Dead Sea Works to Pay Hundreds of Millions for Saline Water

Dead Sea Works (DSW) will pay hundreds of millions of shekels to Mekorot, Israel's national water company, for the saline water it uses in its production processes. The final decision was made by Deputy Supreme Court President Noam Sohlberg, who rejected DSW's request for an additional hearing on a ruling from December of the previous year that mandated this payment.

Mekorot had estimated the debt for 2018-2019 at 85 million shekels, projecting a total payment of 400-500 million shekels by the end of DSW's concession in 2030. Last year, Justice Daphne Barak-Erez accepted petitions from Looby 99 and Adam Teva V'Din, ruling that the concession fees DSW pays to the state do not include the use of saline water. She determined that DSW must pay Mekorot separately for this water, in accordance with the 2017 water sector reform, which stipulates that entities extracting their own water must pay for it to Mekorot, as the owner of Israel's water resources.

Barak-Erez stated that DSW's concession law and charter do not regulate the use of saline water within its area, nor do they set royalty payments for it, and certainly do not exempt it from water fees. She clarified that the Water Law applies to the Dead Sea, and the concession law does not exempt DSW from paying for water, as it grants the right to "obtain" water, not to use it. This collection aligns with principles of distributive justice and the preservation of water as a public resource.

Barak-Erez acknowledged that authorities had long refrained from collecting payment for saline water extracted by DSW, but attributed this to a general policy under previous water regulations, not to the concession law itself. She emphasized that DSW's long-standing benefit from this arrangement does not grant it a vested right to its continuation, especially after the water tariff reform changed the landscape.

DSW argued that the ruling, by interpreting the concession law and charter's "obtain water" clause, overturned a precedent regarding payment for water production versus consumption, which they deemed essential for numerous annual obligations. They also claimed the Supreme Court overstepped by imposing its interpretation on the state's concession terms. Sohlberg conceded that the ruling established a new, principled interpretation of the concession law versus the Water Law, but stated that not every legal innovation warrants a further hearing. He cited previous rulings that a significant change in norms is required to justify deviating from the finality of Supreme Court decisions. Sohlberg concluded that while the ruling is precedent-setting and important for regulating the field, it is ultimately an interpretation of existing law and the relationship between different provisions, not a fundamental shift in norms.

Despite DSW's claims of widespread implications for the water economy, Sohlberg found them insufficient to justify an additional hearing, particularly as the Water Authority and the Attorney General did not support these warnings. DSW was ordered to pay 10,000 shekels in expenses.