In 2018, the nature of Israel as a state received further elaboration in law adopted by Israel’s Knesset titled Israel –The Nation State of the Jewish People. This law declared Israel to be “the nation state of the Jewish People.” The law was designated as a “basic law,” meaning that it held constitutional rank. The law declared “the development of Jewish settlement as a national value.” The law was criticized for excluding Israel’s Arab population from the country’s political constituency by declaring that Israel was the nation state of the Jewish people only. The law was also criticized for declaring settlement as a “national value,” since settlement in occupied territory is prohibited by international humanitarian law.

In later years, Israel’s relationship with the United Nations changed. After occupation by Israel in 1967 of the two sectors of Palestine that had remained beyond its control in 1949, the General Assembly and Security Council challenged Israel over its claim to sovereignty in Jerusalem and over its promotion of settlement by its citizens in these areas. Israel was denounced as a racist state by Third World countries, and the General Assembly adopted a resolution pronouncing Zionism to be racist. The Palestine Liberation Organization accepted Israel as a state and said that it respected Israel’s right to exist in peace. When the prospect of Israel–Palestine negotiations arose, the General Assembly rescinded its resolution on Zionist as being racist.

This chapter examines standards of conduct applicable to businesses operating in civilian settlements in occupied territory, focusing on the Israeli settlements in the West Bank as a case study. It reviews the legal bodies which govern settlement projects and their applicability to businesses. Noting that businesses are not bound by international law directly, the chapter proceeds to examine the responsibility of businesses involved in settlements under the emerging soft law standards on businesses and human rights, namely the UN’s ‘Protect, Respect and Remedy’ Framework. Some businesses directly contribute to violations of human rights on which the settlement project is inextricably dependent. Businesses operating on a regular basis in settlements benefit from such violations and contribute to their perpetuation. The chapter examines the practical implications of these forms of responsibility in light of the UN Framework and of domestic law.