SodaStream as a Model of “Economic Peace”

SodaStream’s recent history has been characterized by growth and opportunity in the face of government bureaucracy and boycotts of our products by various international BDS organizations. I was appointed chief executive of SodaStream in 2007, when the company was teetering on the verge of bankruptcy. Although SodaStream products were popular in the 1970s and 1980s in Israel, England, and Germany, by 2007, the company had limited growth and resources to support product innovation, marketing, investment, or international expansion. In addition to inheriting an ailing company, I also inherited SodaStream’s primary production facility: a former Israeli bomb-making factory in the Mishor Adumim Industrial Zone in the West Bank.

In early 2007, the company was not employing Palestinians in the West Bank facility. We employed only 230 workers, primarily Jewish Israelis from Jerusalem, including immigrants from the former Soviet Union. In 2007, the Mishor Adumim factory was utilizing only 30 percent of its capacity.

The SodaStream factory in Idan Hanegev

The SodaStream factory in Idan Hanegev, October 2017. (David Abitbol)

I came to SodaStream with an ambitious expansion plan to relaunch our brand and compete in the global beverage market. As we grew over the next few years, we began to employ Israeli Arabs and Palestinians. They worked together with the Israeli Jewish workers. SodaStream employed Palestinian Arabs in this facility as a business necessity, not due to ideological conviction.

Our new business plan led to a dramatic company transformation. From 2007 to 2010, SodaStream’s revenues rose substantially from $90 million to $213 million. This growth was sustainable during my first decade with the company, and exceeded $500 million in sales annually by 2017. SodaStream is currently the world’s largest carbonated water brand by volume and the largest producer of home carbonation machines.1

A SodaStream home carbonation machine

A SodaStream home carbonation machine. (SodaStream Official Facebook)

Establishing SodaStream’s Palestinian and Israeli Employee Team

Our unprecedented growth created a labor shortage, which we solved by hiring both Israeli and Palestinian employees. In just a few years, our workforce requirement for the Mishor Adumim factory had increased from 230 to 1,300 employees.

Our decision to hire Palestinian workers also stemmed from Israel’s relatively low unemployment rate of 4.8 percent, according to 2016 OECD data.2 Unlike Israel, the Palestinian economy suffers from high levels of unemployment. According to 2014 statistics from the International Labor Organization (ILO), the unemployment rate in the West Bank stood at 17.7 percent, while unemployment among Palestinian women reached 27.7 percent.3 Palestinian women have reported difficulty obtaining work with Palestinian employers due to gender discrimination.4 Similarly, according to the same ILO report, in 2014 the average Palestinian GDP per capita in the West Bank stood at a mere $2,250.5 In contrast, Israel’s average 2014 GDP per capita was $34,945.6 These statistics have remained relatively constant over the past 10 years and demonstrate that the Palestinian economy continues to suffer high unemployment and low domestic wages. SodaStream’s equal opportunity and compensation policies have addressed theses inequalities and other employment challenges Palestinian men and women face in Palestinian society.

Some of my colleagues were skeptical about employing Israelis and Palestinians side-byside, especially so shortly after the deadly Second Intifada terror campaign that ended in 2004. However, our experience was a very positive one in many ways. Sodastream’s Palestinian employees turned out to be excellent personnel: fast learners, diligent, responsible, and loyal. Some Palestinian employees exhibited strong managerial capabilities and proved to be good team leaders, shift managers, and department heads, despite having no prior experience or training for leadership positions. Most importantly, our Palestinian employees became an integral part of our social tapestry at the factory, and it became completely natural to see Israelis and Palestinians working side-by-side in harmony.

This harmonious daily work environment seemed surreal at times, considering political hostilities and tensions outside the factory. I describe the evolution of our coexistence and discovery of peace as “by accident,” just like how Alexander Fleming discovered penicillin by accident in 1928.

“Economic Peace” in the SodaStream Factory

NGO peace activities and coexistence programs that bring Israelis and Palestinians together are important. However, unlike sporting events, dialogue activities, or people-to-people activities, SodaStream is a real-time professional barometer of Palestinian-Israeli workplace cooperation. Our Israeli and Palestinian workers depend on SodaStream to provide livelihoods for them and – in many cases – their large families.

Our management team worked to ensure the highest possible level of employee cooperation and productivity. Israeli and Palestinian SodaStream employees work as a team to ensure production quotas are fulfilled and quality control maintained. They know that co-worker tensions, prejudices, cultural differences, and insubordination toward managers from “the other side” could prevent them from performing their roles effectively.

Since we hired our first Palestinians in 2008, we witnessed more than “experiments” or “exercises” in coexistence and tolerance on the factory floor. We saw peaceful and harmonious professional and personal relations between Israeli and Palestinian employees.

There was no pre-established employee pyramid based on ethnicity or race. Israelis worked under Palestinian managers just as Israeli managers supervised teams of Palestinian workers.

