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Regulation of Lobbyists in Scandinavia -- A Danish Perspective.

TRADITIONALLY, a salient feature of the Scandinavian political systems has been to involve interest groups in the policy-making process without having formalised regulations. However, within the last couple of years, the political systems have experienced changes in the external environment. The exact effects of these changes and the consequences on the political culture are not yet clear, but they have certainly generated demands by members of parliament for the regulation of lobbying. The Danish case illustrates the latest developments in Scandinavia. We will explain why there is no regulation in Denmark but tendencies in that direction. It is not seen as essential to the political system so long as it is dominated by corporatism. However, when the structure is challenged by pluralistic streams, e.g. a spread of political power and an increase in the number of players, there is insecurity in government, which leads to such demands.

Corporatism is still a reality

Historically, the Scandinavian Welfare Model, characterised by substantial state intervention, many political parties, high taxation and numerous interest groups, has involved a partnership between major organisations and government (parliament and administration). Systematic involvement, in particular formalised cooperation at all levels, has been a central element of Scandinavian corporatism. The major interest groups enjoy a kind of monopoly in representation; professional lobbyists and other groups in the society have had much difficulty achieving recognition. The political culture has accepted this structure and the door has always been open for the major organisations. In public administration, it has been a tradition for decades, indeed an objective, to involve recognised groups in the preparation of legislation within their area of interest.

In Denmark, the institutionalisation of interest groups takes place through their participation in boards, councils, committees and hearings. However, there is a tendency for only the strongest to be accepted as permanent members of the structure. It is characteristic of the system that decision-making routinely involves all `representative stakeholder groups' to such an extent that major groups can interpose a veto in negotiations with the government.(1) It is the very close relationship between the public and private organisations that defines it as corporatism (political power is exercised in close cooperation and interdependence between the state and the major organisations).(2) In Denmark, important political decisions are made by the state, the trade organisations and the unions in an intimate partnership.

There was an increase of the total number of public boards, councils, committees, etc. from 1945 to the 1980s (rising from 413 to 732) and a decline from the 1980s to 1995 (dropping to 369). The number which have members from interest groups rose from 202 to 537, then dropped to 246. The forms of interaction between interest groups and public administrations have changed in the same period of time. From the 1940s until the 1980s, it took place through the formalised structures mentioned above, but since then there has been a substantial transition to more informal contacts and informal committees.(3) If we take this into account, and recognising the considerable number of major interest groups represented, the total number of contacts has in fact increased -- which suggests that corporatism is still a part of the political structure.

The largely corporatist structure seems to have been accepted in the political culture and no organisation protested against it: because all relevant stakeholders were involved at some time in the process, they had no reason to complain.(4) In such corporatistic systems, lobbying has not only been integrated but legitimised from the beginning. Indeed, it is so institutionalised that it is not considered lobbying by insiders. Therefore, there is no need for formal regulations: the rules of the game are well known by the players; mutual trust and respect are constituent phenomena. Lately, however, the external environment has changed. More and more groups want influence in the policy-making process. National and international companies have begun to participate, not only through their trade organisations but directly in the political process. The number of professional lobbyists is growing and the national arena has become international. Some of the players have not yet adjusted to the new tendencies, so what we are seeing is the adaptation of the political system to the changing structures and a new political reality.

Two factors are mainly responsible for the changing behaviour of interest groups and organisations in Scandinavia. Primarily, the policy process has been internationalised. Since policy decisions are increasingly made in the European Union, more complex political and administrative structures have been established and more players have entered the field. New channels of influencing the policy-making process follow Danish and Swedish organisations and businesses directly affected by the new multilevel policy-making, have altered their behaviour. They have become better organised, more directly involved, not only using traditional channels of influence, but lobbying directly and hiring professional lobbyists. Information technology has also opened up the possibility of less well-resourced interest groups participating in the political game. Access to knowledge is much easier than before. Through the internet and the multimedia, citizens can acquire information and target messages to MPs and officials. The result is lobbying in more pluralistic context, and interests have to struggle to obtain influence.

