Adri Nieuwhof, The Electronic Intifada, 16 September 2009

After years of campaigning by Palestine solidarity activists to end the French transportation giant Veolia’s complicity with Israeli violations of Palestinian rights, it was reported in early June that the company planned to end its involvement in an Israeli light rail project being built on occupied Palestinian land. The light rail will connect Jerusalem with several illegal West Bank settlements; Israeli settlements and the annexation of East Jerusalem are illegal under international law.

Veolia steadfastly refuses to provide information on the company’s intention to pull out of the 30-year contract to operate the train and to sell its five percent stake in the City Pass Consortium. The City Pass Consortium holds the contract with the State of Israel for the construction of the light rail project. It consists of four Israeli companies and the French companies Connex (Veolia Transport subsidiary) and Alstom. The European business world has been abuzz with news of a merger between Veolia Transport and Transdev, a French bus transport company. In addition, recent news reports have mentioned the Israeli company Dan Bus Cooperative as a serious candidate to take over Veolia’s role as operator of the light rail.

Contrary to Veolia’s reported intention to abandon the light rail project, the company seems to be conducting business as usual with Israel. Veolia justified its work on the light rail project at length at the seventh Global Compact Annual Local Networks Forum held from 8-11 June 2009. Veolia, as participant in the UN Global Compact, is bound to the principles that businesses should support and respect the protection of international human rights within their spheres of influence, and make sure they are not complicit in human rights abuses. However, Veolia’s participation in the construction and maintenance of the Jerusalem light rail are a violation of both provisions. Also, Veolia continues to advertise for jobs for the light rail’s operational center in the Israeli press. Neither its attempts to justify the project at the Global Compact Forum, nor the recruitment of staff indicate the company plans to withdraw from the light rail project.

On 24 July, French newspaper France Soir reported on the possibility of a merger between Veoila and Transdev before the end of the year. Transdev is a subsidiary of Caisse de Depots et Consignations (CDC), which is a state investment bank and leading administrator of French savings deposits and retirement savings funds. Veolia and CDC will create a new transport entity, each owning 50 percent. Unless it succeeds to sell off its stake in the City Pass Consortium and the contract to operate the light rail, Veolia Transport will bring its involvement in the Israeli light rail project into the new entity.

CDC is already involved in the light rail project, not only as shareholder of Veolia and Alstom, but also through its subsidiary Egis. In 2008, Egis won a contract with the Jerusalem Transportation Master Plan to assist in the project management of the construction of three tramway lines. CDC’s 50 percent control over the new transport company might allow its Egis subsidiary to tap Veolia’s knowledge and experience of the light rail project.

Augustin de Romanet de Beaune, CEO of CDC, seems to be a key player in the history of the light rail. He has accumulated substantial power over the years and has built a wide network of public and private contacts and is likely involved in the talks about the merger of Veolia Transport and Transdev. In addition, it is safe to assume that De Romanet has acquired more than a passing knowledge about the light rail project and its implications for his company.

De Romanet spent most of his career in public functions. He served at the French ministries of economy, finance and industry and was deputy chief of staff to French Prime Minister Jean Pierre Raffarin, when Raffarin visited Jerusalem in March 2005. According to The Jerusalem Post, Raffarin could not hide his satisfaction about Veolia and Alstom’s involvement in the light rail on this occasion. Moreover, as general director of France’s major public investor, De Romanet is member of the board of directors of several companies in which CDC holds a substantial share. This includes Dexia and Veolia Environnement.

Mahmoud Abbas, president of the Palestinian Authority (PA), reportedly asked the French president at the time, Jacques Chirac, to intervene in the construction of the light rail in October 2005. At that point, de Romanet was Chirac’s Deputy Secretary-General, through which he could influence the president’s policies. Considering that the first phase of the light rail is expected to be finalized by the end of 2010 with the continued involvement of Veolia and Alstom, the only conclusion can be that Chirac did not respond to the request of the PA to intervene.

While Veolia remains silent on its alleged withdrawal from the light rail project, the Israeli newspaper Haaretz reported on 13 September that the Israeli Dan Bus Company is buying out Veolia Transport’s five percent stake in the City Pass Consortium as well as the French company’s rights to operate the local Jerusalem railway, for a total of $15 million. The deal is awaiting approval from the state. According to Haaretz, it is likely that Veolia will stay involved for five years to teach Dan how to operate the train system. The Israeli business magazine Globes wrote a few days earlier that the deal might involve a broader strategic cooperation involving bus services between Dan and Veolia. Veolia operates bus services from West Jerusalem to settlements in the West Bank. By running these buses, Veolia is also directly implicated in maintaining illegal settlements in the the West Bank. It is not clear what the strategic cooperation will entail.

In spite of Veolia’s intransigence, the company is no doubt concerned by the recent actions of the Norwegian government. Last week Norway’s Government Global Pension Fund announced its divestment from the Israeli firm Elbit Systems, because the firm provides surveillance equipment for the wall in the occupied West Bank. Norwegian Finance Minister Kristin Halvorsen said, “We do not wish to fund companies that so directly contribute to violations of international humanitarian law.” The decision to divest will certainly be followed by many socially responsible investors. Indeed, it is likely only a matter of time before Norway’s Government Global Pension Fund divests from Veolia and Alstom.

Adri Nieuwhof is a consultant and human rights advocate based in Switzerland.