SodaStream employees in the Mishor Adumim factory also became family. Our employees also represented broad diversity: Bedouins, Palestinian Sunni Muslims, Christians, Jewish Israelis from the former Soviet Union, Ethiopians, Ashkenazi, Sephardi and Mizrahi Jews, and even African refugees from Darfur.

SodaStream honors both Muslim and Jewish holidays. For example, at the end of the month of Ramadan we hold a festive dinner and dance event for our employees, regardless of faith. During these festivities I’d invariably find myself on someone’s shoulders dancing with the crowd. Muslim employees also join their Jewish coworkers in our candle-lighting ceremony each Chanukah. During the broadcast of the annual sirens marking Israel’s memorial days for the Holocaust and for fallen Israeli soldiers and victims of terror, our Palestinian employees cease regular activity and remain silent out of respect for their Jewish co-workers.

SodaStream’s equal opportunity and compensation policies have addressed these inequalities and other employment challenges Palestinian men and women face in Palestinian society.

Palestinian and Israeli Equality at SodaStream

At SodaStream we emphasize that all workers are equal regardless of nationality, ethnicity, and culture. This equality was reflected in salaries, benefits, and opportunities. Salaries are determined exclusively by a worker’s position and achievements at SodaStream. Regarding benefits, while every Israeli citizen automatically receives national health insurance at birth or time of immigration, this benefit is not afforded to Palestinians in Palestinian factories and companies in the West Bank.

SodaStream addressed this inequality by exceeding its legal requirement and purchasing private health insurance for its Palestinian employees and their immediate families. Senior management accepted the substantial financial responsibility to provide health insurance, workers’ compensation, and other benefits to all Palestinian workers. I believe this is SodaStream’s responsibility, since the PA does not provide the Palestinians an equivalent of Israeli national insurance, particularly health insurance.

As part of the SodaStream benefit policy to its 600 Palestinian employees, the company also provided benefits to their immediate families. Palestinian families are large, with an average of 10 people. This meant supporting some 6,000 Palestinians.

SodaStream became the largest private employer in the West Bank and one of its largest private providers of health insurance and social services. As an equal opportunity employer, we promoted our Palestinian employees when opportunities arose, according to the performance and capabilities they demonstrated. Outstanding Palestinian employees were promoted to managerial ranks.

For a brief period the Mishor Adumim factory, branded the “Island of Peace,” also employed Darfuri refugees from Sudan through an employment agency. For this short time, they too integrated into the SodaStream family and were excellent workers. We would have liked to continue employing Darfuri refugees, however, after we broke off ties with the employment contractor, we lost touch with them. We always regretted losing these good people in our workforce and we hope to maintain these ties in the future.

There was no preestablished employee pyramid based on ethnicity or race. Israelis worked under Palestinian managers and vice versa.

Employee Harmony Beyond the Factory

Israeli and Palestinian workers developed personal bonds beyond the factory floor.

SodaStream organized trips and activities for workers to socialize outside of the workplace, enabling families to meet and enjoy a day away from the factory. One of our first trips was to the Dead Sea. We chose to visit a beach that was within the West Bank, so that our Palestinian employees would not need to request permits and avoid the Civil Administration bureaucracy.

The day after the trip to the Dead Sea, I asked a group of our Palestinian employees where they would like their next trip to be. One of the prominent employees, Fhadi, requested a company visit to the Mediterranean coastal city of Haifa. Of all places to visit in Israel, this seemed a bit bizarre so I asked “why Haifa?” That is when I learned from Fhadi that many Palestinian employees had never been to the sea, and simply wanted to see it for the first time. I had never considered that since the first Intifada in 1987, most of our Palestinian workers and their children had never visited the Israeli seacoast. This saddened me, and I decided their next trip would be to the seashore but this time – with their children.

My team and I submitted requests to the Civil Administration for our Palestinian employees and their families to go to the beach for a day with their Israeli co-workers and their families.

After five months, our requests were approved for Palestinian SodaStream employees and their children. Although we did not make it to Haifa, we planned a beach day in Bat Yam, just south of Tel Aviv. We cleared the beach and hired additional lifeguards for the day, six of whom were in the water on paddleboats. This was a necessity since most of our Palestinian workers did not have access to pools and could not swim. Additionally, many of them did not own bathing suits, so they swam in their clothes, weighing them down and making movement difficult in the water.

Yousef Basherat, the brother of Nabil (a contributor to this book), joined us on the trip.

Swimming was so new to him that he did not know to lift up his head to breathe while underwater. Thankfully, I was there and lifted him up from the back of his blue shirt, as he coughed up foamy water. Although most would view this near drowning experience as traumatic, Yousef was so elated that the next day he added “swimming” as one of his favorite activities on his personal Facebook page.

We emphasized that workers are equal at SodaStream regardless of nationality, ethnicity, and culture. This equality was reflected in salaries, benefits and opportunities. Salaries are determined exclusively by a worker’s position and achievements at SodaStream.

