SCOTTISH EXECUTIVE

Parliamentary Practices in Devolved Parliaments

5: Lobbying practice

Introduction

This section examines the regulation of lobbyists in various countries; detailing where applicable any Registers / Codes of Conduct for lobbyists; weaknesses and inconsistencies in such legislation and points of note in relation to a Scottish Parliament. The section does not detail in-depth the nature and practice of lobbying Parliaments. Much reference material is available on this subject ⁴⁹ .

Lobbying is a two-way process between lobbyist and representative. The codes of conduct and Registers of Members' Interests adopted in various legislatures will also affect lobbying activity⁵⁰ . The actions of civil servants, officials and outside advisors in respect of lobbying must also be considered and there is a brief section examining these issues.

In considering the regulation of lobbyists it is important to note the difficulties in regulation and what it entails. Potential problems have to be addressed for any legislation to be comprehensive and effective. The following areas need to be considered:

The overall need for regulation
If it is considered necessary, how to control and regulate through voluntary mechanisms or statutory options entailing a specific register.

The statutory option of a specific Register however will need to detail:

who is to be registered
what constitutes lobbying activity
the areas of the governmental / political system for which registration is required
informational details of lobbyist and client
the body responsible for maintaining and updating the Register
powers of enforcement
access to the Register
possible accompanying Codes of Conduct ⁵¹

These areas will be addressed as far as possible on a country by country basis.⁵² Detailed attention is paid to the system of regulation in America, Canada and Australia. This is in part due to the significant size of the established commercial lobbying industry in these respective countries and existing legislation.

The lobbying industry is a diverse one, composed of many different organisations and group representatives. The one theoretical distinction that can be made between groups are those that are professional consultants representing a variety of clients on a fee-paying basis and those lobbyists who are employed (paid/unpaid) to represent a specific interest e.g. representatives of Trade Unions, voluntary organisations. Whether both types of lobbyists need regulation is still subject to debate in most of the countries studied and should be considered in respect of Scotland.

The purpose behind, and techniques used in, lobbying also make it difficult to define. The simplistic definition of lobbying as making direct contact with individual representatives in an attempt to influence legislation or opinion has to be revised. Consideration has also to be given to the process by which lobbyists monitor and gather information. ⁵³

The above difficulties in defining lobbying in practice and the necessity for regulation are given greater clarity in the specific examples of Canada, the USA and Australia. Methods adopted by European countries are also studied.

5.1 Canada

The Canadian Federal Government instigated the Canadian Lobbyists Registration Act (1988) in response to the growth of the industry and sleaze allegations against Government Ministers. Statutory regulation was considered as necessary and with this the consequent methods of enforcement and control / arbitration. Amendments to the Act were made in 1993 to improve and clarify certain aspects. ⁵⁴

In recognition of the areas of lobbying activity in Canada, lobbyists are required to register their activities whether they be in the legislature, executive or bureaucracy. The Register initially drew a distinction between who should register; professional lobby firms were required to give more detailed information on their clients and finances than those lobbyists representing corporations and interest groups. This two-tier distinction had to be subsequently amended in 1993 as it proved too difficult to draw.

The information required of lobbyists is specific with requests made for the name and business address of individual lobbyists or firms; the name and address of client/clients; the subject matter of the representation; identification of the relevant legislative proposal, Bill or Contract etc.; whether payment is based on a contingency fee; and some detail of campaign strategy.

Subsequent amendments in 1993 were made requiring more detailed information on the subject to be lobbied. The name of the ultimate client/beneficiary also had to be listed to tighten up the registration of lobbying on behalf of large corporate organisations.

It is clear from the details required in registration that the Register is intended for informational rather than regulatory use. This is chiefly because no stipulation is made for the disclosure of fees and no ban is imposed on contingency and success fees.

Administration of the Register is within the office of the Registrar General of Canada and overseen by a specially appointed Ethics Counsellor. The Ethics Counsellor produces an Annual Report on the Register and is responsible for investigation and enforcement. Fines are imposed on those companies failing to comply.

The Register is open to the public and published on the Internet. Accompanying the Register is a Code of Conduct which all lobbyists sign when they register.

The Canadian example illustrates the difficulty that there is in distinguishing between different types of lobbyists. The amendments of 1993 to include all lobbyists have met with little protest or opposition from groups now required to give more detail. Gaps do still remain in registering those lobbyists, mainly law and accountancy firms who claim only to be gathering information. The absence of fee disclosure and ban on contingency fees have made the Register largely of informational use. However, firms that have failed to comply with registration have been investigated and fined.⁵⁵

5.1.1 Quebec

Lobbying does take place in the Assembly, however this tends to be either on an informal basis or through consultation at the Committee stage. It appears that the Federal legislation is considered sufficient in controlling lobbying activity.

