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Councils Face Legal Challenges for Continuing to Invest in Firms Accused of ‘Aiding Genocide’ in Gaza

Exclusive: New legal opinion suggests local authorities and central Government are at legal risk if they continue to invest in firms involved in human rights violations in Gaza

Protesters hold the letters BDS (Boycott, Divestment and Sanctions) outside Downing Street during a march in support of Palestine this June. Photo: Vuk Valcic/Alamy Live News

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Councils are at legal risk if they continue to invest in companies ‘facilitating Israel’s crimes against the Palestinian people’, according to a new legal opinion from lawyers from the Doughty Street Chambers on behalf of the Palestine Solidarity Campaign (PSC). 

PSC has now written to Secretary of State Angela Rayner arguing that she too is under a legal obligation to issue guidance to prevent all local Government pension funds investing in companies ‘enabling Israel’s crimes’. 

The campaign group has asked for a response from councils within 21 days to outline how they will abide by their legal obligation. 

The position paper, first seen by Byline Times, states: “In the face of the almost incalculable devastation caused by Israel’s military assault on Palestinians in the Gaza Strip, it is a moral and legal imperative that all levels of Government take action to bring Israel’s violations of international law to an end. 

“One lever the UK has to effect change is by divesting from companies which are aiding or assisting in Israel’s violations of the most fundamental norms of international law.”

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It continues: “The UK has a number of ‘prevention and non-assistance duties’ [under in international law]: The UK must not recognise, explicitly or implicitly, situations created by Israel’s serious breaches of peremptory norms [fundamental international law principles. The UK must refrain from rendering aid or assistance to maintaining situations created by Israel’s serious breaches of peremptory norms. 

“[And] the UK is required to cooperate with other States, and take all reasonably available measures to bring to an end any violations of peremptory norms by Israel, ensure respect of the Geneva Conventions, and prevent genocide.”

The legal opinion written by leading lawyers today sets out the duties local and central Government have to prevent and end assistance to Israel’s violations of international law, and how those duties apply to investments under the Local Government Pension Scheme (LGPS). Ministers and local Government pension bodies must take action to counter the risk of aiding war crimes and crimes against humanity, according to the legal counsel. 

They add: “Administering authorities and the Secretary of State will be at significant legal risk if they continue to invest or permit investment in Involved Companies,” referring to firms allegedly abetting genocide and other crimes in Gaza and the West Bank. 

The legal opinion continues: “Administering authorities must take a prudent approach in considering, making inquiries and exercising due diligence to determine whether investments in [war crime-] Involved Companies under the LGPS are contributing to violations of international law in the Occupied Palestinian Territories.”

In the past year, 17 local councils have called for, or committed to, divestment from companies believed to be ‘complicit in Israel’s crimes’, according to PSC. More are expected to follow in light of this new legal opinion. 

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It comes as PSC launches a new front in its campaigning by issuing legal notices to all councils in England and Wales that administer a LGPS fund, arguing they are under an obligation to take steps to divest from companies alleged to be enabling Israel’s war. 

PSC’s research released earlier this year has found that LGPS funds have invested £12.2billion in companies which further Israel’s violations of international law. 

That includes substantial investments in companies which are involved in the supply of technology, surveillance equipment and weapons to the Israeli military, and the construction and financing of illegal Israeli settlements in the West Bank.

The legal opinion argues Israel is violating fundamental obligations under international law that must be adhered to in all circumstances, such as the prohibition on genocide, the prohibition of racial discrimination and apartheid, and the right to self-determination. 

Amid the starvation of Palestinians in Gaza, Israel continues to conduct a massive military assault on Gaza City, where one million people are sheltering, the paper notes. 

Israel has also recently approved a large set of illegal settlement expansions in the occupied West Bank that would effectively cut the territory in two, and it is threatening a full annexation of the West Bank. The UK Government has condemned Israel’s actions in Gaza and the West Bank. But the campaigners want sanctions to go much further. 

After Russia’s full-scale invasion of Ukraine in 2022, LGPS funds acted quickly to divest from assets linked to Russia. 

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Campaigners now expect that fund managers will follow suit in this case, “given the clear consensus among human rights bodies and experts that Israel is carrying out genocide against Palestinians in the Gaza Strip.” 

PSC Director Ben Jamal said the legal opinion “puts all councils and the Secretary of State on notice” of a legal imperative to divest from companies “enabling Israel’s atrocities”. 

“With Israel violating all norms of, and duties under, international law through its genocide against Palestinians in the Gaza Strip and decades of oppression throughout Palestine, now is the time for