2013 Annual Report
1. We have launched the Israeli branch of the Tax Justice Network (TJN IL), headed by Adv. Moran Harari. The professional advisory committee includes Prof. Joseph Edrey, (Haifa University), Prof. Ronen Palan (City University of London), Dr. Tamir Shanan (The College of Management), and Ms. Tamar Ben-Yossef (Formerly of the Ministry of Industry and Trade). 2. We have also launched a sustainability reporting division, directed by Mr. Liad Ortar, a former consultant and a leading figure in the Israeli CSR field.
2. The Friedrich Ebert Foundation has awarded TJN IL 10,000 Euros to fund a research on unitary taxation. 3. We have submitted a grant request to the Yad Hanadiv Foundation to fund the creation of an Environmental Entrepreneurship Clinic jointly with the Business School at The College of Management. 4. We have also applied to The Konrad Adenauer Foundation to support a conference on CSR and climate change.
i. Ofer Sitbon and Ronit Donyets-Kedar, Corporate Social Responsibility and Clinical Legal Education, Hamishpat 17 297-323 (2012) (In Hebrew) ii. Moran Harari, Ofer Sitbon, Ronit Donyets-Kedar, Aggressive Tax Planning and Corporate Social Responsibility in Israel, 12 Accountancy Business and the Public Interest pp. 1-46 (2013) iii. Ofer Sitbon The Rise of Global Corporate Responsibility: Mining and the Spread of Global Norms/Hevina S. Dashwood – A Book Review, 92 Bitachon Sociali 180-183 (2013) (In Hebrew).
The CSR Research Forum has been meeting 3-4 times each semester. There are seven sessions with experts from both Israel and abroad scheduled for the 2013-2014 academic year.
The final contract with the Resling Publishing House regarding the publication of a collection of essays on CSR and the public interest, edited by Dr. Ronit Donyets-Kedar and Dr. Ofer Sitbon, is due to be signed shortly. The articles for the book have been juried and are now in various stages of editing.
As part of our cooperation with the Center for Mediterranean Culture and Urbanism in the Bat-Yam municipality, we have formed a research group that will look into Corporate Urban Responsibility in the Israeli City. The chairs of the academic advisory committee will be Prof. Yishai Blank (Tel Aviv University) and Prof. Arza Churchman (The Technion). The group will begin meetings in 2014 and is expected to produce a first-of-its-kind collection of articles regarding urban corporate responsibility.
i. Confrences: Speakers: MK Shelly Yachimovich, chairwoman of the Labor Party and head of the opposition; Mr. Morris Dorfman, vice chairman of Israel’s National Economic Council; Attorney Dror Shtrum, head of the Israeli Institute for Economic Planning and the former Antitrust Commissioner; Ms. Yael Cohen-Faran, CEO of the Israeli Energy Forum (conference co-sponsor); and Dr. Ofer Sitbon, director of the CSRI.
ii. CSR in Israel and in Germany, June 2013 Co-sponsored by the Konrad-Adenauer Foundation. Speakers included, among many others, Professor Guy Mundlak of Tel Aviv University, Mrs. Hana Daum of the Randstad Deutschland corporation, and Dr. Yaad Rotem of the College of Law and Business. iii. Tax Justice in Israel, November 2013 The Institute inaugurated the Israeli branch of the Tax Justice Network with a public conference on the subject. Speakers included Mr. John Christensen, Head of TJN, who arrived from London; MK Zehava Gal-On, who presented the bill prepared by the Institute; Adv. Tali Yaron-Eldar, former income-tax commissioner; Miri Savion CPA, deputy director general at the Tax Authority responsible for auditing and review; and Mr. Itay Rom, a Channel 10 TV journalist. iv. ASessionsSessions at the Israeli Law and Society Association annual conference, December 2013 The Institute organized two of the sessions at the Israeli Law and Society Association’s annual conference. One session was concerned with practical application of CSR in Israel while the other centered on natural resources and distributive justice. In addition, Adv. Moran Harari and others presented a paper describing the field of tax and development in the Israeli context.
i. Business and human rights, March 2013 The Institute organized a workshop with two representatives from Business and Human Rights Resource Center, an international organization based in London which runs the most important independent database regarding issues related to corporations and human rights. The workshop was attended by representatives from various Israeli human rights organizations, in an attempt to raise among them the awareness to the duties imposed on corporations regarding their human rights violations. ii. Regulating CSR reporting, May, June and October 2013 The institute organized three public consultations with panels of CSR experts which focused on a legislation proposal, promoted by the Institute, that would require large corporations to publish sustainability reports. iii. The Financial Secrecy Index, November 2013 TJN IL held a round table on the Financial Secrecy Index published by the Tax Justice Network. Represented were academics from various universities. Lectures were given by Mr. John Christensen and Mr. Markus Meinzer – project manager at TJN who arrived from Germany – who described the global impact of the Index. Adv. Moran Harari presented an analysis of the Index in the Israeli context.
