Israel to Change Status of Confidentiality Around Eilat Ashkelon Pipeline Company

Iran launched three international arbitration suits to receive its share of the revenues from Israel's continued operation of the pipeline, estimated to be in the billions of dollars, and Iranian assets that were nationalized.

Gil Cohen Magen

The government will change the secrecy status of the Eilat Ashkelon Pipeline Company (EAPC), whose franchise expires next year, it says in a response to a petition to revoke the confidentiality order. However, a team of government officials has recommended keeping the secrecy in place except for certain environmental issues.

At the beginning of last year the Israel Union for Environmental Defense petitioned the High Court of Justice to revoke the confidentiality order issued in 1968, when the company was founded as a partnership between Israel and Iran’s national oil company. The petitioners asked the court to order EAPC to release all available information on the 2014 oil spill and to release all the audits and critical reports about the company.

Iran launched three international arbitration suits in Swiss and French courts to receive its share of the revenues from Israel’s continued operation of the pipeline, estimated to be in the billions of dollars, and Iranian assets that were nationalized.

The state says in its response that Finance Minister Moshe Kahlon, who is in charge of the company, set up a team consisting of officials from various ministries to examine the confidentiality act shortly after he entered office in 2015. The team was asked to decide what information must be included in the confidentiality order. In view of this, the state asked the court to deny the petition to revoke the confidentiality order.

The team was asked to update the order to prevent misunderstanding and “preserve Israel’s interests,” probably due to the change in Israel-Iran relations from partnership to hostility and legal rivalry.

Under the confidentiality order the government does not publish organizational or financial data about the company, nor does EAPC send annual reports to the Companies Registrar identifying its directors, as other companies must. It is also exempt from receiving a building permit and any report pertaining to its activity is secret, unless released for publication by the finance minister.

The state said the team is examining the franchise that is due to expire in a year’s time and will determine what information must remain confidential. It did not detail which issues would be released for publication, but indicates they relate to environmental aspects of the company’s activity.

For example, the state claims it already allows the publication of reports about the oil spill and environmental protection.

Kahlon has recently adopted the team’s recommendation to keep the confidentiality order in effect, except for certain matters. The updated order is to be submitted to the cabinet and Knesset Foreign Affairs and Defense Committee’s approval soon.

The state says that EAPC is already subject to various environmental laws and that the Ministry for Environment Protection supervises its activity. However, the state says the ministry wants to lift various restrictions that prevent enforcing the law on EAPC.

The Environment Ministry intends to demand this in the debates on the new franchise law, the state says. For example, today the ministry cannot enforce administrative regulations on the company, like it can enforce on other government corporations.

The state admits that the company did not obtain the planning authorities’ approval before carrying out the work to lay the pipeline, during which the oil spill occurred. This matter is now part of the criminal investigation that opened following the leak, in which 5 million liters of crude oil spilled into the Evrona Nature Reserve near Eilat.