Corona Lobby Watch - unveiling lobby tactics in times crisis

Corona Lobby Watch

Opportunistic lobbyists abuse the EU’s unprecedented health crisis

Lobbyists for many industries are opportunistically repackaging old demands, or developing new ones, and using the Corona Crisis to justify them, even though in many cases there is no clear link to the health emergency. Corporate Europe Observatory has set up Corona Lobby Watch, in order to ensure that civil society can continue to monitor the moves of 'Coronawashing' lobbyists .

Europe is in the midst of an unprecedented and extremely difficult situation. Tens of thousands of people have lost their lives to a deadly virus, while across the continent states have locked down their societies and economies in an effort to avoid further deaths. The corona virus has led to a state of emergency across Europe, and had a profound impact on politics in member states as well as in the EU institutions. European economies are also in crisis, with thousands of companies being kept afloat by massive and unprecedented public financial support.

It is to be expected, in such a context, that many companies and economic sectors will receive special treatment. Numerous industries have asked for, and been given, a range of supports due to the special circumstances, some of which is justified. But, we see another phenomenon developing in EU politics that poses a significant risk: lobbyists for many industries are opportunistically repackaging old demands, or developing new ones, and using the Corona Crisis to justify them, even though in many cases there is no clear link to the health emergency.

These opportunistic campaigns – now being referred to as ‘Coronawashing’ by some – must be exposed and stopped. If corporate lobbyists are allowed to use the current destabilisation of politics and the EU-wide health, social and economic crisis as an opportunity to win the upper hand while no-one is looking, we could see major steps back in areas such as taxation, the fight against climate change, and even health policies.

That is why Corporate Europe Observatory has set up Corona Lobby Watch, in order to ensure that civil society can continue to monitor the moves of Coronawashing lobbyists, even while under lockdown. Based on a variety of sources, we will strive to register all lobbying attempts that use the pandemic as cover to seek reduced regulation.

We would be grateful for any information on Coronawashing by corporate lobbyists that you may come across.

Tips can be sent to ceo@corporateeurope.org

 


Corona Lobby Watch

Lobbyist exploiting a crisis - stories organised chronologically

 

18 June: Laxer rules for banks in the future

Main actor: Institute of International Finance (IIF) - lobby group of big global banks

The IIF, the global lobby group of big banks, is using the corona virus crisis to push back against regulation which, ironically, is specifically designed to make the financial system safer during times of crises. For example rules governing capital requirements, or disclosing exposure to climate-related risk. At the forefront of this campaign is the Institute of International Finance – the lobby group for the biggest banks in the world. Interestingly, their main concern is a set of rules that are not supposed to fully enter into force until 2027. But the crisis opens a window of opportunity to strategically lower ambitions now.

The European Commission has responded quickly to the calls of the banks for postponement of requirements to build up further capital. On 28 April a package of proposals to support the banks was tabled, and both the European Parliament and the Council were on it immediately too. On 18 June, a large majority in the European Parliament voted the package through with minor changes which allegedly has the backing of Council.

The package allows banks to postpone the build-up of capital designed to make big banks more resilient. Arguing that there is a need to support companies with loans under the current circumstances, helped the banks convince MEPs. The decision to postpone did not come with conditions as pointed out by MEP Sven Giegold: “The amendment of the capital adequacy rules… is unfortunately a pure gift package to the banks without any conditionality. Instead of providing targeted support to European businesses and citizens to help them overcome the corona crisis, the package merely props up bank shareholders and risk investors.”

 

18 May: Industry lobbying to postpone menthol cigarettes ban

Main actors: tobacco companies

Tobacco companies were reported to be lobbying for a postponement of the menthol cigarettes ban in the EU as well as for postponing new track-and-trace requirements (both taking effect May 20th 2020).

According to Tobacco Reporter, industry lobbyists have used the corona crisis to try to convince the European Union to postpone the deadline for selling tobacco products that do not comply with the upcoming ban on menthol cigarettes and new track-and-trace requirements.

The EU-wide ban on the sale of flavoured cigarettes, including menthol, is part of the 2014 EU Tobacco Products Directive (TPD), with an original May 2016 deadline for EU countries to transpose the TPD into national law. While retailers were allowed an extra year to sell stocks of other flavours, the phase-out period for menthol was extended for a further three years, and was due to come into force across the EU on May 20th 2020.

