Free and open access to government is an important matter of public interest. In democratic societies, citizens have the right to express their interests and concerns to elected or appointed government officials at national, regional and local levels. While corporate access is also permitted - and in many cases welcomed - this should not extend buying influence or otherwise gaining private advantages through lobbying activity, especially when it could be detrimental to the public interest.
Business has a critical role to play to inform public policy and help create fair and robust legislative frameworks. Indeed, when legislating, politicians and government officials need technical expertise - knowledge and experience which often lies solely within business. The challenge to businesses which are in conversation with government is to ensure that they balance the furthering of their own private interests with those of their stakeholders and of the public at large.
As Transparency International explains, the means by which interests are expressed can be open to abuse. Public perceptions of this activity are often negative with many assuming that abuse is commonplace, that businesses use their influence for their own ends and direct their financial resources to unduly affect public decision-making. Such undue influence could affect policy formulation, or create favourable regulatory regimes or, more crudely, result in awarding of contracts or other favours, sidestepping fair competition. Indeed when organisations have large public sector contracts and also engage in lobbying, questions are raised about the potential for abuse of the public purse. For example pharmaceutical companies who lobby NICE and fund studies into the efficacy of their products have often been accused of unscrupulous practice.
Making donations to political parties can give small groups of individuals the ability to sway political outcomes. Indeed in the UK, the Conservative Party are heavily reliant on corporate donors, whereas the Labour Party takes most of its donations from Trade Unions. Theories as to new means and new technologies for powerful people and organisations to sway elections and interfere with the very mechanics of democracy are rife, and in particular surrounding the election of Trump in 2016 and the Brexit vote earlier in the same year.
Bell Pottinger’s dramatic fall from grace and their subsequent expulsion from the PRCA (Public Relations and Communications Association) provides a clear illustration of the costs of behaving differently overseas, and indeed getting lobbying and influencing fundamentally wrong. The company not only suffered reputational damage, it actually failed as a business when its partners, clients and investors fled. Accused of stirring up racial tensions in South Africa on behalf of the Gupta family, a scandal erupted, and clients such as Waitrose, Richemont, Investec, HSBC, TalkTalk and the Clydesdale Banking Group promptly cut their ties with the agency. It subsequently went into administration after its second-biggest shareholder, Chime, owned by the US firm Providence and Sir Martin Sorrell’s WPP, had handed back its 27% stake for free to escape the scandal.
From food safety and labelling, to destruction of the rainforest, to marketing unsafe pharmaceuticals, to blocking health and safety practices in the workplace, time and again examples show companies have lobbied to continue to be able to negatively impact society and the environment and exploit vulnerable people in the pursuit of profit. The potential reputational damage of this is even greater when the business portrays itself as responsible, while inwardly it pursues anti-social and environmentally harmful practices. Influence Map was created by former CDP executives who discovered that many businesses scored well on their carbon emissions and associated disclosures, while at the same time lobbying against measures to enact more ambitious requirements to reduce GHGs further and even funding climate change denial groups.
Lastly, undue influence and private and corporate gain are feared to flow from the “revolving doors” which appear to exist between business and government. There are undoubtedly practical and universal benefits when individuals move between posts in government and related jobs in commerce and industry. When done conscientiously, this may enable the two sides to better understand each other and bring practical experience to policy making, with benefits to wider society. Yet there is suspicion that these revolving doors between the public and private sectors may result in networks of former colleagues being used for private business advantage and/or individual gain.
The UK government’s ACOBA (Advisory Committee on Business Appointments) was set up to advise former ministers on new appointments. However ACOBA has been branded a ‘toothless regulator’ which does little to prevent the use and abuse of political contacts. In July 2017 a National Audit Office report found that rules intended to stop civil servants abusing their contacts and knowledge in the private sector are not being consistently applied or monitored.
The Association of Professional Political Consultants estimates that professional lobbyists make up only 1% of those who engage in lobbying in the UK. The UK’s 2014 Transparency of Lobbying, Non-Party Campaigning and Trade Union Administrative Act, requires only consultant lobbyists to register. This mandatory register lists only 148 organisations. Since the vast majority of corporate lobbying is done in house, or by membership organisations, with further lobbying by NGOs and campaign groups, this activity remains largely unregulated by UK legislation.
The Act has also faced controversy around stifling the free speech of charities and campaigning groups. Currently, any organisation that spends over £20,000 (£10,000 in Wales) on activity that could ‘reasonably be regarded’ as intended to influence voters in England and Wales within a year of a general election is required to register with the Electoral Commission. Charities have claimed this places an insurmountable burden on small organisations, with 122 organisations stating that it essentially gags them. The 2017 UK snap general election caused many to declare this unfeasible. Greenpeace has become the first organisation to be reprimanded by being fined £30,000, after it refused to register.
The Scottish 2016 Lobbying Act is more comprehensive. An organisation that lobbies MSPs, Scottish Government Ministers, Special Advisers, or the Scottish Government’s Permanent Secretary, about government or parliamentary functions must register these activities on the register run by the Scottish Parliament. This applies to any lobbying that takes place face to face, orally or via video conferencing. Lobbyists are to register before meeting politicians, and are then to submit returns detailing the nature of these meetings. Ireland’s open register lists all meetings had between organisations with more than 10 employees and designated public officials, leading to far greater transparency on lobbying than in England and Wales.
A variety of organisations, including charities, NGOs and trade associations as well as businesses, engage in lobbying for many reasons, with varying levels of success and influence. As Georg Kell, executive director of the UN Global Compact, has written on responsible lobbying, "ensuring that lobbying doesn’t undercut corporate responsibility is of great importance... But probably more important is the question whether and how lobbying can become a positive force to support, or even expand, a commitment to responsible business."
To this end, a constructive dialogue between business and government will likely conform with these key UN principles detailed in the UN Caring for the Climate Report:
- Legitimacy: Is the company’s lobby on this policy issue legitimate? Is it fair and democratic? Or is it shady and viewed as illegitimate by the general public? Is it reasonable for this company to lobby government on this issue? Should it be doing it in the first place? Is the company competent in engaging in dialogue on this policy area?
- Opportunity: How is the company able to influence on this issue? How does it have access to public officials, and how can it influence public opinion? What are the available channels of influence it can use, and does the use of any such channel present ethical dilemmas of any kind?
- Consistency: Is the company’s point of view backed up by science? Do they have evidence for what they’re arguing and do they argue the same way in public and private interactions with policymakers?
- Accountability: Is the engagement aligned with the company’s responsibilities to all its stakeholders? Are the long term interests of employees, shareholders, wider society and the environment considered and protected?
- Transparency: Does the company make clear disclosures of its positions, interests, influence and the policy outcomes that are likely to affect it? Is it clear to the media, the general public, employees, shareholders and policymakers how the company is trying to influence policy and why?
Even in the absence of adequate or effective government regulation, businesses can take steps to ensure their lobbying is responsible, which might include:
- Setting out guidelines regarding hiring lobbyists or donating to interest groups whose functions include lobbying (including policy think-tanks and campaigning groups, e.g. on environmental and human rights issues)
- Being transparent about financial support for politicians, political organisations and campaigns
- Making public the briefing materials and consultation responses provided to public bodies or officials
- Recording and restricting the amounts of spending on receptions, meals, gifts etc.
- Setting out circumstances where a 'conflict of interest' might arise and implementing guidelines for actions and steps to deal with the problem
- Publicly stating the issues on which they work to engage and influence decision makers
- Putting in place comprehensive whistleblowing procedures, so staff can report irresponsible behaviour
- Aligning their lobbying activity with their business interests with the public interest and the interests of the environment.