A necessary partnership

Despite negativity surrounding the industry, Domini Stuart discovers that third-party lobbyists can prove to be a critical component to any business engaging with government, as long as it is effectively managed.

Last year’s Gallup Poll of the most trusted professions in the United States put lobbyists firmly at the bottom of the list. As Carl O’Brien, chief reporter at the Irish Times wrote recently: “The very word is tainted, conjuring up sinister images of brown envelopes, undue influence and unethical decision-making.”

At first glance, the recent Independent Commission Against Corruption (ICAC) inquiry has done little to improve the industry’s reputation in Australia. But according to Justin Di Lollo, a director at Australia’s biggest lobbying firm, Hawker Britton, who also oversees all government relations companies for Hawker Britton’s owner, the STW Group, to think that the ICAC’s findings cement the link between lobbying and corruption is to stumble at the first hurdle. 

“What we have seen at ICAC is almost exclusively to do with political donations,” says Di Lollo. “It is a common mistake to put everything relating to business discussions with government into one bucket and call it lobbying, but handing thousands of dollars to a political candidate is not lobbying, it is trying to buy a favour.”

Later in his article, O’Brien describes lobbying as a legitimate activity, which is, in many ways, a cornerstone of the democratic process. It is also a regulated activity and, while some argue that Australian regulations do not go far enough, and that our sanctions are very weak compared to those of countries such as the United States, others see the ICAC inquiry as affirmation that regulation is working.

“The people coming to the adverse attention of the ICAC are not registered lobbyists,” says Gary Humphries, special counsel at 1st State Government and Corporate Relations and a former federal senator and ACT chief minister. “I believe that only one registered lobbyist was on ICAC’s radar, and that no serious accusations have been levelled at him.”

A burgeoning industry

Twenty years ago, a handful of public relations companies hired former politicians or political staffers to help some of their clients communicate with government. Since then, this niche activity has exploded into the multi-billion dollar lobbying industry. Di Lollo describes today’s lobbyist as: “Someone who helps organisations to understand government processes, government cultures and government people, in order to fit the key of the private sector into the lock of government and make the barrel turn.” He also believes the industry will continue to grow as more and more businesses recognise the extent of their exposure to government decision-making.

“Gradually, businesses are waking up to the fact that they need government approvals in order to go about their day-to-day business, or that regulation under consideration could make them more or less competitive,” he says. “But, as yet, very few are identifying this exposure as a risk that needs to be mitigated, or an opportunity that needs to be exploited, with the kind of professional rigour that they would apply automatically to other aspects of their business.

“Not long ago I met an executive from a multi-billion dollar American company which is doing a comprehensive government relations strategy for the first time. When I went through the six broad reasons why a company might need to consider its exposure to government decision-making they ticked four out of six boxes. Had this been any of the other inputs into their business they would have been on top of this risk for decades.”

Today’s lobbyists do very little actual lobbying. “We spend most of our time talking to clients about what they want from government then helping them to align their proposal with what the government is seeking,” says Humphries. 

It is a service Dr Anthony Sive GAICD finds invaluable. As managing director of Canrock Asset Advisory, he has overseen very complicated property developments, which would never have seen the light of day without very careful interaction with government. He also sees government as a huge and impenetrable maze that any outsider would struggle to navigate.

“First you have to be able to think like the politicians and the bureaucrats,” he says. “Government is very much about democracy, but businessmen and women do not think democratically at all. At best, business is a benevolent dictatorship.

“Political organisations are also built on very complex and varied relationships that we as business people would not begin to understand. For example, knowing where to start is very important in politics. People do not like to get information through the grapevine, or to have to admit they know nothing about a matter that should have gone to them first. A lobbyist can guide you through all that.”

In government, the answer is rarely as simple as ‘yes’ or ‘no’.

“You might think ‘I want this coal mine and I want it now’ but it is very unusual for one government official to get his or her way,” says Di Lollo. “You have to be prepared to compromise, and a good lobbyist brought in early can help you to shape your proposal and then negotiate throughout the ongoing approvals process so that you end up with the best possible outcome, which might be 70 or 80 per cent of what you wanted.”