The lobbying efforts of the tobacco industry appear to have been unsuccessful, as the ban on menthol cigarettes entered force on May 20th.

24 April: Medical industry push back stricter rules on safety

Main actors:  MEDTechEurope and German medtech trade group BVMed - medical equipment

MEDTechEurope and the German BVMed have called for a moratorium on changes of rules governing medical equipment due to the corona virus. New rules governing the approval of new equipment were supposed to be fully phased in in a few months.

This relates to two new Regulations – on medical devices and medical testing equipment (in vitro diagnostics) – both of which were adopted to improve approval procedures to ensure quality and safety. They were developed a response to a series of scandals, including the marketing of dangerous breast implants back in 2011. The phase-in has been underway for some years  – both regulations were adopted in April 2017, and thus it is difficult to see what justification there can be to call for a delay: industry has had years to prepare. Especially when you consider that both Regulations have clauses that allow the authorities to approve a product speedily if necessary, if it is “in the interest of public health”.

The issue was raised in the European Parliament by a CDU MEP in March. Postponement was supported almost unanimously of MEPs who accepted the claim that this would prevent shortages of medical equipment. Later, the Commission decided to postpone the Directive for a full year.

The decision was deplored by the European Consumer Organisation (BEUC) in a letter to the Commission.

 

21 April: A push for giving the tax havens a break

Main actor: The European Banking Federation

The lobby group for European Banks, the EBF, has asked the European Commission to suspend an anti-tax-avoidance Directive and demanded the suspension of a separate requirement on reporting bank account information. Though the suspension asked for is only three months, it seems very problematic to postpone  measures intended to help prevent tax evasion even for a moment, especially as EU governments currently face into a financial crisis and reduction in tax revenue. Also, it is hard to see how reporting by banks could be seriously affected by the corona crisis.

 

20 April: Support for gas infrastructure

Main actor: Eurogas and other gas industry lobby groups

Business associations representing companies with a stake in gas infrastructure are lobbying the Commission to convince it to make support for gas infrastructure, including Carbon Capture and Storage technologies, a key part of the post-corona recovery strategy. They are using elements of the European Green Deal, which says that the EU should ‘decarbonise’ gas, to argue for their proposal.

 

8 April: Eyeing a life line for single-use plastic

Main actor: The European Plastics Converters (EuPC), plastics industry

The European Plastics Converters (EuPC) wrote to President von der Leyen calling on her to delay and reconsider the EU’s Single Use Plastics Directive. EuPC claimed that plastic products were necessary for “ensuring hygiene, safety as well as preservation from contamination“ and further argued that these products were essential during this public health crisis, for material such as “protective equipment, medical devices and medicine“.

The European Commission responded on 15 April, saying that the Directive already includes exceptions for medical devices, and that there is still one full year until the deadline for implementation by member states. The Commission spokesperson added: “With respect to the arguments raised by EuPC, good hygiene practices should be applied to all products, including substitutes of banned SUPs [Single Use Plastics]”.

 

7 April: Moratorium on taxation of airlines

Main actor: Airlines for Europe (A4E) and the International Air Transport Association

The airline industry is pushing for a moratorium on new taxation. As well as other tax measures, the lobby group A4E is targeting the tax measures discussed within the European Green Deal, which include a review of tax exemptions on aviation fuels. Tax measures rank high in the European Green Deal as a tool to promote sustainable transport. This could be costly to the airline industry, but the crisis cannot provide a justification for the demand that taxation is taken off the table.

“We would like to see the removal of rights of EU governments to use aviation as a tax grab against consumers,” the CEO of Ryan Air Michael O’Leary said at an A4E event. 

The International Air Transport Association (IATA) –an international airline lobby group to which A4E belongs - quickly secured a meeting on 16 March with EU Transport Commissioner Vălean, which was logged, enlighteningly,as discussing “aviation”.

In an interview published on 16 April, Commissioner Vălean said that she was “sympathetic” to the airline industry. She also argued that it is the wrong time to attach climate and environment conditions to the public funding that will be pumped into the airlines to bail them out in the coming months.

