Government: Gas Deal's Stability Clause Need Not Be Legislated

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Benjamin Netanyahu and Yuval Steinitz, December 8, 2015.
Benjamin Netanyahu and Yuval Steinitz, December 8, 2015.Credit: Olivier Fitoussi

The government rejected on Sunday last week’s recommendation by the High Court of Justice to bring a key part of its framework agreement with the gas companies to the Knesset and make it law.

“The government’s position is that there is no place for adopting legislation to anchor the gas framework’s stability clause,” the government told the court, days before it is to rule on four petitions seeking to block the controversial framework agreement.

The government’s stance was elucidated after justices last week suggested that the stability clause, which commits the government to not imposing any regulatory changes on the gas industry for as many as 15 years, should be backed by a law, rather than just a cabinet resolution.

The clause is one of the most contested parts of the framework, which puts into place the final elements of Israel’s regulatory regime for the gas sector. Critics, including the four groups that petitioned the High Court, said the agreement leaves Israeli gas in the hands of a cartel controlled by Yitzhak Tshuva’s Delek Group and the Texas company Noble Energy.

Critics say they find the stability clause particularly objectionable because its ties the hands of the government, including all future governments that are in office while the clause is in force.

In its statement on the stability clause, the government said there was no need for legislation because the clause is nothing more than an administrative decision. Government lawyers also asserted that the Knesset had in effect approved the framework and warned that bringing the issue to lawmakers risked undermining the entire framework.

In fact, Prime Minister Benjamin Netanyahu’s government would find it hard to win a Knesset majority for the clause. Its slim Knesset majority of 61 is just 59 seats on gas-related issues because two coalition Knesset members have recused themselves from votes on the issue, due to conflicts of interest. Without the support of the opposition Yisrael Beiteinu party, it would struggle to win passage.

“The stability clause directives are a reasonable arrangement and appropriate under the circumstances, because without it there is a real concern that Israel’s offshore gas fields won’t be developed,” the government said.

It also argued that even of the court wants to establish a precedent and rule that administrative decisions such as the stability clause must be anchored in law, it shouldn’t do so retroactively in the context of the gas framework.

Efi Michaeli, an attorney representing Ramat Gan’s College of Law and Business, one of the petitioners, said the government’s stand was contradictory.

“Rejecting the court’s recommendation underscores the absurdity of the government’s conduct,” Michaeli said. “If you can’t pass a law, as it says, then how can the government, which is the executive branch, promise something that the law doesn’t authorize it to give?”

He argued that the Knesset never gave its approval of the framework but only held hearings on another, controversial section, namely Netanyahu’s decision, as economy minister, to sign a waiver exempting the gas cartel from antitrust scrutiny on national security grounds.

“It is inappropriate to undermine Israel’s democratic machinery just because the coalitions is having difficulties of one kind or another,” Michaeli said.

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