The economic crisis has sparked loud calls  to improve governance both in private  sector boardroom practices and public  sector management. It has also drawn  attention to lobbying, as governments  consider reforms that will affect business  practices, taxation and more. Lobbying  lies at the interface between governments, businesses, non-profit organisations and the  population at large.

Lobbying is a channel that civil society  uses for influencing public decisionmaking.  Businesses, labour and nongovernmental  organisations all exploit it  to varying degrees. Some 15,000 lobbyists  are registered in Washington DC, and  5,000 in Ottawa. Nearly 3,000 lobbyists are  registered with the European Commission  in Brussels and over 4,500 in the European  Parliament. Lobbying mobilises significant  resources too: $3.5 billion was disclosed  for lobbying the US federal government in  2009. This figure is $180 million higher  than in 2008, indicating that lobbyists do  not hold back during recessions, but work  harder to influence reforms.

Interest groups will always seek to influence  government decision-making and are a  reality in modern democracies. Indeed,  lobbying can yield valuable information and  data for more informed decision-making.  But as lobbying happens on the sidelines,  if not shadows, of the democratic process,  it also brings risks of distorting policy  and undermining wider public interests.  Deals struck behind closed doors between  lobbyists and public officials worry voters,  in particular when the public picks up the  bill. This behaviour fuels scepticism in  democracy.

An IMF paper published in December  2009 links intensive lobbying and high-risk  lending practices. The paper concludes  that “the prevention of future crises might  require weakening political influence of  the financial industry or closer monitoring  of lobbying activities to understand the  incentives behind better”.

Little wonder that lobbying causes concern  around the world, particularly if there are  no clear standards for expected conduct of  public officials and lobbyists.

The financial and economic crisis has  reinforced these concerns. Governments  had been rapidly reshaping regulations in  the face of cries against business-as-usual  and for changes to stop the crisis from  happening again. True, governments saved  the day by acting swiftly to take over failing  financial institutions and bail out firms  through a quick and massive infusion of  funds. But as many of these institutions are  again making large profits while welfare  remains threatened, people understandably  wonder how far reforms will really go. Have  lobbyists slowed the process down? Can  lobbying be made to operate more fairly?

Developing or updating regulations  and setting standards for enhancing  transparency in lobbying are no easy  matters. Policymakers and legislators  must determine an appropriate, fair and  enforceable response. Good judgement is  needed to establish best practices.

The OECD, with its wealth of policy  experience, has been leading a factbased  policy debate on how to enhance  transparency and accountability in lobbying.  We have reviewed lessons learned from  legislation, government regulations and also  self-regulations by lobbyists. And to be sure,  OECD countries are taking action.

Some are implementing legislation  and government regulations, notably in  Australia, Canada, France, Hungary, Poland,  the UK and the US. Recently, both houses  of the French parliament issued codes  of conduct for lobbyists and launched  registers. The European Commission  also recently strengthened its regulations  on lobbying. Israel, an OECD accession  candidate country, recently amended its  legislation too, while Slovenia is debating  changes.

Several OECD countries are at bill stage or  are taking action in parliament, including  the Czech Republic, Korea, Italy, Mexico,  Norway and the Slovak Republic.

Self-regulation by lobbyists themselves is  also on the rise: lobbying brings benefits, so  best not to abuse it and lose it, seems to be  the view. In other words, transparency is in  everyone’s interests.

An OECD survey of lobbyists shows that  76% agreed that transparency would  help alleviate the negative perception of  inappropriate influence-peddling. Moreover,  61% of surveyed lobbyists would welcome  mandatory disclosure of their activities.

To help address these concerns, OECD  members have recently adopted a  recommendation based on a set of 10  principles as guidance to decision-makers  on how to promote good governance in  lobbying. Particularly in the context of the  current crisis and for countries that are  rewriting regulations for entire sectors,  these principles will help rebuild trust,  promote a level playing field for business  and avoid potential hijacking by vocal  interest groups.

The principles support transparency, for  instance. This means decision-makers  should know who the lobbyists are, and be  prepared to disclose their names, objectives,  clients and funding sources by keeping an  up-to-date register. The US and Canada  have long kept registers of lobbyists and  encourage regular disclosure of lobbying  activities both at the federal and subnational  levels. Other countries have acted  more recently, such as Hungary, where  the 2006 Act of Lobbying Activities now  requires lobbyists to register with the justice  authorities and to submit quarterly reports  on their activities. In the same year, Poland  also passed a lobbying law to promote  registration and transparency.

Policymakers should use the principles  to foster integrity by providing guidelines  on expected standards of behaviour of  public officials and lobbyists. They should  take action to prevent conflicts of interest,  protect confidential information and  prevent the revolving-door phenomenon,  whereby public officials work in client  firms and then return to the public sector  again, bringing not so much expertise as  insider information. France adopted rules  of transparency and ethics for interest  representatives in its lower house of  parliament in July 2009, which includes a  code that lobbyists must comply with. The  French senate adopted a similar code in  October 2009.

The OECD principles also encourage  use of innovative technologies to assure  compliance, transparency and enforcement.  Canada and the US now use data systems  for online search, transparency and  disclosure.

To be fair, lobbyists do not always have to  rely on government to oversee their trade.  Compliance with codes of conduct can be  achieved through self-regulation and with  disciplinary procedures for violations. In  Sweden and Ireland, for example, sanctions  range from reprimand to expulsion from  the professional associations.

The principles offer a menu of policy and  regulatory options for decision-makers,  ranging from legislation and government  regulations to self-regulation. Each country  can adopt the policies or regulations most  suited to its needs.

The OECD principles on lobbying provide  guidance to decision-makers at all levels  of government and at both national  and sub-national levels. They support  the involvement of the private sector  and civil society too. This underlines  one of the essential thrusts of the new  OECD principles, which is to encourage  policymakers to level the playing field by  dealing fairly and even-handedly with all  interested stakeholders, and not just those  with finance, in the democratic law-making  process.

The new lobbying principles are now  attracting attention in high-level global  policy fora, and have been promoted in  the OECD competition forums, the NATO  assembly, and others. Our experts are  actively involved in discussions on how  to establish and review rules, policies and  practices to foster transparency and integrity  in all member and partner countries. We  are also reviewing how lobby regulations  function in particular contexts, while  continuing to compile the global evidence  and data needed to reinforce good decisionmaking.

Remember that the new OECD principles  are not an anti-lobbying tool. Indeed, several  countries that have improved transparency  have not visibly reduced lobbying. Rather,  the aim is to improve lobbying practices as  part of the drive to foster open governance  and restore public trust in markets and  democracy. The OECD principles are a vital  component in this effort to make the world  economy stronger, cleaner and fairer.

 
References

OECD (2009), Lobbyists, Government and Public  Trust, Volume 1: Enhancing Transparency through  Legislation, Paris

 
OECD (2010) Lobbyists, Government and Public  Trust, Volume 2: Promoting Integrity through  Self-Regulation, Paris (forthcoming).

©OECD Observer No 279 May 2010