Thursday, 27 January 2011

Backlash against transparency: the right to corporate privacy?

To what extent will a right-wing French MP sympathetic to big business and French government's ongoing manoeuvres to create a "corporate confidentiality" label endanger critical reporting on corporations and business transparency?

Last week, French right-wing MP Bernard Carayon in an interview for the website Rue89 boldly stated "I claim that the State and private companies should also benefit from physical persons' right to privacy. [...] Companies should be allowed to define for themselves which information remains secret [...]."

Carayon, who also chairs the French corporate-funded think-tank Prometheus Foundation, recently tabled a remarkable legislative proposal in the French Parliament that aims to enhance business secrecy to the point of seriously undermining the public's right to know about corporate practices. Riding on the controversy created by Wikileaks and a recent case of industrial espionage in France allegedly involving a couple of Renault high executives and a Chinese battery maker, Carayon wants to increase protection for "economic information" by introducing a three-year prison sentence and a 375.000€ fine for anyone found guilty of breaching “the confidentiality of information of an economic nature". The sentence would be doubled if the culprit has acted "with the intention of causing harm" or has "made a personal profit" by leaking the information.

The crucial point here is the definition of the "information of an economic nature ". The proposal is extremely vague, stating that this includes all "information that is not general knowledge freely accessible by the public and that has, directly or indirectly, an economic value for the company, and which has been protected with substantial secrecy measures by its legitimate owner, according to the law and common practices". In other words, the actual definition of "information of an economic nature" is any internal information a company wishes to consider secret.

Of course, Carayon claims that a company should not be allowed to use this law to hide fraudulent activities. But how to prove that certain companies' activities are illegal without access to the information? This new law would considerably increase big business' secrecy because it considers industrial espionage on an equal footing to information leaked to the press. A difference could have been made, but wasn't: there is little doubt the omission is intentional.

Carayon's Prometheus Foundation has built itself a name in recent years for representing, under a “do-tank” label, the political interests of some big names in French industry, notably in the armament and pharmaceutical sectors. Thalès, EADS, Safran, Dassault, Sanofi-Aventis... all sit on the Foundation's Board, but the banking and energy sector also contribute to its budget. The Prometheus Foundation has for instance set up an "NGO Transparency Barometer", which uses flawed criteria and methodology in a poorly disguised attempt to unfairly discredit critical NGOs. This new legislative proposal takes the Foundation into new, far more dangerous territories in its zealous defence of corporate interests.

But this shouldn't be seen as only coming from a right-wing MP backed by a few big companies: the move is bigger. Not only is the legislative proposal supported by 124 MPs, but the French government, through the Inter-ministerial Delegation on Economic Intelligence (a high-level informal body gathering officials from the Ministries of Defence, Interior, Research, Budget, Environment, Foreign Affairs and the Economy, and that now directly reports to the French Presidency), is also working with a number of big French business lobbies (Medef, AFEP, CDSE, CGPME, Chambers of Commerce...) to design new legislation intended to create a new legal label, “corporate confidentiality”, to protect corporate information that is not covered by existing intellectual property laws. According to the head of this body, Olivier Buquen, this will cover “all strategic information, which can be, depending on the company, a client's database, a business plan or the details of a partnership […] we wish to simplify legal procedures for companies, and to create penalties that are severe enough to act as a deterrent. Our text will foresee legal proceedings against whoever steals or leaks a company's key information.”

“Steals or leaks”: in this French official's words, targeting whistle-blowers is an objective no longer pursued with a convenient omission but with an affirmation. Both initiatives still need to pass a few hurdles (and will probably be merged in some way) before being discussed by France's Assemblée Nationale. Nevertheless, the ambition of business lobby groups to take advantage of anti-industrial espionage legislation to silence internal dissent and deter critical reporting is very clear... and could influence the situation all over Europe: a European Arrest Warrant could be used under the terms of this legislative proposal to arrest a French whistle-blower anywhere in the EU, and other countries might be tempted to follow France's appalling creativity.

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Wednesday, 26 January 2011

Commission - belatedly - investigates John Bruton's revolving door move to Brussels lobby consultancy

Ex-commissioner Günter Verheugen is not the only Commission official who just ignored the rules about seeking approval for a new job (Verheugen failed to inform the Commission of his new lobby consultancy firm, the European Experience Company). John Bruton, former Irish Prime Minister and EU ambassador in Washington DC until November 2009, failed to notify the Commission about two new jobs which clearly involve potential conflicts of interest. After Corporate Europe Observatory (CEO) raised this issue earlier this week, the Commission appears to have contacted Bruton and made him file a request for approval for his jobs at the Dublin-based International Financial Services Centre and Brussels-based lobby consultancy Cabinet DN (where he has worked as a Senior Advisor since December 2010).