5.2 USA Federal Level

Lobbying in the USA at the Federal level is on a far greater scale and far more established than in any other country. This has to be recognised in the relevance of its regulatory regime to Scotland.

The Lobbying Disclosure Act 1995 amended and updated previous legislation of 1938/1946. Amendment was considered necessary because it was felt that "existing lobbying statutes have been ineffective because of unclear statutory language, weak administrative and enforcement provision and an absence of clear guidance as to who is required to register and what they are required to disclose".⁵⁶ The 1995 Act now requires all types of lobbyists to register. The previous 1946 Act stated that registration was required for individual paid lobbyists and those groups whose principal purpose was to influence Congress. This was judged through receipts for lobbying activity. Therefore trade organisations and interest groups did not necessarily have to register if their main sources of income were not for this purpose. The only requirement was for them to submit quarterly spending reports.⁵⁷

The ambiguity in what constituted lobbying was also clarified to include any background research and information gathering that many lobbyists undertook.

The registration law now also applies to attempts to influence executive officials and administrative agencies, and as such is the acknowledgement that much of the legislation enacted by Congress emanates from the Executive.

In comparison to Canada, additional information on the financial estimates of income and expenses on the lobbying activity is required if this exceeds $5,000 and $20,000 respectively. The inclusion of financial details, whilst subject to wrangling and amendment, has proved useful in regulating and scrutinising the industry.

The Register is maintained by the Secretary of the Senate and the Clerk to the House of Representatives. It is updated every Quarter and is publicly accessible and available over the Internet.

On an additional note, provision is made in the Act for the "quarantining" of legislative and executive officials, banning them from becoming lobbyists for one year after leaving office. Details of former employment in any legislative and executive capacity have to be registered for up to two years from the last appointment.

No statutory requirement is made for lobbyists to sign a Code of Conduct, however several organisations act as representative associations e.g. the Washington Public Affairs Council, and have voluntary codes of conduct. There are also several independent public watchdogs.

The success of the Register is difficult to judge. The number of registered lobbyists has doubled since the enactment of the 1995 Act and the current number stands at 14,000. Registration does appear to carry with it some advantages for firms. However the Register does not reflect the true size of the lobbying industry or scale of financial transactions involved.⁵⁸

5.2.1 State Level

42 out of 50 States in America have regulation affecting lobbyists. The extent of regulation varies from State to State. Many have chosen to adopt the Federal Act of 1995 at a State level e.g.. New Mexico State.⁵⁹ However State Registers do vary in clauses eg.California has stricter regulations concerning the declaration of finances and New Mexico has a ban on contingency fees.

5.3 Australia

Regulation on lobbying activity was passed in 1984. It has important differences from the Canadian and US Federal Acts. Only paid lobbyists are required to register. Significantly registration is only necessary if lobbyists are to make direct representation to federal ministers and officials. No financial details are required and the register is only updated through new applications. There is no statutory Code of Conduct. The Register is maintained by the Registrar of Lobbyists within the Government Department of Administration.

Two rules of the register are however of note. Lobbyists must produce a letter of confirmation of registration when contacting ministers and officials. Officials must then check with the Register that the registration is current before any representations are received. One effect of this however is to encourage a system of privileged access to executive officials.

Access to the Register is on a need-to-know basis. Information is only released when government officials make reasonable request. Such a system appears to go against opening up the system of lobbying. However having restricted access to the Register may encourage both registration of commercial lobbyists and a willingness to disclose commercially sensitive detail. In the other countries where access to the Register is open, the greatest beneficiaries of this have been other lobbying companies who consult the Register to find out their competitors activities.⁶⁰

The lack of regulation in the legislature has allowed lobbyists ease of access to the legislative process. Changes in this process, with more use made of the committee structure, have given lobbyists greater opportunity to influence debate.⁶¹ Similar decentralisation to Committees has occurred in the USA Congress, but commentators have argued the opposite to this view. Lobbying is seen to be spread more thinly and subjected to greater scrutiny due to the increased expertise of Committee Members. However there is evidence that lobbying by large corporations has succeeded in having senior members nominated to serve as outside advisors to these Committees.⁶²

Methods and regulations concerning the consultation practice of Committees of the Scottish Parliament should probably address the issue of lobby targetting and define clearly who is called in for consultation and reasons for their contribution.

