Saturday, December 22, 2012

Lobbying: Boon Or Bane

        Lobbying is prevalent in both social and commercial sectors. Its positive or negative effect will depend on its use. But, it has a more negative perception than positive.  Recent FDI permission in retail in India brought it into limelight. The history of lobbying is a controversial one, and is quite often seen as a ‘dirty word’. And in some languages the word ‘lobbyist’ has particularly negative connotations.
       Wal-Mart filed a lobbying disclosure report with the US Senate. This surfaced the issue. The company has spent close to $25 million (about Rs 125 crore) since 2008 on its various lobbying activities. Activities are related to "enhance market access for investment in India". This disclosure gave a political agenda to opposition against government in India.
         A on line business dictionary defines lobbing as “The act of attempting to influence business and government to create legislation or conduct an activity that will help a particular organisation.” It generally signifies an attempt to influence government decisions, traditionally by targeting legislators or regulators and government officials. 
        Lobbing has a long grand history. In 1792 in USA, the Virginia veterans of the Continental Army hired William Hull, one of the country’s first lobbyists, to lobby for additional compensation. Worldwide UK, France, European Union, Germany, Slovenia, Australia, Canada, Israel, Italy, Hungary, Poland, Lithuania, Georgia have lobbying industry.
        Lobbing regulations are in place to render government officials more accountable. Regulations promote more transparency of lobbyist actions. The role of regulations is to make the public aware of the interest behind the proposals and link between the lobbyists and policy makers.
        Some political systems choose not to adopt regulating lobbying. There are three main reasons behind it: one, barriers to entry to participation in the policy process; two, formulating ‘good policy’ confidential negotiations sometimes necessary; three, costs of hiring staff to monitor it and later enforcing the rules.        .
        Notwithstanding the rarity of regulating lobbyists, nine political systems throughout the democratic world with lobbying rules in place: Australia, Canada, the EU, Germany, Hungary, Lithuania, Poland, Taiwan, and the US.                                                                                                                                 
        Lobbying is, however, facing a crisis of legitimacy. It is big business, particularly for those representing companies and nations. Even civil society lobbying, once conducted by passionate amateurs, has become a sophisticated industry pursuing an extraordinary range of aims. The sheer numbers of lobbyists and the resources at their command threaten to overwhelm or co-opt politicians and public servants.
           Obama banned on the influence of lobbyists in 2009 themed around changing the Washington establishment. A federal judge upheld the attempt by President Barack Obama to cut down the influence of lobbyists, ruling that Obama was within his authority when he barred them from serving on government boards.
        Lobbying has taken the shape of a lucrative and growing business. Roughly $ 3billion dollars is spent in America yearly on lobbing. Google spent over $9 million on lobbying in 2011 and is on track to spend well over $13 million in 2012. Facebook is also upping its lobbying efforts. In the first two quarters of 2012,Facebook spent $1.6 million on lobbying, significantly more than what it spent on lobbying in all of 2011.
        However besides its negativity, it has positivity too. A United Nations Global Compact report ‘Towards Responsible Lobbying’ published in 2005 highlights its white prospects. The report’s forward says the right to voice our concerns and interests, and thereby influence public policy, is fundamental to democracy.        
       Spheres of influence and action have changed. Now actors from one sector are increasingly involved in areas that were formerly regarded as the preserve of other sectors. The vision of responsible lobbying is visible and legitimate multisector collaboration about how best to achieve the goals society holds in common.
         In today’s inter-dependent global economy, leading companies and other high-profile organizations want to understand and manage a wider range of opportunities, impacts, relationships and risks than ever before.
         It is increasingly recognised that the health of the global economy depends on a foundation of global security, spreading affluence and good governance, and that the private sector’s capacities and creativity can help to achieve these goals.      
        In short, business is becoming an integral part of the governance process at all levels from the local to the global. Increasingly, therefore, companies’ reputations, licence to operate, and ultimately accountability, require them to demonstrate consistency in performance on issues like human rights, environmental impacts and corporate governance. Lobbying is an important component of this accountability and consistency.
       So it is time for lobbying to come out of the shadows, and for companies to take a more responsible approach that is accepted by policy makers, in the attempts of both to contribute positively to sustainable development.      
      Policy makers increasingly accept and often actively solicit the views of business and NGOs in shaping public policy on major economic, social, environmental and ethical challenges worldwide.
      The governments must be open to the positive role of business in public policy, without offering favoured industries or the business community in general, undue influence in relation to other stakeholders. Responsible lobbying will change the jaundiced view of business involvement in public policy. 
      Winning friends and inducing people is part and parcel of democracy. Indian companies – including Reliance Industries, Tata Sons, Ranbaxy and Wipro – have hired lobbyists in the US to influence local politicians on issues ranging from visas to defence deals. Unlike in India, lobbying – persuading legislators and officials to make regulations favouring a particular commercial or political interest – is perfectly legitimate in the US.
       According to US law all organisations that spend more than $11,500 per year on such activities have to file reports with the authorities. Walmart clarified the money was spent within the US, and that none was used in India. But the outcry caused by the revelation has pressurised the government to agree to a judicial probe into the matter.
      This is not the first time that ‘Lobbygate’ has caused a ruckus in India. In 1995 the American power company, Enron, faced flak for spending a substantial sum on the ‘political re-education’ of local legislators to get approval for its ultimately ill-fated Dabhol generating plant. More recently, the so-called Radia-tapes raised the lobbyist bogey.
      India has no lobbying regulations, but it is not illegal either. Well-established Lobbying industry operates in a largely opaque environment. Lobbying industry and outsiders demand to spell out clear laws for the practioners. But it hasn’t happened so far.
       Dilip Cherian, founder of a public relations agency, Perfect Relations, and also a well known lobbyist, describes it differently. He says lobbying is an “iterative” process and lobbyists function as a bridge between companies and the government. “We help our clients in understanding the policy environment of the country.        
          What is the government’s take on lobbying? The Planning Commission of India has set up an expert group to look into the processes that comprise lobbying. Arun Maira, member of Planning Commission, said, “We will be considering various interests of all the stakeholders involved.
         Jug Suraiya writes in his article ‘Divided lobby’ why not make lobbying legal in India, make it transparent and bring it above the table, not below it? Would legalised, and therefore publicly accountable, lobbying add to India’s rampant corruption? Given the scale and scope of graft in India, it seems hardly possible that any measure open to public scrutiny, could add to corruption.
            Indeed camouflaged or disguised lobbying – using money to woo people – is prevalent in India, and it’s not just about the underhand giving and taking of cash bribes. For instance, recently information and broadcasting has spent 1,768.55 crore on advertisements tom-tomming the many ‘achievements’ of the government. What is that but the government lobbying for itself, and using taxpayers’ money to do so?
           Now time is ripe for India to take steps to legalise lobbying by enacting a law or framing some strict guidelines. As Spill over message of this step would be a fight against corruption. Regulation will also help in making lobbying white and legitimate it in the eye of public. It is both and we need to use it for boon.
Heera Lal (Views are personal and based on different resources)