Israel has summoned the Dutch ambassador to object to a decision by Dutch pensions manager PGGM to divest its holdings in five Israeli banks.

PGGM serves as the pensions manager of, among others, the €134bn healthcare scheme PFZW.

Dutch minster of Foreign Affairs Frans Timmermans responded to the row by declaring that the decision to divest was PGGM’s alone, and that the Dutch government had no involvement in the matter whatsoever.

Dutch prime minister Mark Rutte repeated the same message during a press conference following the minister council meeting.

According to PGGM spokesman Maurice Wilbrink, PGGM has no opinion on the political fallout over its decision.

Israeli newspaper The Jerusalem Post accuses PGGM of applying double standards, as the manager does not exclude Chinese banks investing in Tibet.

In a response, Wilbrink told IPE sister publication IPNederland: “PGGM is engaging in a dialogue with those banks as well. Exclusion is a means, not a goal, and this is also true for the Israeli banks.

“We strive to be active shareholders, using our position to encourage companies to change their behaviour. Exclusion of a company can be a measure when there seems to be no hope of such a change of behaviour.”

PGGM has excluded Bank Hapoalim, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Mizrahi Tefahot Bank as of 1 January 2014 on the grounds of their involvement in the financing of settlements in occupied Palestinian territories.

As various UN resolutions condemn the settlements as illegitimate – a charge Israel denies – financing them runs counter to PGGM’s responsible investment principles. 

PGGM engaged in dialogue with the banks prior to excluding and divesting from them, and the talks made it clear the banks had little to no room to stop their financing, in part because Israeli national law prevents them from doing so – a situation that is not expected to change anytime soon, according to PGGM.

PGGM is engaging several other undisclosed Israeli companies in dialogue, according to the manager.

Three of the five banks PGGM has turned its back on are among the listed investments of €293bn ABP, the Dutch civil servants pension scheme.

ABP spokesman Harmen Geers confirmed ABP still invested in the three banks.

ABP, too, is engaging in dialogue with the banks, but these talks will not necessarily end in the same result as PGGM’s.

Meanwhile, ABP has just excluded and divested from Tepco, the partly state-owned Japanese utility company operating the Fukushima nuclear plant.

It said: “During and following the Fukushima nuclear disaster, the company structurally engaged in behaviour that runs counter to our standards, including by disregarding public safety.

“Repeated attempts by ABP to encourage Tepco to change its behaviour have failed.”

PGGM still invests in Tepco.

Wilbrink: “Like APG, PGGM is not happy with the results so far, but we are giving Tepco the benefit of the doubt, as the company is implementing a highly complex clean-up operation around Fukushima.

“At this point, we do not believe divesting our modest holdings in the company will contribute to a better or faster resolution of the problems at hand.”

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