The West Bank settlement of Beit Haggai lives on earnings from a stone quarry it received as a ‘gift’ from the state. But the High Court of Justice may soon stop work at the quarry and force the government to rethink the way it exploits natural resources in the territories.
By Shay Fogelman

Even in the hottest week of the year, a pleasant wind swirls atop the hill on which the settlement of Beit Haggai is located, in the southern Hebron hills. It’s a dry, southeastern wind, from the desert, but it’s enough to cool the body, even when the temperature is 42 degrees Celsius in the shade. A religious-educational youth village now stands on the hilltop site where the first 80 trailer homes of the settlement were placed. The lawn is green, the buildings are well maintained and the clean residential units await the arrival of the 50 youngsters, aged 13-18, who will be returning from summer vacation.

The school in the youth village offers three tracks: metalworking, carpentry and agriculture. With the knowledge they acquire and the encouragement of the staff, the students maintain the village, take care of the animals in the petting corner and tend to the vegetable patch, whose produce is sold in the weekly farmer’s market in the settlement of Kfar Etzion.
Main road to Beit Haggai

This is perhaps the last chance for dozens of youths from religiously observant homes who have temporarily lost their way. The youth village staff talk about the complex daily challenge they face in working with these youngsters, who suffer from many forms of emotional and mental distress that sometimes run deeper than those of their secular peers. But despite the difficulties, the village is very proud of its success.

“Two graduates of my group were recently drafted into special [army] units,” says Kobi Eyal, the coordinator of village housing. Similarly, Joe Bornely, the village treasurer and administrative director, recounts with pride that a few of the youngsters from the village served in army combat units and “integrated normatively into regular life.”

But this well maintained institution faces an uncertain future. A large portion of its budget comes from the profits of a stone quarry to which Beit Haggai has the rights. A year ago, Yesh Din – Volunteers for Human Rights asked the High Court of Justice to close down the quarry, along with the eight other Israeli quarries operating in the West Bank.

Yesh Din argued that under the international conventions and laws to which Israel is bound, Israeli firms are prohibited from quarrying and enjoying the profits of quarries in occupied territories. Attorneys from the law firm of Michael Sfard, who represent the human rights organization, are drawing primarily on two regulations in the Hague Convention, which set forth the general framework for the application of force in an occupied area. Israeli courts have addressed issues relating to the two regulations on many occasions. Indeed, the two clauses form the crux of almost the entire controversy over the settlement project and Israel’s other civilian activities in the territories.

Interpretation of the two regulations is in dispute, and the convoluted interpretations that have been set forth by the two sides in this case are diametrically opposed. One side argues that quarrying is totally banned, the other that it is not only the right but also the duty of the occupier to quarry and extract minerals from the occupied territory. According to several prominent jurists, the Yesh Din petition is political in character, not least in light of the fact that the organization does not directly represent the interests of the Palestinians who are said to be adversely affected by the quarries. To reinforce this opinion, they note that the question of the quarries came up in the talks with the Palestinians over the interim agreements following the Oslo accords, but because final status agreements were never discussed, nothing was finalized.

The state’s response to the petitioners also claimed that the petition is too general, as it does not differentiate between the different quarries, and that it was submitted too late. The quarries, the state says, “underwent allocation procedures and public planning procedures, in some cases many years ago,” and “large resources were invested in the establishment and implementation of the quarries.”

Attorney Shlomy Zachary, from Sfard’s firm, who represents Yesh Din, rejects the accusation that the petition is political. “The purpose of the petition is to demand an end to activity which is prima facie illegal and might even amount to a war crime,” he says. “Court judgments in Israel and internationally have found that occupied territory cannot be used for economic exploitation or to maximize the occupier’s economic and national interests. International law views a situation of occupation as an unavoidable evil for a temporary period, not as a platform for the exploitation of resources.”

Yesh Din hopes that the petition will oblige the High Court to adopt a clear and unequivocal position on the most burning issues in the state’s relations with the occupied territories. Whatever decision the court makes is likely to have critical implications not only for the future of the quarries but for the entire settlement enterprise.

Joie de vivre

The slopes of the hill west of the youth village in Beit Haggai are speckled red by the tile roofs of the settlers’ homes, which were built in the 1990s. The construction of a few homes in a new neighborhood was recently completed on the eastern slope, and the inhabitants are scheduled to move in within a few weeks. The settlers hope that after the construction freeze ends, more homes will be built.

