Corporate lobbyists have an undue influence on the current global trade talks, says a new report by

ActionAid. The report launches on the first day of the World Economic Forum at Davos, where 25 trade

ministers will meet for a 'mini-ministerial'.

ActionAid’s report, Under the influence, reveals a worldwide explosion of corporate lobbying,

contributing to unfair trade rules that undermine the fight against poverty. The report calls on

governments to curb corporate influence and stop the profits of multinationals being put above the

interests of poor people in the current trade talks.

"Multinational corporations are using their economic might to push for trade rules that will

hinder, not help poor countries. The EU and US promised that the current round of trade

talks would combat poverty. Instead they are colluding with big business to ensure that

only the fat cats will reap the benefits," said Dominic Eagleton, ActionAid policy officer and author

of the report.

The report cites examples of privileged corporate access to, and excessive influence over the WTO

policymaking process. Corporate lobby group, the European Services Forum (ESF), which includes BT,

Vodafone and Lloyds, has confirmed it has regular meetings with high-level EU trade officials to share

strategies for WTO negotiations. The group pushes for liberalisation and the opening up of services

markets, including telecoms, tourism and IT, in developing countries. The EU took up ESF’s position in

its negotiations at last month’s Hong Kong ministerial.

ESF also enjoys easy access to the powerful but secretive EU trade policy setting committee – the 133

Committee – that formulates EU trade policies in WTO negotiations. In contrast to ESF’s easy access,

details of 133 Committee meetings are kept secret from MEPs and the public.

Drug companies are using WTO rules to safeguard their profits and hinder the fight against HIV and

AIDS. In 2003, senior officials from Pfizer, the world’s biggest drug company, negotiated directly with

the WTO’s director-general and its member states to block a proposal that would allow poor countries

to import cheaper copies of patented drugs during health emergencies. Drug industry lobbying at the

WTO brought about a rule change last year, that ensured that countries such as Brazil, India and

Thailand will find it much harder to make cheaper copies of patented medicines.

Meanwhile in 2005 PhRMA, the US drug industry pressure group whose members include Pfizer and

Merck, lobbied the Indian government to bring in a new law that threatens to deny AIDS treatment for

up to 350,000 people who depend on low-cost Indian drugs worldwide.

 Key statistics from the report:

In the EU:
 There are around 15,000 lobbyists based in Brussels - around one for every official in the
European Commission
 more than 70% of Brussels lobbyists represent business interests, while only 10% work for
public interest groups
 annual corporate lobbying expenditure in Brussels is estimated at €750 million to €1 billion

In the US:
 around 17,000 lobbyists work in Washington DC – outnumbering US Congress lawmakers by
30 to one
 corporations and lobby groups spent nearly $13 billion influencing the US Congress and
federal officials from 1998 to 2004
 the pharmaceutical industry spent over $1 billion lobbying in the US in 2004
 93% of the official external advisors to the US trade department are from corporate lobby
groups and multinational companies such as Burger King, Coca-Cola, McDonalds, and Pfizer

"Governments meeting at Davos must not be influenced by the business heavyweights in

their midst. Unless there is a radical change in the direction of the trade talks, putting poor

people’s interests above those of multinationals, it is time to halt the negotiations," said

Ruchi Tripathi, head of ActionAid’s Stop Corporate Abuse campaign.

Gaining political influence in India was once a simple affair: You handed over a suitcase of
cash, in nonsequential notes.

But in India, as elsewhere in the developing world, the old business of corruption is meeting
a new rival: the Washington-style business of persuasion, in which companies garner
influence through golf games, planted news stories and PowerPoint presentations.

As global corporations woo a billion customers, there are tax breaks and contracts to be
wrested from Indian officialdom. Some companies still get them by corrupt means, covering
their tracks with middlemen, as some foreign managers acknowledge in private and as high-
profile Indian media investigations have alleged.

But many companies, according to experts on India's corporate landscape, are turning to
lobbyists who use subtler tools of influence, partly out of fear of anti-bribery laws like the
U.S. Foreign Corrupt Practices Act, which threatens jail time even for chief executives if they
let workers pay bribes overseas.
In Washington, lobbying is a huge, established industry and, of late, a source of controversy.
But in India, where there is a long tradition of outright corruption, lobbying is regarded by
many as a lesser evil.

Supporters say lobbyists are helping to pry open closed industries. They are praised for
introducing fact-based analysis into the debate over liberalization, and for creating a
cheaper alternative to bribery. "To some extent, it will reduce corruption," said Abhijit Sen,
an economist who serves on the government's Planning Commission. "You can get certain
things now for free that you once had to pay for."

