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Should India legalize/regulate lobbying?

Published on Sat, Dec 11,2010 | 14:56, Updated at Mon, Dec 13 at 18:16Source : |   Watch Video :

Lobbying is not a new phenomenon in India nor is it restricted to a handful of businesses but if the Niira Radia tapes are to be believed lobbying in India has become so insidious that itís no longer an attempt to simply influence policy, it may even work towards determining ministerial positions. In short, lobbying has become very serious business here and all business needs a set of rules. So, The Firm raises the question: Should India consider legalising lobbying?

CNBC-TV18ís Menaka Doshi debates this issue with Mark Rom, associate professor, Georgetown Public Policy Instituteóprofessor Rom has done an extensive research on ethics and values in public policy and will give us great insight on lobbying in the USA which is the land of over 12000 registered lobbyistsóalong with CV Madhukar, founder and director of PRS Legislative, an independent research organization on legislative and policy issues; Anirban Mazumdar, assistant professor at National University of Juridical Sciences and MR Prasanna, independent lawyer and consultant.

Below is a verbatim transcript of the interview. Also watch the video.

Doshi: The question that lies at the core of this debate and that is that if we were to leaglise lobbying, will it help represent broader public interest in the course of more robust policy making or do you think by legalizing it all we will end up doing is give narrow commercially backed interest a disproportionate say in policy making?

Madhukar: The point is that if we take the word lobbying out of the discussion for now, we might actually get to the substance better because lobbying has become very tainted. So let me make two points. One is that in a democratic set up like India, we need people from across the spectrum to be able to get their views to policy makers who are going to affect their lives in different ways. So what we need to do is find good and efficient and transparent ways of doing that. The second is if there is money involved in this process of influencing what the policy maker does, that process should be made much more transparent than it is currently.

Doshi: Do you believe that the considerable experience that the US has with having regulated or legislated lobbying, it has helped create a fairer system of public policy that is more robust and that represents several interest groups as opposed to just a few of them?

Rom: Yes absolutely, lobbying will occur. People will try to influence the government, so the question is can we channel that lobbying into productive ways and we can do that by encouraging registration, by encouraging transparency, by encouraging disclosure. So that when interest groups contact elected officials or administrative bureaucrats, they make those meetings open in the public and known to the public so that voters themselves can be aware of the interest groupsí activities.

Doshi: Despite the long history that the US has with regulated lobbying or legalized lobbying, there has been severe criticism of the way lobbying has worked in the last several years. There has been tweaking in the regulations as well. Can you update us on some of the pros and cons of the system as it prevails today and what are some of the changes that you need to see?

Rom: The major emphasis on lobbying reforms in the recent years is to try to reduce conflicts of interest. So you want to reduce gift giving, you want to make it so that lobbyists do not provide anything of material  benefit to the people they are trying to lobby and if anything is given, then those things are disclosed so that people can judge whether the interest groups have tried to gain undue influence.

From the Obama administration perspective, one of their first acts in office was to have an executive order which prohibited the Obama Administration either from hiring lobbyists- those who had lobbied within two years of joining the administration or allowing people who had left the Obama administration to service lobbyists for two years. The idea is that you want to break the chains where there is undue influence of special interest groups upon the government.

It is minutely successful but there will always be people who are trying to influence the government outside of the registered lobbying framework.

Doshi: So how do you put a curb or create a framework that ensures that all kinds of lobbying is in fact regulated or legislated upon as opposed to just some kinds of lobbying that is willing to allow for regulation?

Rom: That is a very difficult question. The way we do in the US is that any individual that spends a certain amount of their time, about 20% or more of their time tying to influence government officials, they must register as lobbyist with United States Senate and with United States House of Representatives. The problem is that people can under-report how much time they have spent lobbying, they can simply fail to register. So the tighter that we make lobbying restrictions trying to get people to report that they are lobbyists, this may also encourage people to avoid registering as lobbyists in the first place and avoid the regulations that are imposed with that.
So by trying to toughen up, we may make the people avoid the system. So it is a fine balance to bring people in but not be so onerous that we drive people out of the system.

Doshi: Do you believe that lobbying can in fact, if legalized, lead to better public policy making or do you think that it would, at least in India, end up representing only narrow commercial interest so to speak?

