Legalising The Lobbying

If India of late has been a country of double standards, then most of the blame for such an epithet should go to our politicians. Publicly they say something, though their private beliefs are completely different. Today they may protest over an issue which, ironically, they had supported yesterday. They want something proscribed in India but will like to take advantage of this very thing abroad. That such an approach in this age of globalisation hurts our national interests is not an overstatement. The live manifestation of this sordid phenomenon is the ongoing Parliamentary disruptions over the alleged lobbying at the cost of Rs.125 crore by the American company Wal-Mart to gain access to the lucrative Indian retail market.

I am not going into the merits or demerits of the Wal-Mart making its presence felt in India. Allowing or disallowing it in India is the prerogative of the Indian government. However, in my considered opinion, Wal-Mart has every right to make a case for its presence in India before the Indian authorities before they take a decision. Trying to influence a decision for a particular cause is lobbying and there is no harm in doing it as long as the decision-makers are not individually bribed. Obviously those who lobby are paid by the organisation they lobby for. It is like we paying the lawyer who fights our case in the court. If the Judge is convinced by the merits of his argument and decides the case in our favour, we do not call the Judge corrupt. He is corrupt only when he takes bribes to deliver the verdict in our favour.

Viewed thus, what is a big deal if the Wal-Mart employed lobbyists and paid them and for their activities in promoting its business interests in India? Whether there should be foreign companies doing retail business is a political/executive decision. Like a Judge, the present executive in the country—the UPA government—may have taken a decision in favour of Wal- Mart. The opposition has got every right to criticise this decision and its roll-back. But just because the government has decided to allow Wal-Mart does not mean that the company should be prosecuted for spending Rs 125 crore in convincing the Indian authorities to allow it inside the country. If it is proved that the company has bribed the authorities for gaining entry, then it is a different matter.

A lobbyist is like a lawyer. Lobbying is a legitimate activity in established democracies such as the United States, Canada, Germany and France. I fail to understand why it is not so in India. It is sheer nonsense that lobbying is illegal in this country. In fact, by keeping lobbying illegal, one is making our decision-making process non-transparent, hence more prone to corruption. In a way, proscribing lobbying is even undemocratic. In a democracy that India is, we need people from across the spectrum to present their views to the decision-makers, particularly when the decision concerned is of general nature, affecting the lives of many. In fact, people do and will always influence the government. So it is better to make the process transparent by making the lobbyists to register themselves and disclose their activities and expenditure as is the case in the US.

And once these activities are transparent, we will know who are the elected officials and the administrative bureaucrats the lobbyists have met. That way, we will be able to know better the rationale behind a particular policy-decision and be in a better position to evaluate it.

It may be noted that in the US, lobbying is a huge and established industry. The activities of individuals, consultants, lawyers, associations, groups, NGOs, and corporations to lobby the government are protected by the right to petition in the First Amendment to the US Constitution and according to a recent estimate, the lobbying market in the US is worth $ 3.5 billion. Every year the US government. allows about 2000 lobbyists based on their expertise. As of 2011, there were 12, 220 registered lobbyists in the US. Interestingly, many of these lobbyists are former Congressmen, Senators and retired senior officials.

Ironically, while lobbying in India continues to be illegal, Indian companies desirous of doing business in the US do employ the American lobbyists extensively to promote their interests in the US market. The latest news is that about 27 big Indian companies have spent money on lobbying in the US in recent years. These include Reliance Industries Limited, Tata Sons, Ranbaxy Lab, the National Association of Software and Service Companies, the Gems and Jewellery Export Promotion Council, among others. If a Times of India report is to be believed, Ranbaxy has paid $90,000 to the lobbying firm Patton Boggs for issues including “Preserve Access to Affordable Generics”. The report says, “Tata Sons had roped in Cohen Group for lobbying, according to a document from 2007, related to issues described as ‘market research in the automotive, defence and energy sectors’. No amount was mentioned in the document. Reliance Industries became a client of the lobbyist Barbour, Griffith & Rogers, according to a 2009 document, on the unspecified issue of ‘TRD’, which could mean trade. As per a 2010 document, Wipro spent $33,000 on lobbyist Melanie Carter-Maguire on issues relating to trade and visa. Wipro roped in a lobbyist firm this year too but no amount has been mentioned.”

What is more ironical is that the Indian private sector is not alone in spending money on lobbying in the US. The Indian government, too, has indulged in this practice from time to time. It is an open secret that there was a time when there was a stiff competition between India and Pakistan over hiring the better, hence costlier, lobbying firm in Washington DC to pursue their respective interests. In fact, amid the ongoing Wal-Mart controversy, the government has clarified that the Indian embassy in Washington DC has “not had been availing the services of the lobbying firm Patton Bogs for more than a year”. So said the External Affairs Ministry’s statement the other day, while clarifying that Patton Boggs, one of the lobbying firms which represented Wal-Mart, had been hired by the Indian embassy in the US in 2008 to help clinch the India-US nuclear deal.

This being the case, it is difficult to fathom why lobbying is illegal in India. In any case, has lobbying stopped in the country despite the illegalities involved? No way. You may not call it lobbying as such but the fact remains that our decision-makers have always been under pressure from some quarter or the other. If we are told that our ministers and bureaucrats are often transferred under pressure from industrial houses, what is the use of making lobbying illegal? On the other hand, if you make lobbying legal and transparent, we will be in a better position to know which business representative met when and how many times an official or a minister. That will lessen the scope of corruption, not otherwise. In other words, the more laws or provisions that you have on restricting business activities, the better the scope is for unscrupulous decision-makers and executives to make money through corrupt means. No wonder why India, where every second activity seems to be restricted, is one of the most corrupt countries in the world. Incidentally, India was ranked 94th out of 176 countries in Transparency International’s 2012 Corruption Perception Index (CPI) released on December 5, 2012. So much for our honesty and transparency!

One could always argue that lobbying is just a special form of corruption focused on legislative bodies or some other rule-making agency. However, there are some important differences between lobbying and corruption. While corrupt practices tend to directly benefit a small number of ‘users’ (often one individual), lobbying activities are carried out in order to benefit a group of users that share a specific interest, besides being done openly. But that does not mean that lobbying should be totally unregulated. There is nothing called unrestricted lobbying. In the US, for instance, attempts have been made in recent years to reduce conflicts of interest. The lobbyists there are now not supposed to 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. Besides, the Obama Administration has an executive order which prohibits those who had left the Administration to service lobbyists for two years.

The point is that lobbying as a principle is not necessarily bad. You may regulate it and demand more transparency, but cannot ban it. After all, in a democracy, decision-making is an art of managing conflicting interests. And the people have the right to know why policymakers are making the decisions they do and who has influenced the making of those decisions. We should know the lobbyists and how they are functioning, something that we are being prevented from knowing at the moment just because lobbying is illegal.

 By Prakash Nanda

prakashnanda@udayindia.in

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