INSTITUTIONAL RELATIONS BETWEEN LOBBY AND EU 1 BODIES: THE QUESTION OF TRANSPARENCY Šárka Laboutková2
Working Paper č. 5/2008
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This article was suported by the Czech Grant Agency project no. 402/06/1445 held by Škoda auto University 2 Ing. Śárka Laboutková, Ph.D., Škoda Auto University,
[email protected]
Název:
Institutional relations between lobby and EU bodies: the question of transparency
Editor:
Šárka Laboutková
Vydavatel:
Škoda Auto a.s. Vysoká škola
Místo a rok vydání:
Mladá Boleslav, 2008
Evidenční číslo MK ČR
E 16189
Tištěná verze:
ISSN 1802-2715 , ISBN 978-80-87042-26-7
On-line verze:
ISSN 1802-2723
Sborník nebyl recenzován a neprošel jazykovou korekturou © ŠkodaAuto Vysoká škola, 2008
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Abstract Transparency of political institutions is a prerequisite for legitimacy. It should be easy to scrutinize how decisions are made, the influences behind them and how taxpayer’s money is allocated. Therefore rules for lobbying are ultimately a question of legitimacy. For the last ten years, EU institutions have stressed more and more the transparency of relationships with the interest groups to avoid the temptation to get involved in corruption and other illegal practices. It has led to lobbying being more closely regulated. Transparency is neither a threat nor a judgment. Coming from it are common rules of behavior and ethical principles for both sides, and registration for interest groups. The question is: should the registration have a voluntary character or be mandatory? The Commission has reached the conclusion that today, self-regulation, with information provided on mission, interests represented and funding, can only be justified as sufficient if the information required is also sufficient to address public concerns and perceptions. Many stakeholders have a different opinion. According to them a voluntary system is not strong enough to increase the democratic scrutiny of the role of lobbyists in EU policy-making. The objective of this article is to provide a survey of development institutional communication with special interest groups in the EU including the current position. It is based on an analysis of recent academic work on the regulation of lobbying practices and special interest groups in the EU and previous working documents drawn up by the European Commission plus the real reactions of the relevant players. . Klíčová slova: lobby, transparency, regulation, interest groups, registration JEL Classification: L 30, L 31, L 38, H 42
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“Lobbyists can have considerable influence on legislation, in particular on proposals of a technical nature… But their transparency is too deficient in comparison to the impact of their activities.” Siim Kallas, Nottingham 2005
1. Introduction About 15,000 professional lobbyists operate in Brussels, a large majority of them representing business interests and their influence on the EU decision making process. This number is still increasing. From one point of view this influence makes democracy weaker because it is not only related to positive goals (mainly supporting economic growth and competitiveness) but also to negative ones, (rent-seeking, corruption, overruling the decision-making process to achieve special benefits). The following are often quoted examples stressed in the Green Paper on European Transparency Initiative (see below): • Distorted information is provided to EU institutions about the possible economic, social or environmental impact of draft legislative proposals. • Modern communication technologies (internet and e-mail) make it easy to organize mass campaigns for or against a given cause, without the EU institutions being able to verify to what extent these campaigns reflect the genuine concerns of EU citizens. • The legitimacy of interest representation by European NGOs is sometimes questioned because some NGOs seem to rely on financial support from the EU budget as well as on political and financial support from their members. • By contrast, according to many NGOs, there is no level playing field in lobbying because the corporate sector is able to invest more financial resources in lobbying. • In general terms, there is criticism of the lack of information about lobbyists who are active at the EU level, including the financial resources which they have at their disposal. Transparency of political institutions is a prerequisite for legitimacy. It should be easy to scrutinize how decisions are made, the influences behind them and how taxpayer’s money is allocated. Therefore rules for lobbying are ultimately a question of legitimacy. Almost no country in the EU except Germany and The United Kingdom, has rules to govern lobbying and some of them have quite a big problem with the dark side of this natural part of the democratic decision-making processes – corruption. The discussion about lobbying, interest groups and corruption is ongoing, but there is almost no relevant outcome yet. The democratic system and its
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institutions should support a dialog between them and civil society. In the context of this wider dialogue, its method should be transparent, to reduce the risk of the policy – makers only listening to one side of the argument or of particular groups getting privileged access. This means that the target groups of relevance for a particular consultation need to be identified on the basis of clear criteria. This paper offers an overview of the rules governing lobbying inside the European Union.
