CEMEX’s New West Bank Policy: Continue Production in Settlements

A letter recently sent by the Mexican CEMEX Corporation to the Business and Human Rights Resource Center (BHRRC) described significant changes in the company’s policy and operations in the occupied Palestinian territories. In this letter, which was published by BHRRC on 9 September 2015, Cemex announced that it had sold its holdings in the Yatir quarry, a mining site located south of the Palestinian city of Dhahiriya in the West Bank.

2015-11-24

CEMEX explained the move in the following words: “As part of the general strategy of CEMEX that includes the sale of assets, CEMEX is no longer associated to the third party that manages and exploits the [Yatir] quarry” (the unofficial translation to English was provided by BHRRC). The company tried to further distance itself from the illegal mining preformed on site by claiming that “during the last decade CEMEX was not involved in the management of that particular quarry. The production, operation, logistics, sales, etc. were managed and operated exclusively by a local partner.”

Following the publication of this response on BHRRC’s website, the Who Profits Research Center launched an inquiry in order to check the validity of CEMEX’s announcement. Our findings confirm that Cemex has indeed sold all of its holdings in the Yatir quarry to its former partner, Kfar Giladi Quarries. Until June 2015, the Yatir quarry was owned in equal shares by Kfar Giladi Quarries, an Israeli mining company owned by the Kfar Giladi kibbutz, and Lime and Stone Production, one of the largest manufacturers of quarry materials in the Israeli market. Lime and Stone Production and its parent company Readymix Industries are fully-owned subsidiaries of CEMEX since 2005. Through its holdings in this quarry, CEMEX has reaped profit from the exploitation of Palestinian natural resources for the use of the Israeli construction industry. This is in contravention of international humanitarian law, international human rights standards and corporate social responsibility codes of conduct.

On 10 June 2015, the Israeli Antitrust Authority approved a request for a merger between Kfar Giladi Quarries and the Yatir quarry. Less than a week later, Lime and Stone Production was no longer listed by the Israeli Registrar of Companies as one of the quarry’s owners. According to the Registrar’s current data, Kfar Giladi is the sole owner of the Yatir quarry.

While CEMEX hastened to drop the mining operations in Yatir, it continues to operate four factories on occupied land. Readymix Industries holds production sites in the settlement industrial zones of Mevo Horon, Atarot and Mishor Adumim in the West Bank and Katzrin in the occupied Golan Heights. In June, the Who Profits team visited Readymix’s factory in Atarot and witnessed considerable activity on site.

Through Readymix, CEMEX has provided concrete elements for the construction of military and settlement infrastructure across the occupied West Bank. Company products were used for the construction of the Hawara and Azzun-Atma checkpoints and a security wall along the Gilo Bridge; similar concrete products were used in the construction of the light rail in East Jerusalem. Additionally, the company regularly provides concrete products for the construction of settlements and outposts in the West Bank.

According to CEMEX’s letter to BHRRC, it appears that the company will continue to produce concrete elements in illegal settlements and supply construction materials for the construction of settlements. In its letter, CEMEX argues that “the concrete plants are located in legal settlements approved by the Israeli government and validated by the Supreme Court of Israel.” By accepting the Israeli government’s position regarding the legality of the settlements and by maintaining production lines on occupied land, CEMEX not only profits from the Israeli occupation, but also provides vital support for the expansion of settlements and reinforcement of Israeli control beyond the Green Line.

CEMEX was founded with the opening of Cementos Hidalgo, in 1906. Meanwhile, Cementos Portland Monterrey began operations in 1920, and in 1931, the two companies merged, becoming Cementos Mexicanos, now CEMEX. In the 1960s, CEMEX grew significantly when it acquired several more plants throughout Mexico. In 1976, the company went public on the Mexican stock exchange, and that same year, became the largest cement producer in Mexico with the purchase of three plants from Cementos Guadalajara. In 1982, the company made significant progress in overseas markets, doubling its exports. Further acquisitions of Mexican cement companies were made in 1987 and 1989, making CEMEX one of the ten largest cement companies in the world. In November 2006, an American embassy cable released via Wikileaks listed CEMEX among “Mexico’s monopolists,” with a market share of 87.6%.

In April 2008, the President of Venezuela, Hugo Chavez, announced the nationalization of the whole cement industry in that country, in response to the belief that the industry was exporting its products in order to receive prices above those it was allowed within the country. In mid-2008 the Venezuelan government took over the Venezuelan operations of CEMEX, the largest Venezuelan producer with around a 50% market share; a deal on compensation was reached in 2011.

Related:

http://www.whoprofits.org/content/cemex%E2%80%99s-new-west-bank-policy-drops-mining-activity-continues-production-settlements