Regulatory Blind Spot Enabled Chinese Haifa Port Takeover

The deal to give a Chinese company control of Haifa port in the coming years, which has alarmed the Pentagon, was due to a blind spot in the Israeli regulatory system that has to be corrected, former Israeli acting National Security Advisor Yaakov Nagel wrote on Wednesday.

With a Chinese company running the port, the U.S. Navy might decide not to dock there for fear that its operations could be exposed to Chinese espionage, according to recent media reports.

Nagel pointed out in an op-ed piece that appeared in The Jerusalem Post on Wednesday that China also “has its eyes on the port of Ashdod, the underground tunnels and control systems in the northern Carmel mountains, Tel Aviv’s underground tunnels and their control systems, and Israel’s public transportation system.”

Senior Israeli officials have been conducting an urgent review of the China deal in response to queries from the Pentagon. But many have been asking how such an agreement could have been signed without prior consultation with senior decision-makers in Israel, as well as U.S. defense officials.

“The answer,” Nagel says, “is actually quite simple. Until recently, investment in major civilian infrastructure was not viewed as a national security concern or even a diplomatic issue. Under the current regulatory status, these issues don’t even reach the relevant decision-makers because they are not categorized as defense and security related issues. The relevant ministries, like the Ministry of Transportation (for the Haifa port case), are making the decisions from their very narrow point of view. This is a failing in the Israeli bureaucracy system and a challenge that Israeli leadership will hopefully address.”

To fix the problem, Nagel proposes “an inter-agency regulatory committee headed by the Prime Minister’s Office (NSA+DG), with participation from all relevant players. This committee should have real licensing authorities and not merely recommendation from the authorities.”

In fact, he advocates a broad rethink of the increasing Chinese penetration of strategic points in the Israeli economy and infrastructure that could someday pose a major security threat.