Masaryk University Faculty of Economics and Administration Field of Study: European Economy, Administrative and Cultural Studies
LOBBYING IN THE EU: THEORETICAL AND PRACTICAL ASPECTS
Bachelor Thesis
Supervisor: Author: doc. Mgr. Jiří Špalek, Ph.D. Veronika Slezáková
Brno 2012
Masarykova univerzita Ekonomicko-správní fakulta
Katedra ekonomie
Akademický rok 2010/2011
ZADÁNÍ BAKALÁŘSKÉ PRÁCE
Pro: SLEZÁKOVÁ Veronika
Obor: Evropská hospodářská, správní a kulturní studia
Název tématu: LOBBYING IN THE EU: THEORETICAL AND PRACTICAL ASPECTS
Zásady pro vypracování
Problem Area: In the whole Europe, lobbying has become highly discussed issue, especially because of the very thin border between lobbying and corruption. It is important to emphasize that lobbying itself is not an illegal or anti-social activity. In democratic society, all subjects have the right to be heard even when their interests do not reflect the interests of a broad society. Executing lobbying might be percept as controversial. It is therefore essential to conscientiously examine its ethical foundations and legality.
Objective: The objective of this thesis is to examine the European Union and the Czech Republic legislation in the area of lobbying, and to compare lobbying practises in the Czech Republic and a selected EU country. Furthermore, the paper will focus on formulating impacts of lobbying, especially economic ones.
Contents: 1) Introduction 2) Theoretical aspects 3) Legislation in the EU and in the Czech Republic and their comparison 4) Case Studies of lobbying in the Czech Republic and a selected EU country 5) Comparison of lobbying practises in the countries chosen and formulation of their economic impacts 6) Conclusion
Rozsah grafických prací: (Předpoklad cca 10 tabulek a grafů)
Rozsah práce bez příloh: 35 – 40 stran
Seznam odborné literatury:
Jackson, P. M. - Brown, C. V. Public Sector Economics. 4th ed. Oxford: Blackwell Publishing, 1990. 622 pages. ISBN 0631162089. Mueller, Dennis C. Public choice. III. 1st ed. Cambridge: Cambridge University Press, 2003. 768 pages. ISBN 0-521-89475-1. Van Schendelen, Rinus. Machiavelli in Brussels. The Art of Lobbying the EU. 1st ed. Amsterdam: Amsterdam University Press, 2002. 344 pages. ISBN 90 5356 5795.
Worldwide web sources: http://europa.eu http://www.transparency.org/ http://www.vlada.cz/
Vedoucí bakalářské práce: Mgr. Jiří Špalek, Ph.D.
Datum zadání bakalářské práce: 22. 11. 2010
Termín odevzdání diplomové práce a vložení do IS je uveden v platném harmonogramu akademického roku.
…………………………………… ………………………………………… vedoucí katedry děkan
V Brně dne 22.11.2010
Name and Surname: Veronika Slezáková
Thesis Title: Lobbbying in the EU: Theoretical and Practical Aspects
Thesis Title in Czech language: Lobbing v EU: teorie a praxe
Department: Department of Economics
Supervisor: doc. Mgr. Jiří Špalek, Ph.D.
Year of Submission: 2012
Annotation
The bachelor thesis ‘‘Lobbying in the EU: theoretical and practical aspects‘‘ analyses lobbying regulation legislation in the European Union and in the Czech Republic and their comparison. Furthermore, it focuses on the practical aspects of lobbying – case studies of lobbying for solar policy in the Czech Republic and in the United Kingdom. Interest groups, their roles in the legislative processes and used lobbying practices are studied. In the final part, the thesis formulates the impacts of lobbying, especially economic ones.
Anotace
Bakalářská práce na téma ‘‘Lobbing v EU: teorie a praxe‘‘ analyzuje legislativní regulaci lobbingu v Evropské Unii a v České republice a provádí jejich vzájemnou komparaci. Dále se zaměřuje na praktické aspekty lobbingu – případové studie lobbingu z oblasti solární politiky v České republice a ve Spojeném království. Jsou studovány především zájmové skupiny, jejich role v legislativních procesech a konkrétní pratiky lobbování. V závěrečné kapitole jsou formulovány dopady lobbingu, především ekonomické.
Keywords
Lobbying, interest group, regulation of lobbying, case study, lobbying practices, solar policy
Klíčová slova
Lobbing, zájmová skupina, regulace lobbingu, případová studie, praktiky lobbování, solární politika
Declaration
I declare that I have written this bachelor thesis independently under the supervision of doc. Mgr. Jiří Špalek Ph.D. and I have enlisted all the literal and other references in accordance with the current legislation, internal regulations of Masaryk University and internal managing acts of Masaryk University and the Faculty of Economics and Administration of Masaryk University.
In Brno, May 14, 2012 ...... signature
Acknowledgement
I would like to thank to the supervisor of the thesis, doc. Mgr. Jiří Špalek Ph.D., for his insightful comments, willingness during consultations and his professional guidance. I also want to express my thanks to my sister for her advice and encouragement.
Contents
Introduction...... 10 1 Theoretical Aspects of Lobbying ...... 12 1.1 Theory of Interest Groups and Definition of Lobbying ...... 12 1.1.1 Theory of Interest Groups ...... 12 1.1.2 Definition of Lobbying ...... 13 1.2 Types of Lobbying and Lobbyists...... 15 1.3 Lobbying and Corruption ...... 17 1.5 Ethical Aspects of Lobbying ...... 20 2 Legislation in the EU and in the Czech Republic and their Comparison...... 25 2.1 Legislation in the European Union ...... 25 2.2 Legislation in the Czech Republic ...... 26 2.3 Comparison of the European Union and in the Czech Republic Legislation ...... 29 3 Selected Case Studies of Lobbying in the Czech Republic and in the United Kingdom ...... 32 3.1 Solar Lobby in the Czech Republic ...... 32 3.1.1 Introduction to Solar Policy ...... 32 3.1.2 Solar Interest Groups ...... 33 3.1.3 Solar Lobby Groups and their Influence on Policy-making ...... 35 3.1.4 Solar Lobby in the Czech Republic – Summary ...... 38 3.2 Solar Lobby in the United Kingdom ...... 39 3.2.1 Regulation of Lobbying in the United Kingdom ...... 39 3.2.2 Solar Policy in the United Kingdom ...... 41 3.2.3 Solar Lobby Groups ...... 41 3.2.4 Solar Lobby Groups and their Impact on Policy-making ...... 43 3.2.5 Solar Lobby in the United Kingdom – Summary ...... 44 4 Comparison of Lobbying Case Studies and their Impacts ...... 45 4.1 Lobbying Practices in the UK and in the Czech Republic – Comparison ...... 45 4.2 Impacts in the Czech Republic ...... 45 4.3 Impacts in the United Kingdom ...... 46 4.4 Summary ...... 47 Conclusion ...... 48 References ...... 50 List of Charts ...... 58 List of Abbreviations ...... 59 List of Attachments ...... 59
Introduction
In democratic society, lobbying is a natural part of governance. After all, an individual is granted the right to participate at the government of his country by the United Nations Universal Declaration of Human Rights, Article 21. Lobbying can be therefore considered as a fully legitimate activity. Legislative or decision-making process should take into account multiple preferences, opinions and proposals of various interest groups - that is what good governance is about. However, lobbying is perceived pejoratively by the broad society due to its association with illegal or improper activities leading to undue advantages of the most influential groups. If conducted properly lobbying is an ethical way of representing interests towards the State representatives and thus, it has its legal place in the nowadays policy.
The phenomenon of lobbying is challenged by several issues – how to enforce its transparency, confidentiality and create effective rules for everyone who takes part in the lobbying process? An opinion predominates among the participants at lobbying activities (interest groups and politicians) that the current regulatory situation is not sufficient in the whole Europe. The fundamental question therefore remains: how and to which extent shall lobbying be regulated?
Regulation of lobbying is essentially a new topic in many European countries as well as in the Czech Republic. The European Union has introduced a voluntary regulatory mechanism regarding lobbying at the EU institutions. The model might serve as an inspiration for other states but it is a question how much transferable it could be at national level considering the specifics of the EU institutions – enormous number of lobbying organizations and internal rules. No legislation exists at the EU level prescribing a framework of regulation towards the Member States. As a result, miscellaneous types of approaches can be found all across Europe.
Although there have been several attempts to establish rules regarding to lobbying in the Czech Republic, none of them finally came into force. The situation should be changed in the second half of 2012 with the new prepared act of law. The Czech Republic has decided to establish a more severe regulatory system with an obligatory register of lobbyists. How successful the proposal and how practical the implementation will be would be showed in the future.
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The thesis is divided into theoretical and practical. The first chapter will provide theoretical definition of fundamental terms as interest group and lobbying, economical and ethical impacts of lobbying and regulatory approaches to it. The aim of the second chapter is to examine the European Union and the Czech Republic legislation in the lobbying area and to compare them with focus on the key points – register of lobbyists, codes of conduct and enforcement criteria.
Consequently, the thesis will analyse lobbying practices in the Czech Republic and the United Kingdom in the third chapter. The case studies regard changes to the existing acts of law concerning the solar energy and the activities of lobbyists. The examples were chosen due to their very recent development, importance for the solar industry and an extreme pressure which was put on the decision-makers. The United Kingdom is a country with a long lobbying tradition and self-regulatory system based on self-discipline and ethical rules whereas there is no regulatory framework so far in the Czech Republic. From that point of view it might be interesting to study differences in lobbying strategies, activities and their results in both countries distinguishing in their regulatory approaches.
The impacts of lobbying, especially economic ones, in the countries chosen will be summarised in the final (fourth) chapter.
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1 Theoretical Aspects of Lobbying
1.1 Theory of Interest Groups and Definition of Lobbying
For the purposes of this thesis it is necessary to define the basic terms such as interest group and lobbying. These are key terms of this issue and will occur in the whole text of the thesis.
1.1.1 Theory of Interest Groups
Decisions are being accepted every day at all levels of state administration – at local, regional, national and supranational (European) level. These decisions are made only by a small group of elected representatives and are legally binding for the whole society, having impact on its life, economic activity and social conditions. In democratic society, public choice derives from relationship between preferences of individuals and collective decisions accepted by the government.
Analogically, similar relationship between interest groups and the government could be found. Interest groups try to influence legislative decision-making in their favour and therefore they interfere into legislative process. With regard to this fact a principle of personal interest and a principle of public interest should be mentioned. Those two principles can stand in conflict in particular cases. As Jackson and Brown (2003) explain, from the public interest theory point of view, an individual plays just a facilitating role within a set of organizations creating public choice. The subject of their analysis is behaviour of groups or organizations about which we can presume that they should serve the public interest. The theory of personal interest focuses on the analysis of an individual as a promoter of his own objectives desiring to maximize his personal utility. The border between fulfilling public or individual interest is the point of contradiction especially with respect to lobbying benefits or detriment for society and the ethics of lobbying.
What interest groups have in common is the organization of individuals with common needs and interests, influence on the public policy and independence on the government and political parties (Müller, 2010: 137).
