Participants in the European Commission’s lobby register should declare expenditure on lobbying Council presidencies and permanent representations of EU member states, the EU executive said yesterday (28 October), presenting tighter financial disclosure requirements as part of a wide-ranging review of the scheme. But transparency campaigners criticised the revision for failing to fix “fundamental flaws”.
Lobbying activities to be included in the financial declaration include “activities directed at the permanent representations of the member states, including the Council presidency,” read a Commission communication published yesterday.
The document
represents the outcome of the first-year review of the EU executive’s lobby registration system, introduced by Administration and Anti-Fraud Commissioner Siim Kallas last summer.
Asked by EurActiv whether the Commission was trying to widen the scope of its register to include the EU Council, which represents national governments in Brussels, Kallas’ spokesperson Valérie Rampi urged the Council and its services to treat the register as their own and use it as a reference document.
“Since the beginning, the register has targeted lobbying activities aimed at all the EU institutions,” Rampi said, calling on the Council itself to encourage organisations to sign up.
Council participation ‘difficult’
Council officials, however, warn that the complex nature of national decision-making at EU level would make participation in any common register difficult.
“We’ll need to be prudent and realistic, and the sceptical attitude of most in the Council won’t change overnight,” Jonas Högström, a counsellor at the Swedish Permanent Representation to the EU, said last month (EurActiv 10/09/09).
“If you look at what the Council actually does, then it is not easy to see where the boundaries of registration should end,” Högström said, explaining that “the Brussels-based Council is least-concerned with lobbying, most of which happens in the member states”.
“Policies are most often decided by capitals, and permanent representations and the general secretariat only follow instructions, so including these would not focus on where policy is formulated,” he added.
However, “it would be too far-reaching to include lobbying in the capitals and ministries, because this is the whole of EU territory. We could include only prime ministers and ministers, but distinguishing between EU and national policy formulation would be difficult here,” warned the Swedish official.
Gerard Legris, head of unit for transparency and relations with stakeholders and external organisations in the Commission’s secretariat-general, acknowledges that getting the Council to sign up to a joint register, which is often represented by experts seconded from national capitals, would be difficult.
“Governments and coalitions of governments in the Council that are trying to influence policymaking are clearly lobbyists, as are people trying to influence EU presidencies,” he told a conference last year (EurActiv 07/11/08). “But we didn’t want the register to be an administrative directive,” he said.
Tighter financial disclosure requirements
Yesterday’s Commission communication contains revised guidelines on what should be taken into account when estimating total expenditure on lobbying activities. From now on, “all expenditures covering actions initiated with the aim of influencing European policy formulation or decision-making processes, irrespective of the communication channel or medium it is using,” should be disclosed.
Under the new rules, indirect means of lobbying like expenditure on think-tank reports, platforms, forums and campaigns should be included in registrants’ files alongside direct lobbying costs.
Meanwhile, Commissioner Kallas had last month acknowledged “confusion” regarding the initial financial disclosure system, which required consultancies to disclose the value of work carried out on behalf of each of their clients, either in bands of €50,000 or as a percentage of total revenue (brackets of 10%).
Giving consultancies a choice between absolutes and percentage bands had led to “unintended unequal treatment, requiring the smaller firms to reveal more than the larger ones,” he admitted (EurActiv 10/09/09).
Yesterday’s announcement saw the percentage system abolished in favour of differentiated brackets according to the size of turnover declared.
Consultancies whose turnover generated by lobbying the EU institutions is less than €500,000 are now required to disclose the figure in brackets of €50,000.
The higher the turnover, the broader the required level of disclosure, with brackets of €100,000 for those which declare lobbying income of €0.5-1m, and €250,000 for income above €1m.
New category for think-tanks
The review confirms the Commission’s view that think-tanks are interest representatives and are expected to participate in the register. To facilitate their registration, the EU executive announced the creation of a separate category for think-tanks to avoid confusion with NGOs.
The revised definition of lobbying “underlines that the indirect influence often pursued via events and publications organised by think-tanks is to be considered a lobbying activity,” said the EU executive.
Citizens left ‘in the dark’
Transparency campaigners, meanwhile, lamented that the Commission review had not gone far enough, particularly regarding the issue of financial disclosure.
Claiming that the current scheme leaves citizens “in the dark” regarding the activities of Brussels lobbyists, the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) complained that the revised rules on financial reporting “create new loopholes”.
Moreover, “the Commission has not required reluctant lobbyists to face public scrutiny and it does not intend to check or verify registrations,” ALTER-EU said, claiming that “the register is cluttered with an increasing number of organisations that have little to do with EU lobbying”.
