The interview was published in the print edition of Slobodna Dalmacija on February 22, 2025, and is available HERE. Below is the full translation of the interview.

The first company registered in Croatia’s Lobbyist Register was Vlahović Group. Its founder and director, Natko Vlahović, took over the company in 2012 from his father, who had established it back in 1990.

Vlahović began his professional career in 1999 at the Croatian Embassy in Washington, working on promoting Croatia’s economy. From 2005 to 2011, he headed the Office of the Croatian Chamber of Trades and Crafts (HOK) in Brussels. In this role, he served as the Chamber’s chief representative and lobbyist in EU institutions, becoming the first lobbyist of any Croatian business association registered in the European Transparency Register in Brussels.

He also had an opportunity to learn from, as he likes to say, “one of America’s most famous lobbyists”, Thomas Hale Boggs, founder of the major legal and lobbying firm Patton Boggs (now Squire Patton Boggs).” His long-standing connections in the U.S. led to an invitation to attend Donald Trump’s presidential inauguration in Washington.

For years, Vlahović has been the loudest and most persistent advocate for bringing order to the practice of lobbying in Croatia. He was instrumental in establishing the Croatian Lobbyists Association in 2008. If you missed it, Croatia finally passed the Lobbying Act on March 14 last year, which came into effect on October 1. It has since become a key tool in implementing anti-corruption policies.

Has the Lobbying Act brought order and created an effective regulatory framework for the lobbying market in Croatia?

It’s still too early for a definitive assessment. The law has been in effect for just over four and a half months. As of January 30, the Lobbyist Register has 57 registrants.This number does not reflect reality. There is still a lack of awareness about the obligation to register before engaging in lobbying in Croatia. The register, maintained by the Commission for the Prevention of Conflict of Interest, is publicly accessible, but many entities that engage in lobbying remain unregistered. That is why continuous education is essential. Entering the Lobbyist Register is both a legal obligation and a step towards transparency—or as I like to say, “stepping into the sunny side of the street.”

More important than the number of registrants is ensuring that Croatia’s top economic players are included. Take the top five sectors in the U.S. by lobbying expenditure, which include healthcare, finance, telecommunications and energy. Not a single company from these sectors in Croatia has yet registered as a lobbyist. Let’s also add to that the agriculture and forestry sector, which is very relevant these days, where heated debates often arise over the rules for allocating subsidies and quotas.

Some sectoral associations have joined, which is a positive step. However, companies that are members of these associations should follow suit. It’s difficult to imagine that major businesses in these industries are not independently lobbying. It’s also crucial for publicly owned enterprises, whether state or locally owned, to recognize that they also engage in lobbying and must comply with the Lobbying Act. For example, if a local water utility seeks to influence Hrvatske Vode (Croatia’s water authority) or if a municipal waste management company negotiates with the Environmental Protection Fund over procurement plans, that is lobbying. Another issue is that public authorities are in a dual role—they act as both lobbyists and lobbying targets. This means they must carefully study and align their practices with the law.

The Lobbyist Register as a Step Toward “the Sunny Side”

Given the perception of widespread corruption in Croatia, can we see the Lobbying Act as a tool in the fight against corruption?

Absolutely. I want to emphasize that corruption and lobbying are completely incompatible. Lobbying is a legitimate activity, whereas corruption is punishable by imprisonment. The Criminal Code plays the most crucial role in combating corruption by enforcing sanctions and deterrence. However, from a structural perspective, I believe that education aimed at changing mindsets and business culture is even more important in fighting corruption. In other words, prevention is key. This is where the Lobbying Act comes into play. It has been a year since the law was passed, but it came into force with a delay.

In the meantime, I have had numerous discussions with representatives of the business sector, and the prevailing perception is still that entering the Register—or as I call it, “stepping into the sunny side of the street”—poses a certain reputational risk for them.The thinking is along the lines of: “Well, we are not really lobbyists, and we don’t want to be perceived that way.” However, the real risk is quite the opposite—lobbying without registration, following established patterns of behavior where what should be official and business communication is intentionally shifted into the private sphere, and so on.

The rule is that professional lobbying leaves a trace, that it takes place within institutions, and that lobbyists do not hide. The Lobbying Act should lead to a change in these behavioral patterns, promoting greater transparency. I think it is a missed opportunity that the law does not put more emphasis on the obligations of those being lobbied. For instance, Slovenia has a regulation requiring public officials to report their meetings with lobbyists. This would enable double verification, giving the public even greater insight into lobbying activities. Such measures are crucial for strengthening trust in decision-makers and demystifying the profession.

Your profession has been unjustly stigmatized by a part of the public, almost as the lobbyists are engaged in behind-the-scenes activities. Is that now a thing of the past? Have we “completed” that part of the transition too?

One of the reasons is that we waited far too long for the regulation of lobbying. This has been a topic of discussion in Croatia for almost twenty years, and we have finally reached that point. However, as you called it, this transition does not end here—we have now entered a new phase.

