This blog post is a public service announcement to assist state agencies and political subdivisions of the State of North Carolina in understanding their obligations under the Iran Divestment Act and, in particular, the Divestment from Companies Boycotting Israel Act (together, the “Divestment Acts”). The Divestment Acts contain restrictions on contracts with the State or subdivisions of the State; specifically, the contract restrictions in the Divestment Acts apply to “[a]ny board, commission, department, executive department, officer, institution, and any political subdivision of the State.” (collectively, “Agencies”). N.C.G.S. §§ 147.86.57 (7) and 147-86.80 (5).
In compliance with State law and Department policy, the North Carolina Department of State Treasurer (the “Department”) has updated its lists of companies subject to divestment and contract restrictions. The two Final Divestment Lists (the “Lists”), issued under the Divestment Acts and updated as of December 21, 2023, are available at the Department’s website: https://www.nctreasurer.com/about/transparency/commitment-transparency/divestment-and-do-not-contract-rules. Copies of the Divestment Acts are also available on the Department’s website. Any company on the Lists also includes “all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates” of that company. N.C.G.S. §§ 147.86.57 (1) and 147-86.80 (2).
Updated annually, the Lists identify companies in which the State Treasurer and the North Carolina Retirement Systems are prohibited from investing. Additionally, companies included on the Lists are restricted from conducting business, including entering into contracts valued at over one thousand dollars ($1,000), with the State of North Carolina and its Agencies (including its municipalities and other political subdivisions). Please see §§147-86.60 through 147-86.61 and §§147-86.82 through 147-86.83 of the North Carolina General Statutes for the text of the contract restrictions.
Most likely to impact your Agency is the inclusion of Ben & Jerry’s Homemade, Inc. on the 2023 Boycotting Israel List. This makes its parent company, Unilever PLC, and all of its subsidiaries and affiliates, subject to the same divestment and contract restrictions.
While Ben & Jerry’s Homemade, Inc. is likely the most impactful addition to the 2023 Divestment Lists, it is not the only company added this year. Agencies are encouraged to review both Lists for your own compliance purposes.
The contract restrictions in the Divestment from Companies Boycotting Israel Act mean that no State agency or political subdivision may, as of December 21, 2023, enter into a direct contract valued at more than $1,000 with Unilever PLC or one of its subsidiaries.
Any such contract is void from the beginning and has no legal effect. Existing contracts valued at more than $1,000 with Unilever or one of its subsidiaries may require further actions by your Agency (see N.C.G.S. §§ 147-86.82 (c) and (d) for further guidance in that specific scenario).
The North Carolina Department of State Treasurer, pursuant to the Divestment Acts, annually compiles and publishes the Lists of companies in order to meet its divestment obligations. The Lists also apply to the contract restriction sections of each Divestment Act. This blog post is intended to offer basic guidance and a starting point for Agencies to comply with the statutory obligations under the Divestment Acts.
Additional background information can be found at the Coates’ Canons NC Local Government Law blog.
