The Zondo inquiry and why SA must formalise lobbying activity

OPINION

The Zondo commission of inquiry into state capture has somewhat thrust the think industry into the spotlight. The think industry refers to a range of individuals, activities and institutions that play the role of facilitating ideas in public affairs. At a professional level, this refers to advisers, consultants, researchers, academics, policy specialists and others who often facilitate ideas through different forms of lobbying and policy engagements.

Historically, the practice of advising governments or kingdoms on governance and public affairs generally is as old as human history. Over the centuries, the think industry has grown and diversified to a point where it now intersects with power in more complex and advanced ways owing to the evolution of modern governance systems.

In economic terms, South Africa has not exactly quantified the size of the lobby industry yet. Countries like the United States of America have evolved some indicators and instruments to measure the size and, more importantly, the impact of the lobby industry on public policy. This is possible because in the US, the industry is regulated. In 2020, lobby spend in the US amounted to $3.5 billion, with the pharmaceutical industry leading the pack.

THE NATURE OF THE BEAST

Lobbying exists in South Africa and forms part of the broader think industry. The business sector has lobbyists in the same manner that government does. For governments, diplomats stationed in other countries lobby for foreign direct investments, commercial relations etc, and so do the bureaucracy and political elite here at home in terms of domestic investments. Similarly, business lobbies government daily on policies and projects. In fact, businesspeople are the busiest lobbyists of them all.

Under normal circumstances, such activity is perfectly legitimate. But in a climate where state capture is the buzz word, the activity gets criminalised, and a trust chasm emerges between major actors in the polity. That is where South Africa is today.

For their part, individuals or institutions in the think industry sometimes play an important role during crises or when a government has to evolve public policy in a new democratic order. For example, we know of the activities of Professor Willie Esterhuyse who became instrumental in the pre-Codesa talks as a broker between key political figures in the ANC and the National Party.

Similarly, the late Frederik Van Zyl Slabbert (politician, businessperson and founder of the Institute for Democratic Alternatives in South Africa), was involved in setting up the 1987 Dakar meeting between an exiled ANC and some leading Afrikaners. Later in 2002, Van Zyl Slabbert headed the task team to review our electoral laws in a bid to reform and improve the governance of elections.

So, the revelations at Zondo commission about the activities of KPMG, Bain, McKinsey, Trillian and others are not surprising. The revelations are reason enough to surface the workings of the lobby industry and begin the much-avoided conversation about its formalisation and regulation. This can help minimise risks and improve the levels of trust. There is no government in the world that can avoid state-business relations.

In her book The Entrepreneurial State, progressive economist Mariana Mazzucato writes about the “co-creation of value” by government and business working together in the economy. She says that “the state has historically served not just as an administrator and regulator of the wealth creation process, but a key actor in it, and often a more daring one, willing to take risks that businesses will not”. Therefore, the state needs business and vice-versa. The temporary lapses – at a transactional level – should not blind us to abandon the long march of history in so far as state-business relations are concerned.

Just like in the US, the lobby industry is controversial, more so in South Africa because it is not yet formally recognised. The controversy stems from the fact that an unelected elite of thinkers often use their proximity to power to influence decision-making on public policy. This often powerful elite is not directly accountable to the electorate, but wields considerable influence, worse in South Africa where its size and impact is unquantified.

Two problems arise in so far as the lobby industry in South Africa is concerned: firstly, the status quo of an unregulated lobby is becoming more untenable. The more the rules of engagement remain unknown, the more we risk strategic state-business relations. If there are country-to-country rules of lobbying, then surely, we must have domestic rules.

Secondly, a robust democratic order requires that all forms power must be held to account. The influence of lobbyists, or the think industry more broadly, on public policy must be questioned and openly evaluated. Because they intercept the relationship between the voter and the politician, it is in the public interest that we know the ideas they promote and why.

Lobbyists and the think industry more broadly enjoy varying forms of autonomy depending on their relationship with power and money. Depending on the nature and purpose of the institution, autonomy takes different forms in the industry. For example, think-tanks tend to enjoy greater relative autonomy compared to special interest lobbyists or consultants.

Just like in politics, the role of money in the think industry is not uncontroversial. But funding is not the only element that establishes legitimacy. Sources of legitimacy are many, including openness about methodology, peer reviews and other mechanisms that ensure that intellectual output withstands scrutiny and upholds the highest standards.

Yes, lobbying activities can lead to good outcomes, while others lead to bad outcomes. But that is stuff of ideology. Of course, the think industry is not homogeneous. It has different ideological persuasions and certain sections advance and protect clearly defined interests.

It is immaterial that some think tanks promote clearly defined interests, or that they have ideological leanings of one kind or another. What is important is that they must be honest and transparent about where they stand on policies of public interest so that their policy positions can be contested openly in the marketplace of ideas. Such honesty is necessary because it contributes to transparency and accountability and in turn, improves the legitimacy of institutions in the think space.

CAN THE ‘EXPERTS’ BE TRUSTED?

It was Woodrow Wilson who once said in 1912 ahead of his election as President of the US: “What I fear, therefore, is a government of experts. God forbid that in democratic country we should resign the task and give the government over to experts.” Wilson himself was a professor at the time. In this campaign speech, he was not suggesting that ignorance should lead government. Rather, he was concerned about the intervention of experts in the relationship between politicians and the voters.

What we see at the Zondo Commission in terms of KPMG, Bain, Trillian and McKinsey is not surprising. Lobbying involves transactions. After all, the insights or influence of the institutions and individuals must be paid for. However, the transaction between the lobbyist and the client must be above board through legal contracts and service level agreements.

In some of the examples cited above, it was not the idea of lobbying that went wrong but rather the transactional part of it. If a think tank or lobbyist engages the state on behalf of a client – what is called facilitation – such an activity must not break the law and must be on record. The task is to make sure that your client is heard by decision-makers, and that influence is exerted based on relevant facts and evidence, rather than swindling and underhand tactics. In a rules-based system of lobbying, sanctions are imposed on rule breakers and incentives are created for compliance.

As our democracy matures, it becomes inevitable that this area will evolve a regime that spells out the rules of engagement. But it cannot be accidental, it must be deliberate. As The Polisee Space, we have decided to take up this task as one of our self-initiated special projects and we hope we can find partners to work out the true nature of the space and hopefully evolve workable solutions.

Lobbying is going nowhere, and it is not a crime. The scrutiny and spotlight cast on the think industry is quite timely. It coincides with the 30-year horizon of our democracy. The latter being a time horizon when democracies typically decline in Africa. If it can adopt rules and ethics, the think industry can be a valuable contributor in the next 30 years of South Africa’s democracy.

David Maimela is executive director of The Polisee Space, a progressive pan-African think-tank.

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