Thursday 27 October 2016

New zero-tolerance approach is revolutionising how European regulators approach the veiled world of corporate lobbying

More and more details are emerging about the previously hidden world of Europe's sprawling lobbying industry as watchdogs in Dublin and Brussels launch a drive towards greater transparency, writes Simon Rowe

Simon Rowe

Published 01/11/2015 | 02:30

Europe's new zero-tolerance approach was in evidence in recent weeks when European Ombudsman Emily O'Reilly blasted the EU for having failed to be transparent about its dealings with the tobacco industry
Europe's new zero-tolerance approach was in evidence in recent weeks when European Ombudsman Emily O'Reilly blasted the EU for having failed to be transparent about its dealings with the tobacco industry

New transparency regulations are lifting the lid on the opaque world of corporate lobbying in Brussels and Dublin. The veil of secrecy over what goes on behind closed doors in Europe and in the corridors of power in Dail Eireann is being swept aside as greater scrutiny is applied to how big business interacts with policy makers.

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Strict rules have been introduced by European Union (EU) chiefs to curb the money-spinning lobbying bonanza in Brussels - home to the European Parliament and offices of the European Commission.

Europe's new zero-tolerance approach was in evidence in recent weeks when European Ombudsman Emily O'Reilly blasted the EU for having failed to be transparent about its dealings with the tobacco industry.

She said that Brussels must now publish all meetings with tobacco lobbyists and described its previous efforts as "inadequate".

Ireland has followed Europe's lead in recent months by establishing a lobbying watchdog and an online register of lobbying activity.

Hailing the register as an "important milestone in enhancing transparency in Irish public life", Ireland's first head of Lobbying Regulation, Ms Sherry Perreault, said it will "add a new level of transparency to the process of policy development and political decision-making" in this country.

Any lobbyist who engages Irish officials about policy matters must make a public disclosure every four months, with the first returns due by January 21 next year. The regulatory system, which will be policed by the Standards in Public Office Commission, seeks to bolster Ireland's international reputation for transparency.

Ireland was recently ranked sixth best out of 19 EU member states in a survey by lobbying watchdog Transparency International.

Anne Koch, Transparency International's director for Europe and Central Asia, describes lobbying as a "key corruption risk" across the EU.

"Lobbying doesn't mean corruption, but unregulated lobbying leads to high risks of corruption. This is not an abstract issue. Lobbying affects what we eat, what we drink, the bills we pay, the medicines we take."

The establishment of a lobbying register is a key tool in guarding against undue corporate influence in the political system, said Koch.

A crackdown on unregulated lobbying was sparked by a 2011 scandal involving MEPs who passed amendments on legislation for bribes.

Under the new regulatory regime companies must make a number of vital disclosures including information on how many lobbyists they employ in Brussels, how much they spend on lobbying activity, and any involvement they have in EU committees, forums or groups.

The changes affect thousands of lobbyists, including approximately 100 Irish firms registered with the EU, some of whom earn millions every year from the lucrative lobbying bonanza in Brussels.

EU regulators have been playing catch-up with the sprawling lobbying industry.

A simple comparison reveals the scale of the challenge facing the EU.

Just over 350 lobbyists have signed-up to the new Irish register, whereas 8,300 lobbyists are registered as EU lobbyists in Brussels, with more than half of those granted accredited access to European Parliament offices.

But insiders suggest the true figures may be a lot higher as there are thousands more unofficial lobbyists and consultants.

Lobbying is big business - and it's getting even bigger.

The largest category of lobbyists in Brussels is 'in-house lobbyists and trade and business associations'. This category numbers a whopping 4,200 lobbyists.

NGO lobbyists number more than 2,000, with professional consultants and law firms numbering close to 1,000. Think-tanks account for about 560 more.

As companies are forced to make more complete disclosures, more detail is emerging about the previously hidden world of the lobbying industry.

