Backing Business, Israeli Treasury Moves to Curb Environment Ministry’s Clout to Prevent Pollution

The Finance Ministry says Israel has stricter environmental requirements than other OECD countries

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Smoke billowing from a smokestack at a plant in Ramat Hovav in the south two months ago.
Smoke billowing from a smokestack at a plant in Ramat Hovav in the south two months ago.Credit: Emil Salman
Zafrir Rinat
Zafrir Rinat

The treasury is trying to limit the Environmental Protection Ministry’s purview in monitoring pollution, but the ministry says the treasury is largely thinking about the economic impact on industry.

In the crafting of the new state budget, the treasury seeks to transfer authority over this issue to ministerial committees or to the Prime Minister’s Office. Green groups are worried that this could stifle the monitoring of large infrastructure facilities by the Environmental Protection Ministry.

“The government doesn’t distinguish between bureaucracy and regulation,” the head of environmental group Zalul, Maya Jacobs, told Haaretz. “We agree that there should be an easing of the bureaucratic burden, but not at the cost of weakening important environmental laws.”

The head of green group Adam Teva V’Din, Amit Bracha, adds that “the government is proposing the opposite of smart regulation. This will lead to a decline in professionalism and harm to the environment and public health.”

According to the treasury, the annual cost of environmental regulation to Israeli businesses is 3.7 billion shekels ($1.13 billion).

Last week the treasury, or the Finance Ministry, sent Prime Minister Naftali Bennett a blueprint for changes to encourage economic growth. One proposal is to establish, through legislation, a regulatory authority at the Prime Minister’s Office that could oversee regulation that a ministerial committee defines as “problematic.”

This proposal is raising concerns at other ministries because it would curtail their power. The precise definition of “problematic regulation” is still unclear. Judged by other statements by the Finance Ministry, this seems to include cases that involve multiple licenses and permits, or demands that the ministry considers too stringent, such as in advanced technologies.

Cleaning up tar at a beach at Beit Yanai, central Israel, after an oil spill in March. Credit: Avishag Shaar-Yashuv

For years the Finance Ministry and the Prime Minister’s Office have considered changing regulatory procedures, but this time it seems their chances are greater because there is a good chance the new government will pass a state budget.

The Finance Ministry says Israel has stricter environmental requirements than other OECD countries. Representatives of industry have criticized air-pollution targets they consider too tough.

The treasury says that the stipulations of the Environmental Protection Ministry’s permits frequently change, and that the ministry doesn’t consider economic considerations, driving up the cost of infrastructure projects.

The treasury wants only one authority to be issuing permits, for 10 years with no changes for the duration. Moreover, the Finance Ministry wants regulatory requirements to conform to those of other OECD countries and to take into account companies’ environmental expenses.

Also, according to the treasury’s proposal, a ministerial committee will be able to override decisions by the Environmental Protection Ministry on the licensing of facilities.

Another proposal is to establish a mechanism for submitting reservations on regulatory demands that have significant economic ramifications. A government agency would have the authority to strike down regulatory requirements.

The Environmental Protection Ministry has significant clout in the granting of business permits. But in recent years supervision and enforcement have been compromised due to a staffing shortage.

Previous environment ministers Gila Gamliel and Zeev Elkin were aware of the shortage but could not rectify the situation. The new minister, Tamar Zandberg, intends to make clear that the ministry won’t be able to enact regulatory changes without a significant boost to staffing.

The Environmental Protection Ministry agrees that regulation can be improved, mainly by simplifying the granting of permits. The ministry strongly objects to the establishment of committees or other government mechanisms that could limit initiatives launched by the ministry.

One possible result of such a move would be the ministry proposing a more stringent target for preventing air pollution with a committee then striking it down.

“Such a committee could change or cancel environmental clauses in business licenses,” said a source at Adam Teva V’Din. “Of all the proposed changes, this constitutes the greatest risk.”

The treasury, for its part, says the Environmental Protection Ministry does not sufficiently adhere to so-called regulatory impact analysis, RIA, as employed in OECD countries. RIA analyses the effect of regulation.

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