Black out: Energy companies leaving us in the dark about their EU lobbying
As some of the biggest polluters gather in Paris at Business & Climate Summit, hoping to set the agenda for this winters UN climate talks in the same city, a look at latest version of LobbyFacts (launching soon) highlights their lobbying expenditure in Brussels, as well as some serious problems with reporting.
This is a post written for LobbyFacts by Friends of the Earth Europe, but since publishing, many of the energy companies have updated their entries in the transparency register.
When the new European Commission took over in November 2014, energy policy became one of the central issues on the EU’s agenda. The creation of the position of a ‘Vice-President for the Energy Union’ in the European Commission shows that energy ranks among the top concerns for European officials.
While large energy companies are quick to spend heavily on lavish conferences, they are much less forthcoming when it comes to transparency of their lobby activities. This article looks at some of the most important energy companies lobbying the EU and tracks their disclosures in the EU’s voluntary lobby transparency register in 2013 and 2014. The snapshot from the old register entries provided by lobbyfacts and the new data in the updated transparency register makes this comparison possible.
The cases presented here are examples of implausible or misleading information energy companies have disclosed in relation to their lobby activities. The high number of problematic entries in the register highlights the need for a mandatory lobby register, as well as much stronger checks on the accuracy of information in the register.
Lobby expenditure suddenly multiplying
Some companies have declared significant increases in EU lobbying expenditure between 2013 and 2014.
The multi-national power company ENEL has shown the steepest increase of lobbying expenditure in the energy sector. According to its entry, EU lobbying expenditure climbed up from €450,000-500,000 in 2013 to €2,000,000-2,249,999 in 2014 – more than a four-fold increase. The number of staff working on EU lobbying has also increased from 7 to 24 people for the same period. At least the change in lobby costs seems quite dubious. While ENEL declares to have paid €400,000 in 2014 for membership fees in a range of trade associations it was already member in most of them in 2013. Unless their membership fees have increased drastically, the 2013 entry is therefore likely to represent an instance of under-reporting.
Oil multinational BP’s declared lobby expenditure has almost doubled. It rose from €1,250,000-1,500,000 in 2013 to €2,500,000-2,999,999 in 2014, despite no addition to the five lobbyists employed. No reason for this significant increase could be found: The amount spent on lobby consultancies declared in the register has remained roughly the same and BP's membership in trade associations even decreased in the time period.
Significant decreases in EU lobbying expenditures
Yet, surprisingly, in comparison to the importance energy issues have gained, many other companies have posted huge decreases in their lobbying expenditures. The difference between some of the 2013 and 2014 figures is so large that it makes some of the data reported appear highly dubious.
The French gas and electricity company Engie (formerly called GDF Suez) has declared the most outstanding decrease of lobby expenditure from €2,500,000-2,750,000 in 2013 to than less than €9,999 in 2014. The number of staff working in EU lobbying also fell from 12, including 2 accredited lobbyists, in 2013 to 4 in 2014, with no more staff with EU parliament access. Yet, even if Engie has reduced the number lobbyists it employs to 4, it is completely unrealistic that their salaries and activities – at least 14 high-level meetings with the European Commission since 1 December 2014 – could be covered by a budget of less than €10,000. Engie also sponsors the Business & Climate Summit in Paris this week.
Similarly, Swedish Vattenfall, Europe’s fifth largest electricity provider, declares lobby expenditure of less than €10,000 in its updated register entry, despite employing 4 lobbyists and declaring 5 members of staff with access to the European Parliament. According to Vattenfall’s entry in the register, the lobby costs refer to 2010, which is almost certainly a mistake since the entry was updated in May 2015. In January 2015, while declaring the same number of lobbyists, Vattenfall reported lobby costs of €250,000-300.000. Vattenfall is one of the main sponsors of the corporate UN climate forum, which takes place on 21 May in Paris.
Controversial UK fracking company Cuadrilla Resources has stated their lobbying costs have decreased from €50,000-100,000 in 2013 to less than €9,999 in 2014. The number of staff involved in lobbying fell from 70 in 2013 to 1 in 2014. Although it is very likely that Cuadrilla was over-reporting the number of staff in 2013 – it does not seem realistic that 70 lobbyists could be paid from a budget of less than €100,000. The newly posted figures of less than €10,000 spent on EU lobbying are, however, surprisingly low, given the importance of energy issues and especially gas on the European policy agenda. For example, Cuadrilla chairs one of the two working groups in the newly created European Commission expert group on the development of shale gas and is represented by a second person in the expert group. Friends of the Earth Europe recently left the expert group, due to concerns about the dominance of pro-fracking members.
The Norwegian oil company Statoil also declared that its lobbying costs went down significantly from €800,000-900,000 in 2013 to €50,000-99,999 in 2014. Interestingly, however, the number of staff involved in lobbying has not changed between 2013 and 2014 (7 persons). The European Commission reported 11 high-level meetings with Statoil lobbyists between December 2014 and May 2015, something quite remarkable for a company claiming to spend less than €100,000 on lobbying. Statoil appears as a speaker at the Business & Climate Summit in Paris.
Finnish electricity provider Fortum claims that its lobby expenditure decreased more than 90% from €250,000-300,000 in 2013 to €10,000-24,999 in 2014. However, the number of staff involved has barely changed from 10 people in 2013 to 8 in 2014. With 4.5 staff working full time on lobbying, the numbers declared by Fortum almost certainly indicate under-reporting.
Decreases in lobbying costs have also been published by the German energy provider EnBW Energie Baden-Württemberg AG. Lobby costs supposedly dropped from €1,200,000 in 2013 to €990,000 in 2014. Yet the number of staff involved has increased from 4 to 6 in the same period.
Incomplete financial data in the new register
Some companies provided only partial financial information for 2014. For instance, the French energy provider Alstom and British energy company SSE provided only information for the period between April 2013 and March 2014.
Several large energy companies such as the French oil giant, Total, and Endesa, Spain’s largest utility company (owned by Italian Enel), have not provided any financial data for 2014 as required by the transparency register rules and report information from 2013.
Spanish energy provider Iberdrola has published financial data from 2013. In its latest update in March 2015, the company reported that lobby costs for 2013 were between €500,000 and €599,999, whereas two months earlier it had declared expenses for the same period of €600,000-700,000
New registered companies
At the end of April, new energy companies have also joined the register five years after it was launched. Their registration coincides with a new policy of the European Commission to conduct high-level meetings only with lobbyists listed in the register. They include the parent company of British Gas, Centrica, which reported lobbying expenses of €200,000-299,000 for 2014. Oil and gas service company Balltec who recently registered has declared to have paid €3,490,095 in 2014 for EU lobbying, with 40 people involved – almost certainly another case of over-reporting since Balltec is a engineering and manufacturing company with less than 50 employees and therefore highly unlikely to employ 40 in-house lobbyists.
With the international climate negotiations in Paris approaching and the discussions on the Energy Union in full swing, it is crucial to know who is trying to influence the EU’s climate and energy policy. Yet, the current transparency register is riddled with inaccurate and implausible information about the energy companies lobbying on these issues. At the same time, the same companies are high-profile players in the international climate negotiations, lobbying to shield corporate profits and thus undermining the climate talks.
The Alliance for Lobby Transparency and Ethics Regulation (ALTER-EU), of which Friends of the Earth Europe is a member, just launched a campaign for a mandatory, high-quality transparency register. Such a register would finally allow the public to know who is influencing our energy future.