LOBBYING in Lithuania Law regulation: first experiences and evaluation

LOBBYINGin Lithuania Law regulation: first experiences and evaluation International Conference:„Transparency in decision making process”Prague, 9th December 2010 Dr Marcin Michał Wiszowaty Faculty of Law and Administration University of Gdańsk, Poland

Lobbying regulation. Constitution of the Republic of Lithuania (1992) Article 25 • The right to have own convictions and freely express them. • The right to seek, receive and impart information and ideas. • Freedom to express convictions, to receive and impart information. Article 33 • Citizens’ right to participate in the governance of their State. • Citizens’ right to criticise the work of State institutions or their officials and to appeal against their decisions. • Citizens’ right of petition Article 35 • Citizens’ right to freely form societies, political parties and associations Article 36 • Citizens’ right to assemble unarmed in peaceful meetings.

Lobbying regulation of 2000. Republic of LithuaniaLaw on lobbying activities (Lobistinės VeiklosĮstatymas) No. VIII-1749 of 27 June 2000 In force since 1 January 2001 Amended (2): • 8th of May 2001 (Law No IX-308) • 30th of March 2003 (Law No. IX-1385) 15 Articles in 4 Chapters: • General provisions (Art. 1 – 8) • Register of lobbyists (Art. 9 – 12) • Control of lobbying activities and provision of information (Art. 12 – 14) • Final provisions (Art. 15)

Quick review - General provisions Purpose and objectives of the Law (art. 1): • regulating lobbying activities, • control and liability for violations of this Law • publicity and transparency of lobbying activities • preventing illegal lobbying activities

Short review - General provisions Main definitions of the Law (art. 2) • "Lobbyist"  natural or legal person • "Lobbying activities" actions taken for or without a compensation in an attempt to exert influence to have legal acts amended, supplemented or repelled or new legal acts adopted or rejected, in the interests of the client of lobbying activities.

Short review - General provisions Main definitions of the Law (art. 2) • "Client of lobbying activities"a natural or legal person who has concluded with a lobbyist a contract on lobbying activities(in compliance with the Civil Code or other laws of the Republic of Lithuania).

Short review - General provisions Persons not entitled to be lobbyists (art. 3) 1) under the age of 18; 2) a state politician, public official, public servant or judge 3) a former state politician, public official, public servant or judge, if less than 1 year has elapsed from the expiry or termination of his term of office 4) convicted for a deliberate crime, unless (expired or annulled). 5) Less than 5 years from obligatory termination of illegal lobbying activity

Short review - General provisions Art. 4: Rights and duties of lobbyists— RIGHTS: • Participation in the drafting or drafting legal acts and submitting explanations • Conducting expert examinationof drafts to submit conclusions to clients of lobbying activities; • Explaining to the public and convincing state and municipal institutions that a certain legal act should be adopted / rejected / amended / supplemented / repelled; • Informing the public, enterprises, agencies or organisations about draft legal acts which are being prepared in the Seimas, the Government or other state or municipalinstitutions; • Reporting through mass media and participating in public events; • Collecting data and information about the legislative procedure and submitting it to clients • Proposing to legislators to initiate amendments of effective legal acts; 8) Organising meetings of legislators with representatives of clients of lobbying activities; 9) Organising public-opinion polls regarding the adoption or implementation of legal acts; 10) Organising representational and other events on legislative issues; 11) Organising meetings of state politicians (public officials etc.)with the public on legislative issues; • Obtaining copies of draft legal acts and other information, if this is in compliance with laws • Authorising another person to present a report on lobbying activities in the name of the lobbyist.

Short review - General provisions Rights and duties of lobbyists(art. 4) Duties (2): • terminate lobbying activities no later than within 1 working day from the moment of being elected/appointed a state politician (public official, public servant or judge) • act in compliance with this Law, other legal acts and Lobbyists’ Code of Ethics

Short review - General provisions Duties of others(art. 5) • State and municipal institutions must create conditions for legal lobbying activities and may not constrain legal lobbying activities

Short review - General provisions Illegal Lobbying Activities (art. 6) • performed by a person who is not recorded in the Register of Lobbyists • performed by a person not entitled to be a lobbyist; • performed by a lobbyist after suspension of his lobbying activities • performed by a former lobbyist after termination of his lobbying activities • deliberately misleading state officials etc.due to amend, supplement, repel or adopt a legal act • aiming in electing/appointing the lobbyist a state politician/public official, public servant or judge • carried out in the name of a non-existent client • when lobbyist directly or indirectly declares or states being capable of influencing the legislative procedure, a state politician, public official or public servant; • representingconcurrently several clients of lobbying activities with opposing interests

