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The Nira Radia tapes, coming on the back of the “Telecom 2G Spectrum Scam” and subsequent housing loan scam of financial institutions throws up many interesting issues that needs to be publicly debated and decided upon by the government in order to prevent any ugly controversies in the future. Even if its means going for a national referendum on the issue.
First and foremost is: Should lobbying be legalized? Right now it’s a dirty word in Indian polity and no wonder any form of lobbying by any individual or institution is being seen and perceived as something dirty and illegal. Is it is the question ?
Business is conducted with profit motives, any good student of economics knows this and he does not have to go back to text books to read Adam Smith’s wealth of nations. Or Keynesian economics to understand what is short term or long term economics means. Having said this, the questions now arises as to how business is done and promoted in India particularly.
India has come a long way from the license raj which apparently led to a semblance of alleged corruption in government or bureaucracy or polity, not much of it proved, but always debated and fumed about in parliament or in public. The economic reforms unleashed by the government in the early 90’s has brought with it a sudden upsurge in the economy and tremendous prosperity, albeit only urban prosperity, economists still question if benefits have permeated to the rural masses.
The new prosperity index has also spawned not only a noveau riche society, but accompanying evils as we consider it today. A bikini was blasphemy and scandalous in the Victorian age of rich tapestry and draperies that literally suffocated the wearer with the surfeit of textiles. Today a bikini is so common that one hardly ever thinks of it as anything exciting. Similarly , the system of getting things done in government in a post license raj is a different ball game. Lobbying is the buzz word and its done at various levels.
For corporate, while there is a level playing field to compete and bag contracts, there is still the element of a bit of an extra edge if an industry or industrialist or a lobbyist knew the powers that be to grant favor in terms of contracts. Here is where lobbying plays a great part. On any given day, if you were to visit the corridors of power, you will always find suited and booted corporate executives doing the rounds to meet any official upwards of a joint secretary while their bosses consort with the political big whigs of the day to push their cases. The case may relate to pushing a business proposal over a rival or seeking justice in terms of strongly imposed taxes or the like or representation in terms of a government policy that impacts business. Here the MNCs have a lobbying agenda and generally they do it officially through trade bodies or simply through the visit of their gora bosses overseas.
All this on the surface appears normal legitimate activity as long as no suitcase loaded with foreign exchange is being exchanged at any levels. |Here is where the hawk eye, the central vigilance commission keeps a close a tab on officials. Often we hear of stories of CBI trapping errant officials for pushing files for consideration. This is more in the realm of corruption.
So is lobbying a corrupt practice’? At least in the United States, a very progressive economy and a model for the world to replicate until the Lehman brothers induced global meltdown, lobbying is legal with sufficient safeguards built into the system. There are lobby firms in the United States which do the work for a huge price. They network with government officials, senators and seek to create public opinion on government policies and foreign relations exercises. Their charges are enormous and can go upto over Rs 250 to Rs 300 crore where business interests worth over Rs 20,000 to Rs 30,000 crore are involved.
A recent example is the US department of labour putting the garment and rice industry in India under the watch list for child labour abuse. We know of instances of child labour in the match making industry in Sivakasi in Tamil Nadu, may be scattered instances in garment and hosiery industry and perhaps nil in the rice industry, which is highly automated, while families might work together in farms using their own children. The Indian embassy in the United States, following the advocacy policy, advised the garment industry and the rice exporting industry to fight for removal of their names under the watch list either by disproving it with sufficient evidence or clean up their stables.
Since lobby firms charge huge sums, both the sectors, it is learnt, did not lobby but left the matter to be resolved at the government to government level. The battle is still on and not much has been written about it in the Indian press. The cost for lobbying was reportedly pegged at about Rs 50 crore a year, a fleabite for an industry that earns worth over Rs 20,000 crore worth foreign exchange.
While it might look as if I am digressing, the background for how business in India was done and has now changed, brings issues in the perspective.
Back home, lobbying for licenses in the 2G spectrum issue, was Nira Radia justified in lobbying for any particular group. She represented the interests of the country’s two most powerful business conglomerates in communication strategies, the TATAS and Reliance Group (Mukesh Ambani) and PR work through her PR agency Vaishnavi. All perfectly legal and above board. But did the associate agencies she floated for lobbying work, cross the limits of business ethics is the question under consideration. Only investigating agencies and the courts can decide the matter in a just manner even as a trial by the media continues to rage.
TATA honcho, Ratan TATA has rightly raised the matter before the courts as to, while one can justify investigating agencies to use tools they consider to ferret out evidence to trace the truth, it was not proper to leak out the same for publication. Tapping and recording conversations and leaking them to the media firstly amounted to surveillance by official agencies infringing on the fundamental right of a citizen to privacy as enshrined under the right to freedom of expression or right to life under the constitution. But official agencies cannot also gather evidence unless these tools are used if the end result is going to be the larger public good. If its not then they have intruded on a citizens private life and grossly violated his fundamental right to privacy.
Right now these are in the realm of what one would say grey areas of the law. If political donation by corporate is legal why not lobbying be declared legal as long as guidelines are prescribed for business ethics in pursuing such practices which does not undermine the larger public interests and stays confined within business promotion , that too , in a healthy manner without damaging the reputation or the strength of peer groups in the field.
A top level government official, who has handled key sensitive ministries during his days and advised several prime ministers, observed “ PR bodies have to come out of personal fiefdoms for rescuing the professional from Radias, Govt affairs/Public Affairs agencies. Advocacy is part of any Public affairs department but advocacy to the detriment of the people and nation for private gain against public good, for sheer profiteering is harmful to capitalism as such, Individual capitalists gain against the spirit of capitalism works against capitalism. ‘‘
He further adds: “ Adam Smith did not favor this: nor Max Weber. The US went down because individual capitalists went for greed. PR as an instrument of capitalism, competition, has to stay away from individual capitalist’s gain that harms the system. Do PR professionals have the courage to internalize and keep a distance between capitalist’s greed and capitalism’s need?
Now that’s the question that need to be answered. And the answers to that will determine if Nira Radia did the right thing in lobbying or not. Lobbying per se is not an unethical practice in today’s modern world of doing business, but does it harm public interests is the question.
The 2G issue is one of leakage of revenue for the government as pointed out by the Comptroller and Auditor General , a mind boggling Rs 1,75,000 crore plus. Mind you, it’s not a Rs 1.75 lakh crore scam or bribery issue or any one has made this kind of money. The question is of a government policy, right or wrong that allegedly allowed this revenue to be lost by the government.
Was an established system zapped is the question. If so then, it is in the realm of public good which has been affected. Such money could have been used, if raised, for development works for the people. And any lobbying in this context in influencing government policy in favor of one corporate over the other, could fall into grey areas of rightful or wrongful business practices. And associated with this is the role of the media, often described as the watchdog of society and government, have they crossed the limits of journalistic ethics and media practices or limits of public accountability by allegedly associating themselves with the lobbyists as the radio tapes show , albeit superficially.
In the long run, it’s good to legalise lobbying to remove such doubts from the public mind and bring in greater credibility into the system where government, corporate and lobbyists can come clean with greater accountability and responsibility to the society and do public good.
TN Ashok is a corporate strategist and economic journalist.