John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I seek leave to make a statement relating to the Lobbying Code of Conduct and Register of Lobbyists.

Leave granted.

On 6 December 2007, when the Prime Minister released the ‘Standards of Ministerial Ethics’, he confirmed that the government would establish a Register of Lobbyists. The government is now delivering on that commitment.

Today, I am tabling the Lobbying Code of Conduct and announcing the establishment of the Register of Lobbyists.

The government recognises that lobbying is a legitimate activity and part of the democratic process. Lobbyists can help individuals and organisations communicate their views on matters of public interest to the government and, in doing so, improve outcomes for the individual and community as a whole.

However, there is a legitimate concern that ministers, their staff and officials who are the target of lobbying activities are not always fully informed as to the identity of the people who have engaged a lobbyist to speak on their behalf. The government believes that this information can be fundamental to the integrity of its decisions and should be freely available to those who are lobbied and to the wider public.

The public is also right to be concerned about politicians and others who leave office and immediately begin a career lobbying their former colleagues using contacts they developed and information they obtained while in office.

Respect for the institutions of government depends to a large extent on public confidence in the integrity of ministers, their staff and senior officials.

The Lobbying Code of Conduct is intended to promote trust in the integrity of government processes and ensure that contacts between lobbyists and government representatives are conducted in accordance with public expectations of transparency, integrity and honesty.

The Standards of Ministerial Ethics prohibit, for a period of 18 months, former ministers having business dealings with government representatives on matters with which they had official dealings as minister. The combination of these standards and the lobbying code, means the public can be confident that ministers will not be able to use the experience and contacts they have gained in office to enhance their value to the private sector, either as lobbyists or as senior executives in business with the government.

The code requires a 12-month cooling off period for ministerial staff, senior public servants or defence personnel who have resigned or retired, who may want to work as lobbyists. They are prohibited from engaging in lobbying activities with government for a year in relation to any matter that they had official dealings with in the last year of their employment.

Honourable senators may be aware that I released an exposure draft of the Lobbying Code of Conduct for public comment on 2 April 2008. Twenty-eight submissions were received from companies involved in lobbying as well as from members of the public, and I thank all who put thought and effort into ways of enhancing the code. Suggestions have been taken into account and a number of changes have been made to the exposure draft of the code as a result.

As I have said, lobbying is a legitimate part of the democratic process.  The revised code represents an appropriate balance, I believe, between the right of ministers, officials and the public to know who stands to benefit from the efforts of lobbyists, and the ability of business to be able to make views known to government. It will not impose unreasonable demands on the lobbying industry, business or ministers and officials.

Although there was a lobbyists register in place from 1984 to 1996, it was not a public register, and did not include a code of conduct to regulate lobbying practice. The new Lobbying Code of Conduct and Register brings our integrity checks on third-party lobbyists up to international standards. The European Parliament is moving to establish a mandatory public register of lobbyists and a code of conduct. Canada and the United States also have registers.

The Lobbying Code of Conduct will apply to third-party or consultant lobbyists—that is, those lobbyists who represent third parties including lawyers, accountants and business advisers who are employed in government relations roles in professional services firms, and professionals such as lawyers who may lobby on a regular basis.

It does not apply to government relations staff employed in major companies or peak industry organisations as the very nature of their employment means that it will be clear to ministers and others whose interests they will be representing.

The objective of the code is not to make every company whose staff or executives visit a minister sign a register; rather, it is to ensure ministers and other government representatives know whose interests are being represented by lobbyists before them and to enshrine a code of principles and conduct for the professional lobbying industry.

There are a number of other exemptions to the code. For example, it will not apply to individuals who make representations to the government on behalf of family members or friends. It will not include statements made in a public forum or to foreign trade delegations visiting Australia or to registered tax agents, customs brokers and other persons who are registered under an Australian government scheme regulating members of that profession, provided that their dealings with government are part of the normal day-to-day work of people in that profession.

These are sensible exclusions that will ensure that the register does not impede day-to-day communications with government.

