Lobbying

The NSW Independent Commission Against Corruption (ICAC) Investigation into the regulation of lobbying, access and influence in NSW (Operation Eclipse) report released 22 June finds that new legislation or significant reform of the current Lobbying of Government Officials Act 2011 (NSW) - aka the LOGO Act - is required to safeguard the public interest against the inherent lobbying risks of corruption and undue influence. 

The report states 

Operation Eclipse is an investigation by the Independent Commission Against Corruption (“the Commission”) into the regulation of lobbying, access and influence in NSW. Unlike most investigations conducted by the Commission, Operation Eclipse was not concerned with whether any individual had engaged in corrupt conduct. Instead, it examined factors that could either allow, encourage or cause corrupt conduct or detract from the integrity and good repute of public administration. The Commission has power to make findings, form and state opinions, and make recommendations, even if the relevant conduct is not corrupt conduct for the purposes of the ICAC Act but is otherwise a matter within the Commission’s statutory functions. Lobbying, although widely accepted as an integral and legitimate activity for the functioning of a democratic system, carries inherent risks of corruption, undue influence, unfair access and biased decision-making that are detrimental to the public interest and effective public policies. An examination of lobbying practices in NSW was first undertaken by the Commission in an investigation known as Operation Halifax. A number, but not all the 17 recommendations made in its 2010 report, Investigation into corruption risks involved in lobbying, were adopted. Consequently, many of the inherent risks referred to above continued to prevail and the activities of a great many lobbyists were not made subject to robust regulation. The catalysts provided for Operation Eclipse were a minimalist legislative approach to the regulation of lobbying in NSW, in particular in relation to lobbying in a transparent and accountable way, combined with declining levels of public trust in government officials to conduct their duties and obligations. 

In this investigation, the Commission considered to what extent the regulation of lobbying under the existing statutory regime, found in the LOGO Act, is working in practice. Or, whether enhancements were needed to ensure both the actuality and the perception that access and influence in government and public administration are in accord with accepted standards of transparency and accountability. In line with evidence submitted during the investigation, the Commission has made nine key findings and 29 recommendations for lobbying reform. The recommendations made in this report emphasise the importance of lobbying regulation that promotes transparency of process and accountability in decision-making. They are directed to reassuring the community that lobbying practices are not conducted in unaccountable secrecy.

ICAC's  key findings are 

1 New legislation, or significant reform of the LOGO Act, is required to safeguard the public interest against the inherent lobbying risks of corruption and undue influence. 

A key finding of the Commission is that the LOGO Act fails to provide a proper and sufficiently robust framework to manage corruption risks. It does not provide the required level of assurance to the general public that democratic principles of transparency, accountability, integrity and fairness are being met. The enactment of new legislation for the regulation of lobbying is necessary to ensure accountability in the exercise of public office and public power. Strengthening transparency and accountability in lobbying will only be achieved through legislation that ensures such transparency and accountability. The LOGO Act falls well-short in these respects. The Commission is of the view that lobbying regulation in NSW can be readily strengthened by drawing on best practice standards. The recommendations in this report include proposals to adopt, as appropriate, specific concepts and mechanisms operating in other jurisdictions, including Scotland, Ireland and Canada. 

2 Oversight of improper lobbying and compliance with the LOGO Act could be improved. 

A dedicated lobbying commissioner should be appointed to focus on regulating lobbying activity and take on the new and expanded functions recommended by the Commission in this report. The regulation of lobbying currently falls within the remit of the NSWEC. However, the NSWEC operates under a statutory framework that was designed for the regulation of elections, not lobbying. Regulatory oversight of lobbying in NSW can be expected to be improved by creating a dedicated office. The Commission sees the need for expanded regulatory functions, which an appointed lobbying commissioner would be well-suited to perform, such as: 

• • oversight of an expanded Lobbyists Register 

• greater oversight of government officials, including through the use of investigative powers 

• additional scope to publish regulatory findings 

• duties to prevent undue influence and other forms of improper lobbying conduct. A related function would include the provision of guidance and education on integrity standards. 

3 The existing regulatory regime does not address or set out the ethical obligations for government officials who are lobbied. 

The LOGO Act makes provision for a Lobbyists Code of Conduct that is applicable to all lobbyists. A key finding of the Commission is that a robust lobbying regime must additionally address the obligations and conduct of government officials in processing and determining lobbying proposals. A statutory codification of common law and ethical obligations and standards in the form of a new “Lobbying Code of Conduct” should be formulated to apply to both lobbyists and those government officials being lobbied. 

4 There is insufficient information available to the public, civil society groups and the media about lobbying activities. 