Short review - General provisions Activities not considered lobbying (art. 7) 1) activities or work of mass media owners, publishers or their employees, related to information about effective and draft legal acts: publication of their texts in full or in part, their review, comments (if not receiving compensation for lobbying activities) 2) participating, upon invitation of state and municipal institutions or agencies, in the preparation, consideration or explanation of draft legal acts as experts or specialist for or without a compensation; 3) actions taken by state politicians, public officials or public servants with their official powers granted to them by legal acts; 4) activities of non-profit organisations aimed at exerting influence to have legal acts amended, supplemented, repelled, adopted or rejected, in the common interests of their members; 5) activities of scientists (pedagogues) — except acting in the interests of a client of lobbying activities; 6) an opinion expressed by a natural person regarding a proposals to amend, supplement, repel, adopt or reject a legal act— except that person acts in the interests of a client of lobbying activities.

Short review - General provisions Persons prohibited from being clients of lobbying activities(art. 8) • a state politician; 2) a public official, public servant or judge; 3) state and municipal institutions or agencies; 4) a state or municipal enterprises.

Short review – II. Register of lobbyists • Registering byChiefOfficial Ethics Commission(COEC): • 5 members • Candidates reported by: President of the Republic (1), Speaker of the Parliament (1), Prime Minister (1), High Court (1), Association of Local Authorities (1) • Term of office: 5 years • Elected by Parliament (Seimas) • 1 re-election allowed • Chairman appointed by Speaker of the Parliament • powers of investigation and the right to demand explanations, • The right to impose penalties (administrative — fines)

Short review – II. Register of lobbyists (art. 9) * Registering by Chief Official Ethics Commission (COEC) * Using pre-definedby COEC form ofa lobbyist’s questionnaire and a declaration. * Required information: (natural person): name and surname, personal number, place of residence, place of work in the last one year * (legal person): name, registration number, address of the head office (additionaly: A citizen's passport * State Social Insurance Certificate * Certificate from the criminal record * personal questionnaire * documents on education * Photo (4 x 3cm) * information about employees of a legal person (names, surnames, personal numbers) who will be performing lobbying activities * COEChas the right to request from applying lobbyistsor from state and municipal institutions or agencies, additional information or documents necessary for the taking of a decision regarding the recording • The number of lobbyists shall not be limited. • Term: 5 working days for examining the documents and making a decision • Another 5 working days to notify the decision. * person, who cannot be a lobbyist or submitted incomplete / incorrect form  not registered • Register lobbyist should within 1 month from the date of receipt of the notification, pay a state fee(2.000 Lt – natural person or 10.000 Lt – legal person) • After paying the fee, lobbyists receives „the lobbyist’s certificate” • Not paying  revoking the decision

Short review – II. Register of lobbyists (art. 10) Suspension of lobbying activities(can be renewed): • By a request of a lobbyist (for period of time proposed by lobbyists) • Failing to present the lobbying activity report on time (max. 1 month) • Being suspected of committing a deliberate crime (until the case is solved) Termination of lobbying activities(cannot be renewed): • By a request of a lobbyist (time proposed by lobbyists) • Engaged despite of suspension (*) • Being illegal according toart. 6; (*) • Suspended for reasons, there were not eliminated within prescribed time (*) • In case of conviction for a deliberate crime Expiry (death of natural person/liquidation of legal person) or termination means deleting the record from Register. (* re-engage in lobbying not before 5 years after termination)

Short review – II. Register of lobbyists (art. 11) Report on Lobbying Activities • OBLIGATORY • Filed to the COEC • for the previous calendar year no later than by 15th of February of the current year(max. postponing: 30 days) Required information: • Name (surname) and the personal number of a lobbyist • Name (surname) personal number, addressof each client of lobbying activities; • title of an (effective or draft) legal act with respect to which he acts as a lobbyist; • the income from lobbying activities (with receipts); • the expenditure on lobbying activities (with receipts).

Short review – II. Register of lobbyists (art. 11) Report on Lobbying Activities OBLIGATORY also if : • lobbyist received no income nor incurred any lobbyist's expenditure during the reporting period • Lobbying activity was suspended • Lobbying activity was terminated

Short review – II. Register of lobbyists (art. 12) Additional restrictions: • Contingency fee — forbidden • Financing lobbying from state/municipal budget — forbidden

Short review – III. Control of lobbying activities Lobbying activities are being controlled by the COEC, who can: • analyse and generalise the practice of application of theL-Law; • address to courts with requests to terminate or repel decisions or transactions taken or entered into in conflict with theL-Law; • conduct an investigation (personally or by other institution) if informed that somebody do not abide by the requirements of the L-Law; • draft and approve the Lobbyists’ Code of Ethics(*). • check lobbying activities; • obtain from state or municipal institutions and other persons any information, explanations, orders, decisions and other documents necessary for the implementation of this Law; • check reports on lobbying activities, • check activities of persons engaged in illegal lobbying activities. (* III-2005)