Next Commission to take register further
Asked what developments should be expected during the incoming EU executive’s term, Commissioner Kallas said “the next Commission will definitely consider how to take the field further”.
Kallas spoke out against moving towards a mandatory registration scheme but refused to rule out doing so in future. “Voluntary means shared ownership, and everyone shares the responsibility for transparency,” he said.
The next meeting of an inter-institutional working group set up between representatives of the EU executive and the European Parliament to discuss the establishment of a common register between the two institutions will take place on 12 November.
Hailing the register as “a clear political success,” Administration and Anti-Fraud Commissioner Siim Kallas said “in 2004, there was suspicion with no register”.
“Now there are 2,000 registrants, which is a good number,” Kallas added, hailing the “change in culture” the scheme had brought about. “There is a commitment to certain rules of good behaviour, which is no less important than the numbers,” he said.
Despite his positive assessment, the commissioner did acknowledge a number of weaknesses in the current scheme. “We haven’t found a proper solution for law firms. The same was the case for think-tanks, but we’ve offered them a special paragraph to allow them to join,” he said.
“We don’t quite follow Kallas and his fellow commissioners’ thinking – if the aim was to look for trouble with the Parliament they could not have done better,” said Luxembourg MEP Claude Turmes (Greens/EFA), Danish Socialist MEP Dan Jørgensen (S&D) and Dutch leftist MEP Dennis De Jong (GUE/NGL) in a joint statement.
“The content of the review comes as a total surprise to us, their supposed project partner, in the preparation of this review. While the revision does address some of the worst loopholes in the current register, it fails to respond to the Parliament’s key demands – a common mandatory register instead of a voluntary one, the disclosure of individual lobbyists’ names and tighter financial disclosure requirements,” the MEPs said.
“The Parliament must now make sure that the joint lobby register project will be an issue at the Commissioner hearings and that the EP demands will get their due place in this joint project. What is urgently needed is a transparent evaluation of both existing registers, in a process open to all stakeholders, following qualitative criteria and a clear calendar,” they added.
Belgian Green MEP Isabelle Durant, a European Parliament vice-president and member of the inter-institutional working group (IWG) on a common register between the EU assembly and the Commission, said the IWG’s work “will have to go much further” than the Commission’s review.
“Citizens have the right to expect genuine transparency” and a governance system in which details of all external pressures and financing are made available to all, Durant said, adding: ”This is vital for the legitimacy and credibility of decisions taken by the Commission and the Parliament alike.”
Commenting on the communication, Society of European Affairs Professionals (SEAP) President Lyn Trytsman-Gray said:
“If nothing else, the register has got people talking about the transparency and ethics of lobbying, which can only be a good thing. We are pleased that the Commission is proposing a common register with the European Parliament while sticking to its voluntary approach,” she said.
“The Commission has heeded our calls to make certain changes and clarifications, such as on the scope of activities and double counting. However I hope the changes to the financial reporting rules are simply an adjustment and not a step towards detailed and onerous financial reporting.”
“I also welcome the Commission’s intention to set out more clearly the process for enforcing compliance with the rules of registration – something we also called for. Public affairs practitioners and bodies such as SEAP could play a useful role in this respect.”
“I would note that some of the language used by the Commission with respect to law firms and think-tanks is not helpful but I am pleased by the Commission’s intention ‘to actively pursue its contacts with the bar associations to resolve this issue,’” Trytsman-Gray concluded.
Responding to criticisms about the low number of registrations by law firms, Bob Heslett, president of the Law Society in the UK, said:
“The Society reiterates that law firms are already highly-regulated and bound by strict ethical rules. I am pleased that the Commission has expressed its intention to continue existing contacts with the bar associations to discuss law firm registration. There are still incompatibilities between the register and professional rules. I too hope we can find a solution that provides a way to register while respecting the bar rules. We appreciate the Commission’s effort to clarify what activities do not constitute interest representation in relation to providing legal advice and assistance.”
Commenting on the outcome of the Commission’s review, Erik Wesselius of Corporate Europe Observatory, speaking on behalf of the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU), said: “It’s disappointing that the Commission refuses to fix the register and leaves so many loopholes open. It means that for the time being we’re stuck with a register that captures only a fraction of all Brussels-based lobbies and with information that is often unreliable.”
Friends of the Earth Europe’s Paul de Clerck, also speaking on behalf of ALTER-EU, called on the newly-elected members of the European Parliament “to take the lead and ensure that the EU will put in place a lobby register that will deliver genuine transparency to the public.
“It can be considered an achievement that – after one year in existence only – the voluntary European Commission register has already stimulated the debate and raised awareness related to the importance of transparency in EU lobbying affairs,” said Transparency International (TI), an NGO, in its recommendations for the first-year review.
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