The code makes clear this government’s determination that, from 1 July 2008, ministers, parliamentary secretaries, ministerial staff and other government representatives do not grant access to lobbyists who are not on the register. Transparency will be further enhanced by requiring registered lobbyists who wish to make representations to ministers or their staff to declare who they are acting for and the nature of the matter that they wish to discuss before access is granted. This is the key strength of both the register and the code.

Through these requirements, the Register of Lobbyists will allow ministers and their staff to know who is engaged in lobbying and whose interests are being promoted. It is aimed at ensuring openness, transparency and accountability in government, rather than control.

And let us be clear—registration will not give automatic access to ministers, their staff and officials but, for those who are properly registered, the register will not impede free and open access to government.

The Register of Lobbyists will, for the first time, be available for public inspection. It will be administered by the Secretary of the Department of the Prime Minister and Cabinet. Lobbyists will be required to update their details as soon as practicable in the event of any changes and confirm that they are up to date on a quarterly basis, failing which their registration will lapse. The department has undertaken to update the information on the register on a same-day basis in the event that a lobbyist needs to make urgent representations to government on behalf of a new client.

Lobbyists will also need to comply with the principles of engagement with government representatives set out in the Lobbying Code of Conduct. These principles describe a standard of conduct for lobbyists that will encourage a culture of ethical behaviour and integrity in their activities. Lobbyists who do not comply with the principles will be removed from the register.

To reinforce the importance that the government attaches to the need for lobbyists to be persons in whose integrity ministers and other government representatives can have confidence, any person who has been sentenced to a term of imprisonment of longer than 30 months or who has been convicted as an adult of an offence involving dishonesty in the last 10 years will be refused registration. Lobbyists will need to provide statutory declarations to the secretary of the Prime Minister’s department confirming these matters before they are registered.

In addition, the Cabinet Secretary will be able to direct the secretary of the Prime Minister’s department to refuse to register an individual as a lobbyist, or remove an individual from the register. I expect that this power will only be used in exceptional circumstances.

A number of the submissions that were received in response to the exposure draft suggested that the power to remove lobbyists from the register, or refuse them registration, should be exercised only after the individual concerned had been given an opportunity to be heard. While that was always intended, the government has now included a clear statement to that effect in the revised code.

A further change as a result of the consultation process relates to the problem of lobbyists publicly disclosing a relationship with a client on the register which might result in market speculation about a pending transaction involving the client, when that transaction had not previously been disclosed by the client, or body corporate, in accordance with its continuous disclosure obligations under chapter 6CA of the Corporations Act 2001.

While the code will require the lobbyist to advise the minister of their client on a confidential basis in advance of any lobbying activity, the lobbyist will be required to include the client on the register as soon as the sensitivity has passed—otherwise the code of conduct will have been breached.

The registration requirements will apply from 1 July 2008. From that date, lobbyists must be on the register if they wish to make representations to government on behalf of their clients. In the meantime lobbyists can apply to the Secretary of the Department of the Prime Minister and Cabinet to be included on the register. Further information about the process for applying for registration should be available later today on the department’s website.

The registration of lobbyists should be seen as part of the government’s determination to restore respect for the institutions of government and improved governance across the public sector.

To that end, the Public Service Commissioner and the Chief of the Defence Force have decided that the Lobbying Code of Conduct should also apply to the Australian Public Service and the Australian Defence Force. I understand that they will shortly be issuing guidance to the Australian Public Service and the Australian Defence Force on lobbying activities as they relate to members of the APS and the ADF.

The Prime Minister promised from day one of this government that a code of conduct for lobbyists would be part of the transparency and integrity provisions being established by the Rudd government. It was flagged in the ‘Standards of Ministerial Ethics’, along with the provisions which prevent ministers from working in their field of cabinet knowledge for 18 months after leaving office.

I am pleased to say that today we have another integrity provision in place to help restore public confidence in government and governance.

I table a copy of the statement I have just made, together with a copy of the Lobbying Code of Conduct, and seek leave to move a motion in relation to the documents.

Leave granted.

