Cola to build plant on stolen Palestinian land
19 July 2002
Coca-Cola, in return for millions of dollars in tax breaks, is
to build a new plant on land stolen from the Palestinians. The new
plant will employ 700 israelis.
The land in question is Qiryat (Kiryat) Gat. Intel is already facing
possible legal problems for building its chip plant on the same
Please refer to the news article:
If contains details on Qiryat Gat:
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."
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 following
a campaign of ethnic cleansing by the israeli military. This terrorising
of the civilian population of Al-Faluja until they fled is documented
in the memos of then Israeli foreign minister Moshe Sharett.
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, and soon Coca-Cola
The original article from Ha'aretz:
Cola, Indigo, Tzabar to get tax breaks for new Kiryat Gat plants
By Ora Coren
July 19, 2002
Coca Cola, Indigo and Tzabar will probably get special government
contribution in excess of $55 million for the establishment of plants
in Kiryat Gat, sources connected to the Industry and Trade Ministry's
Investment Center told Ha'aretz. Instructions to approve the allocations
came from Industry and Trade Minister Dalia Itzik and Finance Minister
Silvan Shalom, despite explicit objections by the staff of both
ministries, arguing that there is no valid reason to grant these
companies special preference.
The value of the tax breaks that Coca Cola and Tzabar are asking
for is around $55 million. The value of those sought by Indigo is
Indigo plans to establish a $25 million ink plant in Kiryat Gat
that will employ about 70 workers. The staff at both ministries
has argued that since this is not a high-tech plant, it does not
deserve benefits earmarked for this sector, such as recognizing
depreciation. In addition, the number of jobs to be created by the
plant does not merit exceptions.
Moreover, the plant in Kiryat Gat is to do the same thing as the
existing Indigo facility in Nes Tziona, which makes it an expansion
rather than a new plant. Therefore, legally the plant does not deserve
the tax breaks given to new plants. Also, the treasury is now checking
whether under the trade agreement between Israel and the Netherlands
a company operating from Holland, like Hewlett Packard, Indigo's
parent company, can pay less taxes on dividend distribution.
Shalom and Itzik, on the other hand, hold that multinational companies
should be encouraged to make investments in Israel.
The main benefit sought by Coca Cola is that the tax authorities
recognize 50 percent depreciation. Coca Cola has pledged to employ
700 workers in Kiryat Gat, and the Industry and Trade Ministry is
pushing for an immediate relocation from Bnei Brak to unemployment-stricken
The depreciation and other benefits that Tzabar has applied for
total NIS 10-23 million ($2-$5 million).
The two ministries will soon decide whether to extend the grants
as a one-time decision or to change the standards of the Investment
Center altogether. The Finance Ministry staff advocates an ad hoc
decision, so that in the future the government would not be obligated
to provide any other such benefits. The Ministry of Industry and
Trade, on the other hand, would like the Investment Center's criteria
to be changed.