What Are The Israeli Judicial Reforms?
Introduction
Since Prime Minister Benjamin Netanyahu and his far-right allies’ ascension to office in December 2022, weekly protests have become a standard feature of the Israeli political landscape on Saturday evenings. The intensity of the events above escalated after the presentation of the ruling coalition’s proposal to modify the nation’s judicial system by Netanyahu’s cabinet in January of 2023. Since the start of the year, significant weekly demonstrations have been organized by individuals who oppose the government’s proposed reforms. The size of the rallies has increased as thousands of individuals have been congregating in Tel Aviv, which serves as the commercial center of Israel, as well as in other towns and cities throughout the country. The demonstrators have asserted that the reforms ought to be annulled and that the resignation of Prime Minister Benjamin Netanyahu is imperative. The rallies have been spearheaded by the political adversaries of the individual in question, even though opposition to the measures has transcended partisan boundaries. A noteworthy development is the expression of discontent by many of Israel’s military reservists, who constitute the fundamental pillar of Israel’s military. This has manifested through their threats to abstain from work, raising concerns that this matter threatens Israel’s security. The outcome of the recent election for the Israel Bar Association, which resulted in the election of Amit Becher, a member of the opposition, has had an impact on the power dynamics within the Israeli government. Israel is currently experiencing a potential period of political instability and unrest due to the opposition’s suspension of discussions on judicial reform. At the same time, the government coalition is set to introduce a reform bill on the upcoming Sunday.
Background
According to the prevailing belief, the genesis of the situation can be traced back to November of 2019, when Benjamin Netanyahu was indicted on charges of fraud, breach of trust, and bribery following three years of investigation. The Attorney General, Avichai Mandelblit, pressed charges against Netanyahu following an investigation into allegations of accepting gifts from affluent acquaintances and purportedly attempting to obtain certain benefits. In June of 2021, Yair Lapid, a centralist Israeli politician, was able to effectively assemble a unique coalition consisting of liberal, right-wing, and Arab parties, resulting in the removal of Netanyahu from office after serving as Prime Minister for more than 12 years and installing the far-right politician Naftali Bennett in his place.
In January 2022, reports were disseminated in both local and international media outlets indicating that negotiations were underway for a plea bargain to be reached by the 73-year-old Netanyahu, intending to end his legal proceedings. However, it was reported that negotiations had encountered an impasse due to Netanyahu’s insistence on being exempted from a conviction that carries a “moral turpitude” provision. This clause is considered to be morally reprehensible. In November 2022, Israel’s legislative body Netanyahu as the Prime Minister paving the way for the nation’s most conservative government with a strong emphasis on religious beliefs. In January 2023, shortly after assuming office, Justice Minister Yariv Levin proposed reforming the Israeli judicial system, which has been criticized by various quarters.
1. The potential curtailment of the Supreme Court’s authority to scrutinize and invalidate legislation is a matter of concern, as a mere majority of one within the Knesset would suffice to override judicial rulings.
2. The augmentation of the government’s representation on the committee responsible for appointing judges, including those in the Supreme Court, would confer a significant degree of influence in the selection process.
3. Under the current legal framework, ministers must adhere to the guidance provided by their legal advisors, overseen by the attorney general. However, a proposed amendment would remove this requirement, granting ministers greater autonomy in decision-making.
A legislative reform has been enacted, which entails revoking the attorney general’s authority to declare a currently serving Prime Minister unsuitable for their position.
However, in late March, Prime Minister Netanyahu delayed a crucial aspect of the legislation, which aimed to significantly politicize the judicial selection committee, for at least one month. This decision allowed for sufficient time to reach a broad consensus.
Situational Update
1. The ongoing dispute regarding judicial reform has been intensifying over several months. However, in April, the situation escalated further when Prime Minister Netanyahu dismissed his Defence Minister, Yoav Gallant, following the latter’s recommendation to halt the legislative process temporarily.
2. It is possible that the proposed reforms have the potential to significantly erode the democratic fabric of the nation by diminishing the efficacy of the judiciary, which has traditionally served as a crucial mechanism for restraining the government’s exercise of authority.
3. There is firm resistance towards the current governing body, considered the most conservative in the history of Israel.
4. The proposed reforms aim to protect Mr. Netanyahu, who is presently facing allegations of corruption and has denied the charges. Additionally, the reforms are expected to facilitate the government’s ability to pass laws without encountering any obstacles.
5. The progress of Israeli Judicial Reform negotiations has been halted until a crucial vote on the Judicial Selection Panel is conducted.
6. On Tuesday, Amit Becher was elected as the head of the Israel Bar Association, giving him the power to select the country’s judges.
RISKS INVOLVED:
1. The proposed reform entails a reduction in the Supreme Court’s authority and a transfer of power to the Knesset, which is currently dominated by Prime Minister Netanyahu’s Party, thereby granting it significant influence over the process of judicial appointments.
2. The proposal would steer Israel towards a political framework akin to that of Hungary and Poland, whereby the governing leader possesses significant authority over fundamental governance mechanisms.
3. The nationalist allies of Netanyahu are advocating for the reduction of the Supreme Court’s power to facilitate the establishment of additional settlements on territories where the Palestinians seek to establish a state.
