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28/07/2016

Transparency Initiative

Public Affairs

Transparency Initiative

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The drive to strengthen ethics rules for EU policymakers and the estimated 15,000 lobbyists, NGOs and other pressure groups seeking to influence them in Brussels has triggered extensive public debate since the European Commission launched its Transparency Initiative in 2005. But will it be enough to restore citizens' confidence in the European project? 

Background

According to the Commission, there are currently around 15,000 lobbyists (consultants, lawyers, trade associations, corporations and NGOs) seeking to influence EU officials and MEPs in Brussels (for more on this figure, see EurActiv 10/06/08). Some 2,600 special interest groups have a permanent office in Brussels. 

In a speech held at Nottingham University on 3 March 2005, Administrative Affairs and Anti-Fraud Commissioner Siim Kallas launched the idea of a transparency initiative concentrating on three key areas:

  • Increasing the financial accountability of EU funding;
  • strengthening the personal integrity and independence of the EU institutions, and; 
  • imposing stricter controls on lobbying.

Issues

In a Communication issued on 9 November 2005, then-Administrative Affairs and Anti-Fraud Commissioner Siim Kallas suggested actions be taken in the following fields:

  • Information on beneficiaries of EU funds: Information about end beneficiaries was intended to be made available over a central web portal. Concerning data for which member states have a right to confidentiality, such as CAP beneficiaries, the Commission proposed publishing them on the website with the approval of the member states. 

  • Fighting fraud: Public awareness and information about fraud was to be improved by publishing, for example, a list of entities convicted of fraud. 

  • Ethical standards and accountability of EU lawmakers: The Commission proposed common ethical rules to be applied to all lawmakers in Brussels as well as the setting up of an inter-institutional advisory group to assess individual cases of wrongdoing and take possible sanctions. Concerning its own remit, the Commission proposes to make more of its mail public, including mail addressed to individual commissioners.

  • Lobbying transparency: The Commission initially left open the controversial issue of making registration mandatory. But Kallas explained to EurActiv that the voluntary option would only be given the green light if a common code of conduct is applied by all the organisations listed in existing registers, including NGOs, public affairs practitioners, corporate lobbyists, trade unions, etc. However, the Commission insists that "the credibility of such a system would depend on its proper monitoring, systems for enforcement and the percentage of lobbyists active in Brussels that are effectively adhering to such a code".

Recent debate has focused on the depth of the register's financial disclosure requirement and whether this should include names and precise spending figures for individual lobbyists. Questions have also been raised as to whether the register should be applied equally across law firms and professional consultancies as well as trade associations, NGOs and think tanks. A Parliament report, adopted in plenary in May, called for the financial disclosure requirement to be applied equally and expenditure disclosed "within reasonable parameters".

Despite being willing to declare lobbying activities, law firms have warned that inclusion in a register on an equal footing with other kinds of organisation would be difficult in cases where they are providing legal representation for companies at the European Court of Justice. Here, sensitive competition cases would raise confidentiality issues.

Lobbyists register and code of conduct

The EU executive launched a voluntary register for lobbyists seeking to influence its policymaking on 23 June 2008. 

The register features three main categories of lobbyists - professional consultancies and law firms, corporate lobbyists and trade associations, and NGOs and think tanks – and the requirements for inclusion in the register vary for all three, particularly regarding financial disclosure. 

Consultancies and law firms are asked to provide a detailed breakdown of lobbying revenue in brackets of €50,000 or percentage brackets of 10%, while NGOs and think tanks must publish their overall budgets and indicate their main sources of funding (EurActiv 24/06/08).

Ahead of the register's launch, the Commission adopted a code of conduct regulating lobbyists' behaviour on 28 May 2008 (EurActiv 30/05/08).

Designed to complement the register, the EU executive's 'Code of Conduct for Interest Representatives' contains "clear and precise rules" for lobbyists to follow in their relations with staff at the EU executive, setting out general principles to be adhered to like "openness, honesty and integrity". 

Lobbyists wishing to be included in the Commission's register are required to accept its terms or abide by their own equivalent code of conduct with identical or more stringent requirements.

Towards a common register

Parliament's Stubb/Friedrich report called for the establishment of a joint working group comprising representatives of the Commission, Parliament and Council to develop a proposal for a common, mandatory register for all three institutions by the end of the year. Commissioner Kallas said in May 2008 that the EU executive's own register "will serve as a testing ground" for the feasibility of this (EurActiv 29/05/08). 

