The Knesset Economic Affairs Committee, headed by MK Eitan Cabel (Zionist Union), decided on Monday, in a 7-6 vote, to advise Prime Minister and Minister of the Economy Benjamin Netanyahu and Energy Minister Yuval Steinitz not to invoke Article 52 of the 1988 Restrictive Trade Practices Law (the Antitrust Law) in order to activate the natural gas outline.
The decision was reached during a meeting that followed a series of deliberations on whether implementing the government`s agreement with energy companies for the distribution of natural gas from Israel’s offshore fields justifies the activation of Article 52. The deliberations are a prerequisite to implementing the gas outline.
Fully activating the outline demands that the economy minister invoke a legal clause to bypass the Antitrust Authority’s objections – Article 52. While the article has never before been implemented in Israel’s history, an economy minister can do so by citing national security or foreign policy interests. After former economy minister Arye Deri (Shas) resigned from his position in the ministry last month, it became Netanyahu’s duty in that capacity to consult with the Economic Affairs Committee prior to activating Article 52.
In the decision, MK Cabel said comments made PM Netanyahu and Minister Steinitz during a meeting of the committee last week indicate that ”the decision to advance the natural gas outline, including the parts which require consultation [with the committee] in accordance with Article 52, was reached before the consultation process began. Meaning, it appears that the consultation was not conducted [willingly] and with an open heart, but only as a formal procedure.”
MKs Cabel, Ayelet Nahmias-Verbin (Zionist Camp), Yoseph Yonah (Zionist Camp), Dov Khenin (Joint List), Abd Al Hakeem Haj Yahya (Joint List), Haim Jelin (Yesh Atid) and Esawi Frej (Meretz) voted in favor of the recommendation, while MKs Miki Zohar (Likud), Yoav Kisch (Likud), Nurit Koren (Likud), Roy Folkman (Kulanu), Yoav Ben-Tzur (Shas) and Uri Maklev (United Torah Judaism) voted against.
The vote was preceded by a debate which concluded the consultancy procedure. MK Yaakov Perry (Yesh Atid) said the deliberations had not convinced him that the activation of Article 52 was justified, but stressed that ”this does not reflect my position regarding the gas outline in general.” MK Haj Yahya also said he found no reason to activate the clause.
MK Koren, on the other hand, argued that activating Article 52 was a ”necessity” and added that ”it is time to get the outline underway so that we will be able to allocate funds for welfare, stipends and other important things.”
MK Kisch read from a letter signed by committee members who are from the coalition, which said the gas deal strengthens Israel`s ”energy security and national security”, will positively affect Israel`s foreign policy, and therefore justifies the activation of Article 52.
MK Khenin said ”there is a terrifying monopoly… with a danger to democracy.” The outline, he added, would ”hurt Israel`s security in the short, medium and long terms.”
In response, MK Zohar said ”it appears that committee members from the opposition are looking to taunt the prime minister and criticize, for the wrong reasons, an outline that is meant to help the country… I don’t want to ruin the party, but the prime minister is not obliged to accept the recommendation.”
MK Shelly Yachimovich (Zionist Camp), said the motivation for activating Article 52 was based on the strategic relations with Egypt, ”but this excuse collapsed like a house of cards with the discovery of the Zohr [gas field] and when it was proven that even if we beg Egypt would not want to import our gas due to some arbitration.” Yachimovich was referring to the order given by international arbitrators to two state-owned Egyptian companies to pay $1.76 billion compensation to Israel Electric Corporation for halting gas supplies three years ago. The MK said she was convinced the activation of Article 52 would cause ”extensive security damage to the State of Israel.”
Committee Chairman Cabel concluded the meeting by saying that ”the Israeli government is using the name of security and foreign policy in vain, and this is a very dangerous process. It is easy in Israel to turn everything into a security issue.”
Under the terms of the proposed gas deal, which was approved by the Knesset in September, the government plans to give an international consortium led by the Delek and Noble Energy companies the rights to Leviathan, the largest gas reserve yet found in Israeli territorial waters.
According to PM Netanyahu, the Leviathan find, thought to contain 18.9 trillion cubic feet (535 billion cubic meters) of gas, is considered a gold mine for the state, turning it into a potential major natural gas supplier and providing hundreds of billions of shekels for state coffers.
Critics of the deal, including former anti-trust commissioner David Gilo who resigned in May over the matter, have expressed concern that it creates a de facto monopoly that would lead to high gas prices for Israelis. They have accused the government of capitulating to gas companies’ demands.