Two Spanish firms, CAF from the Basque Country and GMV from Madrid, are tied to a light rail project in Jerusalem. The route includes segments that pass near Israeli settlements in the occupied Palestinian territories of the West Bank. The project is valued at roughly 1,800 million euros. Spain’s Ministry of Industry, Trade and Tourism has requested GMV submit its independent third‑party report within a year, evaluating the project’s effects on local employment. A similar request is expected from CAF before May, amid prior concerns about the companies providing insufficient information on human rights impacts, given that elements of the project would run through areas recognized by Spain and the United Nations as Palestinian territories under occupation.
Both decisions are non‑binding, reviewed by the National Contact Point, a government body that oversees adherence to OECD guidelines on corporate social responsibility for multinationals.
“Normalize the occupation”
The Committee for Solidarity with the Arab Cause argues that this project goes beyond the disputed settlements and includes the so‑called Red Line. The issue has been framed as a violation of international norms and is connected to UN Human Rights Council Resolution 31/36. Critics contend that infrastructure supports the occupation by enabling expropriation and the displacement of Palestinians, which they say undermines prospects for peace.
GMV stated to this newspaper that it had discussed the matter at a recent meeting but declined to comment further. GMV is headquartered in Tres Cantos, Madrid, employing more than 3,000 people and reporting revenues around 260 million euros in 2021. The firm is involved in managing train operations and station configurations for the project.
The consortium built 160 trains and 76 stations for the new Red and Green lines, connecting Jerusalem with nearby settlements. CAF, a publicly listed company with nearly 13,000 employees and revenues approaching 3 billion euros, has been requested to provide an independent report on the project’s human rights implications before May. CAF did not respond to written inquiries. A third Spanish company, TIPSA, is also involved in the Jerusalem light rail construction.
The National Contact Point has raised concerns about both CAF and GMV for their familiarity with the sensitive context of the project and its potential risks. The press materials on the project did not cover all details from three years ago when CAF began involvement, and figures show revenue expectations of approximately 500 million euros for the initial project segment, plus approximately 1,000 million in maintenance for both lines over 15 and 25 years.
In light of the current regional dynamics, Spanish companies were urged to exercise due diligence and consider possible human rights impacts before committing to participation. Local Israeli partners were scrutinized, with some linked to the occupation excluded by investment authorities, and UN databases listing firms connected to the occupation consulted for due diligence. The ministry also advised Spanish firms to remind partners and suppliers that OECD guidelines apply to multinationals, pointing to a 2014 Spanish foreign affairs communiqué about risks in Israeli settlements and alignment with EU positions. The guidance underscored that business should operate within internationally recognized borders. The EU and the United States do not recognize the settlements as part of Israel, and some train routes are intended to connect to the Israeli side of Jerusalem.
The ministry recommends that companies review their disclosure policies and report any risk factors connected to current or future activities.
Both industry decisions anonymized the company names at the request of the parties involved. The Committee for Solidarity with the Arab Cause confirmed to this publication that the decisions relate to legal actions against CAF and GMV, and provided the original texts for comparison. In one case, the decision refers to a collaboration between a “Spanish company” and the Israeli Shapir consortium for the tram system; in the other, the claim concerns a supplier connected to the first company.
Work in a busy region
Spain, the European Union, and the wider international community generally consider Israeli settlements in occupied territories to be illegal under international law. From many foreign perspectives, they hamper the path to a two‑state solution and threaten regional peace.
The EU and its member states have stated they will not recognize border changes made after 1967, including questions surrounding Jerusalem. The West Bank, East Jerusalem, Gaza, and the Golan Heights are viewed as occupied territories since 1967. All transactions, investments, contracts, and services tied to settlements, including tourism, are sensitive topics that can create disputes over land, water, minerals, and other resources.
According to sources cited by EFE, such activities can raise questions about land titles and natural resources that may be subject to future sale or investment, underscoring the broader geopolitical and economic stakes involved.