PM&C shrugs off audit of toothless federal lobbying rules

By Stephen Easton

Thursday February 15, 2018

The Commonwealth register for professional lobbyists and the related code of conduct do not seem to live up to their high-minded objectives, but that appears to be an issue of design rather than delivery.

The Australian National Audit Office points to three ways the scheme’s management could be improved, while acknowledging the arrangements put in place by the Department of the Prime Minister and Cabinet to manage the scheme and monitor compliance are in line with what successive governments have wanted.

PM&C’s response suggests the framework’s main weakness is that it is not legislated; “it is not compulsory for lobbyists to register and penalties cannot be applied for the failure of unregistered lobbyists to adhere to the Code” because it is just an administrative process.

ANAO notes the federal register of lobbyists and the related code of conduct is supposed to “promote trust in the integrity of government processes and ensure that contact between lobbyists and Government representatives is conducted in accordance with public expectations of transparency, integrity and honesty” — but its report casts serious doubt on how well it achieves that laudable aim.

The system, whereby only hired-gun lobbyists have to register but not the in-house type who are permanently employed to earbash public officials, essentially relies mainly on the integrity of those being lobbied.

It basically puts the onus on government representatives — ministers, agency heads, Defence Force members, public servants and any contractors or consultants they employ — to decline to meet with those who don’t register and comply with the code, and to report any breaches to PM&C.

The auditors want PM&C to improve its communications, to raise awareness of the rules, both among lobbyists themselves and the government representatives to whom it applies. “A strategy to raise the lobbying community’s awareness of the Code would help mitigate the risk of non-compliance by unregistered lobbyists,” says the report.

ANAO found the department had not established effective evaluation or performance monitoring and reporting processes, and it wants to see that remedied, as well as stronger compliance arrangements.

“PM&C’s delivery of a low level of compliance activity reflects the original decision of government,” ANAO reports, however it suggests the department could still have done more:

“The effectiveness of the department’s compliance monitoring approach has been reduced by the lack of strategy around advice to Government representatives of their compliance monitoring responsibilities and PM&C’s reliance on reports of non-compliance to drive compliance activities.

“Further, the approach adopted to manage compliance has not been informed by an assessment of risks. While each allegation of non-compliance the ANAO identified had been assessed, departmental records of assessments were not well maintained or collated to inform future compliance activity.

“Given the regime has been in place for close to a decade, it is timely for the department to consider whether the compliance management arrangements for the Code and Register are appropriate.”

There is not enough information published showing how well the scheme is fulfilling its objectives, the audit found. “The Register does not, on its own, provide transparency into the integrity of the contact between lobbyists and Government representatives or the matters discussed.”

Updates should be done more quickly, “due diligence arrangements relating to former Government representatives could be strengthened” and the accuracy of information added to the register in between two yearly reporting periods could be improved, according to the report.

While the compliance monitoring approach is what the government asked for, the report notes that “PM&C could not demonstrate that it had undertaken an assessment of compliance risks or provided advice about the ongoing appropriateness of this approach since its implementation.”

ANAO points out there is no formal communication plan to inform people on the government side about their responsibilities for monitoring lobbyists’ compliance, although PM&C “has taken some steps” like sending letters to secretaries.

“It was not clear from the department’s records how many alleged instances of non-compliance had been reported since 2013,” the report adds.

“For each of the 11 instances of alleged non-compliance identified by the ANAO, the department had conducted an assessment and taken steps to address the alleged non-compliance. The department did not remove or suspend any these 11 registrants or use this information to inform future compliance activity.”

‘It is not a regulatory regime’

PM&C secretary Martin Parkinson says the department will try, but he only agrees to the three-pronged recommendation from the audit office “in part” on the basis that “some elements of the recommendation are better suited to a legislatively-based regime” that would regulate all lobbyists.

“As you are aware, the Lobbying Code of Conduct, as established in 2008 and continued by successive Governments, is an administrative initiative, not a regulatory regime,” Parkinson wrote to auditor-general Grant Hehir.

As such, the head of the APS only promises to “consider how best to implement the recommendation sub-points consistent with the spirit and intent of the policy objectives of the Register of Lobbyists as an administrative scheme.”

Parkinson suggests the auditors are asking a little too much of the department, based on comparing the Commonwealth’s weak administrative scheme to stronger regulatory schemes in other Australian jurisdictions that are underpinned by legislation. He suggests that it’s up to federal legislators to decide they want the same.

All the same, he notes some improvements that are being made within the existing scheme and says the report will also be used to inform the department’s official advice to government.

“Prior to the audit, PM&C had allocated resources to modernise the IT system which underpins the Register with a view to streamline many of the current processes and improve functionality for lobbyists and other stakeholders,” Parkinson writes in his response.

“It is anticipated that the new system will reduce processing time, strengthen quality assurance processes, be more flexible and improve reporting while also implementing other improvements consistent with the audit’s findings and recommendation.

“As you know, PM&C agrees with, and is intending to implement, a strategy to raise lobbyists’ and Government representatives’ awareness of the Code and their responsibilities, following the completion of the IT system redevelopment.”

“PM&C will also develop a set of performance measures and establish an evaluation framework as part of the redeveloped system, to better inform stakeholders about the extent to which outcomes and broader policy objectives are being achieved…”

Incidentally, the department has also released a separate internal audit report it commissioned from PwC on its management of the scheme on its freedom of information disclosure log. The department agreed to three moderate-priority recommendations made by the consultants.

Image: Sutha Kamal.

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