Hidden persuaders of big business come under scrutiny

European Diary: Just how much influence does industry have over drafting EU law? This question was at the crux of an acrimonious…

European Diary: Just how much influence does industry have over drafting EU law? This question was at the crux of an acrimonious dispute between the European Commission and Greenpeace last week as both sides traded insults over ethics and transparency.

Allegations by the environmental pressure group that Brussels operates a "revolving door" policy that enables ex-industry officials to join the executive to work on sensitive environmental legislation provoked the bitter public row.

Greenpeace singled out three former chemical industry staff employed by the commission's industry section to support its new report that argues that chemical firms have waged a successful campaign to water-down Reach.

The Reach regulation is one of the most controversial and complex pieces of environmental legislation ever developed by the EU institutions. It will force firms to register information on thousands of chemicals in a database and replace potentially hazardous chemicals for humans with safer ones where possible.

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Environmental campaigners say the legislation is vital to protect human health. The chemical industry warns that it involves excessive, costly red tape.

"Lack of accountability and transparency in Brussels decision-making comes at the cost of public-interest legislation," said Jorgo Riss, director of Greenpeace Europe, who pinpointed the three EU officials recruited from German firms BASF and Bayer.

"The chemicals industry's corrosive campaign to destroy Reach thus far has depended on the willingness of key officials to abandon their role as public servants and behave like industry lobbyists," he said.

The commission countered Mr Riss's allegations, accusing Greenpeace of "sloppy research" and "unfounded allegations".

"The fact that the commission has employed people who formerly worked for one side or the other, be it the chemicals industry or the environment, is by no means something that should be presented as criminal," said a commission spokesman.

Moreover, he argued that the commission needs industry expertise to deal with complicated and highly technical issues encountered when drafting legislation.

The public spat could not have come at a worse time for the commission, which on Wednesday launched its European Transparency Initiative to boost accountability in EU spending and regulate lobbyists.

The green paper, which was drawn up by commissioner Siim Kallas, proposes the mandatory disclosure of the beneficiaries of EU funding (many states, including Germany and Austria, refuse to disclose who gets cash under the Cap) and the establishment of an improved voluntary register of lobbyists to the EU institutions.

It did not propose any new measures to address the "revolving doors" issue - a point highlighted by those NGOs concerned about industry's influence.

Launching the paper, Mr Kallas said the EU existing code of conduct was sufficient. Under this code the commission can bar departing officials from taking a job that is considered a potential conflict of interest. Two investigations have been undertaken so far by the commission, however no conflict was found, said Mr Kallas.

But it was the proposal for a voluntary register and common code of conduct for lobbyists (to be developed by the lobbying industry) that disappointed NGOs most.

"Self-regulation is not the right way to handle this issue," says Erik Wesselius of Corporate Europe Observatory (CEO), a group that campaigns against the influence of corporate lobbying in Brussels.

Mr Wesselius says an existing voluntary register is a failure because it has attracted less than 10 per cent of the 15,000 lobbyists to sign up. The commission's plan to attract lobbyists to sign up to the register by offering to send e-mails of upcoming consultations by the EU is "weak and unconvincing". Lobbyists that want to stay secret will not sign up and continue to use aggressive tactics, says Mr Wesselius.

According to research by CEO, tactics include the "gunship", where a firm threatens to relocate investment unless policy proposals are dropped, and the "Kofi Annan", where a firm engages to offer decision-makers a mutually acceptable compromise.

The green paper dismisses this purely negative view of lobbying, noting that it is a legitimate part of the democratic system. It also brings important issues to the attention of the institutions, citing examples such as disability action groups.

John Houston, chairman of the European Public Affairs Consultancies Association, which represents 31 of the biggest lobbying firms in Brussels, echoes these sentiments and welcomes the green paper. However, he insists his members could live with a mandatory registration system for lobbyists that would force some of the NGOs that are more ideologically driven to put their own house in order.

The commission also referred to the fact that the legal profession has been notable in its silence, says Mr Houston, who insists a level playing field is needed between public affairs firms that lobby and legal firms that are involved in lobbying.

The German Bundestag is currently the only EU parliament that has adopted specific formal rules regarding the registration of lobbyists. Each year a public list is drawn up of all groups wishing to express or defend their views. The US and Canada have tougher disclosure rules whereby lobbyists must list the clients they act for and the fees they are paid.

The lobbying industry strongly opposes listing fees, for competitive reasons. And with the commission proposing only a voluntary register in its paper, there seems little danger of this type of tough regulation being imposed. A public consultation on the European transparency initiative runs until August 31st , 2006.