Lobbying: Access and influence in Whitehall - Public Administration Committee Contents


Appendix: Paper by Special Adviser on Regulation of Lobbying Activities outside the UK


Introduction

This document features an overview of the regulation of lobbying in Canada, Germany, Australia, the EU and the USA. These five cases represent the most relevant comparisons for the PASC enquiry. Within these five cases, those of Canada, Australia and the EU are particularly pertinent.

In the case of Canada, existing regulation has been built upon to create an advanced form of lobbying regulation, which includes an agency devoted to enforcing the legislation. The regulation of lobbying in Canada is now moving towards an approach similar to that of the USA. In the case of the EU, there is move away from the piecemeal, incentive driven approach towards regulation, to a more encompassing approach, covering all of the European institutions rather than just the Parliament. The case of Australia is particularly instructive, since prior to 2008, there was no regulation of lobbying in place. Now, however, there is some, though the new measures have been subject to criticism on the grounds of incomplete coverage. The discussions surrounding the new legislation are particularly useful to compare with those in the UK.

Whilst less pertinent, the cases of Germany and the USA are also worth noting. Germany is the only major European country to regulate lobbying. The lessons from the German case are that particular forms of regulations can inadvertently privilege one group ('peak' associations') over another ('professional lobbyists'). The USA is included to illustrate the 'far-end' of the regulation spectrum (though it should be noted that many individual US states regulate even more).

Finally, it is worth noting that a recent academic study has attempted the measure the impact of lobbying regulations. The findings are that actors in more highly regulated systems are more likely to believe that regulations help ensure accountability. Moreover, they are more likely to be knowledgeable about legislation. Actors in weaker regulatory environments are more likely to think that there are loopholes.[165] In sum, the authors of this study suggest that whilst regulation is not a cure for corruption, it does establish a framework within which all policy-makers can effectively function, ultimately promoting the long-term goals of accountability and transparency.[166]

Canada

There has been regulation of lobbying on Canada since 1989. [167]

1988 ACT

The 1988 Lobbyists Registration Act established a register of lobbyists where there was direct communication with federal office-holders for the purpose of influencing the formulation or implementation of public policy. In came into force in 1989.

1995 AMENDMENT

2003 AMENDMENT

2008 LOBBYING ACT[169]

New regulations, under the Lobbying Act,[170] came into force on 2nd July 2008 following the Federal Accountability Act 2006. The principal changes are:

  • The creation of a new Commissioner of Lobbying,[171] who is an independent Agent of Parliament with authority to enforce the Lobbying Act and the Lobbyists' Code of Conduct.[172] The Commissioner may prohibit lobbyists found guilty of infractions of either the Lobbying Act or the Lobbying Code of Conduct from communicating with federal government as a paid lobbyist for up to two years.
  • The introduction of the concept of designated public office holder (DPOH). This group includes Ministers and certain senior officials. Lobbyists must file a monthly return if they carry out oral or arranged communications with a DPOH.
  • A five-year post-employment prohibition for DPOHs and designated members of Prime Minister's transition teams, on lobbying the Government of Canada
  • A ban on any payment and receipt of any benefit that is contingent on the outcome of a consultant lobbyist's activity. This does not apply to in-house lobbyists
  • Extension from two to ten years of the period during which potential summary conviction infractions under the Lobbying Act may be investigated and prosecution may be initiated
  • Doubling of the monetary penalties for lobbyists who are found guilty of breaching the requirements of the Lobbying Act.

Australia

  • Australia has recently re-introduced regulation of lobbying via the Lobbying Code of Conduct.[173]
  • The Lobbyists Registration Scheme was originally introduced in 1983, following a scandal (the 'Combe Affair'). The Scheme was, however, widely acknowledged to be ineffective in respect of adherence to its provisions and the lack of effective enforcement. It was abolished in 1996.
  • A number of recent incidents prompted a review of lobbying regulations in Australia—these included the lobbying activities of a former Premier of Western Australia (Brian Burke), and the subsequent sacking of four ministers for their inappropriate contacts having breached Cabinet confidentiality. In general, there have been concerns in respect of former high level politicians becoming involved in lobbying in areas directly relevant to their past responsibilities.[174]
  • The new Lobbying Code of Conduct came into force on 1st July 2008. This followed the establishment of a similar code in Western Australia in 2006. Any lobbyist who wishes to contact a Government representative for the purpose of lobbying activities must be registered and must agree to comply with the requirements of the Lobbying Code of Conduct. As of September 5th 2008, there were 192 lobbying concerns listed.[175]
  • The Lobbying Code of Conduct provides the following information: business registration details, including trading names of the lobbyist; the names and positions of persons employed, contracted or otherwise engaged by the lobbyist to carry out lobbyist to carry out the lobbying activities; the names of clients on whose behalf the lobbyist conducts lobbying activities.[176] Where market sensitivity exists, the client's name may be kept from the register until market sensitivity has passed.[177] Details are updated quarterly. The Lobbying Code of Conduct is published on the Prime Minister and Cabinet's website.
  • Importantly, adherence to the code only applies to lobbyists who are lobbying on behalf of third parties (i.e. professional lobbyists). It does not apply to 'in house' or 'organisational' lobbyists.
  • The terms apply principally to communications with government ministers (as opposed to other parliamentarians), Parliamentary Secretaries, persons employed or engaged by ministers of Parliamentary Secretaries, Agency Heads or persons employed under the Public Service Act.[178]
  • Whilst there is no independent statutory oversight body, the register is policed by the Cabinet Secretary, who has the power to refuse registration or remove lobbying organisations or individuals from the register should they contravene the terms of the code or fail to provide accurate details in a timely manner. Government representatives are obliged to report breaches of the code to the Secretary. Importantly, enforcement is at the discretion of the Cabinet Secretary—there is no regime of offences.
  • Government representatives are forbidden from knowingly be part of lobbying activities by lobbyists who are not on the register
  • The Lobbying Code of Conduct also features provisions in respect of the 'revolving door' which are relevant to the PASC enquiry, but not this paper.[179]