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The definition of an interest group is not clear and unified. Every interest group does not have to be politically active (which means trying to influence the public policy). Moreover, the primary aim of an interest group is usually not to interfere into public policy but to realize the needs of its members (in many cases the interference into public policy remains the only way how to achieve that and becomes therefore a secondary product). Some interest groups also try to influence the public opinion. With respect to the topic of the thesis – lobbying, I will eliminate interest groups only into the politically active ones (individuals as well as companies, unions etc.) for the given purpose.
The Professor of Economics Dennis C. Mueller (2003) distinguishes a wide range of interest groups which differ in their institutional form and size. Groups are formed either to reach their objective as a factor of production – e. g. labour unions, professional associations (authorised engineers, doctors, notaries), trade associations and industrial associations among many others, or with respect to a particular public good (externality). Environmental groups, peace groups, humanitarian organizations or groups fighting for gender equality are examples of these. The majority of interest groups are formed on a base of their economic objectives.
1.1.2 Definition of Lobbying
There might be various discussions about which activities should be considered as lobbying and which do not fulfil the lobbying criteria. We can distinguish between theoretical and practical points of view. While the general public might percept lobbying as an illegal and egoistic activity connected with corruption, the theorists provide numerous definitions of lobbying as a transparent and legal way how to represent interests of minority groups.
For example Mueller notices that ‘‘Lobbying is essentially a one-way transmission of information from an interest group to members of the government” (Mueller, 2003: 496). Other authors put emphasis on more detailed description of what exactly lobbying is and provide more exhausting explanation. The team of authors from the International Institute of Political Science of Masaryk University gives guidance to what a perfect definition of lobbying should include (Dančák, Hloušek, Šimíček, 2006: 88):
Differentiation between lobbying and corruption Differentiation between lobbying and representation by elected representatives Definition of lobbying as a source of information and professional expertises
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A clear definition of the lobbyists which does not taper this group only to the so-called commercial lobbyists or lobbyists promoting their own interests, but also includes a group of lobbyists who do not lobby only in their own interest. Clarification of the lobbying objectives
Luigi Graziano, an expert in a problematic of lobbying in the European Union provides such a definition: ‘‘Lobbying is a specialised and professional representation of interests by means of a wide variety of tools which in principle eliminate a corruptive change of services. It is by its nature very different from a general non-specialised representation provided by elected representatives. As a representative of particular interests a lobbyist provides information and technically-professional expertises which can be useful and sometimes decisive for defining legislative and administrative regulation.’’ (Dančák, Hloušek, Šimíček, 2006: 88, own translation).
In addition to this, there is Schendelen´s definition stating that ‘‘Lobbying refers to the various types of unconventional behaviour of interest groups focused on achieving requested results’’ (Van Schendelen, 2002: 210). Attention to the word unconventional should be paid at this place. Van Schendelen is the first one stating that lobbyists could use unusual methods for achieving their goals. He also points out that their behaviour does not necessarily have to be “active” but they can purposely use the methods of waiting or non-activity.
There is an attempt to define lobbying also at European level. In 2006, the European Commission (further just as Commission) issued a document called Green Book - European Transparency Initiative. This document formulates relatively broad definition of lobbying: ‘‘All activities carried out with the objective of influencing the policy formulation and decision-making processes of the European institutions’’ (Commission, 2006: 5).
Several definitions of lobbying have been introduced. It stands in discussion which one is the most suitable. Graziano´s definition emphasises the fact that lobbying is performed only and exclusively by professionals and that only they are able to submit relevant high-valued expertises and analysis. In another words it eliminates lobbying activity only into such carried out by professionals. It may be presumed that such persons execute lobbying as their job and receives money for that. On the contrary other definitions mentioned do not work with this detail and concede thus that lobbying can be made by non-professionals (amateurs) too. I consider Graziano´s definition as not fully suitable. There exist many interest groups which do not necessarily have to be professionals and execute this activity only on the basis of their
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strong interest and belief in the given case (e.g. students, environmental groups, groups fighting for human rights etc.) and are therefore non-professionals.
Van Schendelen defines lobbying essentially as an unconventional way how to influence elected representatives. This precludes a possibility that lobbying could be transparent, legal and beneficial activity in its consequences. Let me disagree with Van Schendelen´s statement because it is just its legality which differentiates lobbying from the corrupt conduct or other illegal activity.
For the purpose of my thesis I prefer Mueller´s simple definition which lets the way open to all kinds of influence of interest groups (either professional or non-professional) using various tools (conventional and unconventional) in order to achieve their goals.
1.2 Types of Lobbying and Lobbyists
The following chapter will outline types of lobbying – lobbying practices and methods used by the lobbyists. Later on I will also describe various types of lobbyists.
In principle, two types of lobbying can be distinguished – direct and indirect. They are displayed in the following chart:
Chart No. 1: Types of Lobbying Direct ways of lobbying: Indirect ways of lobbying: Personal visit, letter, phone, email (Sub)national association Invite for entertainment (Sub)national government Committee membership Ad-hoc group Hearing participation Affiliated interest groups Presentation of position Science and scientists Formal visit, contact, delegation Well-known personalities Formal request, petition Mid-level civil servants Folder or brochure Caretakers and friends inside Mass media participation Brokers and consultants Political advertisement Political parties Press conference Mass media mobilization Demonstration Undercover actions Hate-site, boycott, blockade, strike Litigation, Court procedure Source: Van Schendelen, 2002: 225
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In search for the best form of lobbying one should always choose such one which is the most suitable in the particular situation. As it is visible from above, lobbyists can choose formal and informal type of behaviour. The best technique always depends on a concrete situation, person who is being influenced and a particular case. Formalism is not suitable in every case. The most effective lobby might start informally (Van Schendelen, 2002): invitation into a pleasant restaurant or a party and making social contacts in leisure time. Whereas some person prefers informal contact as a sign of friendship or familiarity, another strictly refuses such an approach. A professional lobbying group studies carefully all these individual idiosyncrasies and takes them seriously into consideration. Important personal information is being exchanged within the lobbyist among the lobbyists. Some consultants are even selling it.
There are specialised companies whose main subject of activity is lobbying for legislation, acting in favour of their clients. This activity has a strong tradition in developed countries and is usually strictly regulated. Besides experts, we can find numerous interest groups which carry out lobbying as their secondary activity without professional knowledge of lobbying processes and methods. These groups can be equally successful and aggressive though.
Regarding to Müller (2010), three groups of lobbyists can be distinguished:
Consultant lobbyists: persons who execute lobbing for their clients receiving a reward. They can be understood as entrepreneurs - freelancers or big lobbying companies. Their designations might be also consultant, expert in government relations, professional advisor etc. Company lobbyists: employees of big companies whose primary activity is not lobbying. Their task is apart from others to communicate with the public officers and possibly to lobby also. Non-profit sector lobbyists: employees of the non-profit organizations like foundations, civic association, universities etc.
The list of lobbyist types is variable with time and considerably miscellaneous. Mass media and journalists also contribute with their presence because they have access into the lobby (parliament corridors) and dispose therefore of certain influence which is abundantly used by the lobbyists.
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1.3 Lobbying and Corruption
Lobbying and corruption are naturally getting into a mutual relationship thanks to the lobbying history and reputation with numerous lobbying and corruption affairs.1
The essential difference between lobbying and corruption is legality. Whereas lobbying is an allowed activity regarding to the Czech law (or at least it is not prohibited by law)2, corruption is considered as a criminal offence. The word corruption is not defined by the Czech law but as a set of criminal offences it is regulated by the Act No. 140/1961 Coll., Criminal Code, Section Three: Bribery, § 160 – 163. § 160 and § 161 declare that who gives, offers, promises, accepts or shall have a bribe3 promised in association with the procurement of the things of general interest will be punished. According to the § 162, an indirect bribery is a criminal offence as well. Besides that, corruption is regulated by the Civil Code, Commercial Code, Law on Public Procurement and international conventions (namely the Civil Law Convention on Corruption and the Criminal Law Convention on Corruption).
Corruption is characterised as a misuse of position associated with a violation of an impartiality principle when deciding, motivated by the desire for profit. (Dančák, Hloušek, Šimíček, 2006: 13, own translation).
What does lobbying and corruption have in common and in which aspects do they differ? They both appear while the power is in question and one wants to enforce his interests. It means they appear around authorities with the right to decide and to dispose of sources. Lobbying as well as corruption focuses on decision-influencing. The perception of lobbying in the society is more than less negative (rightly or not) but still let´s say acceptable or tolerable, whereas corruption is not. Many political parties promote fight against corruption as one of the main points of their programme4 and reflect mood in the society in this way. On the contrary one does not find any mention about lobbying in political programmes. Reasons for that appear to be obvious: the connection between strong economic groups and political
1 A fact that lobbying has a derogatory meaning in the society has its roots in the history. Lobbying affairs connected with corruption started to appear since the second half of the 19th century in the USA expressing concerns that lobbyists are using improper methods. The first attempts to regulate lobbyists (not lobbying) appeared in 1876 in the USA (Müller, 2010). 2 ‘‘What is not prohibited by law, is allowed.’’ - a general legal principle in the Czech Republic – based on Article 2, paragraph 4 of the Constitution of the Czech Republic. 3 § 162a (1): Bribe is an undue advantage of direct property enrichment or other advantage which is received or shall be received by bribed person or by any other person with her consent, and which is entitled. 4 An issue of fight against corruption can be found in every Government Policy Statement in the Czech Republic at least since 2004. 17
parties (lobbying) and a significant share on their financing might prevent parties from regulating lobbying in a legislative way (Team of Authors, 2007: 82).
The problem with corruption is that it is very hardly detectable due to its proficiency and hidden methods of communication. Lobbyists sometimes too do not desire to receive any popularity or they do not want to be revealed in order to eliminate the attempts of their concurrence or subjects with opposite interests to lobby for different interests (Team of Authors, 2007).
The tools of lobbying are based on the basis of transmission of information, suggestions of own solutions, organization of meeting of lobbyists with relevant persons etc. Corruption uses bribery in the forms of money or other assets. Moreover, even more sophisticated forms like clientelism or various in-return services can be used. In some cases when lobbying attempts remain unsuccessful or unsatisfactory lobbying can results into a corrupt conduct (so we can sometimes talk about corruption as a consequence of an unsuccessful lobbying) (Team of Authors, 2007).
1.4 Economic Impacts of Lobbying
Lobbying is usually investigated from its ethical and criminal-law point of view. But we should not forget about its economic and public policy dimensions too as they might have significant impacts on social welfare and balance in the society.
The main questions are: does lobbying cause inefficiency? And can lobbying ever be efficient? In the following text, I will try to explain the main inefficiencies and effects regarding to lobbying.
Lobbying is connected with the so-called effect of special interest. It is a situation (usually a consequence of a legislative, executive or judicial decision) which generates benefits (increased incomes, lower taxes, trade protection, regulatory benefits, preferred public expenditures etc.) to a small group of economical subjects and relatively small individual costs (in the form of higher taxes, prices etc.) to a big group of people at the same time. We can identify such a small group as an interest group (Team of Authors, 2007).