 

3 April: Postpone emission reductions for shipping industry

Main actor: European Community Shipowners Association (ECSA) - shipping industry

The shipping industry also wants to postpone the Green Deal due to the corona crisis. They say the industry needs time to recover from the impact of the crisis first. Their concern: the European Green Deal sets out to impose emission reduction targets on the shipping industry.

 

2 April: Postpone sustainability of agriculture

Main actors: COPA-COGECA, agribusiness and big farmers - and Hume Brophy

On 18 March the Commission announced that its Farm and Fork strategy, which aims to promote sustainable agriculture, will be postponed. Now, the Agribusiness lobby groups are pushing for a further  postponement.

Ex-MEP turned Hume Brophy lobbyist George Lyon has publicly asked for the strategy to be delayed. Hume Brophy is a lobby consultancy firm whose clients include Bayer, the Glyphosate Task-Force, and other agri-chemicals companies.

On 15 April it became clear that be a further delay is most likely. The question is by how long, and whether that will lower its level of ambition.

 

27 March: Steel and cement maneuvering on emissions

Main actors:  Eurofer and Cembureau, steel and cement lobby groups

The steel and cement industries are trying to avoid reporting on their 2019 carbon emissions any time soon because of the corona crisis. The reporting deadline is an annual day of reckoning for this sector – a day when industries have to hand over quotas to cover their emissions.

Periodically, companies are awarded an amount of free quotas by the EU – permits that allow them to emit greenhouse gasses in a specified amount. If they emit more than their quota, they have to buy further permits, but if they emit less, they can sell them on carbon markets. Most permits are auctioned, but a significant number are handed out for free.

The steel and cement industries have become notorious for securing a large amount of free quotas, to protect them from global competition. They often use these quotas to make a profit by selling them - a sign that they hardly needed them in the first place. This scheme, then, enables companies to avoid introducing less polluting technology.

The Commission has pointed out that there is some flexibility built into the rules already.

 

26 March: List of rules to be eased

Main actor: SME Europe, small and medium enterprises

In a letter to the President of the EU Commission and the Council, SME Europe, the business association of the European People's Party (EPP), suggested the need for a new rule that would allow the Commission to postpone deadlines for new laws set to come into force during the corona crisis.

The group also provided a list giving specific examples of laws that should be delayed, including new rules on medical devices (see section above) and eco-design.

 

25 March: Less regulation and more money  for air transport

Main actor: ASD - Aerospace and Defence industry 

ASD Aerospace has asked for financial aid from governments and the EU Institutions, as well as “relief on various technical/regulatory issues and a stronger crisis management coordinated at European level.” Also, ASD Aerospace believes financial support for civil aviation is necessary “beyond support measures for all other sectors”

 

25 March: Less transparency on chemicals linked to cancer

Main actor: BDI Chemicals, German chemical industry

In a letter to the European Chemicals Agency (ECHA), the Federation of German Industries (BDI) called for a delay of the introduction of a database of dangerous chemicals due to the corona crisis. The database aims to introduce more transparency for consumers and manufacturers alike.

Furthermore, the BDI wants to postpone the ban of perfluorooctanoic acid (PFOA), an extremely persistent chemical. Studies have correlated PFOA with some cancers, for example kidney and testicular cancer. This ban is supposed to enter into force in July 2020. The ban has been in the pipeline for five years.

 

25 March: Laxer rules for companies across the board

Main actor: BusinessEurope, employers association

Business Europe (BE) is conducting its standard attack on almost any regulation of businesses, and adapting it to the time of coronavirus. This time BE claims in a letter that a diminution of regulation is necessary to ensure the survival of businesses and to overcome the corona crisis.

BE has not held back. The employers urge the Member States and the Commission “to allow for temporary derogations from normal regulatory requirements…” – with not a single qualification.

In particular BE has its eye on environmental initiatives, including the European Green Deal. BusinessEurope is “calling on the European Commission to extend all nonessential environment and climate-related consultations for stakeholder engagement such as inception impact assessments and public consultations that are currently active or planned for the next two months, as well as to extend certain deadlines to implement EU legislation.“ It is not clear what ‘non-essential’ initiatives there could be in the area of climate change and the environment.

 

25 March: High emissions from cars in the future

Main actor:The European Automobile Manufacturers’ Association (ACEA) and other car industry lobby groups

Car industry groups sent a letter to President von der Leyen arguing that the corona crisis meant car producers would not be able to comply with “existing and future EU laws and regulations within the applicable deadlines set in the regulations”.