At the launch of the EU executive's register on 23 June that year, Kallas, who was the Commission’s representative on the working group, said it is "ready to produce good results". In the meantime, the EU executive will assess the effectiveness of its own register after a one-year 'experimental phase'. 

But reaching agreeement over a common register for all three EU institutions may prove difficult. The Commission and Parliament have expressed their willingness to cooperate, but the different nature of the Council's work - which often takes place in working groups behind closed doors - means it is more cautious towards the idea.

Targeting the Council

As promised by Commissioner Kallas, in autumn 2009 the EU executive published a wide-ranging review of its lobby registration scheme (EurActiv 29/10/09). The communication, published on 28 October that year, introduced tighter financial disclosure rules for registrants, abolishing the percentage-based system 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.  

Positions

Maroš Šef?ovi?, European Commission vice-president responsible for inter-institutional relations and administration, told EurActiv in an interview that the EU executive would be working "very intensively" to create a common lobby register with the European Parliament by 2011 "at the latest" (EurActiv 10/05/10).

Šef?ovi? suggested that the joint register was unlikely to be mandatory as preferred by the European Parliament. "For us it is very difficult to proceed with a mandatory system because we don't have a legal basis for that. It's not in the treaty," he said. 

The Transparency Initiative, launched in 2005, represents then-Administration and Anti-Fraud Commissioner Siim Kallas's attempt to increase the openness and accessibility of the EU institutions, raise awareness of bloc's budget spending and generally make the EU more accountable to the public. 

In the Green Paper, Kallas warned that compulsory regulation could be introduced if lobbyists fail to establish appropriate self-regulatory instruments, including codes of conduct, common principles and a voluntary register (EurActiv 04/05/06). He also urged member states to disclose lists of CAP beneficiaries (EurActiv 03/05/06). 

Kallas further stated: "Through co-operation on the register, we can resist any campaign to outlaw or discredit legitimate interest representation, and we can ensure a solid, sustainable foundation for the credibility and legitimacy of the business. We can keep the EU institutions open and accessible without daily contacts between us being subjected to bureaucratic hurdles. And by acting now, in the absence of a lobbying 'scandal', we can help to prevent scandals and we can address the ever-increasing level of lobbying of EU institutions in a cool-headed, analytical state of mind."

Despite pressure from lobbying groups, Kallas refused to compromise on financial disclosure. "If spending money on lobbying brings no influence, I wonder what the lobby professionals say to their clients when they bill them?," he recently asked the European Parliament, adding that the proposed regulation was "very light" by international standards.

European Parliament report on lobbying calls for inclusion in the EU executive's lobbyists register to be made mandatory. It should also be common to the Parliament, Council and Commission, it says, proposing that a joint working group be set up to examine how this could be done (reporting by the end of the year).

The European Centre for Public Affairs  (ECPA), European Public Affairs Consultancies' Association  (EPACA) and the Society of European Affairs Professionals  (SEAP) called for "a single register of interest representations" to be established "for all EU institutions", with "a clear legal base and proper impact assessment". In a joint letter addressed to the Commission, Parliament and Council on 8 February 2008, they expressed their concern that "varying proposals" would "create confusion and complexity" and "fail to provide the required transparency." 

The European Public Affairs Consultancies' Association  (EPACA), which represents 34 PA companies with offices in Brussels, says it is "fundamental" to establish an overarching code of conduct that would apply to "all individuals and organisations involved in lobbying the EU institutions". On 16 August 2007, it recommended all of its members to boycott the lobbyists' register, labelling it "discriminatory and unworkable" (EurActiv 23/08/07). 

EPACA supports the registration of employees involved in lobbying and the disclosure of client lists. However, the demands for the provision of commercially sensitive financial information are not practicable within a voluntary framework. EPACA is not opposed to financial disclosure per se but says this is only workable if lobbying becomes a fully regulated profession, in which requirements are mandatory for all (including lawyers, in-house consultants, NGOs and public affairs consultancies). 

Brussels lobbying veteran Daniel Guéguen, CEO of CLAN Public Affairs and chairman of the European Training Institute, thinks reforms should go much further and insists that a professional body for lobbyists will become all the more essential as public affairs professionals in Brussels are expected to adopt much tougher and, sometimes, borderline strategies.

The Alliance for Lobbying Transparency and Ethics Regulation  (ALTER-EU) - a coalition of 80 civil society groups led by the Corporate Europe Observatory  (CEO) - launched a campaign to support Commissioner Kallas's transparency initiative. The coalition pushes for the introduction of mandatory disclosure rules for lobbyists as a way to "end corporate privileges and secrecy around lobbying in the European Union". 

