* for full article with additional photos and maps :
Intel chip plant
located on disputed Israeli land -
Intel could face political, legal problems with chip plant
by Henry Norr
San Francisco Chronicle
8 July 2002
Just how diligent was Intel's due diligence when it chose
to build a multibillion-dollar chip plant in Qiryat Gat, Israel?
Will choosing that location eventually come back to haunt
the company, or at least drag it into some pesky, embarrassing
and costly legal entanglements?
These questions are on my mind after checking out the history
of the site -- not only on several Web sites dedicated to
the Palestinian cause, but also in Israeli government and
United Nations documents collected by a prominent Israeli
Whatever your views on the Middle East crisis, the issue
deserves some scrutiny -- even though it involves a detour
into what many now consider ancient history.
Fab18 plant built on looted land of Al-Faluja
Intel calls the plant Fab 18 ("fab" being chip-industry
jargon for a facility where the silicon wafers that are eventually
turned into working chips are fabricated). The fab, which
went into production in 1999, was the fruit of a $1 billion
investment by the Santa Clara company, supplemented by a $600
million grant from the Israeli government.
Just a year after opening, its output had reached up to $3
million a day, and it accounted for $1.3 billion of Intel's
$2 billion in exports from Israel.
According to the company's annual report, it's Intel's second-largest
facility outside the United States, after one in County Kildare,
Qiryat (sometimes spelled Kiryat) Gat is close to the geographical
center of Israel, along a major north-south rail line and
the route of the planned Trans-Israel Highway. It's on land
that would have been part of Arab Palestine under the partition
plan adopted by the United Nations in 1947, but within the
larger Israel that emerged from the 1948 war between that
country and its neighbors.
In other words, it's on land the United States and most of
the world's governments consider a legitimate part of Israel,
not in the territories Israel conquered in the 1967 war, from
which the United Nations has demanded its withdrawal.
But from a legal and historical point of view, Qiryat Gat
happens to be an unusual location: It was not taken over by
the Israeli military in 1948. Instead, it was part of a small
enclave, known as the Faluja pocket, that the Egyptian army
and local Palestinian forces had managed to hold through the
end of the war. (Among the Egyptian officers was Gamal Abdel
Nasser, who became his country's president six years later.)
The area was surrounded by Israeli forces, however. When
Israel and Egypt signed an armistice agreement in February
1949, the latter agreed to withdraw its soldiers, but it insisted
that the agreement explicitly guarantee the safety and property
of the 3,100 or so Arab civilians in the area.
Israel accepted that demand. In an exchange of letters that
were filed with the United Nations and became an annex to
the main armistice agreement, the two countries agreed that
"those of the civilian population who may wish to remain
in Al-Faluja and Iraq al Manshiya (the two villages within
the enclave covered by the letters) are to be permitted to
do so. . . . All of these civilians shall be fully secure
in their persons, abodes, property and personal effects."
(The fullest account of this episode I've found is "The
Birth of the Palestinian Refugee Problem, 1947-1949,"
a scholarly treatise by Benny Morris, a prominent Israeli
historian, published by Cambridge University Press. Born and
reared in Israel and now a professor at Ben Gurion University
in Beersheba, Morris can hardly be called pro-Palestinian,
to judge by articles of his published in the June 13 and June
27, 2002, issues of the New York Review of Books. Other Israeli
historians have produced similar accounts.)
Within days, the security the agreement had promised residents
of the Al- Faluja pocket proved an illusion. Within weeks,
the entire local population had fled to refugee camps outside
of Israel. (Photos of them on the road are posted at www.palestineremembered.com/Gaza/al-faluja
-- a site dedicated to preserving the memories and experiences
of Palestinian refugees.)
Morris presents ample evidence that the people of the Al-Faluja
area left in response to a campaign of intimidation conducted
by the Israeli military. He quotes, among other sources, reports
filed by Ralph Bunche, the distinguished black American educator
and diplomat who was serving as chief U. N. mediator in the
Bunche's reports include complaints from U.N. observers on
the scene that "Arab civilians . . . at Al-Faluja have
been beaten and robbed by Israeli soldiers," that there
were attempted rapes and that the Israelis were "firing
promiscuously" on the Arab population.
Even though Bunche won the Nobel Peace Prize in 1950 for
his efforts, some might be inclined to doubt that he understood
the whole story of what was happening in the area.
But even the staunchest supporter of Israel would have a
hard time impugning Morris' other main source on this episode:
Moshe Sharett, Israel's foreign minister at the time.
Sharett, it turns out, was acutely embarrassed by the behavior
of his country's military in the area. In a sharply worded
memo to the army chief of staff, he noted both overt acts
of violence by soldiers in the area and "a 'whispering
propaganda campaign among the Arabs, threatening them with
attacks and acts of vengeance by the army."
