Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

I move amendment No. 1:

To delete all words after “That” and substitute the following: "Dáil Éireann resolves that the Illegal Israeli Settlements Divestment Bill 2023 be deemed to be read a second time this day nine months, to allow for further consideration of the Bill, as the Bill as drafted raises specific practical and legal questions, is not likely to achieve its intended purpose and it is appropriate to consider in addition whether a combination of legislative and non-legislative approaches could be adopted which would achieve an appropriate human rights based outcome.”.

I had hoped the Palestinian representatives would be in the Distinguished Visitors Gallery at this stage so I could welcome them, but perhaps later.

The Tánaiste has spoken publicly on recent troubling developments and, at the outset, I would like to again express my condolences and those of Members on this side of the House and, I am sure, everybody in the House to the families of the deceased and all of those whose lives have been impacted. Ireland welcomes the ceasefire reached in Israel and Gaza and calls on all parties to refrain from actions that would lead to further violence. Recent developments highlight once again the need to restore a political horizon and a credible peace process.

In responding to Deputy Brady and other Deputies on their Private Members' Bill, on behalf of the Minister for Finance I want to make clear that the Government understands the motivation behind the Bill. The Bill is intended to require ISIF not to invest either directly or indirectly in companies engaged in doing business in illegal Israeli settlements in the occupied Palestinian territory, where they are listed on a specific UN database – we will come back to that - and to divest from such investments where they become known to ISIF.

For context, it is useful to remind the House that Ireland distinguishes between the territory of the State of Israel and the territories occupied since 1967, in line with international law. This approach is common across all Government Departments. As part of this approach, Ireland ensures that any bilateral agreements with Israel do not apply to territories occupied by Israel since 1967. A whole-of-government approach is applied to the policy of differentiation and the Department of Foreign Affairs also supports other Government Departments by providing guidance and clarification on the policy of differentiation. The Department of Foreign Affairs also ensures that there is information available for the public and companies regarding Ireland's policy on settlements via the website of the Department of Foreign Affairs.

Ireland’s position on the illegality of Israeli settlements in occupied Palestinian territory informs its engagement with the State of Israel across a range of bilateral issues and will continue to do so. This is fully consistent with the approach at EU level where, in line with international law, all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territory occupied by Israel in 1967 and since then. This position was recalled to Israel at the EU-Israel Association Council in October 2022. The EU has also made it clear that this does not constitute a boycott of the State of Israel, which the EU strongly opposes, as does Ireland.

The Bill before the House today seeks to amend the National Treasury Management Agency (Amendment) Act 2014 which established ISIF. In summary, it proposes that the NTMA and ISIF would not invest directly or indirectly in a list of companies doing business in the Israeli Illegal settlements in the occupied Palestinian territory named in a specific UN database produced by the UN’s Human Rights Council on 12 February 2020 and would divest from such investment where it became known to ISIF.

It is useful to highlight ISIF’s track record as a responsible investor over time. The fund has already divested, on a voluntary basis, from investments in tobacco companies and companies which manufacture nuclear armaments and, under legislation, from companies involved in the production of cluster munitions and anti-personnel mines, and in fossil fuels. I was involved in the drawing up of a Private Members' Bill in early 2008 which prohibited investment in cluster munitions. The Government responded to that Bill and took action to do precisely that and that has been the case with ISIF and its predecessors. These were important changes over the years which reflect ISIF’s commitment to responsible investment.

It should also be noted that ISIF is not blind to human rights considerations when it carries out its current investment strategy. As part of its wider sustainability and responsible investment strategy, including in relation to the issue of companies operating in the occupied Palestinian territory, ISIF pursues active ownership through its engagement manager, EOS at Federated Hermes which, for context, advises on €1.3 trillion in assets globally. Within this, human rights is a key theme and Hermes engages according to the UN Guiding Principles on Business and Human Rights framework and the OECD guidelines for multinational enterprises.

It is important that the Government’s approach to this issue is well understood by internal and external observers. In order to facilitate further discussion and debate on this, the Government is proposing a timed amendment of nine months to this Private Members' Bill this evening for a number of reasons. This will allow us to reflect on the best possible approach to take. The Bill was published in March and we are debating it quite soon after its publication. To be honest, the complexity of this issue is such that it requires a good deal more consideration over the next nine months. That time will provide us with an opportunity to reflect.