Unlike in the West, lobbying is virtually unregulated in India, as in many other developing
countries. And even as institutions like the World Bank increase efforts to curb graft in
developing countries, lobbying will remain a gray area immune from equivalent scrutiny,
said James Wolfensohn, a former World Bank president.

"The earlier efforts of lobbying in the developing countries was really writing checks to the
parliamentarians and officials," he said by telephone. "And we were focusing on that much
more than on hiring a lobbyist to promote the interests of Boeing in India."

But the rise of lobbying here has generated critics, who call for more scrutiny. Consumer
groups contend that Washington-style lobbying can veer into manipulation, with fact-filled
presentations supplemented by other practices like planting misleading news articles and
disguising lobbying campaigns by multinational companies as indigenous grass-roots
initiatives. Many of these practices, to which some of the lobbyists freely admit, are within
the law, but critics say it can be harder to counter these tactics than more straightforward
lawbreaking.

Sunita Narain, a well-known Indian environmentalist, describes the new lobbying as

corruption by other means.

"I'm not very happy with this legalized corruption," said Narain, who for years has battled
against the practices of multinational companies in India. "Give me old-fashioned Indian
corruption. Yes, it stinks. But it's a stink that everyone knows."

Defenders of the lobbying say it signals a new partnership between the state and business in
India. In the decades after independence in 1947, India was a socialist republic notorious for
its "License Raj" - the lumbering bureaucracy that parceled out permissions needed to start,
operate and close businesses.
Being a lobbyist meant begging for exemptions from a system that stifled entrepreneurship.
Today, the lobbyists no longer have to beg.

"You have in the government and in the bureaucracy people you don't have to convince,"
said Prakash Karat, general secretary of the Communist Party of India (Marxist). "They are
themselves clear that you have to implement policies in favor of the corporations."

So sympathetic are many bureaucrats that they often copy and paste language from
lobbyists' presentations into government reports that grant the lobbyists their wishes. Sen,
the economist, said that in a country that lacks world-class research centers, officials have
little choice but to rely on the fact-filled presentations that the lobbyists provide.

Foreign companies seeking access to India's market often collaborate with government
officials to outline a deregulation approach that satisfies the company without marring the
government's political standing.

When the Italian clothier Ermenegildo Zegna wanted to open boutiques in India, it was
barred from doing so by law: India prohibits foreign investment in retailing, because of fears
of undermining millions of mom-and-pop shops.

But India's commerce minister, Kamal Nath, wanted to help Zegna and even wears its suits,
said Rahul Prasad, the designer's managing director for South Asia. So Zegna's chief
executive, Paulo Zegna, began discussing with Nath creative ways to alter the rules. The two
traded frequent faxes and e-mail messages with various ideas, Prasad said.

Then, in a letter to the government, Zegna suggested a compromise: Why not admit foreign
retailers selling only a single brand - approving firms like Zegna and Gap, but excluding
hypermarkets that would compete with small retailers?

In January, the government opened retailing to foreign capital for the first time - and solely
for single brands.

In interviews, some of Delhi's leading lobbyists described their methods. When clients are
accused of breaking the law by an Indian government body, one strategy is to play that body
off against other bodies in India's labyrinthine federal system.

Deepak Talwar, a prominent Delhi lobbyist, represented Coca-Cola, which had been accused
of harming the environment. The company, which declined to comment for this article, has
denied the charges. Talwar's lobbying approach was to ensure, among other things, that
every government or private study accusing the company of environmental harm was
challenged by another study.

In addition, Talwar said during an interview, he lobbied high-ranking government officials

to support the company's cause, in the hope that their influence - in addition to the
conflicting studies - might dissuade government scientists from making a clear-cut
judgment against the company.

Lobbyists say one secret of their craft is to invoke the public good in support of their clients'
interest.

When TetraPak, a European packaging company, wanted duties cut on a raw material, it
hired Dilip Cherian, a Delhi lobbyist who charges clients $100,000 a year.

The company came out with a statement criticizing the duties. But Cherian also attempted
to create a groundswell of support for a duty cut from milk farmers too destitute to buy the
cartons at present prices. TetraPak declined to comment for this article.

Cherian's team traveled to villages to persuade farmers' cooperatives to lobby their

members of Parliament, who in turn lobbied the finance minister. "What happens here is
that actually policy- making is much more democratic than it seems," Cherian said, when
asked about lobbying's influence on democracy.

Revelations of the influence wielded by corporate power players, evident from the
telephonic conversations involving corporate lobbyist Nira Radia, have shocked
the Supreme Court.

