Luxembourg’s head of diplomacy is “naughty” and to the point! At the beginning of July, at the United Nations in Geneva, foreign minister 
“Luxembourg has taken note of the report published on 30 June by the special rapporteur on the situation of human rights in the Occupied Palestinian Territories, and stresses the importance of the work of the special procedures in guaranteeing the protection and promotion of human rights,” said the minister for foreign affairs, who also reaffirmed “his full support for the United Nations human rights system, including the independent and impartial work of the special rapporteurs, in accordance with the principles and values of the multilateral system. It deplores the sanctions imposed on special rapporteur Francesca Albanese.”
The database with limited results
And with all the tact of diplomacy, Bettel also said, in his 237-word statement, that he was “highlighting the responsibility of private companies and economic actors in the process of occupation and colonisation of Palestinian territory, which has been declared illegal by the International Court of Justice in its decision of 19 July 2024. Through their activities, these companies participate in the perpetuation of the illegal occupation and the violation of the Palestinians’ right to self-determination.”
But the declaration points to an audacious a priori “at the same time.” “While this council decided in 2016 to set up a database of companies operating in the Occupied Palestinian Territory, by what means can it ensure that the companies concerned exercise their duty of care and fully comply with the UN Guiding Principles on Business and Human Rights?” In other words: what has this basis actually been used for, or is it being used for?
It has not been updated since the end of June 2023, three months before Hamas perpetrated its horrific crimes and kidnappings and the Israeli state’s no-holds-barred response since. In the list of 112 entities in 2020, at the concrete origin of the database, 97 remain there while 15 have stopped working in the region. Is 13.8% deciding to leave a lot? Or is it too little? What about those that do not comply with the United Nations guiding principles?
Nine of the companies targeted by Albanese at the end of June were already in the database and 49 more appear, based on 200 submissions that reached her. That means a total of a thousand entities involved in one capacity or another, according to the rapporteur. Will the shockwave caused by the immediate US sanctions “invite” other companies to no longer want to take the risk of being listed? It’s another question that remains open.
What about the twenty lines of the Fonds de Compensation
But it leads to a third question: at a time when Nato and the European Union want to invest more in defence and companies will have to comply with their ESG obligations, what could be the consequences of reports like the UN's?
Let’s take the example of the Fonds de Compensation (FDC) in Luxembourg. Although it is not directly targeted by Albanese--unlike the sovereign wealth funds or pension funds in Norway and Quebec--half of the companies in the report are in the FDC’s portfolio, at very different levels depending on the company. When contacted, the Fonds de Compensation promised a response, which had not reached us by the time this article was completed.
But at the end of May, Norwegian finance minister Jens Stoltenberg replied at length to Albanese in a word-for-word balancing act. “According to the information available to the council on ethics last year, there were no companies in the fund with ongoing deliveries of relevant types of weapons to Israel, and some companies with ongoing deliveries were supplying military equipment that does not fall under the exclusion criterion,” he asserted, reiterating his aversion to violence and crossing lines. “The council on ethics has stated that it appears that the fund is invested in 13 of the companies on this list, while seven of the other companies on the list have been excluded from the fund. The total market value of the fund’s investments in the 13 companies amounted to NOK 55bn at year end 2024, of which almost NOK 35bn in four American global online platform companies for booking travel and accommodation. The coverage of their services is global, with only a marginal part related to the Israeli settlements. In these cases, the assessment of the council on ethics is that the companies’ activities are of too little importance to the maintenance of the occupation to warrant exclusion under the ethical guidelines.”
“Furthermore, the list includes five Israeli financial institutions where the market value of the fund’s investments amounts to NOK 5bn. These institutions provide, among other things, completion guarantees to home buyers who have paid a down payment when purchasing apartments under construction in the West Bank. The council on ethics has not yet completed its assessment of these companies.”
Accused of having invested nearly $10bn in companies named by Albanese, the Caisse de dépôt et placement du Québec officials were much more forthright. “For one, the majority of investments in the companies mentioned are not directly managed by La Caisse. They are managed by intermediaries or are held through standard products offered to all investors.” In other words: it’s not us…
“Furthermore, La Caisse holds a very small percentage of shares in these companies, which limits its ability to directly influence them. In actual fact, it owns less than 0.1% of the majority of the companies identified. The rest are largely multinationals, such as Booking, Airbnb or Alphabet (Google), that are available and used all over the world and owned by a large number of investors. In addition, when La Caisse cannot exercise direct influence to encourage best practices, it does so through Federated Hermès, a globally recognised service provider specialised in shareholder engagement. We expect all of these companies to meet the highest standards wherever they operate,” it states.
“Lastly, La Caisse would like to reiterate that it has also ceased any new engagement in Israel and the Occupied Palestinian Territories. La Caisse also reaffirms that it acts at all times in full compliance with all requirements of Canadian law and will continue to act in accordance with international standards on this matter wherever it operates. La Caisse takes its responsibilities as a global investor very seriously and is committed to continue operating according to the highest standards of human rights.”
This other “at the same time” hides an even more fundamental issue in one of the examples referred to by Albanese and in the FDC portfolio at a very small level, but present nonetheless.
Elbit Systems: a friend here, an enemy there?
Everyone has forgotten. It was before covid. Another era. The Israeli company Elbit Systems used the Luxembourg airport as a showcase for its filtering and airport security technologies. The European project, carried out by a consortium that also includes the University of Luxembourg and which received more than four of its €54m in European subsidies for this project and seven in total, has already been widely described. Having been spared from criticism--unlike the NSO group and its software for spying on public figures, politicians and journalists--this “world leader in defence technologies, offering advanced solutions for a safer and more secure world,” as it describes itself on its website, achieved sales of $1.9bn for the quarter ended 31 March 2025, and had an order book of $23.1bn at that date. Elbit had a single subsidiary in Luxembourg, via the Netherlands, Elbit Ultrasound (Luxembourg) which was deregistered in February.
“We believe Elbit is well-positioned to seize and capitalise on the opportunities presented by increasing defence budgets globally, and particularly in Europe, through our well-established subsidiaries across the continent, as evidenced by the contract wins we have published. We are continuing to invest in increasing our production capacity and optimising our supply chains in order to manage our order book and meet the strong demand for our products,” said its chairman and CEO, Butzi Machlis, at the time. Strong non-Israeli demand (two-thirds of revenues) with a spectacular 48% rise in demand for ammunition for Israel and the EU.
So it finds itself on the front line... in Ukraine to enable the Ukrainians, supported by the Europeans and the Americans, to resist the Russian invasion and in the Palestinian territories to put an end once and for all, and whatever the cost in human lives, to the actions of Hamas. Frequent or not, then? Cold sweats for those who have made a speciality of telling a company what was compliant and what wasn’t.
This article was originally published in French.
