1
PRELIMINARY DRAFT – PLEASE DO NOT CIRCULATE
The (UN)Constitutionality of Privatized Prisons –
Lessons Learned from the Israeli Experience

Hillel Sommer, Guy I. Seidman
The Interdisciplinary Center (IDC), Herzliya, Israel

Part I – Introduction
Since the late 1970s, Privatization has proliferated in many countries
around the world. Governments chose to privatize State held assets and
services, sometimes whole sectors, for myriad economic, social and political
reasons. In Israel this process started relatively late, gathering momentum
from the mid-1980s onwards. Generally considered as part of Israel’s
conversion from a social-democracy to a neo-liberal economy, the change
has been achieved with limited public resistance. Critique focused on job loss
and on the severe attrition of the welfare state which endangered Israel’s hard
won social rights. As this process took place, Israel’s highly activist Supreme
Court kept out. Probably viewing the process as a legitimate economic policy
that may be chosen by Israeli governments, the Court has avoided any effort
to regulate or limit privatization. This is – until now. In November 2009 the
Israeli Supreme Court ruled in The Human Rights Program v. The Minister
of Finance1 that privately-run prisons are unconstitutional in Israel. The broad
legal and political-science terms in which this decision was framed suggests
significant implications on the future of privatization in Israel but are also
easily relevant and applicable to other Western nations, grappling with the
core duties of the modern nation state.2
1

HCJ 2605/05 The Human Rights Program v. The Minister of Finance (2009) available at:
http://elyon1.court.gov.il/files/05/050/026/n39/05026050.n39.pdf (in Hebrew). All translations
are ours, except as otherwise noted.
2 In a somewhat different context, several European national courts grappled with the
question of what powers must remain in the hands of the nation states in reviewing the

2
This paper has five parts. Following this introduction, Part II, provides a
brief overview of Israeli constitutional law and its special characteristics, to the
extent required for understanding the case at hand. Part III provides a brief
overview of the Israeli privatization process, providing the socio-economic
context for prison privatization. Part IV, describes the Israeli present case, the
arguments on both sides, and the court's reasoning. Part V provides our
critical analysis explaining how the decision of the Supreme Court is
problematic from both constitutional law and policymaking perspectives. We
end the paper by trying to evaluate the impact off the case on areas of
privatization – in Israel, and potentially, way beyond.

Part II – Israeli Judicial Review Powers – a Primer
When the State of Israel was established, in 1948, its Declaration of
Independence stated that a constituent assembly was to be elected within just
a few months with the goal of adopting a constitution shortly thereafter. The
process was outlined in resolution 181 of the United Nations General
Assembly which provided for the establishment of the state of Israel.3
For political and historical reasons the “original intent” of creating a
constitution, never fully materialized.4 In 1950, the prospect of reaching a
constitutional text approved by a wide majority was not promising. The
Constituent Assembly established to write Israel’s constitution reacted to the
impasse by declaring itself as Israel's legislature – the Knesset. The Knesset
subsequently adopted a resolution which abandoned, at least temporarily (i.e.,
from 1950 to date), the effort to reach a comprehensive constitution. Instead,
the Knesset decided to work separately on drafting “Basic Laws”, each

domestic
constitutionality
of
the
EU’s
Lisbon
Treaty.
See
http://www.germanlawjournal.com/index.php?pageID=2&vol=10&no=8
3
For a text of the Resolution, see http://www.yale.edu/lawweb/avalon/un/res181.htm. On the
history of the declaration see Yoram Shachar Histories of Legal Transplantations: Jefferson
Goes East: The American Origins of the Israeli Declaration of Independence 10 THEORETICAL
INQUIRIES L. 589 (2009).
4
For a more detailed account, see Daphne Barak-Erez, From An Unwritten To A Written
Constitution: The Israeli Challenge In American Perspective, 26 COLUM. HUM. RTS. L. REV.
309, 312 (1995); Amos Shapira, Why Israel Has No Constitution, But Should, And Likely Will,
Have One, 37 ST. LOUIS U. L.J. 283, 285 (1993); Dalia Dorner, Does Israel Have A
Constitution? 43 ST. LOUIS L.J. 1325; Barak Cohen, Empowering Constitutionalism with Text
from an Israeli Perspective 18 AM. U. INT'L L. REV. 585 (2000).

3
relating to a different constitutional subject, and enact each of them as a
separate act of Parliament, in its capacity as the Constitutional Authority. The
Knesset decided that only upon the completion of the process, all of the Basic
Laws would be combined into a single-document Constitution.
Since 1950, eleven Basic Laws were enacted. Yet until 1992, all Basic
Laws were structural in nature - empowering the branches of government and
other State institutions.5 Laws protecting civil rights were not enacted until
1992, primarily because it was hard to overcome the differences of opinions
on such delicate matters.
This does not mean that civil rights were not recognized and protected
in Israel. The Israeli Supreme Court established by way of case law many civil
and human rights of the kind that are usually stated in written constitutions.
The freedom of expression, freedom of movement and many other rights were
recognized as fundamental rights, and enforced by the Israeli Court. In the
absence of a written constitution and without any statutory authority to do so
the Court found the legal basis for upholding these rights as arising from the
“nature of Israel as a freedom-seeking democratic state”.6 As Professor Gelpe
notes, the Israeli Supreme Court “[N]ot only developed the norm that such basic values exist, but
also developed the principle that statutes should be interpreted
to avoid impairing these values. The Court reads statutes in
such a way as not to violate the rights it has recognized. The
Court also uses the values when reviewing the validity of
administrative actions. Administrative actions that violate the
basic values are held invalid . . . Again, the Court developed
this approach. The approach is inherent in the Court's
understanding of the meaning of a basic value”7

5

These nine Basic Laws are: Basic Law: President of the State, Basic Law: The Knesset,
Basic Law: The Government, Basic Law: The Judiciary, Basic Law: The Army, Basic Law:
Jerusalem, the Capital of Israel, Basic Law: Israel Lands, Basic Law: The State Comptroller,
and Basic Law: The State Economy. English translations of the Basic Laws are available at
http://knesset.gov.il/description/eng/eng_mimshal_yesod.htm. The two remaining Basic Laws
enacted in 1992 are discussed infra.
6
H.C. 25/53, Kol Ha'am Ltd. v. Minister of the Interior, 7(1) P.D. 165; H.C. 243/62 Film
Studios Israel v. Levi Geri, 16 P.D. 2407.
7
Marcia Gelpe “Constraints on Supreme Court Authority in Israel and the United States:
Phenomenal Cosmic Powers; Itty Bitty Living Space” 13 EMORY INT'L L. REV. 493, (1999) at
508-509. Also see Barak-Erez, supra note 4.

4
In 1992, the Knesset passed two Basic Laws relating to civil rights –
Basic Law: Human Dignity and Liberty8 and Basic Law: Freedom of
Occupation.9 Basic Law: Human Dignity and Liberty lists a series of
enumerated constitutional rights, which include the protection of life, physical
integrity and dignity (Articles 2 and 4), the protection of property (Article 3),
personal liberty,10 (Article 5) the external freedom of movement (Article 6) and
the right of privacy (Article 7). Article 8 of Basic Law: Human Dignity and
Liberty allows the violation of rights "under this Basic Law" only by "a law
befitting the values of the State of Israel enacted for proper purpose and to an
extent no greater than is required."11
Shortly thereafter, in 1995, the Supreme Court handed down the Israeli
equivalent of Marbury v. Madison;12 in the Bank Hamizrahi case.13 In Bank
Hamizrahi, the Supreme Court held that both Basic Law: Freedom of
Occupation and Basic Law: Human Dignity and Liberty, are constitutional laws
in the sense that ordinary legislation which unduly contradicts or limits the
rights enumerated in them are voidable by the Supreme Court. The Supreme
Court thus held that it has the authority to exercise judicial review over the
legislation of the Knesset and to hold laws unconstitutional.14
Since that decision, the Supreme Court has declared several Knesset
Statutes partially unconstitutional and thus invalid.15 A Magistrates’ (first tier)

