knowledge | 13 May 2015 |
Who Said What to Whom? The Regulation of Lobbying Act 2015
The Regulation of Lobbying Act 2015 introduces new registration and disclosure requirements for those carrying out lobbying activities as well as post-term employment restrictions for certain public officials. Most of the Act will commence on 1 September 2015.
The key purpose of the Act is to publicly identify those communicating with designated public officials on specific policy or legislative matters or decisions connected with the award of public funds. Businesses and other organisations that have contact with public officials will need to familiarise themselves with the new regulatory regime and address any compliance requirements that may arise.
In general terms, lobbying involves any communication with a public official made with the objective of influencing legislation, policy or administrative decisions. While it is broadly acknowledged that lobbying enhances the quality of public debate thereby promoting more effective decision-making, there is also a widespread perception that it can lead to undue influence and ‘regulatory capture’. For example, a 2009 International Money Fund Working Paper established a link between intensive lobbying by financial, insurance and real estate corporations and the high-risk lending practices which ultimately contributed to the financial crisis. On the domestic front, the Mahon Tribunal’s inquiries into planning corruption in Dublin highlighted the risks associated with opaque and unregulated lobbying: in its final report, that Tribunal made several recommendations designed to promote ethical lobbying practices.
The Lobbying Act provides for the establishment of a public Register of Lobbying (the “Register”) and requires those carrying on “lobbying activities” to register and to supply certain information regarding those activities for inclusion in the Register. As mentioned, the objective of these requirements is to make the role of lobbying in public decision-making processes more transparent. The Lobbing Act also contains post-term employment restrictions.
Carrying on Lobbying Activities
In order to carry on “lobbying activities” a person must make a “relevant communication”: he or she must communicate personally, either directly or indirectly, with a designated public official in relation to a “relevant matter”. The term “designated public official” includes ministers, members of either House of the Oireachtas, Irish members of the European Parliament, local authority members and other prescribed persons.
A communication will relate to a “relevant matter” if it relates to:
- changes or developments in a public policy or programme;
- legislative changes; or
- the award of any grant, financial support, agreement or authorisation involving public funds.
The Lobbying Act does not apply to communications relating only to the implementation of any such policy, programme, enactment or award. Neither does it cover communications of a technical nature.
In addition, the Act excepts a number of communications from its scope, most notably those requesting factual information or providing factual information in response to a request for that information, and communications requested by a public service body and published by it.
Moreover, with the exception of relevant communications relating to the development or rezoning of land, the Lobbying Act does not cover communications made by individuals regarding their private affairs, or by businesses with fewer than ten full-time employees.
However, relevant communications made by a person who is an employer with over ten full-time employees are in scope, as long as the communications are made on the employer’s behalf. The Act also applies to communications made by a third party in return for payment on behalf of such an employer. Similarly, it covers communications made by or on behalf of a person which has one or more full time employees if it is a body which exists primarily:
- to represent its members’ interests and the relevant communications are made on behalf of any of its members; or
- to take up particular issues and the relevant communications are made in furtherance of any of those issues.
The Lobbying Act restricts the carrying on of lobbying activities by certain public officials for one year following the termination of their public office or employment. Specifically, it prohibits a person who was a minister, special adviser or prescribed public servant from carrying on lobbying activities involving the public service body in which the person held office or by which it was employed, or a designated public official connected with that public service body. However, it is possible to apply to the Standards in Public Office Commission (“SIPO”) to have this prohibition lifted.
Registration and Disclosure Requirements
As mentioned, those carrying on lobbying activities must register as a lobbyist and make returns to SIPO at the end of April, August and December every year. They will be obliged to register lobbying activity that takes place from 1 September 2015 and the first returns are due by 21 January 2016, covering the period from September to December 2015.
Every return must include information regarding:
- the identity of the designated public official to whom the relevant communication was made;
- the subject-matter and intended results of the communication;
- the type and extent of the lobbying activities carried on; and
- the name of the person who had primary responsibility for carrying on the lobbying activities.
In circumstances in which the lobbying was carried out on behalf a client the return must provide additional information including the client’s name, address and business or main activities.
As mentioned, both applications for registration as a lobbyist as well as the information disclosed in the periodic returns are published in the Register. However, the person making the application or return may apply for delayed publication where any information made available could have a serious adverse effect on the State’s financial interests, the national economy or business interests. An application for delayed publication may also be made where making the information available could give rise to a material financial loss to the person to whom the information relates or seriously prejudice that person’s competitive position or the outcome of any negotiations that the person is conducting.
Although those carrying out lobbying activities are not yet required to register or make returns, the on-line Register is already available for a trial period from 1 May 2015 to 31 August 2015. Information entered in the Register during this trial period will not be available to the public.
It is significant that the Lobbying Act focuses on those carrying out lobbying activities rather than solely on professional third party lobbyists. In consequence, the Act applies to a broad range of persons who would not generally regard themselves as lobbyists, or commonly be regarded as such. Consequently, every business and other organisation should review its contact with public officials for the purposes of determining:
- the nature and extent of that contact;
- the identity of those making contact; and
- the public officials involved.
Depending on the results of this review, a business may need to consider putting in place a compliance policy and measures to ensure that its personnel are aware of the Lobbying Act and of the consequences of carrying out “lobbying activities”. In any event, every business should keep a careful record of each communication that any of its employees or agents makes to a public official on its behalf and consider whether that communication is a “relevant communication”, giving rise to registration and disclosure obligations.
A business that intends to engage in lobbying should also take into account a number of other considerations. Specifically, if engaging a professional lobbyist, a business should carry out appropriate due diligence: its association with that lobbyist will become public knowledge and its reputation could be affected by any controversy associated with that lobbyist. A business should also explicitly agree with the lobbyist the subject-matter and intended results of the lobbying, the identity of the public official to be lobbied and the nature and extent of the lobbying activities, as this information will all be put in the public domain.
In addition, any business that is engaging in lobbying, whether personally or through a professional lobbyist, should review its lobbying position thoroughly to ensure that it is prepared to be publicly associated with that position. In particular, it should ensure that its position is compatible with the interests of its shareholders as well as its corporate responsibility principles. The business should carefully consider any possible unintended consequences that could arise should its advocated position be adopted, as such consequences could also have an inimical impact on its reputation.
It is difficult to design a system that respects and protects the positive role played by lobbyists in the legislative process and public administration, while simultaneously controlling and mitigating its negative aspects. The Lobbying Act is the culmination of a long process, which included a wide consultative process. While in certain respects the terms of the Act are ambiguous and contain a number of interpretative difficulties (not least regarding its scope), this is hardly surprising. In acknowledgment of the difficulties involved in regulating lobbying, the Act contains a one-year review period. It also provides for SIPO to issue guidance on the operation of the Act, which is expected to be published soon. Hopefully this guidance will be of assistance to businesses in determining their new compliance requirements arising under the Lobbying Act.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.