The EU transparency register reveals that VW is one of Europe's biggest-spending lobbyists and has intensified its lobbying activity in the past 12 months. The troubled carmaker has tripled its spend on political lobbying at the EU's Brussels headquarters.

Volkswagen chiefs increased spending in Brussels from €1m to €3.3m, making the German firm ninth in the ranking of companies and groups spending the most on EU lobbying.

Not surprisingly, emissions regulations and clean energy policy are listed among the top policy areas that Volkswagen seeks to influence. The number of persons employed part-time by VW in EU lobbying activities has also increased more than tenfold from just four to 43, which is the equivalent of 18 full-time lobbyists.

In addition to VW's lobbying muscle, Verband der Automobilindustrie (VDA), the influential lobby group for German carmakers, spends about €2.4m and employs 14 full-time staff in Brussels.

The European Association of Car Manufacturers (ACEA) - of which VW is also a member - spends €2.3m on lobbying activities on behalf of 15 carmakers and employs nine full-time staff. That's a lot of lobbying muscle.

But the Irish have a fair bit of muscle too when it comes to EU lobbying.

Alongside the likes of the Irish Stock Exchange (ISE), the Irish Congress of Trade Unions (ICTU), the Irish Farmers' Association (IFA), Teagasc and Supermac's - which each has a lobbying presence of varying size and spend in Brussels - there are a small number of Irish private consultancy firms that are ranked among the best lobbyists in Europe.

The best-known Irish lobbying firm is Hume Brophy. Headquartered in Merrion Street in Dublin, the firm is ranked among the top 25 lobby firms in Europe by revenue, earning close to €2m per year, according to estimates. It has operations in Brussels, London, Paris and Singapore and has 18 staff accredited for access to the European Parliament. Its clients include World Rugby, the Dublin Airport Authority, the ISE and food giant Glanbia. It also lobbies on behalf of a lesser-known body called Glyphosate Task Force (GTF). The GTF is funded by agri-chem giants including Monsanto, Arysta Lifesciences and Adama Agan Ltd.

Glyphosate, the world's most widely-used herbicide - used in such products as the Irish farmers' favourite Roundup - hit the headlines in March this year when a World Health Organisation cancer agency, IARC, announced that the substance is a "probable human carcinogen".

The GTF has launched an intensive lobbying campaign in recent months to challenge the IARC findings. It states that no other regulatory agency reached similar conclusions and insists the herbicide does not pose a serious hazard to health.

But the lobbying battle will continue as the EU is due to decide this month whether or not to include the substance on the EU's approved list.

Hume Brophy is also listed as a lobbyist for Peabody, the world's largest privately-held coal company, which has been accused of trying to blur the lines between coal and climate change.

Interestingly, the world's biggest PR firm Edelman announced in recent weeks that it will no longer work with coal producers and climate change deniers. Edelman, which spends about €2m every year on EU lobbying, said it believes such clients pose a threat to its credibility and profits.

Another well-known Irishman who is cashing in on the Brussels lobbying bonanza is former Irish Minister for European Affairs Dick Roche. He earned about €300,000 from lobbying work for Chinese telecoms giant Huawei and business consultants Deloitte in the past year. Roche's company The Skill Set "provides strategic advice to companies and organisations wanting to improve relations with EU institutions and with the agencies of EU member governments".

JJC Consultants, run by Straffan-based lobbyist John Coleman, earns about €75,000 lobbying on behalf of Israeli herbicide giant Adama Agricultural Solutions and Trifol Resources, an Irish company that processes plastic waste into fuel. Trifol last year announced plans for a €54m investment which would see six processing plants built and 180 jobs created.

Another major player in Brussels is Irishman Ronan Barry who heads up cigarette giant British American Tobacco's €2m lobbying machine in Brussels. He oversees a team of seven full-time lobbyists.

British American Tobacco has been fighting a campaign against plain packaging for cigarettes and the tightening of regulations on e-cigarettes.

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