I am an optimist, and I reject the idea that everyone has a vested interest in keeping things the way they were, just so we can check a box and claim that we have passed a law. The law must come to life in practice. The public has the right to information about lobbying, just as we now have access to information about lobbying in the U.S., EU institutions, and elsewhere. Our Lobbying Act sets clear “rules of the game” for the first time. No one can be penalized for lobbying itself—only prohibited lobbying activities are subject to sanctions.

For most professional lobbyists, these regulations are not new, as they are already familiar with the methodologies and international standards. However, for the broader ecosystem in which lobbying operates, these changes are new. It will take time to establish a new standard of conduct in this ecosystem.

What are the advantages and disadvantages of working in this field in “small” Croatia?

Croatia may be small, but we are part of the EU and actively participate in decision-making and shaping the regulatory framework. This makes us a more important lobbying market than other countries of similar size that are outside the EU.

One of the advantages of this profession is the ability to see the bigger picture and provide timely and well-contextualized information to decision-makers. We closely monitor and analyze global geopolitical and business processes, assess political and regulatory opportunities and risks for the economy, and seek win-win solutions. This job is exciting and dynamic, requiring both in-depth analysis and creativity.

An essential aspect is building trust, which is gained and strengthened every day. One of the biggest risks or downsides of this profession is that there is virtually no tolerance for mistakes, as the job is based on reputation. Since lobbyists must be proactive and are often the ones who initiate communication, a great deal of energy needs to be invested.

The Importance of EU Lobbying

There are over 60 Croatian entities in the European Lobbyist Register, but many of them have not registered in Croatia. Why is that so?

There is no automatic connection between the two registers, but the comparison makes sense. It is possible that an entity is listed in the EU register simply because it focused on a specific legislative proposal at the EU level or attended a meeting in an EU institution. However, I believe that most of them recognize the importance of continuous engagement in EU legislation.

If that is the case, given that EU regulations are transposed into Croatian law, it is a legitimate interest to influence how national regulations will be shaped—especially when it comes to EU directives, which leave room for national legislators to determine how to meet shared objectives. 

By definition, this is lobbying, and it requires registration in the national register. I hope that the number of around sixty entities in the EU register will grow significantly. Our. businesses, industry associations, and NGOs should be much more numerous and vocal in EU lobbying, as most regulations are shaped in Brussels.

So far, no serious sanctions

What if someone from the pharmaceutical industry meets with the Minister of Health? What if a representative of the hospitality or hotel industry meets with the Minister of Tourism? Are these situations where we can talk about lobbying and the application of the law’s provisions? In some cases, the line can be quite thin, can’t it?

The person initiating contact must state the purpose of the meeting, making it clear whether it constitutes lobbying. Interest representatives must also disclose their client or the beneficiary of the lobbying effort. The lobbied person is obligated to check whether the individual requesting the meeting is registered in the Lobbyist Register. If they are not, further communication should be refused.

Lobbying includes all forms of communication, not just meetings. While meetings are the most traditional format, they are likely the most effective way to structure and convey information related to public decision-making, which is the legal definition of lobbying.

I believe that real lobbying interests are often disguised as courtesy meetings to facilitate easier access to institutions. This is now punishable, as the law demands maximum transparency from the start. The responsibility to reject covert lobbying attempts has been placed on the lobbied individuals. Unfortunately, there are no sanctions if a lobbied person fails to check whether a lobbyist is registered, does not report an unregistered lobbying attempt to the Commission, or proceeds with a meeting with an unregistered lobbyist.

To what extent does the Government use the services of lobbyists? Is there room to expand cooperation for mutual benefit?

Governments most commonly use the services of professional lobbyists or lobbying agencies in the United States, primarily due to the specific nature of the political system, as well as the tradition and strength of the lobbying industry.

Recently, it was reported that the European Union hired a lobbying agency in the U.S. to assist with trade and investment communication strategy, following the arrival of the new administration and Trump’s announcements, which some view as a potential trade war. This move is considered a precedent. It is a direct consequence of lessons learned from Trump’s first term, particularly in terms of engaging with the U.S. administration.

Currently, one neighboring country is paying for the services of three lobbying agencies in Washington. Croatia also used several lobbying firms in the 1990s. Ultimately, it is up to the Government to assess which of Croatia’s strategic interests could be advanced bilaterally with the help of lobbyists.

In any case, even when governments do not directly engage lobbyists, but private sector actors do, lobbyists remain a crucial source of information. They help officials see the bigger picture and make well-informed decisions.

Geopolitics and Business

Are there any business challenges you still want to pursue?