8

Basic Law: Human Dignity and Liberty, 1992, S.H. 150.
Basic Law: Freedom of Occupation, 1992, S.H. 114. Given the current political situation in
the Middle East it appears useful to clarify that "Occupation" is used as a synonym of vocation
or profession.
10
“Personal liberty” is probably to be interpreted only in the physical sense, as the law reads:
“There shall be no deprivation or restriction of the liberty of a person by imprisonment, arrest,
extradition or otherwise.”
11
A similar provision is included in Article 4 of Basic Law: Freedom of Occupation.
12
5 U.S. (1 Cranch) 137 (1803). This is the classic American case announcing that the
Supreme Court has the power of judicial-constitutional review.
13
C.A. 6821/93, United Bank Mizrachi v. Migdal, 49(4) P.D. 221. For a detailed description of
the case, see Barak Cohen, supra note 4, at 641-648.
14
For further analysis see Dorner, supra note 4; Joshua Segev Who Needs a Constitution?
In Defense of the Non-Decision Constitution Making Tactic in Israel 70 ALB. L. REV. 409
(2007); Yousef T. Jabareen Constitution Building and Equality in Deeply-Divided Societies:
The Case of the Palestinian-Arab Minority in Israel 26 WIS. INT'L L.J. 345, 352-354 (2008).
15
E.g. H.C. 1715/97 Association of Investment Managers In Israel v. Minister of Treasury,
41(4) P.D. 367; H.C. 6055/95, Zemach v. Minister of Defense, 43(5) P.D. 241; H.C. 1030/99,
Oron v. Speaker of the Knesset, 56(3) P.D. 640;
9

5
Court invalidated another statutory section, holding that any court in Israel has
the power to do so.16
These judicial decisions to invalidate legislation drew sharp criticism
from Knesset members. Subsequently, the Knesset practically (although not
formally) froze the enactment of additional Basic Laws and of the final
constitution.17 As a result, several very important rights have not yet been
incorporated into Basic Laws, despite the fact that Bills encompassing the
rights were presented to the Knesset. These rights include freedom of
expression, the freedom of association, freedom of religion and from religion,
and the principle of equal protection (the right to equality). Neither criticism
from the legislature nor the actions arising from such criticism have stopped
the Court from continuing to broaden its sphere of power, resulting in still
more controversy. In a series of cases since 1994, the Supreme Court has
used the protection of human dignity in Basic Law: Human Dignity and Liberty
as a springboard for upholding virtually every civil right normally found in
complete bills of rights.
Clearly the court has taken an activist approach, which has put it on a
collision course with various sectors of the Knesset. Not only has it held that it
has the power to invalidate acts of Parliament despite the lack of explicit
authority in a written constitution, but it has also used the tool of statutory
interpretation in a very liberal manner, broadening the scope of the
constitutional Basic Laws to set boundaries to the Knesset’s omnipotence in
its capacity as legislator. In doing so, the Court further limited policymaking
authority by the legislature and executive branches and its investiture in the
Courts through the enactment of a constitutional catalogue of rights and the
establishment of judicial review.
The

difference

of

opinion

between

the

Court

and

certain

parliamentarians, academics and most notably a recent Minister of Justice
who came from academia without being a politician before and without a need

16

Cr. C. (T.A.) 4696/01 State of Israel v. Hendelman (unpublished decision).
In 2003 the Knesset’s Law, Constitution, and Justice Commission launched a new effort to
complete the constitution “by a wide consensus”. At the time of the writing of this article, the
process does not appear to be near completion.
17

6
to be re-elected,18 caused an unprecedented wave of criticism directed at the
Court, coming even from mainstream politicians. The Speaker of the Knesset
said recently that the Supreme Court constitutes a “danger to democracy”.19
It is important to note three further aspects of the Israeli court system.
First, that The Israeli Supreme Court, acting as a High Court of Justice,
serves as both first and final instance in reviewing most governmental action.
Second, that the Israeli Court virtually eliminated the requirement of
standing20 and is basically allowing any public organization or private
individual to bring a constitutional complaint before the Court. Finally, that the
Court completely eliminated the requirement of justiciability, in the sense that
it does not avoid adjudicating issues that in the U.S. and other democracies
would be considered a "political question" that the courts should abstain from
hearing.21

Part III – Privatization, the Israeli Society and the Court
As Israel approached its three decades of independence in the late
1970s, it was a small, secular, left-leaning nation, with a perennial socialist
coalition at the helm and a highly controlled economy, a singular outpost of
the West in the Middle East surrounded by Arab countries with all of which it
was on hostile terms. But matters have changed significantly since then. A
coalition of right wing, economically liberal and Jewish Orthodox parties has
dominated Israeli politics almost continuously since 1977; the Israeli Supreme
has changed from “a rather secondary political institution in the 1950s, and
1960s, to being a major political institution, even a hegemonic one, since the

18

We refer to Professor Daniel Friedman. See http://en.wikipedia.org/wiki/Daniel_Friedmann
See, e.g. Jonathan Rosenblum, Court Under Fire HAMODIA (May 30, 2003) available at
http://www.jewishmediaresources.com/article/586/.
20
The requirement that the petitioner bringing the action before the Court should have a
personal interest in the proceedings and their outcome. See Suzie Navot CONSTITUTIONAL
LAW OF ISRAEL 152.
21
Yaacov .S. Zemach, POLITICAL QUESTIONS IN THE COURTS: A JUDICIAL FUNCTION IN
DEMOCRACIES – ISRAEL AND THE UNITED STATES (1976). Cf. In the United States Baker v. Carr,
369 U.S. 186, 217.(Holding that among the tests for determining the existence of a
“nonjusticiable” or “political” question is a lack of judicially discoverable and manageable
standards for resolving the question)
19

7
1970s, and principally in the 1980s and 1990s”;22 and peace treaties have
been signed with Egypt (1979) and Jordan (1994) while peace talks are
periodically been conducted with Syria and the Palestinian Authority.
While most Israelis and Israel observers have focused on the war-andpeace debate within Israel, a dramatic socio-economic shift has taken place,
basically without debate –
“[T]he critical discourse is reserved is confined largely to the so-called
‘political’ domain. The ‘economic’ discourse, by contrast, is far less
critical…. The ‘Washington Consensus’ of liberalization, deregulation,
privatization, sound finance and the unwinding of the welfare state, is
seen not as one of several possible paths of development, but as the
natural course of things. It is almost as if the collapse of the old political
consensus of Zionism has given way to a new economic consensus of
free markets: ‘Laissez-faire – good; state intervention – bad.’”23
This is not to say that the State has no role in Israel’s neo-liberal
economy – but it is a markedly changed one: if in the 1950s the State was
responsible for the industrialization, then in the 1960 it oversaw the
emergence of the military-industrial complex, then since the 1980s it direct
economic development through its economic policies, including extensive
privatization of holdings and services.24 Indeed, many commentators find the
liberal economists of the Israeli ministry of finance to be the chief instigators of
government policies that brought about market liberalization, extensive
privatization and more generally the pull back of the social safety net. There is
no singular moment when neo-liberalism took hold in Israel, but it probably
has much to do with the dramatic economic meltdown that Israel experienced
around 1985, a few years after the (first) Israeli-Lebanese War.25 A recent

22

See Gad Barzilai Courts as Hegemonic Institutions: The Israeli Supreme Court in a
Comparative Perspective in: http://poli.haifa.ac.il/~levi/book1.htm#2.
23
Jonathan Nitzan, Shimshon Bichler THE GLOBAL POLITICAL ECONOMY OF ISRAEL (Pluto
Press, 2002) (Arguing that while there is extensive debate on such matters as war, peace,
ethnicity, religion and formal political institutions, these are all part of a larger process “on
which there is practically no debate at all: the progressive emergence of Israel as a capitalist
society.”) (Italics – in the original).
24
Cf. Daniel Maman “The Social Organization of the Israeli Economy: A Comparative
Analysis” in: http://poli.haifa.ac.il/~levi/book1.htm#2. On the historical role of Israel’s
government see: David Levi-Faur THE VISIBLE HAND: STATE-DIRECTED INDUSTRIALIZATION IN
ISRAEL (Yad Ben-Zvi, 2001, Hebrew).
25
For detailed analysis of the crisis see Michael Bruno Crisis STABILIZATION AND ECONOMIC
REFORM (Clarendon Press, Oxford, 1993) at p. 78 et seq.

