Information for Action

Corporate responsibility

Corporate lobbying

Washington, Brussels, Ottawa and Canberra are all scenes of intense debate and political lobbying from different power groups. Individual, corporate, ideological and environmental groups all have offices and infrastructure in these capitals to try and influence the decision makers of the day. The point of a lobby group is to put forward the ideology of its backers and to ensure that legislation favourable to them is put into place.

While educators, environmental groups and other NGOs all participate, they can never dream of equalling corporations in sheer economic influence. Industries often pool their resources and set up Industry Associations to influence politicians and bureaucrats, and some of these Association have such a strong influence that they are easily able to alter individual legislation. Corporations spend so much money on political donations that once the time comes to govern they wait expectantly for the favour to be returned.

Lobbyists are generally either ex-politicians or people who are connected to politicians. They may be politicians who no longer have a seat, professionals such as lawyers with links to politicians and the public service or they may be friends or relatives of politicians. Old school networks play a role in connecting lobbyists to politicians in some countries such as the UK. Many politicians become lobbyists if they fail to get re-elected. If reselected by the party they may be re-elected to power again at the next election. Analogous to a revolving door many politicians move between positions in government or opposition and high level lobbying positions in corporations. Problems of conflicting interest arise when politicians have a financial or personal interest in a particular company.

Ties have become so close between corporations and politicians that individuals frequently transfer between the two as their careers develop. Board members become politicians or are given lucrative diplomatic or government posts, while politicians can anticipate an easy retirement in the corporate sector. The most striking example of this is the current US Vice-President, Dick Cheney, who was CEO of Halliburton Oil which received contracts worth billions of dollars in Iraq. Despite being a figurehead in the government that awarded these uncontested contracts, he still holds a large interest in the company.

Thousands of companies and hundreds of corporations act both individually and as organised industry groups to wield substantial influence on governments. They vary in size and political power. The large corporations and cross-industry groups possess more memberships and greater financial muscle to employ more staff compared to the smaller companies.

Professional lobbyists generally monitor a specific piece of legislation through its developmental stages and know what is happening well before it reaches debate. They read discussion documents, papers from think-tanks and party groups, and talk to civil servants. They maintain files on politicians - their political beliefs, party commitments, constituency concerns and career aims. Further, they adjust their lobbying approach according to who supports the legislation and who opposes it.

In the first instant lobbyists will attempt to influence government by providing information. Senior policy makers regularly consult with members of the economically important industries. If this does not succeed, then they will employ more persuasive methods. Corporate lobby groups will use surveillance and intimidation to attain their policy objectives. They endeavour to form partnerships with the very institutions that are set up to monitor and police their activities. The ultimate lever is the withdrawal of campaign funding for a political party.

Corporations mostly use their influence to weaken, block or eliminate proposed public protection legislation. Occasionally they initiate legislation, and when they do, it is usually to dismantle existing protections or to promote and enact policies and regulations that benefit their bottom line - usually at the expense of the public good.

Corporate lobby groups also use ‘think tanks’ to pressure lawmakers. Think tanks are forums of supposed experts who generate reports on various issues and gain large publicity for it, resulting from their reputation. Think tanks are comprised of ex-politicians, academics and industry leaders. They are financed by corporations, individuals and NGOs who hope to give more credibility to their ideas. Both the left and right wings of politics are guilty of masquerading opinion as fact, in order to get governments to act in their favour. ExxonMobil, one of the world’s largest oil companies, helped fund a report by the British International Policy Network that claims that climate change has had a positive effect by increasing fish stocks in the North Atlantic Ocean.

Corporations promote their narrow interests and get away with serious environmental damage around the world because of their political influence. Corporate pressures continue daily. The setting of environmental regulations, import quotas, mining restrictions and competition laws all come under close inspection from corporate lobby groups. While environmental groups argue the opposite points, they have nowhere near the resources to influence policy makers.

The lobbying industry is massive. In the US alone, interest groups spend about US$2 billion a year on lobbying. Corporations are by far the major employer of the lobby industry, either acting independently but more often aligned with others in the same industry.

One of the major problems of capitalism is that it allows wealth and hence power to be consolidated in the hands of a few. In a democratic society everyone has an equal vote but not everyone has an equal opportunity of being heard or being able to influence his or her politicians. The corporations have too much wealth and power and, as a general rule, use that power to accumulate even more wealth and power.

The corporations argue that they should have greater input towards policy-making processes, since they are large taxpayers serving the interests of their shareholders, and responsible to their employees and customers.

It is in the nature of capitalism and corporations to fight for self-interest. The lobby goal is usually predictable, regardless of the industry type, as demonstrated by the following examples.

• The gun lobby in the US argues for the right of individuals to own guns, despite thousands of innocent people being killed each year.

• The financial services seek deregulation and looser controls.

• The utility companies lobby to secure large contracts and weaker pollution legislation.

• The mining companies lobby for the easing of environmental legislation and for increased mining quotas.

