What the Fossil Fuel Industry Learned from Anti-BDS Laws

IN LATE 2019, Jason Isaac, an energy policy staffer at the Texas Public Policy Foundation, a conservative think tank, began hearing of a new threat to fossil fuel companies. Pressure from climate activists had led some banks, pension funds, and universities to announce that they were divesting from oil, gas, and coal. As a result, executives of companies in Texas told Isaac that they were struggling to access capital as some investors backed away from their sector out of what Isaac—whose think tank program advocates for the continued use of fossil fuels and receives some of its funding from energy companies—called a desire to “appease a woke ideological political base.”

But Isaac had an idea. In late 2016, as a Republican member of the Texas state legislature, he co-authored legislation that banned the state from doing business with companies or individual contractors who withheld their investments or services from the State of Israel. The legislation, later signed into law by Gov. Greg Abbott, is meant to combat the Boycott, Divestment, and Sanctions (BDS) movement for Palestinian rights, which calls for boycotts of Israeli products, divestment from corporations that do business in Israel, and sanctions on the state.

Isaac realized he could apply a similar logic to those who might seek to hobble the energy industry. Prompted by his conversations with fossil fuel executives, he drafted legislation preventing state agencies from contracting with companies that boycott or divest from fossil fuels. The bill garnered the support of the lead sponsor of Texas’s anti-BDS bill, Texas state Rep. Phil King, who introduced it in March 2021; in June of that year, Abbott signed it into law. It requires businesses that have at least 10 employees and contracts of at least $100,000 with Texas to sign a certification pledging that they do not and will not boycott fossil fuels. Under the law, any financial entities that divest from fossil fuel companies will be placed on a government blacklist preventing the state from investing in them. Like Isaac, King has been explicit about the inspiration. In an article published by the Texas Public Policy Foundation in 2021, he wrote of his pride in having backed similar legislation dealing with Israel. “We’re proud to stand firmly with one of our greatest allies—and to show the same support to the energy workers who power our state and our entire nation,” King wrote.

This year, Republicans in seven other state houses have introduced legislation virtually identical to Isaac’s bill, requiring contractors to sign pledges promising not to boycott energy companies. West Virginia’s version passed both state houses in March, and is awaiting the governor’s signature. In December, the American Legislative Exchange Council (ALEC)’s Energy, Environment, and Agriculture Task Force voted to back a version of Isaac’s legislation. The bill seemed tailor-made for ALEC, a corporate-funded organization that drafts model bills for conservative legislators to introduce in state houses across the US. But after taking criticism in the media, ALEC clarified that the bill is only “being debated and discussed” by the organization and has not yet been fully adopted.

The laws have the potential to limit the strategies that climate activists can pursue. “Activists seriously concerned with the climate, the environment, and the future of our youth and the planet see divestment as an important strategy, to get corporations on board to do what they can,” said David Armiak, research director with the Center for Media and Democracy, a group that has tracked the influence of the Texas law. “If governments enact these laws, that could chill those corporations doing divestment. It’s going to make activists’ job much more difficult.” The measures taking aim at the right to boycott for political reasons are just one part of a far broader right-wing assault on free speech encompassing attacks on educators’s ability to teach about race, gender, and sexuality, and on the right to protest. (Many of the bills targeting speech are backed by ALEC, including anti-BDS efforts and bills that increase penalties for protests of oil and gas pipelines.)

Palestinian rights advocates say the wave of bills targeting climate activism show how attacks on Israel’s critics have formed the basis for the suppression of other kinds of progressive activism. “They’re shrinking the space for public debate and action on some of the most important issues of our time,” said Meera Shah, a senior staff attorney at Palestine Legal, which defends the free speech rights of Palestine solidarity activists. “It points to why it’s so dangerous to permit this kind of Palestine exception to speech. Because not only is it harmful to the Palestinian rights movement—it eventually comes to harm other social movements.”