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The size of a group is important – the smaller group the bigger benefits can each member draw. Mueller expresses the same thought in his study of collective action. He especially highlights the fact that the bigger group the more difficult it is to curb a free-riding behaviour.5 Smaller groups are therefore more effective while enforcing their interests. The rest of the society is usually not well informed about their actions and moreover do not express any economic interest to do so. The costs to gain such information are usually higher than the loss of welfare associated with that (Mueller, 2003).
The activity of interest groups to obtain group benefits is a phenomenon of rent-seeking. Individuals6 try to ensure permanent income (rent) by manipulating economic environment or by obtaining special privileges from the government instead of creating any value. The rent can be obtained either from the government, respectively from the public sector (e.g. in the form of subsidies) or from the private sector (companies or consumers) in the form of increased prices. The tendency to rent-seeking is usually increased in the conditions of high state expenses and regulation of economics. The loss of welfare caused by rent-seeking is associated also with the activities conducted for seeking a rent (Team of Authors, 2007).
The founder of the rent-seeking theory G. Tullock (2005) and his follower J.M. Buchanan (1999) also talk about the inefficiencies caused by monopolies. Some lobbying groups may try to influence a legislative decision in order to gain monopoly on the market and thus, they may cause deadweight loss.
Lobbying activities can be perceived as deadweight loss also due to the money and time they employ which might be used in a more productive way. From this point of view together with the rent-seeking effect we can characterise lobbying as economically inefficient in the terms of allocating government expenditures in the favour of interest groups. We speak about an inefficient allocation of resources. Inefficiencies are likely to favour less economically productive groups at the expenses of the more productive ones (Team of Authors, 2007).
A problematic aspect of lobbying is undoubtedly the so-called effect of myopia. The public decisions in pursuit of special interest can be more easily made in situations when their costs will be revealed in the distant future and when they are hardly quantifiable. Moreover, it has become a trend in current policy to prefer a debt growth to an immediate increase of taxes.
5 All members of a group benefit, irrespective of whether or not they contribute to the lobbying. 6 By the term individual are meant single persons, group of people as well as a company or association of companies. 19
The consequences of a debt growth will be revealed in the future and are therefore not considered as important as they should be (Team of Authors, 2007).
A supportive phenomenon for lobbying success is the effect of irrationality of voters. This effect presumes that a considerable part of voters do not fully understand market mechanism and have certain biases against it. It might be difficult for a general public to understand how a pursuit of profit in the free competition economics is beneficial for the public interest. That explains why regulation of economics generating benefits for small groups is supported by the society. This effect is also multiplied by a negative perception of the influence of free international business without restrictions on a domestic market. The public might see certain regulations as profitable for particular groups in a domestic field despite the fact that this perception is economically irrational (deadweight losses are not being taken into consideration) (Team of Authors, 2007).
After studying lobbying from an economic point of view, one can come to the conclusion that it brings certain inefficiencies, especially in the terms of an inefficient allocation of resources (e.g. government expenditures giving preferential treatment to minority subjects).
1.5 Ethical Aspects of Lobbying
The legitimacy of interest representation can be found in the instituting texts which guarantee the right to every citizen to take part in the government. We can name e.g. the United Nations Universal Declaration of Human Rights, article 21: ‘‘Everyone has the right to take part in the government of his country, directly or through freely chosen representatives’’ (United Nations, 1948). The Green Paper of European Transparency of Lobbying Initiative says: ‘‘Lobbying is a legitimate part of the democratic system, regardless of whether it is carried out by individual citizens or companies, civil society organisations and other interest groups or firms working on behalf of third parties (public affairs professionals, think-tanks and lawyers)’’ (Commission, 2006: 5). Both documents give the right to an individual to interfere into the legislative process. The Green Book expressly advocates lobbying as a democratic component of the society (the same document even advocates lobbying stating that lobbyists can bring important issues to the attention of the institutions).
But how much ethical is it to promote a particular interest against the public interest? We can undoubtedly agree with promoting that in the case when an individual or a group (citizens as
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well as corporations etc.) feel or are disadvantaged. This opinion is shared by the European Commission (further just as Commission) also: ,,In some cases, the Community offers financial support in order to ensure that views of certain interest groups are effectively voiced at European level (e.g. consumer interests, disabled citizens, environmental interests etc.)’’ (Commission, 2006: 5).
But what if their position is not necessarily unequal whereas they still require bigger advantages at the expense of their competitors or other parts of the society? This is in my opinion the essential controversy regarding lobbying. A special attention should be paid to the character of things for which lobbying is carried out. For example, companies lobbying for less strict rules in the terms of the amount of harmful substances in their waste discharge do most probably act against the public interest and so we can define this kind of behaviour not only unethical but we can even polemize about its economic efficiency.
Additionally, lobbying groups do not bear the responsibility for their actions. The responsibility lies on the shoulders of the politicians who have actually made the decision. Therefore a lobbying group cannot be punished for its actions.
A lobbyist should always follow ethical codes of his profession, either written or unwritten.7 Daniel Guéguen, a European lobbyist with 30 years of experience, defines four essential principles which every lobbyist should respect (Guéguen, 2007: 140).
Avoiding conflicts of interests (or managing them with the greatest transparency) Respecting the law (no corruption, no illegal tapping, no theft of documents) Not refusing a client directly: listening before accepting or rejecting the dossier Leaving a client in case of disagreement on the strategy to follow
Last but not least ethic problem is the money used for lobbying. Not only the amount as an absolute number but especially the absence of organizations which would be able to provide a comparable amount for lobbying purposes is problematic. That results into an unequal situation when big corporations have a disproportionate access to the government and thus that their lobbying range can go against the public interest (Team of Authors, 2007).
7 Written codes appear in their voluntary or obligatory forms in many countries. We can mention for example the Transparency Register of the European Union. The register sets out general principles such as openness, honesty and integrity which forces representatives in their dealings with the European Commission to be followed. The Code also formulates seven clear rules which have to obeyed. The Transparency Register will be described in the Chapter 3.1 Legislation in the European Union. 21
As an additional ethical conflict we can name the identification of lobbyists with the interests of their clients. If a lobbyist is not internally identified with a character of the things he is lobbying for the situation might result into a problem of his personal non-integrity.
1.6 Regulation of Lobbying – Theoretical Approaches
The need to regulate lobbying comes out not in pursuit to define lobbying as useful and unavoidable activity in the democratic society but from the concerns of misuse, non- transparency and ethical problematic of lobbying activities (Laboutková, Vymětal, 2010). The main objective is not to reduce or restrict lobbying activities but to legalize them while creating binding rules for everyone who takes part in the lobbying process.
Legal regulations should bring clear and exact specifications of what lobbying is, who a lobbyist is, what is being regulated and who is being influenced, furthermore also the forms of lobbying and where to lobby should be identified. Do any special conditions or limitations exist for conducting lobbying? Simultaneously, law should determine concrete exceptions and situations which are not considered as lobbying. It appears necessary to define mechanisms fortifying lobbying transparency and ensuring the accountability of public officials. Last but not least, the legal measures should ensure rules enforcement (Müller, 2010).
We can observe two main theoretical approaches to regulation: self-regulation and legal measures. The approaches differ in the following question: should regulation be completely carried out by the lobbyists themselves (self-regulation) or should it be regulated by a state authority and in the form of law acts? Self-regulation provides a lot of room for lobbying activities, accepted rules are expressed in a very general framework and enforcement possibilities are very limited. Regulation by law on the other hand strictly enforces obeying of rules and can impose sanctions in a case of necessity.
Kalninš, a theorist of lobbying, introduces an interesting view at both approaches. He takes into consideration the criteria of a voluntary/obligatory registration. Four model types based on his study are displayed in the following chart:
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Chart No. 2: Model Types of Lobbying Regulation
Self-regulation Law Regulation Voluntary (A) recommendations, non- (B) laws or rules which guarantee registration obligatory ethical codes certain privileges for the registered ones if fulfilling given conditions (e.g. permanent permission to access the Parliament) - it is dependent on the voluntary registration
Obligatory (C) binding obligations imposed (D) laws setting binding obligations registration by the umbrella organization for all subjects in the field of activity (e.g. obligatory ethical codes, obligatory publishing of client lists)
Source: Müller, 2010: 73, translated and edited by the author
The situation A enables lobbyists to define their activity by themselves and thus is very liberal. It is characterised by a voluntary and progressive evolution of rules which might finally lead into a creation of non-obligatory ethical codes. This model is suitable especially for small organizations where all members know each other very well and where ethical standards are considered as a real value.
On the other hand in the situation C, lobbyists are regulated by their umbrella organizations they belong to and have to therefore obey the rules (membership in such organizations is usually even conditioned by that). Thanks to the ethical codes lobbying activities can be better monitored and thus it can contribute to the transparency, credibility and integrity of the profession in the eyes of the wide public as well as of the lobbyists themselves. This model is very common in the United Kingdom.
In the situation B, the profession is regulated by state in the form of law acts. There is still remaining some space for certain voluntary actions though. The principle specifies conditions which have to be met (registration, publishing of information, obeying rules etc.) if a lobbyist wants to use certain advantages which registration brings. The rules are imposed and enforced by a state authority (on the contrary to the situation C). There is also a risk of sanctions in a case of breaching the rules. This system was introduced by the Commission in 19938 and mostly has a form of the “above” (by the government) created register into which lobbyists can inscribe if they want to enjoy the benefits.
Finally, the situation D is characterised by an obligatory registration imposed and enforced by law. The regulation does not have a selective character as is set broadly for all the actors
8 More about the topic in the Attachment No.2. 23
participating in the lobbying process. The law regulation can be considered as the ‘hardest’ type of regulation and is used for example in the USA, Canada, Poland or Lithuania.9
There occur many opinions promoting one or the other type of regulation in the nowadays practice. The promoters of law regulation claim that self-regulation tools are not effective and strong enough to determine, control and specially to punish (if needed) lobbying activities.
In order to decide which approach is the most suitable we should take into consideration (among many others) political and legal culture in a given state and system of public administration. It is not possible to transform one form of regulation from one country to another (Müller, 2010 via OECD, 2008: 11, 18). Therefore we can find many alternations of lobbying regulations across countries. Generally, it can be claimed that countries with a long lobbying history (USA, Canada) have a well-developed system of law regulation compared to some European countries where the regulation is very liberal or even missing in many areas. Moreover, the number of countries which have introduced any type of restrictions is very low.
9 These countries have established a compulsory register of lobbyists, i.e. they impose an obligation on public relations firms and lobby groups to list their clients, the issues they deal with and the money they are paid by each client to perform their tasks. Lobbyists must also submit a regular report. The data are made available to the public on the internet.
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2 Legislation in the EU and in the Czech Republic and their Comparison
2.1 Legislation in the European Union
The European Union has been working on the issue of lobbying regulation relatively shortly with a very successive pace. There does not exist any legislation at the EU level prescribing any framework of regulation towards the Member States – no regulation or directive was issued. The Member States are given freedom in the way how to deal with lobbying. This non-regulation results in miscellaneous types of approaches all across Europe.
