Inside SodaStream factory, machines whir through boycott controversy

The world may be abuzz over SodaStream’s factory in the West Bank, but it's whirring nonstop.

At the edge of a palm-lined industrial zone 15 minutes east of Jerusalem, heavy machinery punches out aluminum canisters that customers across the world use to create fizzy drinks. In other departments, women in hijabs work side by side with Russian immigrants to Israel while young Palestinian men work on assembly lines fine-tuning the soda maker. (Editor's note: The original version misstated the material from which the canisters are made.)

The Israeli company's sales expanded 30 percent last year and 50 percent in 2012, even before Scarlett Johansson signed on as a brand ambassador just in time for the Superbowl. To keep up with demand, SodaStream has quintupled the number of Palestinians it employs to about 500, making it the largest private employer of Palestinians in the West Bank, according to CEO Daniel Birnbaum, who describes the plant as a haven of coexistence and economic stability.

But in the eyes of critics, employing a few hundred of the more than 2 million Palestinians in the West Bank does not excuse the fact that the factory operates in an Israeli settlement, the establishment of which the United Nations has declared a violation of international law. Supporters of the Boycott, Divestment, Sanctions (BDS) movement, aimed at ending Israel’s occupation of the West Bank and recognizing the rights of Palestinians, are calling on consumers not to buy products from companies like SodaStream.

“The consumer boycott has two goals: ending the complicity of corporations in violating Palestinian rights and increasing the isolation of Israel in the world in order to achieve those rights,” says Omar Barghouti, a Palestinian human rights activist and co-founder of the BDS movement, who adds that it’s part of an effort to apply “morally consistent pressure” on Israel across the board. “The boycott against Israeli companies that violate international law, like SodaStream, is therefore part of a much wider strategy of nonviolent resistance and solidarity aimed at achieving freedom, justice and equality for the Palestinian people as a whole.”

Targeting Israel's brand

Just how effective the BDS movement has been, or can be, at putting a dent in the Israeli occupation of the West Bank – through targeting private companies or otherwise – is difficult to measure. While the Israeli government collects information on companies that face boycotts, “there is no official data on the scope of such boycotts,” according to a recent report from Molad, the Center for the Renewal of Israeli Democracy, based in Jerusalem.

But in recent months the movement has touted a series of successes, and Mr. Barghouti describes the movement as reaching a tipping point in its efforts to make the Israel brand as toxic as South Africa’s once was.

Since last spring, European Union members have taken a number of concrete steps against Israeli companies and institutions working over the Green Line in areas conquered by Israel during the 1967 war with its Arab neighbors. More than a dozen EU countries are poised to require the labeling of products made in Israeli settlements, such as SodaStream machines; the second-largest Dutch pension fund and the largest Danish bank have taken a stand against Israeli banks dealing with the settlements; and Germany recently moved to withhold grants from private companies linked with the occupation – an unprecedented move from an EU country, which some Israelis worry could lead to a domino effect among the EU’s 28 other members.

War and peace

At the entrance to the SodaStream factory stands a statue engraved with a verse from Isaiah: “They shall beat their swords into plowshares, and their spears into pruninghooks: nation shall not lift up sword against nation, neither shall they learn war any more.”

The statue was commissioned by SodaStream when they took over the factory, which formerly made ammunition. “[The factory] went from making bullets to making bubbles,” says President Yonah Lloyd. “We’re turning the weapons of war into tools for food.”

Palestinian employees of SodaStream make at least two to three times what they could earn in the Palestinian economy, and many of those employees provide for as many as 5 to 10 dependents. The Palestinian Authority (PA) made a law in 2010 against working in the settlements, but SodaStream's employees are among some 22,000 Palestinians who have prioritized putting food on the table over politics.

An Al Quds University professor found that 82 percent of Palestinians wouldn’t work in the settlements if they had an alternative. But there are few alternatives amid the poor economy in the West Bank, which is chiefly blamed on Israel’s control of trade and the passage of goods and people, but also on the corruption of the PA.

Raja Khalidi, an economist at the Bir Zeit University Center for Development Studies, says there is a “national responsibility” to couple a boycott of Israeli companies like SodaStream with PA action.

“There is an imperative on public authorities to find alternatives,” he says. In one example, the West Bank village of Tubas was able to reclaim enough land and provide enough water for more than 30 families whose breadwinners had been working in Israeli settlements to return to agriculture.

While SodaStream is not savory to BDS activists or the PA, Mr. Birnbaum, who took over company after the factory had already been established in the West Bank, firmly rejects the idea that SodaStream either “sustains” the occupation or benefits from it indirectly.

SodaStream pays its workers Israeli minimum wage – placing it among about 5 percent of Israeli companies in the industrial zone to do so, according to labor rights group Kav LaOved. While it does benefit from a tax break, that is the same tax break that the Israeli government offers to factories inside Israel proper in the Galilee and the Negev – two areas that are relatively undeveloped economically.

Birnbaum adds that he in fact faces higher costs of business than he would if he operated in Israel, including a municipal security tax levied by Maale Adumim, which SodaStream fought in Israel’s supreme court and lost. And he pays for employee health care and pensions twice: once to the Palestinian Authority but also directly to the employees to ensure that they receive the benefits they deserve.

There’s also another benefit, he argues: the factory is a model for peace.

“In the end there’s going to have to be peace between the people,” says Birnbaum in an interview with the Monitor. “If people learn to know each other, to respect each other, to live side by side, which is something that’s going on here but not going on elsewhere, then you have a fundamental ingredient for peace.”