Corporate influence at the EU level needs to be reined in, LobbyControl has warned. Businesses have been accused in its latest report of using incredible lobbying power to advance their own interests.
Image: picture-alliance/D. Kalker
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LobbyControl on Monday accused the European Union of doing too little to combat corporate influence. A new report by the German NGO said there are insufficient rules to limit such influence, which takes place through expert groups, meetings between civil servants and lobbyists or informal channels.
"Corporations can draw on an incredible lobbying power to push through their interests," said the report's author, Nina Katzemich.
The report said EU member governments were some of the main lobbyists in Brussels, with many countries pushing for EU rules and decisions that reflect the interests of their national industries.
Tax avoidance and emissions test delays
Germany, it noted, had used its influence to weaken and delay rules on tax evasion and diesel emissions tests.
The EU allows "corporations and the rich to move their assets to shadow financial centres and thus evade their tax responsibility," it said.
"Through tax avoidance and optimization, EU member states lost €50 to €70 billion in tax revenue every year," said LobbyControl political director Imke Dierssen.
Dieselgate: A timeline
VW's emissions scandal plunged the automaker into its deepest crisis ever. It brought with it everlasting damage to VW's reputation and massive fees and penalties — not to mention compensation claims from car owners.
Image: picture-alliance/dpa/J. Stratenschulte
The disaster unfolds — September 2015
About two weeks after Volkswagen admitted behind closed doors to US environmental regulators that it had installed cheating software in some 11 million of its diesel vehicles worldwide, the Environmental Protection Agency shared that information with the public. It was September 18, 2015. The ensuing crisis would eventually take a few unexpected turns.
Image: picture-alliance/dpa/O. Spata
The boss must go, long live the boss — September 2015
Volkswagen's then-CEO Martin Winterkorn (above) had little choice but to step down several days after news of the scandal broke. In September 2015, he tendered his resignation, but retained his other posts within the Volkswagen Group. Winterkorn's successor was Matthias Müller. Until taking the reins at VW, Müller had been the chairman at Porsche, a VW subsidiary.
Image: picture-alliance/Sven Simon
Raiding headquarters — October 2015
Regulators in the US weren't the only ones investigating VW. Authorities in Lower Saxony, the German state in which VW is based, were also scrutinizing the company. On October 8 2015, state prosecutors raided VW's headquarters along with several other corporate locations.
Image: picture-alliance/dpa/P. Steffen
Hell breaks loose — January 2016
On January 4, 2016, the US government filed a lawsuit against VW in Detroit, accusing the German automaker of fraud and violations of American climate protection regulations. The lawsuit sought up to $46 billion for violations of the Clean Air Act.
Image: picture-alliance/dpa/A. Burgi
Quit or forced out? — March 2016
In March 2016, the head of VW in the US, Michael Horn, resigned. In the initial days and weeks after the scandal broke, he was the one US authorities turned to for information. He issued an official apology on behalf of the automaker, asking for the public's forgiveness.
Image: Getty Images/C. Somodevilla
Settlement — October 2016
On October 25 2016, a US judge approved a final settlement that would have VW pay $15.3 billion. In addition, affected cars would be retrofitted with better, non-deceptive hardware and software, or else VW would buy them back completely from customers.
Image: picture-alliance/dpa/P. Pleul
Imitators — July 2017
When dieselgate first emerged in 2015, analysts said it was likely other car makers were also cheating tests. But it wasn't until 2017 that other companies were targeted in probes. In July, German authorities launched investigations into luxury car makers Porsche and Daimler for allegedly cheating emissions tests. Others, such as Audi and Chrysler, have also been hit by similar allegations.
Image: picture-alliance/dpa/F. Kraufmann
Public still supportive — December 2017
Despite dieselgate, VW has managed to keep the emissions scandal from utterly tarnishing its image. According to several polls, between 55 to 67 percent of Germans continue to trust the automaker. In the US, polls show that roughly 50 percent still believe the German company produces worthwhile vehicles.
Image: picture-alliance/dpa/C. Klose
Fuming over monkeys — January 2018
In late January, however, VW suffered another heavy blow over reports that the company experimented on monkeys and made the animals inhale diesel fumes. To make matters worse, a separate experiment that had humans inhale relatively harmless nitrogen dioxide was revealed at the same time. Some media wrongly interpreted this to mean humans were also inhaling toxic fumes.
Image: picture-alliance/dpa/F. Gentsch
Canadian court demands millions — January 2020
Years after the scandal that caused Volkswagen to pay CAN$2.4 billion (US$1.83 billion), a court in Toronto order a further fine of CAN$196.5 million. Volkswagen pleaded guilty of violating in environmental laws. Prosecutor Tom Lemon noted that the fine was "26 times the highest fine ever for a Canadian environmental offence."
Image: picture-alliance/dpa/R. Knipping
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The report said the recruitment of politicians as lobbyists, the dependence of the EU's civil service on corporate expertise and lobbyists' privileged access to decision makers through exclusive events were the main sources of corporate influence.
Some 70 percent of representatives on an EU expert group set up to discuss emissions tests for cars came from the automotive industry. According to the EU Parliament, this group helped delay a more effective test for vehicle emissions by years.
"Corporations can rely on an incredible lobbying power to assert their interests," said Katzemich. "Two-thirds of the 25,000 lobbyists who influence laws, politics and public opinion in Europe with an annual budget of 1.5 billion euros represent business interests."
Dierssen called on the EU to introduce more regulations and transparency. "Europe could be a shield against corporate power," she said.
"This has been demonstrated by […] many EU laws, such as mandatory catalytic converters or pollution control rules, which in some cases significantly improved air quality in the long term. We need more such positive impulses from Europe. More lobby transparency and strict rules for lobbyists are essential."