The EU legislation applies only to lobbying in the European institutions. The need to regulate lobby became stronger with a rapidly increasing number of lobbyists over the years.10 Moreover, the EU suffers from lack of professional information in many areas and is therefore forced to rely on external expertises, studies and other sources which are frequently provided by interest groups.11
We could have observed a duplicate regulation of lobbying at the European level – regulation of the European Parliament (EP) and the European Commission till 2011. The system was fully based on the voluntary registration – meaning that a person proclaimed himself a lobbyist voluntarily.
The process of creating the lobbying policy is analysed in the Attachment no. 1 of this thesis.
In 2011, a joint Transparency Register of organisations and self-employed individuals engaged in the EU policy-making and policy implementation was introduced.12 The previous voluntary registers of the EP and the Commission got replaced and unified by the Interinstitutional Agreement. It is so far the most important step in the lobbying regulation policy. The Register eventually remained voluntary as it states ,,All organisations and self employed individuals, irrespective of their legal status, engaged in activities falling within the scope of the register are in principle expected to register‘‘(Transparency Register, 2011).
10 The estimates say that there were about 15 000 lobbyists and 2 500 lobby organizations in Brussels in 2008, from which only 5000 were officially registered (Stubb Report, 2008:7) 11 The Stubb report says: ,, Be as it may, today there is a large consensus that interest groups provide valuable expertise to EU law-making authorities.´´ (Stubb Report, 2008:7) 12 The agreement went through a complicate approval process of the EP and the Commission. It took almost three years because the EP´s objective was to establish the Register as mandatory. 25
The new Transparency Register sets up clear and detailed information about who has to register and who is not expected to register (for example, activities of the social partners as participants in the social dialogue are excluded from the Register’s scope). Religious communities, churches as well as local, regional and municipal authorities do not fall under the scope unless they have created offices to represent them towards the European institutions. Political parties are not concerned by the register as long as they do not create or are engaged in activities falling under the registration expectation (Transparency Register, 2011, § 11 – 13). Secondly, it contains a Code of Conduct, complaint mechanism and measures to be applied in the event of non-compliance with the code of conduct, including the procedure for the investigation and treatment of complaints (Committee on Constitutional Affairs, 2010). Every organization or individual registered has to publish its financial disclosures such as overall budget for lobbying related activities (Transparency Register, 2011).
In the future, the register should contain information about organizations themselves, e.g. details concerning the most important legislative proposals they were involved in during the past years. What is noticeable is also an initiative of the EP to create a system when any meeting of a lobbyist with a leading Parliament member related to a specific legislative process would have to be mentioned in an explanatory statement which would be attached to the report or the recommendation on the draft of the relevant legislative act. This would enable to track the involvement of lobbyists in the EP reports and thus to show a ‘legislative footprint’.
2.2 Legislation in the Czech Republic
Lobbying remains a long-standing and non-solved problem in the Czech Republic even though there have been several attempts to establish rules regulating lobbying in the past. So far the Czech Republic has not issued any act of law or any other regulatory measure regarding to lobbying.13 However, the situation should be changed in the second half of this year (2012) with the new prepared act of law about lobbying (Euractiv, 2012).
In 2011, a series of activities were initiated in order to formulate the most suitable lobbying policy. First of all, it was the acceptance of the Government Strategy for Combating
13 The development of the Czech regulation is described in the Attachment No.2 of this thesis. 26
Corruption during 2011 and 2012 which started the boosted discussion on the topic within experts. Secondly, a project whose main objective was to create concrete recommendations for the Ministry of Interior was launched. In the framework of the project, 4 meetings at the round tables were conducted. The meetings resulted into a conclusion14 that the issue of lobbying should be regulated, 15 namely regulated by law (Czech Government, 2012: 3).
The new proposal for the regulatory law should be elaborated in several variants in the controversial matters (Euractive, 2012). The government has published a document summarising the law propositions and its variants.16 The structure of the new legislation will contain in its first part basic provisions like: definition of lobbying, lobbying contact, lobbyist, lobbied person and his duties, related person, client etc. It is recommended not to distinguish between professional and non-professional lobbyists but to base the definition on the positive and negative specification of a lobbying contact. According to that, a lobbying contact should be: ‘‘Any oral or written communication with a lobbied person, including one-way communication, whose objective is to influence the decision-making of the public authority or a process preceding to the decision-making’’ (Czech Government, 2012: 3).
There are clearly named areas in which a lobbying contact is not permissible. These are: public procurement, grants management, administrative and criminal and judicial proceedings.17 Recommended definition of a lobbyist is: ‘‘A Lobbyist is a person regularly conducting lobbying’’18 (Czech Government, 2012: 3). It is also suggested to consider legislative and executive power representatives (local government representatives included) as lobbied persons.
The proposal talks about necessity to implement a register of lobbyists. The register should contain information such as: name and other personal details of a natural and legal person including the details of the statutory organs, name and details of a natural person who is with
14 To the formulation of the policy contributed significantly the analysis of the Institute of Sociology of the Academy of Science of the Czech Republic. The aim of the Analysis was to investigate the usual way how Czech companies lobby, expenses related to lobbying and their opinions about lobbying regulation. More importantly, it contained recommendations for the new policy-making. It is based on the OECD recommendations and regulatory measures in countries like USA, Canada, Slovakia, Poland and others. 15 90% of the Czech experts taking part in the Analysis questionnaire agree with the regulation of lobbying (Respekt Institut, 2012: 7). 16 The document is called Information on further action regarding the regulation of lobbying in the Czech Republic and the thesis of a draft law on lobbying. 17 Lobbying contact cannot be carried out especially with respect to a judicial power as this one should be completely independent. 18 A person who has executed at least 4 lobbying contacts in a quarter or 5 contacts in a year. 27
a lobbyist in an employment relationship and will conduct lobbying on behalf of its employer. The information about a membership in a lobbyist association would also be provided (Czech Government, 2012).
For enforcing the stated above a control organ should be established. A lobbyist would be obliged to report to it on a regular basis a list of their lobbying contacts, stating date, time and place of contact, draft of a regulation or document concerned, list of clients for which lobbying was carried out (plus parent and subsidiary companies if a client is a commercial company) and a real name of a company owner (Czech Government, 2012).
Every lobbyist will be obligated to submit a financial report till the end of a calendar year proving incomes and expenses of lobbying.19 Reports will be available on the Internet. Whoever would have any doubts about their sincerity they could submit an incentive to the financial office (Czech Government, 2012).
A lobbyist has to give up his activity on date when they were elected or appointed into a public function. Furthermore, the aim of the new proposal is to prevent the ‘effect of revolving doors’ - a situation when a politician or a public official becomes lobbyist immediately after finishing his function. Therefore, a period of two years should be implied till one can register himself as a lobbyist (Czech Government, 2012).
The duties of lobbied persons are clearly set. Lobbied persons cannot carry out lobbying themselves and cannot be in an employment or any other relationship with a lobbyist. Simultaneously, they cannot accept or be promised any advantage from a lobbyist either for themselves or for a related person. Any promise has to be reported (Czech Government, 2012).
The new law will help also to follow the ‘legislative track’ (the same way as in the European institutions, described in the previous chapter 2.1). The acceptance of the law will require additional amendments to the associated laws: Conflict of Interests Law and Rules of Procedure of the Chamber of Deputies20 (Czech Government, 2012).
19 A non-profit organization submits an annual report. 20 The Rules of Procedure shall be completed by a sentence in a § 86: „If some other persons than a proposer take part in the preparation of law draft, an explanatory report has to contain a list of such persons including name or names and surnames, company name and a legal form of legal entities at which a person is employed.’’ Secondly, a § 94, paragraph 1 will be followed by a sentence: „Amendment proposal has to be justified and has 28
No law would be efficient without a clear and efficient mechanism of a controlling and enforcing powers. A parliamentary plenipotentiary21 should execute a control over the register of lobbyists and obeying the rules and should also deal with administrative offenses. He would be endowed with the power to impose sanctions too (Czech Government, 2012).
The proposal is supposed to be finalised in August 2012 and to go through a legislative process after that. It should come into a force till July 1, 2013 (Euractiv, 2012).
Furthermore, the Government informs about a progressing process of a new Ethic Code of MP formulation.22 The process should be finalised in the second quarter of this year. A consensus is being searched through the spectrum of political parties in the Chamber of Deputies. According to the press release, the talks proceed constructively. Any significant discrepancies in the opinions about the particular clauses did not appear (Czech Government, 2012). The Government also accepted the Code of Conduct of Public Officials and Civil Servants on May 9, 2012 (Czech Government, 2012).
2.3 Comparison of the European Union and in the Czech Republic Legislation
The Czech Republic has showed a different approach to the lobbying regulation issue than the EU institution - a law regulation with a mandatory registration duty, enforcement rules and financial sanctions. This system differs in certain matters from the self-regulation model for which the EP and the Commission have opted in their Interinstitutional Agreement. Although the Czech Republic has not finalised its policy yet we can consider as very probable that the new legislative solution will be accepted soon and implemented next year.
The approach of the Czech Republic basically comes from the recent research conducted by the Institute of Sociology. The general assessment was to regulate lobbying by law. The
to contain particulars of the bill according to article 86, paragraph 3, fourth sentence’’ (Czech Government, 2012: 8). 21 Plenitotentiary would be chosen from six candidates suggested by the President, Chamber of Deputies and Senate (2 each), the election would be conducted by the Chamber of Deputies. His office period would be six years for maximum two periods immediately after each other. The function would be incompatible with other functions. 22 As a part of the Government Strategy for Combating Corruption for 2011 and 2012. 29
European policy is a result of a long-standing process of policy-making and searching for a joint agreement of the European Parliament and the Commission. In principle, both systems impose similar measures of regulation. The registers of lobbyists both contain identification information and financial reports. The Transparency register displays estimated costs of the organisation directly related to representing their interests towards the EU institutions during the year. Czech register should display not only lobbying expenses but also the incomes. The information will be published on the internet. Both measures deal with the problematic of revolving doors and legislative footprint tracking (the EU has not define its policy clearly yet).
At the European ground, an organization conducting lobbying in the EU institutions has automatically signed the Transparency Register Code of Conduct by its voluntary registration. In the Czech conditions, a code of conduct will also become a part of the registration process. The respect of the code will be binding for everybody and breaching it will result in certain actions ranging from a written notification to 2 years removal from the EU register (Interinstitutional Agreement, 2011) and up to financial sanctions in the Czech Republic.
Concerning the rules of enforcement, the Czech rules seem to be harder and more specific. There shall be a position of a parliamentary plenipotentiary responsible for the register, investigation and sanctions imposing. Anyone who sees any discrepancies in the financial report can submit a stimulus to the financial office. The Interinstitutional Agreement implements such measures too and implies a joint Transparency Secretariat as an institution responsible for managing the register and monitor compliance and sanctions. A complaint mechanism gives a possibility to anyone to lodge a complaint, substantiated by material facts, about suspected non-compliance with the code of conduct.23 However, the Agreement does not impose any financial sanctions.