"There is no doubt," Sharett wrote, "that
there is a calculated action aimed at increasing the number
of those (Arab civilians) going to the Hebron Hills (in the
West Bank, then controlled by Jordan) as if of their own free
will, and, if possible, to bring about the evacuation of the
whole civilian population" of the pocket.
Sharett's main concern, it appears, was that the campaign
in Al-Faluja called into question "our sincerity as a
party to an international agreement."
Whether he had any moral scruples about the situation isn't
clear. A few months later, when Arab civilians in other parts
of Israel's newly conquered territory resisted similar pressures,
he wrote, with what sounds like regret, "It is not possible
in every place to arrange what some of our boys engineered
in Faluja (where) they chased away the Arabs after we signed
an . . . international commitment."
Nowadays we'd call the Al-Faluja events ethnic cleansing.
In substance, what happened to the people of Al-Faluja and
Iraq al Manshiya isn't very different from what happened to
the residents of hundreds of other Palestinian villages.
Only a few things make this case unique: the legal agreement
that was supposed to guarantee the residents' security, the
Sharett memos recording what happened to that guarantee --
and the fact that 40 years later their land, having been converted
by the Israelis into an industrial park, became the site of
an Intel fab.
Now Palestinians in the United States and elsewhere are starting
to organize around this case. A Connecticut organization called
the Palestine Right to Return Coalition (www.Al-Awda.org)
is encouraging Palestinians and their supporters to write
to the media about the case. (A version of the story appeared
earlier, in somewhat garbled form, in The Register, a British
Web site covering technology).
The group is calling on Intel to, among other things, divest
It's also tracking down the original Arab villagers and their
descendants -- now almost 15,000 people in all, including
people living in Texas, Louisiana and New York.
While the group hasn't announced any plans for legal action,
some Palestinian lawyers are looking for ways to pursue their
cause in the courts. At least some experts think the residents
of Al-Faluja and Iraq al Manshiya could make a strong case.
For example, Francis Boyle, a professor of international
law at the University of Illinois at Urbana-Champaign, said
he wasn't familiar with the details of the situation. But
based on my summary of the history, he said that the original
inhabitants and their heirs could take Intel to a U.S. court
in a type of suit known as an in rem proceeding or under similar
doctrines in many other countries and seek to attach Fab 18's
"Intel and its lawyers and bankers had better be very
careful here," he said, noting that a similar legal strategy
was used in cases involving the former British colony of Rhodesia
-- and by Jewish survivors of the Holocaust.
Boyle is a longtime supporter of the Palestinian cause, so
I talked to a lawyer at the opposite end of the political
spectrum: Abraham Sofaer, George P.
Shultz Distinguished Scholar and Senior Fellow at the Hoover
Institution at Stanford University, a former federal judge
who served as legal adviser to the State Department from 1985
Not surprisingly, Sofaer was less sanguine about the prospects
for any such lawsuit, but he also said he wasn't familiar
with the facts of the case. The main obstacle, he said, is
the absence of a treaty resolving the conflict between the
Israelis and the Palestinians and legal structures for settling
"Without that," Sofaer said, "the courts are
going to be very reluctant to get involved" in such cases.
But if peace ever comes, he said, "I'd be very happy
to represent the Palestinians."
Noting that native Americans won compensation in several
major cases once Congress adopted procedures for dealing with
such claims, he said, "It sounds as if there's potential
in the long run for recovery here."
Several weeks ago, I asked Intel spokesman Chuck Mulloy about
the history of the land where Fab 18 sits. He said the company
had acquired rights to it in a deal that was legal under the
laws of a recognized sovereign state. "We don't think
it's appropriate for us now to question the Israeli government.
"We cannot insert ourselves into the middle of what
is really a political issue" between Israel and the Palestinians,
Those arguments are understandable, though I'm sure they
won't placate the Palestinians, and I wonder how they'll stand
up if the case ever gets to court.
Mulloy also said the fab is not actually in the area that
made up the Al- Faluja pocket in 1948. "These claims
didn't come up until after we built the fab -- there were
no Web sites and no campaigns about it when we did our due
diligence" in the mid-1990s, he said.
When I went back to my sources, those arguments didn't check
out. The maps I examined seem to confirm the Palestinians'
claim that Fab 18 is on land that was part of the village
of Iraq al Manshiya. As for when the issue arose, I checked
and found that Morris' book was first published in 1987 and
widely debated in Israel.
I left Mulloy several follow-up messages reporting what I'd
found, but he didn't respond.
I also called the Israeli consulate in San Francisco to get
its perspective, but the first official I spoke to there said
he didn't believe the story, and the press spokesman he referred
me to hasn't called back.