CORPORATE LOBBYING: SHOULD IT BE LEGALISED IN INDIA

Hoimee Dey

• The Webster’s dictionary defines “lobby” to mean “a group of persons who conduct a campaign to influence members of a legislature to vote according to the group’s special interest”.

• Going by the definition, lobbying is probably as old as democracy itself.

What is Lobbying ?

Where is the DEVIL?

• The tenuous balance between legitimate and illegitimate lobbying activities is endangered when business houses with enormous funds back up close relationships with lawmakers and gain unauthorized access to the policy-making process, otherwise unavailable to “the common man”.

• Conventional wisdom suggests that lobbying is the preferred means for exerting political influence in developed countries and corruption the preferred one in developing countries.

• At the end both are WAYS OF OBTAINING HELP FROM THE PUBLIC SECTOR IN EXCHANGE FOR FAVORS.

Lobbying & Corruption are Symbiotic

History of Lobbying

Inception…

• Although some have noted it’s influence on the earliest political forums in Greece and Rome, what we know as modern lobbying began in the US.

• In 1792, William Hull was hired by the Virginia veterans of the Continental army.

• In 1795, a Philadelphia newspaper described the way lobbyists waited outside Congress Hall to "give a hint to a member”.

continued…..

• In 1850, Samuel Colt gave away a free pistol to the twelve-year old son of a representative as a mild encouragement to sign a patent bill.

• In 1946, Congress passed the first comprehensive lobbying disclosure law, the Federal Regulation of Lobbying Act.

• In 2011, Former Senator Chris Dodd (D-Conn.), author of the Wall Street Reform and Consumer Protection Act, became Hollywood’s Chief lobbyist as CEO of the Motion Picture Association of America—but he’s not registered.

In India…..

Dates back to almost 60 years ago…

• H.G Mudgal, was expelled for taking money from business houses to support their interest in the parliament.

• Dhirubhai Ambani, Founder of Reliance Industries, was also known for his competence in lobbying with the legislature and policy makers.

Types of Lobbying1. Direct lobbying2. Grassroots lobbying

Direct Lobbying…

Is an attempt to influence legislation through communication.– Here the communication refers to specific legislation and reflects a

view on legislation.

Is an attempt to influence legislation, through an attempt to influence the opinions of general public.– It includes “a call to action”.

Grassroots Lobbying…

Industry Lobbyists

They know the pulse of the government—and know just where to apply pressure. Apex industry chambers FICCI and CII are the big fish and the most powerful.

Lobbying may not be part of their official brief, but legal firms are the crucial cog in helping companies deal with regulatory boards and government-appointed commissions.

India on Global Map

Legal Lobbyists

Foreign Lobbyists

The Lobbying Battlegrounds

• Retail : opening up of FDI in multi-brand retail and more• Defense : acquiring state-of-the-art technology and raising

of FDI bar.• Mining : stalling new tax proposal• Aviation : better health for private carriers• Telecom : spectrum allocation, net neutrality• Infrastructure : power generation or highway construction

POLICIES BEING TWEAKED INDISCRIMINATELY TO SUIT CORPORATE.

#NetNeutrality a recent peril

• The internet is supposed to be neutral for all with no governing bodies in between.

• However, a few telecom providers are said to be heavily lobbying with the TRAI.

• They are planning to allow them to block certain apps and websites so that they can ‘extort’ more money from consumers and businesses.

“I think net neutrality is important to make sure network operators don't discriminate and limit access to services people want to use, especially in countries where most people are online.”

- Mark Zuckerberg, CEO, The Facebook

THE DEBATE ON LEGALIZING

What is not wrong?

• Hiring professionals to speak at conferences/meetings• Funding research and paying for publication and distribution

of books/reports• Traveling and staying at hotels to meet and negotiate with

decision makers or influencers• Asking "independent" professional experts for "voluntary"

endorsement • Paying for occasional dinners or rounds of golf or vacation

What is (obviously) wrong ?

• Bribe (direct or indirect)• Paid newspaper articles• Blackmail• Conflict of interest • ... etc. etc.

Advantages of Legalizing

• Lobbyists act as a bridge between the companies and the government

• It has helped both the policy makers as well as business firms to adhere to their respective agendas

• Representation of a broader set of public interests

Advantages of Legalizing

• Help in technical expertise assistance to parliamentarians of the Country.

• It would provide NGOs, interest groups, trade associations, businesses and policy makers a formal platform for mutual association.

• Cant be used in enriching our parliamentary democracy.• If correctly implemented it can aid in curbing corruption as

it would certainly bring more accountability.

IF MISUSED, CAN INCREASE CORRUPTION BY MANYFOLDS

What ethical dilemmas does lobbying present?

• Fairness

• Transparency

• Common Good

Necessary Evil

• Regardless of the level of reform, it remains an integral part of the policymaking process of government at all times

• With increased transparency in governance, corporate entities realized that a more legitimate method is needed to influence policymakers.

• Given where India stands at the global corporate map, India cannot afford to lose its money nor its resources to either of the two, corporate lobbying or corruption.

References

• Arora, Sunit and Arindam Mukherjee. Outlook India. 17 May 2010. 10 April 2015 <http://www.outlookindia.com/article/Favourite-Lobby-Horses/265345>.

• Harsh, Arunabh. The Typewriter. 14 September 2014. 2015 April 15 <http://thetypewriter.org/2014/09/should-corporate-lobbying-be-legalised-in-india/>.

• Nadler, Judy and Miriam Schulman. Lobbying Ethics. March 2006. 2015 April 13 <http://www.scu.edu/ethics/practicing/focusareas/government_ethics/introduction/lobbying.html>.

• Roy, Tanmoy. (Blog). 19 December 2012. 12 April 2015 <http://www.tanmoyroy.com/2012/12/why-is-lobbying-illegal-in-india.html>.

• Titus, Diljeet. India Law Journal: Corporate Lobbying and Corruption-Manipulating Capital. 11 April 2015 <http://www.indialawjournal.com/volume4/issue_3/article_by_diljeet_titus.html>.

• Slideshare presentation by Gitanjali Maria and Kranthi227

This is to sum it up…..

“Real lobbying reform must end the practice of corporate lobbyists writing our laws.”

Marty MeehanChancellor of the University of Massachusetts Lowell