Over 130 people gathered on 24. September 2018 on the premises of the Permanent Representation of Austria to the EU to attend the panel discussion “Corporate Capture in Europe: The influence of corporations in policy making and what to do about it”, hosted by the Brussels Office of the Austrian Federal Chamber of Labour (AK EUROPA) and the Austrian Trade Union Federation (ÖGB Europabüro) and The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU). The question of the influence of business interests on legislation in the European Union was hotly debated.
Olivier Hoedeman of “Corporate Europe Observatory” and ALTER-EU, who introduced the term “Corporate Capture”, started the debate. Corporate Capture is the close intertwining of business interests and EU institutions, which is facilitated by informal communication channels and “revolving doors”, which lead from politics to business and vice versa. However, more and more academics would also sit on advisory boards, some of whom would work for groups with business interests and therefore frame scientific debates around said interests (“academic capture”). Obviously, this has an impact on proposals and laws of the Union. However, this would also create public mistrust. Therefore, democratic control and transparency is required not only in the EU, but also in the institutions of Member States, to correct the imbalance between politics as defined by large companies and the general social interest.
Mariana Prats, researcher at the OECD Public Integrity division, also talked about the asymmetric relation concerning the access to politicians by business interests/lobbyists. There would be three measures, which could put an end to “Corporate Capture”. (I) Trade unions and civil society had to be strengthened to create fair conditions. (II) The role of advisory bodies had to be reconsidered as these were only lightly regulated and (III) political funding had to be subject to far-reaching regulation.
Frank Ey of the Chamber of Labour Vienna referred to the extreme imbalance of lobbyists in EU bodies; this had been particularly notable during the financial crisis of 2008, when advisory experts came exclusively from the finance sector. However, some sectors – particularly also through pressure from civil society – have made progress in the meantime. As an example for the meeting of different (lobby)interests he quoted the REFIT platform, where 50% business lobbyists were gathered and where the other 50% would deal with “all other” interests, such as those relating to civil society, consumers, environment and employees. This too could not be called a balanced composition. According to the EU Parliament, 80,000 people in Brussels would be involved in EU lobbying, which would mean that on average each MEP would be lobbied by at least 100 people. Of these, just 1.5% would be trade unionists and consumer protection groups.
MEP Ana Gomes, from the S&D faction and deputy chair of the TAX3 Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance, referred to the important role of civil society, whose engagement made the Transparency Register of the EU possible. However, this was by far not sufficient enough, as she impressively illustrated by the case of José Manuel Barroso, who went from the EU Commission to Goldman-Sachs. In general, the finance sector would be one of the biggest lobbying interest groups and had co-written laws on deregulation measures for years. In order to counter this at all, she demanded a European “Glass/Steagall” Act, hence the separation of credit and investment banks.
Paul de Clerck of Friends of the Earth & ALTER-EU referred to TTIP as a classic case of “Corporate Capture”. Negotiations behind closed doors, a trade agreement, which was only tailored to maximise profits and had been characterised by a “What can we do for you?” relationship of politics and business. TTIP had fulfilled all “Corporate Capture” criteria. According to de Clerck, what was needed was a drastic change, not only in Brussels' political culture, but also at Member State level.
The author of the book “Shadow Sovereigns: How global corporations are seizing power”, Susan George, painted a bleak picture and referred to a study from 2011, which showed that multinational companies were closely intertwined among themselves. The bankruptcy of one corporation would trigger a domino effect where all would fall. This in turn would result in a bigger crisis than the one in 2008, which followed the collapse of Lehman Brothers. Hence, it was time to act before the real economy would be damaged in such away, which cannot even be imagined today.
Solving the various problems the podium referred to will only be possible by greater transparency in the EU and its institutions. Hence, trade unions, employee interest groups and the civil society must continue to fight for transparency efforts to make the EU a more social and fair place.
AK: Lobbying in Brussels. Breaking the excessive power of corporations
Corporate Capture in Europe. When big business dominates policy-making and threatens our rights
A&W Blog: Who calls the shots Brussels – on the political balance of power at EU level
The Fire Power of the Financial Lobby – A Survey of the Size of the Financial Lobby at the EU level