8
OECD report told the story of Israel’s economic recovery in the following
terms:
“A sea change in macroeconomic policy and a shift towards
market-oriented structural reforms was prompted by chronic
hyperinflation and unsustainable public-debt levels in the mid1980s. Anti-inflationary measures were particularly successful,
allowing the introduction of inflation targeting in the early 1990s,
which brought price increases down to low, single-digit levels by
the end of the decade. The early 1990s also saw the emergence
of a world-class, export-based high-tech sector specialising in
computer hardware and software, medical technologies and
pharmaceuticals.”26
As the economic rather than the military situation became dire, Israeli
econo-bureaucrats in the Ministry of Finance and in the Central Bank have
taken the lead in economic matters and have run the Israeli economy very
prudently, for better or worse, ever since. On the one hand, these civil
servants are often criticized by politicians and pundits for allegedly grabbing
power from elected officials27 (and for going through the revolving door into
well paying private sector positions), but they are also praised for guiding
Israel’s economy safely through the recent worldwide turbulences.28
Two facts, however, are quite clear: first, that Israelis’ socio-economic
views have changed and all recent governments, including Labor-led ones,
have been pro-market, pro-privatization, and essentially of neo-liberal
orientations; indeed, despite the critique against liberal economics, none of
the contenders for leadership in Israel has espoused this cause. Second, that
26

Org. Econ. Coop. & Dev. [OECD], Policy Brief, Economic Survey of Israel, 2009, 3 (Dec.
2009), available at http://www.oecd.org/dataoecd/41/30/44383721.pdf.
27
One of the most problematic legal manifestations of these economists’ dominance is what
is known as “the arrangements act” – a statute presented to the Knesset annually as a
supplement to the budget act and including a laundry list of legislative amendments on a
broad range of economic issues. Passed with little time for discussion, it fulfils the
governments’ wish list of statutory amendments, most often at the behest of the treasury.
Although similar in form and purpose to Omnibus Budget Reconciliation Acts common in the
United States, the scope of reforms passed in this manner without an appropriate
parliamentary debate is overwhelming, and has been the subject of much criticism.
28
The civil servants at the Israeli Ministry of Finance and the Bank of Israel are credited for
having “together brought Israel to balance its budget and behave conservatively and
responsibly.” (Meirav Arlosoroff, Soft Landing/Israel Teaches the World a Lesson in
Economics,
HAARETZ
(Isr.),
Sept.
15,
2009,
http://www.haaretz.com/hasen/pages/ShArt.jhtml?itemNo=1114617&contrassID=2&subContr
assID=2, summarizing that “among the OECD nations, Israel behaved like the only
responsible adult.”

9
privatization and the rolling back of social services have had significant and
often unhappy social costs. Observed the OECD: Israeli “[g]overnment
spending has been on a downtrend trend over the last two decades… social
policy… spending went down … to 15.8% of GDP in 2007 (about 6
percentage points below the OECD average).29 There is good reason for
mentioning the OECD: it was a great diplomatic triumph for Israel to join the
organization in May 2010,30 yet the OECD itself was critical of Israel’s socioeconomic policies “Israel will join OECD as its poorest member,” ran the
headline of the Jerusalem Post coverage. The report calls on Israel to give
“due priority” to its “deep socio-economic cleavages.” It stresses that at 20%
of households Israel's poverty rate is higher than in any OECD country
including Mexico, Turkey and Portugal, and is almost twice the OECD
average. The OECD urged the Israeli government to accommodate higher
investment in social policies. “The report shows the real picture of the socioeconomic situation in Israel,” admitted Israel’s Social and Welfare Minister.31
With the OECD report, Israelis had proof to what many have suspected
in recent years – Israel’s neo-liberal policies cut way beyond the ossified
layers of fat in the nations’ social spending. There have been outspoken
critics of Israel’s social policies for decades, but they were (and are) fighting
an uphill battle, for two separate reasons:
First, they seem unable to garner wide public (or political) support for an
expansion of public spending or for reversal of government privatization
processes. In fairness, there are some indications of a potential change in
mood among government bureaucracy and politicians; the former is indicated
by official reports finding economic waste in government outsourcing and the
latter by the Knesset defying the government coalition, which let expire the so29

“[B]ecause of tightening access to benefits and cuts in income transfers to the working-age
population including unemployment benefit, social assistance and in particular child
allowances to the many large families. Compared to OECD countries, public spending on
pension transfers (4.9% of GDP vis-à-vis an OECD average of 6.0%) and health (4.4% of
GDP in Israel, 6.3% across the OECD) is comparatively low.” OECD, OECD REVIEWS OF
LABOUR MARKET AND SOCIAL POLICIES: ISRAEL 18 (2010).
30
With a unanimous vote including that of Turkey, a country unlikely to vote again in Israel’s
favor in the foreseeable future. See Ami Kaufman “A Minefield of Missteps” 5/25/10
Jerusalem Post 16 [2010 WLNR 10905846].
31
See Sharon Wrobel “Israel will join OECD as its poorest member” 1/21/10 Jerusalem Post
17 [2010 WLNR 1582570].

10
called ‘Wisconsin Plan,’ an effort to privatize the government placement
agency for the unemployed.32
Second, and perhaps more critically, they have had trouble finding a
legal support for their efforts to slow down the inroads made by neo-liberalism
in Israel. To do so, would require two cumulative condition: one, that critics
could show a legal cause of action to force the government to maintain a
certain level of public spending; second, they would need to find the Israeli
Supreme Court willing to intervene, force the government to spend where
both it and the Parliament are reluctant to do so, then establish clear
standards on the limits of privatization and similar policies and finally spend
vast political capital in forcing the political branches to enforce such rules.
Until the prison privatization case, social activists have repeatedly failed
on both counts. This is actually somewhat surprising. If there is an area where
the Israeli Supreme Court treaded lightly – slow in recognizing rights, slothlike in defending them, it is in socio-economic rights. The Court has been
reluctant to pass judgment on economic policies of the Israeli government,
including its expanding privatization of state owned assets and state provided
goods and services. Thus, while the Court was sharply attacked for being
over activist over civil and political rights,33 it has proved a disappointment to
its human rights constituency for it’s under-involvement in the struggle over
social equality and fairness in the use and distribution of public assets.34

32

See
http://it.themarker.com/tmit/article/10668;
http://www.themarker.com/tmc/archive/arc.jhtml?from=aonline&ElementId=skira20100505_11
67277&origin=IBO&layer=hp; also http://elyon1.court.gov.il/heb/MerkazMeyda.htm
(in
Hebrew); and see Ruth Eglash “Welfare-to-work plan is being killed off, with nothing on the
horizon to replace it” Jerusalem Post 4/30/10 [2010 WLNR 9215920] and
http://www.haaretz.com/print-edition/business/pm-looking-for-wisconsin-plan-alternative1.287496.
33
Writing of the Israeli Supreme Court under the leadership of Court Presindet Aharon
Barak, Robert Bork described the Court as “simply the most activist, antidemocratic court in
the world . . . .” ROBERT BORK, COERCING VIRTUE: THE W ORLDWIDE RULE OF JUDGES 13
(2003). Also see Richard A. Posner, Enlightened Despot, NEW REPUBLIC, Apr. 23, 2007, at
53; Robert Bork, Barak's Rule, 27 AZURE 125 (2007).
34
See, e.g., Israel Doron, Tal Golan Aging, Globalization, and the Legal Construction of
‘Residence’: the case of Old-Age Pensions in Israel 15 ELDER L.J. 1, 40 (2007)(“Much has
been written in Israeli legal literature regarding the reluctance of the Supreme Court to
intervene in the sphere of social rights in Israel.”); on the limited protection for social rights in
Israel see: Aeyal M. Gross The Constitution, Reconciliation, and Transition Justice: Lessons
from South Africa and Israel 40 STAN. J. INT'L L. 47, 95-96 (2004).

11
The Court noted in its case law the significance of Parliament’s taxing
power and the importance of equipping the government with flexible judgment
over spending money for the public good. But it also noted that the Israeli
Constitution – such as it is – did not adopt a specific economic policy, and
thus the government is free to adopt a free market policy.
But are there no limits? Has the State no socio-economic duties towards
its citizens? Is there no minimal standard of living, healthcare or education the
State must provide? More to our point – is there no core business the
government must carry out itself – can it privatize itself to oblivion?
This is no mere theoretical concern. From one of the most egalitarian,
welfare oriented nations, where the good of the nation was placed ahead of
the needs of the individuals, a nation that came up with the Kibbutz, the
idealistic form of collective settlement, the country has been transformed with
an almost post-communist nation’s zeal. Income inequality has surged,35 the
Kibbutzim have been largely privatized36 and the government is constantly
shirking its services, forcing Israelis to pay out of pocket for education, health
and many other items previously State provided or subsidized.37 It seemed as
if there were no limits to the process – in effect, “I exist, therefore I can be
privatized.”38
Until recently, Supreme Court pronouncements on socio-economic
policies were very rare. In 2002 case the Court struck down a public land

35

See http://pluto.huji.ac.il/~msfalkin/02-03.pdf; Ira Sharkansky Israeli Income Inequality
I SRAEL S TUDIES 1(1) 306 (1996); Momi Dahan The Rise of Earning Inequality in: Avi
Ben-Basat T HE I SRAELI ECONOMY , 1985-1998: FROM GOVERNMENT INTERVENTION TO
MARKET ECONOMICS (MIT, 2002), in p. 485 et seq.
36
As the Kibbutz movement celebrates 100 years in 2010 only “little resemblance to the
ideals which once motivated [the Kibbutzim]… remain. Only a quarter of kibbutzim
still function as equalized cooperatives, while the rest have begun paying salaries to
their
members.”
See
http://www.haaretz.com/hasen/spages/1140864.html;
http://en.wikipedia.org/wiki/Kibbutz; also: http://www.haaretz.com/hasen/spages/826982.html.
37
See Ruth Sinai, First Education, Then Health – Now Welfare Faces Privatization,
Haaretz (Isr.), Apr. 17, 2008, http://www.haaretz.com/hasen/spages/975290.htm;
Avirama Golan, The Privatization of Children’s Rights, Haaretz (Isr.), Jan. 17, 2010,
http://www.haaretz.com/hasen/spages/1143058.html.
38
Nurit Wurgaft, I Exist, Therefore I Can Be Privatized, Haaretz (Isr.), Dec. 10,
2009,
http://www.haaretz.com/hasen/spages/1132542.html;
cf.
http://www.jcpa.org/jcpa/jl/vp442.htm;
and
more
generally:
http://en.wikipedia.org/wiki/Privatization_in_Israel.

