July 22, 2021 | Newsweek

Double Scoops and Double Standards Courtesy of Ben & Jerry’s

July 22, 2021 | Newsweek

Double Scoops and Double Standards Courtesy of Ben & Jerry’s

In addition to its classic double scoops, Vermont-based ice cream producer Ben & Jerry’s is now offering a calorie-rich serving of double standards, too. The Ben & Jerry’s brand, owned and operated by Unilever, announced on July 19 that it would terminate its license agreement with an Israeli-based manufacturer to ensure its products “will no longer be sold” in the “Occupied Palestinian Territory.” Unilever cut off the longstanding licensee after it refused to halt sales in the disputed territories, which reportedly would violate Israeli law. In short, Unilever engaged in a boycott of Israel as defined by state and federal law, which means the company may soon be facing penalties that eat into its profits.

Unilever is a British multinational consumer goods company headquartered in London, U.K. It has annual revenues of $61 billion (£45 billion) and its products are available in over 190 countries. It also maintains corporate offices in numerous human rights-abusing countries, including China, Pakistan, Russia, Saudi Arabia, Turkey, Venezuela, Vietnam and Zimbabwe. Unilever is reportedly a major purchaser of tomato paste from state-owned factories in China’s Xinjiang region, where the U.S. State Department says China is engaged in “horrific abuses.” In January 2021, the U.S. government halted the import of all such tomato paste into the U.S., citing the use of forced labor that amounted to “exploiting modern slavery.” Yet neither Unilever nor Ben & Jerry’s appears to have ever taken action against China’s massive human rights violations in Xinjiang.

It is difficult to say why Unilever shows greater concern for the sale of ice cream in West Bank settlements than it does for the exploitation of forced labor in Xinjiang, yet the company’s board members and senior executives have a lengthy record of criticizing the Jewish state. Jeff Furman, the president of the Ben & Jerry’s Foundation’s board and former chair of the corporate board, visited the West Bank in 2012 on a tour organized by an activist group that advocated for boycott, divestment and sanctions (BDS) against Israel. Furman also signed a letter that condemned Israeli military operations in Gaza, but conspicuously never mentioned Hamas—the terrorist outfit that runs Gaza. Furthermore, he has called for the end of U.S. aid to Israel and has falsely claimed that Palestinians endure “apartheid living conditions.”

Anuradha Mittal, Furman’s replacement as corporate board chair, has similarly demonstrated her selective emphasis on the Israeli government’s actions. The Oakland Institute, which she directs, produced a series of nine reports condemning Israel in 2017. Mittal announced that she deleted her Airbnb account in May 2019 after Airbnb reversed its own short-lived boycott of Israel. Moreover, she publicly opposed a congressional resolution condemning anti-Semitism and signed a petition in June 2021 calling to end U.S. arms sales to Israel.

The Ben & Jerry’s independent board distanced itself from the brand’s July 19 announcement—objecting to a clause stating that Ben & Jerry’s would continue operating in “pre-1967” Israel and reasserting its autonomy to make “social justice” decisions under its 2000 merger agreement. This underscores that Unilever does indeed share responsibility for the boycott decision. Unilever’s release of the boycott announcement under the Ben & Jerry’s brand—and its admission that Unilever, not Ben & Jerry’s, will be the corporate entity that cuts off the Israeli licensee—demonstrates that the parent company has ultimate control over Ben & Jerry’s operations.

Furthermore, Unilever cannot hide behind its merger agreement to claim its hands are tied by Ben & Jerry’s independent board. Such an agreement cannot legally require Unilever to violate state or federal laws and thus put the company and its shareholders in jeopardy. Doing so—as it appears Unilever has—opens the company to potential shareholder litigation.

The Ben & Jerry’s boycott, and Unilever’s role in it, has ramifications under both U.S. federal and state laws. Federal anti-boycott laws, adopted by Congress in the late 1970s and renewed by bipartisan majorities in 2018, prohibit U.S. companies from participating in anti-Israel boycotts sponsored by foreign countries. Federal law also specifically reflects the U.S. government’s opposition to divestment from Israel, which it defines to include divestment that is “politically motivated” and “intended to penalize or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in any territory controlled by Israel.”

In addition to federal anti-boycott measures, more than 30 U.S. states have additional laws, resolutions or executive orders designed to stop boycotts of Israel. Many state-level anti-BDS laws define such boycotts to include any actions that are politically motivated and intended to limit commercial relations with companies based in the State of Israel or in territories controlled by the State of Israel. On its face, the announcement that Unilever and Ben & Jerry’s will not renew a contract with an Israeli-based manufacturer as part of a politically motivated campaign to influence Israeli government policies constitutes a boycott of Israel as defined.

These laws typically require the state to hold parent companies, not just subsidiaries, legally responsible for boycotts of Israel—all the more so when, as in the Ben & Jerry’s situation, the parent is the actual implementer of boycotting business activities. Twelve state laws require their public pension funds to divest from businesses that boycott Israel and/or forbid the state to contract with boycotters. States like New Jersey (where Unilever is headquartered in the United States), Illinois, Florida and Texas may soon divest their public pension funds from Unilever and warn fund managers against holding Unilever positions within broader index funds. Likewise, state governments in Florida, Georgia, Michigan, Texas and elsewhere may soon find that they are prohibited from contracting with Unilever for soap, shampoo, tea and, yes, ice cream. That could receive support from environmentalists, as Unilever was listed in 2019 as one of the world’s top ten plastic polluters.

As the parent company of Ben & Jerry’s, Unilever’s involvement with the Ben & Jerry’s decision could also constitute a breach of fiduciary duty to the company’s shareholders. To avoid harming their shareholders, Unilever executives will need to work quickly to reverse the Ben & Jerry’s decision.

President Joe Biden has vowed that his administration will “firmly reject the BDS movement—which singles out Israel and too often veers into anti-Semitism—and fight other efforts to delegitimize Israel on the global stage.” Ben & Jerry’s and Unilever have fallen into precisely the trap Biden warned of: Their double standards constitute a form of discrimination. Calling off their boycott is the right thing to do—not merely the right decision for their shareholders.

David May is a research analyst at the Foundation for Defense of Democracies (FDD), where Orde Kittrie is a senior fellow and Richard Goldberg is a senior advisor. FDD is a nonpartisan think tank focused on foreign policy and national security issues. Follow David, Orde and Richard on Twitter: @DavidSamuelMay@OrdeFK and @Rich_Goldberg. Follow FDD on Twitter: @FDD.

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Issues:

Israel Lawfare Palestinian Politics