Environment Minister Bowing to Business Interests, Watchdog Avers

Israel's trustbuster yesterday accused Environmental Protection Minister Gilad Erdan, of folding under pressure from beverage manufacturers regarding a bill he drafted that governs the operations of Israel's only bottle recycler.

The company is owned by three competing beverage manufacturers: the Central Bottling Company (also known as Coca-Cola Israel), Tempo Beer Industries and Jafora. Their collective ownership of the recycling company, which on the face of it contravenes antitrust law, was enabled by a time-limited permit from the antitrust tribunal.

Erdan intends to let the competitors continue to cooperate on collecting used bottles for recycling without supervision, Antitrust Commissioner Ronit Kan charged.

The minister and Knesset member denied the allegation, saying he had no intention of neutering Israel's antitrust law in order to allow drink manufacturers to collaborate on collecting used bottles.

What's for sure is that his proposal is wending its way through the Knesset's Economic Affairs Committee. If the bill is passed, one major change would be in the ownership of the recycling corporation, which collects and recycles used plastic beverage bottles.

The co-ownership permit was first granted in 2001 and extended in 2005. Since 2008 the antitrust tribunal has been deliberating over whether to extend it again.

Both the Antitrust Authority and the Israel Union for Environmental Defense (Adam Teva V'Din) oppose extending the permit again on the grounds that the recycling company has not met its targets. Given that allowing the three companies to cooperate did not bear the hoped-for fruit, there's no reason to let them continue working together, say authority and IUED officials.

The tribunal has yet to hand down its opinion. Even if does decide to let the companies continue to cooperate there would probably be strings attached.

The Antitrust Authority had planned to support Erdan's bill, which included an article assuring that the recycling company would remain under antitrust law and that the antitrust tribunal would revisit its status every few years. But then Kan was astonished to find, she says, that in the final draft of the bill the Environmental Protection Ministry deleted that clause from the law.

The ministry's action, claims Kan, legitimizes the status of the recycling company irrespective of the Antitrust Authority's position.

Exempting the recycling company from antitrust enforcement would enable it to impair competition and hurt the public, Kan said. Moreover, since the exemption would be enacted into law it would perpetuate the situation for long years. Problems that arise over time couldn't be handled, she argues.

Kan also claims that the powerful beverage lobby has persuaded several MKs on the Economic Affairs Committee to support Erdan's bill.

Erdan denies any intention of exempting the recycling company from antitrust enforcement. He feels it's important for all food manufacturers to be responsible for collecting the packaging of their products and to cooperate on recycling, he explained yesterday. That's how it works in Europe, he points out.

In favor of his bill, Erdan argues that it grants the recycling company certainty in its business activity, which it doesn't have now given that its license remains contingent on the decisions handed down from time to time by the antitrust tribunal.

He has no intention of exempting the company from any anticompetitive restrictions, Erdan clarified. What needs to be done is to understand the requirements of competition and to act accordingly. The companies should be allowed to cooperate only and solely when it comes to collecting waste, Erdan said: Information leaks should not be permissible.