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Haifa’s Oil Refineries Ltd. tops worst environmental offenders list… again

Environment Protection Ministry publishes ninth report on organizations considered high risk; 5 of top 10 are part of Israel Corporation, majority-owned by Idan Ofer

View of the oil refineries in Haifa Bay, May 5, 2017.  (Yaniv Nadav/Flash90/File)
View of the oil refineries in Haifa Bay, May 5, 2017. (Yaniv Nadav/Flash90/File)

Israel’s Environmental Protection Ministry published its ninth top offenders report on Wednesday, listing companies with the worst environmental impact on their surroundings or those that fail to comply with regulations, and marked Haifa’s Oil Refineries, Ltd., also known as the Bazan Group, as the top offender. The group operates the largest oil refinery in Israel in the Haifa Bay.

The Environmental Impact Index reviewed more than 120 factories, 49 publicly traded or state-owned companies that have industrial subsidiaries, and 700 gas stations on their compliance with environmental regulations, their performance and risk, and their impact on the environment. It included the ministry’s “Red List” — the top 10 companies that accrued the most points for bad behavior during inspections carried out in 2019. The data is collected annually by the ministry, “as a result of its role as the environmental regulator that oversees the industry.”

In this current report, the ministry said it included data from 20 factories that were not included in previous indexes.

Points are awarded based on three factors: a company’s impact on the environment, lack of compliance with environmental laws and regulations, and environmental management and reporting.

According to the index, Oil Refineries, Ltd. earned 586 points in 2019, an 18 percent increase from 2018, marking its spot at the top of the Red list. In second place, with 516 bad points, was ICL Rotem (formerly Rotem Amfert Negev), which mines phosphate rock from phosphate deposits in the Negev and is a subsidiary of ICL Group (Israel Chemicals). Next up was Shafdan, a new entry into the index with 461 points; it is a wastewater purification facility operated by the Igudan-Dan Region Wastewater Treatment Plant in Rishon Lezion. In fourth place was the Paz Ashdod Oil Refinery, at 368 points, a 28% drop from 2018. It was followed by Carmel Olefins (347), Mey Sheva’s Sewage Treatment Plant Shokat (338), Dead Sea Works (308), Shemen Industries, Ltd. (296), Gadiv Petrochemical Industries (294), and Dead Sea Magnesium (242).

The ministry noted that, over the course of 2019, it had noted a number of violations committed by Oil Refineries, Ltd., “mainly anomalies in air emissions of various pollutants, as well as violations concerning wastewater treatment and hazardous substances.”

The collapsed wall of the evaporation pool at ICL Rotem (formerly Rotem Amfert Negev Ltd), seen on January 27, 2020. The 2017 collapse of the wall led to major pollution of the Ashalim stream. (courtesy, Rael Horwitz, HaMaarag)

Separately, the government is currently engaged in a class-action lawsuit against ICL Rotem for one of the worst environmental disasters in Israel three years ago, following a massive escape of industrial effluent that sent between 100,000 and 250,000 cubic meters (3.5 million to 8.8 million cubic feet) or more of highly toxic wastewater rushing through the Ashalim stream. The recovery of the stream is ongoing.

A number of the companies in the top 10, chiefly Oil Refineries Ltd, are part of the Israel Corporation conglomerate, the biggest holding company on the Tel Aviv Stock Exchange. A majority shareholder of the company is Idan Ofer, one of the two sons of the late Israeli shipping magnate and philanthropist Sammy Ofer. Idan specializes in the oil, mineral, and chemical side of the family business. He is estimated to be worth $6.5 billion.

Israel Corporation has significant stake holdings in both ICL (Israel Chemicals) and Oil Refineries Ltd/Bazan Group, whose subsidiaries include Gadiv Petrochemical Industries and Carmel Olefins. Dead Sea Works is an ICL company.

This week, Channel 13 reported that the state agreed to wipe out NIS 65 million ($20 million) in debt owed by Ofer’s ICL for Dead Sea Works operations. According to the Calcalist business daily, the Dead Sea Works’ total debt to the Water Authority stood at NIS 83 million earlier this year, but the majority of that will now be wiped out.

A portrait of the late Sammy Ofer with his son, Idan Ofer. (Moshe Shai/Flash90)

Minister of Environmental Protection Tamar Zandberg said in a statement Wednesday that the Environmental Impact Index “reveals to the general public and to investors in industrial companies the environmental risks inherent in them.”

“The index links the environmental risks to the entities responsible for them, and allows investors in companies — whether they are our pension funds, banks or the general public — to demand more investment in appropriate environmental management from those that operate them,” she added.

Galit Cohen, the director-general of the Environmental Protection Agency, said that in recent years, “we have witnessed financial regulators demanding that public companies and institutional bodies reduce their environmental risks and to be transparent about it to the public. The index allows for the simple monitoring of these risks.”

Oil Refineries Ltd/Bazan Group said in response that the index was “unreliable” and “presented misleading information to investors.”

Newly appointed Minister of Environmental Protection Tamar Zandberg at a handover ceremony at the Environmental Protection Ministry in Jerusalem on June 15, 2021. (Olivier Fitoussi/Flash90)

The group said that it “considers investing in environment protection to be of strategic importance” and that it is is “currently planning long-term projects that will have a significant positive environmental impact.”

The company said that in 2018 and 2019, “it reduced emissions by tens of percentage [points], including a 75% reduction in benzene emissions (in one year only),” and claimed to reduce major pollutant emissions by between 65-95% between 2009 and 2019.

In late August, the Environmental Protection Ministry said that the 570 biggest factories in Israel cost the state NIS 12.9 billion ($4 billion) in damage to public health and the environment last year, according to its annual report on polluting and global warming gas emissions.

The figures include NIS 7.7 billion ($2.4 billion) in global warming gases, which actually represents a 3% decrease on 2019. The report explained this by reduced use of gas and a decrease in demand for electricity because of COVID-19 and its effects on production.

The report is the second to assess the external, or indirect, costs of these emissions according to criteria set by the Organization for Economic Co-operation and Development (OECD). These costs include, for example, providing hospital treatment to people with pollution-related diseases, or cleaning up a river that has been contaminated by industrial waste.

The report’s findings are based on data reported by the big companies themselves in the fields of energy, chemicals, metals, food and beverages, waste and wastewater treatment and intensive animal farming.

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