Lobbyists are sidestepping rules to hide activities, former integrity chief tells Icac

Lobbyists have changed their business practices to sidestep regulations and avoid transparency obligations, Queensland’s former integrity chief has said.

The New South Wales Independent Commission Against Corruption resumed an inquiry into lobbying on Monday, examining regulatory gaps that allow many lobbyists to avoid rules and keep their activities hidden.

The state, like most Australian jurisdictions, regulates only professional lobbyists who act on behalf of a client. Peak industry bodies, in-house lobbyists and corporate government relations executives are not required to place themselves on a transparent lobbyist register or comply with lobbying rules.

Related: Lobbying industry pushes back against calls for lobbyist register expansion in NSW

The former Queensland integrity commissioner David Solomon told the commission only about a fifth or a sixth of lobbying activity was captured by this approach in his state. He said the most powerful lobbyists had managed to avoid proper regulation and hide their activities.

“If you allow exemptions, the lobbying will head that way, to be hidden,” he said. “If you’re dealing with lobbying, surely you should try to capture it all in the same framework.”

Solomon said there had been a recent downturn in the number of third-party lobbyists placing themselves on the register.

Asked whether it was his belief that lobbyists were seeking to avoid regulation by changing the way they did business, Solomon said: “Yes it is. And I’d had discussions with some of the lobbyists during my time and they were indicating that that was what they were intending to do.

“Essentially they would describe themselves as advisers, and while they would attend the lobbying meetings, their client would do most of the talking and they would be there simply as a backstop.”

Solomon also discussed the weaknesses of post-separation employment bans for former ministers. The issue has been highlighted by the employment of Christopher Pyne, the former defence minister, who went to multinational contracting giant EY to help it grow its defence business, and Julie Bishop, the former foreign minister, who took a job with a major aid contractor.

In Queensland, former ministers are barred from lobbying in their former portfolio areas for two years after leaving office. The bans are designed to stop ministers from profiting personally from inside information and contacts they held as a result of their ministerial position.

But Solomon said the Canadian model, which institutes a five-year ban on such employment, was preferable. “Because one would assume that after five years the information that the departing minister or official has has become stale and useless … less useful,” he said.

Solomon said such bans should also be broadened beyond a minister’s portfolio area. “It’s not just the minister’s portfolio, it’s the contact with other ministers, the reading of cabinet briefs, cabinet discussions.”

Related: Icac chief urges overhaul of lobbying rules after NSW's nine-year failure to act

The inquiry has heard that NSW has a relatively strong system of lobbying regulation, compared with other Australian jurisdictions. The activities of some in-house lobbyists and peak bodies are captured by NSW’s publication of ministerial diaries, though they often contain scant detail.

Earlier on Monday, the inquiry heard from the NSW Department of Planning, Industry and Environment about its interactions with lobbyists.

The department’s chief legal counsel, James Hebron, said contact with third-party lobbyists was strictly controlled and interactions were published transparently on its website. Contact with in-house lobbyists or peak bodies was also well documented, he said, but details were not released publicly.

Hebron said he did not see the department’s interaction with lobbyists as a high-risk area. But he said transparency was key and that he would support publishing records of interactions with in-house lobbyists.

“Personally, I think it would be a very good thing to do to publish those records as well.”

The inquiry continues before chief commissioner Peter Hall.