I move:

That the Senate take note of the documents.

Alan Ferguson (President) Share this | Link to this | Hansard source

Before I call any senators, I draw the attention of the Senate to the fact that, under standing order 169(2), the time limit on this debate is 30 minutes.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

While the Greens welcome the Register of Lobbyists and the Lobbying Code of Conduct, this is way short of what is required to protect the interests of the public and the interests of democracy in our country in an age when vested interests put enormous pressure onto the elected representatives of office and, in particular, onto parliaments.

I give the example of the Sydney Morning Herald article on Saturday which mooted the line-up of coal industry executives who are currently lobbying the minister for matters related to climate change, Senator Penny Wong. The fact is that there is an open door to the coal industry but there is not an open door to community interests who may be affected by government policy when it comes to the huge range of climate change issues. I think there should be much greater openness about that, and maybe this will open the door.

I point to a question that I put to Senator Wong in estimates. I asked: ‘Since the election, on which occasions has the minister met representatives of the coal industry and what was discussed?’ I got the answer: ‘The minister is determined to meet as many individuals as possible, both formally and informally, in her portfolio. Generally meetings have been either held with the expectation of confidentiality or on the public record.’ In other words, ‘I am not going to tell you.’ I will be interested to see what a non-legislated Register of Lobbyists and a non-legislated Lobbying Code of Conduct will do about that.

The problem with Senator Faulkner’s proposals, firstly, is that they are not legislated; they ought to be. Secondly, they apply to ministers and perhaps, in some other circumstances, backbenchers of the government, though that is not clear, rather than to all members of parliament. Thirdly, they apply to some lobbyists but not all lobbyists. The minister has just given the example of public relations groups. The coal industry, the logging industry and the mining industry come to the fore with their big edifices here in Canberra, working as public relations officers—a prodigious lobby, unseen by the public in this place—with presumably a loophole a mile wide to escape the requirements that otherwise might ensure that everybody knows when they see ministers and when they do not and whether they are complying with the code of conduct.

This code should be legislated. This code should apply to all members of parliament. This code should apply to all lobbyists who see members of parliament. Let me give another big loophole. We are moving into a new balance of power situation in the Senate. All parties will be able to contribute to the balance of power. Not just the crossbench but all members of the opposition will hold the balance of power in given circumstances. I know from previously being in the position that, when it comes down to one or two people making a decision, the big end of town will be queuing up immediately to lobby them. Are Senator Fielding or Senator elect Xenophon, when he enters the Senate after 1 July, or indeed any of the five Greens, going to be under the purview of the register and the Lobbying Code of Conduct? No, they are not. We ought to be, and so should the lobbyists who come to see us. I would want to know that this Lobbying Code of Conduct applies not just in this parliament and in our electoral offices but at business lunches, fundraising dinners and everywhere where politicians are approached by lobbyists because of a sectional interest that they want to pursue.

We are here for all the people all of the time and the least we can do is let all the people all of the time know who is seeing us, what their case is and whether they have been successful. Let us be straight about it. There are thousands of lobbyists in all the great democracies. I understand there are 80,000 in Washington. They pervert and corrupt the democratic system because they get opportunities that the rest of the citizens do not. If we believe in a democracy of one person, one vote, one value, we have to go much further than this code of conduct and this register in correcting that imbalance. Senator Faulkner is quite right in that we have to hear from industries, from non-government organisations, from unions and from individuals. We are here in a representative democracy. All of us know that there are powerful interests at work which have huge sway on the body politic which the average citizen suspects but does not know about. And they change outcomes in parliaments. We ought to know about that. All of us who are involved in making decisions ought to be prepared to be totally transparent about those lobbyists who come to see us. This register and this code of conduct go nowhere near satisfying complete transparency of the forceful powers that come to sway not just on government but on all members of parliament and, indeed, as Senator Faulkner said, on the bureaucracy. There is a long way to go here.