The EP and the Commission members are bound by the internal rules applied to themselves like Staff Regulations, Code of Good Administrative Behaviour and others. In the Czech
23 The paragraph 18 of the Interinstitutional Agreement says: ‘‘Non-compliance with the code of conduct by registrants or by their representatives may lead, following an investigation paying due respect to the principle of proportionality and the right of defence, to the application of measures laid down in Annex IV such as suspension or removal from the register and, if applicable, withdrawal of the badges affording access to the European Parliament issued to the persons concerned and, if appropriate, their organisations. A decision to apply such measures may be published on the register’s website.´´ (Interinstitutional Agreement, 2011:10) 30
Republic, the matter should be incorporated in the new law as well as in the Code of Conduct of the Parliamentary Member.
Overall summarised, the EU has made an important step forward in the lobbying regulation evolution which may contribute into a better transparency of the EU bodies as well as lobbying activities in the eyes of broad public. The acceptance of the Transparency Register was welcomed by many respected institutions.24
Despite that, many experts (e.g. Daniel Guéguen) claim that the system of a voluntary registration is too weak. The external scrutiny can act just as a deterrent of the improper lobbying behaviour. Furthermore, the current system relies too much on self-discipline. The practical implementation may face severe problems as a non-willingness to share sensitive information or concealing them. Secondly, from the estimated 15 000 lobbyists in Brussels only 4628 of them were registered on April, 23 2012 (Transparency Register, 2012). The information indicates that there are still 2/3 of an overall number of lobbyists who do not fall under the register scope and do not have to prove any information about their interests, activities and finances.
If the Czech Republic accepts the new proposed law it will join the few European countries (Lithuania, Poland) with a hard regulatory system. It is difficult to predict the practical implementation aspects of the register and the code right now. Nevertheless, a working system should be imposed especially with a clear focus on enforceability. It appears necessary to place an emphasis on common enforcement and sanction system trusted by all.
24 Namely by: Transparency International, European Public Affair Association, International Public Affair Association as well as the Society for European Affairs Professionals. 31
3 Selected Case Studies of Lobbying in the Czech Republic and in the United Kingdom
The objective of the following chapter is to analyse lobbying practises in reality. I will focus on concrete cases of lobbying in the area of solar policy and will bring two examples -from the Czech Republic and from the United Kingdom. I will define the most powerful solar lobby groups and their activities in given cases. At the end of the chapter I will summarise lobbying results and lobbying forms used in these cases.
3.1 Solar lobby in the Czech Republic
Solar lobby is one of the most visible cases of lobbying in the Czech Republic. To analyse successfully the policy-influencing it is essential to understand the wide context of the solar policy and its significant changes. Therefore I will first describe shortly the solar policy development.
3.1.1 Introduction to Solar Policy
Solar energy is a fast developing field in the Czech Republic, widely supported by the Czech government and the European Union: The Czech Republic was obliged to increase the use of renewable sources in the electric power production from 4% to 8% till 2010 (Directive 2001/77/ES). The mandatory commitment set by the Directive 2009/28/EC on the promotion of energy used from renewable sources is 13 % share of RES on the final energy consumption in 2020 for the Czech Republic.
The Czech Republic introduced a mechanism of a so-called feed-in tariffs (FIT) the combination with the „green bonus“ system already in 2005 (Act No. 180/2005 Coll. about the promotion of the electricity production from the renewable sources). Feed-in tariffs apply to electricity supplied and metered at the delivery point between the power stations and the respective distribution system operators. Tariff is guaranteed for 15 years. Green bonuses apply to electricity supplied and metered at the delivery point between the power station and
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the regional system operators and supplied by the generator to an electricity trader or eligible customer. Producers can choose if they sell electricity for purchase prices or offer it to trader for „market-price“ and simultaneously get extra green bonuses – paid by the operator of Transmission System.
Solar investment in the Czech Republic grew significantly since 2005 due to the strong feed- in tariff. In 2011, 1966 megawatts of solar power capacity were installed in the Czech Republic compared to just 0,15 megawatts in 2005 (Ministry of Industry and Trade, 2011).
In 2009, the policy on solar energy brought several changes. The government cut the extremely big subsidies (by 5% for 2010) for solar energy in order to decelerate the growth rate of solar power stations.25 At the end of 2010, the government taxed the biggest solar power stations (installed capacity higher than 30kW) with 26% withholding tax from sales revenues. The tax is imposed for three years. Further on, the government introduced a 32% gift tax for the emission permits which were supposed to be provided free of charge to the producers. Additionally, the fee for exemption of the land from the land fund was increased in order to limit the installation of solar power stations on the respective land. The amendment to the Act came into force on January 1, 2011. 26 The Czech Constitutional Court issued a judgment confirming the constitutionality of the Act on May 16, 2012 (Constitutional Court, 2012).
The most recent development in this area is indicated by the approval of the new Act of law on promoted energy sources which will substitute the Act No. 180/2005 Coll. After being vetoed on March 14, 2012 by the President it was approved by Chamber of Deputies on May 9, 2012.
3.1.2 Solar Interest Groups
Czech solar lobby is a visible and widespread phenomenon in the nowadays policy-making. The following part will focus on describing the most visible solar interest groups and their
25 The number of solar power stations has increased in the years 2009 and 2010 due to the high purchase prices of solar energy. This situation would lead to the hike of electricity prices. The aim of the government was to prevent the increase of energy prices and therefore a series of measures was introduced to slowdown the growth rate of solar power stations. 26 With the exception of the provision of the Article I, section 2 and Article II, section 1 which came into effect on March 1, 2011. 33
influence on particular governmental decisions regarding to the changes of the Act No 180/2005 about support of the renewable sources of energy.
To define the solar interest groups I studied the criteria of their activeness in the given case, size and visibility. There are undoubtedly many other interest groups but they are either not well-known publicly, do not appear in the press often enough to be noticed or they do not publish openly their intentions and activities (e.g. at their websites). As long as no official register of interest groups exists these factors are essential to define them as the solar lobby players.
The most relevant interest groups for the study are:
Platform for the Renewable Energy Sources (Platform for RES) The Czech Photovoltaic Industry Association (CZEPHO) European Association for the Renewable Sources (EUROSOLAR) Czech Photovoltaic Association (CPA) OZE
Platform for the Renewable Energy Sources (Platform for RES) provides consultancy and executes activity leading to the improvement of conditions for all renewable energy sources in the Czech Republic. The group states that all its activities are based on the principles of transparency, continuity, expertise and top-quality. Czech companies as well as international entrepreneurs and investors are associated in this organization. The platform conducts activities as contacting legislators, comments on law, preparation of their own legislative proposals, preparation and submission of complaints to the local and community level. A member fee is required in the sum of 12 000 CZK without VAT per month (Platform for RES, 2012).
The Czech Photovoltaic Industry Association (CZEPHO) whose aim is to join efforts and promote development of the photovoltaics in the Czech Republic. Today, CZEPHO associates more than 50 members who represent over 20% market share. Its members are represented especially by proprietors and operators of solar power plants, producers of PV components, system providers, suppliers of relevant complementary services, scientists and academy institutions, non-profit institutions operating in the domain of photovoltaics. One of their main activities is to initiate and participate on changes of legislation (CZEPHO, 2012).
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EUROSOLAR, a European Association for the Renewable Sources is an international association of companies with its presence in the Czech Republic. Its objective is to work for complete conversion of the power supply to the renewable sources. The association tries to influence members of the government (at the national as well as local level) sending appealing letters, creating petitions, publishing articles and press releases concerning renewable energy policy (EUROSOLAR, 2012).
Czech Photovoltaic Association is an organization whose objective is to promote and develop the use of renewable sources of energy. One of the points of their programme is an active pursuit of enhancing the legislative framework of the use of renewable energy (CPA, 2012).
Further on, we can name OZE, an association of the wind, photovoltaic power stations and other operators. The aim of the association is to enforce transparent and fair environment enabling the promotion of the industry in the Czech Republic. It associates namely CZEPHO, Czech Society for the Wind Energy, Czech Geothermal Association and others (OZE, 2012).
ČEZ, the biggest energy supplier in the Czech Republic, can be also considered as an important player in the field.
3.1.3 Solar Lobby Groups and their Influence on Policy-making
A series of actions has been initiated by the interest groups since the beginning of 2010 when first mentions about prepared changes appeared.
The pressure exerted by lobbyists was enormous, especially three weeks before the forthcoming approval of law. As Jan Kubita from Hospodářské Noviny informs hundreds of companies contacted the legislators, usually through their lawyers and consultants. Even the experienced Minister of Finance Miroslav Kalousek stated that ‘‘lobbying of photovoltaic representatives was extraordinary’’ (Hospodářské Noviny, 2010). He adds that their behaviour was carried out in a proper way on the other hand.
Petr Gazdík, a chairman of the parliamentary club of TOP 09, describes the situation: ‘‘It was several tens of letters daily from various groups - requests for meetings either directly with the Member of Parliament, his assistant or with a person acquainted to him.’’ (Hospodářské Noviny, 2010). Furthermore, the solar lobby invested into advertisements. It warned against the danger that the new amendment would cause bankruptcy for half of the power stations. A
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demonstration was organized in front of the Chamber of Deputies one week before the law approval.
No names were published. But it is officially known that the law office of Vladimíra Glatzová (Glatzová&Co.) represented the interests of several energy companies.27 The Member of Parliament Petr Bendl confesses that he worked in association with one interest group. After talks with the chairman of the Association of Chemical Industry of the Czech Republic he introduced an amendatory proposal mitigating the impacts of the law. (Hospodářské Noviny, 2011).
EUROSOLAR sent an official letter to the Prime Minister Petr Nečas appealing on him and the Chamber of Deputies to abandon a law amendment. They are saying namely: ,,We respectfully urge You not to approve such measures which will destroy the majority of the photovoltaic market in the Czech Republic providing up to 5000 jobs nowadays but to regulate it instead by using differentiated purchase prices for installations of various sizes and at different sites’’ (EUROSOLAR, 2010). They also strongly discourage the Parliament from the retroactive taxation as it may threaten the viability of instalments, especially the ones who are repaying bank loans. It might also have a negative impact on the Czech Republic credibility for the investors. The letter is signed by the international presidium members, by Milan Smrž for the Czech Republic.
Platform for RES conducted many steps against the amendment. In June 2010, it submitted complex comments of the National Action Plan for the Renewable Sources to the Minister for Industry and Trade. Further on, they sent an official complaint to the Energy Office of the European Commission regarding to the legislative changes. The complaint was complemented again in December. The Platform submitted a complex analysis of the conformity of the prepared changes with the community law to the Legislative Council of the Government in August 2010. The law proposal was sent back after that to 4 Ministries to be revised. The Platform acted against the proposal in the Parliament since September 2010 till March 2011 getting for example a public hearing in the Senate on November 29, 2010. The platform is an initiator of the petition for the rejection of the withdrawing taxing which was signed up to 600 of entrepreneurs and organizations like EUROSOLAR, CZEPHO and ČSVE (Czech Society for the Wind Energy) (PLATFORM FOR RES, 2012).