ALTER-EU urges the Commission to introduce of a fully searchable electronic public register, detailing all lobbyists with significant annual budgets, to "enable democratic scrutiny of inputs into EU policy-making."

Speaking on the lobby register's second anniversary on 22 June 2010, Olivier Hoedeman of CEO said "when two years after the launch of the register only a minority of Brussels lobbyists are registered, it is clear that the voluntary approach has failed".

"The European Commission must now make a commitment to introduce a mandatory lobby transparency system that enables European citizens to see who is influencing EU decision-making, on which issues, on whose behalf and with what budgets," Hoedeman continued.

Also speaking on the register's second anniversary, Natacha Cingotti of Friends of the Earth Europe said "it is high time to close the loopholes and tighten the weak financial disclosure requirements which allow lobby groups to disguise the size of their lobbying effort". 

Weak financial disclosure rules also "make it impossible to determine who the biggest spenders really are and which policies they are trying to influence," Cingotti added. 

In an interview with EurActiv, Friends of the Earth's Paul de Clerck - a leading member of ALTER-EU - said NGOs were ready to move to a compulsory registration system (EurActiv 26/07/05). ALTER-EU also promotes an improved code of conduct for EU commissioners that would include "an extended 'cooling off' period before commissioners and senior officials can start working for lobby groups or lobbying advisory firms. 

Julia Bateman of the joint Brussels office of the UK Law Societies said: "Lawyers are concerned that the proposed definition of lobbying will extend to decision-making in the context of individual court cases and Commission decisions." 

The UK Law Societies have been discussing such problems with the Commission. Bateman said the EU executive had asked them to come up with a definition of lobbying that better reflected the day-to-day reality of lawyers' work in Brussels. "We are seeking a practical solution that will ensure that lawyers are in a position to make a distinction between 'pure' lobbying work in relation to new legislative proposals, and advisory and court work for clients," Bateman added.

Commenting on the Commission's October 2009 review of its register, Tom Spencer, executive director of the European Centre for Public Affairs (ECPA), said the outcome reflected Kallas's attempts to "maximise his legacy and reputation" before assuming the transport portfolio in the Barroso II Commission. 

"Kallas would like to see the changes come into effect immediately, because ending the distinction between direct and indirect lobbying would quadruple the number of lobbyists in the register and benefit his legacy," Spencer told EurActiv in December 2009.  

Timeline

  • Nov. 2005:  Commissioner Kallas launched Transparency Initiative.
  • 1 April 2008: Parliament report called for mandatory register common to all three institutions. 
  • 8 May 2008: Parliament report adopted in plenary.
  • 28 May 2008: Commission adopted 'Code of Conduct for Interest Representatives'. 
  • 23 June 2008: Commission launched voluntary lobbyists register.  
  • Summer 2008: Commission published a list of individual experts who sit on its advisory groups.   
  • Second half of 2008:  Commissioner Siim Kallas pledged to assess situation and identify areas for improvement.
  • By end 2008: Joint working group between Commission, Council and Parliament mandated to discuss feasibilty of establishing common lobbyists register.
  • 16 Dec. 2008: Joint working group met formally for the first time, without the participation of the Council, and pledged to "report to the political level as soon as possible".
  • 22 April 2009: Commission and Parliament agreed common guidelines and a code of conduct for joint voluntary register.
  • 4-7 June 2009: European Parliament elections.
  • 15 June 2009: Deadline for stakeholders wishing to submit contributions to Commission's first-year review.
  • 23 June 2009: Commission register's first birthday.  
  • July-Dec. 2009: Swedish EU Presidency to prioritise transparency.   
  • July 2009: Commission launches review of voluntary lobbyists register's success after its first year.
  • 25 Sept. 2009: Commission presents its lobby registration scheme to Swedish EU Presidency.
  • 28 Oct. 2009: Commission publishes outcome of first-year lobby register review.
  • 27 Nov. 2009: Slovakia's Maroš Šef?ovi? becomes EU commissioner for inter-institutional relations and administration in the second Barroso Commission, with Kallas moving to transport.     
  • 6 May 2010: Second meeting of inter-institutional working group on common lobby register (first under new European Commission and new Parliament). 
  • 6 Sept. 2010: Commission register surpasses 3,000 entries mark. 
  • 6 Oct. 2010: Joint information seminar on establishing common register between Commission and Parliament.
  • June 2011: Date by which Commission and Parliament hope to get joint register up and running. 

Further Reading