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Ott Lumi: Lobby — Hard To Regulate in Sauna

This article was first appeared in Äripäev on April 24, 2018.

In the case of lobbying, it is important to mark first of all that it is one of the areas of consultancy with, for example, around 25 000 people in Brussels and around 15 000 in Washington. Laws and regulations have an impact on a very wide range of business areas. At the top of the list you could list the food industry, pharmaceuticals, agriculture, IT, arms industry, classical industry, etc. Companies compete intensively and are usually influenced by the regulatory environment as one of the important factors. 

Government relations experts and advisers are the people who know how regulations are made, who makes them and how to monitor and sometimes influence their development. Regulatory lobbying is therefore a very old profession. The problem is illegal lobbying. It is something that countries and nations have tried to regulate according to their contextual specificities. For example, our Minister of Justice (at the time Urmas Reinsalu – ed.) took the position that lobbying should be better regulated and promised to come up with ideas for doing so. The latest yearbook of the internal security service also speaks about covert lobbying and the importance of keeping all policy influencing activities in the open and public domain. 

I am a government relations practitioner as well as a theorist. I am the author of Estonia’s first university lecture course on the subject and have written a few academic articles in the field. But first and foremost I am a practitioner of government relations. I have been advising companies on regulatory issues, both domestic and foreign, for a decade now.  As a practitioner in the field, I believe that sensible regulation would undoubtedly be in the common interest of all normal advisers in the business. There is just one big caveat. Namely, only such a regulation really makes sense, which actually contributes to real policy influence disclosure and which all actors are willing to accept. 

Only such a regulation really makes sense, which actually contributes to real policy influence disclosure and which all actors are willing to accept. 

Three ways to regulate

Broadly speaking, there are three main traditions of lobbying regulation. The first is the Nordic option. In those societies, the regulation of lobbying has been debated at length, but the general consensus view is that regulating such activities is a threat to freedom of expression. Of course, this Nordic position should be seen in conjunction with the fact that the Nordic countries have the best perception of corruption in the world, i.e. that politics is conducted honestly in these societies and that there is a general perception that influencing politics can also be honest. We are talking here about societies in which it is believed that policy-making and the decisive influencing of policy must not only be honest, but also appear to be transparent. 

Central European countries are generally classified in the second group. There, the picture of lobby regulation is relatively mixed. Classical lobbying regulation exists only in France and Austria, with self-regulation being the main feature. 

Eastern Europe leads the way in regulating lobbying, with rigidly written lobbying regulations in Lithuania, Slovenia and Poland. In the case of Lithuania, for example, this also has a very specific background. Lithuania’s main obstacle in the European Union accession negotiations at the time was the great challenge of fighting corruption, and it was then that American consultants were recommended to Lithuania, and they wrote an American-style lobbying regulation for Lithuania, with accredited lobbyists who have to pass security clearance, rigid reporting, etc., as is the custom in Washington. The lobbying background in Poland is similar. The experience in Eastern Europe speaks of the way in which general misbehaviour is attempted to be tackled through excessive regulation. 

All in all, so-called very rigid lobbying laws have been adopted in six EU Member States (as of 2018 – ed.). Ten countries have so-called soft regulations, which mainly means self-regulation on the part of advisers. In the remaining EU Member States, there is no self-regulation, no national regulation and no lobby register. These include, for example, Estonia*, Finland, Latvia, Denmark, and Sweden.

Lobbying depends on cultural background

There is a general consensus that illegal influence on politics, or various forms of corrupt practices, are largely cultural phenomena in nature and background. In the United States, for example, the regulation of lobbying has been an ongoing issue for the last 100 years. The first lobbying regulation, or law, in the United States of America was passed as early as 1946. Since then, one of the themes of every federal election has been to improve lobbying regulation, to make it tougher, to make it more transparent, and so on. This law tries to regulate both the subjects of politics, i.e. the lobbyists and the lobbied, and the objects of politics, i.e. the question of who has the right to have a say and who does not on specific proposed laws or regulations. 

The issue of lobbying rules was also on the agenda during the 2016 US presidential election. In January 2017, President Trump enacted a series of new lobbying rules, including a two-year period during which officials are prohibited from advising clients on the same issue on which they previously worked and a five-year ban on lobbying the same agency where they previously worked**. 

It is a question of its own what we could achieve if we were to regulate government relations consultancy, or lobbying, in Estonia. As international practice shows, there is no point in going into this in a cavalry charge style. It is also questionable how effective such regulations would be at all. The relevant debate in Finland has come to the conclusion that in a society where real decisions are made in the sauna, registers and the like are of little use. 

Greater order would be beneficial

Nonetheless, as a practitioner in the field, I concede that a move towards more order in the field could be a goal. Firstly, it is positive that the number of professional advisers in government relations has increased significantly over the years, which also means that horizontal quality control of the indusry is beginning to emerge. A couple of things could deserve a chance already in a purely symbolic sense. 

Firstly, I think that a voluntary register in Parliament would be progressive in terms of political culture. The German experience, where such a register has existed on a voluntary basis since 1972, confirms this. 

Secondly, some kind of operational restrictions could be considered for civil servants and politicians, so that they do not become advisers in certain areas immediately after leaving public office. This could also be something that has a practical dimension and would undoubtedly strengthen political culture. Above all, however, legal compliance and political culture are important. 

* In spring 2021, Estonia adopted a good practice guideline for dealing with lobbyists. Among other things, it obliges ministries and public authorities to publish the meetings of ministers and senior officials with interest groups. 

** Shortly before the end of his term, Trump repealed these rules. 

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