I call on the government to legislate this code and this register; otherwise you leave it to the good people to do the right thing and to the crooks, the villains and those who want to get an advantage in the night to slide around the side. If you have not had an approach from somebody wanting an advantage and offering one in return, you have not been in this place very long. We have a long way to go beyond this. It is a very meek, tremulous and unsatisfactory start to really throwing open the power of lobbyists and the perversion that can occur in the political system—and did occur under the last government—being manifest. It is something we should go a lot further towards correcting. I congratulate Senator Faulkner for raising the issue onto the public agenda. I know it has been brought before the Senate on budget day. We have a long, long way to go before we satisfactorily ensure that the public is given total transparency when it comes to lobbyists, who are there either to represent them or to gain an advantage against their interests in the parliamentary system.

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

While the opposition broadly support the thrust of both the Lobbying Code of Conduct and the register of interests, we are deeply cynical about both the stated reasons for the code and the timing of its release today. I would like to make some general comments about the code and then get to the code specifically. The Lobbying Code of Conduct released today by the government will not stop the Brian Burkes of this world or other Labor identities from breaking the rules. Labor broke the old rules and Labor will break these new rules. The bottom line is this code will not stop the sorts of problems we have seen arise with former Western Australian Premier Brian Burke or the types of abuses we have read about in the media regarding Labor Party figures and the Wollongong council sex and bribe scandal. Let us not forget that we are only having this debate today for one reason: a string of problems involving Labor identities turned lobbyists who have overstepped the mark in their dealings with both local Labor councillors and state and federal Labor MPs.

I would now like to turn to the code. This code, like the draft, still gives the cabinet secretary unfettered power under section 10.3 to exercise absolute discretion to not register or remove a lobbyist from the register. The minister now defends this by saying that he expects ‘this power will be used in exceptional circumstances only’. Giving yourself complete and unaccountable power with the caveat that you do not expect to use it very much is to use words that should fill everyone involved in this matter with both fear and trepidation. It is still a case of all roads leading to the Special Minister of State and Prime Minister Rudd.

The Rudd government has somewhat addressed the lack of recourse for those who are struck off or denied joining the register but only after the issue was exposed by the opposition. The process by which the cabinet secretary contacts a lobbyist or individual and discusses a potential breach is done in secret. Our question is: where is the accountability in that change?

Also of great concern to the coalition is that this code does not even once mention unions. Unions are not only aggressive campaigners in federal elections but also the most aggressive lobbyists in politics. Their power and influence over Labor governments is not just confined to visitations in ministerial offices. Last Australia Day, representatives of the MUA enjoyed the hospitality of the Prime Minister at the Lodge. Who knows what was discussed and what was agreed. There certainly would not have been any minutes kept of the discussions that day.

In this code, unions come under part (f) of the description of ‘lobbyist’ in section 3 and, remarkably, are therefore exempted from this code. Everyone agrees that unions have the right to put their case forward on policy issues and be walking the corridors of Parliament House, but this exemption for unions, combined with the tens of millions of dollars they donate to the Labor Party, raises serious questions about how effective this code will be in the real world. The omission of unions from this code is breathtaking but, despite this flaw being pointed out by the coalition to Prime Minister Rudd, he has chosen to ignore this advice and persisted with giving unions special privileges. The community will quite rightly ask the rhetorical question: ‘Why are unions being given special privileges in this matter?’ If this code is to have any credibility it simply must deal with the issue of lobbying by union officials.

Like the draft code, this code provides no penalties for government representatives who breach the code. It also still fails to account for the realities of government. What constitutes an oral communication under section 3? Does a chance meeting at the Parliament House coffee shop ‘Aussie’s’ fall under this definition? What happens if a lobbyist has a chance conversation with a ministerial staffer out of sitting hours who is unaware of their engagement as a lobbyist? The provisions of this code certainly will not stop the sort of clandestine meetings we have read about in the media involving the likes of Brian Burke or the types of activities of those Labor figures on the Wollongong Council.