The existing regulation of lobbying

There is no formal regulation of lobbyists in Denmark or for that matter in Sweden. The purpose has nevertheless been pursued through reverse means: the attention has focussed on politicians and public administration. It is the behaviour of public employees that is moderately regulated through the Danish constitution and the Administration Act. In order to understand the limited Danish regulation system, it is necessary to know something about the administrative regulations as well as the unwritten rules that apply.

The Danish constitution states that MPs are to follow their convictions and not any directions from their voters. In other words, they are expected to act in ways that conform with their responsibility to promote the collective welfare. They must also respect the constitution and the Rules on Procedure for Parliament. Several measures have been taken to ensure that each MP is capable of acting independently of external interest groups. They involve party subsidies based on the number of votes at general elections, secretarial support, a high -- but not exorbitant -- salary and an attractive pension scheme.

Study of this framework of rules shows that Danish MPs are not much restricted by regulations. They are not prevented from taking advantage of their position for financial benefit, joining boards or engaging in business ventures for example. Conduct largely depends on the unwritten rules. They are expected to behave responsibly and act according to high moral standards. Their non-parliamentary activities should never give occasion for questioning their public position and intentions. The unwritten rules draw attention to the crucial importance of political culture. For instance, it would be regarded as an insult if an interest group attempted to bribe an MP, but there are no regulations that prohibit the receipt of gifts. In extreme cases of unacceptable behaviour Parliament could decide, through a majority vote, to find an MP guilty of `disloyalty' -- and the MP in question would have to resign. There are also unwritten rules about how interactions between MPs and interest groups should be conducted. In order to set up a meeting with a politician, a letter explaining the position and the purpose of the meeting should be addressed to the MP, who may or may not agree. If an interest group attempts to lobby by mail, it has to make sure that its intentions are made clear. If a group approaches a parliamentary committee, it is registered and the list is then open for the public.

The degree of respect for written and unwritten rules is striking in every corner of the Danish political system -- and MPs are no exception. (However, they are expected to vote according to their party and support their party's official policy of the party, even if they disagree, and there is a high level of party discipline.

Probably, the most striking feature of the legislation on public administration is that civil servants are prohibited from taking part in decisions where they may have a private interest of any sort (financial, political, etc.) that could raise questions about their objectivity or good judgment. According to the criminal law no public employee is permitted to receive unjustifiable presents of any kind. There are, of course, also rules relating to the positions held.

In regard to the unwritten rules, many ministries register the groups that approach the ministry. Lists of groups that receive material from the ministry are also made available to the public. Also important in setting the framework for the public administration is the Law on Transparency and Public Access to Public Administration of 1985. It was adopted because of serious management problems in the 1980s connected to formal and informal relations with interest groups in boards and committees. The objective is to ensure that the public has access to public records and to secure transparency in the administration. (None of these requirements apply to parliament, legal courts or the audit office.) Access is limited by rules relating to privacy and national security. In addition, only in certain circumstances are citizens permitted sight of internal working papers, letters between ministers dealing with legislation, or documents relating to court cases. What is important is that public administration must ensure openness in its work and answer any enquiry regarding public access within ten days. Despite the fact that the legislation contains numerous exemptions from the general principle of transparency, its mere existence has a considerable importance. It allows public access to significant documents from the administration and consequently the interaction between the state and interest groups can be surveyed by third parties, which is in contrast to the relatively closed corporatist structures.

All these briefly described regulations and unwritten rules have to be understood and respected by groups that want to build long-term relations with civil servants or MPs. Groups that do not comply, will have difficulty in taking part in any positive interaction in the future.

The reflection of changes in the external environment

After a long tradition of corporatism in Scandinavia, where only representatives of particular organisations and the government participated in the policy-making process, the phenomenon of professional lobbyists is new. A situation where many different interests, formally or informally, press demand on government, or hire professional lobbyists to do so, has appeared over recent years. When the political debate centres around regulation of lobbyists, however, it must be remembered that its advocates primarily call for regulation of newcomers, not regarded as part of the established political community; it is not by any means an attempt to impose strict control on interest groups already well established.

