Tuesday, 20 October 2009

Three surprising new entries on the register

The number of entries in the Commission’s voluntary lobby transparency register has now passed 2,000 (753 of which are Brussels-based). The Commission celebrated this as a big success, but in fact the rate of participation is still below 1/3 of Brussels-based lobbies (estimated as 2,600 in an European Parliament report from 2000). Among the recent sign-ups are some big fish, but their reports beg a few questions.

The European Roundtable of Industrialists (ERT) joined the register earlier this month, much to the delight of Commissioner Kallas, who celebrated with a note on his website saying he was “pleased that [the ERT] has again confirmed its positive European spirit by joining the transparency register”. The ERT lists the names of three members of staff “engaging in direct advocacy of ERT positions” and reports lobbying expenditure of 300,000 - 350,000 euro in 2008, which “does not include expenses incurred by our Members and their companies for participation in ERT activities”. There are several major problems with the ERT’s registration: firstly, only 20 of the 48 member companies have joined the register; large firms like Nokia, E.ON, BT, Deutsche Telekom and Heineken have not. This means that a major part of the ERT’s lobbying expenses remains invisible. Secondly, the ERT lists three of its staff as lobbyists, but shouldn’t politically active CEOs like Peter Sutherland (BP), Jorma Ollila (Nokia) and Peter Brabeck-Letmathe (Nestle) also be listed?

Another surprising new entry is chemical industry lobby group CEFIC, which returned to the register in late September after two months suspension. The Commission suspended CEFIC as it had reported its lobby expenses as less than 50,000 euro per year, out of a budget of over 40 million euro. The Commission judged that this “appears to be underestimated”. CEFIC is now back on the register reporting a 4,000,000 euro lobby budget in 2009, a remarkably round figure. The figure may be 80 times more than its previous entry, but this still means that only 10% of CEFIC’s budget is being used on lobbying which seems to be a low estimate. CEFIC's entry says that the remainder of the budget goes on managing Horizontal Programmes, Sector Groups (a combined 30,2 million euro), and Research Funding (a total 13,5 million euro). Why these costs are not considered as lobbying remains unclear.

The third noteworthy addition to the register is lobbying consultancy firm Pleon, which reports its lobby turnover as “>= 1,000,000 euro”, using the privilege of the lobbying consultancies to opt to hide their lobby turnover. Whether this means just over a million or perhaps ten times more, one can only guess. With 50 staff in its Brussels office, 5 million euro is perhaps a good guess. But the Commission’s lobby register, in its current form, does not provide answers to such basic questions. Pleon's entry does at least mean its client list is now in the public domain. According to media reports, Pleon had seen an increase in “clients for whom proposed EU environment and consumer protection rules go too far”. Pleon lists 16 clients for 2008, 15 of which contribute below 10 % of Pleon’s lobby turnover. Among the clients is BAT, but as with all the other clients it is impossible to judge whether Pleon is undertaking a major lobby operation for the tobacco giant or perhaps just some advice. The list is for 2008 and as reporting is only once per year, the register does not show who Pleon has started lobbying for since then. Far more frequent reporting is needed, especially for lobby consultancies, if the register is to become a reliable information tool.

The Commission is expected to announce changes to the register before the end of this month. A crystal clear definition of what to report as lobbying expenditure, more frequent reporting and closing loopholes in financial disclosure are essential.

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