy – UoM should aim to practice the values it projects, and hold itself to that standard – divesting holdings in Caterpillar should be the natural course of action.

Despite being presented with clear evidence that their equipment is used for human rights violations, Caterpillar have been evasive and unwilling to act upon it, thereby making them even more complicit.

In response to a letter from Human Rights Watch demanding that Caterpillar suspend bulldozer sales to Israel, their CEO responded that they did “not have the practical ability or legal right to determine how our products are used after they are sold.”

Elsewhere, when challenged, they responded that “we expect our customers to use our products in environmentally responsible ways and consistent with human rights and the requirements of international humanitarian law.”

These deflections of responsibility, even when confronted by reputed human rights organizations, demonstrate that Caterpillar is unwilling to take action to adhere to its stated values.

It is highly unlikely that attempts to ‘critically engage’ Caterpillar to change their ways will be any more successful than those of Human Rights Watch.

Divesting from Caterpillar sends a clearer signal that they must improve their conduct and adhere by social responsible values, before UoM is able to invest in them again.

Precedents

– The General Synod of the Church of England divested £2.2million from Caterpillar in 2008, after voting in 2006 to divest from “companies profiting from the illegal occupation [of Palestine].”

– The Presbyterian Church in the USA voted in 2014 to divest from companies whose products Israel uses in the occupied territories to maintain its occupation – including Caterpillar.

• In early 2017, the city council of Portland, Oregon (USA) voted to divest from corporations, as part of a move to block investment in companies that violate the city’s adopted socially responsible investment policy.
  Caterpillar was specifically cited as one such case as its “practice of selling custom weaponized military equipment and its involvement in human rights controversies, including direct maintenance and support of Israeli military bulldozers during attacks on Palestinian residences, orchards and other property.”

 

Stories of Palestinians who have had their homes demolished

The Al Sho’bi family: Mahmoud Omar Al Sho’bi is from Nablus in the West Bank. In April 2002, a D9 bulldozer destroyed Mr. Al Sho’bi’s family home without warning in an IDF attack in the middle of the night. His father Umar, his sisters Fatima and Abir, his brother Samir, pregnant sister-in-law Nabila and their three children, ages 4, 7, and 9, were all killed.

The Fayed family: Fathiya Muhammad Sulayman Fayed’s home was bulldozed during an IDF incursion into the Jenin Refugee Camp in 2002. Hundreds of buildings were destroyed allegedly to clear paths for IDF tanks. During the demolition, her son, Jamal, who was paralyzed, needed assistance to get out of the house. While the IDF briefly stopped bulldozing so Fathiya could help Jamal, they quickly resumed demolition. Fathiya escaped, but was unable to get Jamal out, and he was killed.

The Abu Hussein family: A D9 demolished the Abu Hussein family home in the al-Salam neighborhood of Rafah in 2002. Destruction began without warning at 5:00 a.m., injuring six family members inside. After being warned, IDF halted active demolition but fired on neighbors and relatives trying to evacuate those in the house.

The Khalafallah family: In a July 2004 incursion into Khan Yunis Refugee Camp, the IDF demolished over 70 homes. At midnight, a bulldozer approached the home of Ibrahim Khalafallah and his wife Eida, where they lived with their 5 children, 2 daughters-in-law and 4 grandchildren. Ibrahim, in his 70’s and sick, was unable to move. When the bulldozer hit the house, Eida tried to stop the driver, but he continued, destroying the home and killing Ibrahim.