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What Happens When Heads Of State Also Start Lobbying?


The chorus is getting louder. So what if Wal-Mart had spent Rs 125 crore ($25 million) in lobbying to gain access to the lucrative $500 billion Indian retail market. After all, it's not a one-off case, US firms have been doing it for a long time, says another news report.  Not only the print media, almost all TV discussions in India in the past few days have by and large carried the same line. Foreign Direct Investment (FDI) in retail got Indian Parliament’s nod last week after an acrimonious debate. 

But what worries me more is when Heads of State start indulging in lobbying. If you have followed the news reports regularly, all Heads of State of major economic powers who visited India after 2009 had lobbied strongly in favour of FDI in retail. US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholos Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. US Secretary of State Hillary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying with West Bengal chief minister Mamata Banerjee when her party, Trinamool Congress, was part of the UPA-II Coalition.

The demand is for legalising lobbying, following the pattern in the US, and thereby bringing in some regulations to make it more transparent. After all, the US has 12,220 lobbyists (consultants, lawyers, associations, corporations, NGOs etc) registered in 2011. There are over 15,000 lobbyists based in Brussels alone, who try to influence the European Union legislative process. In India, except for the industry lobbying groups — Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham India) — not much is known about the other players in lobbying. Lobbying can certainly be brought under regulations for ushering in some level of transparency, but how does one tame the Heads of State who indulge in lobbying?

There are layers at which lobbying operates. It starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets. Even the Heads of State join in, as has been established in case of FDI in retail.  

Although the Indian government has agreed to institute an inquiry in to the specific case of Wal-Mart lobbying to know who was paid, if some payments were made at all, to influence the political decision making, the fact remains that the rut runs much deeper than what is visible. Take the case of Dow Chemicals, which later bought Union Carbide. According to a news report, Dow Chemicals had in 2011 spent $8 million (Rs 50-crore) to seek market access in Thailand, India and China. Well, this is only one of the activities that companies often indulge in. Prior to lobbying activities in 2011, the US Securities and Exchange Commission had in 2007 fined Dow Chemicals $325,000 for bribing Indian officials to fast track permission to sell their pesticides brands that are banned in the US and many other countries.

India had instituted a Central Bureau of Investigation (CBI) inquiry into the bribery case. How can we expect these companies to be following different yardsticks for lobbying and bribing? And knowing how the Union Carbide was let off the hook so easily for its role in the Bhopal Gas disaster, big business will never be held accountable for its acts of omission and commission, forget about criminal culpability.  

Monsanto, the global seed and technology giant, is known to be aggressively pursuing the introduction of controversial genetically-modified crops in the developing world. In 2005, the US Department of Justice had charged Monsanto with bribing Indonesian officials, and the company had agreed to pay a fine of US $1 million. Interestingly, the bribe amount of $50,000 to a senior Ministry of Environment official was shown as 'consultancy fee' in the company's books. In other words, it was shown as a lobbying fee. The GM industry has set up an NGO for lobbying purposes. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) has an office in India, like many other developing countries. Coming back to Wal-Mart, the New York Times had sometime back taken the lid off a massive scandal by Wal-Mart in Mexico — where it allegedly paid bribes to seek expansion of its stores. In India too, Wal-Mart faces an Enforcement Directorate probe over allegations that the company violated foreign investment rules by investing $100 million with its Indian partner much before the approval came from the government.    

I don't therefore understand how we can believe that lobbying is completely a pious and legitimate activity unless we try to see how sometimes the same companies bribe officials, and that includes economists, agricultural scientists and media owners, to get its way through. Lobbyists have been known to be moving in the corridors of power, and more often than not carrying a bag of money. Ask any business and political journalist and they will tell you the who's who of the corporates who have their lobbyists moving in the corridors of power. A large number of corporate lobbyists have been successful in the job, and seemingly operate silently without any public glare. Looking at the amounts being spent on lobbying it now becomes apparent that most decisions that you think have been made in the national interest are actually swayed by money bags.

Lobbying has over the years become more sophisticated. It is not only a particular bureaucrat or a government official who gets an all-paid foreign trip or jewellery or other expensive gifts (like the way doctors are bribed by pharmaceutical companies as part of the lobbying activities to promote their brand of drugs), lobbying is now becoming a diplomatic activity. Several times we know how the US Ambassador in India (backed by the USIS and USAID) for instance had lobbied hard to push American commercial interests, including the nuclear treaty. EU diplomatic missions regularly hobnob with Indian officials lobbying on behalf of their respective businesses. Sometime back, Wikileaks had exposed the use of diplomatic channels for lobbying across the world. Diplomatic lobbying also comes with arm-twisting, if required. Many such instances were exposed in Wikileaks.

Devinder Sharma is a distinguished journalist, author and is respected for his views on food and agricultural policies. He tweets at @Devinder_Sharma  

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