G4S - Decides to Quit Key Contracts in Israel because of ‘adverse publicity’
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| Jimmy Mubenga |
But the organisation, the largest such in the world, having only just recovered from the Olympics debacle, has no wish to take on the BDS lobby and has decided that discretion in the better part of valour.
Tony Greenstein
Financial Times April 21, 2013 5:42 pm
G4S to quit key contracts in Israel
By Gill Plimmer |
| palestinian-Arafat Jaradat tortured-to-death-in-g4s-israel prison |
The company employs 6,000 people in Israel, where it provides and maintains screening equipment for several West Bank military checkpoints. It also manages security systems at the controversial Ofer Prison in the Occupied West Bank.
But with sporadic international protests continuing both outside the FTSE 100’s headquarters in London and internationally, the company said it would exit the contracts covering Ofer, the checkpoints and the West Bank police headquarters when they terminate in 2015.
“Having conducted a review in 2011, we concluded that, to ensure that G4S Israel business practices remain in line with our own business ethics policy, we would aim to exit the contracts which involve the servicing of security equipment at a small number of barrier checkpoints, a prison and a police station in the West Bank area,” G4S told the Financial Times.
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| The University of Oslo has decided to end its contract with G4S |
Analysts have raised the prospect that G4S could be tempted to divest the Israeli business altogether. The company has raised “reputational risk” higher up the list of priorities in the wake of its humiliating failure to provide 10,400 guards contracted for the London Olympics, with the armed forces called in to make up the shortfall.
Kean Marden, analyst at Jefferies, the US investment bank, said in a note: “G4S Israel may be next to be divested? The Israel/Palestine conflict has created reputational issues. In our view the potential disposal of G4S Israel could be announced as soon as the 25 June capital markets day.”
G4S has established a risk committee and is conducting more formal reviews of the operational and reputational dangers of contracts worth more than £20m. It has also stated its ambition to offload underperforming parts of the business.
The group earned £100m in sales at its Israeli operations last year. But the division accounts for just 1 per cent of global revenues, and 1 per cent of profits at the global group, which employs 625,000 people in 125 countries.
Last week 19 non-government organisations from Egypt, Lebanon, Jordan and Palestine called on Arab nations and the European Union to stop dealing with G4S. The Scottish Trades Union Congress also voted on Tuesday to support Palestinian calls for a boycott of the multinational. It has agreed to put pressure on Holyrood to cancel G4S’s new £13m contract to carry out the electronic tagging of offenders in Scotland over the next five years.
G4S has said that it has no people working at the prison sites or managing control rooms in jails in Israel or the occupied territories; staff simply fix security equipment such as CCTV and leave.
Earlier this week, Trevor Dighton, finance director, sold 30 per cent of his share holding, or about 400,000 shares, at £2.958 and raised £1.3m. According to the latest report and accounts Mr Dighton held 1.46m shares (including deferred shares) on December 31 2012. His successor, Ashley Almanza, starts on 1 May.