Comité de la Solidaridad con la Causa Árabe v. Construcciones y Auxiliar de Ferrocarriles (CAF)

Date filed

1 December 2019

Keywords

Countries of harm

Occupied Palestinian Territory

Current status

Rejected

Sector

Infrastructure

NCP

NCP Spain

Allegations

In December 2019 and January 2020, Comité de la Solidaridad con la Causa Árabe (The Committee of Solidarity for the Arab Cause) filed two specific instances against Spanish company Construcciones y Auxiliar de Ferrocarriles (CAF) and Israeli company Shapir Engineering and Industry to the Spanish and Israeli NCPs, respectively. The complaints concern activities of the companies in the Occupied Palestinian Territory related to construction and infrastructure management of tramway lines that enter into the occupied Palestinian territory. According to the complaints, the companies allegedly formed a consortium, TransJerusalem J-Net Ltd., that won a contract to extend and manage an existing light rail tram line (red line) and build another tram line (green line) from Jerusalem to illegal settlements in the West Bank.

According to the complaints, the work would involve extension of 27 kilometers of railroad, provision of 114 new trams and refurbishment of 48 existing trams, provision of traffic signals, power, and communication systems to support the tram lines, as well as maintenance of the tram lines during a 15-25 year period.

The complainants allege that the companies breached several chapters of the OECD Guidelines in accepting and beginning the work, including in particular by failing to engage in adequate stakeholder consultation via a complete and effective due diligence process (Chapter II), failing to disclose fully the nature of the work and its foreseeable impacts on occupied peoples (Chapter III), and failing to respect the human rights of impacted rightsholders (Chapter IV, with particular focus on guidance in Commentary 40 urging companies to respect the standards of international humanitarian law during situations of armed conflict). According to the complainants, the complaint is based on the fact that the Occupied Territory cannot be colonised as the Israeli authorities claim. They argue that the route of the tram lines, established by the occupation authorities, facilitates colonisation, the establishment of colonies (after expropriation and expulsion of the original inhabitants) and facilitates the transfer of the population of the occupying power to the occupied territory, all of which is prohibited by the Geneva Conventions and rejected by the UN Security Council Resolutions.

The complainants are seeking mediation and a rigorous examination of the facts by the Israeli and Spanish NCPs to encourage the companies to cease participation in the project and report their withdrawal to Palestinian authorities.

Relevant OECD Guidelines

Outcome

More than a year after submission of the specific instance, the complainants raised with all NCPs their concern that neither the Israeli nor Spanish NCP had yet issued an initial assessment regarding the complaints. Such a delay represents a breach of the Guidelines’ expectation that NCPs complete the initial assessment phase of complaints within a three month period.

On 25 May 2022, the Spanish NCP published its assessment of the complaint. The NCP ended the complaint on the basis that CAF refused to engage in mediation.

The NCP made three recommendations.

“RECOMMENDATION 1 (related to chapters II General Principles and IV Human Rights of the Guidelines):
It is recommended that greater diligence be exercised in assessing the damages or violations of human rights that may be caused by the activity of the Spanish company. Thus, the company should review its Human Rights policy and integrate it – if it has not already done so – into its CSR policy, especially in:
– its Corporate Social Responsibility plans on Human Rights;
– its Corporate Social Responsibility plans in the area of Human Rights; – its corporate rules scheme in the area of Compliance; – its Code of Conduct;
– its Code of Conduct;
– its Corporate Social Responsibility policy;
– its Crime Prevention Manual;
– its Due Diligence Manual for contracting with third parties;
– its specific corporate Human Rights Due Diligence procedure;
– its Due Diligence controls checklist.

RECOMMENDATION 2 (related to chapter III Disclosure of Information of the Guidelines):
The Spanish company is recommended to review its disclosure policy so that it publishes, in a timely manner, accurate information on all significant aspects of its activities, structure, financial situation, results, shareholders and corporate governance system, including risk factors that may exist in the activities it is carrying out or may carry out in the future.

In addition to the two previous recommendations, which are directly related to some of the chapters of the Guidelines, the following recommendation, applicable to the whole of the current project, should be added:

RECOMMENDATION 3 (related to the OECD Due Diligence Guidance for Responsible Business Conduct):
It is recommended that, as part of its due diligence, the Spanish company commission an independent third party to prepare a report that examines the social impact that the project may have on the occupied territories and that acts as a complement to the mechanisms it already has in place. This report should be made available to the NCP within one year of the publication of this report on the website of the Ministry of Industry, Trade and Tourism. In addition, it is recommended that Spanish companies remind their partners and suppliers, in line with the OECD Due Diligence Guidance for Responsible Business Conduct16 , of the need to respect the OECD Guidelines for Multinational Enterprises in their business activities.”

The NCP will follow up on its recommendations in one year.

In May 2023, the complainant stated that there were discrepancies between CAF and the complainant regarding the company’s implementation of the NCP’s recommendations, and that the NCP has not expressed an opinion on this to date.