Rossiyskaya Gazeta: Influencing the Laws (19.02.2013)
Civilised Lobbyism Now in Demand in Russia
By Yulia Voronina
Entrepreneurs are going to work out recommendations for a Lobbyism Act, say the participants of the round-table workshop on “Business-Government Relations – New Cooperation Opportunities and Civilised Lobbyism”.
“We are now engaged in more active discussions of this issue, because it is only now that we have seen the real economy sector finally take shape. As recently as ten years ago few people were interested in conditioning the environment in which business operated, all everyone cared about was assets,” says Marat Bashirov, Director for GR and Strategic Communications at Complex Energy Systems. “We do not want to influence the way the country is run, but we want an independent way of formulating the rules of business. This is why we need a package of direct-action laws which would contribute to the promotion of private interests and provide all business players, large, medium, and small, with an opportunity to promote their interests.”
As the business community has observed, corruption-reliant schemes of promoting their interests are detrimental for the image of the business. “These schemes only work on a local level and do not bring about a rise in the price of components. Meanwhile, the key task of any large company is to increase component prices. At present, we can only make a reliable profits and expenses forecast for 2-3 years. This is a situation in which it is quite difficult to attract long-term debt financing”, Mr Bashirov added.
According to Rustam Akberdin, Director of the Department for Promotion of Entrepreneurial Activity at the Eurasian Economic Commission, the Commission has created 16 consultation committees to give businesses the opportunity to promote its interests. Their task is to provide prompt information to businesses of any legal acts due to be adopted in the near future. Moreover, the Consultation Committee for Business also works together with expert teams who offer their opinions concerning specific legal acts. However, the share of business representatives on the committees is as low as 11.9%. This means that the committees largely consist of civil servants of the supranational and sector levels, while businesses have virtually no access to finding solutions to their own problems. “At the supranational level, the lobbying mechanisms are not yet in place. All the important issues are decided by civil servants, while entrepreneurs take no part in discussions, despite the fact that many legal acts require attention and control on their part”, Mr Akberdin added.
Entrepreneurs are convinced that a Lobbyism Act would provide them with access to the making of regulatory acts. At present, they have nearly no such opportunity, which makes them incur to considerable damage. “The obsolete regulatory system is a serious problem that works as a brake on the development of industry. A striking example is provided by the Industrial Safety Act which regulates the procedures for all repair and construction work undertaken by companies. Moreover, there are problems with the certification of imported equipment since it may turn out to be incompliant with the existing legal acts. The need for its adaptation brings up the maintenance and warranty costs considerably”, said Oleg Vaitman, Vice-President for GR at Rusal. “The same situation can be observed in the energy sector, where there are two price-setting zones. I believe that businesses must have wide-ranging and transparent access to the discussion of regulatory acts. This will create a certain degree of competition. The more people are involved in this process, the better. We have to consider an optimal combination of all interests.”
Entrepreneurs are convinced that a Lobbyism Act would allow them to take part in the drafting of regulatory acts.
In the opinion of Yuri Kozlov, Deputy Chairman of the Union of Builders, a Regional Sector Employers’ Association, business has to use the existing instruments of civilised lobbyism. “The Social Partnership Act is currently in force in Russia, but it is does not have much effect yet. The instrument that could protect the interests of entrepreneurs in the social sphere has the opposite impact. Our aim is to make employers’ associations more representative and help the business community realise where their strengths lie,” Mr Kozlov explains. “Besides, we need to bring our legislation into conformity with international standards. Among other things, we need to use the international financial reporting standards.”
Experts agree that large industrial companies are able to lobby their interests to a degree. Medium and small businesses are much worse off. Their interests are meant to be protected by business unions and associations such as OPORA Rossii [Pillar of Russia] and Delovaya Rossia [Business Russia], but their power is limited. “Saving each individual businessman from the pressure of law enforcement structures is extremely difficult,” admits Dmitry Nesvetov, Chairman of the Public Services Committee at the Moscow Municipal Branch of OPORA Rossii. “Meanwhile, it is small businesses that could help accelerate the growth of the economy. In the US, 50% of the GDP is created by small businesses, and in Northern Europe, the figure is around 70%, while in Russia, according to the most optimistic estimates, it is as low as 12%. Add to that the fact that 50% of the economy is controlled by the state. This is one of the most important macroeconomic imbalances we have to deal with.”
“A Lobbyism Act could allow business to find long-term solutions to its problems,” according to Kirill Shamalov, Deputy Chairman of the Board at SIMUR. “Civil servants often don’t have sufficient information about business, so entrepreneurs have to learn to be argumentative in defending their point of view. But when a law is being drafted, it is important to understand how it is going to work. First and foremost, it must make it possible to involve entrepreneurs in the decision-making process.”
The original of the publication in Russian can be read at: http://www.rg.ru/2013/02/19/lobbizm.html