COMMENTARY

  • In some ways, there are significant parallels with the PASC enquiry. Griffith notes 'While lobbying is undoubtedly a 'legitimate activity', there is a perception that lobbyists can sometimes wield undue influence and that, without appropriate regulation, their activities may skew the political decision-making process'.[180]
  • The route that Australia has taken, however, is one of statutory regulation. The first point to make is that this route has generally been welcomed by lobbyists (or at least those who submitted evidence).[181] The majority of submissions indicated support for the statutory regulations in the interests of increasing transparency. Indeed, in a number of cases, there were calls to strengthen the regulations.[182]
  • However, a number of lobbyists and commentators have highlighted perceived shortcomings. First, and most obvious, is the restriction of the register to professional lobbyists and the exclusion of 'in-house' and 'organisational' lobbyists.[183] Thus, in house lobbyists, lobbyists from peak associations, trade unions and not-for-profit organisations are not covered by the regulation. In sum, the regulation does not cover a significant level of lobbying activity, though the Standing Committee on Finance and Public Administration is committed to re-examining the code towards the end on 2009.[184]
  • The second concern surrounds procedural fairness. In sum, the view has been expressed that too much power is vested in the Cabinet Secretary and that there was a lack of transparency in respect of how decisions in respect of the register would be taken.
  • Thirdly, whilst many lobbying firms welcomed the code, there were some concerns expressed by smaller lobbying organisations, who felt that the register would place an unfair regulatory and administrative burden on small businesses.[185]
  • Fourthly, some lobbyists feel that the Code should cover all Parliamentarians, not just Ministers—again reflecting the general call for the regulation to be tougher rather than weaker.[186]
  • It is also worth noting, though outside the realms of this paper, that trade unions were concerned that their members would be unreasonably restricted in respect of future employment by tighter regulations in respect of 'revolving doors'.

European Union

1992-2008

2008

  • In 2007, the European Commission reviewed lobbying under the European Transparency Initiative. In a draft report,[187] the Commission proposed a voluntary register and code of conduct for lobbyists. This was in addition to the existing framework in the European Parliament. The proposal included a proposed definition of lobbying—consistent with Article 4 of the Rules of Procedure of the European Parliament. Critically, it was also argued that where law firms were engaged in influencing future law and not representing court cases, they should be regarded as being lobbyists.
  • In May 2008, the Commission issued guidelines on the register and code of conduct.[188] It indicated that any entity, regardless of legal status,[189] would be expected to register if it was engaged in activities defined as 'activities carried out with the objective of influencing the policy formation and decision-making processes of European institutions.'
  • The Register includes the following information: the turnover of professional consultancies and law firms attributable to lobbying the EU institutions, as well as the relative weight of their major clients; an estimate of the costs associated with direct lobbying of the EU institutions incurred by in-house lobbyists and trade associations; the overall budget and breakdown of the main sources of funding of NGOs and think-tanks
  • Where there are breaches of the code highlighted via complaints, the Commission will investigate and may suspend or even exclude lobbyists from the Register.
  • The Register is published on the European Commission website.[190] As of 8th September 2008, there were 315 interest representatives registered.
  • Initially, this Register and Code of Conduct applies only to the European Commission. However, the European Parliament has proposed that by the end of 2008, a working group of Council representatives, Commissioners and MEPs will consider the implications of a common register for all lobbyists—something that had been called for jointly by the ECPA, EPAC and SEAP.[191] The European Parliament also proposes the establishment of a monitoring body.[192]

Germany

The German Bundestag is currently the only house of parliament in the EU with specific regulation of lobbying.[193]

  • Regulatory systems for relations between private actors and political institutions have been in place since the early days of the German Federal Republic
  • All groups wishing to defend their interests before the Bundestag or Federal Government must be entered on a register, which is updated annually and published in the federal gazette
  • In theory, lobbyists may not address parliamentary committees or be issued with a pass for parliamentary buildings unless they appear on the register. However, the register lacks any legal force. Moreover, no special privileges in respect of automatic consultation arise from registration. Equally, if invited by members of the Bundestag, non-registered groups may still appear at committees.
  • In addition, lobbyists often seek to influence either ministers or the civil servants at the pre-parliamentary stage. This aspect of lobbying is largely unregulated.[194]
  • However, Article 23 of the Federal Rules of Procedure emphasises that ministers should only cooperate with national federations. As a consequence, this affords some privilege to peak associations and arguably hinders professional lobbyists.[195]
  • No rules on lobbyists apply in respect of the Bundesrat.