5.4 Austria

There is no formal Register or Code of Conduct for lobbyists in the National Council / Federal Council or at the Land level. However there is a considerable pre-legislative consultation process by the Government with its "social partners" - the self-governing associations - Chambers of Commerce, Unions, Professional Associations. These associations are corporate bodies in public law and statutory bodies under the provisions of the federal constitution. Due to their statutory consultation rights, lobbying activity has tended to be an integral part of the Austrian system. The associations also have close ties to political parties and have a significant input at the parliamentary stage, utilising contacts made with individual MPs.⁶³

There are also independent associations with voluntary members, and increasing numbers of pressure groups who are not represented in this system. As the social balances in Austria change, there may be need for reform and regulation in the consultation process.

5.5 Belgium

No statutory or regulatory registration of lobbying is practised at the national or regional level. However the lobbying industry is discussing the necessity for a voluntary Code of Conduct and a Register supervised by an independent arbitrator. The movement for some form of regulation comes from former PR companies now working in political lobbying. PR companies in Belgium do have their own Representative Association with a Code of Conduct. Proposals are to copy this code for political lobbyists.⁶⁴

5.5.1 Walloon Region Parliament

The Rules of the Parliament make provision for consultation at the Committee stage. Committee members can nominate outside groups they wish to be consulted. Lobbyists however are only allowed to be present if they can show that they have a direct interest in the subject; and the nominating member is present.⁶⁵

5.6 Denmark

The only formal regulations are for lobbyists who wish to make representations to the Standing Committees, where their names must be entered on Committee records. Of note however is a stipulation that those making a deputation must have a natural affiliation to the person, organisation or association. This may therefore restrict the amount of access professional lobbyists have to Committee consultations.⁶⁶

5.7 European Parliament

The European Parliament has enacted the most recent legislation covering lobbying activity (1996). This was due to the large growth of lobbying activity and commercial lobbyists. All lobbyists must sign a Register, detailing name and address of firm; client details and subject of interest. They must also sign an accompanying Code of Conduct (reproduced in Appendix I to this report) in order to be issued with a pass.

The Register is administered by the College of Quaestors and is open to the public.

Note should also be made of the attention given, in drawing up this legislation, to the registration of MEPs Assistants and secretarial staff.⁶⁷

5.8 Finland

There is no system of registration or regulation. Lobbyists contact representatives and political parties on an informal basis.⁶⁸ As in Norway (see below), there is a formal consultation procedure for interest groups for the preliminary preparatory work on legislation in the Parliamentary Committees.⁶⁹

5.9 France

The Senate has no register of lobbyists. The only restrictions on lobbying activities are through the administering of passes to the Assembly buildings by the General Secretariat of the Presidency and the College of Quaestors. Passes for lobbyists can however be obtained at the request of individual deputies. Consequently access to the legislature is relatively easy.

5.10 Germany

Annex 2 of the rules of procedure of the German Bundestag require that a public list is drawn up annually of all groups wishing to make representation to the Bundestag or Federal Government.

Lobbyists must register before they can give evidence before Parliamentary Committees or have passes to the buildings. The register requires the following details: name and address of group, composition of the board of directors, sphere of interest, names of clients or appointed representatives.

The Register does not however have any legal force and is for informational use only. Furthermore, it does not give privileged access to parliamentary hearings by only registered groups.⁷⁰

The Bundesrat does not have any rules governing lobbying.

5.10.1 Lander

No specific reference to lobbying regulation and registration could be found. Some recognition of its existence is made in references to "Members' Interests" e.g. in Lower Saxony. Members are full-time politicians, and receive remuneration in respect of this. The L�nder committees do, however, have much lobbying activity directed at them ⁷¹, as happens to their counterparts Canada, Australia and the USA.

5.11 Italy

There have been many attempts to pass legislation on lobbying in the Italian Parliament. In drafting this legislation, the Research Department of the Chamber of Deputies noted some of the difficulties in registering lobbyists, e.g. defining lobbying activity and lobbyists. The Department also considered some need for institutional reform in the Parliament, particularly in publicising consultation in the pre-legislative process. The proposed legislation in 1992 failed due to the early dissolution of Parliament.

The only mechanisms for control are the Senate rules in issuing cards to the Senate buildings for national associations and organisations.⁷²

5.12 Northern Ireland

There are no current proposals for the regulation of lobbyists. This is due, according to one commentator, to the small size of the commercial lobbying sector in Northern Ireland. However this sector is predicted to grow.⁷³

5.13 Norway

There are formal procedures for lobbying activity detailed in the Standing Orders of the national Parliament, the Stortinget, which refer to the consultation practice within committees in that a committee can arrange an open hearing where representatives from organisations or other groups can meet and give evidence on behalf of their cause. (This is, as will have been seen above, a common practice in many devolved parliaments also). Each Committee itself decides who is invited to the hearing.

There is however no Register or Code of Conduct for lobbyists.⁷⁴

5.14 Spain

There are no rules governing the activity and registration of lobbyists in either of the two chambers of the Spanish Parliament.