12
appropriation scheme citing the lack of “distributive justice”39 yet in a 2004
decision that refused to interfere with a severe cut in state welfare benefit,
lowering the bar for court protection to a right to minimal conditions of
subsistence.40 Then, in late 2009 came the prison privatization case, where
the Court took the rare step of holding a statute unconstitutional, and, in a
long political-science-oriented decision provided broad ground rules on the
privatization of sovereign functions in a democratic state.
Part IV – The Israeli Prison Privatization Case
A.

Introduction

As noted, although privatization processes had been going on for some
years in Israel, the Court has, in effect, refrained from reviewing and
regulating them. Then, in November 2009 the Israeli Supreme Court ruled in
The Human Rights Program v. The Minister of Finance41 that privately-run
prisons are unconstitutional in Israel. At the time of the decision, the first
private, state-of the-art, prison was fully built, and ready to be operated by the
winners of a public tender. Following the Court's decision – handed down
almost five years after the petition was made – the State had to pay 280
million NIS (approximately 75 million U.S. Dollars) in compensation to the
prospective operator.42
The decision to establish the privately run prison was made by a
statute enacted in 2004 – technically, Amendment no. 28 to the Prisons
Ordinance.43 The law passed by a majority of 52 to 33, representing both a

39

See H.C.J 244/00 The Association in Favor of the Democratic Discourse v. Minister of
National Infrastructure, P.D. 66(6) 25; for analysis see: Daphne Barak-Erez Law and Politics
in Israel Lands: Towards Distributive Justices 14(4) ISRAEL AFFAIRS 662 (2008);
http://pdfserve.informaworld.com/910811_731458845_903112168.pdf.
40
See: H.C.J. 366/03 Commitment to Peace and Social Justice Society v. Minister of
Finance (unpublished); for context see: Yoram Rabin,Yuval Shany The Case for Judicial
Review over Social Rights: Israeli Perspectives 14(4) ISRAEL AFFAIRS 681 (2008).
http://pdfserve.informaworld.com/811739_731458845_903189627.pdf.
41
Supra note 1.
42
See http://www.themarker.com/tmc/article.jhtml?ElementId=abe20100328_77662 (in
Hebrew).
43
Law Amending the Prisons Ordinance (no. 28) 5764-2004 (hereafter: the Law or
"Amendment 28"). For a comprehensive early analysis by a criminologist of the Israeli law
with respect to the international experience, see Uri Timor, Privatization Of Prisons In Israel:
Gains And Risks, 39(1)ISR. L. REV. 81 (2006).

13
comfortable majority and a relatively high participation of the members of the
120 member Knesset, the Israeli Parliament).
At that time, as in the present time, many countries including the United
States, England, Germany, Australia, New Zealand and France had
established private prisons, employing

several different models, and with

some public and academic debate as to the desirability of privatizing the
prison system.44 Not all prison privatizations are created equal. The scope of
the privatized elements varies. In some cases, as in France and Germany,
only logistical services were privatized. In other cases, such as in England
and even more so in the United States, the private prison has also been
granted authority to manage many aspects of prisoners' rights including the
power to discipline prisoners who deserve it. The Israeli model was very
detailed and the law specified thoroughly the requirements for all aspects of
prison life.45 The Israeli model was similar to the English model, involving
oversight of the prison by government representatives stationed at the prison.
Under Amendment 28, however, the authority given to the private operator
was more limited than in England, and the government ability to oversee the
private prison has increased. The State therefore referred to the Israeli model
as an "Improved English Model".46
Up to the present case, to our knowledge, no national court has held
prison privatization to be illegal, let alone unconstitutional.
44

This debate is beyond the scope of the current article. See, e.g., David Shichor,
PUNISHMENT FOR PROFIT: PUBLIC PRISONS, PRIVATE CONCERNS (1995); Alexander Volokh, A
Tale of Two Systems: Cost, Quality, and Accountability in Private Prisons 115 HARV. L. REV.
1838 (2002); Ira P. Robbins, The Impact of the Delegation Doctrine on Prison Privatization,
35 UCLA L. REV. 911 (1988). PRIVATIZATION IN CRIMINAL JUSTICE: PAST, PRESENT, AND FUTURE
(David Shichor & Michael J. Gilbert eds., 2001); Clifford J. Rosky, The Privatization of
Punishment, Policing and Military Force in Liberal States, 36 CONN. L. REV. 879 (2004);
Richard F. Culp, “The Rise and Stall of Prison Privatization: An Integration of Policy Analysis
Perspectives”,16 CRIM. JUS. POLICY REV. 412 (2005); Warren L. Ratliff, The due process
failure of America’s prison privatization statutes, 21 SETON HALL LEG. J. 371 (1997); Sharon
Dolovich, State Punishment and Private Prisons, 55 DUKE L.J. 437 (2005);
The
reports
by
the
University
of
Greenwich,
England,
available
at
http://www.psiru.org/ppri.asp; For additional background, see Matthew Zito, Prison
Privatization: Past and Present http://www.ifpo.org/articlebank/prison_privatization.html and
the
web
sites
of
anti-privatization
group
at
http://www.privateci.org/
and
http://www.psiru.org/ppri.asp
and that of one of the major corporations in the field at
http://www.correctionscorp.com/ .
45
Paul Dost, "The Israeli Model for Private Prisons – the Best in the World" TheMarker July
27, 2006, at p. 11 (Hebrew).
46
The Academic College, supra note 1, C.P. Beinisch at §6.

14
The Israeli Supreme Court was well aware of this, noting that claims of
unconstitutionality have either been rejected by other national courts47 or have
not been presented to the courts in certain countries operating privatized
prisons and would have been rejected if presented.48
The State's motivation in its privatization scheme was twofold: to save
funds by having the prison run more efficiently and to improve the physical
conditions available to prisoners. Both aims were to be achieved by
transferring the management of the prison to a private firm chosen by public
tender, to then be closely supervised by the State in its actual operation.
Although one of the main motivations for instituting private prisons was to
save money, weather such prison would have indeed have saved money is
open to debate.49
An extraordinary enlarged panel of nine Justices, presided by Supreme
Court President Dorit Beinisch, ruled in an 8-1 decision50 that for the State to
transfer the authority for managing the prison to a private contractor whose
aim is to maximize profits would, in itself, unconstitutionally violate prisoners'
constitutional right to dignity and freedom. The importance of the case lies in
the fact that it does not condemn any specific attribute of the private prison,
nor did it examine the conditions at a specific prison, in actual operation;
rather, the Court held that the very concept of privatizing a prison, in general,
is unconstitutional. This was the case although the decision to establish
private prisons was an informed judgment of the legislator, and is a common
47

In the United States - Pischke v. Litscher, 178 F.3d 497, 500 (7th Cir. 1999); Tulsa County
Deputy Sheriff's Fraternal Order of Police v. Board of County Commissioners of Tulsa
County, 2000 OK 2 (2000).
48
The State presented an expert opinion written by Professor Jeffrey Jowell QC, a former
Dean of UCL’s Faculty of Laws in London. Prof. Jowell wrote that privatizing prisons has not
been challenged in England, South Africa or the European Union, and opined that should the
issue arise, the constitutional challenges are likely to be rejected.
49
Cf Keren Harel-Harari, "The Supreme Court was Wrong, a Private Prison is the Solution"
TheMarker
June
22,
2009
available
at
http://www.themarker.com/tmc/article.jhtml?ElementId=skira20090622_1094614
(Hebrew)
(arguing that the private prison would have saved approximately 350,000,000 NIS over 25
years) with Yoav Peled, "A Private Prison is not the Solution" Haoketz July 6, 2009 available
at http://www.haokets.org/default.asp?PageID=10&ItemID=4413 (Hebrew) (arguing that the
cost of private prisons may actually be higher than that of government-run prisons).
50
The main opinion was written by Chief Justice Beinisch, with whom Justices Arbel, Grunis
(concurring except with respect to human dignity), Rivlin, Procaccia (concurring with most of
the opinion), Hayut, Jubran, Naor. For simplicity purposes, we shall refer to the "Court" or to
Beinisch's opinion interchangeably, and note significant differences of opinion by concurring
Justices where applicable.