This code, like its predecessor draft, does not properly deal with conflicts of interest or even mention the conflicts relating to spouses or close relatives. While I am sure it is not its intention, in practical terms this code may exempt Prime Minister Rudd’s chief of staff, whose wife is a senior lobbyist. Another practical flaw with this code which may lead to ministerial personnel problems down the track is the prohibition on ministerial staffers taking jobs in the private sector in an area in which they had official dealings. There is no definition of ‘official dealings’. Who makes that decision? Is it the Prime Minister? Is it the Special Minister of State?

While the provision of section 7.1 for former ministers appears reasonable, the prohibition under section 7.2 affecting current Labor ministerial staffers does not appear to take into account situations where they may lose their jobs under reshuffles or the like. In practical terms, this provision appears to be totally unfair. To take a practical example, what happens in a situation where, hypothetically, Treasurer Wayne Swan loses the Treasury portfolio in a reshuffle? What happens to his economic advisers? Under this code there are restrictions on what future jobs they can take. Surely this is a disincentive for potential budding ministerial staffers to enter the political fray. This provision can only have long-term consequences for the quality of staff that ministers can recruit.

Another flaw in this code is that, by exempting companies who lobby directly, there is nothing to stop the Brian Burkes of this world working as employees for a company part-time. It exempts companies who put a former politician on their board of directors for lobbying purposes. It encourages companies to hide their lobbying activities by doing it directly—that is, outside the code—and it discourages an open and transparent understanding of lobbying.

The register requires lobbyists to list all the clients they are lobbying on behalf of. Some would say that is fair enough. But what happens in the circumstances where the Hawker Brittons of this world are in Prime Minister Rudd’s office for a political and strategy briefing and they happen to mention one of their clients or an issue affecting one of their clients? The code does not cover that situation.

I am pleased that Senator Faulkner took on board the coalition’s concerns about the draft code effectively giving Labor law firms a special deal. As the coalition argued on the day the draft was released, by giving lawyers a special exemption we would be moving towards the American model, where most lobbyists are registered as law firms, gaining their clients special lawyer-client legal privilege. Fortunately the coalition was successful in forcing that change.

Finally and importantly, why is this very important debate occurring just hours before the Prime Minister’s first budget? Here is a new government, where Prime Minister Rudd cynically talks about openness, accountability and transparency, and they are dropping this controversial code in the afternoon before the budget so that it gets lost in tomorrow’s newspapers. It is a tactic classically out of an episode of the West Wing. The fact is the Prime Minister wants this debate, which is essentially about the cultural problems of the Labor Party, to be buried under an avalanche of media reports about the budget. It may be a smart short-term political tactic but it has all the characteristics of a government that, in its infancy, is already successfully avoiding accountability. There is no justification, as Senator Bob Brown said, for this matter to be raised today. This is an issue that should not be lost in tomorrow’s budget papers. This is an issue that deserved greater transparency, greater discussion and the ability for the media to be commenting on this matter. They will not comment on this because they will be commenting on the budget. This is not openness. This is not transparency. As I said earlier, we broadly support the thrust of this; we are deeply cynical about both its rationale and the timing of its release.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I am going to start with two notes of congratulation. The first is because, for a change—because it has been put aside as a form of courtesy—we have a ministerial statement to which we can actually apply a debate. It had become the practice under the previous government to drop them into the Senate with no debate, so I am glad to see a return to proper Senate consideration of a ministerial statement. Attached to that note of congratulation is of course a congratulation to the government for having put out an exposure draft two months ago, and for there being adequate time for both the media and politicians to examine this and to come forward with their final conclusion at the earliest opportunity, which is the first sitting day of the new session. I thought the previous criticism outlined was both ungracious and inaccurate.

My second note of congratulation is for the introduction of the code itself. This is an advance in accountability and integrity. This is a movement forward. It is a bit like people criticising a situation where there has been no house and a house has then been built which has not got two bathrooms, only one, and has got only one bedroom and should have two. We have got a house; now let’s build on it. That is going to be the thrust of my remarks. I welcome and I am pleased with the initiative of the government. I want to say to you: it is inadequate and it needs further additions.

