Cabinet overrides Antitrust Authority on natural gas
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Cabinet overrides Antitrust Authority on natural gas

At the same time, deputy state attorney turns back bid to disqualify PM from dealing with issue

Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel's natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)
Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel's natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)

The cabinet on Sunday voted to override decisions made by the Antitrust Authority that would have limited its ability to implement a controversial agreement on the country’s natural gas.

Antitrust Authority chief David Gilo is a vocal opponent of the draft agreement between the Israeli government and the gas companies in its current form. He, along with other critics, says that it would leave too much power in the hands of US company Noble Energy and the Israeli Delek Group, which jointly hold most of the shares in gas reservoirs off Israel’s shores.

A clause in the Antitrust Law, clause 52A, grants the economy minister the exclusive power to override decisions by the Antitrust Authority chief on issues with sensitive strategic or diplomatic implications. On all other issues, the Antitrust Authority chief’s decisions are binding.

Gilo is so vehemently opposed to the draft agreement that he publicly announced his resignation last month rather than see the draft implemented. Gilo will remain chief of the authority until the end of August.

Economy Minister Aryeh Deri, who would have had the power to overrule Gilo, announced last week that he would not exercise his authority, forcing Prime Minister Benjamin Netanyahu to bring the matter to a cabinet vote.

During the cabinet meeting, Prime Minister Benjamin Netanyahu said he was “determined” to push through the deal for the development of the country’s natural gas.

“Last week, the cabinet unanimously approved the expedited development and expansion of the natural gas fields that have been discovered off Israel’s coast,” he said. “I am determined to advance a realistic solution that will bring gas to the Israeli economy. I will not capitulate to populist proposals that will leave the gas deep underground. We have already seen enough countries that succumbed to these pressures, and their gas has remained in the ground. This cannot be allowed to happen here. The outline that has been formulated breaks up the monopoly. In the coming decades it will put hundreds of billions of shekels into education, culture, health and many other things for the benefit of all Israeli citizens. After years of discussions, the time has come to decide so that the gas will emerge from the ground and reach the Israeli economy and the citizens of Israel.”

Earlier Sunday, Deputy Attorney General Dina Silber announced that she saw no reason to disqualify Netanyahu from handling the issue despite a message sent to the Prime Minister’s Office by Sheldon Adelson in mid-July 2014.

The Tamar Lease natural gas rig, located 90 kilometers west of the city of Haifa, northern Israel. (photo credit: AP/Albatross Aerial Perspective)
The Tamar Lease natural gas rig, located 90 kilometers west of the city of Haifa, northern Israel. (photo credit: AP/Albatross Aerial Perspective)

Adelson, who is one of Netanyahu’s main financial backers and who bankrolls Israel Hayom, a Hebrew-language daily considered extremely supportive of the prime minister, wrote to Netanyahu in his capacity as chairman of the US-Israel Business Initiative, a body working under the auspices of the US Chamber of Commerce. A member of the board in the US-Israel Business Initiative, Haaretz reported, is Keith Elliot, who is a top executive with Noble Energy, one of the companies invested in Israel’s offshore gas reserves.

In the letter, Adelson mentions several issues, one of them “streamlining the regulation of hydrocarbons in Israel.” The Haaretz report implied that Netanyahu is not negotiating the de-monopolization of Israel’s offshore gas reservoirs in good faith, but is beholden to Adelson because of the latter’s significant financial support to Netanyahu during the campaign and also through his daily paper.

Following the report, which came out on Friday, both Meretz party leader Zahava Gal-on and Joint (Arab) List MK Dov Khenin asked the Attorney General’s Office to disqualify Netanyahu from negotiating on the gas issue.

Prime Minister Benjamin Netanyahu gestures during a plenum session in the assembly hall of the Knesset on June 17, 2015. (Miriam Alster/FLASH90)
Prime Minister Benjamin Netanyahu gestures during a plenum session in the assembly hall of the Knesset on June 17, 2015. (Miriam Alster/FLASH90)

“After examining the data, our position is that there is no cause to disqualify the prime minister from dealing with the natural gas issue,” Silber wrote. “First, the prime minister said he had never spoken to Sheldon Adelson about the gas market policy — neither directly nor indirectly. Second, the request sent to the Prime Minister’s Office and signed by Sheldon Adelson was sent by a body working under the sponsorship of the US Chamber of Commerce, and not a request relating to Adelson’s private businesses. Third, in any case, the draft for dealing with natural gas is a draft written by a large government team with representatives from all relevant ministries and authorities. Fourth, decisions on advancing and approving the draft will not be made by the prime minister alone.”

Responding indirectly to the Haaretz report, Netanyahu wrote on Facebook, “I do not work for any tycoon – I’m the prime minister of Israel and I work for you, for the security of the State of Israel and the welfare of all of its citizens. During the election I pledged to work to reduce the cost of living. I am determined to do this through the many resources we will gain through [implementation of] the gas draft. The draft dismantles the monopoly and will bring over the coming decades hundreds of millions of shekels for education, welfare and health for all the citizens of Israel.”

Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel's natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)
Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel’s natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)

On Saturday evening, thousands of protesters marched in Tel Aviv against the government’s handling of offshore gas reserves, blocking roads and chanting slogans, sparking low level clashes with police.

At least four people were arrested during the protest, according to Hebrew media reports, as crowds marched through central Tel Aviv, blocking the Maariv flyover at one of the city’s main junctions after midnight.

Small fights also broke out between police and protesters, according to Israel Radio.

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