The Commission notes that the current NSW Lobbyists Register only covers a small amount of the lobbying activity that takes place in NSW. As a result, it can be difficult to determine which groups or individuals have influenced key government decision-makers. A revised online NSW Lobbyists Register should be designed to make information available to the public about who is lobbying whom and about what. Those required to register should extend beyond third-party lobbyists, subject to exemptions for lower risk lobbying activities. While online lobbying registers in Canada, Ireland and Scotland differ in the range of information that regulated lobbyists are required to disclose, some elements of transparency are common to them all, including:  

• • the identity of those on whose behalf lobbying is being carried out 

• the designated public official being lobbied 

• the purpose of the lobbying 

• intended results of the lobbying. 

5 The local government sector faces considerable risk of undue influence and should be regulated by the LOGO Act. 

Investigations conducted by the Commission and interstate anti-corruption commissions indicate that local councils are often the target of improper lobbying. However, local government officials are not “government officials” as defined by, and for the purposes of, the LOGO Act. The Model Code of Conduct for Local Councils in NSW does not explicitly refer to lobbying; however, it does contain general obligations in relation to ethical and honest conduct, as well as more detailed material covering:

• improper and undue influence 

• inappropriate interactions 

• use and security of confidential information 

• recordkeeping.

Extending the provisions of the LOGO Act to local government would, among other matters, allow the lobbying regulator to provide guidance about the appropriate policies and procedures that would best suit the circumstances of local councils, particularly regarding matters about planning, land use, the environment and community amenities. 

6 The movement of certain former public officials between the government sector and lobbying roles is currently unregulated, presenting a risk of undue influence over government. 

In NSW, post-employment cooling-off periods are generally confined to ministers and parliamentary secretaries. Other classes of public official, including members of Parliament, ministerial staff and senior public sector executives, do not face the same restrictions. The Commission’s view is that post-employment restrictions should be considered for a broader range of officials in high-risk categories. Greater transparency about the movement in, and out of, key government roles is also recommended and could be achieved by establishing a “Former Public Officials” list. This list would contain the names of relevant former public officials who have moved into lobbying roles. 

7 The published summaries of ministerial diary disclosures are not sufficiently detailed or meaningful for the public to understand who is meeting whom and why. 

Since 2014, extracts from ministerial diaries have been published that record scheduled meetings held with external parties, including lobbyists. In their current format, these ministerial diary disclosures are not easily accessible or searchable, making scrutiny and analysis difficult. Importantly, the published descriptions are usually too short and too vague to adequately explain what the meetings are about. To ensure accountability, members of the community should be able to know which ministers have met with lobbyists and the purpose of such meetings. For this to happen, the publication of ministerial diary disclosures must be strengthened in terms of content, format and timeliness. The Commission recommends that the oversight of diary disclosures should fall to the regulator of the LOGO Act. 

8 Lobbyists are not explicitly prohibited from giving gifts to government officials. 

The LOGO Act and Lobbyists Code do not place specific obligations or restrictions on lobbyists in relation to gift-giving. Although gift-giving by lobbyists is not commonplace, this anomaly should be corrected. 

9 Recordkeeping practices in relation to lobbying activities are inadequate. 

NSW Government agencies should be required to adopt minimum standards and a model policy on recordkeeping, the disclosure of records, and protocols around scheduling and conducting meetings with lobbyists. Numerous acts, regulations and procedures require NSW public officials to validate or give an account of their decisions or record information. Open government initiatives, such as the State Records Act 1998, the GIPA Act, and Standing Order 52 of the Legislative Council are mechanisms used to acquire information, usually in relation to a government decision, that has become a matter of broad public interest. A key finding of the Commission is that greater accountability can be achieved by strengthening recordkeeping provisions and their oversight.

ICAC's recommendations are 

 R 1 That the Lobbyists Code of Conduct be renamed the “Lobbying Code of Conduct” and imposes standards and obligations on public officials with regard to how lobbying proposals are received, considered and determined. These standards and obligations will be consistent with the obligations at law that apply to the discharge of public functions and the exercise of public powers. 

R 2 That the “Lobbying Code of Conduct” includes general principles that a public official must adhere to when receiving, considering and determining a lobbying proposal, including the obligations: • to act honestly, impartially and disinterestedly • to act in the public interest and not for any extraneous purpose • not to act improperly, including by improper preferencing or favouritism. 