• The tobacco lobby argues for the right of individuals to smoke in public places, even when scientific evidence clearly indicates tobacco causes morbidity and mortality on a massive scale. They are fighting against legislation to hold them accountable for the harm caused by tobacco products.

• The oil industry campaigned to keep lead in petrol during the 1980s. More recently it has lobbied against the Kyoto Protocol and legislation to stop greenhouse gases causing climate change. It contributed millions of dollars towards the election campaigns of George Bush and was rewarded by being allowed to drill for oil in the pristine wilderness of Alaska.

• The building industry lobby argues for relaxation of land use regulations such as those relating to infrastructure and green belts, and for low interest rates.

• The agriculture lobby argues for a relaxation of pesticide and chemical fertiliser policies, which protect drinking water and wildlife. It argues for the promotion of genetically modified (GM) products and the blocking of GM labelling. It also argues for government subsidies even when this creates mountains of unwanted produce that gets dumped on developing countries struggling to develop their own agriculture.

• The plastics industry lobby argues for a relaxation of European legislation against PVC, which is a major source of dioxins and phthalates - both hormone-disrupting chemicals.

• The roads lobby argues against stricter emissions control, for fuel prices to be kept low, and for the building of more roads. In the UK it lobbied the Treasury not to cut the roads programme.

• The nuclear lobby argues that nuclear power plants should be built because they produce a lot of energy and their waste does not cause global warming. They underplay the incredibly long period that radioactive waste must be stored before it is safe and the related immense financial cost of that storage.

• The pharmaceutical industry lobby argues for privatised medical markets and against proposals to provide cheaper generic medicines to the poor in developing countries with illnesses such as AIDS. It opposes free national health care programs for all people.

Political donations

Corporations gain political access through their political contributions. Corporate political donations are not always given with the simple goal of furthering their commercial interests. Sometimes the aim will be more generalised; supporting a particular ideology or a range of issues and policies, or winning favour with a particular party.

President George W. Bush's election campaigns were paid for by key industries - finance, real estate, communications, energy, health care, and insurance. In return for their support, Bush has consistently rewarded these industries with tax breaks, legislative favours and bestowed plum appointments on their executives.

Real estate developers are permitted to build on wetlands and other sensitive areas, electric and mining companies are allowed to continue emitting carbon dioxide, oil and gas exploration is given the go-ahead on public land including protected national parks, corporate executives are given top jobs in the US Interior Department, and the pharmaceutical industry receives the drug legislations it wants.

Donors who give more than $200,000 are called Rangers and donors who give more than $100,000 are called Pioneers. Together the Rangers and Pioneers raised US$60 million for George W. Bush’s 2004 election campaign. Businesses contributed nearly three quarters of all political donations, with finance, insurance and real estate companies contributing nearly a quarters of the donations. The remainder came from corporations involved in pharmaceuticals, communications, construction, agribusiness (especially tobacco), energy and natural resources, transportation and defence. The labour unions and single issue groups, like the National Rifle Association of America, were also large donors.

Although communication between the State and other sectors of society is necessary for good governance, corporations exert a disproportionate level of influence through their donations. Sometimes the leverage they exert borders on corruption. In some instances, corporations are drawn into “donation wars” where they have to compete with each other on their donations to political parties.

The laws regulating donations and the general political environment in which they are made varies between countries. In the US, donations are a more accepted part of the political process, while in the UK they are more strictly regulated, and in France they are banned. Hence the type and extent of lobbying will vary between countries

Companies should always maintain a clear policy on donations. Not all corporations make political donations and some have adopted company-wide bans on donations. In most cases, however, the policies and the activities of corporations are constrained solely by the laws which are in place for each country.

Not all corporations published information on their political contributions. Some corporations are so large and diverse that managers in one country are unaware of the company’s political donations in another country. Companies should declare their donation budgets, disclose the process of how they determine them and evaluate the amount of money they have donated to political parties.

Industry Overview

The International Chamber of Commerce (ICC) represents the international voice of business - mainly the multinational companies. It represents 7000 companies in over 130 countries.

The European Round Table of Industrialists (ERT) is a powerful lobby group representing the interests of 45 of the wealthiest businessmen in Europe - the chiefs of Europe's largest corporations, including ICI, Hoechst, BP, Shell, Volvo, Fiat, Unilever, Nestle, Carlsberg, BAT, Pilkington, Olivetti, Philips, and Siemens.

The Confederation of British Industry (CBI) is the ICC’s National Committee in the UK and represents British business as a whole. Its membership of 250,000 firms employs about half of Britain's workforce.

The National Farmers Union represents nearly 250,000 family-owned farms and ranches across the USA. The group lobbies the US Congress on many issues including trade, energy and the environment.

The Minerals Council of Australia lobbies the Australian government on behalf of companies engaged in mining, exploration and minerals processing. They address issues such as greater access to mineral resources, the environment and labour relations.

The Association of Plastics Manufacturers in Europe (APME) is the voice at the European Parliament for most plastics manufacturers based in the EU. They raise issues including recycling, emission control and packaging regulations.

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