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The Regulation of Lobbying

The Regulation of Lobbying

Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.
The Regulation of Lobbying


This paper discusses the regulation of political lobbyists as at 2 June 2008. It takes a comparative approach, looking at current and proposed schemes in Australia and in selected overseas jurisdictions. It asks what is the best and most effective regulatory scheme to safeguard and nurture confidence in the democratic system?

Definition: By ‘lobbying’ is meant the attempt to influence decision makers into choosing a course of action preferred by the lobbyist or his client. It may be to pass or amend certain legislation, or to oppose its passage through Parliament. It may be to oppose, adopt or amend a government policy, or to influence the awarding of a government contract, or the allocation of funding. [1]

Issues: While lobbying is undoubtedly a ‘legitimate activity’, there is a perception that lobbyists can sometimes wield undue influence and that, without appropriate regulation, their activities may skew the political decision making process. Two key issues arise: first, the effective regulation of lobbyists generally; and secondly the particular concerns relating to post-separation employment for Ministers and others, where former public office holders are recruited to the lobbying industry. [2]

Questions: One question for the regulation of lobbying is how narrowly or widely to cast the net? Are more or less all forms of lobbying and lobbyists to be included under any regulatory scheme, or is it to be more focused, perhaps limited to those professional ‘hired guns’ who lobby on behalf of their clients? The same applies to lobbying activities. Should regulation attempt to capture only communications seeking to influence Ministers, or should it extend to such dealings with public servants and all parliamentarians? [3]

Types of regulatory systems: The academic literature identifies three ‘types’ of regulatory systems – ‘lowly regulated systems’; ‘medium regulated systems’; and ‘highly regulated systems’. A key finding is that ‘Actors in highly regulated systems were more likely to agree, compared to actors in lowly regulated systems, that regulations help ensure accountability in government’. [4]

United States: The more ‘highly regulated’ systems are found in the US. Statutory schemes are in place, federally under the Lobbying Disclosure Act of 1995, with strict registration and reporting requirements for all professional lobbyists who seek to influence either members of the Executive or the Congress. Spending disclosure requirements are also in place, as are enforcement mechanisms and criminal penalties for failure to comply with reporting requirements. Post-separation or ‘revolving door’ provisions are a further feature of US regulatory systems. Federally, a tiered system operates under the Ethics in Government Actof 1978 involving lifetime bans on lobbying in some cases, and two or one year bans in others. For example, as amended in 2007 the Act places a two-year ban on lobbying contacts by former Senators and ‘very senior’ Executive officials. A one-year ban continues to apply to former Members of the House of Representatives, elected officers of the House, and Senate officers, or senior Senate employees. [5.1]

Canada: A similar statutory approach to the regulation of lobbying operates federally in Canada and in several Provinces. Federally, the relevant legislation is the Lobbyists Registration Act of 1985 (to be renamed the Lobbyist Act). This probably ranks among the medium to highly regulated systems. Lobbyists are defined broadly, as is lobbying activity to cover Senators and MPs and all persons holding an elected or appointed position with the Canadian Government. Enforcement of the regulations is the work of the new Commissioner of Lobbying, an independent officer of Parliament. There is a statutory five-year ban on ‘designated public office holders’ from lobbying (including Ministers and senior public servants). Under the Conflict of Interest and Post-employment Code for Public Office Holders, Ministers and senior public servants are permanently banned from engaging in particular lobbying/advocacy activity. The one area of regulation not provided for it seems is that of ‘spending disclosure’. [5.3]

United Kingdom: The Public Administration Select Committee is currently conducting an inquiry into the regulation of lobbying. Provision for post-separation employment is made under the Ministerial Code of Conduct, which requires Ministers to seek advice from the independent Advisory Committee on Business Appointments about positions they wish to take up within two-years of leaving office. The system operates on a voluntary basis, but it is said to be ‘widely and willingly used’. Published on the Advisory Committee’s website are lists of those appointments taken up by Ministers and Crown Servants. [5.5]

Australia: Due to come into full effect on 1 July 2008 is the Commonwealth Government’s Lobbying Code of Conduct. This non-statutory scheme probably belongs to either the category of ‘lowly regulated’ or ‘medium regulated systems’. Its registration requirements are relatively strict, as are its ‘principles of engagement with government representatives’. The draft code’s revolving door provisions are also relatively strict. Ministers and Parliamentary Secretaries are banned from lobbying for 18 months, while a one-year ban applies to retiring Ministerial advisory staff, senior public servants and high-ranking Defence Force personnel. On the other hand, a narrow definition of lobbyists applies, confined to ‘hired guns’ working on behalf of third party clients. Further, lobbying activity directed towards parliamentarians not holding executive office is excluded from the scheme. Also, while the registration requirements are relatively strict, they are to be enforced by the Cabinet Secretary, not by an independent statutory body. On 14 May 2008 the Senate referred the Lobbying Code of Conduct to the Finance and Public Administration Committee for inquiry and report. [6.1]

Western Australia: The Commonwealth system is based to a significant extent on the Contact with Lobbyists Code established in Western Australia in 2006. [6.4]

New South Wales: In 2006 the NSW Premier’s Department issued guidelines for Ministers, their staff and public officials in dealing with lobbyists. [6.5] That same year the Code of Conduct for Ministers was amended. First, to require Ministers who, while in office, are considering an offer of post-separation employment as lobbyists on behalf of third parties to obtain advice from the Parliamentary Ethics Adviser where the prospective work relates to their portfolio responsibilities. In comparable circumstances, within 12 months of leaving office, former Ministers must also obtain advice from the Parliamentary Ethics Adviser.[6.6]