The Government is concerned that the Bill is drafted in a way that links investment and divestment by ISIF to a specific UN database created in 2020. That database has not been updated since 2020 and we understand that the database does not currently have a clear basis for amending the information on it. Therefore, companies on the database cannot have their data removed, even if they change their investment strategy. We also understand that companies cannot currently be added to the database, irrespective of their approach to investment in the illegal Israeli settlements in the occupied Palestinian territory. The hook in the Private Members' Bill is the UN database but we need to have a greater understanding of how that works. If this legislation were to be enacted in its current form it would still be possible for ISIF to be invested in companies engaged in activities within the illegal Israeli settlements in the occupied Palestinian territory while respecting the intent of the legislation.

It has also been argued that the UN database is too limited and does not cover all businesses that could be involved in business activities within the illegal Israeli settlements in the occupied Palestinian territory. There is also a question as to whether it is legally possible to link an investment or divestment strategy to the database, given its status and the position in Irish law. That is a genuine question for the drafting of the Bill. Including the names of companies that have no right to be removed from the database may create legal difficulties for the State in terms of those companies remedying their rights over time. When the Oireachtas passes legislation it is assumed to be both legal and constitutional but also operational, in terms of how it is linked to a given database existing in time and how that operates over time. The Government considers that the Bill is flawed in terms of its execution. That may seem like a very harsh line to take but is not meant to be. The issue is the operability of how things are linked in drafting terms and it is important to reflect on that.

The Government is also concerned about the practical implications of using the UN database as a source of information and how effective and appropriate it may be to encourage investment in line with the provisions of human rights and international law. We are seeing environmental, social and governance, ESG, strategies all around the world, whereby companies are moving to more sustainable strategies. We would like to see that happening with companies right around the world. The Government also notes that the publicly expressed intention of the Bill is to send a signal to others regarding investment in illegal Israeli settlements and that this may encourage other investors to carry out similar actions. The level of investment by ISIF is relatively small compared to the overall size of the fund and indeed nationally or globally. It is not obvious that a straightforward divestment by ISIF would carry the same message as is expected, arising from this Bill. While I appreciate that Deputies will say that it is of symbolic significance, we must have legislation that is workable.

Pausing the Bill for now allows for a more considered and comprehensive determination of whether a more calibrated, principle-based approach could be adopted which would have a greater practical impact. Divestment may not be the immediate answer in seeking to persuade companies of their human rights obligations. It is also important that there is a sound legal and informational basis for the State to take action in this area that it can stand over. The State should only be able to take action where it can defend its approach.

All of these matters require that time would be taken to explore a more detailed and nuanced policy approach that the Government is sure is legally sound. Primary legislation such as this proposed Bill - as with the Bill on cluster munitions proposed by former Deputy Timmins in 2008 - can often be a blunt instrument to achieve a specific outcome. The possibility of combining an administrative approach along with legislation needs to be considered as part of any engagement process. Time was taken to introduce appropriate legislation with respect to investment in fossil fuels and cluster munitions. There can be no argument in this House that the Acts in question were not important and successful legislation or that they have not achieved their intended outcome. Legislative changes are useful models but further consideration is needed in respect of investment across a wide range of companies not linked to any business-specific activity, as was the case with divestment from fossil fuels or munitions.

To allow appropriate time to consider the implications and explore the possibility of a more nuanced approach, the Minister for Finance has received Government approval today to tabling a timed amendment for a period of nine months. That timed amendment allows for further consideration of the Bill. Its current drafting raises specific practical and legal questions, including whether it is likely to achieve its intended purpose. It is appropriate to consider whether a combination of legislative and non-legislative approaches could be adopted which would achieve an appropriate human-rights based outcome vis-à-visthe illegal Israeli settlements as opposed to Israel more broadly.

The Minister for Finance is conscious that this is a difficult issue to resolve and time needs to be devoted to it. It is important that we take a consistent approach to the illegal Israeli settlements. I have some concern about some of the language used by Deputies opposite. I hope it is not their position that this language around Israel continues. I also hope that some of that language is not an attack on the existence of the State of Israel.

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