Kallas faces battle of wills with lobbyists

Siim Kallas, the European commissioner for administrative affairs, warned on Monday (18 June) that if lobbyists refused to sign up to the register for interest representation that is to be launched next spring he would introduce a compulsory scheme.

Kallas’s threat came in response to increasing indications from many parts of the several thousand-strong lobbying community of Brussels that they will not register because of the Commission’s demands that they disclose how much of their earnings come from particular clients.

José Lalloum, the chairman of the European Public Affairs Consultants Association (Epaca), which represents 38 consultancies including many of the biggest names, wrote to Kallas in May saying that their lawyers had warned them against signing the register. On 11 June, Lyn Trystman-Gray, president of the Society of European Affairs (Seap), said that her organisation still had not decided whether it would recommend signing up to the register, adding: "It’s difficult to see how we could meet the information requirements." Julia Bateman of the UK’s Law Societies’ office said that lawyers feared that they would be breaching client confidentiality agreements.

The issue of a common code of conduct for interest group representation appears much less problematic and Seap, Epaca and the International Public Affairs Association have drafted common principles for a code of conduct. Kallas said in his speech on Monday that detailed discussions with stakeholders were "well under way".

The element of Kallas’s initiative which is causing the biggest problems is the requirement for lobbying firms that wish to join the register to declare their share of turnover related to lobbying and the proportion of this figure that their clients accounted for.

The condition has prompted a number of objections, including that it will be difficult accurately to assess how much of a lobbying firm’s activity is spent on direct lobbying rather than, for example, gathering information. Trystman-Gray gave the example of getting the chief executive from a major multinational to meet a commissioner. "How much of his salary should we declare?" she asked.

So far Kallas is sticking to his guns. In his speech he said that "facts on funds invested in lobbying" were a "meaningful indicator of the importance of the issues at stake". "Nobody would pay real money for lobby services without expecting something in return," he said. Kallas also played down objections that the Commission was not being clear enough about how to calculate a meaningful figure, saying: "The Commission is neither competent nor willing to provide an ‘accounting manual’ on how to do this."

He also took a tough stance on the issue of breaking client confidentiality rules. "Of course a transparency initiative challenges confidentiality," he said.

Kallas warned that if practitioners worked against the initiative then self-regulation would prove a failure and would lead to "mandatory registration", saying that there was enough support in the European Parliament and among the broader public for such an approach. He threatened that, under a compulsory code, lobbyists would have to declare "single lobby events" rather than producing an annual report. The alternative, he said, was to work with the Commission to devise a system which as many organisations as possible could join.

Lobbying professionals say that as the current rules stand there is a strong possibility that large numbers of Brussels lobbying firms will not sign up to the register. There are, though, some signs of possible areas of compromise.

Catherine Stewart of Cabinet Stewart, a vice-president of Seap, said that she would try to join the register and was prepared to disclose her client list if she got permission from clients to do so. As for financial transparency, Stewart said she could consider "a mechanism where we show our willingness" to be transparent about what clients spent, provided there were safeguards that the information was provided on a case-by-case basis and with the client’s permission.

Stewart gave the example of where the Commission’s director-general for environment wanted to know "who my client is". But there should be safeguards to avoid "voyeurism" and to prevent information falling into the hands of "troublemakers".

Stewart said that she wanted the initiative to work but as it currently stood "what is basically a good initiative could get shipwrecked". "Let’s get it up and running," she said.

Paul de Clerck of Alter-EU, an organisation campaigning against lobbyists, said: "Financial transparency for us is crucial. If the argument is lost on budgets, on how much money is being spent on lobbying, the exercise would become useless."

He added that if Kallas did not hold the line on financial transparency he would lose the confidence of the public.

Kallas has promised to review how the system works after its first year of operation, although that would be in 2009 when his term as commissioner is nearing an end.

Given that consultancies are already committed, under their existing codes of conduct, to disclosing who they are working for when contacting EU officials or MEPs, making the leap to disclosing what proportion of their business a particular client accounts for does not seem unreasonable. Public relations and consultancy firms should be able to take advantage of the flexibility Kallas is offering on how to calculate and declare earnings from a particular client to provide broadly indicative figures. If the methodology is completely flawed and the information without value then a mixture of public scrutiny and peer review within the industry will show that up quickly. The transparency initiative is an opportunity for the lobbying industry to make a gesture towards an increasingly suspicious public. The industry would be unwise to refuse to co-operate.

Siim Kallas, the European commissioner for administrative affairs, warned on Monday (18 June) that if lobbyists refused to sign up to the register for interest representation that is to be launched next spring he would introduce a compulsory scheme.