Stinging Caterpillar

The Palestinian-Israeli conflict is never far from the headlines, but a recent twist in campaign tactics by peace activists and human rights lawyers have made it an issue of corporate citizenship. "Caterpillar faces an intifada" reported Farhad Manjoo in the magazine Salon.com in May, as various groups targeted "the manufacturer of the giant bulldozer that Israel uses to demolish Palestinian homes."37 Since 1967, the Israeli government has used Caterpillar equipment, including specially armoured D9 and D10 bulldozers to destroy over 7,000 buildings in the West Bank and Gaza Strip, leaving 50,000 men, women and children homeless.38

In June, a protest took place outside the head office of the company in Geneva, following protests in the United States, and calls to boycott Caterpillar products, which include branded clothing.39 Meanwhile, the United Nations' Special Rapporteur on the Human Right to Food, Jean Ziegler, wrote to the CEO of Caterpillar, James Owens, asking him about their position on the use of their equipment to destroy Palestinian agricultural resources such as olive groves, greenhouses, and orchards of dates, prunes, lemons and oranges. He said that allowing the delivery of their bulldozers "in the certain knowledge that they are being used for such actions, might involve complicity or acceptance on the part of your company to actual and potential violations of human rights."40 This followed a resolution at the Human Rights Commission in April that condemned the destruction.

The complicity of the company in legal terms is not clear. Various products are used for damaging purposes where the manufacturer is not held legally responsible. For example, cars have killed millions of people, are often designed to drive well beyond speed limits, and their speed is often used in advertising, yet the car manufacturers are not (yet) legally liable for deaths and injury caused by speeding. Any case against Caterpillar would probably need to prove that the company designed bulldozers so they could be armoured to operate in conflict situations, and advertised this adaptability in their sales promotion, while knowing human rights abuses were being carried out with their products. "Legally, it is difficult to make this case. Morally, however, it is not, and it is to the consciences of the people who manage, work for, and invest in Caterpillar that I appeal," wrote Dr. Elizabeth Corrie, in May.41 She is the cousin of Rachel Corrie, who was killed by a Caterpillar bulldozer while protesting the demolition of Palestinian homes in Rafah.

Dr. Corrie cited the corporate citizenship policy of the company, which states that "Caterpillar accepts the responsibilities of global citizenship" and recognizes that Caterpillar's "commitment to financial success must also take into account social, economic, political, and environmental priorities." It is not just a question of principles, but also profit. The previous month some Caterpillar shareholders expressed concern over "the actual and potential damage to Caterpillar's international sales and worldwide reputation" and their interest "in determining if the evidently small amount of revenue derived from these sales outweighs the economic and public relations costs, especially in the United States, Europe and Arab countries." This is in addition to the risk of costly future legal action, given the trend towards human rights related corporate litigation.

At the Annual General Meeting in April, Jewish Voice for Peace, a California grassroots group that advocates an end to Israel's occupation of Palestinian territories, and two other organisations sponsored a shareholder resolution, asking the management to re-examine its sales to Israel. The management recommended that shareholders vote against the proposal, pointing out that "more than two million Caterpillar machines and engines are at work in virtually every country of the world each day. We have neither the legal right nor the means to police individual use of that equipment." Management did not want to set a precedent in relation to Israel, given that its equipment is not only used to build the infrastructures of societies and improve lives, but also to destroy homes, forests and rivers, around the world. Many companies do, however, decide to only do business with clients whose social and environmental performance they can accept, and this does not only include the purchase of products and services but also the sale of them, as such the sale of financial services by banks with ethics policies. The potential financial implications of reputational damage suggest the management might have responded positively to the campaign on purely commercial grounds. Not having been in the spotlight before, the management seemed to have a rudimentary understanding of the corporate citizenship agenda. "We believe any comments on political conflict in the region are best left to our governmental leaders," they said, which illustrates a limited conception of corporate citizenship, that does not embrace a public role for companies.42

Stockholders representing only 4 percent of Caterpillar shares favoured the resolution, but that percentage met a threshold that allows the groups to reintroduce their resolution next year, suggesting the issue will not go away. Yet we can ask what if, after a year or maybe many years of campaigning, the company makes a decision on commercial grounds not to sell machines to Israel, then what would this achieve for resolving the Palestinian-Israeli conflict? The government could purchase machines from other foreign, or even domestic, manufacturers. Much energy would have been exerted by peace activists and lawyers and little achieved. When activists have adopted brand-bashing as a tactic in the past it has been a means of increasing media attention on an issue and getting the company to improve the lives of specific workers or communities involved in its operations. Neither of these apply in the Caterpillar case, as the conflict already has high media attention, and the company can not change its operations in ways that will benefit the affected community, only wash its hands of any connection.

Brand-bashing campaigns may seem novel, and create energy and interest, but are counterproductive if they galvanize people into action with no clear strategy for change, which should be informed by an awareness of how such campaigns have fared in the past. If the Caterpillar campaign raises awareness of the commercial interests in the Palestine-Israeli conflict, then it might prove helpful. People always make money out of war. The 2 billion US dollars of military aid, and half a million US dollars of economic aid provided to Israel by the US government every year translates into profits for a range of companies and individuals, who have this to lose from a resolution to the conflict.43 Determining who they are and what influence they have might make the economics of the conflict far clearer. In addition, some companies and individuals make money from producing products and services within the Palestinian occupied territories. The extent to which Palestinians benefit from these commercial activities, or whether they just create vested interests in maintaining the occupation, needs to be understood by any campaign aiming to address corporate complicity in the conflict. Movement on this agenda appears slow, with university divestment campaigns and initiatives like boycottisraeligoods.org not seeming to have a clear strategy that learns from the potential and limits of the history of boycotts. A key point of leverage might be the Socially Responsible Investment (SRI) community, but initial inquiries suggest that they are not yet considering the reputational risk that could arise from corporate relations with the Palestinian-Israeli conflict.