When I and my party have looked at the business of lobbying and the question of how a lobbying register should be set up, we have had to address the same fundamental questions which I am sure the minister has addressed. In viewing these questions, the great thing the minister has been able to do is to overcome the natural inertia—in fact the very considerable forces that are always against these sorts of moves. It is no accident that in the previous government they did absolutely zip on this, because the powers that were opposed to a lobbyist register were very strong indeed, despite there being members within the Liberal Party who would certainly have thought it a good idea.

The basic questions you need to cover when you are dealing with something like a lobbyists register are, firstly, who should be on it, how the applications should be made, how decisions as to who should be on it are made and whether there is review of decisions. Secondly, there is the question of how it should be administered and whether that is independent or in house. Thirdly is the question of who should be affected by a lobbying register and, fourthly, what should be the means for enforcement and discipline?

Going to the third question of who should be affected by it, obviously this register covers cabinet ministers, junior ministers and parliamentary secretaries, but there is the question of caucus committee chairs and members of those caucus committees, there is the question of Senate and House committee chairs and their members, and there is the question of members and senators themselves and, as Senator Bob Brown rightly said, particularly with respect to senators who may hold the balance of power on particular issues before the Senate. There is the question of who in the public sector should be covered by it, whether it is those covered by the Financial Management and Accountability Act or the Commonwealth Authorities and Companies Act, and there is the question of whether the register should apply not just to the Commonwealth but to all states and territories. The basic issue of lobbyists is the same whether you are in the Commonwealth or in the states or territories.

When we think about those who lobby, sometimes those who get the most flak for being basically creatures for hire are those who lobby for anyone—in other words, they are firms whose business is lobbying. But they are no different to accountants or lawyers who accept a fee for service. In that sense, they are a business for hire. The second group are those who lobby for a specific sector or group. There are organisations representing for-profits—peak organisations such as those who lobby for miners or farmers or those sorts of people who are making a profit. There are lobby groups who lobby for specific not-for-profit sections of the community such as unions or clubs. There are lobby groups who represent churches, religions or sects.

There are those who lobby for their own corporation or entity, whether for profit or not for profit—that would be people like Telstra or big not-for-profit organisations such as, say, the Catholic health body. There are those who lobby on their own account as individuals—they have a specific problem with a specific law—and those who lobby in the public interest who have no self-interest but are attached to causes such as environmental groups or civil liberties groups.

The criticisms that surround the register that we have been presented with cover many fields. They cover the fields of independence, they cover the fields of enforceability and they cover the fields of exemption. The Australian Democrats have recognised that this is a complex and difficult issue and it is one on which we need the Senate to form a consensus and push the government for a better standard. We do not simply need to hear the sorts of criticisms without solutions that some might offer. Consequently, I have today put down in the Senate a notice of motion, a signed version of which I have submitted, which asks that the Senate Standing Committee on Finance and Public Administration inquire into and report on this lobbying code of conduct by the first sitting Thursday of August 2008. I should note that, when I put it down, I had an exposure draft before me and it was titled ‘Exposure Draft’. But that of course is now replaced by the documents before us.

I have asked that the committee examine the code of conduct issued by the government and whether the proposed code of conduct is adequate to achieve its aims—in particular, (a) whether a consolidated code applying to members of both houses of the parliament and their staff as well as to ministers and their staff should be adopted by a joint resolution of the two houses; (b) whether the code should be confined to organisations representing clients or should be extended to organisations which will lobby on their own behalf; (c) whether the proposed exemptions are justified; and (d) any other relevant matters. Frankly, I am open to having those terms of reference changed, improved, except for the one which says ‘any other relevant matters’, because I do not want it to be narrowly confined. Having given the minister a lead that he may propose additions to the terms of reference if he wants to accept the notice of motion, I am happy to do that.

In concluding my remarks, I say let us be clear that this is a very significant milestone—a very significant advance. The minister and the government should be congratulated on it, but the Senate should do its work to improve and add to what we have been offered to make us a leader in the world, not just a follower, with respect to this issue.

Question agreed to.