4. The forthcoming demonstrations will likely prioritize historically favored locations like Rabin, Habima, and Dizengoff squares for nationwide protests, including notable public plazas, urban hubs, and government offices.
The Geopolitical Angle
The judicial reforms concerned not only Jewish society in Israel but also American Jewish organizations who have also raised their concerns. President Biden has emphasized the significance of an autonomous judiciary and the necessity of attaining agreement on essential government modifications in the US and Israel. In contemporary times, it is infrequent for the President of the United States to criticize Israel explicitly, considered one of the nation’s foremost allies.
Israel’s transition towards a de facto autocratic regime could weaken Israel’s diplomatic ties with the United States, which some argue is a justifiable outcome. The alliance between the United States and Israel is founded upon and maintained through their mutual commitment to democratic principles. Moreover, the US must maintain close ties with Israel and cooperate to attain their respective geopolitical objectives in the Middle East and other regions.
Business Implications
The Israeli economy is anticipated to experience adverse effects due to domestic political turmoil and ongoing protests.
1. Investment and business departure from Israel: The current situation in Israel can prompt an increase in the number of foreign companies departing from the nation, particularly in light of growing concerns surrounding the potential curtailment of autonomy for judicial and legal establishments. The policies of the Netanyahu government have resulted in institutional turmoil and instability within Israeli society, as well as increased tensions with the Palestinians. This may deter foreign investors and clients from finding Israel’s business environment appealing. There have been reports that many international institutions and companies, including but not limited to WIZ, Unicorn, SKAI, and Papaya Globa, have recently relocated their business operations from Israel. The heads of Israeli banks conveyed to Minister of Finance Bezalel Smotrich on February 14th that there has been a significant increase in the rate of capital outflow from Israeli banks, reaching ten times the usual rate.
2. The stock market took a nosedive recently: On February 12th, the Tel Aviv Stock Exchange experienced a significant downturn due to the ongoing political turmoil stemming from the initiative to curtail the authority of the High Court. The Tel Aviv-35 Index, which comprises the 35 most prominent companies in Israel, experience a decline of 1.92%. Similarly, the Tel Aviv 125 Index witnessed a drop of 2.27%, and the shares of the Tel Aviv-90 Index decreased by 3.31%. Similarly, a significant decline of 3.43% was observed in the stock index for the actual state.
3. The devaluation of the Israeli Shekel: The depreciation of the shekel via dollar has persisted, as evidenced by the exchange rate surpassing 3.56 shekels per dollar on February 16th. Citigroup projected February 21st regarding the potential decline of the shekel’s exchange rate to 3.95 against the dollar if the vote on the judicial reform plan proceeded. Consequently, the continuation of the crisis may result in heightened economic and political ambiguity within the nation, thereby causing a further depreciation of the shekel’s value and instability in the Tel Aviv Stock Exchange.
4. Significant harm to the high-tech industry: The ongoing crisis, if prolonged, is anticipated to have a detrimental impact on Israel’s advanced technological industry, commonly referred to as “high-tech,” which is widely regarded as the foundation of the Israeli economy. This assertion holds particular validity in light of the outflow of overseas investment, which comprises most of the capital allocated to this industry. Notably, a considerable number of workers in the technology industry staged a cautionary strike in Tel Aviv on January 24th of this year, advocating for the fundamental principle that high-tech cannot exist without democracy. Similarly, many technology startups actively engaged in a strike on April 13th, 2023, while special high-tech investment funds opted to divest from Israeli banks and relocate their operations overseas. This substantiates the detrimental impact that this particular industry will suffer if the present crisis persists.
5. Possible Adverse Impacts on Financial Contributions to Israel: Several Jewish communities in various cities across Europe and America have recently organized demonstrations to denounce the proposed “judicial reform” plan, accompanied by increasing political tension with Israel. The ramifications of the discernible engagement of the Jewish diaspora extend beyond the provision of ethical and communicative backing to the protests taking place within Israel. Moreover, its actions reinforce the unfavourable perception of the present administration, which is predominantly characterized by far-right ideology. Consequently, this strengthens the apprehensions of foreign corporations regarding their presence and investment in Israel, alongside adverse effects on monetary contributions to Israel, particularly within the US, and a reduction in the credit rating of the Israeli economy.
Analysis
A thorough analysis of the proposed reforms reveals a justifiable apprehension regarding their implementation. Implementing structural reforms to reduce the judicial and legal oversight of government and Knesset operations will entail several significant changes that will effectively overhaul the judicial system. Granting the government complete discretion in appointing judges across all courts would undermine the judiciary’s autonomy, compromise the judge’s professional integrity, and introduce political influences into the legal system. Furthermore, the Israeli government is advocating for additional actions to enhance the consolidation of unregulated authority within the legislative branch, including intensifying political oversight over the military and police, closing down the public broadcaster, and significantly restricting the ability to engage in strikes.
Sources: Web articles from Reuters, BBC, AJC, The National, Aljazeera, and The Jerusalem Post. Interregional.
MA International Studies
Christ University, Bangalore
Impact of Israel’s ongoing protest related to the nation’s judicial reforms