15
practice in other democracies. The decision has sparked international interest
as a precedent of worldwide relevance, but commentators focused on the
outcome, the prohibition against privatized prisons, and not on the
constitutional framework which allowed the decision.
In this paper we examine the decision of the Court, focusing on two
distinct aspects of it. The first is the constitutional aspect. There we focus not
on the human rights dimension but rather on the structural dimension. We
examine how, in the context of the Israeli constitutional law world, the
Supreme Court has the ability to come into the picture at such a late stage
and completely ban a government policy, approved after serious debate at the
Parliament, and on the basis of values alone. The second is the effect that the
case may have on the privatization debate which is ongoing in Israel and
worldwide.51
B.

The Petition and the Sides’ Arguments

The decision to establish a privately run prison was made by a 2004
Statute.52 The decision to take this route was not taken lightly. The process
included a series of discussions in the offices of the Ministers of Public
Security, discussions in the office of then-Attorney-General Elyakim
Rubinstein (currently a Supreme Court Associate-Justice), and a visit by a
delegation to prisons in England, Scotland, and France.53
The petition was filed by three: a law school, a former senior officer of
the Israel Jail Administration and a former prisoner.
The petition was based on two separate grounds. The first was the argument
that the complete privatization of prisons would cause unconstitutional harm
to the prisoners’ constitutional rights of personal freedom and of human
dignity, and that the establishment of a privately run prison, in itself, is a

51

See, e.g., http://blogs.law.yale.edu/blogs/compadlaw/archive/2009/11/22/cases-prisonprivatization-judged-unconstitutional-by-the-supreme-court-of-israel.aspx;
http://www.comparativeconstitutions.org/2009/11/israeli-supreme-court-says-privatized.html ;
52
For a comprehensive early analysis by a criminologist of the Israeli law with respect to the
international experience, see Uri Timor, PRIVATIZATION OF PRISONS IN ISRAEL: GAINS AND
RISKS, Isr. L. Rev. 81
53
See Shmuel Hershkovitz A Privately Run Prison: Worthy Addition to Israel's Correction
System, http://www.idi.org.il/sites/english/OpEds/Pages/APrivatelyRunPrison.aspx .

16
separate harm to the prisoners' rights in addition to the obvious (and
constitutional) harm of putting them in confinement.
Petitioners also claimed that the decision to privatize a prison
contradicts Article 1 of Basic Law: The Government which holds that "[t]he
Government is the executive authority of the State."54 Petitioners interpreted
this Article as holding that the State cannot delegate its constitutional role to
enforce the law and safeguard the public's safety.
The State argued in response that establishing the private prison is an
important solution to the shortage of prison facilities in the country, that it will
improve the conditions in which prisoners are held and that a private prison
would save between 20-25 percent of the operating budget of a comparable
public prison.
The State also emphasized that the current project was a one-prisononly pilot, and that it includes adequate mechanisms to protect the rights of
the prisoners allowing the State to supervise the prison's operation and
intervene if necessary. One of these safeguards allows the State to take over
the prison at any time if the private operator breaches its obligations.
The State also noted that the prison operator is subject to judicial
supervision, with all prisoners having the right to petition the judiciary. The
prison operator was also to be subject to the supervision of the State
Comptroller and to a yearly review by a permanent, special-purpose, advisory
committee headed by a former senior judge. The statute clearly stated that
the prisoners at the private facility would have the same rights, privileges and
services granted to inmates at state prisons.55 The Court agreed that these
supervision mechanisms are more comprehensive than those available in
other countries with similar private prison systems.56
The State rejected petitioners’ interpretation of Article 1 of Basic Law:
The Government, suggesting instead that the provision is a "ceremonial"
definition of the executive with respect to the other branches of the State. The
government is often assisted by private entities in the performance of its
54

Basic Law: The Government (2001).
Prison Ordinance, §128(XI)(c)(1).
56
The Academic College, supra note 1, C.P. Beinisch at §42.
55

17
duties, and does not cease to be the executive authority just because it
delegates authority to private entities.
An important part of the State’s response was based on a comparative
analysis. The State claimed that the Israeli model for a private prison was
based on that of the U.K., which includes supervision by State inspectors
within the prison. That said, the powers that were to be given to the private
operator in Israel were more moderate than in the U.K., while the supervision
power over the private operator was to be broader.57 The law provided that
the private prison was to be closely monitored by the Israel Prison Service
(IPS) and that rights of prisoners incarcerated at the private prison would be
similar to those in public prisons.
The State concluded that since the privatization did not include a
violation of prisoners’ constitutional rights, Court intervention should be limited
to "rare and extreme cases, in which the privatization shakes the foundations
of the structure of the democratic regime and the basic principles of the legal
system".58 Needless to say the State did not think that the present petition
presented such a case.
In a rare move, the Knesset, decided to appear before the Court as a
party in its own right (aside from the government). The Knesset argued that
Basic Law: The Government does not limit the Knesset's authority to
authorize the government to act in various ways in the performance of its
executive role. It should be noted that the Knesset is the source of both Basic
Law: Human Dignity and Freedom (in its capacity as a constituent authority)
and of Amendment 28 (in its capacity as the sovereign national Parliament),
the former being used by the Court to strike down the Latter.
The Knesset acknowledged that the issue of prison privatization was "a
hard case" and that there should be tight supervision of the State over the
private operator, which, in turn, should be, in the performance of its duties,
subject to the legal rules applying to public entities.59

57
58
59

The Academic College, supra note 1, C.P. Beinisch at §6.
The Academic College, supra note 1, C.P. Beinisch at §6.
The Academic College, supra note 1, C.P. Beinisch at §9.

18
C.

The President Speaks for the Court: stage one

Court President Beinisch stated that the legal question is whether the
privatization, which gave the private operator official powers, the use of which
inherently involves infringing civil rights, is constitutional.
Court President Beinisch noted that although certain traditional powers
of a public prison director were not given to her private prison equivalent, the
private prison manager and other wardens were to have many powers similar
to those granted to their public prison counterparts, and that these powers
infringe on human rights. Thus, the private prison manager has the power - to
hold a defiant prisoner in solitary confinement; the power to examine a
prisoner's naked body for security purposes; the power to order the taking of a
urine sample; the power to use reasonable force to search a prisoner, and a
limited power to lawfully limit the meeting of a prisoner with a specific
attorney. Similarly, the private prison security guards were to have the power
to use weapons to prevent the escape of a prisoner from the prison, and also
search and arrest authorities. It should be noted that all these powers are
currently vested in the public prison management and wardens, respectively,
and their legality and constitutionality has always been upheld.
In the present case, as in many others, the Court states that it would
not invalidate a statute lightly, and that any law is presumed to be
constitutional until proven otherwise. The Court further states that the
constitutional examination shall be done "prudently and in a restrained
fashion, while refraining from redesigning the policy chosen by the
legislature"60
While stating that the non-intervention policy is especially applicable in
matters of economic policy, the Court classified the present case as one
potentially involving a significant harm to protected human rights, and held
that in such cases the economic policy considerations become secondary,
while the dominant element in judicial review will be the nature and the
intensity of the potential damage to human rights.

60

The Academic College, supra note 1, C.P. Beinisch at §14.

19
The Court refrained from holding that there is a significant risk that the
powers granted to the private prison employees will be used in a more
intrusive way than the same powers granted to their state prison equivalents.
The Court stated that these risks involve a future harm to human rights, the
occurrence of which is uncertain, and does not constitute a sufficient ground
to invalidate an act of Parliament.61 This, however, was not the final stage of
the analysis, quite the reverse.
D.

