chip plant located on disputed Israeli land - Intel could face political,
legal problems with chip plant in Israel
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
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 historian.
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
of Al-Faluja just before they were ethnically cleansed from their
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 region.
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
Sharett's main concern, it appears, was that the campaign in Al-Faluja
called into question "our sincerity as a party to an international
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
Nowadays we'd call the Al-Faluja events ethnic cleansing.
of Al-Faluja ethnically cleansed
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 from
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 assets.
"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 to 1990.
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 property claims.
"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
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, he
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,
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