The beach day was otherwise an overwhelming success. Many of the children of Israeli and Palestinian employees bonded on the trip and added each other as Facebook friends so that they could continue communicating. I was especially happy to see my own children make Palestinian friends that day.

The interest that many of my employees had in swimming inspired me to take action.

One-third of the Palestinian employees at SodaStream, including the Basherat family, lived in the village of Jaba’ in the Ramallah district. Our Jaba’ employees and their families were eager to enter the water. For most of them, the SodaStream beach day was the first time they had ever gone swimming. Therefore, I contacted the mayor of Jaba’ about building a pool that I would privately donate to the village.

Unfortunately, I failed to secure a meeting or even receive a response from Jaba’s mayor or any PA official to advance my idea.

“Island of Peace”

My other interactions with politicians mirrored my experience in Jaba’. When I reached out to both Israeli and Palestinian business and political leaders, I received virtually no response. As SodaStream became the largest private employer of Palestinians in the West Bank, with 600 Palestinian workers, I thought I would gain some leverage with the Palestinian Authority (PA), the de facto political representative of my Palestinian employees.

I was proven wrong by both the PA and international community. When I hosted a group of 15 senior diplomats and professionals from the European Union, including their ambassador to Israel, they could not get beyond their criticism of Israel and their hostility toward the checkpoints, to understand and embrace our model of coexistence, even when seeing it with their own eyes.

The day after the trip to the Dead Sea, I asked a group of our Palestinian employees where they would like their next trip to be. Many of them requested a company visit to the Mediterranean coastal city of Haifa. I had never considered that since the first Intifada in 1987, most of our Palestinian workers and their children had never visited the Israeli seacoast.

One idea I proposed to the PA was to encourage technological innovation. I was confident that for the PA, as a developing economy trying to end dependence on Israel, fostering innovation was a key to success. I wanted to encourage Palestinian entrepreneurship and innovation by establishing a Palestinian technology campus or hub, so that Israel’s startup culture and technology could be shared with Palestinians. I was inspired by Israel’s Technion University, where about 20 percent of students in its rigorous science and engineering programs are Arab.7 However, similar to my experience in Jaba’, not a single Palestinian leader responded to my request for a meeting or project proposal.

Trying to reach PA Chairman Mahmoud Abbas also proved difficult. His associates suggested I write a letter to the PA headquarters, known as the Muqata, and wait for a response. I wanted to discuss paying Palestinian taxes on the Mishor Adumim factory, which was not required of SodaStream, and potentially turning it into a joint Israeli-Palestinian factory and possibly even place it under Palestinian ownership. I never received a response.

As SodaStream became the largest private employer of Palestinians in the West Bank, with 600 Palestinian workers, I thought I would have some leverage with the PA, the de facto political representative of my Palestinian employees. I was fundamentally mistaken.

I thought that even if PA and Fatah officials refused to speak with me, Palestinian business leaders would share an interest in forging Israeli-Palestinian economic cooperation – or “economic peace.” I was also mistaken. When I attempted to arrange a meeting with Bashar Masri, the Palestinian billionaire real estate developer, he would not take my call. Although Masri is very forward thinking, I was given a message that he saw SodaStream as part of the “occupation economy” and would have nothing to do with me.

The PA’s policy to denormalize all relations with Israel and Israeli companies overpowered any chance for SodaStream’s model to be implemented by the PA. Although I was willing to rescind Israeli ownership of the Mishor Adumim factory (and sell the facility to a Palestinian who would become our sub-contractor), our attempts at a dialogue with Palestinian business and political leaders failed.

BDS protesters outside of the EcoStream store

BDS protesters outside of the EcoStream store in May 2014. (UK Media Watch)

Some Israeli politicians proved equally uncooperative with SodaStream’s economic-peace approach. Palestinian-Israeli coexistence presents an obstacle to the political aspirations of some Israeli politicians. Thus, I was unable to secure a meeting with many of them. Only two Israeli Ministers were willing to meet with me, Naftali Bennett, then the Minister of Economy, and Ayelet Shaked, the Minister of Justice. Opposition leader Tzipi Livni also supported and encouraged me to pursue SodaStream’s coexistence model. However, the concept of peaceful coexistence largely fell upon deaf ears. Indeed, the SodaStream “Island of Peace” remained just that – an island – isolated in an ocean of hate, separatism, and growing distrust and violence. Yet, we persisted.

The BDS Threat to Palestinian-Israeli Reconciliation and Normalization: The Case of the EcoStream Store in Brighton

I assessed that SodaStream’s green technology could become a significant thrust to our international business growth. The fact that each of our bottles is reusable and that a single bottle can replace thousands of disposable PET bottles was a compelling idea that we began promoting in 2008.

We were enthusiastic to embrace another “greater cause,” in addition to our coexistence model, by offering a solution to the increasing hazard of plastic waste. We quickly gained international credentials and support as an “Active Green” company. SodaStream support from The Carbon Trust and created partnerships with various environmental organizations including Legambiente in Italy, and Good Green Design Award in the United States. Sharing of our messaging were NGOs such as The Plastic Pollution Coalition, Whales and Dolphins, 5 Gyres, and most recently, Green Peace.

