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| A detour sign stands above a street renovation project, in Beirut. |
Over the past two years, Lebanese contractors working on projects overseen by the Council for Development and Reconstruction (CDR) – a Lebanese government entity that deals with post-war reconstruction – have been hearing disturbing talk from representatives of foreign governments and organizations.
These governments and organizations have increasingly been objecting to the fact that firms bidding for CDR projects are required to be in compliance with Lebanese laws relating to the economic boycott of Israel.
The Italians have repeatedly voiced their disapproval of this stipulation, which since 2010 has been made explicit in the terms and conditions attached to CDR tendering documents.
European Union (EU) officials have said that this violates European competition rules. They note that the boycott legislation referred to in the terms and conditions disqualifies some European companies that might want to bid for contracts in Lebanon. But the EU has so far kept its objections verbal and has yet to lodge a written complaint.
Other Western providers of loans or grants for CDR contracts have also pressed for compliance with the boycott of Israel legislation to be dropped from the terms and conditions of bidding documents.
The World Bank has now made the demand official. On January 31, the director of its Middle East Department, Hedi Larbi, addressed a letter to CDR President Nabil al-Jisr titled: “Law of boycott of Israel in standard bidding and consulting documents under World Bank financed projects.”
The letter opens with a reminder that the World Bank has an obligation to “ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations.”
It adds there are “detailed procedures” for this in its own guidelines – which provide for “firms and individuals from all countries” to bid for projects that it funds – and in its legal agreements with borrowing countries.
Larbi then refers to a “narrow list of exceptions,” under which the World Bank could allow a primary boycott of Israel to apply (i.e. a direct boycott of Israeli companies and products), but not a secondary boycott (of companies with strong Israeli links).
“Firms and individuals and goods manufactured in a country may be excluded if as a matter of law or official regulation, the borrower’s country prohibits commercial relations with that country,” the letter explains. But, the bank must be satisfied that this “does not preclude effective competition.”
However, Larbi points out that “the law for the boycott of Israel...[and the related blacklist] is not limited to primary boycotts.”
The Bank, therefore, will only “accept the exclusion of Israeli firms and individuals or goods manufactured in Israel [primary boycott], provided this is announced to potential bidders/consultants with the language contained in the relevant World Bank’s standard bidding and consultancy documents.”
The letter concludes: “Please remove from the bidding and consulting documents used for projects which are financed by the World Bank, the specific clauses concerning the law of boycott of Israel of 23/06/1955.”
Al-Akhbar sought an explanation for the letter from Larbi. He suggested its aim was to alert potential bidders for World Bank-funded projects that Lebanon applies a secondary boycott which the World Bank does not recognize. He said the letter was meant to inform companies that import Israeli goods or have Israeli partners that they could not bid.
But any company wanting to bid would know that anyway, as it would have found it clearly spelled out in the terms and conditions of the bidding documents. The World Bank seems intended to redefine the whole concept of the boycott in order to apply pressure on the CDR to remove these terms and conditions from World Bank-funded contracts.
Larbi did not elaborate on the timing of the move, though he noted it would be incumbent on the CDR to comply with the World Bank’s request.
It is also incumbent on the council to comply with the boycott of Israel legislation that has been in place in Lebanon since 1955. In June 2010, Economy and Trade Minister Mohammad Al Safadi issued a circular to all public and municipal bodies instructing them to ensure that any foreign firms with which they contracted had certified that they were compliant with the law.
http://english.al-akhbar.com/content/world-bank-joins-anti-bds-campaign
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