i. Financial industry regulation – Letter to the Finance Ministry on conflicts of interests among members of the Ministry’s committee examining private loans provided by Israeli financial companies. ii. Corporate governance disclosure – Letter to the Israeli Securities Authority on improving corporate governance disclosure in the 2012 annual reports. iii. Executive pay – Letter to the Israeli banks regulator on failures in one of the local banks executive compensation system. iv. Privatization – Letter to the Israeli Prime Minister and to the Finance Minister on a possible deal to sell the controlling shares at the Israeli energy company, Israel Chemicals, to the Canadian company Potash and its potential implications on the Israeli economy. v. The participation of institutional investors in stockholder meetings – letter to the Israel Security Authority and the Capital Markets department at the Ministry of Finance which opposes draft regulations that rescind some of the obligations imposed on institutional investors. vi. The strengthening of stockholders positions in public companies – letter to the Ministry of Justice with remarks on the draft regulation regarding the strengthening of the position of stockholders in public companies. vii. Gas drilling licensing – letter to the Gas and Oil Supervisor in the Ministry of Energy and Water to abide by the Oil Law and to protect the public interest with regard to the drilling licenses he distributed.
i. Corporate debt arrangements – Recommendations on capital markets reform submitted to the Israeli government’s team on corporate debt arrangements. ii. Regulation in Israel – The Institute’s recommendations regarding the need to strengthen the communication and the information sharing between various regulators were incorporated into the final report of a governmental committee that was nominated in order to improve Israels regulatory structure. iii. Tax justice – Recommendations on corporate tax reform submitted to the Knesset’s Finance Committee examining the necessity of tax benefits to large companies in Israel. iv. Increasing the State’s share in its natural resources – the Institute submitted a position paper to the a Committee appointed by the Finance Minister that pointed to the need to organize tenders for bidding as a fair method to allocate mining or drilling rights.
i. Petition to the Israeli Supreme Court against the decision to export Israel’s natural gas not through a parliamentary decision (rejected by a 5-2 vote) – The Institute submitted a petition on behalf of four MKs (Israeli Parliament) and two environmental NGOs. The petition argued against the June 2013 decision by the government to allow export of the natural gas found in Israel’s territorial waters. The petition claimed that the arrangement set forth in the 1952 Oil Law constitutes insufficient grounds for the government’s decision in the matter. The petition received significant attention from the press, initiated a public debate on the issue and formed the culmination of the public resistance to the export of the gas. Note that the rationale for the decision has not yet been published. ii. Petition leading to the disclosure of the protocols of a governmental committee charged with developing policy guidelines vis-à-vis the export of natural gas; the Institute was awarded expenses – As a result of the Institute’s petition to the Jerusalem District Court, the Ministry of Energy and Water agreed to disclose the protocols of the Tzemach Committee that dealt with formulating the proposed government policy in the field of exporting natural gas from Israel. The Institute was awarded expenses and a refund of the court fees. iii. Amicus Brief in a corporate derivative suit – The Economic Department at the Tel Aviv District Court decided to allow the Institute to file an amicus brief in a derivative suit brought against the corporate officers at Bezeq, a large communications company in Israel. The suit was brought in relation to a leveraged buyout (LBO) pursued by the controlling shareholder at Bezeq with the Institute arguing that he applied a section of the Israeli Companies Law that was never intended for such a scheme. The court’s decision was the first time that the Economic Department accepted an Amicus Brief since its establishment in 2011. iv. Follow up on the Intern-Doctors lawsuit to end 26 hour hospital shifts – The Institute continues to provide legal aid to the Intern-Doctors in their lawsuit to end 26 consecutive hour shifts at hospitals. This lawsuit was chosen by The Marker, Israel’s leading economic newspaper, as one of the most influential court actions in 2012. v. Administrative law petition against the privatization of prisoner rehabilitation – In response to the Institute’s petition (together with the CLB Clinic for prisoners’ rights) to the Jerusalem District Court against the Government’s decision to privatize hostels for prisoner rehabilitation, the Government announced that it will freeze all privatization processes in relation with these hostels.
i. The Knesset passed the Business Concentration Law, including a clause on self-dealings proposed by the Institute – ii. Drafting the Corporate Responsibility bill (mandatory reporting) – Following an invitation by the Knesset, the Institute drafted the Corporate Responsibility bill (mandatory reporting) that would require corporations to file social and environmental responsibility reports. As part of this effort the Institute held three public consultations with a panel of experts in CSR and environmental sustainability. One of the meetings was attended by MK Eitan Cabel who will submit the bill in May 2014 alongside the launch of the Knesset’s Corporate Responsibility Caucus. iii. Drafting the Country-by-Country Reporting Bill – The Institute has prepared a draft bill that would require large corporations to annually disclose their income in the various countries in which they are active. This legislation would be following similar moves in the United States and in the European Union as part of the global effort to combat corporate tax evasion. The bill was drafted under the professional direction of a CPA, and was submitted to the Knesset by MK Zehava Gal-On and ten members of the financial affairs committee – from both sides of the aisle. The Bill is currently debated with Government officials in order to receive the Government support.
i. Participation in the debate on the ‘trapped profits’ – the Institute was invited to a debate With the Head of the Tax Authority on the issue of the ‘trapped profits’ before the Knesset’s Audit Committee. At the close of the meeting the Institute presented its position regarding the formation a commission of inquiry to study the question. ii. Participation in the debate on disclosure of bank clients’ credit rating – The Institute was invited to a debate in the Economic Affairs Committee, convened to discuss the Banking Commissioner’s plan to compel banks to provide each client with a full report of their debts, assets and intra-bank credit rating. The Institute, argued that although such a report may increase competition among banks, the disclosure of clients’ credit ratings may hurt middle-class households – as happened in the United States in its recent economic crisis.
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