However, the BDS movement branded us as a source of evil to be protested and boycotted.

This didn’t deter us or slow us down in any way. But, the more successful we became and the more visible we were on the international public stage, the more the global BDS movement marked us as a primary target. Our affiliation with celebrity producer and designers such as the renowned advertising creative director, Alex Bogusky and designer, Yves Behar, attracted threats and attacks by the BDS movement. Our feature on premier advertising stages, such as the Super Bowl in 2013 and 2014 drew BDS attention and attacks. However, the most violent attacks were in Brighton, UK, at the site of our environmental pilot store – EcoStream.

The idea of an EcoStream store was to offer eco-conscious consumers the opportunity to purchase consumer products by volume or weight by refilling their existing packaging.

This “refill store” would sell anything from olive oil, balsamic vinegar, laundry, detergent, shampoo, or SodaStream flavors – all by weight and without plastic packaging.

After months of market research, we decided to launch our first EcoStream store in the city of Brighton, United Kingdom, in the summer of 2012. EcoStream was a concept store designed to be our first pilot store that, if successful, we might later roll out in other markets. We chose Brighton as our first retail location because it is an ecological and liberal city. In fact, Brighton’s MP Caroline Lucas, the first British MP elected from the Green Party, successfully campaigned on an environmental platform in 2010. We gauged that it was in the best interest of the people of Brighton to be environmentally friendly and support an innovative concept like EcoStream. We expected Ms. Lucas, a celebrated environmentalist, to fully embrace our concept and welcome us enthusiastically to her constituency.

The problem is that, at present, Palestinian economic policy is primarily driven by the desire to damage the Israeli economy.

The BDS movement organized protests of the EcoStream store twice every week. Sometimes protesters even chained themselves to the store’s door, preventing customers from entering or exiting. MP Lucas also abandoned her “green” principles and released the statement, “[I] support the right of my constituents and others to do the same by peacefully demonstrating against companies, which operate out of illegal Israeli settlements.” She clarified in a later statement that she did not support calls for the EcoStream store to close, but also denounced SodaStream as “implicated in the widely condemned occupation of Palestine.” The statement added “furthermore” – there was a “particular irony in SodaStream’s manufacturing of a water carbonating product in light of reports that Israel routinely denies Palestinians access to clean drinking water.”8 This is a fabrication. SodaStream does not deny Palestinians access to clean drinking water. It’s a widely debunked claim made by anti-Israel activists against the Israeli government.9 Moreover, MP Lucas mischaracterized SodaStream without first educating herself about our commitments to the environment and human rights.10 Had Caroline Lucas been committed to Palestinian rights, she would have accepted one of my numerous invitations to meet or my invitations to visit Israel and witness SodaStream’s Mishor Adumim facility, for herself. I was even prepared to offer her that SodaStream’s Mishor Adumim facility would be transferred to Palestinian owners if a final peace settlement were to be reached with Israel and if the factory were to be located in a future Palestinian state.

This singling out of Israel and the demonization of an Israeli enterprise simply because it is representative of a Jewish state appeared to be a classic form of anti-Semitism. Regrettably, these tactics by MP Lucas, the BDS movement, and its supporters proved disruptive to the EcoStream store, and we shut down this experiment in late 2013, after 18 months of operation.

After shutting down the EcoStream store in Brighton, we never opened another EcoStream store, in the UK or elsewhere. Ms. Lucas lost for her constituency a pinnacle sustainability jewel, which could have been a source of pride to her town and a model for other communities in the UK and around the world. She could have embraced a practical vehicle to reduce or eliminate plastic packaging, which is the greatest source of waste on Planet Earth. It seemed clear that Ms. Lucas was blinded by hatred.

Scarlett Johansson, the Super Bowl, and Oxfam

While SodaStream’s revenues and production continued to increase from 2012 to 2014, we outgrew our Mishor Adumim factory and sought to open a larger production facility. We also chose to expand our marketing and advertising output in the United States.

Our marketing strategy involved retaining the American actress Scarlett Johansson to star in a commercial to be shown at the 2014 Super Bowl, probably the most coveted TV time slot for advertisers in the world. Although we had submitted a commercial to air at the Super Bowl the previous year, this particular one with Ms. Johansson fell under the scrutiny of BDS activists, solely because of her celebrity status.

Before Scarlett signed an agreement with us, I advised her that certain BDS pressure groups would likely attack her because our factory was located in the disputed West Bank. At the same time, I explained our “building bridges” model and showed her video footage of our “Island of Peace.” Scarlett immediately saw the potential of promoting peace by bringing people together in productive work while treating everybody equally – with equal pay, equal benefits, and equal opportunities. Scarlett accepted the challenge with confidence and conviction that we are doing the right thing for our employees and their families.

