|
|
|
|
There may be trouble ahead |
|
|
|
Public Affairs News , April 2007
Kristian Schmidt explains to Andrew Alexander why - and how - the
European Commission plans to regulate the industry
As the European Commission moves inexorably on with attempts to bring
greater transparency to lobbying in Brussels, Kristian Schmidt - the
deputy head of cabinet to Siim Kallas, the commissioner responsible for
anti-fraud - is alive to fears that regulation will hit some parts of
the PA industry harder than others.
The disarmingly simple philosophy behind the register of interests and
the proposed code of conduct is this: the public believe the democratic
process is being compromised by money, and the only way to prove it is
not is to be completely transparent.
Recalling when Kallas first encountered the subject, Schmidt says: "Mr
Kallas and the Commission as a whole were met very early on with the
question, 'Are you aware the Commission is lobbied with a strong bias in
favour of corporate interests?'. Mr Kallas' reaction was no, I don't
think this is true, but if that is the perception, here is another
source of suspicion and mistrust."
Better to act now
Schmidt, a Dane, argues that it is better for the Commission to step in
now with regulation that will prove "light in the long term" than wait
for a Jack Abramov-scale lobbying scandal to hit Europe, with the
ensuing response of tough legislation.
"We don't believe there's a case made where we have a scandal on our
hands and we need to go directly to mandatory rules," he says. "You can
quote different incidents and specific cases of questionable behaviour
in different lobbying situations. We have anecdotal evidence mostly
linked to lobbying in the European Parliament, but we don't think you
can say we have a crisis on our hands and now we need to take very
strong action.
"What we do think we have is the potential of a problem in the future,
and it would be very silly not to take action now. Lobbying is a very
intensive phenomenon in Brussels, second to Washington the biggest place
in the world for lobbying, and it would be careless for us not to take
steps to try to protect the reputation of the institutions and the
profession itself."
Schmidt is keen to show the Commission is not lining up with the
anti-business forces in an "ideological fight", and describes its role
as "offering collaboration to ensure legitimacy".
In fact, he says, the original plan was to ask everyone from
professional lobbyists to NGOs to sit down together and sort it out
among themselves. But the Commission was told it "would never happen".
Existing industry codes of conduct are no use, he says, because they can
be painted as self-imposed paper exercises, and Schmidt envisages a
relatively simple - two pages long - common code, "or at least a common
set of minimum criteria".
Register of interests
On the thornier issue of the register of interests, the Commission has
the difficult task of applying the same principle across the broad
church of lobbying.
"It has to be clear who you represent, what your mission is and how
you're funded. The trick has then been to try and translate that
principle into how the different groups will then have to declare these
points.
"How you are funded may be clear for say a trade association, if you are
an inhouse lobbyist for company X producing cars in Germany, that's very
obvious.
"Then the problem becomes different when you are not going directly but
using a public affairs consultancy, paying people to lobby on your
behalf. There the rules would need to be different, same again for NGOs,
which might get some public money, some membership fees."
The breadth of the definition of what it means to lobby is, Schmidt
says, the reason why going straight to mandatory regulation would not work.
"If we were to sit down with our legal service and try to come up with
mandatory rules it would by definition end up in a much more narrow
sense. That would be unfair to the core of professional lobbyists who
would be subject to legislation, while some of their real competitors
would escape because they would say they have special status as trade
associations or law firms."
As well as pointing out the benefits of a collaborative approach,
Schmidt adds that setting up a mandatory system would take longer than
the remaining lifespan of this Commission.
Voluntary regulation is inevitably open to being dismissed as toothless,
but Schmidt puts a lot of faith in the industry's desire to be seen to
be doing the right thing.
One supporting incentive not aimed at professional lobbyists is that the
Commission will alert registered groups when new consultations start.
The 'stick' comes from treating consultation replies from non-registered
groups as an individual contribution, no matter how many people they
represent.
Financial disclosure
On the controversial matter of financial disclosure, Schmidt says the
principle is both necessary and not anti-business, but a "challenge to
all sides of the argument". Asked why it is necessary to know how much
is being spent, he sounds surprised, and says it is "a rather tangible
indication of the intensity and force of the interest that is being
targeted at the EU institutions", But he also says it is by no means the
only goal, and points to the different reporting requirement for other
types of lobbying group.
"So for NGOs, for instance, we're asking for the funding sources but
we're also asking for the membership fees. Because you could say for an
NGO they're not very rich, although some of them are, but you could see
with the financial disclosure we're asking for whether they really are
funded by the grassroots.
"If they come and say we're representing the European citizen, well, if
you can see they are funded 60 per cent by the European Commission and
their membership fee is for instance less than 10 per cent, the rest is
donations and contributions from other associations, you can say 'Okay,
your views are very interesting and high-quality in terms of technical
detail and what have you, but you cannot say that you're
grassroots-based demonstrated through contributions for your work."
He says the new Washington rules have turned lobbying into a
"bureaucratic nightmare" that threatens to shut the door between
legislators and lobbyists.
"We have an open system in Europe, the institutions are open, we want to
invest in protecting the reputation of the profession so we can continue
to have this close interaction. This is the European model we want to
preserve."
He emphasises the trust involved in disclosure for companies, pointing
out that they will be asked to declare the size of turnover spent on the
European institutions - not office rental, campaign spending, hourly
rates or other more voyeuristic titbits of information.
Tougher action possible
For all the optimism that a collaborative European model will work, the
Commission is keeping the door firmly open on tougher action if needed,
Schmidt says they are not just keeping their fingers crossed, and points
out that the trial period for the register of interests - from spring
2008 to spring 2009 - is relatively short.
The Commission will be making a crunch decision in the last few months
of its period of office and Schmidt thinks that while a registration
rate of much less than 50 per cent will be deemed a "clear problem", 50
or 60 per cent will mean better promotion of the need to register could
take care of that problem.
"If there was a failure, we have made it clear we would then envisage
taking steps towards mandatory registration, so we will not let it fall." |
|
|
|
|
Events Calendar