Unregulated lobbying opens door to corruption
Transparency International said today that Europe urgently needs lobbying reform. A new report from the anti-corruption group found that of 19 European countries assessed, only seven have some form of dedicated lobbying law or regulation, allowing for nearly unfettered influence of business interests on the daily lives of Europeans.
The 19 countries together score just 31 per cent (out of 100 per cent) when measured against international lobbying standards and best practice in the report “Lobbying in Europe: Hidden Influence, Privileged Access”. The new report, the first ever comprehensive assessment on lobbying in the region, studies how well political decision-making is protected from undue influence.
“In the past five years, Europe’s leaders have made difficult economic decisions that have had big consequences for citizens. Those citizens need to know that decision-makers were acting in the public interest, not the interest of a few select players,” said Elena Panfilova, Vice-Chair of Transparency International.
Despite the fact that lobbying is an integral part of a healthy democracy, multiple scandals throughout Europe demonstrate that without clear and enforceable rules and regulations, a select number of voices with more money and insider contacts can come to dominate political decision-making – usually for their own benefit.
The report examines lobbying practices as well as whether safeguards are in place to ensure transparent and ethical lobbying in Europe and three core European Union institutions. It looks at whether there are sufficient mechanisms allowing fair and equal access to decision-makers.
Slovenia comes out at the top with a score of 55 per cent, owing to the dedicated lobbying regulation in place, which nevertheless suffers from gaps and loopholes. Cyprus and Hungary rank at the bottom with 14 per cent, performing poorly in almost every area assessed, especially when it comes to access to information.
Eurozone crisis countries Italy, Portugal and Spain are among the five worst-performing countries, where lobbying practices and close relations between the public and financial sectors are deemed risky. The report shows that post-crisis financial sector reform efforts at the national and EU levels have been thwarted and watered down, in large part due to intense lobbying by the financial sector in Europe.
Revolving doors and vested interests in Europe
None of the European countries or EU institutions assessed adequately control the revolving door between public and private sectors, and members of parliament are mostly exempt from pre- and post-employment restrictions and “cooling-off periods”, despite being primary targets of lobbying activities. In Portugal, 54 per cent of all cabinet posts have been filled by bankers since the country became a democracy in 1974.
Moreover, there is a high risk that conflicts of interest can sway decision-making processes. In France, parliamentarians are permitted to carry out lobbying and consulting work while holding office – a situation that is similar in Portugal and Spain.
“Unchecked lobbying has resulted in far-reaching consequences for the economy, the environment, human rights and public safety,” said Anne Koch, Director for Europe and Central Asia, Transparency International. The research highlights problematic lobbying practices across a wide range of sectors and industries in Europe, including: Alcohol, tobacco, automobile, energy, financial and pharmaceutical.
“Unfair and opaque lobbying practices are one of the key corruption risks currently facing Europe,” said Panfilova. “European countries and EU institutions must adopt robust lobbying regulations that cover the broad range of lobbyists who influence – directly or indirectly – any political decisions, policies or legislation. Otherwise, the lack of lobby control threatens to undermine democracy across the region.”
The report makes several recommendations to ensure lobbying does not lead to corruption, including the following:
All countries and EU institutions must:
- Adopt lobbying regulation that is broad and comprehensive – capturing all who engage in lobbying activities as well as all key lobbying targets.
- Establish mandatory registers of lobbyists, recording detailed information on clients lobbyists represent, who lobbyists target, and with what resources they seek to influence which decisions.
- Ensure a “legislative footprint” is established to track and publish which external input has influenced legislation as well as what contact between lobbyists and public officials has taken place.
- Establish or amend minimum “cooling-off periods” before former public and elected officials can work in lobbying positions that may create or be seen to create conflicts of interest.
All those seeking to influence public policy must:
- Proactively publish information on their advocacy and lobbying activities and expenditure, including supporting documentation sent to decisions-makers, as well as on their political contributions and involvement.