Just days after the announcement that Scarlett would appear in our Super Bowl advertisement, in January 2014, the BDS movement pressured her to end her relationship with the company. BDS leaders likewise pressured the international “antipoverty” NGO Oxfam.11 Scarlett had been a humanitarian ambassador for Oxfam for nine years and had traveled to India, Sri Lanka, and Kenya on the organization’s behalf.

SodaStream SuperBowl commercial

SodaStream SuperBowl commercial featuring Scarlett Johansson, January 2014. (YouTube screen capture)

Regardless of Scarlett’s advocacy for the organization, Oxfam released a letter in January 2014 condemning her partnership with SodaStream. According to their statement: Oxfam respects the independence of our ambassadors. However, Oxfam believes that businesses that operate in settlements further the ongoing poverty and denial of rights of the Palestinian communities that we work to support. Oxfam is opposed to all trade with Israeli settlements, which are illegal under international law.12

Fortunately, Newsnight’s host Jeremy Paxman recognized the hypocrisy of Oxfam’s criticism of Scarlett Johansson and rebuke of SodaStream.

Scarlett responded to the letter by stepping down as Oxfam’s ambassador, ending their nine-year partnership. In a January 2014 Huffington Post article clarifying her decision, she explained:

SodaStream is a company that is not only committed to the environment, but to building a bridge to peace between Israel and Palestine, supporting neighbors working alongside each other, receiving equal pay, equal benefits and equal rights. That is what is happening in their Maale Adumim factory every working day.13

I also addressed this controversy. Appearing on the BBC program Newsnight in 2014, I was joined by Oxfam’s Campaigns and Policy Director Ben Phillips for a debate. Fortunately, Newsnight’s host Jeremy Paxman recognized the hypocrisy of Oxfam’s criticism of Scarlett Johansson and rebuke of SodaStream. Paxman asked Phillips directly if there was anything SodaStream could do to meet Oxfam’s standards, other than shutting down the Mishor Adumim facility. The Oxfam representative did not have a concrete explanation for why it was justified for our 600 Palestinian employees to lose their jobs, simply because of where our factory was located.14 Oxfam further ignored SodaStream’s employment of Darfuri refugees. Oxfam had taken an active role in helping Darfuri refugees and trying to end the Darfuri genocide for over a decade. Oxfam advocates for social and employment services for these refugees.15 Oxfam also provides services in Europe in response to the current Syrian refugee crisis, encouraging Western nations to absorb and resettle refugees, with efforts that include finding employment for them.16 In 2015, together with the mayor of the Negev Bedouin town of Rahat, located close to the new SodaStream factory within pre-1967 Israel, I announced an offer to absorb 1,000 Syrian refugees, or 200 families. I offered to provide jobs at SodaStream for the refugees, as I had offered a few years earlier for my contracted Darfuri employees.17 The mayor of Rahat committed to assist in housing and absorption these refugees. Together, we were to help them begin a new life in the safe and tolerant environs within Israel. Of course, our joint proposal recognized that each family would need to be approved by the Israeli security authorities, as the entire program would need to be endorsed by the Israeli government.

In 2015, together with the mayor of the Negev town of Rahat, located close to the New SodaStream factory, I announced an offer to absorb 200 Syrian refugee families. I offered to provide jobs at SodaStream for all accepted Syrian refugees, as I had offered a few years earlier for my contracted Darfuri employees.

In my naivete, I believed that the assurance of employment and housing assistance would make this decision easy for the government, and could happen very quickly. My motivation here was not only to save 1,000 people, but also to show the humanitarian soul of the Jewish people.

Unfortunately, the Israeli government did not approve the endeavor, and Oxfam never responded to it. In practice, we went beyond Oxfam’s recommendations for assisting refugees. Yet, despite our intensive outreach to help Syrian refugees, we received only reprimands from Oxfam, simply because of the West Bank location of the Mishor Adumim facility.

One would have expected the Oxfam controversy and the recent closure of the Brighton EcoStream store to negatively affect SodaStream’s growth and international reputation, especially in the UK where Oxfam is headquartered. Yet the opposite has occurred; our growth has continued despite these criticisms. Additionally, in December 2016, Oxfam Chief Executive Mark Goldring admitted that Oxfam lost many donors, largely due to the SodaStream controversy. He acknowledged that because of the mishandling of the Johansson and SodaStream situation, Oxfam had created “something of a PR disaster.”18 In response to the 2014 Oxfam debacle, the Christian Science Monitor’s Christa Case Bryant visited the SodaStream Mishor Adumim facility to interview Palestinian employees. All Palestinian SodaStream employees expressed great satisfaction that SodaStream employed them. They also expressed fear that the BDS movement could end their employment there. One employee spoke of his previous job, in which he earned 20 shekels ($6) a day plucking and cleaning chickens. At SodaStream, he noted, he earned nearly 10 times that, and his job included transportation, breakfast, lunch, and health insurance for himself and his family. He told Case Bryant, “Before boycotting, they should think of the workers who are going to suffer.”19 Another Palestinian employee added, “If SodaStream closes, we will be sitting in the streets doing nothing.”20

Although SodaStream had planned for years to move our primary SodaStream production facility from Mishor Adumim in the West Bank to the Idan Hanegev Industrial Park in Israel’s Negev Desert in order to expand our business, many international media outlets falsely attributed our move to BDS pressures.

