TRANSPARENCY AND INTEGRITY IN LOBBYING: HOW TO WIN BACK THE TRUST (OECD)

As part of the OECD Trust Agenda, the OECD Public Sector Integrity Network hosted the OECD Forum on Transparency and Integrity in Lobbying on 27 and 28 June in Paris, France.  The Forum mobilized 115 participants representing 26 OECD and partner countries, the EU, private sector, lobbying associations, trade unions and civil society.

Summary of discussions 

Participants agreed that, while the external perception of lobbying is often associated with negative connotations, the “principle underpinning regulation is that lobbying is a healthy part of democracy”. The purpose of regulation should therefore not be to deter lobbying activities, but rather to “throw light” on advocacy efforts “without prejudgement of good or bad objectives of advocacy activities”, as judging this rests the responsibility of the decision maker. Effective lobbying regulation is “legitimate and needed for informed decisions” and “can help the democratic process by avoiding capture and facilitating equitable access”.

In the current economic climate, there is a strong emphasis on limiting the administrative burden. This should be kept in mind when developing legislation. Participants exchanged suggestions in this regard, including leveraging new technologies, or considering a balanced approach to administrative requirements (e.g. “lobbyists should not have to register every single contact, but more on subject matter, purpose, organisation/person lobbied, type and intensity of lobbying activity”). Participants also highlighted called to keep in mind, as a matter of diminished administrative burden and enhanced policy coherence - that some information might already be on the public record. As a core element, it is important to give adequate consideration to the usability of information collected and disclosed to facilitate and promote its use by a broad range of stakeholders, including by allowing them "to draw conclusions on trends and development".

In addition, discussions provided evidence that the actual regulation is highly context specific. In particular, the definition of who is a lobbyist remains open for discussion. Ireland, for instance, has opted for a broad scope, based on “communications (on specific policy matters) with designated public office holders”. Under this definition, NGOs, trade associations, companies and 3rd party lobbyists are included. In Chile, they are seeking an approach that regulates lobbying without making a distinction between lobbyists and other interest groups, as this discussion has stalled the regulation of lobbying for a decade. The inclusion or exclusion of lawyers remains up for discussion.

However, there seem to be a consensus that to achieve a level playing field, “all organisations participating in the decision making process are expected to provide information”. The first important step is to define a lobbyist broadly – no discrimination should be made. The definition should take into account the final objective of lobbying activity.

Regarding the regulatory process, individual country contexts shape the final outcome, given political and societal considerations. Participants agreed that, in the absence of a strong political will, it is preferable to adopt a “gradual approach” rather than wait with the hope of reaching an improbable consensus on the “perfect legislation” (e.g. Austria). The mere existence of a regulation or mechanism (e.g. a register)  shapes the discussion on transparency and changes behaviours.

However, it is important to recognize that a large number of regulatory initiatives have been introduced in the wake of major political scandals. This “reactive approach” severely limits the ability to manoeuvre, to design and to reach a consensus on an optimal regulation for the country. Participants called for engaging in a forward-looking approach to regulation as part of strengthening an overall integrity and transparency framework for better decision making.

In considering regulation, some elements of the regulation emerged as key in the discussions: (i) an oversight body that is independent, and that can preserve normal interaction between constituents and their representative; (ii) adequate reporting and monitoring; (iii) focus on compliance and enforcement (although the scope of sanctions can vary to use an adequate combination of incentives); (iv) focus on education and guidance; (v) keep abreast of new developments, and revise regulation accordingly (for example Ireland, based on the lessons learned from Canada, built into the law a review mechanism after a period of 5 years); (vi) provide adequate balance of incentives (e.g. in the US, a de-regulation tendency is observed, that at least partly can be traced back to recent legal developments that put a toll on the professional opportunities for lobbyists).  Regarding the last two points:

1. On incentives, while there is a consensus on the importance of adequate enforcement, different sanctions can be used in order to encourage compliance. For example, “low levels of infringement can be dealt first with education and alerting, then with naming and shaming, before administrative sanctions” (e.g. Ireland, Slovenia), this allows for an opportunity for  “misunderstandings to be corrected, clarifications made, or even late compliance” (e.g. EU). Stronger sanctions can also be considered, (e.g. Austria 2013 Lobbying Act provides, under certain circumstances, for the nullity of contracts).

2. Likewise, providing positive incentives can encourage desired behaviour (e.g. special access badges, access to consultation process, preferential treatment for registered lobbyist in meetings and access to information (a specific mailing list)). It is about convincing people.

3. It is also important to keep in mind the changing times and trends. For example, lobbying does not only take place in formal meetings – lobbying can occur at breakfasts, town halls, and informal gatherings. Also, some lobbyists lobby on commission (e.g. in the USA) and this would not be covered by regulation in most cases.

Transparency and integrity in lobbying is “a societal effort, and not only a government effort”. Efforts by governments can be complemented by other stakeholders (i) where a number of government, private, and sunshine organisations track records and alert authorities if needed; (ii) participants in the decision making process, by committing to high standards of conduct. To enable this shared responsibility:

1. As mentioned earlier, the usability, realiability and timeliness of information collected and disclosed is essential to facilitate and promote its use by a broad range of stakeholders, including by allowing them “to draw conclusions on trends and development”.

2. Education and awareness are key in facilitating compliance. This includes compliance at the local level (e.g. Slovenia).

3. Broader guidance must be provided to stakeholders. Beyond rules and codes, “there are situations that require adhoc analysis not found in codes and rules” where there “needs to be strong advice access on individual basis (e.g. ethics correspondent).

These discussions during these days clearly showed how these components such as managing conflict of interest, codes of conduct, asset disclosure, the revolving doors phenomenon, lobbying practices and political finance interlinked in a comprehensive Integrity Framework. For example, Canada - one of the most advanced models- is expanding its focus on transparency and will review, in parallel, the 1997 Code of Conduct.

Participants agreed that both lobbying and political finance have a strong bearing on the legitimacy of the political process. If citizens do not trust in governments’ ability to pursue public interest when designing and implementing policies, the “foundations of parliamentary democracy are at stake”. In addition, lobbyists have a stake in the regulation of political finance. While “lobbyists have discovered that they can’t buy meal/travel/gifts for members of congress, there is no limit [in the USA] for others to raise tens of thousands of dollars to finance campaigns”.

Much remains to be done in this regard. The 3rd evaluation round of GRECO focused on the funding of political campaigns and parties, reaching the overall conclusion that “national law and practice falls short of principles established”. Particular weaknesses that were found were “ineffectual transparency of political party books, absence of independent monitoring body, and insufficient pursuit of violations to political finance rules”. The approach to regulating political finance should have three components: further transparency, effective control and enforcement.  These elements will inform future OECD work in this regard, in particular, a policy debate forum in Fall 2013.

In addition, participants linked a broader Integrity Framework with proportionality and inclusiveness in the decision making process. This is not only between business and civil society, but also between big business and SMEs. There is a need to better understand how to ensure inclusiveness in the policy making process for those stakeholders with less capacity to make their voice heard. This implies the responsibility of the public sector to adequately balance the input in consideration of the incentives driving each actor.

In addition, participants called for improving measures that “place responsibility on both sides: the lobbyists as well as those who are being lobbied, with the required focus on the actual decision makers – (e.g. code of conduct for parliamentarians, legislative footprint, etc)”.

Likewise, this is also about broad corporate governance issues: adequate reporting mechanism, including whistleblowing protection, and internal control risks management policies need to be put in place by companies and positive incentives built into management practices, including recruitment, rewards, recognition, discipline and sanctions.