Short review – III. Control of lobbying activities Public information about lobbying activities • By 15 May, every year, COEC report forSeimas on the control of lobbying activities. • Information about lobbying activities is available to the public. (lobbyists, clients of lobbying activities, effective or draft legal acts with respect to which lobbying activities were carried out). • Quarterly COECpublish information about lobbyists recorded in the Register as well as: suspension, renewal, termination or expiry of lobbying activities in the supplement to the Official Gazette Valstybės žinios. • Information about lobbying activities may be published on the website of the COEC

Short review – III. Final provisions Persons : • who violate the requirements of the Lobbying Law, or • whose lobbying activities have caused damage to other people • shall be liable for damages in accordance with the procedure established by laws.

Lobbying in Lithuania political and social background

Lobbying in Lithuania — political and social background The Freedom House„Nations in Transit New Democracy” 2010 Report: Lithuania is one of 8 „Consolidated Democracies” in Eastern Europe with 2,25 points, when 1 = best score and 7 = worst score. The winner of 2010 Report is Estonia with 1,93. Lithuania is between Czech Republic (2,21) and Poland (2,32)

Lobbying in Lithuania — political and social background • Opinions, conclusions and facts: • Business associations and trade unions are traditionally the most influential NGO’s in the policy-making arena, • labor unions — weak and losing influence in recent years. • Lithuanian interest groups do not use sophisticated practices or tactics of lobbying; • access is largely based on personal connections and corrupt practices. • the business community is the most effective lobby due to its contacts and extensive resources; • About 100 members of Seimas have business connections. • About 4 members of Seimas can be considered to represent labour. • Government cooperation and consultation with NGOs has not been fully established. • the media are receptive to public policy groups as reliable sources of information The Freedom House „Nations in Transit New Democracy” 2010 Report:

Lobbying in Lithuania — political and social background • Public perception of corruption in Lithuania — equivocal • ¾ of the population believe that unofficial payments are effective in dealing with authorities • 2/3 of the population ready to give bribes • 54 % of citizens believe, that the level of corruption has grown sizeably over the past 5 years. • In May 2009, Parliament updated the national anti-corruption program (criteria for anti-corruption work with the supervisory role of the Interagency Anti-Corruption Commission and the Special Investigation Bureau). Transparency International (Lithuanian branch) 2009 Report:

Lobbying in Lithuania — political and social background • Underdeveloped interest groups system in Lithuania caused by: • Low feelings of political efficacy • Strong suspicion of interests groups, itsactivity and lobbying • As a legacy of communism: • Civil society is weak • Many Lithuanians believe, • that ability of the individual or the organized group to influence • political decision and public policy is weak • - Most people do not see how • joining an interest groups or unions • could make any difference in their lives R. J. Hrebenar, C. H. McBeth, B. B. Morgan (University of Utah, Lithuanian National Academy of Science) 2008 findings: Source: R. J. Hrebenar, C. H. McBeth, B. B. Morgan, Interests and Lobbying in Lithuania, Journal of Public Affairs 2008

Lobbying in Lithuania — political and social background Factors determining interest groups succes in Lithuania: Source: R. J. Hrebenar, C. H. McBeth, B. B. Morgan, Interests and Lobbying in Lithuania, Journal of Public Affairs 2008 R. J. Hrebenar, C. H. McBeth, B. B. Morgan 2008 findings: Strong believe: ‘Anything in Lithuania can be done quickly with money”

Lobbying in Lithuania — political and social background • Strategies and tactis of Lithuanian interests groups: • Unsophisticated • „friends and neighbours” system based upon contacts (Lithuania: only about 3,5 million people) • lobbying = „good old boy operation” • hiring professional lobbyists – rather exceptional  lobbying is rather personal connections than professional representation: Source: R. J. Hrebenar, C. H. McBeth, B. B. Morgan, Interests and Lobbying in Lithuania, Journal of Public Affairs 2008

Lobbying in Lithuania — political and social background Unequal competition between business organisations and NGOs: The exercise of civil right of petition is not regulated in Lithuania, beside Constitution

Lobbying in Lithuania — political and social background Widespread negative perceptions of lobbyists and lobbying and negative attitude towards interests groups

Lobbying in Lithuania — political and social background Endemic corruption and the use of bribes and gratuities as effective lobbying tactics Source: R. J. Hrebenar, C. H. McBeth, B. B. Morgan, Interests and Lobbying in Lithuania, Journal of Public Affairs 2008