Mazumdar: We think we need to keep in mind that law has its own limitation. Yes, we do require law which will facilitate more transparency, which will facilitate more disclosure, which will bring more accountability but we should not think that law is solution for every kind of problem. To give an example we have prostitution in the society from day one and we are thinking of legalizing it. We really do not know whether legalization will either improve the condition of prostitutes or control its ill effects.

So we need to remember that here is a situation which requires something to do about lobbying. Lobbying is going on for ages and what is happening now is just the peak of an iceberg, which we need to control this but in what form that is what we need to discuss and debate. But just to think that the moment you legalize it, it will be out of the society, I think that is too much to expect from law.

Doshi: One of the merits that lobbyists, one of the arguments in favor of legalizing lobbying or in favor of lobbying itself is that it often offers very in-depth technical expertise advice to parliamentarians or to Congress in the US at least. Do you believe that in a country like India where we often criticize law for being lacking on technical nuances? If you were to legalize lobbying in some fashion not only will it represent a broader set of public interest but it will also mean we will have better written laws, technically finer laws?

Prasanna: I think the Indian corporates have a responsible attitude towards this opinion building and also to some extent policy advocacy. Most industries actually go through recognized bodies like Federation of Indian Chambers of Commerce and Industry (FICCI), the Associated Chambers of Commerce and Industry of India (ASSOCHAM) to make representations to various governments and for e.g. the budget memorandum and for e.g. the response that the industry gives to various proposed legal enactments in the form of bill etc when they are posted. Competition Law for that matter has witnessed a significant amount of activity on this front. So there is always an opportunity for corporates to make use of all these bodies to actually voice their opinion, they have been doing it successfully all along and these industry bodies are also represented by number of industries themselves.

Doshi: Would you consider these industry bodies to be lobbyists in some fashion?

Prasanna: No, I would not think that Ė it all depends on how the term lobbying is actually defined for e.g. lobbying is typically the way I understand is that there is a lobby in the House of Senate or House of Representative as it were and people go there and before somebody goes in and votes for something, they actually create an impression or try to influence but thatís not the case here. Everything is done outside the house and everything is done in a proper structured manner and therefore the industry bodies actually represent the interest of a particular industry and there is an adequate opportunity for these people to put across their views.

Madhukar: There is a quick point on Parliament and the process of approaching Members of Parliament to make certain decisions. Let me throw up a couple of issues for us to think about. In a representative democracy voters from a MPs constituency might feel the MP should take up an issue in Parliament or in a lobby for them to get maybe great fishing rights or get mining rights. Is that lobbying when an MP represents the votersí interest in Parliament or for e.g. there are processes for industries, for NGOs to go and testify before standing committee and say I want to make these points of view known to you and so you can take more informed decision, is that lobbying? So I think the problem is really with the word lobbying.

If you take the case of Right to Information Act, how did it come about? NKSS in Rajasthan has put in years of work to make sure that we have transparent system to get information from government and there we have the Right to Information Act and we also know for e.g. in India ministries often reach out to number of people outside the government to help them formulate laws for e.g. in the AIDS bill that was drafted, the health ministry reached out to several NGOs and said could you help us draft a law.

By the same token if in a mining bill, if the ministry of mines reached out to the mining industry and said could you help us draft a law, there will be a hue and cry. So I think there are some different standards that you want to apply for corporate and non-corporate interest and I think we need to think about it, I am not saying itís an easy balance to strike but these are things that we have to think about.

Doshi: What do you think of the fact that maybe professional lobbyists need to be treated differently as opposed to lobbyists who are grassroot lobbyists or in-house lobbyists. This is at the core of all lobbing legislation across the world?

Rom: I am greatly amused by the industrial organizations saying they are not lobbying, they are merely engaged in political advocacy. Advocacy is lobbying, advocacy is just a nicer word, a more polite word for lobbying. Lobbying is good and I think that interest should have access to policymakers. I donít see we should make a special distinction between corporate lobbyists and non-profit lobbyists. I think we should disclose any interest that is trying to influence government policy whether they are profit business, non-profit organization. If they are trying to influence the government, they are lobbyists and that should be registered and that should be disclosed.

Doshi: How should these disclosures be done? Is the onus of the disclosure on the lobbying agent or institute itself or the company itself or should it be upon the parliamentarians who may then represent those points of view in parliament or in Congress which is the US equivalent. Who is responsible for making those disclosures?