As head of the Commission’s delegation in the US (2004-2009), Bruton was one of the highest Commission officials, but he seems to have been unaware of the obligations under the Staff Regulations (Article 16) for “Officials intending to engage in an occupational activity, whether gainful or not, [to] within two years of leaving the service shall inform their institution thereof.” After such a notification, the Commission assesses possible conflicts of interest and can “either forbid [the official] from undertaking it or give its approval subject to any conditions it thinks fit.”

The incident also reveals that the Commission does not monitor post-employment activities for even its most senior officials - and does not act until a problem is raised by civil society watchdogs like CEO.

The Commission’s decision on the case is unlikely to be clear-cut, judging from its record on revolving door cases so far. Following a query from Nessa Childers MEP, the Commission revealed that just one out of 201 requests for job approvals has been turned down since January 2008 (less than 0,5% of the cases).

In 2009, the Commission gave the green light to Jean-Philippe Monod de Froideville (a personal advisor and member of Competition Commissioner Kroes’ cabinet) to move to lobby consultancy Interel Cabinet Stewart, where he works for industry clients on “competition and trade matters”.

It also approved - in 2010 - Mogens Peter Carl’s move to Kreab Gavin Anderson (KGA). Carl, who works for KGA clients on energy issues, was director-general in DG Environment at the European Commission and also served as director-general in DG Trade. Also worth mentioning is Michel Petite, head of the Commission’s powerful Legal Service from 2001-2008, who moved straight to Clifford Chance, a leading law firm with a blossoming lobbying business. This revolving door case was shortlisted for the top-five nominations for the category of Worst Conflict of Interest in the Worst EU Lobbying Awards 2008. Petite, ironically, now heads the Commission’s Ad Hoc Ethical Committee, responsible for assessing conflicts of interest related to job moves by ex-Commissioners.

The Commission is about to start discussions with MEPs about stricter rules for ex-Commissioners wanting to go through he revolving door. The Bruton case underlines the need to also strengthen the Staff Regulations and the Commission’s monitoring of which new jobs former Commission staff take.

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Monday, 10 January 2011

MEP meetings with lobbyists - transparency ahead?

Sweden is known as a global leader in transparency, but among centre-right Swedish MEPs there’s very little enthusiasm for being open about their contacts with lobbyists, as a survey published on europaportalen.se found.

Europaportalen asked the 18 Swedish MEPs for a list of lobbyists they met with during a four-week period in October and November. Twelve MEPs responded to the survey, disclosing details of meetings, but five MEPs declined. Three of these voiced their dislike of this form of transparency, including Cecilia Wikstrom who argued that the privacy of the lobbyists should be protected as they had not been asked in advance whether they were happy for journalists to be told about the meetings. But lobbyists’ privacy is hardly an appropriate argument against transparency.

When professional lobbyists engage in influencing EU decision-making, for instance on behalf of large companies or lobby groups, they are not acting in a private capacity and must accept that their activities can be made public. Gunnar Hokmark, another Conservative MEP who refused to reveal details of his meetings with lobbyists, argued that he has the right to meet with anyone without questions being raised.

This anti-transparency stance goes against a clear and very positive trend in the European Parliament. In October the 25 UK Conservative MEPs published a full overview of all the lobbyists they had met with in the first half of 2010.

Giles Chichester MEP, a member of the Parliament’s Committee on Industry, Research and Energy, had no less than 219 meetings with lobbyists during the six month period, almost entirely with industry lobbyists. Among the Swedish MEPs surveyed, liberal MEP Olle Schmidt had most meetings with lobbyists, with 16 meetings during the four weeks. Schmidt explained to europaportalen that he was not surprised by this given that he is a member of the Committee on Economic and Monetary Affairs which is dealing with a very large number of new pieces of EU financial regulation. But while the other Swedish MEPs met with a diverse range of groups, including trade unions and NGOs, the list shows that virtually all Schmidt’s meetings were with business lobbyists, mostly from large banks and their lobby groups. No other Swedish MEPs had anywhere near such a one-sided list of lobbyists. This kind of information is of value to the public, including voters who want to assess the record of an MEP.

The UK Conservatives are so far the only political group in the European Parliament to have disclosed meetings of all its MEPs with lobbyists. Several other individual MEPs have also done this since the last European Parliament elections in June 2009, including German Green MEPs Sven Giegold and Reinhard Bütikofer. Giegold publishes lists of meeting requests received from lobbyists and whether the meeting took place or not, but also regularly highlights examples of problematic lobbying he has encountered. As for example with the recent lobbying offensive by the PVC industry to prevent regulation of their toxic products, using a glossy leaflet which Giegold describes as “repulsive”.

Will 2011 see more political groups in the European Parliament embrace transparency around meetings with lobbyists?

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