UPDATE: After this was posted, Orange announced it will sever ties with its Israeli subsidiary.
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It’s not so easy to launch a boycott of Israel, according to Orange CEO Stephane Richard, who told reporters in Egypt this week that his company was looking for ways to leave Israel but the idea was simply not viable at present.
“I am ready to abandon this tomorrow morning, but the point is that I want to secure the legal risk for the company,” Richard said. “I want to terminate this, once again, but I don’t want to expose Orange to a level of risk and of penalties that could be really sizeable for the company.”
Orange remains under contract with the Israeli cellular company Partner, which operates under the Orange brand. Partner is an Israeli company owned by Haim Saban, and operates independently. The global giant, Orange, has been criticized in recent months by European NGOs because Partner provides cellular service to Israelis living over the Green Line.
Richard’s outrageous comments reflect the growing pressure from Europe over Israeli activity over the Green Line and lack of progress in the peace process. But few European CEOs have been as stark in their disdain for Israel, particularly while continuing to profit from Israeli citizens.
Richard, however, implied that his position was driven by “sensitivities” in the Arab world and pressure from Arab states. “I know that it is a sensitive issue here in Egypt, but not only in Egypt… We want to be one of the trustful partners of all Arab countries,” he said.
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Richard said the cost of leaving could go as high as hundreds of millions of dollars if the dispute hits the courts. “Sorry to say, but a dispute with a partner when you have zero legal position in Israeli courts is not something that I would recommend for my company,” Richard said.
Despite Richard’s apparent caution, Orange may still find itself in court due to potential damage caused by Richard’s comments. According to the Israeli financial news site, Globes, Partner executives are currently considering their options:
It is not clear whether the Orange brand has any advantages for Partner and especially after Richard’s boycott comments the brand might now be a burden. Partner is also expected to assess the damage in the coming days and decide if there is a sufficient case to sue Richard for damages.
Meanwhile, Israeli political figures have expressed outrage over Richard’s comments. Yesh Atid leader Yair Lapid called it “hypocrisy of the highest order,” especially since “I don’t remember him having a problem making money here and profiting from Israeli citizens.”
Haaretz columnist Anshel Pfeffer noted that Orange did not have much room to claim the moral high ground:
Education Minister Naftali Bennett called on Israelis to avoid a mass cancelation of contracts with Partner in order to boycott Orange. “Partner is the victim, not the aggressor,” Bennett said.
The entire episode, however, is a stark reminder of Israel’s precarious position in global finance and its increasingly boycott-proof economy. Orange will eventually succumb to foreign pressure and exit Israel, but not without leaving its abandoned affiliate richer and with more options for the future.
Featured image: CC BY-NC Flavio~ via flickr with modifications by HonestReporting