Rom: In the United States, the lobbyists are responsible for the disclosure, not the elected officials. I think thatís not the best policy. I think its incumbent for the elected officials to let the public know who they have been working with, who they have been meeting with, there is a way of disclosure because if you make the lobbyists do it, the lobbyists have all sorts of incentive not to fully disclose or under disclose the amount of contact they have had with the elected officials. I think putting the onus on the lobbyists themselves is not the way to go. It should be on the politicians.

Doshi: Do you agree that maybe we should include all kinds of lobbying efforts?

Prasanna: I agree with Professor Rom because in the UK, the freedom of information act actually enables the public to seek information about the meetings that the minister has had and the government is also very quick to disclose and nothing is hidden but the question is- Is India ready for such a regulation? Look at the legislative history of US and UK. UK of course is largely under regulated, it is governed by the conduct rules or the civil code of conduct, civil service code etc but in India, of course, you have the prevention of corruption act which takes care of various gifts and other stuff and also there is a civil service code which also has certain parameters within which the behavior must be regulated of government officials and the question is Ė Is there a necessity for a separate exclusive law that will regulate lobbyists and are we ready for that? In my opinion I donít think that we need to jump to a conclusion that there is a dire necessity for a separate law for lobbying. The existing legal framework can actually be tweaked if there are concerns to address those concerns.

Doshi: What about the needs for enhanced disclosures when it comes to corporate interest- either being represented by the corporates themselves or by other third parties who may be professional lobbyists. Shouldnít the public know about the kind of representations that companies or third party lobbyists or grass root lobbyist making to parliamentarians? Whose interests are being represented? Isn't that fair that the people know whose interests are being represented in that policy?

Prasanna: Corporates have always disclosed what must be disclosed according to law. The question is, is there a necessity for the corporates to actually go into a huge disclosure on a completely voluntary basis without actually knowing what the disclosure means, to whom does it concern? The question is there is no particular obligation on the part of corporates to disclose what they might do. Like I said, if their concerted efforts actually drawing the attention of the government to a number of policy issues is through the associations, etc, the question is unless they have actually worked with an agency which actually helps them present their case before the government and if you call them lobbyist, if that expression has to be used, then the question arises as to what is the regulation that governs the conduct of the corporates vis-ŗ-vis the agency which represents their interest. It is absolutely unclear as to what these two constituents must do.

Mazumdar: Iíll go along with Mr. Prasanna. As I said that we need to remember the limitation of the law. If you take the word lobbying, what do you mean exactly by this and Iíll go with Madhukar that if you are talking about that the legislature must know or get the information about all the stakeholders and their interest, yes there should be a system, there should be a channel so that their voice should be hard before they take up policy decision but if lobbying means to influence existing mechanism to get an undue advantage over other competitors, that definitely has to be regulated and I believe the amount of legislation which we have in this country, if we can effectively implement that, it can be considerably regulated but all of a sudden if you come to a legislation in the terms of legislation which is available in the US or other states, I doubt whether it will work because we are very efficient in making a law non-functional.

Doshi: I agree that you donít necessarily need a law to fix the situation but Madhukar in this situation, we donít have full disclosure of the several corporate commercial interests that are being represented to parliamentarians, to policy makers and that has adequately been brought to the surface by the current controversy in India regarding the Nira Radia tape. So if lobbying has reached a point where it is influencing in who becomes a minister or at least attempting to do so, we do need more disclosures. How do we go about making sure that happens?

Madhukar: This is not a new phenomenon. This has been around for 30-40 years if not longer and it will continue for the next 30-40 years if not longer. So I think we need to recognize this has always existed and this is not new. Number 2, we have been discussing the disclosure of the corporate sector and which is very important but I am also saying from the government side, from the policy makerís side what kinds of disclosures exist. If you take a look at Lok Sabha and Rajya Sabha, the MPs has something called a register of interest so they have to disclose what interests they have and thatís an important mechanism but thatís not yet made fully transparent to public and thatís something we need to push for. We have had issues about disclosure of assets of judges, of politicians and all these are essentially addressing the need for a larger transparency in many things that public sector people do.