An advertising brochure issued by the settlement promises, “Here you will be able to realize your dream already now, without living a mad life of economic worry and without subjugating your life to the bank. Here you will find open spaces, the quiet of nature, far from the bustle of cars and the noise of machines. Here you will find cultivated, green streets and expanses of a breathtaking hilly landscape.”

Life is good in Beit Haggai, the settlers say. The air is sweet, the view fine, the community strong and supportive. In the past few years the settlement enjoyed a positive migration balance: more people moved to Beit Haggai than left. According to Reuven Tal, a member of the settlement’s secretariat, beyond the arrival of a few families from the evacuated Gaza Strip settlements in 2006, last year alone 12 families moved to Beit Haggai with great success. A video clip that was uploaded to YouTube to mark last Independence Day shows a few of the newcomers speaking in praise of the way of life and the community of Beit Haggai. The brochure says that residents of the settlement are “a happy, very optimistic group, an educated society most of whose members are busy with the needs of the public and concern for the community. People with a smile who project joie de vivre, calm and goodness.”

There’s good reason for the residents of Beit Haggai, which this year celebrates the 25th anniversary of its founding, to be pleased with life in the settlement. In 1991, six years after its establishment, the state, through the land settlement unit of the World Zionist Organization, granted it a 49-year lease to operate a quarry. This was done, the official documents state, “both for the development and consolidation of the settlement, and for the development and support of the youth village that was established in Beit Haggai.”

Most of the residents of Beit Haggai who were interviewed for this article have never visited their quarry. It is located close to the Green Line, 22 kilometers away as the crow flies and almost an hour’s drive from the settlement. Many of them have often passed by it, but they say they have never taken any particular interest in its operation.

Only one resident of the settlement is employed in the quarry; all the rest are Palestinians, most of them from the town of Dahariya. Management is by an external contractor, the Madan company. In return for quarrying rights, Madan pays the settlement royalties for every ton of gravel and stone it extracts from the site. The payments are pretty much the only connection between the settlers and the quarry. According to the response of the quarry and the settlement to the court petition, the royalties constitute 80 percent of the settlement’s revenues. The agreements between the quarry and Beit Haggai are classified, but people in the know say the royalties amount to more than NIS 1 million a year.

“In a small community there is a much closer connection with the individual,” says attorney Baruch Haikin, who is representing the quarry and the settlement in the court case. “This might be a small amount for a local council or a city,” he adds, “but in a settlement of 100 families, the impact of the cancelation of an annual income of this size can be very significant.”

“The same policy exists with regard to other settlements, and not only in the territories,” says Daniel Krichman, the head of the World Zionist Organization settlement division, which is responsible for establishing settlements in the West Bank, Negev and Galilee for the government, with full funding from the state budget. Krichman, who was appointed to the post less than a month ago, explains that the state grants “gifts” like these, based on clear regulations and criteria, to many communities, particularly in the periphery. He offers several examples of places that have been granted employment and infrastructure sources in industry, agriculture, tourism, crafts and business services. “One community was granted the right to build a hotel,” he relates. Others have received permits to establish cow sheds, chicken coops, industrial plants and other sources of livelihood across the country.

However, the case of Beit Haggai and its quarry is different from the examples cited by Krichman, because there is almost no connection between the settlement and its source of livelihood. The residents don’t work there and its environmental damage does not affect them, in contrast to Kibbutz Lahav (within the Green Line ) and the settlement of Eshkolot, which suffer from the dust thrown up by the digging, the dynamite explosions and the constant movement of heavy trucks. Krichman rejects these issues and says he does not intend “to deal with events of 20 years ago.”

The Beit Haggai quarry is considered the largest in the West Bank – there are two larger quarries in Israel. In another court case involving the quarry, dating back to 2005, its representatives said it sold three million tons of gravel and stone products a year, amounting to about a quarter of the output of all the Israeli quarries in the territories. According to the Civil Administration, 74 percent of the output of the Israeli quarries in the West Bank crosses into Israel, in addition to 80 percent of the output of the Palestinian quarries that operate in Area C (fully controlled by Israel under the Oslo agreements ). Data of the national master plan for mining and quarrying show that these quarries produce between 20 and 30 percent of Israel’s needs in these areas. Accordingly, stopping work in the quarries, as the Yesh Din petition calls for, will have a direct and indirect ripple effect extending far beyond Beit Haggai.

