Lobbying: What is the fuss about? | Deccan Chronicle
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Lobbying: What is the fuss about?

DC | 12th Dec 2012

After being defeated in Parliament on the question of FDI in multi-brand retail, the BJP and the Left have latched on to a mandatory filing by Walmart, the international retail giant, that the company undertook lobbying in America to help it gain entry into foreign markets, including India.

There is nothing sinister about this, and yet the Opposition parties cannot accept their pet project of blocking FDI in retail being defeated. They are looking for any reason to stop Parliament from functioning. We saw this in the Rajya Sabha on Monday and in both Houses on Tuesday.

The allegation of bribes has been made when those doing so should know better. In the circumstances, the reckless allegation can only be called political — and disingenuous. Lobbying has existed in the United States since the time of George Washington, and the first lobbyists represented farm lobbies.

There is nothing shady about the activity. It is well regulated. Lobbyists file activity and expenditure reports to the US Senate each year. Lobbyist firms are well-known entities. Indeed, several are run by former Congressmen. Anyone with a cause — and not only commercial — can engage the services of lobbyists who are valued for their access on Capitol Hill.

The embassies of India and Pakistan, besides others, also hire lobbyists to push their case in the US Congress on specific qu­e­stions (like Kashmir, civil nuclear issue, etc). Lobbyists don’t offer bribes to American legislators. That would be a serious offence. They run large establishments of lawyers, researchers, public relations people and others.

They seek to in­fl­u­ence perceptions, much like advertisers do, and their work entails sufficiently convincing those in authority to help effect policy and legislative changes. Walmart declared it spent $25 million since 2008 to lobby in the US to push for entry into the retail sector in many countries, including India. No lobbying was done in India.

Nor was the effort, for which the filing in question was made, India-specific. Then what is there to get excited about? Formal lobbying conducted within specific laws does not exist in India while bribery is routine, rampant, and all-pervasive. Much of the allegation of corruption is directed at the political class, about which most people harbour a low opinion.

It is therefore ironic to see members of this class make such a song and dance about Walmart’s perfectly ordinary declaration. Patently, the purpose of the Opposition is to scuttle the implementation of FDI in multi-brand retail. It is not a far-out thought that the Opposition may want the policy paralysis charge to stick to give the government a bad name. But India suffers in the bargain.