“John Smith” works for a registered charity in a sector that is very much at the mercy of public policy decisions. He uses lobbyists to make sure they are delivering the right message to government in order to support the sector and, ultimately, their clients.

“It is really difficult, if not impossible, for one organisation or industry body to persuade the government to change its views completely,” he says. “When we do our lobbying, it is always honed to a message that government is already delivering. However good an idea, it needs to be articulated properly and to tie into government policy in some way, and that is where a lobbyist is particularly useful to us. For me, using a lobbyist is a no-brainer — it is on par with employing a third-party lawyer or any other specialist adviser when you need a particular kind of help.”

A dubious reputation

John Smith is not his real name; he believes that using a lobbyist gives his organisation a competitive advantage so he would rather keep the strategy to himself. But there are others who choose not to advertise their association with lobbyists for reasons of reputation. Misguided or otherwise, many people regard lobbying with something close to contempt, so some organisations would rather turn away from lobbyists altogether than risk damaging their public image. And, as Di Lollo points out, regulation may be exacerbating the situation.

“Professional lobbyists love the additional transparency that comes with regulation,” he says. “We want a very bright light to be shone on our industry because that will force the tiny minority who want to do things in a shonky way out of the shadows. But the current legislation requires everyone who uses a lobbyist to appear on a public register. Not everyone wants to do that so, in a way, it has created a disincentive.” 

Sive believes that effective lobbying is predicated on good behaviour. “Everything I say is based on the premise that you want to do the right thing — that you have the broad community in mind and that you are not trying to get something over on someone else,” he says. “Of course you have to take the same care in choosing a lobbyist as you would a lawyer, an accountant or even a doctor, but the vast majority of business owners want the best people on their team, including honest lobbyists.”

A member of the board

Some organisations might still be tempted to go it alone — perhaps by recruiting a director with lobbying skills or, at least, government connections.

“Undoubtedly boards will feel they need to explore alternatives in the current climate but, at the end of the day, if you have a problem which demands a very considered and effective response you need the best possible advice,” says Humphries. “In the case of influencing or presenting ideas to government, it happens to be lobbyists who have that expertise.”

Unless a company has a consistently high level of exposure to government, lobbying skills will only be required occasionally. The government environment is in an almost permanent state of flux, so a director’s contacts may not be relevant for long. And the complexities created by three levels of government make it difficult for one person to have the breadth of experience, which may be required across a range of projects.

“We had a client who needed a development approval on an industrial property and finding a lobbyist who had very specific experience in local government saved us an awful lot of time,” says Sive. “I have also worked with lobbyists from both sides of politics simultaneously on a project that was going to extend beyond an upcoming election. We could not pre-empt the outcome so we wanted to make sure that both sides were properly briefed and that we had bipartisan support. The lobbyists recognised this as a pragmatic approach and were happy to work together.”

Smith values the control that comes with using a consultant. “When you are paying someone to do a job you can hold them to account,” he says. “And directors are busy people. You cannot assume they will be able to commit as much time to a project as you would expect from a consultant or, indeed, as much time as it needs.”

Directors’ time might be better spent on thinking more deeply about the nature of their interactions with government and the possible impact of their exposure to government decision-making.

“I believe that boardroom decisions should be around whether they are going to be passive, putting in proposals and hoping for the right answer, or whether they are going to take active steps to interact with government in a more positive way, not questioning whether they should be using a lobbyist or not,’” say Di Lollo.

All-round benefits

Sive believes that careful interaction with government can benefit the community as well as the companies involved.

“In our case, properties that have been dormant for years have been revitalised — a good outcome for the community that, for the life of me, I could not imagine would have been achieved without the help of a lobbyist.”

There is also an argument that lobbyists replenish government with new and beneficial ideas for public policy.

“Governments as much as corporations need to be open-minded to new ideas,” says Humphries. “Lobbyists give companies the capacity to put forward those ideas, and that is a very important contribution to good government.”

By definition, lobbying is an attempt to influence a policy outcome and, as Smith points out, not every goal is as altruistic as those his charitable organisation would like to achieve. But he also believes that lobbying is a critical component of any sophisticated business that needs to engage directly with government. It just might take awhile to convince a sceptical public that bribery, corruption and lobbying are not all lurking in the same brown paper bag.