SodaStream’s Move to the Negev

Although for years SodaStream had planned to relocate our primary SodaStream production facility from Mishor Adumim in the West Bank to the Idan Hanegev Industrial Park in Israel’s Negev Desert in order to expand our business, many international media outlets falsely attributed our move to BDS pressures. Media outlets like Bloomberg and Financial Times inaccurately credited the move to a slump in sales because of the negative publicity we had received in 2014, from Oxfam and the BDS movement.21 Although our sales had declined that year, it was due to the dramatic weakening of the euro against the dollar (while 75 percent of our sales are euro-based and converted to U.S. dollars) as well as changing consumer preferences from sugary sodas to healthy alternatives. We therefore announced our new growth plan, on October 28, 2014, which primarily changed our focus from a soda company to a healthy sparkling water company.22 This approach worked, and in 2015, 2016, and 2017 we saw a steady increase in revenues.23 Part of our growth plan of October 2014, included the optimization of our operating infrastructure and the folding of our five factories in Israel into our new state-of-the-art factory in Rahat in the Negev. This meant that we would close the Mishor Adumim factory in the West Bank, along with our factories in Alon Tavor in the Galilee, and several other factories in Israel. The concentration of our manufacturing and logistics operation in one modern site was to be a major source of cost reduction, which would fuel investments in marketing and deliver profits to our shareholders. In hindsight, the move to Rahat was an excellent business decision. We chose the Rahat location in order to enable as many of our Palestinian and Israel employees as we could to retain employment with us. Rahat is only a one-hour drive from Jerusalem and only 30 minutes from Hebron.

However, as expected, the BDS movement celebrated the announcement of our move as if it were a victory for their boycott campaign. In a statement they made the day following our announcement, BDS leaders said, “The SodaStream boycott must continue because while they are leaving the occupied West Bank, they are moving to the occupied Negev, (“Naqeb” in Arabic) where at least 40,000 of our Bedouin brothers are being displaced into townships.”24 The BDS-supporting Electronic Intifada site declared that the, “new SodaStream factory could help destroy Bedouin agriculture.”25 This statement has absolutely no factual or historic basis because the Negev has always been part of Israel, since 1948, and was never “occupied” or included in any proposal or plan as part of a Palestinian entity. Therefore, the BDS movement’s statement in October 2014, demonstrates that it is disinterested in establishing a Palestinian state next to Israel. Rather the global BDS campaign is committed to destroying the State of Israel. The BDS movement has pursued a two-staged approach. First, it focuses world attention on the “occupied territories” in the post-1967 territories, and only later emphasizes the elimination of the Jewish state in any territory.

The global BDS movement’s boycotts of SodaStream continue to this day. In the view of BDS activists, SodaStream did not suddenly become a “kosher” company because it relocated from the West Bank to the Israeli Negev. Indeed BDS activists constantly attempt new attacks against us.

In short, the BDS movement continued to fabricate reasons to boycott us simply because we are a high-profile Israeli company dedicated to coexistence. At this time, they do not even try to hide the fact that their agenda has shifted from rejecting Israel’s “occupation” of the West Bank to Israel’s very existence.

BDS activists continued to spread rumors internationally that BDS pressure had forced us to leave our West Bank factory. This is simply untrue; the company’s substantial growth required a far larger factory, and with our growth, we needed to structure our operations more efficiently – in a single site, rather than scattered all over Israel, as well as in China and Turkey. Ideally, we would obtain work permits for all 600 of our Palestinian employees to work in the new Negev factory and guarantee permits for new Palestinian hires. However, there are low quotas for permits issued each month, so instead we aimed for a more realistic 350 permits.

Although the commute from the homes of some of our West Bank-based employees to SodaStream’s Negev factory can take at least two hours, most Palestinian employees were eager to continue working for SodaStream regardless of the new factory’s location. We were committed to doing our best to bring all of our workers to the new Negev factory.

SodaStream employees at work

SodaStream employees at work, October 2017. (David Abitbol)

Despite our requests, The Israeli government only provided 74 temporary permits, which were issued for one year. The government argued that we should employ Israeli workers, especially Bedouins, who needed employment, especially since the government contributed to the construction of our new factory through an economic incentive program aimed at Bedouin communities.

I argued that we owe it to our longtime workers to retain them and that we needed their expertise to continue operations smoothly.

Furthermore, I contended to senior officials in the Israeli government that our “Island of Peace” model provides hope and inspiration to our people, especially younger generations of Israelis and Palestinians.

Our dispute with the government and the lack of available permanent work permits for Palestinians to work in the industrial sector, resulted in our losing 74 Palestinian employees on February 29, 2015. The next 15 months were a “dark period” at SodaStream, during which I dedicated most of my time and energy to reinstating the work permits of our Palestinian workers. During this period, we stayed in touch with them; activated media in Israel and overseas, spoke in the U.S. Congress and the United Nations, and relentlessly worked with Israeli bureaucrats to regain these permits.