2. Relations with interest groups At the end of the 80’s there was a bigger and bigger need to define contacts between EU institutions and the public and to create some rules for their communication. Parliament was the first European institution which addressed the phenomenon of an increasing number of interest groups at European level and especially the consequences of this evolution for the legislative process. The first written question concerning the establishment of a potential regulation of lobbying activities was presented in 1989. In 1991, the Committee on the rules of procedure, the verification of the credentials and immunities drafted a report with proposals for a code of conduct and a register of lobbyists. However, after very difficult Committee debates the proposals were not submitted to the Plenary. A compromise was found in July 1996. With regard to financial interests, each MEP is now required to make a detailed declaration of his professional activities. MEPs have to refrain from accepting any gift or benefit in the performance of their duties. Registered assistants also have to make a declaration of any other paid activities. These rules were added to Parliament's Rules of Procedure3. Today lists of registered lobbyists, of MEPs declarations of financial interests and of registered assistants are available. The European Parliament (EP) has an accreditation system. Anyone who wishes to enter Parliament frequently to provide MEPs with information relating to their parliamentary duties (defined as five or more days per year), in their own interests or those of third parties, has to pass accreditation procedures. Their names are recorded in a public register. This system allows physical access to Parliament. Special passes are valid for one year. The European Parliament has numerous contacts with lobby groups, which have led it to adopt an associated code of conduct. The European parliament published several documents about lobbying, for example: Rules on lobbying and interest groups in the national parliaments of the Member States (working document 1996); Lobbying in the EU: current 3
Art. 9 and Annexes I and IX. 6
rules and practices (working document 2003). The European parliament has its own identification of lobbyists: Lobbyists can be private, public or nongovernmental bodies. They can provide Parliament with knowledge and specific expertise in numerous economic, social, environmental and scientific areas. A recent document (the Stubb Report, 8 May 2008) related to interest representatives (lobbyists),4 has been based on the recognition that lobbying plays an essential role within a democratic system, and is an important source of information for MEPs. The report would allow rapporteurs, in charge of steering legislative documents through Parliament, to voluntarily attach lists of which lobbyists were consulted and had a “significant input” to the preparation of their reports. But this practice, the so-called “legislative footprint”, would not be made obligatory. The report stresses that it is even more important for the Commission to attach such “legislative footprint” to its legislative initiatives. At the same time The European Commission started a discussion about “communication depth” between the EU and its citizens. Wide consultation is one of the Commission’s duties according to the Treaties. At the beginning the 90’s the EU called on the European Commission to formalize rules for communication with these groups. This dialogue proved valuable to both the Commission and interested outside parties so the European Commission has started to be seriously concerned with this issue. Before that, explicit Commission rules (such as accreditation, registration, code of conduct) towards special groups didn’t exist. There were basically two forms of dialogue between the Commission and special interest groups: through advisory committees and expert groups; and through contact with interest groups on an unstructured, ad hoc basis.
3. Approaches towards interest groups 3.1 Commission’s Communication of 2 December 1992 The Commission deals with the approach towards interest groups in several documents called: An open and structured dialogue between the Commission and special interest groups (2 December 1992, where the Commission’s line of conduct with regard to interest groups was officially expressed for the first time. Who are these interest groups? European, national or international federations covering all sectors of economic and social activity, legal companies, private enterprises, public affairs consultants, NGOs, think-tanks, regions and municipalities of the Member States… etc. Uncountable terms are used 4
Report on the development of the framework for activities of interest representatives (lobbyists) in the European institutions, 2007/2115(INI) 7
in everyday language to describe these organizations: interest groups, pressure groups, lobbies, public relations, promotion groups. The European Commission makes a distinction between two categories: non-profit making organizations [European and (inter)national associations/federations] and profit making organizations (legal advisers, public relations firms and consultants, companies’ in house lobbyists). The documents include a study describing the rules of lobbying in the Member states and some non-member countries.
3.2 Consultation standards The Commission adopted, on 11 December 2002, a communication General principles and minimum standards for consultation of interested parties by the Commission5, which are concerned with the interaction between European Institutions and society. The target was to help reinforce the culture of consultation and dialogue in the EU, plus make more transparent the decision-making process in the Commission itself. General principles and minimum standards applied from 1 January 2003. The principal aims of the approach can be summarized as follows: • To encourage more involvement of interested parties through a more transparent consultation process, which will enhance the Commission’s accountability. • To provide general principles and standards for consultation that help the Commission to rationalize its consultation procedures and carry them out in a meaningful and systematic way. • To build a framework for consultation that is coherent, yet flexible enough to take account of the specific requirements of all the diverse interests, and the need to design appropriate consultation strategies for each policy proposal. • To promote mutual learning and the exchange of good practices within the Commission.
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The Communication defines “consultations” as those processes through which the Commission wishes to trigger input from interested parties for the shaping of policy prior to a decision by the Commission. “Interested parties” means all who wish to participate in consultations run by the Commission, whether they are organizations or private citizens.