27 The official website of Glatzová&Co. says that they provide consultancy in negotiations with state and local government, e.g. for the wind energy company VENTUREAL, MVV/Teplárna Liberec (cogeneration heat and power production) or Mondi (combustion of biomass). 36
CZEPHO also acted actively against the legislative changes. The former Minister of the Environment Martin Bursík provided his help through the law office Šikula but he refused using his political contacts or lobby directly.
Jan Kubita (Hospodářské noviny, 2010) states that there were many key players of the energy industry participating at the lobbying process. Namely they were e.g. ČEZ, Energy and Industry Holding (EPH), Czech Coal and many others.
Nevertheless, the new amendment was accepted and came into force on January 1, 2011.
Interest groups continued in their actions despite of that. In March 2011, a group of Senators influenced by a solar lobby (especially by the Platform for RES)28 submitted a Senate proposal to the Constitutional Court in Brno to repeal the amendment to the Act No 180/2005. They disagree especially with the 26% rate taxation of the sales revenues, cancellation of the tax holiday for RES and taxation of the emission permits. The Constitutional Court has not obtained any decision in the given case yet. CZEPHO raised question to the Court asking when it will come into a conclusion. It got an answer that it should happen in the second quarter of 2012 (CZEPHO, 2012).
The Platform has sent a letter (called Amicus Brief) addressed to the Constitutional Court highlighting the main points of a constitutional complaint submitted by the group of Senators 29 (Platform for RES, 2011).
The year 2011 brought unwelcome changes for the solar industry again. The government approved a new law proposal about promoted sources of energy which should have substituted the Act no 180/2005 in May 2011. The proposal was accompanied by an emotional discussion since its beginning because it might restrict the development of natural renewable resources in a significant way. The OZE managed to enforce 8 changes in the proposal within the Parliament (OZE, 2011). EUROSOLAR created a New Energy Conception and forwarded it to all senators of the Parliament on November 11, 2011.
The Platform for RES submitted its analysis of the prepared law to the Members of Parliament before the first reading in June 2011. They named 15 reasons why the law should be rejected. Furthermore, they initiated a petition for maintaining of the Act no 180/2005. Up to 555 companies, 7 municipalities, 12 professional associations and others supported the
28 The Platform participated largely in the formulation of the Senate proposal and contributed to ensuring a sufficient number of the Senators for submitting the Senate proposal (Platform for RES, 2012). 29 One can polemize about a suitability of such action. According to the Thesis on the draft law about lobbying in the Czech Republic it would not be allowed to carry out lobbying towards the juristic power. 37
petition till October 2011 (Platform for RES, 2011). The petition was subsequently transformed into an appealing advertisement informing about the threats of the new law and urging the government to abandon this intention.30 In February 2012, the organization sent an official letter to the President Václav Klaus requesting him to veto the proposed law (Platform for RES, 2011).
CZEHPO sent a letter addressed to the Chairman of the Chamber of Deputies Petr Nečas dated on November 8, 2011. He warns against the improper influence of ČEZ on the legislative process and requires an abandonment of the proposal. The writing is signed by Martin Bursík (CZEPHO, 2011).
The new law was eventually vetoed by the President in March 2012. The President used for the explanation some of the arguments provided by the Platform for RES.31 The Chamber of Deputies approved the Act it on May 9, 2012 anyway (Chamber of Deputies, 2012). It did not come into force yet.
3.1.4 Solar Lobby in the Czech Republic – Summary
We can recognize several types of lobbying activities conducted in the given case:
Official letters addressed to individual politicians, the Chamber of Deputies and the Senate Public demonstration in front of the Chamber of Deputies, advertisement campaigns Personal meetings Petitions, official statements, press releases Public hearing in the Senate Comments on the proposal, analysis, own proposals, conceptions
Lobbying groups used a wide range of lobbying tools varying from the direct to indirect forms. The lobby was enormous in its intensity, length of duration and number of players who have participated in the case.
It can be stated that the pursuit of lobbying groups to influence the decision was more than less unsuccessful. The legislators did not take into account almost any of the lobbyists´
31 According to the organization itself (Platform for RES, 2012) 38
requests. Although the whole case may be described as a big loss of solar lobby, there were some points in which the interest groups were successful.
The Government eventually mitigated the impacts of their own proposal when it limited the imposed 26% tax of the sales revenues only for the period of three years (Hospodářské Noviny, 2010). The Platform for RES can be considered as the most influential group. It managed to influence the group of Senators to submit a Senate proposal to the Constitutional Court to repeal the amendment. This is a significant contribution of the lobby to the policy-making.32 The President vetoed the proposed law about promoted sources of energy under the influence of the Platform. The OZE managed to enforce 8 changes in the law about promoted sources of energy proposal within the Parliament in 2011. The tax was not imposed on some energy companies (other than photovoltaic) against of the initial proposal.33
The result meant a loss also for big energy companies (other than photovoltaic) who participated in lobbying. Namely they are e.g. ČEZ and Czech Coal.
The impacts of the lobby for the industry, consumers and the State will be further analysed in the Chapter 5.
3.2 Solar Lobby in the United Kingdom
In the following part I will analyse lobbying activities conducted by interest groups regarding the solar policy in the United Kingdom and the results they have brought. First of all, I will refer shortly about the regulatory framework of lobbying in the UK and the recent development in the solar policy in order to understand the background.
3.2.1 Regulation of Lobbying in the United Kingdom
The United Kingdom opted for a system of self-regulation in the lobbying case. It comes out from the side of lobbyists themselves and secondly also from the public officials side. There
32 Although that the Constitutional Court has found the Act as constitutional. 33 These are heating plants, e.g. the Energy and Industry Holding. 39
exist many working codes at various levels of the public administration as well as the working code of a Member of Parliament. The State authorities set up rules for their employees (for the recipients of lobbying) with indirect impact on lobbyists.
The main tool of lobbying regulation from the State side is a Register of Members´ Financial Interests. It was launched already in 1974 with a clear objective to promote transparency and responsibility. The register contains overall information about all financial interests and other financial profits which an MP obtains and which may have a significant influence on his decisions-making. The financial interest of wives/husbands, partners and dependent children also fall under the register´ scope.
Further on, the State applies a number of registers helping to enhance the rate of transparency of governance. We can name e.g.: Register of Interests of Members´ Secretaries and Research Assistants, Register of Journalists´ Interest, Register of All-Party Groups. These are provided in fully electronic versions. Besides the registers, there are applied codes covering the extra- parliamentary public officials´ activities - Ministerial Code and Civil Service Code. The Business Appointment rules imposed in 2007 generally prevents the public officials to work in a private sector in the same field as his agenda is for a period from 6 to 24 months. The Advisory Committee on Business Appointment or a Government Office has to grant their consent to an official for accepting a job in a nongovernmental sector.
The system of self-regulation resulted into creation of several professional umbrella organizations. The most important ones are the Association of Professional Political Consultants (APPC), Public Relations Consultants Association (PRCA) and Chartered Institute of Public Relations (CIPR), regarding their historical tradition, respect and recognition. (Laboutková, Vymětal, 2010). Each of these associations differs in the internal rules and member base but they all dispose of professional codes of conduct and sanctions in a case of rules breaching.
At the beginning of 2012, the government launched a consultation on initial proposals to introduce a Statutory Register of Lobbyists.The proposal says that any individual or firm who lobbies for a third party for money must put themselves on the register and disclose their clients, according the statement of Mark Harper, a Parliamentary Secretary. (UK Government, 2012).
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3.2.2 Solar Policy in the United Kingdom
As part of the EU action to increase the use of renewables energy, the UK has committed to generating 15% of the overall energy from renewable sources by 2020, regarding to the Department od Energy and Cliamte Changes. To achieve this target, the government represented by the Prime Minister Gordon Brown launched the support for the renewable sources of energy and thus, the feed-in-tariffs were introduced and took an effect in April 2010 (Energy Act 2008). The photovoltaic industry grew in a rapid pace since then – from less than 10 kW of installed capacity in the second quarter of 2010 into 1000 kW in the first quarter of 2012 (DECC, 2012).
In October 2011, the Department of Energy and Climate Change (DECC) cut dramatically the subsidies by almost 50% (Energy Act 2011) due to the government’s perception that large- scale solar instalations poses a threat that was not expected. It was in response to the speculations of setting up huge solar farms which would have absorbed a disproportionate amounts of the funds. The cuts were to be effective from December 12, 2011 (Energy Act 2011). A strong oposition was raised against the Act. A lawsuit has been filed against the Department of Energy and climate Change (DECC) on behalf of the solar industry seeking for an interim legal injunction against the cuts.
The High Court issued a judgment issued stating that Government´s FIT cuts were illegal. The DECC´ s lawyers appealed against the ruling but the Supreme Court threw out their attempt in January 2012.
3.2.3 Solar Lobby Groups
To define the solar interest groups in the United Kingdom I again looked at the criteria of their size, visibility in the press and activeness in the given case.
Such groups are:
European Photovoltaic Industry Association (EPIA) Solar Trade Association (STA) Renewable Energy Association (REA) We Support Solar Friends of the Earth
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Solarcentury
EPIA represents members active along the whole solar power chain towards political institutions at European level. It anticipates legislation having a potential impact on the sector, gives advice to key decision-makers on the adequate policies and informs about the latest legislative developments. It counts all together up to 200 members from all around the world (EPIA, 2012).
The STA is a non-profit trade organization. Its aim is to achieve the right regulatory framework and incentives for solar by undertaking policy development and providing expert advice. The membership consists of over 450 companies ranging from large manufacturers, through to distributors, installers, consultancy firms and training bodies, including overseas members looking to do business in the UK. The STA is affiliated to the Renewable Energy Association (REA) taking the combined membership to over 900. It provides policy briefings and lobbying updates at its member page which is not available for public (STA, 2012).
The REA is again a not-for-profit trade association, representing up to 950 British renewable energy producers. It endeavours to achieve the best legislative and regulatory framework for renewable energy production in the UK. It undertakes policy development and provides input to government departments, agencies, regulators, NGOs and others (REA, 2011).
We Support Solar is a network of companies, NGOs and individuals. The groups´ supporters include the Friends of the Earth, the band The Klaxons34, 275 MP’s, 500 businesses and 1000’s of individuals. Their main aim is to influence the legislators in their decisions-making (We Support Solar, 2012).
Solarcentury is a solar panel producer which presents itself as one of the UK most experienced and the fastest growing solar company in Europe with offices in France and Italy. It brings news coverage on the industry and initiates actions in an extensive way, conducts many public events to inform about its activity and tries to influence the solar policy-making (Solarcentrury, 2012).
Friends of the Earth is an environmental group working for a better climate and green energy, laws to protect the countryside and persuading companies to behave better. It is working with individuals as well as companies, charities, politicians and local authorities. It runs numerous campaigns, publishes press releases and puts pressure on politicians at the local, national and
34 A famous music band in the UK. Awarded by many awards. 42
European level. It is recognised as a successful and respected environmental organisation in the UK (Friends of The Earth, 2012).