Fortunately, in May 2017, following 15 months of struggle with the Israeli government, we were awarded 80 permits for Palestinian workers from the former Mishor Adumim factory to return to work at SodaStream in the Rahat facility. Soon after, all 80 Palestinian employees, including Nabil Basherat, returned to their positions in the new Negev factory.

Our employees describe the return of their Palestinian colleagues as “reuniting the family.”

Economic peace is a model that should be praised, and replicated, not scorned and boycotted. The path to Israeli-Palestinian peace is one of economic equality, cooperation, and mutual respect and not one of intimidation, threats, and boycotts. This important dynamic has prevailed at SodaStream. it not just a fact of history; it should be emulated in the future by Israeli and Palestinian business, political, and civil society leaders.

Prospects for Continued Reconciliation, Normalization, and Peace

The struggle to build reconciliation and economic peace between Palestinians and Israelis is very much alive. It is reasonable to anticipate that as Israel’s economy continues to expand, labor shortages will become more acute. SodaStream’s new Rahat facility now employs 600 Israeli Bedouins from surrounding communities and 80 Palestinians from the West Bank. However, as our production needs continue to grow, we anticipate hiring additional Bedouin workers, as well as additional Israeli Jews and Palestinians. SodaStream needs to fill new positions at the Negev factory, and there are not enough Israeli applicants to meet this labor demand. Hence, there is an opportunity for well-paying and well-protected employment for thousands of Israel’s Palestinian neighbors.

The SodaStream case proves that Palestinian and Israelis are important partners in economic reconciliation and good-neighborly relations. There is a need for thousands of professional Palestinian employees in a number of Israeli economic sectors. Israel’s agricultural and construction sectors are also desperate for good workers and managers.

Israel’s housing crisis is twofold; it is a result of both land and labor shortages in the face of the country’s ever-increasing housing demand.

Palestinians can meet the Israeli demand for construction professionals. However, Israeli decision-makers will need to change priorities. It was reported that in April 2017, the Israeli and Chinese governments signed a bilateral labor agreement authorizing 6,000 Chinese construction workers to enter Israel. This deal was signed with the condition that no building sites would be in settlements.

Additionally, Israel will need to find suitable housing for these workers, who will likely spend their earnings upon their return to China and not in Israel itself.26 It is reported that currently there are thousands of Chinese construction workers, Thai agriculture workers, and Filipino service workers in Israel.

The Israeli government would be well advised to employ Palestinians instead of foreign workers. The unemployment rate in the PA is hovering at 19 percent. Israel can and should help provide economic stability to our neighbors. The Israeli government and the private sector should use economic relations as a vehicle for mutual prosperity and normalization.

Let us build bridges and establish a foundation for trust and hope for a peaceful future.

Rather than importing labor from far away countries such as China, Israel should instead be issuing permits for Palestinian laborers in the housing, manufacturing, agriculture, and service sectors. Such permits would also enable Palestinian employees to spend or reinvest their earnings in Israel and in the fledgling Palestinian economy. Many economists maintain that economic development and free markets for goods and labor are inextricable parts of modernization, state formation, stability, and democratization.27 Expanding job opportunities for Palestinians and lowering the Palestinian unemployment rate, especially for women, would contribute directly to economic development and modernization for all in the region.

The economic peace that SodaStream fostered in its Mishor Adumim factory from 2007 to 2015 is being replicated in the Negev factory. The Israeli government’s agreement to renew the working permits for 80 Palestinian SodaStream employees is enabling Israelis and Palestinians to work side-by-side and form lasting friendships both in and outside the company.

The recreation of the “Island of Peace” is contingent on the Israeli government continuing to issue work permits both for SodaStream’s Palestinian workers and for Palestinians who want to work for other Israeli companies that replicate our model. It also relies on ending the practices of intimidation and arrests by PA security forces, and relies on ending de-normalization activities that stop economic and social progress between Israelis and Palestinians via propaganda campaigns and the intimidation of Palestinian SodaStream employees.

Finally, the success of SodaStream’s “Island of Peace” model requires confronting the destructive BDS movement, which threatens SodaStream and assaults Palestinian livelihoods. Economic peace is a model that should be praised and replicated, not scorned and boycotted. The path to Israeli-Palestinian peace is one of economic equality, cooperation, and mutual respect and not one of intimidation, threats, and boycotts. The important workplace dynamic that prevailed at SodaStream’s Mishor Adumim from 2007 to 2015 and currently takes place in its Negev factory should be emulated in the future by Israeli and Palestinian business, political, and civil society leaders.

* * *

Notes

1 http://www.globes.co.il/en/article-1000627175; see also http://www.globes.co.il/en/articlesodastream- profit-triples-1001177222

2 https://data.oecd.org/israel.htm

3 “The Situation of Workers of the Occupied Arab Territories,” International Labour Organization, Geneva, 2015.