THE BDS MOVEMENT began in 2005, when over 170 Palestinian civil society groups issued a call for the world to boycott, divest from, and sanction Israel until the state grants Palestinian citizens of Israel equal rights, ends its military occupation of the West Bank, Gaza, and East Jerusalem, and allows Palestinian refugees and their descendants to return to the homes they fled or were expelled from when Israel was founded in 1948. In the United States, boycott activists called on pension funds to divest from US corporations that do business with the Israeli military and encouraged famous artists to cancel concerts in Tel Aviv, among other things.

It wasn’t until December 2013 that state lawmakers took serious notice. That year, the American Studies Association (ASA), a membership organization for academics in the field of American studies, endorsed the Palestinian call for an academic boycott of Israeli universities. The universities, the association said, were “party to Israeli state policies that violate human rights.” Shortly after the ASA vote, New York state legislators introduced bills that would have prohibited universities from using state aid to contribute money to the ASA, and defunded colleges whose departments are members of the association. Those efforts failed after a coalition of Palestinian rights activists and civil liberties advocates lobbied against them. But state lawmakers kept coming for the BDS movement. In 2015, South Carolina became the first state to prohibit its government agencies from entering contracts with entities that boycott a person or company based on national origin, among other categories. While the bill does not specifically mention Israel, its author, state Rep. Alan Clemmons, said he wrote it to combat the BDS movement. So far, versions of the South Carolina legislation have been enacted in 31 states. When Arizona passed its own anti-BDS bill in 2016, it included a notable addition: language requiring state contractors to sign a pledge saying they do not and will not boycott Israel. Soon enough, similar language began appearing in subsequent anti-BDS laws.

The pledges stirred the fears of civil liberties advocates, who argue that forcing contractors to sign an oath as a condition of receiving state money constitutes a violation of the First Amendment because it restricts political expression and discriminates against political speech that espouses a particular viewpoint. “Government agencies should not be putting what are effectively litmus tests on the political speech of companies or persons who want to do business with the state,” Edgar Saldivar, a senior staff attorney at the Texas chapter of the American Civil Liberties Union (ACLU), told Jewish Currents.

To challenge the bills, civil liberties advocates relied on a famous 1982 case in which the Supreme Court examined an NAACP boycott of white businesses in Claiborne County, Mississippi. While the Mississippi courts ruled that the boycott was in violation of numerous laws governing commerce, the Supreme Court reversed those decisions, finding that an economic boycott was protected speech. The boycott “sought to vindicate rights of equality and freedom that lie at the heart” of the 14th Amendment’s guarantee of equal protection of the laws, Justice John Paul Stevens wrote in the majority opinion. “One of the foundations of our society ‘is the right of individuals to combine with other persons in pursuit of a common goal by lawful means.’”

Civil liberties lawyers are finding success in federal courts with this argument. In October 2017, the ACLU filed a lawsuit against the state of Kansas on behalf of a math teacher who boycotts Israeli settlement products, and who was denied a contract to train other teachers after she refused to sign a pledge promising not to boycott Israel. ACLU lawsuits in Arizona and Texas followed, likewise representing plaintiffs whose boycotts of Israel prevented them from holding government contracts. In all three of those cases, federal judges struck down the laws. (In Arkansas, civil liberties advocates have had a more mixed record. One federal judge ruled in favor of the state, finding that boycotts are not a protected form of free speech, while an appeals court overturned that ruling. The matter remains in court.) Judge Robert Pittman, a US district court judge in Texas, wrote that the state’s statute threatened to silence unpopular opinions and shape the public debate through force. “This the First Amendment does not allow,” he added.

But while the laws have been amended in response to these challenges, their underlying logic remains intact. Legislators in Texas, Arizona, and elsewhere changed their laws to raise the threshold for the requirement that state contractors sign certifications pledging not to boycott Israel. Whereas the original laws applied to all contractors, including individuals without any employees, the amended laws only apply to companies with at least 10 employees that receive state contracts worth over $100,000. In effect, this mooted the initial lawsuits against the anti-BDS laws, because the amended statutes no longer applied to the plaintiffs challenging them.