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4. Principal measures There are three Principal measures supporting this dialogue:
4.1 Directory Creating a Directory of non-profit making organizations, which has worked officially from January 1993 on a voluntary basis. By January 1997 more than 600 non-profit making organizations were registered, from hundreds of different fields of human activities. In 1999 an electronic version was set up and in 2001 the whole project was modernized with a new name CONECCS (Consultation, the European commission and Civil Society). The database was used as a platform for providing information in both directions. This directory of organizations was also established on a voluntary basis, which didn’t seem to be enough. It was intended only as a source of information, not as a means of accreditation. With regard to profit making lobbying organizations, such as consultancies, legal advisors, public relations/public policy and other private firms, the Commission has had a problem finding the key to defining exactly who should or should not be included in the directory. The Commission encouraged the lobbying sector to draw up its own directory with all the relevant information, similar to the European Parliament. The objective was to construct a common database for both institutions, even if this would mean that the data in question would be used for different purposes by each institution. 4.1.1 Database CONECCS – Consultation, the European commission and Civil The database was set up as a platform for providing information on the committees and other Commission frameworks through which the civil society organizations are consulted in a formal or structured way. There is no legal definition of the term “civil society organizations”. However, the Economic and Social Committee has produced a definition of civil society, which includes the following types of organizations: • social partners or so-called labour-market players, • organizations representing social and economic players, which are not social partners in the strict sense of term, • NGOs (non-governmental organizations) which bring people together in a common cause; consumer associations, educational organizations, etc.,
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• CBOs (community-based organizations; organizations set up within society at grassroots level which pursue member-oriented objectives); family associations, organizations which act in local and municipal life, • religious communities. CONECCS served three important functions: • It was an integral part of the Commission’s commitment to making its work more transparent. • It increased the list of potential consultation partners. • It was a tool that can be used by the Commission itself to identify the appropriate mix of consultation partners who can offer the necessary geographical/sectoral/target group coverage. To be included on the database meant meeting certain basic conditions; it didn’t need a form of accreditation by the Commission. Every type of interest groups contributes its own perspectives to policy consultations. To be able to maintain the right balance among the different interests, organizations were categorized on CONECCS according to the type of interests they represent: trade unions, employers’ federations, professional federations, non government organizations (which have to fulfill some conditions), associations of public authorities, service and production federations, political interest, religious interests, other groups. 4.1.2 Register for Interest Representatives – European Transparency Initiative Green Paper On 9 December 2005 the Commission adopted the European Transparency Initiative – ETI and a Green Paper was published in May 2006 to launch a debate with all the stakeholders, on how to improve transparency on Community Funds, consultation with civil society and the role of the lobbies and NGOs on the European institutions decision-making process. In its ETI Green Paper, the Commission suggested a new framework for lobbying activities which would be based on: • A voluntary registration system with incentives for lobbyists to register. The incentives would include automatic alerts of consultations on issues of known interest to the stakeholders. • A common code of conduct for all lobbyists, or at least common minimum requirements. • A system of monitoring, and sanctions to be applied in the event of incorrect registration and/or breach of the code of conduct. For the purposes of this Green Paper, “lobbying” means all activities carried out with the objective of influencing the policy formulation and decisionmaking processes of the European institutions. Accordingly, “lobbyists” are defined as persons carrying out such activities, working in a variety of organizations such as public affairs consultancies, law firms, NGOs, think-
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tanks, corporate lobby units (“in-house representatives”) or trade associations. The European Commission runs neither an accreditation system nor a compulsory register of organizations that have dealings with the Commission. Based on the Green Paper entitled European Transparency Initiative the Commission decided on 21 March 2007 to set up a new public register, based again on a voluntary system with incentives to register, for all interest representatives working to influence decisions taken in EU institutions. This register was launched on 23 June 2008. Groups and lobbyists which register certain information about themselves are given an opportunity to indicate their specific interests and, in return, are alerted to consultations in those specific areas. Consequently, only lobbyists who have registered are automatically alerted by the Commission. To qualify for entry in the register, applicants have to provide information on who they represent, what their mission is and how they are funded. With regard to the financial disclosure required to join the register, the Commission asks registrants to declare relevant budget figures and breakdown on major clients and/or funding sources. This principle is then applied to the different categories of actors, taking into account their different nature. Some lobbyists say they cannot disclose “fees” per client, and that what the Commission is asking is identical to that. But the fundamental is identical to “fees per client”. The formulation retained allows them to make their own estimate of their activity, and obviously their contract with a client could include activities not targeted at EU institutions. Applicants also have to subscribe to a code of conduct, which will be enforced credibly and