Deal reached on Dead Sea salt harvest

Finance Ministry and Israel Chemicals end standoff over salt harvesting project.

By NADAV SHEMER,
December 29, 2011 05:15
4 minute read.
Dead Sea

Dead Sea 311. (photo credit: (Marc Israel Sellem/The Jerusalem Post))

The Finance Ministry and Israel Chemicals ended a standoff over the financing of a Dead Sea salt harvesting project Wednesday, but environmental activists reacted angrily to the deal and demanded a committee examine the matter.

Under the agreement, Israel Chemicals unit Dead Sea Works will contribute NIS 3.04 billion – or 80 percent of the total cost – toward a full salt harvest of the sea’s southern portion. The state will fund the remaining NIS 760 million, of which NIS 337 million is its share of the current value of a $30 million dividend it withdrew in 1992 to finance the sea’s protection.

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The state’s share of potash sales will rise from 5% to 10%, with the extra royalties to be designated to a Dead Sea rehabilitation fund. This will translate to roughly an extra NIS 1.772 billion for the rehabilitation fund by 2030, the Treasury said.

“The fate of the Dead Sea is the same as that of the Mediterranean Sea,” Finance Minister Yuval Steinitz said, adding that the deal ensured the state would collect its rightful share of potash revenues, just as the Sheshinski Report ensured the state collects its rightful share of gas and oil revenues.

The Sheshinski Report, whose recommendations became law in March, increased the state’s share of gas and oil revenues to figures ranging between 52 and 62%, whereas previously the state received only a one-third share from those revenues.

Steinitz threatened on Sunday to establish “Sheshinski II” if Israel Chemicals did not respond to its proposal on salt harvesting by Tuesday night.

The agreement could encounter another barrier, after the Knesset Economics Committee passed the first reading of a bill proposed by MK Moshe Matalon (Israel Beiteinu), which would force Dead Sea Works to fund the salt harvesting project in its entirety.

Committee chairman Carmel Shama-Hacohen (Likud) said any agreement between the government and Israel Chemicals would need to be anchored in law, as otherwise it would be open to future abuse at the public’s expense.

“Today we have a finance minister who we trust and who has a healthy and balanced approach to the distribution of national resources, but another finance minister could appear in the future who gives in to Dead Sea Works and reopens the agreement,” Shama-Hacohen said.

Environmental activists and politicians slammed the Finance Ministry’s agreement, and agreed all such decisions can occur only in the Knesset.

MK Dov Henin (Hadash), who is championing another, more comprehensive Dead Sea rehabilitation bill drafted by organization Israel Union for Environmental Defense (IUED), charged the government with “abandoning the country’s resources for years” and called the agreement a “scandal.”

“Has someone demanded the 10 liras that the public deserves from the lease?” Henin asked, referring to the archaic contract originally made between Dead Sea Works and the Ottoman Empire. “The future of the Dead Sea, environmental and economic, can be – and must be – decided only in the Knesset.”MK Nitzan Horowitz (Meretz), chairman of the lobby to save the Dead Sea, called the 10% royalty figure “a mockery” and likewise charged the state with abandoning a natural treasure.

“The royalties amount is ridiculous especially given the great damage that the factories have caused to the Dead Sea,” Horowitz said. “They are drying up the sea – a spectacular natural treasure that belongs to all of us – profiting with enormous fortune and returning to the state pennies only.”

Particularly problematic, according to Henin, is the environmental disregard displayed by the finance minister, as the low level of royalties will actually incentivize the company to pump even more water from the northern basin, decreasing already dwindling water levels there.

“We cannot use the urgent need to implement a salt harvest in order to protect the southern basin as a means of enslaving the public’s rights to our natural resources for years to come,” Henin said.

At a joint press conference Wednesday with Environmental Protection Minister Gilad Erdan and Tourism Minister Stas Meseznikov, Erdan echoed Henin’s sentiments precisely.

“If we give them the best tax rate, they don’t have an incentive not to expand, expand and expand,” Erdan said.

The way the Finance Ministry is behaving regarding Israel Chemicals is problematic and “very, very weird” because the office isn’t transparent in its actions, Erdan argued. The agreement is unfavorable to the interests of the public, the tourism industry and the environment, but Steinitz has emerged as quite “proud” of his actions, according to Erdan.

Neither the Environment nor Tourism ministries can count on the Treasury as a body that will in the future invest in tourist attractions or in improving environmental damages to the area, he said.

NGO Friends of the Earth Middle East called upon the government to reject the agreement entirely, and establish the very “Sheshinski II” committee Steinitz had originally himself threatened to create to determine a more reasonable royalty fee.

The only truly “comprehensive solution” to the problems of the Dead Sea, however, lies in the proposal drafted by IUED and launched by Henin, which would allow for longterm ecological rehabilitation, according to Friends of the Earth.

“The agreement between the Treasury and tycoons will not save the Dead Sea,” said the NGO’s Director Gidon Bromberg, who argued the government must follow the “polluter pays” principle, by legally requiring Dead Sea Works to pay for the full harvest and by raising the company’s royalty fees.

“This is a cheap sale of natural resources to tycoons,” Bromberg said. “It is necessary to require the factories to increase their royalties to internationally acceptable levels.”


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