OECD Dismisses Lawfare Group UKLFI’s Complaint Against Auditors for Two Palestinian NGOs 

October 14, 2021

A complaint filed by UK Lawyers for Israel (UKLFI) against the PricewaterhouseCoopers network of firms (PwC) alleging violations of the Organization for Economic Co-operation and Development (OECD)’s Guidelines for Multinational Enterprises was dismissed on Sept. 24, 2021. UKLFI alleged that PwC Palestine violated the Guidelines by providing auditing services to two Palestinian nongovernmental organizations (NGOs). The UK’s National Contact Point (NCP) conducted an independent review that found no breach of the Guidelines, noting that “nowhere in the complaint does UKLFI assert that the NGO charities were misusing donor funds to finance terrorist activity.” UKLFI is a politically motivated organization that uses complaints in legal fora to harass civil society organizations in Palestine. This is the second time UKLFI has unsuccessfully attempted to use the OECD Guidelines against PwC.

As the European Legal Support Center recently noted, the dismissal “plays a crucial role in the struggle of global civil society against the phenomenon of shrinking civil society space, as it exposes the groundlessness and unreliability of the accusations that lawfare actors such as UKLFI use to interrupt the activities of human rights organizations.” UKLFI has also been unsuccessful in its complaints to the Charity Commission for England and Wales that target British humanitarian and human rights organizations that work in Palestine.

OECD is a 60-year old organization of member states that works to “foster prosperity, equality and opportunity…” Its Guidelines are non-binding recommendations for multinational corporations to promote “responsible business conduct in a global context consistent with applicable laws and internationally recognised standards.” The Guidelines include specific criteria for respecting human rights and promoting sustainable development, as well as risk-based due diligence to avoid adverse impact of their activities. Each member country appoints a National Contact Point (NCP) to “promote the OECD Guidelines and to handle cases against companies when the OECD Guidelines are not observed as a non-judicial grievance mechanism.”

UKLFI’s most recent attempt to use the OECD process to further its political agenda began in June 2019 when it filed a complaint alleging that PwC violated the Guidelines by providing auditing services to two Palestinian NGOs (the Union of Agricultural Work Committees and Defense of Children International – Palestine) because of their alleged links to the Popular Front for the Liberation of Palestine, which is subject to sanctions in the UK. PwC responded that UKLFI’s “allegations of links between PFLP and the 2 NGO charities are not well supported or evidenced.” It also said it had undertaken “comprehensive risk-based due diligence” of PwC Palestine, which in turn undertook comprehensive client acceptance checks.

The NCP’s Final Statement said after its review it was “satisfied that at the time of audit work took place there was no evidence that UAWC, DCI-P, nor any of their board members nor senior management were listed on any relevant terrorist watchlists.” It further found that each of the two NGOs “was undertaking legitimate humanitarian-based activities that were legally and ethically permissible.” As a result, the audit work did not breach OECD’s Guidelines.

In its Initial Assessment of the case, the NCP noted that UKLFI was entitled to bring a complaint “in its capacity as an NGO” even though it was not representing a specific client.

The NCP noted that UKLFI filed a complaint against PwC in 2016. The NCP dismissed the complaint in March 2020, but recommended PwC ensure its network of firms recognize the OECD Guidelines and take steps to ensure they are used. In that case UKLFI alleged that PwC violated the Guidelines by providing audit services to the World Bank, which facilitated aid transactions to the Palestinian Authority. UKLFI said the PA made payments to prisoners in Israeli jails and to their family members, alleging this constituted support for terrorism. The NCP found that PwC’s actions were not inconsistent with the Guidelines.

For more background on UKLFI see a profile in our recent report, The Alarming Rise of Lawfare to Suppress Civil Society: The Case of Palestine and Israel, pages 96-98. For details on UKLFI’s failed complaints to the Charity Commission for England and Wales see Chapter 8 of the report.