transparently. From the point of view of the general public, the register should provide a general overview, open for public scrutiny, of groups engaged in lobbying the Commission. Organizations that sign up to the register will have to indicate who they are, what their objectives and missions are and what policy areas they are particularly interested in. Furthermore, they can describe their main activities of interest representation as well as their networking efforts. Registrants will also have to disclose financial information, so that the driving forces behind a lobbying effort become clear. Organizations lobbying on behalf of third parties will have to indicate the names of their clients. When registering, interest representatives must sign up to a code of conduct which has been adopted by the European Commission. It sets out general principles – such as openness, honesty and integrity – which should guide the activities of interest representatives when they are dealing with the European Commission. The code also formulates seven rules of behavior that interest representatives are expected to respect. The register features three main categories of lobbyists: professional consultancies and law firms, corporate lobbyists and trade associations and
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NGOs and think tanks. The requirements for inclusion in the register vary for all three: • Professional consultancies and law firms: Signatories in this first category must disclose total revenue related to lobbying the EU institutions, either by placing their clients in boxes representing absolute amounts (brackets of € 50,000) or percentages (brackets of 10%). • Corporate “in-house” lobbyists and trade associations: This second category must provide an estimate of their costs associated with the direct lobbying of all the EU institutions. • NGOs and think-tanks: Those wishing to be included in the third category must publish the overall budget of their organization and indicate their main sources of funding, for example public monies (European, national or sub-national). The register will serve as a testing ground for the feasibility of a register common to all EU institutions – Commission, Parliament and Council by the end of 2008 an Inter-institutional working group should present a proposal for a common register. At present, the three institutions have very different rules governing the behavior of lobbyists and bringing these together into a “one-stop shop” to cover the Commission, the Parliament and the Council will not be an easy task. But despite this ambitious timetable, it is unlikely the French will make the lobbying dossier a priority of their EU Presidency, it means that the EU Council of Ministers is unlikely to adopt conclusions on the matter before the Swedish Presidency in the second half of 2009. From all this is possible make a conclusion that the debate will be prolonged through into the autumn of 2009 and the spring of 2010. Also The European Parliament recommends creating a mandatory public register common to all three institutions, providing for “full financial disclosure” and accompanied by a code of conduct complete with a mechanism for expelling lobbyists who infringe its rules.
4.2 Code of Conduct Creating a Code of Conduct; the Commission called interest groups to achieve a voluntary Code of Conduct, which would meet the Minimum requirements for a code of conduct between the Commission and special interest groups (2 December 1992). From this time, the lobbying organizations have discussed the shape of it. In 1997 a non-profit, professional organization SEAP (The Society of European Affairs Professionals) was set up to represent all those individuals active in European affairs – trade associations, corporate representatives; consultants; lawyers; non-governmental organizations; regional representatives and others – to encourage the highest standards of professionalism for European affairs activity and promote self- regulation of the profession. Its main objective is improving communication between European institutions and civil society. These organizations
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and organizations associated later in the European Public Affairs Consultancies Association – EPACA (launched in January 2005) signed the Code of Conduct, which is inspired by the minimum requirements communication. The European Commission adopted her own a code of conduct regulating lobbyists' behavior on 28 May 2008 as a forerunner to the voluntary register. The code of conduct will not replace the existing code of conduct of public affairs’ associations (such as EPACA, SEAP)6 but will define general principles for lobbyists to follow (such as honesty and transparency), though it will not include the issue of corruption – as this, the Commission maintains, is already foreseen for EU officials under separate staff rules.
4.3 Commission staff’s rights and obligations Formulation of the Commission staff’s rights and obligations; An important part of improving communication between EU institutions and the public was the effort to constitute rights and obligations for Commission staff. It meant finding how EU staff should act towards the public. This is set up in the article Staff regulations (1992). In 2000 the Code of Good Administrative Behavior was adopted, formalizing the standards of professional technique. Since this time, the Commission has modernized administrative procedures, staff rules and its internal control and accounting system. The first Ethics Day was organized in July 2006, where Commission staff had an opportunity to discuss practical ethical cases. In February 2007 the Commission launched a bottom-up drive to review the ethical principles underlying the rules of staff behavior and in March 2008 adopted a Communication on standards of professional ethics for its staff. This initiative is one outcome of the Commission’s efforts to increase public trust and to provide assistance and guidance to staff in understanding their responsibilities with regard to professional ethics. Three main actions are conceived: • Awareness-raising – including the discussion and publication of basic principles of professional ethic, supported by a single thematic website, and training programmes targeted to key groups of staff. • Creation of an ethics infrastructure – each DG should appoint an ethics correspondent to act as a first contact point, and an electronic “one-stopshop” should be set up for managing authorizations. • Clarification of rules – the current rules on potential conflicts of interest should be clarified, with respect to gifts, favors, and outside activities.
