Firms turn to lobbyists to knock at EU’s door

Date: 16/11/1995

WHEN Europe's biggest public relations company Shandwick opened a new specialist lobbying office in Brussels last week, it was bowing to the inevitable.

While in the Seventies or early Eighties firms might have expended all their efforts on influencing national governments and parliaments, the advent of the single European market in 1993 meant Brussels could no longer be kept at arm's length.

Organisations ranging from major corporations to environmental pressure groups are setting up shop in the Belgian capital to ensure that, at the very least, they know what is going on in their areas of interest. At most, they want to have enough influence to shape legislation as it passes through the European Union's decision-making labyrinth.

More than 200 of the world's biggest firms have established Brussels offices, with others arriving all the time. US car giant Chrysler recently opted to shun the Netherlands and set up its European headquarters in the EU's capital city.

There are so many trade associations here that it is hard to keep count. There are at least 500 federations batting for their industries and interests, chambers of commerce from more than 30 countries and satellite offices from all the world's leading law firms.

The powers of the European Commission to vet mergers and take-overs which spill over into other countries, and the creation of the European Economic Area, has also meant organisations from outside the Union are keen to keep an eye on developments in Brussels.

Every member state naturally has a representative office in Brussels, but even their regions are now starting to muscle in, keen to press their side of the case in Brussels - sometimes against their own national governments.

In total, 10,000 lobbyists are believed to be operating in Brussels, dedicated to influencing legislation and winning funding.

Over the past seven years, the game has heated up further with a wave of the big London and Washington public affairs firms setting up their stalls and US law firms arriving en masse.

Formal professional lobbying is still a largely Anglo-Saxon pastime, according to the author and former lobbyist Richard Hill, who has just produced a study of national differences in influence-peddling.

“The only really conscious lobbyists are the Anglo-Saxons,” he says. “Other nationalities tend to get dragged into it.”

The nearest thing to a British or American lobbyist would be a German, he says. “The typical German lobbyist will almost certainly be a lawyer, will have a good brief and will supply substantive information to support his case.”

It is certainly true that the big players among the professional lobbyists are mostly American or British in origin. The names Burson-Marsteller, Hill & Knowlton and Fleishman Hillard can strike fear into the hearts of competitors. These companies are full-time service agencies offering a range of public relations and public affairs services to their big-name clients.

But as the supply of lobbyists expands, some fear the demand is static or even shrinking. Some small European affairs firms went under this year.

It is up to all these companies to justify their presence and explain what they can offer a client that the client cannot do himself: a fact not lost on European Strategy's Maurits Bruggink. “Clients are getting more and more involved in EU affairs and are better prepared than they were a few years ago,” he says.

Elaine Cruikshanks at Hill & Knowlton agrees, but stresses the added value that firms like hers can bring to the party.

“Clients are buying into an additional level of expertise about the system,” she says. “We may not know about the issue as well as they do, but we are an adjunct to people who have their own offices. Some of the best clients we have in public affairs have their own capability, but they want to buy into expertise, knowledge of the people and what motivates them.”

For example, she says, a coalition of companies was setting up a large-scale monitoring operation in Brussels not long ago. “They were so busy they didn't know the Commission was busy drafting legislation in their area until Hill & Knowlton told one of the companies.”

The big public affairs firms insist that they have one huge advantage over the smaller groupings: their geographical spread. A client who wants information gathered and governments lobbied in Washington, Brussels and Sydney or throughout the EU, need only come to one of the big international lobbying firms and leave it in their hands.

Shandwick, whose new Brussels office is offered as a counterbalance to its 25-strong Washington practice, stresses the question of presence is particularly important when dealing with a non-federal government like that of the EU. “Clients have become more sophisticated. They know it's not enough to lobby in Brussels and Strasbourg. They know you must also do it in the capitals,” says Louise Harvey, managing-director of the new Brussels office.

Needless to say, the smaller operations disagree. “I wouldn't say small is beautiful, but small is convenient,” says David Haworth from Euro-Associates. “It means overhead costs and fees can be kept down.”

Nevertheless, the lobbyists all seem to agree that it will be a long time before the Council of Ministers stops being the key institution to be lobbied and monitored.

It is certainly true that the Maastricht Treaty enhanced the competence of the European Parliament, giving it co-decision powers in certain areas of legislation. Committee meetings which, until recently, had been sparsely attended even by MEPs, sometimes have their back rows packed by lines of note-takers working for lobbies.

But this still does not compare with the situation in the US Congress, with its elaborate system of formal hearings and submissions on any piece of legislation, which are held in public and published.

Parliament has started holding regular hearings, but usually on a subject or an industry. “Most of these are general rather than legislation-specific,” says Michael Callingaert, a former US government staffer who lobbied in Brussels for the US pharmaceutical industry.

“The problem with dealing with Parliament is its lack of organisation. There is no compulsion for them to deal with us like there is in the Congress.”

Until Parliament plays a bigger role in the law-making process, lobbying firms, particularly those with a presence throughout the EU, will continue to concentrate their fire on the national capitals.

“The Commission is one thing, Parliament is another, but in 99&percent; of cases, it will be decided by complex votes taken by national governments. The Council is still the most important institution,” says Michael Kearns of Fleishman Hillard.

This is just one of the many differences between Washington and Brussels. The powers of US lobbyists worry many in Brussels who fear the same kind of pressure group power taking a hold here.

Marie-Paule Baus, a public affairs specialist who helped create the Brussels-based European Institute for Public Affairs and Lobbying, is one of those who hopes the American style stays across the water.

“Lobbying in Europe is cleaner,” she says. “You have to come with convincing arguments and a well-prepared dossier, but I think money is less important in Europe.”

Parliament has recognised the need for some control and looks set to give approval to a tough code of conduct for lobbyists during December, a move that lobbyists at least claim to welcome.

On the other hand, Washington lobbying is intense and cut-throat for a reason, claims Peter Linton of Robinson Linton Associates. “The one major difference in the US is that the federal budget is a massive portion of GDP,” he says. “That means the game in Washington is big-time money. Relatively speaking, the EU's budget is minuscule. What we have here is much more purely political and regulatory.

“Compared with what goes on in Washington, this is still small-scale and I suspect it always will be.”