Two-Step Unconstitutionality

The decision of the Court to hold Amendment 28 unconstitutional
involved two stages: an initial holding that the statute infringes upon human
rights and the further holding that such an infringement is impermissible under
the constitutional standard of Basic Law: Human Dignity and Freedom as "a
law befitting the values of the State of Israel enacted for proper purpose and
to an extent no greater than is required."62 Both stages are required for the
Court to find the law unconstitutional.
Step I: Does the concept of a private prison, per se, infringe on rights?
Obviously, the incarceration of a prisoner infringes on her right to
personal liberty,63 whether the prison is private or public. The Court points out
that when the right to personal liberty is infringed upon, so are many other
human rights, since the prisoner is unable to take full advantage of such rights
as free movement, the freedom of profession and many others.64
Court President Beinisch then holds that the legitimacy of the
deprivation of personal liberty "depends to a large extent on the identity of the
entity authorized to deprive liberty and the manner in which the deprivation of
liberty is performed".65 Since it has to be done for a public interest, Beinisch
believes that where the entity depriving the liberty is acting to promote a

61

The Academic College, supra note 1, C.P. Beinisch at §19.
Basic Law: Human Dignity and Freedom, Art. 8.
63
Supra note 10.
64
The Academic College, supra note 1, C.P. Beinisch at §20, quoting H.C. 6055/95, Zemach
v. Minister of Defense, PD 53 (5) 241, 261-262.
65
The Academic College, supra note 1, C.P. Beinisch at §21.
62

20
private interest (being a for-profit company) much of the legitimacy of
depriving from liberty is lost.66
Given the President’s emphasis on the prison operator’s being a forprofit company, it is important to make the following observation: the
remuneration that was to be paid by the State of Israel to the operator of the
private prison was not to be based on the actual number of prisoners held in
the facility but rather on the numbers of physical spots available in the prison.
This is quite different than the arrangement common in other countries and
gives the prison operator no direct financial incentive in the handling of
individual prisoners.
Citing political philosophers such as Thomas Hobbes and John Locke,
President Beinisch emphasizes the role of society or of the State in enforcing
criminal law and views this as part of the "social contract" of the modern
state.67 When a prisoner is incarcerated, she views the infringement of her
right to freedom as deriving not only from the judgment of the Court which
sent him to prison, but also from the operation of the entity running the prison
on a daily basis and its employees. In addition to the loss of democratic
legitimacy in private prisons, Beinisch points to the increased risk of abuse
where the power is in the hands of private entities.68
The social contract is not merely the transfer of the authority to the
state, but also the agreement that the state itself would use that power.
Concurring Justices make interesting theoretical observations. Justice
Arbel views privatization as the transferring of public power to a party foreign
to the social agreement, a party not committed to its norms, a party that does
not necessarily seek to achieve its purposes.69 Justice Procaccia emphasizes
that the social contract makes the government agency legally, socially and
morally responsible for the use of force. She argues that:
"The state . . . is directly responsible for the restraint required in
exercising the power. It is supposed to be accountable to the
public as to the manner of execution of its powers in criminal
66
67
68
69

The Academic College, supra note 1, C.P. Beinisch at §22.
The Academic College, supra note 1, C.P. Beinisch at §23.
The Academic College, supra note 1, C.P. Beinisch at §26
The Academic College, supra note 1, Arbel J., at §2.

21
proceedings, and it has within itself the body of education,
knowledge, experience, tools and all means necessary to
perform all the required balances. The art of balancing the use
of force and the authority applied to the individual is in the
‘genetic code’ of the government agency. It is not in the hands
of any other entity which was raised outside of the
governmental authority, and for whom the duty of balancing is a
foreign consideration, and is not a structured part of its modus
operandi."70
It is the State, she stressed, that has always applied coercive official
authority against the individual in the criminal process; it is the State that
formulated the code of conduct in the application of force and is directly
responsible for its execution. As such it is also accountable to the public and
has the depositories of knowledge, experience and all tools vital for the
carrying out of such powers in a balanced manner. This balancing know-how
is part of the public authorities “genetic code”, she argues, and any other
entity that grew outside of government lacks it in its operation.71
Taken to its fullest extent, this view clearly preferring nature over
nurture may preclude privatization of any specialized government functions,
ex-definition.
The private party, on the other hand, is operating under private
efficiency considerations, such as profit making, which are foreign to the art of
balancing.
Since the powers to preserve public order and discipline at the prisons,
and the powers related to preventing prisoners from escaping are traditionally
state powers, the legitimacy of the punishment is reduced, because the
punishment is enforced by a for-profit company.
The Court’s conclusion is that the infringement of the constitutional
right to personal freedom of a prisoner in a private facility is more severe than
the infringement of the right to personal freedom of a prisoner at a state

70
71

The Academic College, supra note 1, Procaccia J at §14.
The Academic College, supra note 1, Procaccia J at §15.

22
prison, even if they are imprisoned for a similar period of time and the actual
infringement of human rights in both prisons are identical.72
Furthermore, Court President Beinisch also concludes that that the
very existence of a for-profit prison, in itself, reflects a lack of respect to the
status of the prisoners as human beings, resulting in an infringement of their
right to human dignity.73 “There is”, she stressed "[A]n inherent and built-in concern that the implementation of
prison based on a private economic purpose turns the
prisoners, in fact, simply by placing them in confinement in a
private prison, into means for producing financial profit by the
corporation that manages and operates the prison. To be
precise: the very existence of a for-profit prison reflects a lack of
respect for the status of prisoners as human beings, and this
violation of the human dignity of the prisoners does not depend
on the extent of human rights violations actually occurring within
the prison."74
The violation of human dignity is further increased, decides the
President, by the various powers vested in the private prison operators.75 She
explains that the operator of a private prison cannot be said to be merely
assisting a public authority in carrying out its functions; rather this is a case of
delegations of powers.
The main distinction between the two situations involves the measure
of power and discretion given to the private party by the granting authority. In
this case, the examination of the provisions of Amendment 28 indicates that
extensive public powers concerning prison management have been granted
to the private franchisee.76
The claim that an infringement of human dignity may occur from a
symbolic manifestation rather than from any actual actions that violate human

72

The Academic College, supra note 1, C.P. Beinisch at §33. It should be noted, however,
that Beinisch raises the possibility that imprisonment in a private prison may lengthen the
term, since the behavior of the prisoner, and the opinion of the prison's manager, may affect
early release decisions. Id at §27.
73
Justice Grunis, who concurred in the opinion of the President, dissented on this specific
point and did not concur as to the violation of human dignity.
74
The Academic College, supra note 1, C.P. Beinisch at §36.
75
The Academic College, supra note 1, C.P. Beinisch at §36-40.
76
The Academic College, supra note 1, C.P. Beinisch at §31.

23
rights is based on a theory suggested by Prof. Meir Dan-Cohen. Dan-Cohen
argues that:
"Once an action-type has acquired a symbolic significance by
virtue of the disrespect it typically displays, its tokens will
possess that significance and communicate the same content
even if the reason does not apply to them… As long as certain
actions are generally considered to express disrespect, one
cannot knowingly engage in them without offending against the
target's dignity, no matter what one's motivations and intentions
are."77
Step II: Can the infringement be (constitutionally) justified?
As noted above, the determination that Amendment 28 infringes on
human rights is not the end of the analysis. Such infringement may be justified
and hence permitted if it is the result of "a law befitting the values of the State
of Israel enacted for proper purpose and to an extent no greater than is
required."78 The Court then addressed each element:
First, there has been no contest that the infringement is made by a law,
since Amendment 28 is, indeed, a statutory instrument.
Second, quite surprisingly President Beinisch summarily dismissed the
question whether the law is befitting the values of the State of Israel,
explaining that the petitioners did not elaborate on the subject and that a law
will be held to be breaching this condition only in very unusual
circumstances.79 We find this surprising since there appears to be a potential
overlap between such holding and Court's holding that privatizing the public
order sphere is contrary to the basic conception of the society, as discussed
above.80
Third, to be constitutional, the infringing law must be enacted for a
proper purpose. Under prior case law, the protection of other rights or the
fulfilling of an important public purpose were deemed proper purposes.81 The
first of the two purposes in the present act was the improving of prison
conditions, which is certainly a proper purpose. The second purpose was to
77

Meir Dan-Cohen, HARMFUL THOUGHTS: ESSAYS ON LAW, SELF, AND MORALITY (2002) 162.
Basic Law: Human Dignity and Freedom, Art. 8.
79
The Academic College, supra note 1, C.P. Beinisch at §31.
80
See __________.
81
HC 4769/95 Menachem v. Minister of Transportation, PD 56 (3) 235, 264.
78

24
achieve economic efficiency. Petitioners asked the Court to reject this
purpose as improper, but the Court refused to categorically find that saving
money is not a proper purpose, although as will be shown shortly, the Court
used

the

economic

purpose

in

ultimately

holding

Amendment

28

unconstitutional.
Fourt, for the statute to be held constitutional it is required that the
harm caused by the infringement of right be to an extent no greater than is
necessary. This is referred to as the proportionality requirement. In
interpreting this element the Israeli Court, following Canadian jurisprudence,82
has long held that it is comprised of a three prong test:
"[F]irst, that the legislative means chosen are rationally
connected to the proper purpose; second, that the means
adopted impair the right minimally, i.e., that no other means
available achieve the purpose (and no more than the purpose)
with less restrictions upon the right, and third, that the
infringement is proportional, or, in other words, that harm
caused by the infringement is proportional to the harm
prevented is proportional, or, in other words, that harm caused
by the infringement is proportional to the harm prevented (or
good attained) by the legislative purpose as achieved by the
specific means under consideration. Under proportionality
analysis, the court may reach a conclusion that fully achieving
the legislative purpose involves inflicting harm on rights-holders
that is disproportionate to the benefits accrued (or harm
prevented), and therefore the legislative purpose can be
achieved only as far as proportional to the harm inflicted."83
In applying the three prong test in the present case, the Court refused
to accept the petitioners’ assertion that the legislative measure (Amendment
28) was not rationally connected to the proper purpose (economic efficiency).
Petitioners’ cited shows no significant correlation between the prison
privatization and economic savings. The State, on the other hand, claimed
that based on the offer of the winner of the tender, the private prison is
expected to bring savings estimated at 20-25% compared with the cost of
running a public prison in similar standards. The Court said it was too early to
determine the issue.
82

R. v. Oakes, [1986] 1 S.C.R. 103.
Amnon Reichman, ""When We Sit To Judge We Are Being Judged" - The Israeli GSS
Case,
Ex Parte Pinochet And Domestic/Global Deliberation" 9 CARDOZO J. INT'L & COMP. L. 41, 51.