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Registrants can choose another Professional code that has comparable rules and they have to be able to hand this code over to the Commission upon request 13
5. Reaction to the Transparency Initiative – deeper analyses Associations of European lobbyists (SEAP, EPACA, AALEP, ALTER-EU, Civil Society Contact Group – act4europe) welcomed this type of initiative (ETI) and considered it necessary to define and formalize ethical and transparent rules for lobbying. They support an EU Lobbying Transparency and Ethics regulation that provides the basis for registration of all lobbyists and their compliance with a common code of conduct. The question of lobbying transparency and ethics has become one of the key and most debated components of the ETI process. A considerable number of the contributions received by the Commission in response to its Green Paper on transparency, in particular NGOs, advocated a compulsory rather then voluntary approach as the only way to ensure full transparency. The debate soon became polarized with opponents and supporters of lobbying disclosure dominating the discussion. Recent debate has focused on the depth of the register's financial disclosure requirement and whether this should include names and precise spending figures for individual lobbyists. The questions, which should have been answered in a clear way, are what information is useful to assess external influences on the legislative process and how they can be acquired without breaking legitimate confidentiality rules or overly burdensome administrative procedures. Moreover financial figures don’t always have to be the best way to give information on the scale of lobbying activity. Questions have also been raised as to whether the register should be applied equally across law firms and professional consultancies as well as trade associations, NGOs and think tanks. The reality is that: • The register requests different types of financial information from different types of actors. For-profit lobbying organisations are asked to report approximate figures related to lobbying expenditure, while public interest organisations are asked to provide total budget figures. This means that the register will not provide comparable financial information to the public. • The register is limited to organizations and does not request the registration of individual lobbyists working for them. This means that the register will not make public any information about the number of lobbyists working at EU level, nor who they work for. The US, Canada and Australia have lobby registers with names. • Lobbyists who voluntarily register certain information about themselves would be given an opportunity to indicate their specific interests and, in return, would be alerted to consultations in those specific areas. Most of the stakeholders have not found these incentives attractive enough as motivation to join a register. It is the “carrot and stick” system without the “carrot”. Any consultant would know better. The Parliament has a much more powerful motivator… the receipt of an access badge.
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• The Commission list of lobbyist does not include other categories of interest groups with a significant presence in Brussels – regional, provincial or local authorities, which lobby on their own behalf or on behalf of companies or other entities situated in their territory; trade unions or accounting firms that offer a full range of business services, including lobbying activities. • Law firms are expected to register when their purpose is to influence policy rather than case law. They should only be excluded “in cases where it is crucial to protect a client's rights”. However, the “level playing field” is essential. Law firms can be competing against others in the field of interest representation, and for this activity, there certainly needs to be a level playing field; for example: public affairs consultants work on competition cases, but on the public affairs dimension of a competition case, very often alongside lawyers, who themselves are working on the legal aspects of the competition case. A Parliament report, adopted in plenary in May 20087, called for the financial disclosure requirement to be applied equally and expenditure disclosed within reasonable parameters. The report sends a strong message to the European Commission by calling for a common mandatory register for the Council, the Commission and Parliament, including lobbyists’ names, their clients or founders and financial disclosure on registered lobbying activities. Registration must be mandatory because without a legislative act, the sanctions will be quite weak. It concludes from the list of categories of lobbyists targeted by the Commission that its approach is essentially based on, primarily, regulating private sector lobbying, without any apparent attempt to apply equivalent transparency to lobbying by public sector representatives; e. g. regional authorities, diplomats, ministers, national parliamentarians except when they are carrying out the tasks of such bodies, as provided for in the Treaties. ALTER-EU (The Alliance for Lobbying Transparency and Ethics Regulation – a coalition of over 160 civil society groups, trade unions, academics and public affairs firms led by the Corporate Europe Observatory, CEO) pushes for the introduction of mandatory disclosure rules on lobbyists as a way to end corporate privileges and secrecy around lobbying in the European Union. ALTER-EU urges the Commission to introduce a fully searchable electronic public register detailing all lobbyists with a significant annual budget in order to enable democratic scrutiny of inputs into EU policy-making. ALTER-EU has been concerned that a voluntary register will never cover the landscape of European interest representatives as comprehensively as possible or ensure that decision-makers and the general public can identify and assess the strength of the most important driving forces behind a given lobbying activity – two of the Commission’s stated objectives for the ETI Communication. For these reasons ALTER-EU has been advocating for a 7
See Stubb Report. 15
