Government approves planning and construction reform in business sector

The government approved a number of reforms on Sunday aimed at easing and shortening bureaucratic processes in the planning and construction sector for non-residential structures.

Prime Minister Naftali Bennett and Economy and Industry Minister Orna Barbivai said in a joint announcement that the move will “strengthen Israeli industry” and allow business owners and entrepreneurs to get their operations off the ground more quickly.

The reforms include shortening the amount of time it takes to approve and build factories and establishing a “licensing and permits center” to reduce the lengthy approval process involving various government agencies and local authorities.

“This is wonderful news for the planning and construction sector in Israel,” said Bennett in the statement. “For the economy to grow and prosper, the state needs to allow business owners to run forward and to bother them as little as possible. Entrepreneurs are the living spirit and we need to assist them, not hinder them with unnecessary and complicated procedures. For years, the state made these connections more difficult. Now we are removing the blockage and taking another step for the business sector in Israel.”

Barbivai said that “improving the business environment and reducing the regulatory burden is a national goal designed to significantly shorten timeframes to allow industry and the business sector to compete fairly and lead the economy to substantive growth.”

After an initial contraction in 2020 due to the COVID-19 pandemic, Israel’s economy grew some seven percent in 2021, outstripping a global 5.9% average.

According to the government announcement, the reforms aim to shorten the amount of time required to set up factories from four to five years to two years, and reduce red tape related to the allocation of land and initial planning stages. The changes were proposed by an inter-ministerial committee led by the Economy and Industry Ministry, the Prime Minister’s Office, and the Interior Ministry’s Planning Administration.

The government will also pilot a first-of-its-kind licensing and permits center in northern Israel that is “expected to reduce the time necessary for issuing construction permits for new and existing factories by 50%.”

The licensing center will include representatives from the Environmental Protection Ministry, the Fire and Rescue Authority, and the IDF Home Front Command in cooperation with the local committees on behalf of the Federation of Local Authorities.

“This is a unique model that combines all government and local authority elements in order to cooperate and work together in a manner that puts the entrepreneur in the center and saves [them] maximum time and effort vis-à-vis the various elements, reduces unnecessary costs, provides certainty and shortens timeframes,” read the government announcement.

In addition, the reforms would address planning issues for proposed industrial zones and resolve “widespread impediments in industrial planning in Israel, with an emphasis on environmental regulation,” the statement said.

The announcement came a week after the cabinet approved a NIS 1 billion ($317 million) development plan aimed at encouraging demographic growth in the Golan Heights by setting up new residential areas and industrial zones.

The plan involves a number of agricultural technology projects, including agro-voltaic projects where solar panels are mounted over crop fields to facilitate crop growth and generate electricity at the same time.

The Society for the Protection of Nature in Israel (SPNI) said the plan was riddled with planning and environmental problems.

Sue Surkes contributed to this report.