COMMENT: Red warning for firms as Lobbying Act sweeps in, says Pinsent Masons
With much focus on the weather this week, including Scotland's first-ever Met Office red alert warning, one might be Âforgiven for paying a little less attention than normal to matters of policy and politics.
While the Beast from the East has raged, a significant change to how Scotland’s business community interacts with politics and government is preparing to make landfall.
The Lobbying (Scotland) Act 2016 comes into force on 12 March, placing a legal obligation upon a range of organisations to publish information regarding their dealings with parliamentarians and other senior political stakeholders on a publicly-viewable online register.
This is a change that has been in the offing since legislation was passed almost a full two years ago. Yet, worryingly perhaps, many organisations remain ill-equipped for its imminent arrival.
Borne of a drive to increase transparency around the interplay between politics and business interests, it is not only applicable to the private sector, but also to charities, trade unions, professional associations and other bodies.
A five-step test has been developed to determine whether “registerable lobbying” has been undertaken and organisations that meet this test are required to submit an information return for inclusion on the new online Scottish Lobbying Register, a prototype version of which is currently viewable at www.lobbying.scot.
Firstly, the communication must take place orally and face-to-face (in person, or via video link). Secondly, the communication must relate to Scottish Government or Scottish Parliamentary functions. Thirdly, the communication must be used to inform or influence decisions, and fourthly, the individual making the communication must be paid by the organisation they represent.
Note that payment does not need to relate directly to the communication in question. A salary constitutes payment, so all employees have, in theory, the potential to trigger the act. The fifth and final test is that exemptions under the act must not apply.
One feature that could attract significant attention as the new register beds in will be the “constituency exemption”. This will excuse from registration communications with any MSP (excluding Scottish Government ministers) “who represents the constituency or region where I live or where my company/organisation is based or ordinarily operates within”.
Taken by the letter, organisations with an extensive bricks-and-mortar presence across Scotland might find themselves subject to significantly lower disclosure requirements than those without. With less than two weeks until the new rules come into effect, organisations who have not made advance preparations should urgently acquaint themselves with the legislation and accompanying guidance.
All organisations should identify an “owner” and single point of contact to coordinate register returns, and in order to capture instances of lobbying that may be being undertaken in their name, it is vital that organisations be sighted on both planned and unplanned engagement.
Businesses should also identify those internally most likely to undertake communications that meet the lobbying test, and train them on the requirements of the act as a matter of urgency.
Compliance with the act is not optional, a fact reinforced by sanctions up to and including three months’ imprisonment, alongside the potential for considerable reputational damage, as the new register will undoubtedly attract significant media interest.
Organisations who interact with politicians and government in Scotland should take action now to ensure they are compliant.
Andrew Henderson is director of public policy at legal firm Pinsent Masons.