mandatory register and the development of a code of conduct for lobbyists, including the disclosure of financial information concerning lobbying activities. According to Erik Wesselius (ALTER-EU, Corporate Europe Observatory) this voluntary lobby register is more of a token gesture for transparency than an actual step forward: “The Commission is obviously more worried about protecting the identity of lobbyists than it is in increasing transparency and restoring citizens trust in the EU at a time when such trust is needed most.” (Wesselius, 2008). ALTER – EU highlights the following: • The voluntary principle of the Commission lobby register is a major flaw. • There will be no names of individual lobbyists. This means no exposure of scandals, no trace of revolving doors, no information on possible conflicts of interest and continued confusion over the number of lobbyists active in Brussels. • The rules for financial disclosure are weak and skewed in favor of industry lobbyists: – different interest groups are allowed to calculate data in different ways, such as in percentage bands of total expenses or in wide ranges; – financial reporting will not be comparable, since industry lobbyists are asked to give a “good faith estimate” of their lobbying expenditure in Brussels, while public interest organizations must disclose their total budget. Transparency campaigners demand that lobbyists be treated equally and disclose lobbying expenses as well as overall budgets. • The lack of common data disclosure rules means that the information published cannot be compared or aggregated. For example, journalists will not be able to ascertain how much money was spent by the agrochemical lobby as a whole to influence legislators, but only what each company has spent, excluding fees paid to consultancies. ALTER-EU recommends to the EU: • EU lobbying disclosure legislation must include: – A mandatory system of electronic registration and reporting for all lobbyists with a significant annual lobbying budget. – Enforceable ethics rules for lobbyists (for instance prohibiting employment of officials or their relatives for lobbying purposes). • An improved code of conduct for European Commission officials, including: – Recording of formal and informal meetings between Commission officials and lobbyists and logging of correspondence (to be made available in a fully accessible online database). – An extended “cooling off” period before Commissioners and senior officials can start working for lobby groups or lobbying advisory firms.
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– The European Commission should encourage the other EU institutions, particularly the European Parliament and the European Council, to develop similar rules. • The Commission must terminate cases of privileged access and undue influence granted to corporate lobbyists, for instance: – joint taskforces in which corporate interests are represented while public interest NGOs are not (such as Cars 21 which consists of Commission officials, CEOs and lobbyists from the automobile industry, but no environmental NGOs). – the privileged status accorded to business lobby groups like the European Services Forum and the Trans-Atlantic Business Dialogue. According to this alliance these are minimum requirements if the European Transparency Initiative is to achieve meaningful democratic progress. Vested interests are defending secrecy and privileged access by advocating “self-regulation”, voluntary codes of conduct and other pseudo-solutions that do nothing to increase democratic scrutiny of the role of lobbyists in EU policy-making. If the EU institutions endorsed such proposals instead of introducing mandatory disclosure and ethics rules, it would fundamentally undermine the European Transparency Initiative. SEAP (the Society for European Affairs Professionals), one of the major organizations representing for-profit lobbyists have been opposing mandatory lobbying disclosure, defending secrecy and privileged access by advocating “self-regulation”, voluntary codes of conduct and registration. Commercial lobbyists have also been arguing against the inclusion of verifiable financial information concerning lobbying activities claiming that “money does not equate influence”, that the process would be too burdensome and also contrary to their client’ right to privacy – although many of their clients are also US-based and have disclosed such information as part of the US regulation on lobby disclosure. In SEAP's view, self-regulation is the best way to promote ethical behavior with lobbyists, whether they represent business or civil society group interests. EPACA (the European Public Affairs Consultancies Association) is not opposed to financial disclosure per se, but says this is only workable if lobbying becomes a fully regulated profession, in which requirements are mandatory for all (including lawyers, in-house consultants, NGOs and public affairs consultancies). If we have a level playing field and a mandatory system, at least we will not have a choice and will have to adapt. A voluntary system, requiring financial disclosure, in their profession will undoubtedly distort the market. Consultancies not able to register may become stigmatized and therefore lose clients. On the other hand, the disclosure of client fees would conflict with contractual obligations or other agreements on confidentiality with clients, and put registering companies at a commercial disadvantage. Some clients may instead work with non-registered consultancies. Having a mandatory system would be the only way not to have
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market distortion. Like other groups, EPACA welcome the withdrawal of the amendment suggesting parameters which would have required disclosure of commercially sensitive information for consultants. By asking registered consultancies to reveal voluntarily such information, to the benefit of nonregistered consultancies or other lobbyists, the Commission would encourage the undermining of competition law. Consultancies would essentially be asked to divulge information which no other profession is required to. EPACA believes any financial disclosure should respect contractual and privacy obligations between clients and their consultants. The consultancies who have signed EPACA´s code of conduct have accordingly agreed to inform any Commission official or elected member of the Parliament - indeed any decision-maker – of the client on whose behalf they are being approached. But they are against putting the name of a client on a website, when it is a competition case. For the reasons outlined above, EPACA calls on the Commission to establish lobbying as a regulated profession. This should include: • Setting up a mandatory legislated registration system following full consultation and due legal process. • A non-discriminatory system, which applies a level playing field to all. • Clear definitions and workable mechanisms for financial disclosure. • Recognition that there is confidential commercial information which must be respected and mechanisms set up to deal with this sensitivity.
