Making lobbying a legit business
Dec 21 2012
The Walmart debate is only the latest chapter of a winding story
Walmart or no Walmart, there is a widely known fact about Raisina Hill that houses the seat of the government: Without exception, most companies, industry bodies and their funded non-government groups lobby on policy issues and individual cases, for days on end. It is also true that most companies and their chief executives seek favours from politicians of all hues and shades. And, in return, bankroll elections of politicians and their parties.
In other words, political parties, their leaders and minions alike, enjoy cozying up to private enterprise both at national and state levels, in many cases taking their relationship to unacceptable heights, compromising public governance, people’s welfare and delivery of services.
When this has been an ‘accepted norm’ of governance for well over 65 years, then why do our politicians make a big issue on Walmart? So what, if the company spent the entire $25 million on lobbying for market access in India? What’s the big deal in that? After all, the fact came to light because of the company’s filings before the US Senate, not because of some clever investigation into some deep-rooted conspiracy at home. For no one in the Indian government had a clue until these public disclosures were made by Walmart in the US, where as in several other European countries, lobbying with policymakers is a legitimate activity.
In India, lobbying and liaison happen clandestinely and mostly into the dead of night. Cutting across party lines, the homes of most politicians in Lutyen’s Delhi come to life when armies of liaison men, and women, descend in the shadow of darkness every night, briefcases and leather bags in hand.
Our high profile bureaucracy, with its tentacles across the establishment from the lonely distant village to the inner temples of governance in Delhi, is no exception. Even our military establishment has not been spared, as was revealed by former General VK Singh’s charges against agents cutting deals under the table.
In a situation where lobbying and bribery are an accepted fact of public life, it makes sense to consider it as a legitimate activity. As the economy opens up further to billions and more billions of dollars worth investments, and homegrown corporate giants venture abroad, it may be worthwhile to adopt global best practices on reporting lobbying expenses as ‘business development’ accounting. The Tatas, the Birlas, Ambanis, Bharti, Infosys and several state-run enterprises like ONGC, for that matter, have commercial interests spread across 90 countries worldwide, where they mostly file annual reports before regulators and law enforcement agencies on business activities, as required under respective legal jurisdictions. If that is so, there is little reason why they should not comply with the same back home, and report ‘lobbying’ as a legitimate practice.
Imagine a situation where the Ambanis declare before the Securities Exchange Board of India (Sebi) the huge expenses they incur on ‘lobbying set up’ — personnel, infrastructure and their travel-related and miscellaneous expenses — they have across the globe. Similarly, industry groups and bodies such as Ficci, Assocham, CII and their like, should declare ‘lobbying expenses’ in public filings. Exporters bodies must also do their bit when lobbying either through Fieo or the score of export promotion councils.
When the erstwhile Enron Corporation of the US reported development or education expenses in India ahead of setting up the jinxed Dabhol Power Project in Maharashtra, there was uproar and cries of foul play at home. But then, if the Indian establishment has come to accept such activities by special interest groups, especially the private enterprises, then all such operations must be legitimised or provided statutory backing.
The British House of Commons has accepted lobbying as ‘legitimate and accepted process’ in a democracy. In fact, the UK Public Affairs Council has recommended self-regulation by policymakers, while dealing with lobbyists.
In the European Union’s headquarters at Brussels, there are 15,000 registered lobbyists who are normally lawyers, consultants, associations or those registered as NGOs. In Australia, lobbying is legitimate, while in France, though this has not been accepted as legit, it is nevertheless as rampant as in India.In Washington DC alone, more than 12,000 registered lobbyists are protected under the US Constitution. In fact, the Willard Hotel lobby in DC emerged as the hangout of all lobbyists, leading to coinage of the word ‘lobbyist’ itself.
Whether lobbying is ethical or not, may a big question. But there is no doubt that it is a double-edged practice that has both the good and the bad sides to it. Many view it with contempt, while others see the positive side of a lobby pursuing an issue of public concern. Given the diverse experience across the globe, political parties across the spectrum in India could think of holding a vote in Parliament, the state legislatures, zilla parishads and even gram sabhas on the legitimacy of lobbying. Yet, a note of caution must be sounded in the Indian context. If lobbying by special interest groups is accepted as a norm, then how does one protect the interests of people incapable of articulating their grievances in an organised manner?
The Walmart debate is only the latest chapter of a story we have been reading for long. Should lobbying go legit? The jury is still out.