83

25
As for the second prong of the test – whether there are other means
available to achieve the same target with fewer restrictions on civil rights –
petitioners argued for the adoption of the so-called "French model" in which
only logistical duties are privatized while all security and enforcement duties
remain with the State. The State argued that this model does not fulfill the
dual purposes of improving prison conditions and budget savings. Court
President Beinisch stated that she was unable to determine, at present, that
there is a less restrictive measure which would fulfill the State’s purposes, and
therefore did not declare Amendment 28 unconstitutional on this basis.84
Up to this point, Court President Beinisch held for the State on all
points and seemed poised to uphold the law despite its harm to human rights.
Then came the final prong of the proportionality test. “The test”, stated the
President – “is essentially one of values”. Its’ application compares the
challenged law’s expected public benefit (as compared with the condition
before it went into effect) with the damage it is set to cause to constitutional
rights.85
Essentially, this is a simple constitutional cost-benefit analysis, with no
clear guidelines for judges to apply other than their feelings, mores and
personal opinion. Indeed, the Court acknowledges that such a decision shall
be "[D]ependent on the values and norms in the society in
question. Naturally, different countries may have different
positions regarding the scope of responsibilities of the State
and the relationship between the types of activities that will be
managed by the public sector and those which should be ran by
the private sector. These positions are derived, inter alia, from
political and economic ideologies, from the unique history of
each country, the political structure, and from differing social
values....
The role of the court, which is required to interpret and to cast
content into the different constitutional arrangements is not, of
course, to choose between different economic and political
ideologies; the Court is required however, to express the values
that are anchored in the social consensus and in a foundation
of values shared by the members of society, to identify the
84

Justice Naor, who concurred with the Chief Justice, dissented on this point and wrote that
the State's rejection
85
The Academic College, supra note 1, C.P. Beinisch at §50.

26
basic principles that make the society a democratic society."86
The Court then returned to the stated purpose of saving money, and
performed the constitutional cost-benefit analysis by balancing the expected
savings against the perceived harm of giving the power to run a prison and to
control prisoners to a private entity.
In applying this standard, the Court held that the benefit of improving
prison conditions while saving State money is not proportional to the harm
caused by the creation of a privately-ran prison, hence it fails the third prong –
and the statute cannot be found constitutional.
In a concurring opinion, Justice Procaccia held that the main purpose
of Amendment 28 was increasing prisoners' welfare by making prisons less
crowded, and improving the services offered in them, rather than t saving the
State money. Justice Levy, who wrote the only dissenting opinion in this case
and would have allowed the law to stand until operation of the private prison
can be tested in real life, concurred with Justice Procaccia on this point.
Justice Procaccia’s analysis substantively changes the cost-benefit
analysis. Under it, the harm to personal freedom and human dignity caused
by the creation of a privately run prison does not need to be balanced against
money savings but against the improvement in prison conditions. The choice
is between a concern for the breach of the prisoners' rights by the very fact
that they are confined in a privately-run prison and the concern for improving
their tough physical conditions which cannot be achieved without the
privatization.87
Although it appears to us that this balancing should make it more
difficult for the Court to hold Amendment 28 unconstitutional, Justice
Procaccia still holds that the harm in privatizing the prison outweighs the
benefits in improving prison conditions (and the ensuing cost savings); Justice
Levy, the lone dissenter, would hold the statute, for now, to be constitutional,
reserving judgment until the prison is actually operating.88

86
87
88

The Academic College, supra note 1, C.P. Beinisch at §53.
The Academic College, supra note 1, Procaccia J. §45.
The Academic College, supra note 1, Procaccia .J. §48-50.

27
Since Amendment 28 provides a comprehensive arrangement, the
Court decided not to attempt to make some in it but rather declare it to be
unconstitutional in toto. The Court emphasized that its decision does not
prevent the transfer of logistical services to the private sector.89

Part V – The Day After90
A.

A final Introduction

As is the case in many controversial decisions of the Israeli Supreme
Court, where it intervenes with a major decision of the political branches,
pandemonium ensued – politicians, legal analysts, social activists and pundits
of all creeds opined.91
In fairness, in not “a bombshell”, as one commentator put it, this is still
a dramatic case, on several distinct levels. On one level – a practical one – it
froze completely a policy that enjoyed the support of both government and
Parliament and, as the minority Justice Levy remarked, while the Court spoke
its lofty words, there were prisoners in atrocious facilities, who have to watch
a modern, well equipped prison, stand empty. On another level – the dramatic
reversal in the Court’s policy – from non intervention in socio-economic
matters to a full-force intervention in one singular policy leaves us guessing as
to the reason for this change of heart and the correct way to interpret it.
As Judaic sources have long taught us, ever since the Temple was
destroyed, prophecy has been taken from prophets and given to fools and
children.92 As we hope we fall in neither category, we will limit ourselves to
several educated guesses, and we will split our suggestions along the lines of
our two respective areas of expertise: constitutional and administrative law.
On the first front we shall note our significant regarding the Court’s
constitutional analysis and voice our concern over its potential impact. On the
89

The Academic College, supra note 1, C.P. Beinisch at §65.
Cf. http://en.wikipedia.org/wiki/The_Day_After.
91
See, e.g.. http://www.haaretz.com/print-edition/news/international-legal-precedent-noprivate-prisons-in-israel-1.3774;
http://www.haaretz.com/print-edition/news/beinisch-drops-a-bombshell-1.3776;
http://www.haaretz.com/print-edition/opinion/the-right-way-to-run-a-prison-1.3621;
http://www.haaretz.com/magazine/friday-supplement/correctional-facility-1.263165;
92
See http://www.come-and-hear.com/bababathra/bababathra_12.html.
90

28
latter front we examine the question what this case bodes for future Court
view on socio-economic policies, especially that of privatization.
A.

A Constitutional Case

a. The Facial Review v. As Applied review Debate Revisited
U.S. courts disfavor "facial review" of statutes and prefer a case-bycase "as applied" judicial review. Explains Prof. Michael Dorf:
"Conventional wisdom holds that a court may declare a statute
unconstitutional in one of two manners: (1) the court may
declare it invalid on its face, or (2) the court may find the statute
unconstitutional as applied to a particular set of circumstances.
The difference is important. If a court holds a statute
unconstitutional on its face, the state may not enforce it under
any circumstances, unless an appropriate court narrows its
application; in contrast, when a court holds a statute
unconstitutional as applied to particular facts, the state may
enforce the statute in different circumstances."93
In U.S. v. Salermo the U.S. Supreme Court explained its preference:
"A facial challenge to a legislative Act is, of course, the most
difficult challenge to mount successfully, since the challenger
must establish that no set of circumstances exists under which
the Act would be valid. The fact that [a legislative Act] might
operate unconstitutionally under some conceivable set of
circumstances is insufficient to render it wholly invalid, since we
have not recognized an ‘overbreadth’ doctrine outside the
limited context of the First Amendment."
Under a separate classification, A Classic distinction between
U.S. style judicial review and the system in many European
countries is that -"In the United States, courts adjudicate
constitutional issues in what is known as "concrete review," in
which the parties raise claims of constitutional rights as a
defense to the actual or threatened enforcement of law against
them by the state or by other private parties . . . . The United
States quite specifically rejects prepromulgation review of
statutes and other kinds of "abstract review" commonly found
on the continent of Europe in which specifically designated
government officials have automatic standing to raise
constitutional challenges to a statute without having to show

93

Michael D. Dorf, Facial Challenges to State and Federal Statutes 46 STAN. L. REV. 235
(1994).