Civil liberties advocates say that the higher threshold doesn’t change the underlying problems with the laws. The amended anti-BDS measures still limit the actions of companies that meet the higher thresholds. This, in turn, may spur a new wave of legal challenges—led, this time, by executives with sizable state contracts rather than individual freelancers. Brian Hauss, an ACLU senior staff attorney, pointed to a January 2022 ruling against the revised Texas law banning boycotts of Israel, which was brought by an oil company owned by a Palestinian American with a Houston contract worth over $100,000. A judge ruled that requiring the company to sign an anti-BDS pledge violated its First Amendment rights, but the Texas Attorney General has appealed that ruling, sending the matter to a higher court. “While we’re always glad when an unconstitutional law is narrowed, it doesn’t really affect the merits,” Hauss told Jewish Currents.

THESE LEGAL CHALLENGES also have not prevented the laws from spawning copycats. Texas’s bill requiring state contractors to agree to do business with the fossil fuel industry is identical to the state’s anti-BDS bill in several key respects—including replicating elements that were challenged in court in Texas and ruled to be unconstitutional. Like the anti-BDS law, the bill requires any contractor with over 10 employees and a state contract worth over $100,000 to sign an oath pledging that they do not and will not boycott energy companies. Unlike the anti-BDS bill, the energy bill principally targets banks and investors; in March, the Texas Comptroller sent letters to 19 financial institutions, inquiring whether their investment strategies constitute boycotts of fossil fuel companies.

Anti-boycott laws are also spreading in other directions. Last year Texas passed a law that requires entities with state contracts worth over $100,000 to pledge not to boycott gun companies. Lawmakers in six other state houses have introduced versions of the same legislation, though no other state has enacted the law. In March, Rep. Jack Bergman, along with 74 Republican colleagues, introduced a federal version of the firearms legislation that would bar the US government from contracting with any company that “discriminates” against firearms. “We thought what we did with boycotts against Israel was effective,” said Jack Woodrum, a state senator in West Virginia who co-sponsored that state’s legislation against boycotts of Israel, fossil fuel companies, and gun companies. “People looked at it and took a similar plan towards those other two topics.”

The spread of anti-boycott measures has continued with legislation introduced in Minnesota and Idaho in March, which prevents state contracts from going to companies that boycott not only fossil fuels but also the mining, lumber, and agriculture industries. “They’ve taken the anti-BDS template and pasted into it literally every industry that is important politically or economically to the state,” said Lara Friedman, president of the Foundation for Middle East Peace (and a Jewish Currents contributing writer). “Want to work to prevent destruction of forests? Want to challenge practices of industrial-scale agriculture companies? Get ready for state laws that require giving up the right to engage on these issues—and on any other issue a legislature or governor decides merits special protection from protest—as a condition for competing for state contracts or benefiting from investment by state pension funds.”

Palestinian-rights activists say the widening assault on social movements—and its roots in the suppression of BDS—shows the need for coordination between progressive activists who focus on different struggles. “The more intersectional our approach to combating laws that attack any struggle’s right to organize, the stronger our movements—regardless of their focus—will be,” said Sumaya Awad, director of strategy and communications for Adalah Justice Project. “These tactics of repression” could “allow for different movements under attack to organize more closely against these shared tactics of repression and really expose the material connections between those profiting off Israel’s occupation and those profiting off climate change.”

As long as anti-BDS laws continue to proliferate, Palestinian-rights advocates say, other social justice movements will continue to face attacks on their free speech as well. “As early as 2017, the BDS movement warned that the rising wave of Israeli-induced, anti-Palestinian repression in the US and Europe—which I’ve called McCarthyism 2.0—would not stop at suppressing free speech on Palestine,” said Omar Barghouti, the co-founder of the Palestinian BDS movement. “If Israel and and its fanatic lobbies get away with violating the First Amendment of the US Constitution and silencing advocates of BDS for Palestinian freedom, justice and equality, no other justice movement will be safe.”