6. Conclusion The lobbying and consultancy industry is a growing business and a widely unregulated one. It is a natural, important and legitimate part of the democratic decision-making process, however, as every coin has two sides, sometimes lobbying practices go beyond the legitimate representation of interests, and methods can be deceptive. On the other hand supply can only exist where there is demand for it. So some officials can be tempted to get involved in corruption and other illegal practices. The public has the right to know who these lobbyists are, what they stand for, how they are financed and what their relationship with the institutions looks like. The objective remains transparency and the credibility and legitimacy of this business. Transparent and equal access to all the EU institutions is an absolute prerequisite for the Union’s legitimacy and trust among its citizens Transparency is neither a threat nor a judgment. The transparency is a two-way street that is needed both in the work of the institutions themselves and among the lobbyists. It will result in common rules of behavior and ethical principles for both sides, and registration for interest groups. The question is: should the registration have a voluntary character or mandatory? The Commission has reached the conclusion of self-regulation, but with information to be provided on mission, interests represented and funding, can only be justified as
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sufficient if the information required is also sufficient to address public concerns and perceptions. Many stakeholders and The Parliament have a different opinion. According to them a voluntary system is not strong enough to increase democratic scrutiny of the role of lobbyists in EU policy-making. Europe could learn from the lobbying disclosure legislation in place in the United States and Canada and oblige firms and organizations targeting the EU institutions (with a lobbying budget over a certain threshold) to submit regular reports giving details on the issues they are lobbying on, for which clients and with what budget.These lobbying disclosure reports should be fully accessible to the public in an online searchable database.
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Box. 1:
Rules of Procedure of the European Parliament
Article 3: CODE OF CONDUCT 1. In the context of their relations with Parliament, the persons whose names appear in the register provided for in Rule 9(4) shall: (a) comply with the provisions of Rule 9 and this Annex; (b) state the interest or interests they represent in contacts with Members of Parliament, their staff or officials of Parliament; (c) refrain from any action designed to obtain information dishonestly; (d) not claim any formal relationship with Parliament in any dealings with third parties; (e) not circulate for a profit to third parties copies of documents obtained from Parliament; (f) comply strictly with the provisions of Annex I, Article 2, second paragraph; (g) satisfy themselves that any assistance provided in accordance with the provisions of Annex I, Article 2 is declared in the appropriate register; (h) comply, when recruiting former officials of the institutions, with the provisions of the Staff Regulations; (i) observe any rules laid down by Parliament on the rights and responsibilities of former Members; (j) in order to avoid possible conflicts of interest, obtain the prior consent of the Member or Members concerned as regards any contractual relationship with or employment of a Member's assistant, and subsequently satisfy themselves that this is declared in the register provided for in Rule 9(4). 2. Any breach of this Code of Conduct may lead to the withdrawal of the pass issued to the persons concerned and, if appropriate, their firms.
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Box. 2:
EPACA: Code of Conduct
This code of conduct applies to public affairs practitioners dealing with EU Institutions. Our work as public affairs professionals contributes to a healthy democratic process, acting as a link between the world of business and civil society and European policy-makers. The signatories to this code are all committed to abide by it, acting in an honest, responsible and courteous manner at all times and seeking to apply the highest professional standards. In their dealings with the EU institutions public affairs practitioners shall: (a) identify themselves by name and by company; (b) declare the interest represented; (c) neither intentionally misrepresent their status nor the nature of their inquiries to officials of the EU institutions nor create any false impression in relation thereto; (d) neither directly nor indirectly misrepresent links with EU institutions; (e) honor confidential information given to them; (f) not disseminate false or misleading information knowingly or recklessly and shall exercise proper care to avoid doing so inadvertently; (g) not sell for profit to third parties copies of documents obtained from EU institutions; (h) not obtain information from EU institutions by dishonest means; (i) avoid any professional conflicts of interest; (j) neither directly nor indirectly offer nor give any financial inducement to: – any EU official, nor – Member of the European Parliament, nor – their staff; (k) neither propose nor undertake any action which would constitute an improper influence on them; (l) only employ EU personnel subject to the rules and confidentiality requirements of the EU institutions. All signatories agree that they and all employees of their company will adhere to the above Code, and be subject to the disciplinary rules of EPACA (as set out in the Statutes and Internal Regulations, extract attached) in case of breach of the Code. The signatories will meet annually to review this code.