USA

Professor Justin Fisher, September 2008


165   R. Chari, G. Murphy and J. Hogan, 'Regulating Lobbyists: A Comparative Analysis of the United States, Canada, Germany and the European Union', Political Quarterly, 2007, 73:3, pp.422-38. Back

166   Chari, Murphy and Hogan, p.433 Back

167   Useful summaries of the 1988, 1995 and 2003 Acts can be found in M.M. Malone, Regulation of Lobbyists in Developed Countries Institute of Public Administration, Dublin 2004 Back

168   M. Rush, 'The Canadian Experience: The Lobbyists Registration Act' Parliamentary Affairs, 1998, 51:4, p. 517 Back

169   A useful summary of the new legislation in Canada can be found in The Lobbying Act: A Summary of New Requirements, Government of Canada, June 2008 Back

170   Details can be found at: http://laws.justice.gc.ca/en/showtdm/cs/L-12.4 Back

171   Details can be found at: http://www.ocl-cal.gc.ca/epic/site/Lobbyist-Lobbyiste1.nsf/en/h_nx00261e.html Back

172   Details can be found at: http://www.ocl-cal.gc.ca/epic/site/Lobbyist-Lobbyiste1.nsf/en/nx00019e.html Back

173   The Lobbying Code of Conduct can be viewed at: http://lobbyists.pmc.gov.au/lobbyistsregister/index.cfm?event=contactWithLobbyistsCode Back

174   G. Griffith, The Regulation of Lobbying, NSW Parliamentary Library Research Service Briefing Paper 5/08 (June 2008), p. 1 Back

175   The lobbying register can be found at: http://lobbyists.pmc.gov.au/lobbyistsregister/index.cfm?event=whoIsOnRegister Back

176   Standing Committee on Finance and Public Administration, Knock, knock…who's there? The Lobbying Code of Conduct, Commonwealth of Australia, September 2008 pp.1-2 Back

177   The Lobbying Code of Conduct, paragraph 5.2 Back

178   The full list can be found on The Lobbying Code of Conduct, paragraph 3 Back

179   See The Lobbying Code of Conduct, paragraph 7 Back

180   Griffith, Executive Summary, 2 Back

181   The evidence received in response to the Senate enquiry, together with transcripts of hearings are available at: http://www.aph.gov.au/senate/committee/fapa_ctte/lobbying_code/index.htm Back

182   See, for example, Senate Standing Committee on Finance and Public Administration, Official Committee Hansard, Monday 16th June 2008, p. 2; Springboard Australia, Submission; Public Interest Advocacy Centre Ltd, Submission Back

183   An exception to this consensus can be found in the submission from CPA Australia Ltd. Back

184   Standing Committee on Finance and Public Administration, Knock, knock…who's there? The Lobbying Code of Conduct, paragraph 2.20 Back

185   See, for example, John O'Callaghan & Associates Pty Ltd, Submission. Whilst Mr O'Callaghan supported the code of conduct, he felt the regulatory burden was too high Back

186   See, for example, Springboard Australia, Submission, Public Interest Advocacy Centre Ltd, Submission Back

187   European Parliament, Draft report on the development of the framework for the activities of interest representatives (lobbyists) in the European institutions (2007/2115 (INI)) 31st October 2007 Back

188   European Commission, Communication from the Commission: A framework for relations with interest representatives (Register and Code of Conduct) (SEC (2008) 1926) 27th May 2008 Back

189   Except local, regional, national and international public authorities Back

190   https://webgate.ec.europa.eu/transparency/regrin/welcome.do;REGRINSID=8WGGLFVP3hG1H2Hmc5zHhQz
JXW7zXTL2MvR3YY5gFv3n4byQpsJz!1914171189 
Back

191   http://www.publicaffairs.ac/inindex.php?in=main.htm Back

192   European Parliament, Development of the framework for the activities of interest representatives (lobbyists) in the European institutions (INI/2007/2115) REG 045 8th May 2008 Back

193   A useful background to German regulation can be found in K. Ronit and V. Schneider, 'The Strange Case of Regulating Lobbying in Germany' Parliamentary Affairs, 1998, 51: 4, pp. 559-67. Back

194   Ronit & Schneider, p. 562 Back

195   Ronit & Schneider, p. 563 Back

196   http://www.senate.gov/legislative/Public_Disclosure/LDA_reports.htm Back


 
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