4 http://www.passia.org/images/meetings/2015/dec/Women2015.pdf

5 “The Situation of Workers of the Occupied Arab Territories,” International Labour Organization, Geneva, 2015.

6 https://data.oecd.org/gdp/gross-domestic-product-gdp.htm

7 http://forward.com/fast-forward/357361/israeli-mit-triples-arab-enrollment-in-decade

8 https://www.carolinelucas.com/latest/protest-against-sodastream-plant-in-israeli-settlement

9 Alan Baker, “Debunking 11 More False Assumptions Regarding Israel,” Jerusalem Center for Public Affairs, January 10, 2017.

10 Ms. Lucas’ antipathy for Israel is clear. So deep that, like Oxfam that followed her, she is willing to sacrifice 600 Palestinian jobs in order to demonize Israel. Ms. Lucas claimed in a letter to me that she was well-informed of the conflict because she had “visited Israel and Palestine,” and she claimed that companies like SodaStream only served to “perpetuate the occupation.” This charge, central to the BDS rhetoric, has now proven to be baseless, because although we have been out of the West Bank for three years and there are no significant Israeli factories remaining in the West Bank, the “occupation” continues. The only real change has been the increase in Palestinian unemployment and the worsening of living conditions in this area. its appears that Ms. Lucas was less informed about the conflict and the importance of providing jobs in the West Bank than she had represented.

Incidentally, according to international law (including the Hague Regulations of 1907 and the Fourth Geneva Convention of 1949), an occupying power is obligated to provide infrastructure and employment to an “occupied population.” Is the existence of a McDonald’s fast food branch in any of the approximately 100 disputed areas of the world a violation of international law? Why aren’t Ms. Lucas and her BDS friends screaming for boycott of McDonalds? Is the existence of an Apple store in Ukrainian Crimea, Western Sahara, Tibet, or Nepal a violation of international law? And most astonishingly, is a Nike store, in Turkish-occupied northern Cyprus a violation of international law? How can Ms. Lucas explain her obsession with Israel, joining hands with the BDS and their misguided and hateful followers, in singling out Israel in an attempt to boycott, defame, and delegitimize it in the name of international law?

11 https://www.oxfam.org/en/explore/how-oxfam-fights-poverty

12 http://www.oxfam.org.uk/media-centre/scarlett-johansson-statement

13 http://www.huffingtonpost.com/2014/01/24/scarlett-johansson-sodastreamstatement_ n_4661945.html

14 https://www.youtube.com/watch?v=cd9ioQrTqoY

15 https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp184-we-no-longer-shareland- darfur-210414-en_0.pdf

16 https://www.oxfamamerica.org/static/media/files/fairer-deal-syrians-oxfam.pdf

17 http://www.globes.co.il/en/article-sodastream-offers-to-absorb-syrian-refugees-1001069331

18 https://www.theguardian.com/voluntary-sector-network/2016/dec/15/oxfam-pr-disaster-scarlettjohansson- perfect-storm-tweet

19 http://www.csmonitor.com/World/Security-Watch/2014/0130/Palestinian-workers-back-Scarlett- Johansson-s-opposition-to-SodaStream-boycott-video

20 http://www.csmonitor.com/World/Security-Watch/2014/0130/Palestinian-workers-back-Scarlett- Johansson-s-opposition-to-SodaStream-boycott-video

21 https://www.bloomberg.com/news/articles/2014-10-29/sodastream-to-close-factory-at-centerof- israel-palestinian-spat; see also https://www.ft.com/content/f1b0ab5c-56d1-11e5-a28b- 50226830d644

22 https://www.wsj.com/articles/sodastream-to-close-controversial-west-bank-factory-bymid- 2015-1414599238

23 http://www.globes.co.il/en/article-sodastream-profit-triples-1001177222

24 https://bdsmovement.net/news/freedom-and-justice-gaza-boycott-action-against-7-complicitcompanies

25 https://electronicintifada.net/content/new-sodastream-factory-could-help-destroy-bedouinagriculture/ 13182; see also http://www.aljazeera.com/news/2015/09/sodastream-factory-showspalestinian- bedouins-plight-150910100606371.html

26 http://www.timesofisrael.com/israel-signs-deal-to-bring-chinese-construction-workers-but-theywont- work-in-west-bank

27 Margaret L. Andersen and Howard F. Taylor, Sociology: Understanding a Diverse Society (Boston: Cengage Learning, 2007), 252-253.

Daniel Birnbaum

Daniel Birnbaum has served as chief executive officer of SodaStream International Ltd. and of the Soda Club Group at Soda-Club Enterprises NV since 2007. From 2003 to 2006, he served as general manager of Nike Israel. Previously he served as a founding member of Nuvisio Corporation and of Pillsbury Israel. A graduate of Hebrew University and Harvard Business School, Birnbaum held senior positions at Pillsbury International and at Procter & Gamble.