The recent debate in Denmark was started by the former president (Speaker) of the parliament, a Social Democrat, Erling Olsen, in 1996. He was worried that a substantial part of the lobbying was taking place behind closed doors and that regulation was therefore required.(5) He advocated strict rules on lobby activities and a registration in order to secure transparency.(6) He explained that his position was brought about by the alarming tendency of former MPs and political secretaries to become professional lobbyists, drawing advantages from their former insider positions. He only focused on professional lobbyists. Interest organisations like those of workers, farmers and industry he considers a legitimate part of the political system: `In this case we know who is approaching us and what positions are represented.'(7) This illustrates the experience of trust that the traditional political culture in Denmark has created among established players. Representation of interest through major interest groups is not called lobbying!

The definition of lobbying is often characterised by the context in which it is used. Erling Olsen, along with many other MPs, defined it narrowly in order to focus on the behaviour of professional lobbyists. Here, however, we understand the concept more widely, as the formalised and non-formalised interaction -- direct or through representatives -- between interest, organisations and the political system.(8) This gives a more realistic idea of participation in the policy-making process. If one has to regulate lobbying, it is vital to identify who to regulate, why, and what the consequences may be.

We have noted that relations with established interests are built on mutual respect and not considered lobbying. In contrast, the general sentiment is that the `bad boys' are to be found in the public relations and public affairs industries, in consultancies and in law offices. They are considered real lobbyists. The word has negative connotations, including corrupt politicians and non-democratic agreements; the lobbying professionals are somewhat shameful too; the idea of selling services to varying clients demanding influence is perceived as offensive as well as a threat to the established practice.

In recent years, several companies have offered their services as professional lobbyists. In Denmark the market is growing fast. In the lobby industry it was estimated that the revenue in 1996 among private lobby firms was to be Dkr 10m.(9) Among these one finds respected traditional communication firms as well as newly established lobbying firms offering a wide-range of services.(10) Their clients are mostly private and public companies, as well as trade organisations and other interest groups. The same trend prevails in Sweden. A report addressed to the Constitutional Commission (Forvaltningspolitiska Kommissionen) in 1996, showed that lobby activities had increased in Sweden. Specialised consultancy firms and public relations agencies had increased their role in the policy-making process. According to the industry, more than SKr 20m is earned from lobbying service -- and it is rising.(11,12)

Both Danish and Swedish consultancies are organised in associations with charters on ethical behaviour. There are no direct sanctions on companies which break the rules, but the charters indicate that they have a keen interest in setting minimum requirements to regulate their own behaviour.(13) The objective of the industries, is to obtain a position of respect. The charter came about when the industry realised that it had a credibility problem. It was just a question of time before a public debate would have cast doubt on the activities of public relations and lobbying firms. In the eyes of the industry, this could easily have lead to strict governmental regulations.

Looking back on the Danish debate, we see that a majority in the Danish parliament rejected the registration of lobbyists provided that their activities took place in the open.(14) A small survey of MPs concluded that most were aware of who was lobbying them and why. As a Liberal MP commented: `It is an underestimation of the member of parliament if Erling Olsen thinks that we do not know how to separate the sheep from the goats. The Liberal Party does not support any kind of criminal catalogue.(15) A Conservative MP stated that lobbyists were necessary for politicians in their everyday activities. Other parties were not hostile to the idea of registration: they thought the existing system sufficient for the moment but might consider the idea in the future.(16) Lately, one can find a tendency of unease among some political groups about lobbying. They are not used to direct interaction with professional lobbyists or private companies. Support of regulation then seems like a reaction of self-defence and it is not really clear why, who and how they want to regulate.

The lobbying issue has also received attention in the media.(17) In 1996, discussion focused on growing professional lobbying. In 1997 another issue surfaced, namely the regulation of public servants and the behaviour of MPs in relation to businessmen in the so-called VL-groups.(18) With more than 1,600 members from all top positions in Danish society (highly positioned businessmen, civil servants, MPs, judges and other opinion leaders) this is one of Denmark's most exclusive networks. They meet eight times a year in fifty groups of around thirty members to discuss political and economic issues. The private interaction between highly positioned figures was considered potentially dangerous by many MPs and academics, one of whom wrote: `It is a problem, if one is in connection with other leaders that frequently are clients in one's official activity.'(19) A Danish Ombudsman declared that public leaders should abstain from situations that could give rise to a suspicion of dependency. The Prime Minister entered the debate, saying that he would not prevent officials from participating in VL-groups, considering the interaction with business leaders progressive but emphasising that it ought to take place in the open. He also referred to the Administration Act mentioned earlier which refers to conflict of interests: it was not the government's function to regulate public servants' conduct in detail, that should be their own responsibility. This again illustrates the cultural trust in the existing regulations and unwritten rules.