In its response to the petition the settlement stated, “The closure of the quarry will inflict extremely serious economic damage to the settlement, to the point of genuine existential danger.” Nevertheless, the residents do not seem overly concerned that the court will rule against them. Tal, from the secretariat, is certain the court will reject the petition, a view shared by many others in the settlement and by the youth village staff.

Optimism also reigns at Or Yosef, a kolel – yeshiva for married men, in this case rabbinical court judges – which has been operating in the settlement for five years. The institution, which was relocated here from the Gaza Strip settlement of Kfar Darom in the wake of the evacuation, currently has 15 students, most of them from Beit Haggai. Or Yosef, one of the most elite religious institutions in the West Bank, numbers some members of the sector’s “aristocracy” among its students. Requirements for admission are extremely tough, and the students spend hours every day poring over sacred texts.

According to Dubi Reisman, the settlement’s executive secretary, the scholarships that provide for the students’ living expenses, as well as the budget of the kolel, derive primarily from the revenues generated by the quarry. However, Noam Waldman, one of the students, says he is not worried. “The state,” he says, “will certainly provide the settlement with alternatives for a livelihood if the court rules against us.” As the son of Rabbi Eliezer Waldman, one of the founders of the Kiryat Arba and Hebron settlements, he probably knows what he’s talking about.

Financial lever

Israel began digging for minerals and other resources in the occupied territories immediately after the June 1967 Six-Day War, which brought the West Bank, Sinai, the Gaza Strip and the Golan Heights under Israeli rule. Already at the end of July 1967, personnel from the land settlement division were sent to dig water wells in the area of the present-day Etzion Bloc south of Jerusalem and at Latrun, halfway between Tel Aviv and Jerusalem. A month later, experts were dispatched to Sinai to survey oil wells, coal mines and the presence of minerals such as kaolinite and manganese.

Israeli stone and gravel quarries in the West Bank did not begin to operate until the early 1970s. Until then only two Palestinian quarries had existed in the area, but their low prices endangered the future of the Israeli quarrying industry.

In December 1968, following the closure of two quarries in Galilee due to competition, and under pressure from several MKs, the government imposed a special levy on construction materials imported from the territories. (The levy was revoked when Israeli firms started to operate in the West Bank, in 1972. ) In the 1980s, Israeli quarrying activity in the West Bank was greatly expanded; building the settlements demanded raw materials on a large scale. In addition, construction materials also started to find their way into Israel.

According to an individual who until recently was a senior officer in the Civil Administration, “Confidants and people with vested interests received very generous permits to operate quarries, without having to bid in tenders and without the authorities taking into account the long-term master plans or the implications for the environment and the landscape.” Nor, he adds, was the impact of the quarries on the local Palestinians ever taken into account.

Some of these problems were redressed by the Civil Administration at the end of the 1990s, following a report drawn up by Maj. Gen. (res. ) Rafael Vardi, who examined the procedures for granting licenses, permits and franchises for mining and quarrying. “Care should be taken,” Vardi wrote in his recommendations, “to ensure that former officials who have retired and are now employed by developers that have ties with the economic activity in the Civil Administration or in the District Coordination and Liaison Offices, are not employed in their reserve duty by these units, in which their present employers have vested interests.”

A survey of environmental hazards in the West Bank quarries that was carried out in 2004 by the Environmental Protection Ministry notes that “every request is considered separately; the overall systemic approach is insufficiently clear and is susceptible to changes. A plan exists for mining and quarrying sites in Judea and Samaria, but it is partial in character and has not been authorized. Not only are quarrying permits issued without reference to this plan, but in certain areas of Samaria, in which a national master plan for quarries is in effect, quarrying permits are also being given for additional areas. The result is that the amount being quarried is not subject to review and dualities sometimes exist, raising concern about over-quarrying. Even after a quarry has been authorized, there is insufficient review of its operation in practice and of whether the quarry meets the standards of air and noise quality. By and large, no plan currently exists for rehabilitating quarries in Judea and Samaria, in contrast to the situation within the State of Israel. Similarly, there is no fund for rehabilitating quarries in Judea and Samaria, so that effectively, each quarry is an irreparable wound in the landscape.”

