By Ian Kilbride
Lobbying – a dirty word or fundamental to an open democracy?
In simple terms, lobbying is understood as the act of influencing, or attempting to influence, government policy, legislation or regulation towards a preferred outcome.
From a competitive perspective, this implies that through lobbying, someone, or some entity is attempting to gain some advantage sometimes in relation to or the detriment of another. But not always. In fact, arguably the most beneficial and legitimate lobbying is conducted in the “public interest”.
Think of green activists for example lobbying for changes to reduce greenhouse gas emissions in order to tackle climate change.
Climate change denialists notwithstanding, climate change activists are no doubt legitimate in their lobbying for drastic and immediate cuts in CO₂ emissions in the global public interest. However, their demands may be viewed as either illegitimate, misguided or an existential threat to countries and communities highly dependent on fossil fuels.
Nobody would suggest the lobbying of Greta Thunberg is corrupt, or in anyway illegitimate, but her lobbying has potentially profound and complex consequences for humankind. Before painting all environmental activists with the same green brush of legitimacy, the funding, policy-making and irresponsible tactics of some NGOs is less than exemplary when compared to the regulated nature, transparency, corporate responsibility and accountability of some of the multinational corporations they target.
The concept of lobbying originates in the historical practice of those seeking influence to meet with British parliamentarians in the lobby of the House of Commons or less commonly, the House of Lords, with the objective of swaying their positions or voting intentions on a particular policy or Bill. This historical practice already suggests unfair or unequal access, lack of transparency and preferential treatment towards those with the resources to collar a legislator before entering the chamber.
While the old-fashioned arm-twisting and handshake legislative lobbying is still in evidence from Washington and Brussels to Paramaribo and Pretoria, today’s lobbying has become a highly sophisticated global industry engaged in by entities ranging from the United Nations, multinational corporations, religious bodies, non-governmental organisations and individuals such as the young female Nobel Laureate, Malala Yousafzai.
While lobbying is a fundamental element of contemporary democracy, it also has the potential to undermine and corrode it in favour of well-funded special interests. For example, in 2022, lobbying spend in the United States reached a record $4.1 billion (R76bn). This insider influence was the target of former president Donald Trump’s populists and popular “drain the swamp” mantra.
In the European Union, company spend on lobbying Brussels has increased by one third in the past seven years, with five of the top 10 companies lobbying lawmakers coming from the mega tech sector. Google conducted 281 meetings with the European Commission, while Meta conducted 176 and Microsoft close behind with 174 EC meetings.
In South Africa, the lobbying field is open to legitimate business associations such as the Black Business Council, Business Unity South Africa, the Black Management Forum and Business Leadership South Africa, yet is also far too “open” to corrupt practices that paved the way for the entire state capture project. Clearly, this requires urgent corrective attention.
Counter-intuitively perhaps, the best way to cut out corrupt corporate lobbying, is to include business into policy thinking at the earliest stage of conceptualisation. This has a number of advantages.
Firstly, business is a cardinal stakeholder in any economy and democracy and is invariably impacted by policy, legislation and regulation. In other words, business has legitimate interests and voice in policy matters. Presenting business with a take it or leave it fait accompli is neither democratic, nor rational, but is rather likely to induce self-interested business lobbying, or worse still, litigation. This, in turn, undermines efforts to construct social compacts and threatens social cohesion more broadly.
Secondly, business is innovative and often enjoys (and has earned) comparative advantage with respect to expertise in areas government seeks to regulate. Think for example, of the challenges facing governments in regulating social media, artificial intelligence and crypto currency to name just three. In each of these instances, business has sought to craft self-regulation internally and sectorally in part driven by enlightened self-interest dressed up as corporate social responsibility, but in reality, in response to public concerns and the perceived threat to company profits. Yet, without the authentic input of business into sectoral regulation, policy is likely to lag the private sector, be ineffective or lead to counter lobbying.
In this regard, the government is to be congratulated on the introduction of socio-economic impact assessment studies (SEIAs) designed to inform and guide the policy-making process with the objective of delivering a better, more cost-effective and impactful governance architecture.
The problem, however, is the uneven application of SEIAs and a pattern of selective engagement with the business sector or entities perceived to be opposed to the proposed policy. This exclusion defeats the object of the exercise and again, leads to counter-lobbying and litigation. Indeed, the underlying problem that needs to be addressed in the policy-making arena is the lack of trust between government and business.
In South Africa we remain somewhat naive about both the benefits and harm lobbying can produce. So, as a first step, it’s time to lobby for an improvement in business and government relations.
Ian Kilbride is the chairman, Spirit Invest, the chairman of Spirit Foundation and Honorary Professor Stellenbosch Business School [email protected]
BUSINESS REPORT