ICAC recommends significant reform to lobbying legislation, including banning secret meetings between lobbyists and government officials

Tuesday 22 June 2021

The NSW Independent Commission Against Corruption (ICAC) recommends that legislation be amended to better manage lobbying in the state including the prohibition of secret communications or meetings between lobbyists and government officials.

In a report released today, Investigation into the regulation of lobbying, access and influence in NSW (Operation Eclipse), the ICAC finds that new legislation, or significant reform of the current Lobbying of Government Officials Act 2011 (the LOGO Act), is required to safeguard the public interest against the inherent lobbying risks of corruption and undue influence.

ICAC Chief Commissioner, the Hon Peter Hall QC, said that while lobbying contributes to positive outcomes that are in the public interest when it is conducted ethically and honestly, Operation Eclipse and other Commission investigations have shown that lobbying, access and influence can result in favouritism, or even corrupt conduct, and the present regulation is deficient.

“The LOGO Act, while a step in the right direction, falls short of implementing all of the 17 recommendations made by the Commission more than 10 years ago in its previous lobbying investigation, Operation Halifax,” Chief Commissioner Hall said. “In Operation Eclipse, the ICAC has made a further 29 recommendations to address this shortfall and to better regulate lobbying practices in NSW.”

The recommendations made in Operation Eclipse include that:

•    the NSW Government creates a dedicated NSW lobbying commissioner whose primary purpose is to regulate the LOGO Act
•    any fundraising event, where an attendee pays for any form of exclusive or private access to a minister, should be classified as a “scheduled meeting” for the purposes of Premier’s Memorandum M2015-05 and subsequently be disclosed in published summaries of ministerial diaries, along with the fact that it was paid access. This information should be published irrespective of whether any lobbying takes place
•    the Lobbyists Code of Conduct, which primarily creates obligations for lobbyists, be expanded, to create obligations for government officials who are lobbied, and renamed the “Lobbying Code of Conduct”. Despite its name, the LOGO Act imposes few if any obligations on government officials who interact with lobbyists (that is, the “lobbied”), and the existing Lobbyists Code of Conduct
•    the detailed standards and obligations set out in the “Lobbying Code of Conduct” include a prohibition on undocumented or secret meetings with lobbyists with requirements to: document all communications with lobbyists, including those held away from government premises (apart from immaterial or ephemeral communications); and avoid discussing substantive matters with lobbyists in social settings.

Operation Eclipse also found that third-party lobbyists are subject to regulation despite carrying out just a fraction of the lobbying that takes place each year in NSW, and only third-party lobbyists are required to be registered. The Commission therefore recommends that a broader range of lobbyists be required to register, particularly professional in-house lobbyists, who ought to be subject to a similar level of regulation as third-party lobbyists.

The Commission also recommends that the LOGO Act be amended to mirror the provisions of section 16 of the Gaming and Liquor Administration Act 2007. This would provide secretaries and agency heads with authority to designate high-risk roles and associated “key officials” where appropriate. Officials in such roles would be subject to a six-month restriction on employment in certain areas related to their public duties.

Based on criteria published by the lobbying regulator, the restriction period could be removed, modified or made subject to conditions.

Based on an analysis of complaints and investigations, the Commission notes that lobbying is common in local government. This point was made in the Commission’s recent report on its Investigation into the conduct of councillors from the former Canterbury City Council and others (Operation Dasha), where it was recommended that the provisions of the LOGO Act be extended to apply to local government.

The Commission conducted research to draw lessons from models considered to have elements of best practice. Case studies of regulatory models in Australia, Canada, Ireland and Scotland were prepared, followed up by further insights in interviews with international regulators. In addition, an analysis was conducted of all NSW Government departments that provided information on procedures and protocols in relation to their interactions with lobbyists. This included guidelines on how officials grant access to lobbyists and how those interactions are recorded and made transparent.

The ICAC commenced Operation Eclipse on its own initiative in February 2019. Like Operation Halifax, Operation Eclipse differed from investigations usually conducted by the Commission in that it was not concerned with examining whether any particular individual may have engaged in corrupt conduct, but rather sought to examine particular aspects of lobbying activities and the corruption risks involved in the lobbying of public authorities and officials.

After a consultation period, the Commission held a public inquiry over three phases in August and October 2019, and February 2020. Chief Commissioner Hall presided at the public inquiry, at which 16 witnesses from various sectors voluntarily gave evidence.

The Commission will write to the Premier, the Special Minister of State, and other relevant parties to communicate the recommendations. The Commission will seek advice in relation to whether the recommendations will be implemented and if so, details of the proposed plan of action and progress reports.  

Investigation report              Fact sheet