3.2.4 Solar Lobby Groups and their Impact on Policy-making
The following part will describe the interest groups´ influence on the Energy Act 2011 issued on October 18, 2011, its results and further actions taken by interest groups in the given case.
EPIA called on the UK Government to act very carefully when reconsidering the Feed-in- Tariffs already in February 2011 during its gathering in London. It also offered to provide any advice (EPIA, 2011).
The STA, REA and the We Support Solar teams all tried hard not only to fight the decision, but also to demonstrate what Government should do. The REA initiated several meetings with the State representatives: Charles Hendry, Minister of State, Chris Huhne, Secretary of State for Energy and Climate Change and Richard Benion, Minister for Natural Environment and Fisheries. The meeting took place from May to July 2011 (DECC, 2011).
The STA came up with a report (Solar Revolution Strategy for the UK) urging the Government not to cut the tariffs in the proposed rate35 but to reduce it only by 25% (STA, 2011). They also point at other countries´ policy (e.g. Germany) which they present as a model and compare the amount of subsidies provided for other kinds of renewable energy sources with the subsidies for photovoltaics.
The STA organized a huge campaign in association with Friends of the Earth and Greenpeace to put the pressure on the government and to activate people to oppose the decision. Within the framework of the ‘Cut, Don’t Kill’ campaign a protest has been organised and people are (were) encouraged to sign an e-petition, share it on the social networks like Facebook 36 and Twitter and to sign up for a mailing list. The strategy also enables the companies to add their logo to promote the campaign. People are moreover encouraged to download an editable letter on the campaign website and sent it to their MP demanding he or she to take the issues up with Ministers. In fact, individuals are carrying out lobbying too in that case. The campaign is overall very attacking and sharp blaming the Government from not fulfilling its promises and misleading the information. The citizens are being pushed for an urgent public inquiry. The action is on till now.
35 Coming up to 70 % (STA, 2011) 36 1,587 people already liked this on Facebook (Cut, Don´t Kill, 2012) 43
Environmental groups usually promote their interests by public demonstrations, public appearing and contacts with the Members of Parliament. The same can be observed at the Friends of the Earth activities who play an active role in the green policy influencing they conducted e.g. an official meeting with the Planning Minister in September 2011 to communicate their requests.
We Support Solar´ main requests from the government are especially to leave the solar Feed- in tariff alone for households and communities until 2012. They launched a ‘Save our Solar’ campaign and the ‘Write to your MP’ action and within which framework they urge the individuals to ask their MP to write to the Secretary of the State on their behalf and/or consider tabling a Parliamentary question asking him to rethink the FITs cuts.
3.2.5 Solar Lobby in the United Kingdom – Summary
Forms of lobbying used in the given case:
Putting pressure on the politicians through public by conducting campaigns to increase the individuals´ activity Official letters addressed to the MPs Public demonstration, appealing campaigns Personal meetings Petitions, official statements, press releases Comments on the proposal, analysis, own proposals, conceptions
Lobbying groups used a wide range of lobbying tools varying from direct to indirect forms. The lobby was very intensive especially towards public. Many campaigns, e-petitions and press releases were issued in order to activate the wide public.
It can be stated that the pursuit of lobbying groups to influence the decision was more than less unsuccessful. The legislators did not take into account any of the lobbyists´ requests so it means a big loss again for the solar industry.
In the Chapter 5, I will analyse impacts of the unsuccessful lobby.
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4 Comparison of Lobbying Case Studies and their Impacts
I carried out two cases studies of lobbying for the solar policy in the European environment – one in a country without any regulation and one with self-regulatory system. Their comparison follows below.
4.1 Lobbying Practices in the UK and in the Czech Republic – Comparison
The lobbying in both cases was very intensive in its pursuits not really successful. The lobbying tools used in both cases were similar. It can be said that the most common form of lobbying were official letters, statements and meetings with the decision-makers. Whereas the Czech lobby lobbied mostly through professional lobbyists and associations, the British lobby activated especially individuals to put pressure on politicians. The public campaigns were stronger, more visible and appealing in the UK than in the Czech Republic.
The acceptance of the law amendment to the Act no 180/2005 Coll. in the Czech Republic and the Energy Act 2011 in the UK had severe consequences for the solar industry, consumers and the States:37
4.2 Impacts in the Czech Republic
Due to the law changes the solar energy producers received smaller revenues since January 2011. It was because of the 26% withdrawal tax from the sales revenues, cancellation of the tax holiday for RES, taxation of the emission permits and other measures. Secondly, the duration of the tax (3 years) plays an important role in the rate of return (IRR) criteria of the investment projects. The investments will return later than initially supposed.
Overall, the law change might have brought a deceleration in the pace of establishing the solar power plants. The data to base this statement on are not available yet.38 The chairman of the
37 The law about promoted sources of energy (approved on May 9, 2012) has not come into force yet. The specific conditions for each segment of solar industry will depend on other legislation which will be issued - implementation of the decrees of the Government and the National Action Plan. They will only determine which renewable resources and to which extent will be developed in the future. Taking into account this, impacts of the amendment to the Act no 180/2005 Coll. from 2010 were analysed for the purposes of the thesis. 45
Energy Regulatory Office (ERO) at that time Josef Fiřt confirmed that till the end of 2010 a big amount of power plants with an overall installed capacity of 1650 Megawatts were connected and that the pace was supposed to decelerate after the law amendment coming into force (ERO, 2010).
The law amendment changed retrospectively the conditions for solar investors who had been supported by the government to an enhanced activity by the state subsidies. The procedure was criticised by the European Union too.39 The Czech Republic risks an arbitrage – the international investors are preparing legal proceedings on the Czech State due to retrospective changes of conditions. From such organizations e.g. the International PhotoVoltaic Investors Club (IPVIC) associating 20 international investors into the solar industry can be named.40 The association has authorised the law offices Bruckhaus Deringer LLP and Glatzová & Co to represent their interests in legal aspects of their discussions with the Czech State.
The law also had an impact on the final electricity consumers. According to the ERO studies on the electricity prices before the end of 2010, non-acceptance of the law amendment would result into 11,2 % price increase for households and 14,5 % for companies. On the contrary, the price hike for 2011 should have been only 4,6 % for households and 5,2 % for companies in average (ERO, 2010).
4.3 Impacts in the United Kingdom
There was a strong opposition against the action on Feed-in-Tariffs. The cuts were challenged at the High Court by an application for judicial review, jointly made by Friends of the Earth and solar panels producers Solarcentury and HomeSun. They disagreed with the retrospective change of the FIT rates. The Court clarified that such retrospective changes were unlawful. This means any solar installation completed before March 3, 2012 qualifies for the higher FIT rate (Solarcentury, 2012).
According to the Government, the cuts were made in order to prevent big players from building up large-territorial solar parks which would absorb a non-proportional part of funds. The aim was to protect small producers too. The consequences of the FIT cuts for the
38 The Ministry of Industry and Trade published the data concerning to the year 2010 only. 39 According to the EU, it is necessary to keep stability in the renewable resources promotion. 40 E.g: Voltaic Network GmbH (Germany), Radiance Energy Holding (Luxemburg), Antaris Solar (Switzerland) and others. 46
decrease of big/small producers cannot be quantified now as long as the initial FIT rate has been introduced recently. Despite that, it can be considered probable that the big players will be discouraged to come into the industry segment.
One of the main arguments of the solar groups against the cuts was that it would result into a dramatic loss of green jobs. Solarcentury claims that it has already happened but it does not base its statement on any relevant numbers. No official studies are available regarding the topic. One can however suppose that the cuts will have a negative impact on jobs.
4.4 Summary
The objective of the case studies was to examine and compare lobbying practises in given cases in the Czech Republic and the United Kingdom, to evaluate what the lobby managed to achieve and to formulate the impacts of lobbying on the legislation/policymaking in both countries.
In conclusion, I would like to point out one more thing: the lobbying for solar was unsuccessful not because of inappropriately chosen lobbying tools or strategies but simply because of the solar industry specifics. The solar industry was growing too fast since the introduction of governmental subsidies and the mood all across Europe (Euractiv, 2011) was to decelerate what can be called ‘a solar boom’. The reasons are extremely big subsidies and too big pace of solar power stations establishments. I consider lobbying practices in both cases appropriately chosen, the lobbyists just tried to lobby for something which was not possible to enforce by any means because of the extremely high subsidies and unproportional state support in general, together with price increase for final consumers.
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Conclusion
The thesis studied theoretical and practical aspects of lobbying. In the theoretical part, fundamental terms and issues linked with lobbying were analysed. That provided a base for the practical study of legislation in the European Union and the Czech Republic and case studies of lobbying practices.
The issue of lobbying is discussed broadly in the whole Europe due to increasing pressure of public towards politicians and interest groups to enhance lobbying transparency and to enforce compliance with the regulatory measures and ethical codes (if existing). A number of countries has currently launched consultation about the way of dealing with this issue and a about the model of regulation to be implemented.
The Czech Republic is one of such countries as it is working intensively on the bill about lobbying. The proposal is supposed to be finalised in August 2012. If it was approved by the Chamber of Deputies and the Senate in the legislative process it would come into force on July 1, 2013. However, it is of course not sure that the proposal will be accepted exactly in the form introduced by its creators (the current version of the bill was described in chapter 2.2) amendments may be submitted and passed in the legislative process. Even a possibility that the proposal will not be accepted is there, although it is now not very probable.
After studying the problem of lobbying from various points of view I am getting more convinced that a law regulatory system with obligatory register of lobbyists is the most suitable option for the Czech Republic with regard to the Czech political environment and culture. One might claim that the Czech society is still to some extent influenced by the communist period when the ethic standards were not highly valued. Therefore, a voluntary regulation might not be efficient enough to eliminate an improper behaviour. Many corruption and unclear affairs in the past and the present can serve as an evidence of that.
Similarly, I would opt for the mandatory registration in the European Union too. The European institutions constitute a huge colossus of administrative and policy-making activities with a significant influence on the Member States. Taking into account the absolute number of lobbyists operating at the EU institutions it appears essential to me to create unified rules for everyone and to prevent some interest groups from escaping from the register scope. So far, the lobbyists are only in priciple expected ro register. Another important
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measure which could be imposed is financial sanctions which should be high enough to cause a threat for lobbyists.
Even the United Kingdom, a country with long-standing lobbying tradition based on the self- regulation, has launched a consultation on initial proposals to introduce a unified register of lobbyists. The register would include all individuals or firms lobbying for a third party for money.
The practical studies on lobbying for solar policy in the Czech Republic and the United Kingdom showed a series of actions and strategies which were used in the processes of influencing. Although the interest groups were not very successful in their pursuits, a conclusion can be made that both lobbying cases showed similar signs concerning lobbying tools used, lobbying intensity and severe consequences of the governmental decisions.