And last point really is, if you look at what happens in parliament as this process of law making happens, at various points, there is an interface of law makers with people who want to influence what law has been made and how do we make all of this process transparent in a manner that ultimately the voter can see whether money was exchanged and if the money was exchanged, did the government policy favor those who gave the money. For example in the US, there is a lot of work going on  tracking the money trail and what votes does the senators or the congressmen actually voted for congress. Those systems donít exist in India to see whether first of all there is money, second, if the money inflows are deficient. Those things are absolutely necessarily on the other side as well.

Doshi: Do you believe that before we actually in fact in India consider putting in a framework to legalize lobbying, maybe we should make it incumbent upon parliamentarians and policy makers to disclose more information which is not just financial assets but also other kinds of interests that may have influenced the policy making. Is that a realistic expectation or a better way to go about it?

Rom: I think itís realistic to put restrictions and obligations on elected officials or government officials because they do work for the public and they are accountable to the public. Itís much harder to put those restrictions on private sector or non profits. So yes, for politicians and bureaucrats, you have to disclose where you are receiving resources, what investments that you have, where family members works so to make sure that your family members or spouse or a child is not working for a interest group or an industry that is trying to influence you. The more disclosure on those kinds of things, the more information the public will have, the more it will be able to judge whether the policy makers and politicians are acting in the public interest or acting in self interest.

Doshi: But do you think that just that itself can replace the need for legalizing lobbying. Do you believe that India can get away without having to legalize this and just work with more disclosures?

Rom: Lobbying may not be legalized in India but itís not illegal, right? So I think that any passes that you make to make a more open system, a transparent system- that may not really change peopleís behavior of what they do but make them report what they do to the public. But I think the onus needs to be on elected officials and bureaucrats because we can have them make that disclosure, we can make them to do the reports in a different way than private sector actors.

Doshi: Clearly at the end of this conversation, we have said, letís put the onus on the elected representatives; letís make it an onus of enhanced disclosures and not one where we jump into trying to create a legislative framework for lobbying. My question is do you believe that the elected representative will be ready to accept this. Is he going to be able to disclose several non-financial interests? Is he going to be willing to talk about several representations made to him because if that doesnít happen efficiently, we are back to square one which is that this continues to be a sub- terranean practice and will only come to light when once in a few years scandals happen of this nature?

Mazumdar: The legislatures will be definitely hesitant to declare and to disclose until and unless they are forced to. So what we should emphasise more is that more and more transparency, more and more disclosure and more and more accountability. I will emphasise on the word accountability because until and unless you bring the framework of accountability, no one is going to volunteer to disclose something which will otherwise affect them

Doshi: And I also buy the point that you made offline to me that may be we are not ready as a country if we cannot accept electoral reforms and increasing campaign spends, then how are we going to accept money being part of the system when it comes to policy making. So culturally, may be, we are not willing to accept this.

Madhukar: Exactly. The 25 lakh rupee limit on MP expenditure is a big joke and everyone knows that. Everyone in parliament knows that and there is not a consensus yet to reform that. There are lots of areas in India where people know that there is a problem but are unwilling to work on it for different reasons.

Doshi. And why canít we put the same accountability requirements with Corporate India as well. Currently, if any company funds an election campaign or a political party, that needs to be disclosed at least once a year in its balance sheet. So why canít we ask companies, may be to begin with on a voluntary basis but later on mandatory basis saying that you have to disclose the representations made to parliamentarians or policy makers?

Prasanna: Without understanding what purpose will be achieved and what is the necessity for doing that, we cannot simply dictate that certain things must be disclosed just because certain events have taken place. But let me say this that there should be a top-down commitment to bring in certain degree of discipline. You know under the Right to Information Act, ministerial notes are also available. If the ministers are actually asked to keep a record of whom they have met, what they have discussed etc; that would be available under the Right to Information Act and the people who are interested can ask for that information and that is something one has to really look at.

And secondly people who actually work for the corporates, there should be some degree of self-regulation. They should be allowed to self-regulate and there is no point in simply thrusting some law which ahs not been tested, particularly in a federal polity like India where there are competing tension when it comes to law making.

Rom: I am never surprised when people resist lobbying reforms because when you try to restrict lobbying or regulate lobbying, it does threaten peopleís interests. We understand that. Politics is about the conflict of interest. However, I still think its important, specially if the public demands, greater disclosure, greater transparency and greater openness because the public deserves to know why policymakers are making the decisions they do and who has influenced the making of those decisions. So, I think India should proceed in ways to open up lobbying, to regulate it and to make it transparent for the public interest.


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