Israel Must Tell the Truth About Iran Oil Arbitration

Do Jerusalem's efforts to impose international sanctions on Tehran also stem from financial considerations?

Haaretz Editorial
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Laying the final part of the Eilat-Ashkelon Pipeline, 1969.
Laying the final part of the Eilat-Ashkelon Pipeline, 1969.Credit: Daniel Rosenblum / Starfot
Haaretz Editorial

In 1968, Israel and Iran launched a project for selling Iranian oil to Europe via Israel. At the heart of the deal was the construction of the Trans-Israel Pipeline from Eilat to Ashkelon. The project was shrouded in a veil of secrecy, and Israel imposed censorship on any publication trying to write about the pipeline or its financing.

After the Islamic Revolution in 1979, Iran turned from being Israel’s ally to its enemy. Israel continued to operate the pipeline after nationalizing it de facto using a legal trick. Iran sued in international arbitration to receive its share of the fruits, estimated to be worth in the billions of dollars.

This oil arbitration has been going on for years in Switzerland, and as Aluf Benn has reported in Haaretz, Israel under Prime Minister Benjamin Netanyahu has suffered legal defeats to the Iranians — after changing its strategy and claiming that its refusal to pay was designed to damage the Iranian nuclear program. Switzerland’s Federal Supreme Court has rejected these claims and forced Israel to stick with the arbitration — and pay its debt in another case.

The legal battle has kept the highest people in government very busy, but Israelis have been left in the dark. The censorship over the Eilat Ashkelon Pipeline Company has remained in place since the time of the Shah, and the government has remained silent.

All this raises troubling questions. Do Israel’s efforts to impose international sanctions on Iran also stem from financial considerations, not just security ones? Are Israel and Iran conducting a dialogue through their lawyers and arbitrators behind the public threats that have led Israel to the brink of war with Iran?

The ecological disaster that a spill from the pipeline caused last month reignited the public’s interest in this mysterious company that operates under a franchise granting it extensive benefits. Haaretz's Avi Bar-Eli has revealed that the military censor hid harsh reports on irregularities at the company. In another two months the firm must inform the government if it wants to extend the franchise agreement when it ends in two years.

For all these reasons — the weak supervision, the environmental damage and the importance to the country — the moment of truth has arrived for the Eilat Ashkelon Pipeline Company. Netanyahu, who is responsible for the firm in his side post as finance minister, must tell the people the truth about the oil arbitration with Iran in Switzerland.

And if he is reelected, he must make his position on renewing the franchise clear. The conspiracy of silence must end.



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