"We have been talking about pollution of the sacred rivers like the Ganga. This pollution is
quite mindboggling," a bench comprising Justice G.S. Singhvi and Justice A.K. Ganguly said
on Tuesday.

Taking note of the fact that Radia not only influenced discussions in Parliament but also
news reports appearing in the media at the behest of corporate houses, the court said in
dismay: "We live in a world of illusions. The real world is in the villages and forests. We live
in a world… let us not talk about it."

The observation by the bench - during the hearing on a petition seeking a court-monitored
probe into the 2G spectrum scam - came after advocate Prashant Bhushan read some
transcripts of telephonic conversations between Radia and various other people, including
law makers and journalists, who were reportedly under her influence.

Bhushan, who represented the Centre for Public Interest Litigation (CPIL), said only 100
odd conversations of the 5,800 calls tapped by the income tax department had entered the
public domain. "Even these 100 reveal too much on how the country is being run, how
politicians are subservient, how decisions in court are fixed, how MPs lobby for business
houses and how corporates manage everything in this country," he said. Pointing to Radia's
contact list, Bhushan said the tapes show that she can call anyone in the bureaucracy.

Referring to the petition by industrialist Ratan Tata seeking to prevent publication of the

transcripts to protect his right to privacy, Bhushan said the tapes revealed commission of
several illegal and immoral acts with regard to governance which people in general had the
right to know.

Bhushan got support from Justice Ganguly who cited a judgment by a seven-judge bench on
open governance. The CPIL counsel said it was not just the 2G scam but the tapes also
showed commission of several illegal acts which should be brought in the public domain.
"The court has said in several other judgments also that people are the ultimate masters of
this country and they have a right to know," he said.

Justice Singhvi, noting that some journalists present in the courtroom were smiling, said the
concept of open governance had brought smiles on faces of some young women who
probably represented the media.

In the course of the hearing, Justice Ganguly sought to know what would happen in a case
where both private and public interest merged. "In such cases the right of the people to
know should override," Bhushan said. Even though the judge did not say anything, he
seemed to agree with the advocate.

After Bhushan read from the transcripts of what have come to be known as the Radia tapes,
the court sought to know about Radia's profession. Bhushan said that she was a consultant
but the expanse of her brief included lobbying with law makers, journalists and top
bureaucrats.

"That is not an ostensible profession," Justice Ganguly said. "According to her she is a
consultant, according to you she is a wheeler dealer," Justice Singhvi said.

Justice Ganguly, thereafter, said that the word 'profession' meant something which was
honourable and suggested the use of some other expression to describe Radia's work. On the
comments made by the bench during the hearing, the court clarified that when it said
something it only tried to respond to social ethos.

Bhushan said the tapes showed how the constitution was being subverted in the interest of a
few corporate houses.

Even though the court was hearing CPIL's petition seeking a court-monitored probe in the
2G spectrum scam, Bhushan read out some of the transcripts to show the importance of the
revelations and requested the court to ensure that the tapes did not disappear or get
destroyed.
The advocate said the court should keep a copy of the tapes in safe custody like it did in the
Jain hawala case when it kept the Jain diary in its custody. "There is an attempt to ensure
that the tapes do not see the light of the day," Bhushan said.

Taking note of this demand, the court sought the response of the incometax department by
Wednesday on why a copy of the tapes should not be kept in safe custody by the court.

Bhushan said people were living in a dream world and did not know what corporates were
doing. The court should pass an interim order on preservation of tapes before they
disappear.

Bhushan argued that there was nothing which should prevent the tapes from being revealed
to the public. Personal information could be concealed under the right to privacy only if it
did not involve any public activity or interest.

TATA'S PETITION

Ratan Tata has submitted in his petition before the Supreme Court that damage to his
reputation because of the leaked telephone conversations would also affect investors of the
Tata Group of companies. He also asked the court to protect his right to privacy. For this, he
requested that the court:

1. "Direct the ministry of home, finance, director general income tax and the CBI to
take steps to immediately retrieve and recover as far as possible all recordings that
have been removed from their custody"
2. "Direct the government to conduct through the CBI or any other authority a
thorough inquiry into the manner in which these secret records were, contrary to the
rules, made available and/or became available to those not authorised to so receive
the recordings and file a report before this court"
3. "Direct the government and its agents to ensure that no further publication of these
recordings, either as audio files through the Internet or any print as transcripts
appears in any media - print or electronic - and for that purpose take steps as may be
necessary, including but not limiting to steps under the Cable Television Networks
Regulation Act, 1995, the Information Technology Act, 2000, the Code of Criminal
Procedure, 1973, read with the Indian Penal Code, 1860, and any other law as may be
necessary"