Deri denies he’ll invoke legal measure to advance gas deal

Deri declined to exercise his authority, and instead agreed to transfer his powers to the government – a move that requires both cabinet and Knesset authorization.

By
July 22, 2015 06:13
4 minute read.
Arey Deri

Arye Deri. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Economy Minister Arye Deri denied claims on Tuesday that he would sign off on a legal measure to circumvent the antitrust commissioner’s authority, enabling the advancement of a controversial gas compromise outline.

Following Antitrust Commissioner David Gilo’s December decision to review whether the market dominance of the Delek Group and Noble Energy constituted a restrictive agreement, six months of negotiations ensued among government officials and the companies.

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While the parties eventually agreed to the terms of a recently published compromise outline, Gilo made clear that he would not grant his support to the document in question. He went on to announce his pending resignation.

Bypassing Gilo’s authority would require invoking Article 52 of the 1988 Restrict Trade Practices Law (the Antitrust Law), through which an economy minister can prevent an antitrust commissioner from interfering in a “restrictive agreement” due to reasons of foreign policy or national security.

At the end of June, however, Deri declined to exercise his authority to invoke the article, and instead agreed to transfer his powers to the government – a move that requires both cabinet and Knesset authorization.

While the transfer quickly received cabinet approval, the Knesset vote was eventually postponed after too many coalition MKs refused to participate, leaving the opposition with a majority.

During a Tuesday morning Economic Affairs Committee session, chairman Eitan Cabel (Zionist Union) told participants he had learned that Deri intends to retract his initial refusal to invoke Article 52.

Cabel said that on Monday he had met Deri, along with National Infrastructure, Energy and Water Minister Yuval Steinitz and deputy attorney- general Avi Licht. During that meeting, Cabel explained, the officials informed him that Deri planned to submit to Cabel a request to activate Article 52 – as such a move is supposed to occur only in consultation with the Economic Affairs Committee chairman.

If Deri does choose to activate the article, a discussion on the matter in the Knesset plenary would be superfluous, Cabel warned. The chairman stressed, however, that he intends to convene a committee session on the subject, but would only do so after the government finishes its own ongoing hearings on the compromise outline itself.

“I declare that I will consider using all means at my disposal to deal with the question that will be placed before us,” Cabel said.

Despite Cabel’s claims, Deri immediately denied on Tuesday that he intends to go back on his previous decision at this time.

“As I announced previously to the government, I am not ready to activate Article 52, and therefore, the government has taken the authority to operate this clause,” he said.

Deri explained that because the Knesset has not yet confirmed the cabinet’s transfer of authorities to the government, the power to activate it remains in the hands of the economy minister at the moment. Energy and Water Resources Minister Yuval Steinitz and Prime Minister Benjamin Netanyahu are therefore planning to first bring the compromise outline itself for cabinet approval and then for Knesset approval, according to Deri.

“Only after the approval of the Knesset plenum will I consider whether to activate Article 52,” he said. “I did not ask Eitan Cabel to hold consultations on Article 52.”

While the minister confirmed that a meeting with Steinitz, Licht and Cabel did occur on Monday, he said that their conversation focused “on checking schedules and existing legal possibilities.”

“I regret that after this meeting, MK Cabel chose to announce what he did, and I have now expressed to him my displeasure with his words,” Deri added.

In addition to the Economic Affairs Committee session focusing on the ongoing natural gas controversy, a State Control Committee meeting on Tuesday delved into the issue – examining a relevant state comptroller’s report published the day before.

On Monday in the report, State Comptroller Joseph Shapira slammed the country’s various regulators for failing to coordinate natural gas policy, which has led to a situation in which Israel has only one gas supplier, one gas pipeline, no backup storage and no new development in sight. The state comptroller stressed the need for gas price supervision, demanding that the government evaluate a variety of means to ensure a competitive market.

The report’s publication came two days before the start of hearings on the terms of the natural gas compromise outline, which are being conducted by the National Infrastructure, Energy and Water Ministry on Wednesday and Thursday.

At the State Control Committee on Tuesday, a stormy session ensued, with Knesset members screaming over each other and officials who attempted to defend the gas outline.

Committee chairwoman Karin Elharar (Yesh Atid) praised Shapira for his staff’s quick work in assembling the State Comptroller’s Report, also stressing the need for tighter controls on gas prices.

“A miracle occurred for the State of Israel in the discovery of the gas fields, and it seems that the government is dissolving it,” Elharar said.

The gas outline itself proposes for the establishment of a price ceiling with linkage to market changes – at this point, $5.40 per million British thermal units – until a competitive market is achieved.

MK Manuel Trajtenberg (Zionist Union) called for a much stricter regulation of prices, calculated based on those prices in similar markets.

However, Constantin Bluz, a representative from the Energy Ministry’s Economics Department, argued that such a demand is impossible, as “there is no one gas price in the world.”


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