[News] Report: Israel stole $2 billion from Palestinian workers
Anti-Imperialist News
news at freedomarchives.org
Thu Feb 4 11:19:36 EST 2010
Report: Israel stole $2 billion from Palestinian workers
http://electronicintifada.net/v2/article11056.shtml
Jonathan Cook, The Electronic Intifada, 4 February 2010
Over the past four decades Israel has defrauded Palestinians working
inside Israel of more than $2 billion by deducting from their
salaries contributions for welfare benefits to which they were never
entitled, Israeli economists have revealed.
A new report, "State Robbery," to be published later this month, says
the "theft" continued even after the Palestinian Authority was
established in 1994 and part of the money was supposed to be
transferred to a special fund on behalf of the workers.
According to information supplied by Israeli officials, most of the
deductions from the workers' pay were invested in infrastructure
projects in the Occupied Palestinian Territories -- a presumed
reference to the massive state subsidies accorded to the settlements.
Nearly 50,000 Palestinians from the West Bank are working in Israel
-- following the easing of restrictions on entering Israel under the
"economic peace" promised by Benjamin Netanyahu, the Israeli prime
minister -- and continue to have such contributions docked from their pay.
Complicit in the deception, the report adds, is the Histadrut, the
Israeli labour federation, which levies a monthly fee on Palestinian
workers, even though they are not entitled to membership and are not
represented in labour disputes.
"This is a clear-cut case of theft from Palestinian workers on a
grand scale," said Shir Hever, a Jerusalem-based economist and one of
the authors of the report. "There are no reasons for Israel to delay
in returning this money either to the workers or to their beneficiaries."
The deductions started being made in 1970, three years after the
Israeli occupation of the Palestinian territories began, when
Palestinian workers started to enter Israel in significant numbers,
most of them employed as manual laborers in the agriculture and
construction industries.
Typically, the workers lose a fifth of their salary in deductions
that are supposed to cover old age payments, unemployment allowance,
disability insurance, child benefits, trade union fees, pension fund,
holiday and sick pay, and health insurance. In practice, however, the
workers are entitled only to disability payments in case of work
accidents and are insured against loss of work if their employer goes bankrupt.
According to the report, compiled by two human rights groups, the
Alternative Information Centre and Kav La'Oved, only a fraction of
the total contributions -- less than eight percent -- was used to
award benefits to Palestinian workers. The rest was secretly
transferred to the finance ministry.
The Israeli organizations assess that the workers were defrauded of
at least $2.25 billion in today's prices, in what they describe as a
minimum and "very conservative" estimate of the misappropriation of
the funds. Such a sum represents about 10 percent of the PA's annual budget.
The authors also note that they excluded from their calculations two
substantial groups of Palestinian workers -- those employed in the
Jewish settlements and those working in Israel's black economy --
because figures were too hard to obtain.
Hever said the question of whether the bulk of the deductions --
those for national insurance -- had been illegally taken from the
workers was settled by the Israeli High Court back in 1991. The
judges accepted a petition from the flower growers' union that the
government should return about $1.5 million in contributions from
Palestinian workers in the industry.
"The legal precedent was set then and could be used to reclaim the
rest of these excessive deductions," he said.
At the height of Palestinian participation in the Israeli labour
force, in the early 1990s, as many as one in three Palestinian
workers was dependent on an Israeli employer.
Israel continued requiring contributions from Palestinian workers
after the creation of the Palestinian Authority in 1994, arguing that
it needed to make the deductions to ensure Israeli workers remained
competitive.
However, the report notes that such practices were supposed to have
been curbed by the Oslo process. Israel agreed to levy an
"equalization tax" -- equivalent to the excessive contributions paid
by Palestinians -- a third of which would be invested in a fund that
would later be available to the workers.
In fact, however, the Israeli State Comptroller, a government
watchdog official, reported in 2003 that only about a tenth of the
money levied on the workers had actually been placed in the fund.
The finance ministry has admitted that most of the money taken from
the workers was passed to Israeli military authorities in the
Palestinian territories to pay for "infrastructure programs." Hannah
Zohar, the director of Kav La'Oved who co-authored the report, said
she believed that the ministry was actually referring to the
construction of illegal settlements.
The report is also highly critical of the Histadrut, Israel's trade
union federation, which it accuses of grabbing "a piece of the pie"
by forcing Palestinian workers to pay a monthly "organizing fee" to
the union since 1970, even though Palestinians are not entitled to membership.
Despite the Histadrut's agreement with its Palestinian counterpart in
2008 to repay the fees, only 20 percent was returned, leaving $30
million unaccounted for.
The Histadrut was also implicated in another "rip-off," said Hever.
It agreed in 1990 to the Israeli construction industry's demand that
Palestinian workers pay an extra two percent tax to promote the
training of recent Jewish immigrants, most of them from the former
Soviet Union.
Hever said that in effect the Palestinian laborers were required to
"subsidize the training of workers meant to replace them." The funds
were never used for the stated purpose but were mainly issued as
grants to the families of Israeli workers.
In one especially cynical use of the funds, the report notes, the
money was spent on portable stoves for soldiers involved in Israel's
three-week attack on Gaza last year.
In response, the finance ministry called the report "incorrect and
misleading," and the Histadrut claimed it was "full of lies."
However, neither provided rebuttals of the report's allegations or
its calculations.
Hever said the government body responsible for making the deductions,
the department of payments, had initially refused to divulge any of
its figures, but had partly relented after some statistics were made
available through leaks from its staff.
Assef Saeed, a senior official in the Palestinian Authority's labour
ministry, said the PA was keen to discuss the issue of the
deductions, but that talks were difficult because of the lack of
contacts between the two sides.
Jonathan Cook is a writer and journalist based in Nazareth, Israel.
His latest books are
<http://www.amazon.com/exec/obidos/ASIN/0745327540/theelectronic-20>Israel
and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the
Middle East (Pluto Press) and
<http://www.amazon.com/exec/obidos/ASIN/1848130317/theelectronic-20>Disappearing
Palestine: Israel's Experiments in Human Despair (Zed Books). His
website is <http://www.jkcook.net/>www.jkcook.net.
A version of this article originally appeared in
<http://www.thenational.ae/>The National, published in Abu Dhabi.
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