The state comptroller also noted, in his annual report for 2005: “The Civil Administration’s handling of the Vardi report’s recommendations, which were adopted by the defense establishment, in regard to enforcing the restrictions on the work of former officers and officials in the Civil Administration shortly after their retirement from the IDF and from their work in the Civil Administration, was insufficient.” But the most important finding of the report about the activity of the Civil Administration was that for years, the custodian of government property and of abandoned property in the West Bank had not collected payment from government and private bodies for the use of state lands.

The state comptroller also found that royalties which the quarries, along with other civilian and governmental bodies operating in the territories, were supposed to remit to the Civil Administration were in practice being collected by the Israel Lands Administration and injected directly into the state coffers. This might look like a minor bureaucratic glitch, as a result of which a few million shekels were simply deposited in the wrong public pocket, but in summing up this issue the report spoke of a “protracted failure in dealing with these subjects.”

In return for receiving quarrying permits, the franchisees have to pay the Civil Administration a regular fee for use of the land and additional royalties for each ton of gravel and other materials they extract. The money thus received, according to the international laws and conventions to which the state is bound, must be used for the benefit of the local population or for local needs of the authorities. According to a senior official in the State Attorney’s Office, this was in fact the procedure that was followed until the signing of the interim agreements with the Palestinians in September 1995. In the wake of those agreements, it was decided that the royalties from the Israeli settlement project in the region would be incorporated into the budget of the Israel Lands Administration. The underlying assumption was that after the agreements came into effect, the activity of the Civil Administration would be substantially reduced.

Maj. Gen. (res. ) Oren Shachor, who was the head of the Civil Administration at the time, says he does not remember the details about the transfer of royalties. He does remember, though, that the quarries represented “a considerable financial lever in which quite a few people were involved.” The response of the Civil Administration to the state comptroller’s findings was: “The question of settling the debts for past allocations will be examined,” taking into account the fact that the expenditures of the Civil Administration exceed its revenues. However, beyond dealing with the accounting issue, the Civil Administration’s legal advisers understood that the state comptroller’s findings were liable to entangle the state in legal actions and cause serious political problems.

Around the same time, the prime minister received an internal memorandum from the assistant attorney general, Malchiel Balas, concerning a refuse dump near the West Bank city of Ma’aleh Adumim. Writing in a similar context, Balas noted that “the Supreme Court has dealt often with the issue of the long-term investments in Judea and Samaria, but in general has justified this when the investment was earmarked primarily for the benefit of the local population, by which is meant the local Palestinian population.”

Yet in the case of the quarries, for an entire decade the royalties were not used for the benefit of the local population, certainly not the Palestinians, while the majority of the quarries’ production was imported into Israel.

To address the implications of the state comptroller’s findings, joint working teams were set up urgently, composed of representatives from the Finance, Justice and Defense Ministries and from the Israel Lands Administration. One immediate decision was to channel the royalties directly into a separate fund that would be placed at the disposal of the Civil Administration – though according to a senior official in the treasury this was not implemented until recently. In the meantime, the working teams looked for a way to validate retroactively the apparent illegal use of the money.

A legal expert who until a year ago was employed in one of the relevant ministries and took part in several meetings of the working teams terms the process absurd and ludicrous. “At first we took literally the requirement of the law,” he says. “We looked for state investments in the territories in recent years that could be labeled as being undertaken for the good of the local population. The idea was that these investments would offset the royalties that did not reach the Civil Administration. We were astonished at the demand of the Civil Administration and the Defense Ministry to place under this rubric the separation fence, the police Shai [Samaria and Judea] District, ongoing army expenditures and a range of activities that are totally unrelated to the welfare of the Palestinian public in the territories.”

Subsequently, the legal expert continues, there was a demand to also include in this category the bypass roads and other infrastructure projects undertaken for the benefit of the settlers.

The treasury declines to specify which expenditures in the territories were ultimately used to offset the revenues of which the Civil Administration was deprived. According to a senior official who was involved in the activity of the working teams, “In the end, all the clauses bearing a character that did not benefit the Palestinian public directly were rejected.” This official adds that it was decided “to play it safe” and avoid including potentially controversial expenditures. As an example, he notes the demand to include the activity of the police Shai District, which costs about NIS 400 million a year, under this rubric. A thorough examination, he says, revealed that only about 5 percent of police activity in the region is earmarked for dealing with problems related directly to the welfare of the Palestinian public, such as road accidents, criminal activity and the like. Accordingly, it was decided that only NIS 20 million of this amount would be factored into the calculation.