The main contribution of this thesis is the comparison of the existing regulatory measures imposed at the EU level with the new draft bill in the Czech Republic and formulation of recommendations for both subjects. Secondly, it is also the study of lobbying cases in two different countries – analysis of the most influential interest groups, their requirements, concrete lobbying tools and how much successful they were in their pursuits. Consequently, the thesis placed emphasis on the impacts of the lobbying activities. The thesis focused on the development since 2010 till now and so its value lies also in mapping very recent situation.
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51) SOLAR TRADE ASSOTIATION. STA Publications [online]. 2012 [cit. 2012-05-07] Available from www: http://www.solar-trade.org.uk/solarHandbook.cfm
52) SOLARCENTURY. About [online]. Updated 27.4.2012. [ cit. 2012-04-16] Available from www: http://www.solarcentury.co.uk/about-us/
53) Transparency register [online]. Updated 27.4.2012. [ cit. 2012-04-16] Available from www: http://europa.eu/transparency-register/index_en.htm
54) Transparency Register. Statistics [online]. Last update: 27.4.2012. [cit. 2012-04-29] Available from www: http://ec.europa.eu/transparencyregister/public/consultation/statistics.do?action=prepar eView
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55) UK GOVERNMENT. Introducing a Statutory Register of Lobbyists [online]. Last update: 20. 1. 2012 [cit. 2012-05-04] Available from www: http://www.official-documents.gov.uk/document/cm82/8233/8233.pdf
56) UNITED NATIONS. United Nations Universal Declaration of Human Rights [online]. 2012 [cit. 2012-04-06] Available from www: http://www.un.org/en/documents/udhr/index.shtml#a21
57) WE SUPPORT SOLAR. About [online]. Last update: 13.5.2010. [cit. 2012-05-07] Available from www: http://wesupportsolar.net/about-2/
Legislation
58) Act No. 140/1961 Coll., Criminal Code [online]. [cit. 2012-04-06] Available from www: http://trestnizakonik.cz/trestni-zakon/
59) Act No. 180/2005 Coll. about the promotion of the electricity production from the renewable sources [online]. [cit. 2012-05-03] Available from www: http://portal.gov.cz/app/zakony/zakonPar.jsp?idBiblio=60082&fulltext=&nr=180~2F2 005&part=&name=&rpp=15
60) Constitution of the Czech Republic [online]. [cit. 2012-04-06] Available from www: http://www.psp.cz/docs/laws/constitution.html
61) Energy Act 2008 [online]. [cit. 2012-05-10] Available from www: http://www.legislation.gov.uk/ukpga/2008/32/pdfs/ukpga_20080032_en.pdf
62) Energy Act 2011 2008 [online]. [cit. 2012-05-10] Available from www: http://www.legislation.gov.uk/ukpga/2011/16/pdfs/ukpga_20110016_en.pdf
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63) Directive 2001/77/ES on the on the promotion of electricity produced from renewable energy sources in the internal electricity market [online]. Last update: 27.10.2001 [cit. 2012-05-02] Available from www: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001L0077:EN:HTML
64) DIRECTIVE 2009/28/EC on the promotion of the use of energy from renewable sources [online]. Last update: 5.6.2009. [cit. 2012-05-02] Available from www: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:en:PDF
65) Interinstitutional agreement between the European Parliament and the Commission on a common Transparency Register (2010/2291(ACI)) [online].Updated 22.7.2011. [ cit. 2012-04-16] Available from www: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:191:0029:0038:EN:PDF#pa ge=
List of Charts
Chart No. 1: Types of Lobbying Chart No. 2: Model Types of Lobbying Regulation
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List of Abbreviations
APPC Association of Professional Political Consultants CIPR Chartered Institute of Public Relations CONECCS Consultation, the European Commission and Civil Society CPA Czech Photovoltaic Association CZEPHO Czech Photovoltaic Industry Association ČSVE Czech Society for the Wind Energy DECC Department of Energy and Climate Changes EP European Parliament EPH Energy and Industry Holding EPIA European Photovoltaic Industry Association ERO Energy Regulatory Office EU European Union EUROSOLAR European Association for the Renewable Sources FIT Feed in Tariffs IPEK Institute for Political and Economic Culture IPVIC International PhotoVoltaic Investors Club MEP Members of European Parliament MP Member of Parliament NGO Non-governmental organization OZE Obnovitelné zdroje energie (Renewable Energy Sources) PRCA Public Relations Consultants Association PV Photovoltaics REA Renewable Energy Association RES Renewable Energy Sources STA Solar Trade Association UK United Kingdom
List of Attachments
Attachment No. 1: Development of the Lobbying Regulation in the EU Attachment No. 2: Development of the Lobbying Regulation in the Czech Republic
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Attachment No. 1: Development of the Lobbying Regulation in the EU
The European Parliament started to deal with the problematic in the early 90-ties. The acceptance of new rules in 1996 required every EP member (MEP) to make a detailed declaration of his professional activities. MEPs were obligated to refrain from accepting any gift or benefit in the performance of their duties. Registered assistants also had to make a declaration of any other paid activities. The special registers with the names of deputes of companies, organizations and other groups (enlisted in the EP special interest groups database) were launched and incorporated in the Rules of Procedures of the EP.
Further, the EP started to use an accreditation system for anybody needing to access the Parliament for more than 5 days in the year. The system stated the holder’s name, the name of the firm the holder works for and the organisation the holder represents. But the register did not give any indication about which interest a lobbyist is acting in. To get the accreditation a holder had to accept a code of conduct (ethical code). As a reward he got an unlimited access to the parliamentary ground for a period of 1 year. The register of accredited lobbyists was published on the EP website.
The EP has issued many documents regarding to lobbying which influenced the EU lobbying policy-making over the time. From the most recent ones we should definitely mention the Constitutional Affairs Committee report, namely Stubb report (2008). The report places emphasis on the creation of a mandatory register of lobbyist common to all three institutions – EP, Commission and the Council. It also calls for a full financial disclosure and a code of ethical behaviour. The report had a significant importance for a later policy-making process as described further on in the text.
Similarly, the Commission´ policy was being formed slowly since 1992 when an Open and Structured Dialogue between the Commission and Specific Interest Group was initiated. Its main objective was to specify minimum standards of interest groups and Commission activity. The Commission launched a register of interest groups in 1993. It went through many modifications in order to result finally into a creation of Consultation, the European Commission and Civil Society (CONECCS) database in 2001. The database served as a two- way platform for providing information to the Commission and to the civic public. This
solution appeared not to be sufficient especially due to an inconsistent specification of which groups should be included in the register (e.g. if to include also consultancy firms, PR agencies, law firms and others).
The most complex document issued by the Commission was the Green Paper on European Transparency Initiative (EPI) from 2006. The European Transparency Initiative was launched earlier in 2005 and its aim was to enhance transparency and ,,to identify and stimulate a debate on areas for improvement.´´ (Commission, 2006) The Green Paper deals with two inherent categories of regulatory measures which can be characterised as outside and inside scrutiny. Reinforcing the outside scrutiny, the European Union has developed a policy on transparency specified in the “General principles and minimum standards for the consultation of interested parties”. According to the document, the participants´ contributions to public consultations have to be published on the internet, whereas it has to be clear which interests they represent and how inclusive that representation is. This applies also to a systematic monitoring of their objectives, sources of funding and the represented interests.
The Commission has created a system of self-regulation which encouraged many umbrella organizations of European public affair consultants or consultancy firms to accept voluntary codes of conduct (inside scrutiny). In 2005, the organisations added to their codes internal sanction mechanisms, ranging from a reprimand to limited or indefinite expulsion. In 2008, an on-line Register of Interest Representatives was introduced.41
The third kind of regulation which the Commission imposes is towards itself. There were attempts to unify the rights and obligations of the Committee employees, especially the way of behaviour of the public servants to the public. Several measures were initiated with respect to that: so called Staff Regulations, Code of Good Administrative Behaviour formalizing the standards of the professional ethics and also the communication policy for support of the professional ethics of the lobbyists were defined and enforced.
In 2011, a joint Transparency Register was introduced by the Interinstitutional Agreement between the European Parliament and the Commission.
41 It is noticeable that it does not bear the name of Register of Lobbyists but Register of Interest Representatives as some participants of the internet discussion in the framework of the European Transparency Initiative how to improve the transparency of European institutions were against the designation ´lobbyist´.
Attachment No. 2: Development of the Lobbying Regulation in the Czech Republic
The history of regulation started only after the EU accession in 2004. The first attempts were initiated by the Prague think-tank Institute for Economic and Political Culture (IPEK) whose members are e.g. Karel Müller, Pavel Bratinka and Pavel Kohout, among the other specialist in the given area. Their strategy was to analyse the situation in the exemplary states such as the USA, United Kingdom and Poland and to formulate recommendations for the Czech environment on the analyses basis. Finally, a brochure was issued and distributed to all governmental and nongovernmental institutions, followed by talks with political subjects (both parliamentary chambers and governmental institutions) and seminars on lobbying (IPEK, 2004). However, the initiative has finally turned out not to be enforced in the legislative process.
The next unsuccessful proposal in the regulatory process was seconded by the Chairman of the Chamber of Deputies of that time Lubomír Zaorálek from the ČSSD party. He came up with the Ethical Code of Members of Parliament of the Czech Republic which should have lead especially to the enhanced credibility of the Parliament Members (MPs). The proposal was therefore focused on the ones who are lobbied. The problematic of lobbying was indirectly mentioned in the Article 3 stating that ‘‘Every MP undertakes to notify the law beyond any gift, income or other property advantage which he or a person close to him gets in the context of his mandate’’ (Respekt institut, 2012). Secondly, the code required (Article 5) the MPs to meet only representatives of such lobbying and interest organizations which had been registered according to the internal rules of the Parliament (Respekt institut, 2012). The code was subsequently swept of the table42 and proclaimed as an empty gesture by the opposition, with regard to the questioning of the initiator´s credibility (Laboutková, Vymětal, 2010).
In 2007, lobbying problematic was incorporated into the Government Policy Statement of the ODS government: ‘‘The government will prepare legal measure to regulate lobbying, including a more transparent system of registration.´´ (Czech Government, 2007). However, the register remained unrealized.
42 The proposal was signed only by 9 Members of the Parliament (Respekt institut, 2012).
The most compact proposal till that time was introduced in 2009 by the ČSSD members of Parliament Bohuslav Sobotka and Jeroným Tejc. They proposed a new bill on lobbying which suggested establishing lobbying as an entrepreneurial business and requiring a trade certificate (free trade) and a duty of being registered at the Ministry of the Interior. It also imposed an obligation for the public officials to publish contacts with the lobbyists. The proposal was refused by the Parliament already in the first reading. Subsequently, this proposal was revised taking into account previous comments and submitted to the Chamber of Deputies in February 2010. A lobbyist was newly defined on the basis of a continuously conducted activity which was considered as more than 4 lobbing contacts in a quarter. Furthermore, it contained a change in the Conflict of Interests Law and in the Rules of Procedure of the Parliament. The second law proposal was affected by the same faith as its precursor and after being accepted by the Parliament it had been finally declined by the Senate in June 2010. The proposal was not discussed since then due to the new election to the Chamber of Deputies in 2010.