In parallel, the German car industry is exerting pressure on the German government to prevent stronger rules at EU level. 

This is all about CO2 emissions from cars – an area where the EU is about to improve standards. The car industry has more than two decades’ experience of successfully postponing effective rules on car emissions, and is bringing it to bear now as it tries to use this crisis to put regulations off once again.

On the same day the letter was sent, ACEA and parts suppliers in the European Association of Automotive Suppliers (CLEPA) scored an online meeting with the Cabinet of Executive Vice-President Timmermans, who is responsible for the European Green Deal. The following day they had a meeting with Internal Market Commissioner Breton, to discuss the economic impact of the corona crisis on the car industry.

 

24 March: Drop social and environmental demands, go for ‘innovation’

Main actor: Corteva Agroindustries, agribusiness

According to Corteva Agroindustries, the EU must invest in ‘innovation’ in agriculture and be more cautious about “ideas to balance social demand, climate change and mitigate risks.”

Corteva argues that “the current COVID19 health crisis has laid bare the vulnerabilities of our seemingly strong system and it is more important than ever that we address our weak points by focusing on education and promoting the innovation that enables farmers to keep improving.”

Why exactly the corona crisis would require less focus on social and environmental demands remains unclear.

 

19 March: More money for commercial digital infrastructure

Main actor: DigitalEurope, the digital industry

The coalition which represents the digital and related industries have asked for a huge range of things;  more long term investment in their area, a stimulus package to encourage digitalisation of various sectors, a redesign of the EU budget to put more money into tech sectors, the speeding up of measures to allow deployment of technology such as 5G networks, and a move to hasten the creation of an European health data space to facilitate sharing of data between public sector, researchers and the private sector.

What does all this have to do with the virus? According to a letter, DigitalEurope believes the industry has played such an important role during the corona crisis that decision-makers should show them gratitude!

 

19 March: Less concern for ground water needed, says big farmers

Main actor: Bauernverband, German big farmers lobby

Bauernverband have demanded less stringent environmental rules on nitrate pollution, adopted to protect the ground water. The organisation claims laxer rules are needed to secure the necessary supplies, though there are no signs of scarcity. The big German farmers have voiced opposition to EU rules on nitrate pollution for years.

The conservative group in the European Parliament (EPP) has supported the proposal.

 

18 March: Pharma pushes strong patents as a long term solution

Main actor: European Federation of Pharmaceutical Industries and Associations (EFPIA)

One of pharma’s biggest lobby groups, EFPIA, has named as a requirement “an IP framework that inspires long-term investment into our R&D infrastructure and a regulatory system that is stable, dynamic and effective". EFPIA doubled down on the intellectual property issue in a separate blog linking their preferred IP framework with a faster research and development process but also supposedly in order to compensate the financial risk for these companies.

Yet public health groups and consumer organisations have highlighted how this demand is prejudicial for the affordability and access of treatments and vaccines, especially for the most vulnerable communities and even countries. Already before the COVID-19 crisis, 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.

In a letter to the Commission, Parliament and national Permanent Representations in Brussels supported by 61 NGOs highlighted that the EU institutions have since January 2020 allocated millions of Euros to promote research on COVID-19.

Since the WHO declared the spread of COVID 19 a pandemic, the Commissioner for Health started having weekly video calls with “Pharmaceutical Industrial Associations and the European Medicines Agency to discuss possible shortages of medicines and medical devices for the Covid-19 outbreak”. While these meetings are undoubtedly important, there hasn’t been a single meeting recorded between the Commissioner with public health or independent patients' organisations (29 April).

 


 

Read our article, 'Coronawash alert!, How corporate lobbyists are cynically exploiting the pandemic', 29 April 2020.

More recommended reading:

European Environmental Bureau, ‘5 ways opportunistic lobbyists are using corona virus to attack EU environmental laws’, 16 April 2020.

Sven Giegold, ‘Lobbyists are trying to water down a sustainable way out of the Corona crisis’, 23 April 2020.

Cristina González et al., ‘Lobbyists ask EU to pause new laws’, Politico, 19 April 2020.

Elena Sánchez, et al., Lockdown: EU officials lobbied via WhatsApp and Skype, EUObserver, 3 April 2020.