LITHUANIAN LOBBYING LAW– evaluating the current regulation

Evaluating the current regulation - allegations Disproportionate penalties: Code of Administrative Violations (art. 202-1): • public officials — fine 500-1,000 Litas (€165-335) • repeated violations — fine of 1,000-2,000 Litas (€335-660), or • removal from office Administrative Code (art. 172 (25)): • Violating the requirements of the Lobbying Law for te first time — fine 500-1,000 Litas (€165-335) • Violating the requirements of the Lobbying Law again (recidivism) Average salary in Lithuania (3rd quarter of 2009): 1665 Lt. Effect  illicit lobbying about 100-200 million Lits per year According to Romas Stumbrys, chairman of the National Lobbyist Association (Nacionalinė Lobistų asociacija

Lithuanian lobbying law Legislative Executive Judicial - law-making - law-drafts only ? Self-governmental Grass-Roots - law-making ? Also doesn’t regulate: rule regulation, executive order, other programs, policy negotiation, award, contract, grant, loan, permit, or license. Lobbying for electing/promoting/appointing officers — forbidden

Lithuanian Register of Lobbyists (as of: 7th December 2010): Recorded persons — 24 Natural persons: 20; Legal persons: 4 Deleted lobbyists: 2 (2006, 2008) Registration and activity (according to Lobbyists and COEC Reports 2001-2009)

COEC - proposed changes in Lobbying regulation A) distinguish lobbying activities carried out by professional lobbyists andan associated interest groups; 2) narrow (clarify and specify) the definition of lobbying activities 4) provide for two categories of lobbyists, depending on the nature of their work and the workplace: • a consultant lobbyist - a natural person, lobbying client's interests through lobbying, • a lobbyist for the company - the company shareholder, the management or supervisory board member, or the company-employed person • 5) the obligation for lobbyists to report on COEC lobbying activities when the activity started up, and the annual declaration of activities carried out lobbying activities; 6) distinguish the associated interest groups and their activity and divide them into categories according to their interests representing the interests of civic groups or business interest groups; 7) the associated interest groups that have an impact on legislation shall be obligued to submit a declaration to CEOC of impact on legislation 8) The Republic of Lithuania, the Seimas, the Lithuanian Government and municipal office of the Republic of Lithuania on its website shall publish information about the normative legal acts, their promoters and initiators 9) The Lithuanian Seimas, the Government and municipal authorities should publish information about their contacts with lobbyists and interests groups during the legislative process (COEC); 10) to provide reports about the ongoing lobbying and lobbying declarations submitted electronically.

Evaluating the current regulation The main proposals of amendments to the Lobbying Bill (2006): • Two categories of lobbyists (in reference do Canadian practice): • in-house lobbyist • consultant lobbyists 2. Two kinds of lobbyist report: • On the ongoing lobbying activity (max. 14 days after starting) • Annual report about finished lobbying activity (-ies) 3. Special report („declaration”) of associated interests groups (civic or business) about their influence on legislation (max. 14 days after starting their action) 4. Electronic way of submitting documents and declarations 5. Obligatory for „Seimas, Government and other state and local authorities” involved in the law-making process — publishing the information about preparation of regulations together with the drafts; interested persons (natural or legal) can notify their interest, opinions and proposals. Such actions must be published by the organ and reported to COEC

Evaluating the current regulation Critical concerns raisedby the scholars and professional lobbyists: • No compulsory register of associations and other organizations as organized interests. • Quite often — inviting association’s members (in fact: lobbyists)by state authorities to participate in legislative work as experts, with additional remuneration • Lack of tangible benefits for registered lobbyists, which would encourage registration. • No mandatory, regular reports submitted by lobbying politicians and civil servants (makes it easy to circumvent the law) • Lack of clarity on the purpose of the Lobbying Act - the fight against corruption or promotion of lobbying • uncontrolled media lobbying activities

Evaluating the current regulation Additional proposals: • Adding to the list of mandatory elements of bill justification – information on interests groups, which will benefit from the new legislation ( art. 135 of Seimas Stanind Orders). • More restrictive access to MPs (as one of the privileges of registered lobbyists) • statutory regulation of the citizens’ right of petition— also to distinguish it from lobbying • promoting a positive image of lobbying at the stage school • State support for the emergence of a strong, professional organization lobbyists promoting legal lobbying activity using sophisticated methods

THANK YOU FOR YOUR ATTENTION ! e-mail: marwisz@prawo.univ.gda.pl Dr Marcin Michał Wiszowaty Faculty of Law and Administration University of Gdańsk, Poland

LOBBYING in Lithuania Law regulation: first experiences and evaluation