In Sweden, many similarities can be seen. There are no formal regulation of lobby activities but debate on whether it should be imposed has been intense for the last couple of years. In the Parliamentary Committee on Constitutional Affairs, the issue has been on the agenda since 1982. It carried out a comprehensive research on lobby activities. For example, its 1982/83 report focused on the pros and cons of limitations on lobby activities, concluding that regulations would seem unnecessary in a context where free and open political debate flourished and there were no reasons to fear lobby activities. The same conclusion was supported by the governmental White Paper 1991/ 1992. After research on the distribution of political power in Sweden, a government White Paper also concluded that there was no sound basis for regulations.(20)

In general, we have explained that even though there are no specific regulations regarding lobbyists in Scandinavia, it is incorrect to conclude that no regulation of lobbying takes place in the respective societies. There are both written and unwritten rules regulating the interaction between interest groups and public authorities, MPs, etc.

These regulations and rules have been an integral part of the Scandinavian political structure due to the historical involvement of interest groups in the policy-making process. Since the beginning of the modern welfare state, interest groups have been closely integrated into the political structures to such an extent that they are in fact part of the structure. Therefore, there is trust, mutual understanding and interdependence between the players. This is reflected in the set of regulations and rules that exist.

Written regulations are few and mainly focus on officials and MPs rather than on the lobbyists, they are primarily concerned with conflicts of interest. Some MPs have lost their confidence in the adequacy of the system as new interest groups and professional lobbyists have come on the scene, but a majority of MPs believe that they will adapt to the present system with its unwritten traditions. Therefore, Denmark and Sweden still have no regulations directly applying to lobbyists. Lobbying is now a reality in the Scandinavian political systems. One sees the traditional corporatist systems struggling to adapt to a changed world.

(1) H. Bregnsbo and C.N. Sidenius, `Lobbyisme i praksis', Okonomi og Politik, 3 (1995).

(2) Ibid.

(3) O.K. Pederson, `Organisationer og Demokrati', Samfunds Oknomi og Politik, 2 (1995).

(4) Loc. cit.

(5) Jyllands-Posten, 24.9.96.

(6) He referred to the Lobbying Disclosure Act of 1995, where lobbyists have to register in both the Senate and in the Congress.

(7) Jyllands-Posten, 24.9.96.

(8) This definition is very close to Bregnsbo and Sidinius, loc. cit.

(9) Markedsforing, 18.9.96.

(10) Among the traditional PR firms offering lobbying services in Denmark: KS Consult, Brinkmann, Mannov Consult, Burson-Marsteller; among newcomers: Waterfront, B-Comm, etc.

(11) Dagens Nyheter, 1.2.97.

(12) In Sweden Kreab nd JKL are the biggest lobbying firms; others are Burson-Marsteller, Jerry Bergstom, Adreasson PR, Gullers Gropu, Carta Communication, and newly on the market Hill and Knowlton.

(13) In Denmark the organisation is called Public Relations Foreningen and in Sweden PRECIS.

(14) Jyllands-Posten, 25.9.96.

(15) Loc. cit.

(16) Loc. cit.

(17) See Politiken, Jyllands-Posten, Berlingske Tidende and Markedsforing.

(18) See Jyllands-Polsten, Politiken, Bosen and Berlingske Tidende in August and September 1997 and Jyllands-Posten, 17.3.96.

(19) Jyllands-Posten, September 1997.

(20) Statens offentliga utredningen. Demokrati och makt i Sverige, Maktutredningens huvudrapport, 1990.
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Author:RECHTMAN, RENE E.; Larsen-Ledet, Jesper Panum
Publication:Parliamentary Affairs
Geographic Code:4E0SC
Date:Oct 1, 1998
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