R 3 That the “Lobbying Code of Conduct” also sets out some detailed standards and obligations including:

a) a prohibition on undocumented or secret meetings and communications with lobbyists, which entails obligations to:

i. document all communications with lobbyists, including those held away from government premises, apart from immaterial or ephemeral communications 

ii. avoid discussing substantive matters with lobbyists in social settings

b) an expectation that a public official makes all reasonable efforts to seek the views of all parties whose interests are likely to be affected by the adoption of a lobbying proposal 

c) a prohibition on improper preferential treatment of a lobbyist on the basis of any existing or former relationship (for example, a conflict of interest situation) 

d) that a public official should discourage lobbying representations relating to proposals in situations where there are formal assessment procedures in place for determining the merits of the proposal, and that these procedures (for example, those relating to development applications, tenders, grants and unsolicited proposals) offer a more suitable channel through which representations can be made 

e) that a public official must not divulge information to lobbyists that would provide them with an unfair advantage over other interested parties, including other lobbyists 

f) a requirement to report any reasonably suspected breach of the “Lobbying Code of Conduct” to the lobbying regulator. 

R 4 That, with respect to the proposed “Lobbying Code of Conduct”, the obligations on, and oversight of, government officials should extend to circumstances where an official is “lobbied” by a person or entity acting in their/its own interests; that is, not “representing the interests of others ”. 

R 5 That the lobbying regulator be empowered and resourced to:

• develop minimum standards and a model policy relating to interactions with lobbyists and others making representations to government, which should: – address recordkeeping, disclosure of records and protocols for organising and conducting meetings – prohibit undocumented or secret interactions with lobbyists or other persons making representations to government 

• ssess and report on agencies’ compliance with minimum standards 

• give advice to agencies and individual government officials about compliance with minimum requirements and better practice 

• liaise with organisations such as the State Archives and Records Authority and the Information and Privacy Commission 

• direct an agency or public official to provide any lobbying-related documents or records.

Such a direction would operate in a manner similar to the power in s 15 of the State Records Act 1998. In addition, the lobbying regulator should, subject to a public interest test, have the power to direct an agency to make public any document or record concerning lobbying communications. 

R 6 That all public sector agencies subject to the LOGO Act be required to adopt policies and procedures that conform to minimum established standards issued by the lobbying regulator. 

R 7 That all professional lobbyists (third-party lobbyists and in-house lobbyists) be required to register with the lobbying regulator and make entries into the NSW Lobbyists Register. 

Exemptions for organisations that are small or lobby infrequently should apply (based on the Scottish or Canadian systems). As is currently the case with third-party lobbyists, all lobbyists should:

• provide relevant details about their organisation and staff that engage in lobbying activities 

• complete mandatory training 

• disclose if they represent a foreign principal 

• file statutory declarations with the lobbying regulator. 

R 8 That all regulated lobbyists on the Lobbyists Register should disclose:

• date and location where face-to-face lobbying communications took place 

• the name and role of the government official(s) being lobbied 

• a description of their lobbying communications 

• a description of the purpose and intended outcome of their lobbying communications 

• whether lobbying was undertaken on behalf of another party.

Exemptions, similar to those in Scotland and Ireland, should be introduced. 

R 9 That lobbyists should file information electronically that is then automatically published on the Lobbyists Register. 

The register should allow any person to alert the lobbying regulator of any information that is considered missing or inaccurate. 

R 10 That the lobbying regulator should have powers to determine whether a person or entity is required to register and whether the information required for the Lobbyists Register is accurate and up-to-date. 

This could include issuing information notices and making use of the Lobbyists Watch List. Failure to register may require the lobbying regulator to provide an adequate opportunity to comply, as there is with third-party lobbyists. 

R 11 That, in order to reduce the administrative burden, lobbyists required to be registered in NSW should be permitted to provide or rely on registration documentation filed with other jurisdictions, such as a jurisdiction under the Commonwealth. 

This could include relevant statutory declarations made in order to satisfy fit and proper person requirements. 

R 12 That the diary and overseas travel information of ministers and parliamentary secretaries should be published:

• monthly, not quarterly 

• in a single, searchable document or database formatted for easy access to enable public scrutiny 

• displaying each minister’s name against his/her portfolio. 

R 13 That the NSW Government creates a pre-set menu of options that must be used to indicate the purpose of each meeting disclosed in the diary summaries of ministers. 

These options could be based on the categories of lobbying set out in s 4(1) of the LOGO Act or another classification that adequately covers the types of disclosable meetings held by ministers. The individual ministers ultimately should be responsible for supplementing the indicated entry by adding a clear description of the specific purpose of the meeting. 

