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- Sep 2, 2008
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Report: Israel Stole $2B from Palestinian Workers by Jonathan Cook -- Antiwar.com
Talk about awkward. Thoughts USMB?
Over the past four decades Israel has defrauded Palestinians working inside Israel of more than $2 billion by deducting from their salaries contributions for welfare benefits to which they were never entitled, Israeli economists have revealed.
A new report, “State Robbery”, to be published later this month, says the “theft” continued even after the Palestinian Authority was established in 1994 and part of the money was supposed to be transferred to a special fund on behalf of the workers
According to information supplied by Israeli officials, most of the deductions from the workers’ pay were invested in infrastructure projects in the Palestinian territories — a presumed reference to the massive state subsidies accorded to the settlements.
Nearly 50,000 Palestinians from the West Bank are working in Israel — following the easing of restrictions on entering Israel under the “economic peace” promised by Benjamin Netanyahu, the Israeli prime minister — and continue to have such contributions docked from their pay.
Complicit in the deception, the report adds, is the Histadrut, the Israeli labor federation, which levies a monthly fee on Palestinian workers, even though they are not entitled to membership and are not represented in labor disputes.
“This is a clear-cut case of theft from Palestinian workers on a grand scale,” said Shir Hever, a Jerusalem-based economist and one of the authors of the report. “There are no reasons for Israel to delay in returning this money either to the workers or to their beneficiaries.”
The deductions started being made in 1970, three years after the Israeli occupation of the Palestinian territories began, when Palestinian workers started to enter Israel in significant numbers, most of them employed as manual laborers in the agriculture and construction industries.
Typically, the workers lose a fifth of their salary in deductions that are supposed to cover old age payments, unemployment allowance, disability insurance, child benefits, trade union fees, pension fund, holiday and sick pay, and health insurance. In practice, however, the workers are entitled only to disability payments in case of work accidents and are insured against loss of work if their employer goes bankrupt.
According to the report, compiled by two human rights groups, the Alternative Information Center and Kav La’Oved, only a fraction of the total contributions — less than eight per cent — was used to award benefits to Palestinian workers. The rest was secretly transferred to the finance ministry.
The Israeli organizations assess that the workers were defrauded of at least $2.25bn in today’s prices, in what they describe as a minimum and “very conservative” estimate of the misappropriation of the funds. Such a sum represents about 10 per cent of the PA’s annual budget.
The authors also note that they excluded from their calculations two substantial groups of Palestinian workers — those employed in the Jewish settlements and those working in Israel’s black economy — because figures were too hard to obtain.
Mr Hever said the question of whether the bulk of the deductions — those for national insurance — had been illegally taken from the workers was settled by the Israeli High Court back in 1991. The judges accepted a petition from the flower growers’ union that the government should return about $1.5 million in contributions from Palestinian workers in the industry.
“The legal precedent was set then and could be used to reclaim the rest of these excessive deductions,” he said.
However, the report notes that such practices were supposed to have been curbed by the Oslo process. Israel agreed to levy an “equalization tax” — equivalent to the excessive contributions paid by Palestinians — a third of which would be invested in a fund that would later be available to the workers.
In fact, however, the Israeli State Comptroller, a government watchdog official, reported in 2003 that only about a tenth of the money levied on the workers had actually been placed in the fund.
Talk about awkward. Thoughts USMB?