Puzzling approach

In addition to the work of the interdepartmental teams, the state responded to the Yesh Din petition by noting that “without connection to the petition” the Civil Administration had recently decided not to authorize new quarries in the West Bank whose principal aim would be to extract material for sale in Israel. In addition, according to communiques issued by the Civil Administration, authorizations for continued quarrying will henceforth be given only to Israeli quarries with currently valid permits, to allow them to utilize the full potential of active sites. At the same time, as Amira Hass reported in Haaretz in April, the Civil Administration began to relax the procedures for licensing the operation of Palestinian quarries in Area C.

“I find the state’s response very peculiar,” says attorney Haikin, who represents Beit Haggai and Madan, the company that operates the quarry. “The state decided to freeze renewal of the contracts and permits for quarrying even before it looked into the matter. Why freeze things before deciding in an orderly way whether there is a legal problem here or not? For decades this activity was all right, so why the sudden decision to suspend it? The true implication of this decision is the state’s admission that all the legal advice it received was invalid and all those who dealt with the issue for decades were wrong. They seem to be admitting that, legally speaking, the state has until now behaved mistakenly in regard to the bulk of the economic activity in the region [of Judea and Samaria]. From a purely legal standpoint, this is a very puzzling stance.”

According to a former senior official in the Justice Ministry, the decision by the Civil Administration to freeze the work of the quarries was made in full coordination with the State Prosecutor’s Office. The official adds that the decision was correct, because “fresh thinking is needed about a great many aspects of operation of the quarries in the territories, and until matters are examined and a new policy set, it’s necessary to freeze what is now in operation.” According to this source, “There is history and there is the future. The mistakes of the past have to be corrected, but what’s more important is to avoid repeating them in the future. That’s why it was important, at the conclusion of the process in which government ministries examined the situation, for the existing rules of the game to change.”

Accordingly, the former senior official says, it was decided that a rehabilitation fund will soon be made available for the quarries in the territories, as in Israel. The fund, however, will operate differently from the one in Israel and will be more suited to the situation in the territories. In addition, it was decided to transfer to the Civil Administration a development fund to handle not only current expenditures but also new projects for the Palestinian population, such as construction planning, dealing with the water infrastructure, road improvements and so on. This will add about NIS 30 million a year to the budget of the Civil Administration, says a senior treasury official. He promises that funds will be included in the budget for 2011.

The former Justice Ministry official terms this a genuine policy shift. “The state comptroller’s report exposed them to so many suits that someone there grasped that the policy had to be changed,” he says. “The state will do the right thing by presenting matters this way to the court in the Yesh Din matter and also as protection against future petitions. But this is the cynical approach. Just maybe, a lightbulb went on for someone there about our general policy in the territories and its impact on the Palestinian population.”

Similarly, Reuven Tal, from the Beit Haggai secretariat, also fears that the state’s response is the harbinger of a new policy that is liable to affect the quarry’s future. “If continuation of the work is not authorized,” he says, “all the existing reserves will be depleted within a year or two and the quarry will be forced to close down.” That, he says, could have very serious consequences for the settlement. The majority of the residents are not closely familiar with the details, he explains, and therefore are not aware of the potential result. Unlike them, he is far less optimistic. “The kolel is budgeted largely from these funds. They also constitute a third of the youth village budget. You can raise funds for the establishment of a new residential unit and get donations for almost any project, but ongoing revenues to keep things going and maintain them are hard to come by,” he explains.

The youth village has about 35 employees, most of them from Beit Haggai, and the 15 students in the kolel are also mostly from the settlement. Two day care centers funded partly by the regional council also operate there. Simple arithmetic shows that at least half the settlers in Beit Haggai are largely dependent on the quarry’s revenues. Two youngsters spent the summer at the youth village, along with a few of the staff who maintain the institution and prepared it for the new school year. Bornely, the administrative director, proudly shows off the beds, which were built by the carpentry students, and the iron railings welded by those in the metalworking unit. Next to the stables he shows off the riding courtyard, for which the workers in the settlement’s quarry helped bring materials and level the ground.

All this is now in danger, say sources in the secretariat. Even if the court rules in their favor, the new policy of the Civil Administration and the judicial system will put a major crimp in the activity of the quarries and other Israeli industries in the territories. The state’s response to the petition and the remarks of legal advisers in government ministries show that they too apparently understand that the way the state has behaved in the occupied territories until now is no longer tenable.