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
RELATED:Cabinet quashes plan to rehabilitate Dead Sea
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
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.
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
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
“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.
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
“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
“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
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.”