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Walmart's lobbying efforts may have drawn sharp criticism in India, but the US retail giant continues with its hectic lobbying activities for an easier India entry in the power corridors of Washington, showing how critical a tool lobbying is for corporations wanting to influence policy legislations to suit their business goals, not just in their home countries but across operational geographies. In India, there is currently no clear definition to segregate legitimate and illegitimate means of influencing government policy, even though covert hush hush lobbying by splinter industry groups has gone on for years.
In the wake of the probe into Wal-Mart's lobbying in India remaining inconclusive, and the revelations in the Niira Radia tapes and Coalgate scandal exposing cozy corporate-government equations, lobbying has become a dirty word, an euphemism for bribery as was alleged by Ravi Shankar Prasad of the BJP a few months ago. It is in order to bring more clarity to the issue, that the government is reportedly considering a framework to define what lobbying exactly means, and how it can be legally used as a business tool by companies wanting a bigger say in a participative democratic process.
Globally, countries like the US, UK , Canada and Australia have clear cut laws defining lobbying, with explicitly stated rules and regulations, financial disclosure norms and penalties for non compliance. India too needs a law, the effectiveness of which will depend on how full-proof it is in defining what lobbying means, say experts.
"We need a clear and comprehensive legislation that defines legitimate lobbying and includes clauses on the nature of penalties and punishments for non compliance etc. A lot of thought needs to be given to nitti gritties like the scope of who and what it will cover, because a simplistic law that leaves out the nuances will be open to misuse" says Daljeet Titus - Founding Partner of Titus & Co., who advises clients on USFCP (US Foreign Corruption Practices Act) due diligence audits.
Titus recommends that a law on lobbying needs to be accompanied in tandem, by reforms on electoral funding by corporate entities, to ensure that lobbying does not become a political tool to thwart business or a corporate tool to entice policy favors. In the absence of reforms that eliminate the opacity of political funding by corporate entities who back up lawmakers and gain access to policy decisions, "the balance between legitimate and illegitimate lobbying could be endangered" according to Titus who believes corporate entities often make illegitimate contributions to political parties as quid pro quo, under the garb of business dealings.
But a clampdown is not what India needs say experts making a case for legitimising lobbying. They seek regulations that keep in mind the socio-political milieu and adopt a balanced approach that is practicable but not crushing.
"Too high disclosure requirements could drive lobbyists underground while too low penalties may not act as sufficient deterrent for law-breakers. It may be noted that the Right to Information Act, 2005, also stresses on voluntary disclosures by public authorities. If public authorities pro-actively disclose information, it can complement the disclosure requirements under a lobbying law." say Kaushiki Sanyal Senior Analyst at Bharti Institute of Public Policy - Indian School of Business and Harsimran Kalra - Public Policy Scholar at The Hindu Centre for Politics and Public Policy writing for the Mint newspaper earlier this year.
Given the tardy pace at which any reform process moves in New Delhi, a new definition for lobbying or a law regulating the practice would be some time away presumably, as it has been mulled over since 2010 with no concrete action. But experts are skeptical anyhow, about an effective legislation being drafted, given the conflicting interests at play.
"I would be skeptical about this unless there is a huge amount of political will to do it. You might either see nothing, or see something that will be prone to misuse. Politicians will not turn off the money tap on themselves entirely through something powerful " says Titus.
Meanwhile, another persuasive stream of thought believes that giving lobbying any legal framework by defining it would be a fundamentally flawed move by the government. Corporate lobbying in essence amounts to powerful companies using their financial, political and social clout to pitch for a policy that is tailored to favour to their area of business. And this goal might bear out a direct conflict of interest with the government's paramount aim of upholding public interest.
The US auto lobby for instance has often been accused of stifling public transport. An University of Kensas study in 2009 showed that tax lobbying in the US earned a whopping 22,000% return to firms, reflecting the scale to which lobbyists can sway policy-making and buy influence.
"We don't need to blindly follow what the developed world is doing. Legitimising lobbying, if anything will blur the lines between crony capitalism and plain lobbying. Why is it that whenever we have a problem, rather than solving it, we legitimize it?" questions Devinder Sharma, Food & Trade Policy Analyst, referring to the government's earlier proposal to provide a one-time amnesty to recover black money stashed abroad.
It is without a doubt, an extremely polarized debate and the government has admitted that more consultations are needed before a broad framework is arrived upon. While no structure is likely to be a please all, upholding national interest must be the chief governing principal for any such legislation insist policy experts.