5.15 Sweden

There are currently no mechanisms for regulating lobbyists in the Swedish Riksdag. However the methods of lobbyists have attracted increasing attention in the last three years, and Private Members Bills have been tabled but rejected by the Parliament. This was, it has been suggested, because the Riksdag saw lobbying in its present form as a natural and legitimate part of the political process and part of the long tradition of involvement by organisations in Swedish society.⁷⁵

The debate over lobbying has however resulted in a voluntary Register of Members' Interests modelled on the Westminster Register.⁷⁶

5.16 Wales

The situation in Wales is similar to that found in Northern Ireland. There is a very small commercial lobbying industry based in Cardiff and as yet there are no proposals for regulation.

5.17 Other countries: Portugal, Luxembourg, Netherlands, Greece

None of these countries have registration or regulation of lobbying activity. Rules of procedure do deal with the consultation process by Committees.⁷⁷

5.18 Members' Interests and Codes of Conduct

As noted in the introduction, the effective regulation of Members Interests and enforcement of a Code of Conduct for them is just as important in ensuring the integrity of a lobbying system. A comparison of the Registers of Members Interests in other European Parliaments carried out by the Parliament's Committee on the Rules of Procedure indicates that the Westminster Register is one of the most detailed and worthy of consideration by the Scottish Parliament.⁷⁸

Codes of Conduct for representatives are another mechanism of controlling lobbying influence. Codes of Conduct for US Congressmen and legislature officials are detailed in how they deal with lobbyists. Of note for any similar Committee in the Scottish Parliament, the American Senate's Committee on Legislative Ethics runs regular training seminars for new Senators to explain and clarify Senate rules and cover proper responses to lobbying.⁷⁹

5.19 The current situation in Scotland

It is clear that the number of professional political affairs consultancies in Scotland is growing. There are around a dozen companies, some very recently established, that handle political lobbying for clients. Furthermore, there are Westminster based companies that have clear intentions to involve themselves in the Scottish Parliament either from a London or Edinburgh base. The number of PR firms that will also engage in paid lobbying could also be significant. In addition Scotland has a large voluntary sector, and recent recruitment shows that more organisations are considering appointing Parliamentary Officers.

Certain aspects of the Scottish Parliament have also been mentioned that could affect the level of lobbying activity. The ideal aim of encouraging greater participation through new technology and consultative techniques; the committee system and possible use of outside advisors; significant policy networks in health, education, transport and industry will all heighten the level of lobbying activity.

Whilst this lobbying activity will be on a much smaller scale than in Washington or in Ottawa, and the numbers of professional lobbyists in Scotland may not necessitate regulation and control, there is a willingness within the Scottish industry for scrutiny and control. An "Association for Scottish Public Affairs" (ASPA) has been proposed, which will require members to sign a Code of Conduct. The first clause of this Code states that members shall be bound by any rules of the Scottish Parliament designed to regulate their activities.⁸⁰ Current and new proposals for Codes of Conduct by Representative Associations (included in Appendix I) also aim to raise the overall standard and professionalism of lobbyists. This will be of benefit to both MSPs and lobbyists. It is felt within the industry that the positive step of self-regulation and the raising of standards by lobbyists in Scotland provides a basis for future co-operation in solving the problems associated with any statutory regulation.⁸¹

The administration of Lobbyists' Registers does not appear to be problematic in the countries studied. Questions were raised as to the cost of operating a Register in the UK House of Commons Select Committee Report on Members' Interests (1991), but proposals such as registration fees could reduce the amounts involved.⁸²

However, it is clear that lobbyists need to see the Registrar as an independent arbiter. Crick and Millar in their proposals for Standing Orders for the Scottish Parliament do not see the need for an Independent Parliamentary Commissioner for Standards, and recommend rather a Committee on Members' Interests.⁸³ However, such a committee may not be able to work independently enough to encourage good practice. Whether maintenance of the Register is within the Parliament or through a Government Department needs to be resolved, chiefly through consultation with involved parties.

5.20 Summary

Many national Parliaments and regional Assemblies have yet to implement regulation on lobbying activity. The necessity of regulation in Scotland should therefore be carefully considered. The likelihood of regulation appears to be connected to the level of concern that there is in the Assemblies and general public of particular countries over lobbying activity e.g.. in Sweden and Italy, and it is the public perception of the growth of lobbying and misconception over its role that tends to lead to recommendations for regulation. Regulation as seen in Canada and the USA is possible. The Scottish Parliament can draw and improve upon their experience, and utilise the positive commitment in the Scottish political affairs industry to ensure that lobbying can be practised in conformity with the highest levels of professional conduct.

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