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Australian companies free to lobby government without shareholder oversight – advocacy group

New report from Australasian Centre for Corporate Responsibility

Australia’s top companies are spending excess cash on influencing government policy despite the lack of any laws governing how lobbying expenditure is disclosed or whether shareholders have any say on lobbying activity, according to the Australasian Centre for Corporate Responsibility (ACCR), the Canberra-based shareholder advocacy group.

A new report from the ACCR also compares levels of disclosure and accountability to shareholders of political contributions at US, UK and Australian companies using the CPA (Center for Political Accountability)-Zicklin metric: where 100% represents perfect transparency, the average score across all S&P 500 companies is 39.8%, while the same for ASX 20 companies in 2016 is 18%, with no Australian company individually scoring as high as the S&P average.
Among this group of 20 companies, only one (supply chain firm Brambles) had a policy that specifically avoided corporate political spending, while five (ANZ, Westpac, Woodside, Rio Tinto and Suncorp.) reported on this directly. No company in the ASX 20 disclosed its lobbying expenditure in any detail, or payments made to trade associations, or even money sent to non-profit or think tank groups.

The 30-page report – Corporate Political Expenditure in Australia – marks the first time that Australia’s major corporations have been scored on how open they are about money spent on influencing public policy.

There has been increasing public awareness of the amount Australian companies spend on politics, says Caroline Le Couteur, ACCR’s executive director, particularly following several ASX firms’ efforts to pay trade associations to dissuade Australian governments from implementing policy that addresses climate change.

Recent elections have also prompted further discussion of the issue, as has a case involving former New South Wales Labor minister Eddie Obeid, who in June was found guilty of misconduct in public office after failing todisclose his family’s interest in restaurant leases he was campaigning on behalf of.

Le Couteur, a Green politician and a founding director of Australian Ethical Investment, added: “Compared to the UK and US, our companies do not disclose much about what they are doing politically. It is clearly a public issue and its one where shareholders have no say on expenditure in Australia.”

Another problem that the report highlights is that it is often hard to determine where a company’s interests lie and, when it comes to trade associations, which causes they are backing. One example highlighted is conglomerate Wesfarmers, which through its subsidiary Wesfarmers Resources is a member of two organizations that have lobbied to delay new climate change policy. At the same time, through its membership of the same trade associations, Wesfarmers is a signatory to the Business Coalition on Climate Change group.

Le Couteur added that even after ACCR’s research, observers “don’t really know” which industries are contributing most or which areas of legislation are being targeted. There are, however, industries that ACCR is directing its efforts towards.

She explained: “In terms of reported political expenditure then property developers, miners and financial sector are significant, and we are looking at targeting companies that have a poor disclosure record in these sectors. In the mining and resource sector we have a number of examples of companies which claim to be reducing their carbon impact while at the same time funding trade organizations that are arguing against climate action.”

The report’s findings will feed into ACCR’s campaign to ask investors to lobby fossil fuel polluters (and other companies) to cease their lobbying activities at the next round of AGMs. The campaign aims to co-ordinate investor efforts as in order for a shareholder resolution to be included on the proxy ballot at an Australian company’s AGM, it has to receive support from at least 100 shareholders.