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Regulating Lobbying Will Empower Citizens And Increase Govt’s Political Legitimacy

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As allegations of bribery by Air Asia’s lobbyists grabbed the headlines in June 2018, it once again spotlighted the grey areas in the laws and policies in which lobbying exists in India. While bribery is a criminal offence under the Prevention of Corruption Act, 1988, the practice of lobbying remains unregulated. Opinion among policy-makers, experts and activists are divided. The popular belief in India holds that lobbying is akin to bribing and quid-pro-quos between public servants and businesses and should not be legalised. On the other hand, there are those who believe that lobbying does not mean bribing and should be viewed as a legitimate right of citizens.

Furthermore, lobbyists serve a useful function in the policymaking process – that of providing information to policymakers on a relevant subject. However, it requires effective regulation to not only make the process transparent but also increase access to policymakers for all citizens. It is also worth noting that no country has banned lobbying and only a handful of them regulate the practice. These include the US, Australia, Canada and Germany.

Given that the practice of lobbying will continue irrespective of whether it is unregulated or legally banned, the sensible course is to put a regulatory framework in place to make the process transparent and legitimate. Therefore, Odisha MP Shri Kalikesh Narayan Singh Deo’s Private Members Bill, Disclosure of Lobbying Activities Bill, 2015, is a welcome move as it attempts to fill the legal vacuum in this area. That said, the Bill as it stands now, is unlikely to serve the purpose for which it was drafted.

What does the Bill say?

MP Kalikesh Singh Deo has introduced a Private Member Bill to regulate lobbying.

The Bill is premised on ensuring that the “right” kind of lobbying takes place and echoes the legal framework seen under US law in the Lobbying Disclosure Act, 1995, which also envisages a registration process and a mandatory disclosure regime of lobbying activities. However, there is a crucial difference between the two laws.

The Bill defines “lobbying activity” as “any act of communication with and payment to a public servant with the aim of influencing” a Bill or government policy. The Bill further defines “payment” as “contributions made in cash or kind and includes the cost of meals, retreat, vacation, meeting, conference, travel or support for the election campaign and offering gifts in the course of lobbying activity.” The US law has no such provision and only covers “any oral or written communication” made on behalf of a client to the relevant branch of the government.

The Bill defines a “lobbyist” as a person or organisation who conducts lobbying activity either on his behalf or on behalf of a third party in return for financial or other benefits. The US, Canada, and Australia only regulate professional lobbyists. The Council of Europe recommends including both in lobbying regulations.

Other provisions in the Bill include setting up of a Lobbyist Registration Authority, the conditions of registration, the disclosure of information by lobbyists as well as public servants and penalties for not complying with the law.

Why the Bill will remain an unfulfilled promise

The Bill is premised on the view that lobbying is a necessary part of representative democracy as it allows citizens to voice their opinions on government decisions that affect them. The objective of the Bill is to increase transparency and accountability in governance by making public information about the activities of lobbyists. As the Bill has a broad definition of what constitutes lobbying, as well as allows payments to public servants, with the only check and balance being a Registry, it will not serve the purpose of curbing corruption.

However, allowing lobbyists to make payments to government officials tantamount to bribing which is a criminal offence under Indian laws. The primary purpose of lobbying is to sensitise the policy maker to the interest of a particular group which may be affected by a policy decision. This sensitising or influencing has to be done through information sharing, not quid-pro-quos through payments in cash or kind.

Allowing for payments also erects a barrier for lobbying by less financially well-endowed groups than big corporates. NGOs, smaller lobbies such as farmers, artisans and environmentalists would be disproportionately affected if payment is allowed as part of lobbying activities since there are times when they are in direct conflict with corporates.

Secondly, the US model of registration and information disclosure to regulate lobbying has not been a resounding success in curbing corruption at high levels. Big banks and firms used lobbyists to prevent laws being enacted that would control mortgages. It has been suggested that there could be a link between lobbying and the financial crisis that ensued.

While any citizen can do lobbying, its effectiveness depends on (a) the ability to reach the right people in government, who may not be accessible to all citizens in equal measure; and (b) the size of the groups affected by a policy decision. This Bill does not address these realities in any manner. It assumes that merely enforcing disclosure through registration and compliance with reporting will curb malpractices and ensure that the ordinary people have a greater chance to represent their interests.

Effective regulatory options for India

Given that we have more information and experience of how lobbying laws have worked in other countries, there could be a case for re-thinking the model for regulating lobbying activities. In addition to having a registration requirement for lobbyists, public servants should be required to disclose their communications with lobbyists. This is a requirement in UK and Germany. Maintaining the integrity of the public sector is essential. Therefore, including measures such as having a “cooling off period” for public servants who may want to become lobbyists after retirement is important.

There should be more transparency in how governments make decisions on policy and allow for public scrutiny of such decisions. For example, the public feedback that a draft law or policy receives should be available in the public domain, including presentations of lobbyists.

Disclosures of expenses incurred by lobbyists and financial accounts of lawmakers are likely to force interest groups to engage in the legislative process through legitimate means. Universal access to information on expenses and details of communications with policymakers would give impetus to more debates in the public domain.

A good lobbying law should make it a punishable offence to involve “payment” in any shape or form and discourage any quid pro quo arrangements that are likely to arise in such cases. It should encourage public consultations and impose measures of greater scrutiny on the lobbyist and the manner in which the lobbying is conducted.

India’s regulatory model needs to suit its socio-political realities. It, therefore, needs to ensure transparency and disclosure both from the lobbyists as well as the lobbied so that individual citizens gain greater awareness of the process of public decision making. This will empower citizens and increase the political legitimacy of the governments of the day.

Author:  Shambhavi Ravishankar and Kaushiki Sanyal,  Sunay Policy Advisory Pvt. Ltd.

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