CODES OF CONDUCT REVISITED

Codes of conduct are common in many professions and occupations. Codes of conduct provide guidance to individuals on responsible and ethical professional practices. They define rules of behaviour based on core principles and ethical standards for members of the profession or occupation. They increase peer pressure on professionals to comply with certain generally accepted standards. They can also enhance the reputations of individuals by publicizing the principles for which they stand, and provide a means of evaluating the ethics of individuals who practise in the profession.

 Codes of conduct typically address the relationships inherent in lobbying amongst lobbyists and their clients or employers, public office holders, and the general public. While existing codes of conduct differ in detail, they all incorporate similar principles, such as the need for frank disclosure, appropriate confidentiality, and the avoidance of real or perceived conflicts of interest.

TRANSPARENCY

Some codes of conduct require lobbyists to identify themselves as lobbyists when they approach a public office holder, and to disclose the identity of the client or employer for whom they are working and the purpose of the lobbying. In other words, disclosure obligations mandated by a code require that lobbyists be frank about their intentions when approaching public office holders.

ACCURACY AND COMPLETENESS

Codes of conduct also govern how lobbyists present information to public office holders. Most codes require lobbyists to provide accurate, current, and complete information. Codes require that lobbyists not knowingly provide false or misleading information, and to take all possible steps to ensure that inaccurate information is not inadvertently provided to public office holders, clients or employers, or the public. In the same spirit, some codes expect that lobbyists present their case persuasively without resorting to manipulating information in ways that could reasonably be interpreted as dishonest or false.

CONFIDENTIALITY

Many professional codes also contain clauses about confidentiality and require lobbyists to be principled in the ways they acquire and use confidential client information. Typically, lobbyist codes prohibit lobbyists from sharing – without the informed consent of affected persons or organizations – confidential information they acquire through lobbying activities, and stipulate that they not use confidential or insider information they learned through lobbying in ways that might harm the clients, employers, or organizations for which they work

CONFLICT OF INTEREST

In the lobbying context, a conflict of interest can arise in two ways: (1) conflicts that pertain to lobbyists themselves; and (2) situations in which lobbyists’ activities place a public office holder in a real or perceived conflict of interest. Codes often require lobbyists to avoid conflicts of interest in representing different clients. For example, codes of conduct discourage lobbyists from representing competing interests. Lobbyists must not represent two clients in the same industry or two clients with opposing objectives, without the informed consent of those affected. With respect to public office holders, conflicts of interest occur when tension between a person’s personal interests and public duties threatens their neutrality or judgement. The nature of the relationship between lobbyists and public office holders makes it especially vulnerable to conflicts of interest or perceived conflicts of interest. Lobbyists might have previously worked for elected officials as public servants or as political staff. Lobbyists might also have worked on the electoral campaigns of elected officials. These relationships have the potential to place a public office holder in a conflict of interest situation. Conflicts of interest can compromise sound public policy decision making, if they lead to decisions being made based on narrow personal interests rather than the broader public interest.

UNDUE INFLUENCE

Codes ban lobbyists from attempting to influence public office holders by means other than communicating evidence and valid arguments. For example, they often prohibit lobbyists from offering gifts or benefits, or using any other means that might be seen as currying favour or creating a sense of obligation in their attempts to influence public office holders. Lobbyists and public office holders who have frequent contact might naturally develop cordial working relationships. Cordial business relationships often evolve into personal relationships. The lines between the two can become blurred. Codes of conduct can help lobbyists operate so that the line between these relationships is not crossed, and does not even appear to be crossed, in the professional context.

ENFORCEMENT OPTIONS

There are at least three options for code enforcement:

1. Voluntary self-regulation;
2. Regulation by a public regulator; or
3. A hybrid model combining elements of self-regulation and regulator enforcement options.

VOLUNTARY SELF-REGULATION

Many professions or occupations have developed their own, self-administered codes of conduct, such as the lobbyists’ codes . These codes can be specifically tailored to the industry to which they apply, and be relatively easy to develop and adapt, because only the members of the industry need be involved in the process. Although organizations have the ability to enforce their codes with respect to their members, the codes of bodies with voluntary membership exert no influence on individuals who do not choose to be members of these organizations.

Strengths of self-regulated codes:

• Suitability: industry insiders understand the business and know what kinds of incentives and disincentives would be effective.
• Flexibility: codes can be refined efficiently where needed, whereas publicly-appointed regulators are subject to lengthier approval processes to change laws, regulations or policies.
• No cost to taxpayers: administrative costs are absorbed by the industry itself.

Weaknesses associated with voluntary codes

• Voluntary nature: businesses may abide by codes’ requirements only if they lead to financial savings; those requirements that do not save businesses money might be ignored.
• The diverse nature of the lobbying community makes it challenging to reach consensus on the contents and enforcement of a lobbyist code.

INDEPENDENT REGULATOR

Under this model, the oversight and enforcement of a lobbying code of conduct would be carried out by a regulator who is independent of the industry being regulated.

Compared to self-regulation, this model could result in a less tailored and less responsive code, particularly if the code were developed without industry input. For a government regulator, the process of developing a code of conduct might entail more involved planning and analysis, broader public consultation, review by legal counsel, and review and possible revisions by the sponsoring ministry before the code is approved. However, an enforceable code administered by a third party might well be taken more seriously by lobbyists than a voluntary code, and oversight of a code by an independent authority could inspire greater public confidence.

Strengths of government regulation

• Integrity: there is greater public confidence when the regulatory authority is independent from the regulated entities, avoiding perceptions of conflicts of interest that might result where lobbyists are regulating lobbyists.
• Effectiveness: independent regulators might be more rigorous and transparent in conducting investigations.

Weaknesses of this model are:

• Relative inflexibility: the code would be established by government, making it comparatively difficult to amend quickly, due to the lengthier consultation and approval processes required of public agencies.
• Costly: if supported by public money, administering the code would be more expensive for taxpayers.

HYBRID

Hybrid models for regulation combine some features of self-regulation and some features of government regulation. A model based on “enforced self-regulation” might require individual companies to create and enforce their own codes of conduct. The codes would conform to minimum standards, and be subject to approval by an independent regulator. If the regulator found that a code did not meet minimum standards, the regulator would return the code for revision. If serious breaches occurred, regulators could assume an enforcement role.

Strengths of hybrid codes include

• Suitability: beyond even broad industry standards, rules could be shaped to suit individual organizations and to be comprehensive for each organization.
• Flexibility: as with self-regulation, codes can be refined quickly as a need is demonstrated, whereas publicly-appointed regulators require a relatively lengthy approval process in order to change laws, policies or regulations.
• Possible increased compliance and oversight: organizations might be very committed to enforcing rules they devised, and closer oversight is possible through in-house oversight.
• Efficiency in relation to direct oversight: as with self-regulation, some of the costs associated with hybrid self-regulation are lower, because the administrative costs are absorbed by the industry itself.

Weaknesses of hybrid codes are

• Inefficiency: both companies and the regulatory agency would bear costs of regulation. Companies would bear costs of administering the code, and regulators would bear the cost of vetting codes for their adherence to minimum standards.
• Inconsistency: there could be considerable variations in the codes across industry organizations. Some would likely be more rigorous than others.
• Administrative fairness: there could be issues related to establishing fair avenues of appeal on enforcement decisions.