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Box. 3:
Code of Conduct for Interest Representatives (The European Commission)
Interest representatives are expected to apply the principles of openness, transparency, honesty and integrity, as legitimately expected of them by citizens and other stakeholders. The present Code contains seven basic rules, specifying how interest representatives should behave when representing their interests. RULES Interest representatives shall always: • identify themselves by name and by the entity(ies) they work for or represent; • not misrepresent themselves as to the effect of registration to mislead third parties • and/or EU staff; • declare the interests, and where applicable the clients or the members, which they • represent; • ensure that, to the best of their knowledge, information which they provide is • unbiased, complete, up-to-date and not misleading; • not obtain or try to obtain information, or any decision, dishonestly; • not induce EU staff to contravene rules and standards of behaviour applicable to them; • if employing former EU staff, respect their obligation to abide by the rules and • confidentiality requirements which apply to them.
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Box. 4:
Statement of Principles of Professional Ethics (The European Commission)
Staff of the European Commission serve the public interest of the European Union. Incumbent with this privilege is the obligation to adhere to the principles of the European Civil Service as reflected in the Staff Regulations. • Upholding public interest and accountability – staff's conduct and participation in any decision-making process should be determined by the need to serve the common good and the European public interest, and never by any other interests whether private or as a result of pressure from any source. Staff help the European Commission to meet the highest standards of transparency and accountability. Staffs act in a manner that will bear the closest public scrutiny. • Competence, responsibility and objectivity – staff serve the public interest of the European Union with competence and responsibility, in accordance with the highest professional standards. They constantly aim at achieving the Commission’s objectives effectively and efficiently and they loyally implement all decisions. Staff give honest and impartial advice and act at all times in an independent and objective manner. Conclusions or decisions should be balanced and based on a thorough analysis of the facts and the legal background. Staff must ensure that any conflict of interests which arises between their individual, private interests and the public interest of the European Union is handled properly. • Safeguarding public assets and information – staff ensure proper and efficient use of the resources and public assets trusted to them so as to protect the financial interests of the European Union. Staff are responsible for the security of information in their possession or under their responsibility whilst complying with the rules on access to documents safeguarding the public interest. • General Conduct – staff communicate and behave in a way which will not reflex negatively on the Commission. Staff should in all contexts consider the possible consequences and implications of potential action; they should conduct themselves at all times with a due sense of proportion and propriety, always bearing in mind the image and the reputation of the Commission.
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REFERENCES: [1]
A framework for relations with interest representatives (Register and Code of Conduct), COM(2008) 323 final, Communication from the Commission, European Transparency International, Brussels, 27. 5. 2008
[2]
An open and structured dialogue between the Commission and special interest groups, COM(1992)
[3]
European Transparency Initiative, SEC(2005)1300final
[4]
Green Paper on European Transparency Initiative, COM(2006)194final
[5]
Follow up to the Green Paper on European Transparency Initiativ, COM(2007)127, final,
[6]
General principles and minimum standards for consultation of interested parties by the Commission, COM(2002)704
[7]
Lobbying in the EU: current rules and practices, European Parliament 2003
[8]
Report on the development of the framework for activities of interest representatives (lobbyists) in the European institutions, 2007/2115(INI)
[9]
Rules on lobbying and interest groups in the national parliaments of the Member States, working document, European Parliament, 1996
[10]
KALLAS, S.: Speech on Lobbying: Political Transparency and Representation of interests, Madrid, 1st RETI Seminary, 2007
[11]
LABOUTKOVÁ, Š.: Interest groups, Ph.D. disertation, VŠE, 2001
[12]
BOUWEN, P.: A Comparative Study of Business Lobbying in the European Parlament, the European Commision and the Council of Minesters, MPIfG Discussion Paper 02/7 November, 2002, ISSN 0944-2073
[13]
CHARRAD, K.: Lobbying the European Union, WP Westfalische Wihelms-Universitat, Mnichov, 2005
[14]
LABOUTKOVÁ,Š,: Prosazování zájmů v EU – národní a specifické zájmy jako legitimní prostředek ovlivňující tvorbu a rozhodovací procesy hospodářské politiky v Evropské unii, in: ŠAROCH, S. a kol.: Teorie a praxe lobbingu a jeho regulace v EU – přehledový přístup; Working Paper č. 6/2006; ISSN 1802-2715, ISBN 80-87042-04-2
[15]
http://europa.eu.int/comm/civil society/coneccs/index.htm
[16]
http://www.euractiv.com
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