R 14 That the LOGO Act be amended to improve oversight of post-separation employment provisions by providing that the lobbying regulator may require any relevant former public official during the cooling-off period, who has a role in an organisation that employs lobbyists (whether or not a lobbyist themselves), to provide it with information concerning:

a) the terms and conditions of any employment or engagements undertaken by former public officials in the cooling-off period 

b) the nature of any employment or engagement referred to in (a) 

c) whether any employment or engagement undertaken in the cooling-off period has or does involve information obtained during his/her period as a public official 

d) whether any employment or engagement undertaken in the cooling-off period involves or relates to any former portfolio functions or responsibilities pertaining to his/her former position as a public official. 

R 15 That the LOGO Act be amended to restrict ministerial and parliamentary secretary advisers of sufficient seniority from engaging in any lobbying activity relating to any matter that they had official dealings with in their last 12 months in office, for a period of 12 months after leaving office, except with the approval of the lobbying regulator. 

Based on criteria published by the lobbying regulator, the restriction period could be removed, modified or made subject to conditions. 

R 16 That the LOGO Act be amended to mirror the provisions of s 16 of the Gaming and Liquor Administration Act 2007. 

This would provide secretaries and agency heads with authority to designate high-risk roles and associated “key officials” where appropriate. Officials in such roles would be subject to a six-month restriction on employment in certain areas related to their public duties. Based on criteria published by the lobbying regulator, the restriction period could be removed, modified or made subject to conditions. 

R 17 That, in the absence of any other new measures to reduce the risks associated with lobbying by former public officials, the LOGO Act be amended to introduce a “Former Public Officials” list, to be managed by the lobbying regulator. 

For a period of four years after leaving office, all former public officials involved in lobbying activities would be required to ensure they are named on this list, including those working for third-party lobbyists. 

R 18 That the NSW Government: 

• creates a dedicated NSW lobbying commissioner whose primary purpose is to regulate the LOGO Act. The lobbying commissioner could head a standalone lobbying commission, or serve within an existing oversight agency 

• provides the lobbying regulator with additional resources and powers to carry out the expanded functions set out in this report. 

19 That the role of the lobbying regulator be clarified by creating clear legislative provisions that allow it to:

• oversee the conduct of both public officials and lobbyists under the “Lobbying Code of Conduct” and LOGO Act, including the criminal, administrative and ethical aspects of the regulation 

• establish formal processes for accepting complaints and referrals in relation to lobbying matters 

• have powers with respect to auditing compliance 

• investigate suspected breaches (including of its own initiative) and make referrals for further investigation or sanction (if required) 

• publish and disseminate any relevant findings 

• have an advice-giving and standard-setting function. 

R 20 That the LOGO Act be amended to give the lobbying regulator responsibility for setting the conditions of the Lobbyists Watch List. 

R 21 That the requirement for ministers and parliamentary secretaries to publish summaries from their diaries should be set out in the regulation to the LOGO Act rather than a Premier’s Memorandum. 

The lobbying regulator should be responsible for compliance. 

R 22 That the NSW Government gives the lobbying regulator power to investigate and report on indirect lobbying that involves alleged unlawful and/or dishonest conduct. 

R 23 That the NSW Parliament ensures that induction training for new members of Parliament is extended to existing members and addresses the administrative and ethical requirements of public officials in relation to lobbying. Such training should also be mandatory for parliamentary and ministerial staff. 

R 24 That the Lobbyists Code of Conduct be amended to prohibit lobbyists (as defined in the LOGO Act) from offering, promising or giving gifts or other benefits to a public official who is, has been, or is likely to be lobbied. 

R 25 That any fundraising event, where an attendee pays for any form of exclusive or private access to a minister, should be classified as a “scheduled meeting” for the purposes of Premier’s Memorandum M2015-05 and consequently be disclosed in published summaries of ministerial diaries – along with the fact that it was paid access. This information should be published irrespective of whether any lobbying takes place. 

R 26 That clause 13 of the Lobbyists Code of Conduct applies to all classes of lobbyist. However, this should not prevent members and supporters of a political party from lobbying in relation to policy issues. 

R 27 That the prohibition on paid advocacy – as outlined in clause 2(a) of the Members’ Code of Conduct (Legislative Assembly) and the Members’ Code of Conduct (Legislative Council) – be extended beyond the promotion of matters in the NSW Parliament or its committees, to any communication with any other public officials, and that clause 7A of the Constitution (Disclosure by Members) Regulation 1983 (relating to disclosure) be amended accordingly. 

R 28 That the NSW Government establishes a “Lobbying Reform Panel” comprising appropriately qualified persons to examine and formulate proposed legislative reforms. Appropriate secretariat services for the panel should be provided. 

R 29 That, over a 12-month period, the “Lobbying Reform Panel” undertakes the required work under recommendation 28 and, by the end of the 12-month period, the panel provides a report setting out the provisions it recommends be incorporated into revised legislation. .