29
that resolution of the constitutional issue is necessary to
determine their individual rights in a pending case.94
We argue that from the perspective of a regulator attempting a major
reform, the events of the present case provide significant support for facial
review on the condition that it is made at an early stage of the reform. If,
however, facial review has not been done at an early stage – and here, given
the golden opportunity to do so, the Court waited, and waited95 – it appears
that the court should defer its holding until the reform can be assessed "as
applied".
We shall demonstrate the argument with the somewhat tragic and
definitely very costly results of the facts in this case.
A State attempts a significant legislative reform, for example,
privatizing an important sector such as the prison system. In a constitutional
system, the State's decision is subject to judicial review even if the action is
supported by Parliament in the form of a law.
When the petition was filed, in March 2005, the tender process for the
prison was not yet completed. Only in November of 2005 did the government
choose the winner of the tender and only in January 2006 was an agreement
signed with the private company, which then started to build the new facility.
Meanwhile, the legal proceedings continued slowly. Only in March of 2009 did
the Supreme Court actively intervene, issuing an interim injunction preventing
the prison (already fully built) from starting operations.
The reform can be evaluated on two different levels: a facial review
would review the reform at the inception stage, before the State has spent
millions on the actual reform, or "as applied", when the prison is operated and
it is clearer whether it helps the welfare of prisoners or damages it.
The matter of the timing was clearly presented by the Petitioners in the
case. In an article published in 2006, when the Court refused to issue an
94

John C. Reitz , American Law In A Time Of Global Interdependence: U.S. National Reports
To The Xvith International Congress Of Comparative Law: Section Iv: Standing To Raise
Constitutional Issues 50 AM. J. COMP. L. 437 (2002).
95
Until some commentators thought the moment has passed – see, e.g., Avirama Golan
comment that “[t]he High Court of Justice's reluctance to deal with the petition against
privatizing prisons is liable to transform the issue into a theoretical debate.”
http://www.haaretz.com/print-edition/opinion/prisoners-of-privatization-1.238238.

30
immediate ruling, or at least an interim injunction (waiting for the
parliamentary debate of several proposed amendments or repeal to the law
authorizing the prison), the Petitioners' legal counsel foresightedly stated that:
"the law is unconstitutional today just as it will be in three years."96
But the Court chose the worst course possible from the regulators'
perspective. It refused to issue an interim injunction (tantamount to an early
facial review), allowed the regulator to enter into major financial commitments,
and

eventually

held

the reform

unconstitutional

not

based on its

implementation, but based on facial review, without any facts in the decision
that were not known five years earlier.
In that respect, we should note that President Beinisch holds that a
potential for future harm to human rights will generally not warrant a court
intervention to invalidate a law. The constitutional examination of that law will
only be when the results of the law are known and assessable.97 Hence, her
decision that Amendment 28 is unconstitutional is based on the immediate
harm created by the very existence of the private prison.
b. Determining "the basic concepts of a society"
The holding of the Court is based on the determination that "[T]he Imprisonment of a person in privately-managed prison is
contrary to the basic concepts of the Israeli society. . . regarding
the responsibilities of State, acting through government,
regarding the use of force against its subordinate "98
The holding is therefore that the decision of the elected Parliament, in
adopting a practice common in other democracies, after a lengthy debate and
several unsuccessful attempts to repeal, may be held unconstitutional upon
the Court's decision that it contrary to the core values of society.
This has happened before, in other countries with a judicial review
system. But in this case, the determination of what is the "basic concepts" of
Israeli society is based primarily on examining current Israeli law and finding

96
97
98

Efi Michaeli, "Stop the Privatization Train" Globes September 7, 2006
The Academic College, supra note 1, C.P. Beinisch at §67.
The Academic College, supra note 1, C.P. Beinisch at §39.

31
that all authority relating to public order vested in the State.99 Since under the
existing law the authority is with the State, the Court finds it unconstitutional
for the new law (Amendment 28) to move the authority to the private sector.
This of course is a run-around argument, where the law is held contrary
to values – that are proven only by other laws.
The court did not use any public opinion polls, although it could have,
since an independent poll by the Democracy Institute found that 54% oppose
privatized prisons while only 23% support it.100 Furthermore, a survey
conducted by the Israel Prison Service found that 36% objected to the full
privatization of prisons, while only 12% supported a major privatization and an
additional 17% supported only the privatizing of services such as
maintenance, kitchen and laundry.101 Neither of these was mentioned in the
Court's decision. It is plausible that the Court refrained from citing these or
any other opinion polls supporting its own position so as not to create a
precedent that such polls may determine value judgments. In the absence of
polls or any other convincing evidence, it is difficult to accept that the Court
represents the values of society better than the elected parliament, who came
to their decision after a serious debate.
C.

An Administrative Law Decision

What does this holding tell us about the Court’s current views on its
administrative review of socio-economic policies? In truth – very little. It may
be the final word on prison privatization,102 but is the holding applicable to
other instances? Maybe, but most likely not. Here is why:
The widest reading – in terms of potential application – of the decision
is that some core functions of the State cannot be privatized. The argument is
that under the social contract – which serves as the basis of legitimacy for
organized society – the State must carry out some functions by itself, or else,
like the polar bear on the melting glacier, it might see its sovereignty melt
99

The Academic College, supra note 1, C.P. Beinisch at §24-25.
http://www.idi.org.il/events1/RoundTableDiscussion/Documents/‫סקר‬.pdf
101
http://www.mops.gov.il/NR/rdonlyres/DD6353D8-384D-4500-A867F09E6642BAB0/0/OmniShabas84.pdf
102
Or it may not – cf. http://www.israelnationalnews.com/News/News.aspx/130542
100

32
away all around it. In a way, this is the mirror-image to the Nozickian “night
watchman State” argument: if an anarchist like Robert Nozick103 believes that
the State should take a minimal role that would include functions such a
protection against force, theft, fraud, enforcement of contracts etc. – then
clearly the State must not shirk away from its responsibility in these core
areas and if it does – then it draws away from the lowest common
denominator that legal philosophers have coalesced around as needed for
human co-existence in an organized society. Here follows a string of
questions that seem to limit this potentially powerful holding:
(1) Is the State allowed to use private sector help to perform its duties
more cost effectively? The typical answer would be – yes, as long as the
government retains judgment over the main decisions and oversight over the
entire operation. If we take the example of military contractors we can see the
shortcomings of such notions: can the government really tell The Boeing
Company how to manufacture aircraft? Can the government effectively control
every gun-carrying contractor in Iraq or Afghanistan?
(2) How adamant is the Court that core public services the government
pays for be carried out only by persons directly employed by it? One obvious
example concerns public safety and security, a major concern in Israel. The
provision of such services runs the gamut in Israel from being carried out by
the Israeli Defense Forces or the National Police, to local government, private
security firms and security personnel hired by private institutions – standing
guard, guns in tow, at the entrance of supermarkets, cinemas, indeed our own
lovely campus in Herzliya. For some years now there is evidence that the
Israeli government is intent on privatizing, i.e. handing over to private security
firms, the handling of the checkpoints between Israel and the Palestinian
authority, which are analogous to an international border.104 Is the Court likely
to intervene? We highly doubt it.

103

See Robert Nozick ANARCHY, STATE, AND UTOPIA (1974).
The purely military checkpoints that the IDC holds within Palestinian territories will not be
privatized. For information and critique see http://www.pmo.gov.il/NR/rdonlyres/5D4C8D4D4A2E-40E6-9A1B-AC250702641D/0/freeinfo.doc;
http://www.knesset.gov.il/protocols/data/rtf/pnim/2007-05-01.rtf;
http://www.iramim.org.il/_Uploads/dbsAttachedFiles/StateComptrollerReport.DOC;
104

33

(3) Another potentially limiting factor to the holding is that the current
case involved not only a suspected unconstitutional delegation of powers –
but a specific class of citizens who stand in harm’s way. Of all categories of
protected individuals, incarcerated citizens face perhaps the most extreme
predicament. If the current decision is to be limited to its facts it seems
unlikely to effect any other privatization that is currently undergoing in Israel.
True, shrinking public contribution to healthcare funding sharpens the socioeconomic distinctions in Israel, in terms of the availability of healthcare105 –
but is the decline in services provided so much a vital part of the ‘socialcontract’ as the handling of prisoner by for-pay contractors? Again, we doubt
the likelihood of Court intervention on such matters.

http://www.knesset.gov.il/plenum/data/00491810.doc
http://www.nrg.co.il/online/1/ART1/711/304.html (Hebrew) and http://www.haaretz.com/magazine/week-s-end/outsourcing-the-checkpoints-1.230416.
105
http://www.ynet.co.il/articles/0,7340,L-3904888,00.html.