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Dr.C.Murukadas's picture
by Dr.C.Murukadas (not verified) on
Lobbying means sustained efforts of interested parties like corporates, industry/trade groups and others to feed information/details amongst politicians, lawmakers and bureaucrats, with a view to influence and derive favourable governmental policy or eliminate/modify unfavourable government policy, which can result in considerable benefits for the sponsor/sponsors. Professional lobbyists are people whose business is trying to influence legislators and bureaucrats on behalf of a company or group or individual who hires them. Individuals and nonprofit organizations can also lobby as an act of volunteering or as a small part of their normal job. Lobbying by capitalists often leads to provision of false or exaggerated information or particulars or details or sequences about the sponsor or the opposite party. Lobbying is said to be an accepted practice in some countries, particularly in the US. But social activists say that from moral and ethical point of view lobbying is an erroneous and wrong practice. To them, influencing somebody, particularly people in authority, often involves unethical practices and it is definitely a shadow activity. Lobbying often involves corruption and bribery and use other of illegal means. The protagonists of lobbying say that the expenditure simply is the cost of hiring lobbyists (fees run into tens of thousands of dollars per month) and the related time and material expenses of putting together their respective cases in front of the government and law makers, and therefore cannot be construed as bribery. But through their activities the lobbyists often attempt to corrupt the minds of the authorities which often lead to wrong decisions injurious to the opponents and hardship to the public. While lobbying for a public cause is acceptable, lobbying for private gain is not a laudable practice in a civilized society. Lobbing has grown enormously over the years due primarily to the growth of crony capitalists whose sole motive is profit maximization and to gain extra normal income and wealth at the cost of the poor. It has in fact emerged as a multi-billion dollar industry and it is widely practiced in the United States and Europe. According to Center for Responsive Politics, nearly $3.3 billion was spent lobbyists to influence policies in Washington.* It means that the American government is highly susceptible to maneuvering and manipulations of the lobbyists. Even the American Presidents have not been free from the pervading influence of the lobbyists on so many occasions and numerous issues concerning US as well as rest of the world. Now the lobbyists engaged by Walmart, for instance, apart from influencing American politicians, law makers and bureaucrats, were able to persuade the American President to clamour for allowing FDI in retail trade in India. In an interview to Press Trust of India, on 15th July 2012, the US President Barack Obama stated: “In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow.” Obama’s above statement does not seem to be a passing reference made unwittingly. Certainly, it was the result of powerful lobbying by the multinational retail giants to open up the Indian retail market. Anyway, it is deplorable for an American President to be seen advising India on a sensitive subject that has been hanging fire for many years now. Obviously, Obama’s statement aroused strong opposition from a wide spectrum of political parties, traders associations and others in India. Samajwadi Party (SP) leader Shahid Siddiqui said: "We do not need any certificate from anybody, and I will tell our Prime Minister, leaders and economists that take decisions in the interest of India without caring for how the West or how the Americans look at us. If we need FDI in retail, we should go for it. If we don't need FDI in retail, then we should not go for it. We have to see the interests of our peasantry, common people, shop-keepers, Walmart has, for obvious reasons, revealed that it has spent US$ 25 million (around Rs.125 crores) for lobbying with a view to influence the Indian government to allow FDI in multi-brand retail trade. Moreover, it is suspected that that in addition to the amount disclosed as expenditure towards lobbying, Walmart has spent huge amount as kick off payments to Indians. Of course, money spent by Walmart to get favor of concerned law makers/ authorities, to exert pressure on Indian government as legally permitted expenditure as lobbying in America. But any amount spent for the same purpose is known as bribery in India and most other countries. Walmart is clever enough to establish its retail chain business empire throughout the whole world. It will not do silly mistakes to get trapped easily. So its spokesman is right that they not done anything improper. And the protagonists of neo-liberal reforms may say that Walmart has not committed any mistake in the Indian soil. But the fact that it has spent money to influence, directly or indirectly, the Indian government to allow FDI in the retail sector continuously for four years is an unlawful act. There is no guarantee that Indians have not receieved pecuniary or other benefits. A reporter published in New York Times entitled, "Officials at Walmart de Mexico (a.k.a. Walmex), showed that Walmart had made hundreds of cash payments to government officials — including “mayors and city council members, obscure urban planners, [and] low-level bureaucrats” — totaling about $24 million, in order to obtain building permits “in virtually every corner of the country.” Wal-Mart de Mexico paid bribes on numerous occasions to obtain construction permits during a period of time when they were rushing to rapidly expand across the nation. This was not reported in dis-closer reports. As a result of these tactics, Wal-Mart has grown to become Mexico’s largest private employer, employing more than 2 lakh employees in Mexico. One in five Walmart stores is now in Mexico. These tactics of establishing business and promoting it are common for Walmart and adopts everywhere. Indian political environment is very conducive for Walmart. While the other multinationals retail giants continue to wait for fuller access, Walmart has been expanding its joint venture with Bharti, an Indian conglomerate, which provides wholesaling and logistics—including to Bharti's Easy Day chain. Walmart may be on the verge of forming another alliance, with Future Group, the Mumbai-based owner of Pantaloon Retail, though the behemoth from Bentonville refuses to confirm reports that the two firms are talking. It is reported that Walmart has been making preparations in various cities of the India to stage a grand entry into retail trade once India gives permission. The opposition parties alleged that Walmart had indulged in corruption to enter Indian market. So they have pressed for a probe into this "illegality" and the wanted Prime Minister Manmohan Singh to make a statement on this issue. So, Walmart was pretty sure that it will be possible to pressurise the Indian government to allow FDI in multi-brand retail trade. The Public Interest Litigation filed in the Madras High Court by T. Vellaiyan, President, Federation of Tamil Nadu Traders' Association, has brought to light that Walmart has fraudulently entered into multi-brand retail trading even before the government notified FDI in mutli-brand retail trade. That is, in March and April 2012 year, Wal Mart Stores Inc, USA through its subsidiary, in collusion with two Indian firms, illegally invested Rs 455.80 crore in multi -brand retail in India by masquerading it as for “Services Sector.” Moreover, in his complaint submitted to the Prime Minister's Office the CPI Rajya Sabha member M.P. Achuthan alleged that Walmart had invested about R456-crore in a company called Cedar Support Services through compulsorily convertible debentures (CCDs) in March 2010. The announcement that a retired judge would hold the inquiry into reports on lobbying by international supermarket chain Walmart to open the way for foreign equity in retail trade in India is not the end. it will be of no use. The inquiry should be conducted by a Special Investigating Team (SIT) under supervision of the Supreme Court or at least by a sitting judge of the Supreme Court. So, for judicial inquiry, terms of reference should be broad based, otherwise it will be very easy to skip off and get clean chit to this giant company. Where is the guarantee that Walmart will not indulge in high voltage lobbying to get clean chit?


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