SodaStream Controversy Fueled by Lies and Distortions — and Israel's Occupation

Palestinian Workers Treated Equally at Factory

Glitz and Tall Tales: SodaStream’s supporters and defenders have both bent the facts about the Israeli company. Finding the truth starts in the West Bank settlement where its factory is located.
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Glitz and Tall Tales: SodaStream’s supporters and defenders have both bent the facts about the Israeli company. Finding the truth starts in the West Bank settlement where its factory is located.

By Nathan Jeffay

Published January 30, 2014, issue of February 07, 2014.
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To some people, it’s a storm in a soda cup. But to others, SodaStream’s most ambitious advertising campaign ever, starring Scarlett Johansson, is a potent symbol of all that is bad about Israel’s occupation of the West Bank.

The ad campaign, to be kicked off during the broadcast of the Super Bowl, on February 2, has it all — a celebrity name, sex appeal, an environmental motif and a healthy-living theme. It even had a subversive element that took a dig at Coke and Pepsi before this part was banned by Fox, the Super Bowl’s broadcaster, generating further publicity. To critics, however, all this just underscores their concern that operating from Israeli settlements deemed illegal by the international community is no impediment to commercial success.

In the run-up to the Super Bowl, Johansson and SodaStream have come under both withering attack from critics of the settlements, including those calling for an anti-Israel boycott, and stirring praise from defenders of Israel, in particular from the right-wing nationalist camp. The two sides have propagated portraits of the company and its policies that are mutually irreconcilable. What they do share, a probe by the Forward has found, are a tendency to distort facts and tell incomplete truths and, in some cases, outright falsehoods. Information put out by SodaStream itself avoids the last of these pitfalls but does offer spin that leaves viewers with a less-than-complete picture.

Meanwhile, over and above that, is the issue of the land on which the SodaStream factory sits.

The Mishor Adumim industrial park, where the SodaStream plant is sited, and the settlement Ma’ale Adumim, of which the park is a part, are not hard-line outposts. Israelis regard Ma’ale Adumim as one of the “consensus” settlements — those deemed certain to be retained, with possible land swaps, in any final peace deal with the Palestinians that would establish a Palestinian state.

Just 15 minutes outside Jerusalem, Ma’ale Adumim is nevertheless a settlement especially loathed by Israeli peace activists. It was made possible in the 1970s by one of the largest expropriations of Palestinian land implemented by Israel during its 46-year occupation of the West Bank.

According to the Israeli human rights group B’Tselem, the land on which the settlement and its industrial zone, including SodaStream, now sit was taken from the Palestinian towns Abu Dis, al-’Izariyyeh, al-’Issawiyyeh, a-Tur and Anata. Other expropriated lands are areas in which the Jahalin and Sawahareh Bedouin tribes lived before Israel evicted them.

The establishment of Ma’ale Adumim and Mishor Adumim “meant loss of grazing and farming land and, in effect, loss of the agricultural way of life” for these villages, B’Tselem related in its July 1999 report on the expropriation. The mass expropriation “also denied these villages the land reserves they needed for housing, industry and public institutions.” The regional services the settlement brought with it are closed to Palestinian residents of the area, except for those with special permits to enter the settlement for work only — such as the employees of SodaStream. And the geographical spread of the whole settlement itself bisects much of the West Bank and cuts it off from Jerusalem in a way that Palestinian Authority officials and their supporters say makes a territorially contiguous and viable Palestinian state almost impossible.

But the question of how Soda Stream workers are treated there has also become an important part of the controversy. The Palestinian advocacy website The Electronic Intifada published a hyperbolic article that purported to include an interview with an unnamed employee, quoting him reciting a litany of abusive labor practices. “Palestinian workers in this factory always feel like we are enslaved,” the unnamed worker said.

That portrayal seemed implausible — unless one supposes large-scale orchestration — during a January 28 visit by this Forward reporter to the plant, where he was allowed to speak with employees without supervisors present. None of the workers complained about their treatment, on or off the record. Some 250 Palestinians also applauded SodaStream CEO Daniel Birnbaum loudly when he gave a speech on the plant floor urging them to ignore the political attacks on the facility. The CEO reassured the workers about their jobs and said he wanted to bring “more and more hands” into the factory as SodaStream grows. “We are making history for the Palestinian people and the Israeli people,” he told them.

Around the same time, the influential pro-Israel blog Elder of Ziyon produced a poster that has gone viral via social media, portraying the West Bank factory, where Jews and Arabs work together, as a landmark humanitarian achievement.

“If a European company would build a factory in the West Bank that employed a thousand Palestinian workers, paid them double the average wage and even built a mosque on site, it would win worldwide praise and awards for humanitarianism,” the poster declares. “When a Jewish-owned Israeli company does it, it is called a ‘war crime.’”

In fact, the company’s own estimate of how many Palestinians it employs is now 500 out of some 1,300 total workers — up from 160 Palestinians in December 2010 as a result of the growth in sales.

