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On the night of December 3, 2014, workers were moving a section of a pipeline running through the desert near Israel’s southernmost tip, where it meets Egypt and Jordan at the Red Sea, when it ruptured and oil began to gush.

Witnesses to what was to become the country’s biggest environmental disaster said that a “river of oil” poured out, blocking traffic on Route 90, the main road to the regional capital Eilat. The spill lasted just a few minutes, but by the time the two spigots on either side of the leaky pipe were closed, some 5,000 cubic metres of crude had spilled.

Fumes from the oil wafted into Jordan, sending several people into Aqaba’s Prince Hashem hospital. Some residents of the city panicked, fearing an Israeli chemical attack, and Jordanian soldiers were deployed to the border.

By the light of day, the full extent of the disaster was clear: the oil had oozed into the Evrona nature reserve, a pristine piece of desert home to about 200 gazelles and groves of acacia trees that can live for centuries. Some of the reserve’s dry desert wadis had become slick rivers of black.

Just over a year later, the first lawsuits are reaching court and Israelis are demanding accountability for the spill. Alongside the questions about responsibility and costs of the clean-up, the spill has raised broader issues about state secrets that go to the heart of Israel’s social contract with its citizens.

The oil leak sprang from a pipe owned by Israel’s most secretive company, the Eilat Ashkelon Pipeline Company, which was set up in 1968 as a 50:50 joint venture with Iran. EAPC has operated since its founding under a blanket state decree that shrouds its affairs in secrecy. Israel says the decree was issued for reasons relating to national security.

“Everything regarding the pipeline is secret, even the direction the oil is flowing,” says Leehee Goldenberg, a lawyer with Adam Teva v’Din, an environmental group that has brought a suit over the spill. “People deserve to know what is flowing through their backyard.”

The Israeli government has invoked the secrecy decree to request a gag order on a separate class action lawsuit brought by lawyers seeking damages on behalf of local property owners and others affected by the spill. The case is due to have a preliminary hearing in March.

Among the defendants in the lawsuit, which got under way last week, is Benjamin Netanyahu, prime minister, who was briefly acting as finance minister during a coalition crisis that coincided with the spill. The ministry exercises oversight powers over EAPC.

The finance ministry said this month that it was working to lift the secrecy order, most likely only for environmental matters. Moshe Kahlon, finance minister, has convened a committee to look at the blanket secrecy decree. The ministry declined an interview request from the Financial Times.

Israel took control of EAPC’s assets after the Islamic revolution in 1979, but Iran’s national oil company has for more than 20 years been seeking financial redress worth billions of dollars from it in international arbitration.

In the absence of a public explanation of who is responsible for the spill and EAPC’s affairs, Israelis have been left to speculate on why it is so secret. One theory is that the government is reluctant to lift the wraps on past business dealings and current arbitration with its regional arch-enemy, Iran.

“I think the secrecy around the spill is an outcome of the secrecy about the company,” says Tamar Zandberg, an MP with the leftwing party Meretz. “And the secrecy about the company is the result of the ‘I’ word being involved: Iran.”

EAPC declined an interview request, but in written replies to questions says that it “deeply regrets the damage done” by the spill and was working with the environment ministry and other authorities to restore the Evrona reserve. The FT has also interviewed environmentalists, lawyers, officials and others about the disaster and their views on the secrets of EAPC that the state may be seeking to hide.

Moving the line

Yehoshua Shkedy, chief scientist of the Israel Nature and Parks Authority, says the spill may have been caused “by negligence, a mistake”. EAPC’s workers were moving the pipeline in connection with construction of the new Ramon airport.

Mr Shkedy was part of a team that responded quickly to the spill. In Jerusalem, the government convened a special meeting. A command room headed by the environment ministry was set up in a nearby village. A bulldozer was brought into the Evrona reserve to dredge small ponds to contain the oil. Sewage pumping trucks were brought in to suck up the crude oil the morning after the disaster.

Israeli government and nature protection officials feared the oil would flow to the sea and contaminate the shorelines by the resort towns of Eilat, Aqaba and Egypt’s Taba — known for their clear blue water and coral reefs.

“The effort was to prevent oil from getting into the Jordanian kingdom and the Gulf of Eilat — to prevent another disaster in the sea and a political disaster,” Mr Shkedy says.

The state said this month, in a written response to Adam Teva v’Din’s suit filed in the supreme court in Jerusalem, that the planning authority did not receive a request for the work EAPC was conducting when the accident occurred. The company’s special status exempts it from some of the environmental and other regulations governing Israeli companies but the lack of permission is now said to be under investigation. According to several accounts, the construction work to secure the section of pipe that ruptured was poor.

EAPC declined to discuss whether it had applied for a permit, or the precautions it took when moving the pipe, because various investigations are under way. However, it said that all work on the pipeline was done according to applicable law.

The pipeline has leaked and polluted Israel’s southern Arava desert on other occasions, including in 1975 and twice in 2011.

Long-term impact

Workers for the NPA picked up seed pods from acacia trees contaminated by the oil to prevent gazelles from eating them. A few birds died during the clean-up, after mistaking the reflective surfaces of the oil puddles for water.

According to the Israeli state’s court filing, 15 hectares of land were affected by the leak and 22,000 tons of oil-
contaminated earth removed. A count of the reserve’s gazelles showed that nearly all of them had survived, as did the older acacia trees with deep roots. Mr Shkedy says the acacias are the reserve’s “anchor” species, meaning their environmental importance exceeds that of their physical mass.

