The Coronavirus CrisisCorporations Make Moves to Cynically Exploit COVID-19
Stephen Delahunty delves into the industries using the COVID-19 outbreak to repackage old demands and further their interests under the cover of a crisis.
Corporations are attempting to exploit the Coronavirus crisis to delay climate action and oppose environmental regulations, curtail sustainability initiatives in food production, and roll-back financial regulations brought in after the 2008 financial crisis.
As measures to reduce the spread of COVID-19 affect the lives of millions of people, corporate lobbyists in Brussels and London are determined not to let a good crisis go to waste – with special interest groups from a wide range of industries attempting to repackage old demands and secure public bail-outs while avoiding any conditionality.
The irony is that the Coronavirus crisis has exposed how many of the regulations in the lobbyists’ sights – from financial regulations put in place to prevent bank collapses, to making our food systems more secure and sustainable, and ensuring affordable medicines – are now more necessary than ever.
Transparency watchdog, the Corporate Europe Observatory, has documented the impact of lobbying going virtual among the EU’s institutions, moving from meetings and informal networking to messaging services such as WhatsApp and webcam meetings via Skype.
Under the current rules, UK citizens have little scope to understand who is trying to influence whom, how and for what purpose.Steve Goodrich, Transparency International UK
Even though meetings have become virtual, the same transparency requirements still apply. For instance, only Commissioners, their cabinet members and directors-general have to publicly disclose their lobby meetings – that is fewer than 300 out of 30,000 estimated Commission officials.
At the same time, the EU’s Transparency Register is almost useless as companies don’t have to update their lobbying disclosures until long after the lobbying happened – and even that remains a self-declaration.
In addition, with EU officials and policy-makers having to cancel participation in public events and meetings, it has become even harder for journalists, citizens, NGOs and SMEs to understand what is happening and how to reach them.
Repackaging Old Demands
A key demand repeated by various corporate lobbyists is that the current crisis means that environmental, fiscal, labour and safety regulations either have to be delayed or actually weakened.
As the crisis hit, BusinessEurope, the lobby association representing employers’ associations and big companies such as Google, Bayer, Shell and Facebook, immediately wrote to the European Council President Charles Michel asking for “temporary derogations from normal regulatory requirements”.
It has also requested that all EU initiatives not directly linked to the health and economic crisis are put on hold, such as key elements of the European Green Deal, the 2030 Climate Target Plan and the Commission’s proposal for a Climate Law, aimed at enforcing emissions targets among member states.
Car-makers – who have spent the past few years fighting new CO2 emissions standards – have made the case that the COVID-19 crisis means that car producers would not be able to comply with the “existing and future EU laws and regulations within the applicable deadlines set in the regulations”.
The airline industry is also pushing the message that the pandemic should allow it to avoid upcoming environmental taxation, including the possibility of a jet fuel tax. Airline associations are not only seeking governmental bail-outs, but are demanding that new taxation is put on hold.
The agricultural and chemicals lobbies want to delay environmental and sustainability standards. ‘Farm to Fork’ is a key component of the upcoming European Green Deal, which will set out to make the European food sector more sustainable and cover everything from obesity to pesticides regulation. Farm lobby groups are demanding an impact assessment is done for both ‘Farm To Fork’ and the whole European Green Deal, further delaying them.
Plastic producers – which for years fought the EU’s ban on specific single-use plastics agreed in 2019 – are attempting to delay its implementation by claiming that plastic products are necessary for “ensuring hygiene, safety as well as preservation from contamination” from the Coronavirus.
In finance, lobbyists are asking central banks – including the European Central Bank – to relax or delay rules that were put in place after the 2008 financial crisis to limit potential new crises. The measures cover “everything from capital and liquidity to accounting and climate change”. At the European level, a key concern seems to be the requirement for banks to build up capital levels to be able to absorb shocks without collapsing, due to be implemented by 2027.
The interests of defence companies during the pandemic are not the most obvious, but one of its trade associations, ASD, has publicly asked for financial aid from governments and EU institutions, plus “relief on various technical/regulatory issues” – despite already having access to the European Defence Fund.
Another controversial lobbying victory was secured by the medical technology industry, as represented by MedTech Europe. It has asked governments and the EU to delay the implementation of a new Medical Devices Regulation (MDR), the aim of which is to increase oversight, market surveillance and transparency with regards to medical devices. Now, just two months before the new standards were to be implemented, the industry has asked for a postponement, arguing that the COVID-19 pandemic has made it impossible to comply with the regulation in time – despite it having had three years to adapt to the new standards.
The pharmaceutical industry has been an important player in responding to the Coronavirus crisis and, as such, it is receiving large amounts of public financing and enjoying easy access to decision-makers. In Brussels, big pharma lobbying associations are working hard to ensure that this financing is as easygoing as possible while preserving the most industry-friendly intellectual property rules.
Even before the COVID- 19 outbreak, Europe suffered from a growing problem of pharma companies demanding extremely high prices for medicines, causing a major burden for public health budgets and endangering access and affordability to life-saving medicines.
A spokesperson for Corporate Observatory Europe said: “The examples of corporate lobbies opportunistically using this public health crisis to repackage their demands are piling up. Environmental, labour, fiscal and health standards seem to be under attack. It is more important than ever for EU policy-makers and officials to be careful and question the information and requests put forward by lobbyists.”
Scale and Nature of UK Lobby Unclear
The picture is less clear in the UK. As Transparency International has pointed out, despite recent reforms, there is still little transparency about the scale and nature of lobbying activities in the UK and few disincentives to deter questionable behaviour.
TechUK, which represents hundreds of technology companies including Facebook, Google, Apple and Amazon, claimed that the Government should “look again” at the digital services tax – aimed at targeted tech giants offshore profits – and “give companies a bit more breathing space” by delaying liabilities for a year.
“Lobbying is an important part of any functioning democracy, but problems arise when this process takes place behind closed doors,” Steve Goodrich, senior research manager at Transparency International UK, said. “Under the current rules, UK citizens have little scope to understand who is trying to influence whom, how and for what purpose.
“Many recent lobbying scandals have largely fallen within the rules, which highlights the inadequacy of the current regulatory regime. Urgent reform is needed to raise transparency and integrity standards across the UK.”