And the poster’s grandiose claim that the company “built a mosque on site” appears to be based on a company video during which an Arab employee displays a room that he says is “dedicated to prayer.” The space shown is actually a locker area with a small eating table, some coat hooks on the wall, a coffee machine and a couple of large garbage cans. The workers are shown spreading thin prayer mats on the bare floor during their prayer times — far from a customized prayer room, much less a mosque.

One point of major importance among SodaStream critics is the extent to which the company is actually profiting from the occupation. In reality, the answer depends on how you phrase the question.

In SodaStream’s publicity video, shot at the West Bank factory, Birnbaum claims, sweepingly, that his company gets no government benefits from its location over the Green Line, as the boundary separating Israel from the occupied territories is known.

“There are so many untrue, uninformed, manipulative claims against SodaStream, as if we’re benefiting from being in this location,” he said. “We’re not getting government incentives for being here; we have to pay a penalty to be here. We’re far away from the port, far away from our suppliers.”

But the importance of the location and its accompanying incentives were clear enough to Peter Wiseburgh, the British-born Israeli who established the company in the 1990s. Wiseburgh spoke in 2000 of how he searched far and wide for facilities and found the perfect bargain in the Mishor Adumim settlement.

“When I got here, the space was deserted and full of pigeons. So I just turned around and walked away,” he told the business paper Globes. “A week later, the Jerusalem Economic Corporation [which leases the industrial zone from the military administration in the West Bank] offered to give me the site for free for the first six months, and then for 44,000 shekels rent per month and also offered $100,000 in cash for the cost of renovating the place. I rented 13,000 square meters, and it was a good deal. Not a political act.”

As for today, the company’s own 2012 annual report seems to dispute Birnbaum’s claim that SodaStream’s location gives it no financial advantage.

The report notes the opposition to its West Bank operations from international activists, the Palestinian Authority and the European Union, and acknowledges the possibility that this may require it to move at some point. But such a move, the report adds, “may limit certain tax benefits.”

The tax benefits enjoyed by industrial companies that locate in Mishor Adumim are significant, according to Inon Elroy, the official at Israel’s Ministry of the Economy who is responsible for industrial parks. Mishor Adumim is classed as National Priority Area A, which brings companies locating there a package of benefits, including a reduction of Israel’s 25% corporation tax, in some cases down to single digits.

But SodaStream takes the view that Birnbaum’s statement was valid because the subsidies are not unique to West Bank settlements. They are available, too, in other National Priority Areas within Israel proper.

Shlomo Swirski, academic director of the Adva Center think tank, has conducted a comparison of state benefits received in priority areas. “I didn’t see any major difference between industrial areas in the occupied territories and priority areas within the Green Line,” he said.

In fact, SodaStream’s biggest recipient of government incentives right now appears to be a new plant it is building in a National Priority Area in the Negev, within internationally recognized Israeli territory. The new plant, which is due to open any day, will receive “additional support” on top of what plants in Priority A zones of Israel and the West Bank get, according to Elroy, because of a government decision to promote the development in the Negev.

One subsidy that is unique to the West Bank doesn’t put settlement businesses ahead of those on sovereign Israeli land, but rather levels their margins. The government reimburses companies making products in the West Bank for the tariffs that the E.U. imposes on them, in contrast to goods made in Israel proper, which flow into the E.U. duty free.

A separate issue has been SodaStream’s labor practices. The phrase “blood bubbles,” coined in an article in New York magazine in January to describe SodaStream’s carbonation, has since been used widely in other reports. There have been far-reaching suggestions that the company fails to respect labor laws, which, indeed, often go unenforced in the West Bank when it comes to Palestinians.

In 2007, the Israeli Supreme Court ruled that Palestinian workers in settlements must receive the same rights — including minimum wage — as workers in Israel. But a report by the State Comptroller in 2012 found that in many cases, the rights were not being enforced. Still, labor rights advocates who monitor the situation say they have no reports indicating that SodaStream is today one of the West Bank companies violating these laws.

The Israeli workers’ rights group Kav LaOved criticized SodaStream heavily for workers’ rights issues between 2008 and 2010, but currently has no complaints against the company. Adam Keller, a leader of the Israeli peace activist group Gush Shalom, which actively promoted boycotting the settlements until a 2011 law made such advocacy illegal, said he also has no great cause for suspicion when it comes to pay and working conditions at SodaStream. It is “quite possible that these workers do indeed get relatively good pay and working conditions” and “quite likely that they are better paid than in any job they could get in the Palestinian economy itself,” he said.

SodaStream estimates that wages for entry-level workers at Mishor Adumim — which are the same for Palestinians and Israelis — are four to six times the Palestinian average. The critical article on The Electronic Intifada, while claiming that workers’ rights are poor, conceded that wages are three to four times the Palestinian average.

It’s not clear that any of this will matter, one way or another, for the millions who watch Johansson on Super Bowl Sunday. While the E.U. and a significant number of European consumers care a lot about the issue of Israeli goods made in the occupied West Bank, “Scarlett Johansson is really geared toward an American audience, which typically is less concerned with where the product is made,” Joseph Altobello, an analyst at the national investment boutique Oppenheimer & Co. Inc., told Bloomberg L.P.

Contact Nathan Jeffay at [jeffay@forward.com](mailto:jeffay@forward.com)


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