A year later there is little visible evidence of the spill, as most remaining oil was covered by fresh sand during recent heavy rains. However, as the tractors and earthmovers worked, they found evidence of the 1975 spill in the reserve. A sheet of oil remained under the sand in the area of that spill. Because of contamination and blocking of rainwater, new acacias have failed to germinate — a sign of the 2014 spill’s possible long-term effects, environmentalists say.

“Under the top layer of sand, when you scrape it, it’s black or dark brown,” says Nitzan Segev, a researcher with the Dead Sea and Arava Research Center, pointing to evidence of the oil spill still lingering 40 years later. “We don’t find small or medium-sized acacia trees growing here.”

EAPC’s headquarters lie behind a fence in an industrial area of the Mediterranean city of Ashkelon, near the country’s second-largest independent power plant, Dorad, in which it owns a stake. The company’s pipelines and containers can accommodate crude oil, cooking gas and jet fuel. Imported oil destined for refineries in Ashdod and Haifa also pass through its facilities.

When the company was established, Iran under the Shah enjoyed a close relationship with Israel. The pipeline was set up as an alternative route to the Suez Canal after Egypt blocked it in the 1967 six-day war.

According to accounts of the time, Tehran wanted the project to be kept discreet. Marc Rich, the billionaire trader whose company was the predecessor to Glencore, used the pipeline to sell Iranian oil into Europe in the 1970s and kept the business going despite the 1979 revolution. As Iran has pursued Israel for lost assets, oil, earnings and accrued interest in arbitration, the decree cloaking EAPC in secrecy has remained in place.

Ha’aretz, the left-leaning Israeli newspaper, which has reported extensively on EAPC, calls it one of Israel’s “most secret clubs”. The company is chaired by Yossi Peled, a former minister without portfolio in Mr Netanyahu’s last government. According to Ha’aretz, EAPC’s main shareholder is APC Holdings, based in Halifax, Canada, and other shareholders include the Panamanian Eilat Corporation. The company, pressed by the FT, would not discuss its shareholders or board members.

EAPC does not publish financial results or disclose what if any royalties it pays to the Israeli state. Reports on its activities are subject to press censorship. The company was granted a 49-year concession to operate the pipeline, its tanker terminals and storage facilities which expires in 2017.

“Having covered national security and foreign policy for almost 30 years, I have never encountered a more sensitive topic in terms of getting the facts from sources reluctant to talk,” says Aluf Benn, Ha’aretz’s editor-in-chief.

Iranian role

One widely held view among lawyers and environmentalists is that Israel does not want details of the company’s finances made public for fear of helping the Iranians’ case in arbitration, which Tehran has pursued in France and Switzerland since 1994. In 2015 a Swiss court ordered Israel to pay Iran compensation worth $1.1bn, but the Israelis ruled out paying what it calls an “enemy” state.

“If Iran holds shares in the company, theoretically as a shareholder you [the Iranians] should get dividends,” Asaf Pink, one of the lawyers leading the class action suit, says when asked why he thinks EAPC’s affairs are secret. He also suggested another reason for the secrecy: “There may be crude oil running through this pipe coming from governments we don’t have pacts with.”

The FT reported last year that Israel became a major importer of oil from Iraq’s semi-autonomous Kurdish north. Some of that Kurdish oil is delivered to Israeli refineries in pipelines controlled by EAPC, while some are put into the company’s storage tanks before being re-exported. Israel officially classifies Iraq, as it does Iran and Saudi Arabia, as enemy states and prohibits doing business with them.

When asked about this, EAPC said it did not disclose details concerning its clients. It also declined to discuss the arbitration. On why secrecy is still so important, the company says that this is under review. It also says that there are no such restrictions on environmental matters.

“The company invests considerable resources in preventive maintenance of its pipeline system, including planned maintenance and repair of piping in accordance with the strictest international standards,” it says.

Hagai Kalai, another lawyer involved in the civil suit, says of the confidentiality around the pipeline: “It might be a simpler explanation. Once you have secrecy, you don’t want to give it up.”

In the Arava desert, Elli Groner of the Dead Sea and Arava Science Center points out that the region, with its abundant sunlight, could meet much of its needs with solar energy, and does not need the pipeline’s oil.

“The oil spill is the straw that broke the camel’s back,” he says. “The solution is to take the oil out of the pipeline.”

In a sign that EAPC may be forced to become more accountable, a criminal investigation has been opened by Israel’s “Green Police” — an investigative unit within the environment ministry — to determine responsibility for the leak. Separately, the state attorney’s office on January 18 filed charges in Ashdod magistrate’s court against several people, including a former chief executive of the EAPC, over two leaks of jet fuel from the pipeline in 2011, which fouled another nature reserve.

Some Israelis are framing the secrecy surrounding the company within a broader critique of a rightwing establishment that uses security issues to decide other matters of national importance over their heads.

Mr Netanyahu also invoked national security to push through a controversial framework for exploiting natural gas reserves, which has been condemned by leftwing critics. “The rule should be that everything is open, except what is confidential,” says Ms Zandberg. “However, the rule is total confidentiality and the rest is the exception.

“It’s something that’s easy to overlook until there’s a disaster.”

Additional reporting by David Sheppard

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