Recently, I launched the New Frontier Foundation with my colleagues. It is a think tank that deals with the impact of geopolitics on business, making us unique in Croatia in this field. Our work has been recognized by a respectable number of companies that support us in bringing very important topics to the agenda, such as cybersecurity challenges, energy security in this part of Europe, artificial intelligence, the investment potential of the Three Seas Initiative, and more. We have established strong cooperation with similar organizations in the Central and Eastern European region and the United States and continue to move forward. It is extremely interesting and dynamic, and at the moment, it completely fulfills me. I believe that in this way, we can make a significant contribution to bringing globally relevant and current topics closer to the Croatian public.

Testimonials

After the Lobbying Act entered into force on October 1, 2024, the Commission for Conflict of Interests Resolution as an implementing body issued the first decision on registration in the Register of Lobbyists in the Republic of Croatia. Vlahovic Group, a professional lobbying consultancy, is the first legal entity registered in the Registry of Lobbyists. The registration decision contains the names of natural persons who lobby in the legal entity and who are also registered in the Register of Lobbyists, namely company director Natko Vlahović and Miljenko Pekić and Tomislav Lacović, partners in the company.

“The Act clearly stipulates that lobbying is any form of communication towards a lobbied person as part of promoting interests in connection with public decision-making. Everyone who lobbies shall enter the Register, regardless of whether lobbying is their main activity or whether they occasionally lobby in their interest or for a lobbying user. Businessmen were particularly interested in this, and the Commission confirmed it to us with the interpretation it issued,” said Natko Vlahović.

“The Lobbying Act is the first instrument that separates lobbying from corruption in Croatia. Moreover, it is a protection and an opportunity for all entities that operate and act in accordance with legal and ethical norms to create new rules of engagement between lobbying entities and decision-makers and to legally and legitimately promote their interests”, says Vlahović.

The Lobbying Act is part of a broader anti-corruption strategy and is intended as an important mechanism for increasing the transparency of public decision-making.

Vlahovic Group is also the first lobbying company in the EU with a certified Anti Bribery Management System according to ISO 37001:2016, which it acquired this year.

The Register of Lobbyists can be assessed here.

Testimonials

Before the entry into force of the Lobbying Act, a well-known Croatian lobbyist says: Our job is not corruption

In a few days, the Lobbying Act will enter into force, regulating this activity, which is often negatively perceived by the public, and on this occasion, the frist Croatian lobbying company, Vlahovic Group, commented on the following newspapers.

At the beginning of October, the Lobbying Act comes into force in Croatia, which for the first time in history will regulate relations between lobbyists and lobbied persons and regulate the market, which is worth about 145 million euros annually.

One of the biggest novelties of the Act is the introduction of a register of lobbyists, which, unlike the Brussels register, which is voluntary, will be mandatory. In addition, the register of lobbyists will be publicly available and will contain a list of professional lobbyists, as well as companies and associations that lobby for their interests, and the area of interest that the lobbyist is interested in, Vlahovic Group, the first lobbying company in Croatia, announced on the occasion of the entry into force of the new act.

We absolutely welcome the Act, and it’s no secret that I’ve been talking about the importance of lobbying regulation and the professionalization of this important profession for years.

Vlahović: We welcome the new law

Natko Vlahović, founder of Vlahovic Group, commented on what the new act brings and what consequences it will have.

“We absolutely welcome the Act, and it’s no secret that I’ve been talking about the importance of lobbying regulation and the professionalization of this important profession for years. Lobbying is not corruption, but a legal and legitimate activity that promotes and defends interests. We did this in order to demystify lobbying, make it completely transparent, and at the same time put an end to the gray zone, hunting in the dark, and practices where you lobby for someone but don’t say for whom,” says Vlahović.

In terms of the new law, lobbying, says Vlahović, is considered any written or oral communication to the lobbied person as part of a structured and organized promotion, advocacy or representation of certain interests and the transmission of information related to public decision-making in order to achieve the interests of the lobbying beneficial. According to the new law, a lobbyist is any domestic or foreign legal or physical person who is registered in the lobbyist register, which also represents the basic regulatory meaning of the new law.

“The registry of lobbyists is the most important segment of the new law, and the entire Croatian public will know at all times who the lobbyist is and with what mission it represents. According to a rough estimate, there are currently more than 200 lobbyists from various sectors operating in Croatia, but we will find out the exact number of those who want to declare themselves as lobbyists only after the Act enters into force. The conditions for enrollment are quite simple – the age of majority and confirmation that a lobbyist has not been convicted,” claims Vlahović.

“There are serious sanctions for violators”

The register of lobbyists will be under the jurisdiction of the Commission for the Resolution of Conflicts of Interest, which will impose penalties and report to lobbyists who violate the law and all those lobbyists who are not registered in the register and are lobbying.

“Sanctions exist and are very serious. A ban on lobbying can mean a key in the lock for someone, because you can no longer carry out your activity. Initiating a procedure before the Commission for a listed company with high regulation of internal processes can mean dismissal for the director who was put in such a situation, high reputational damage and a consequent decrease in the value of the company. A legal entity can be fined up to 20,000 euros if it lobbies and is not registered in the register. With the law on lobbying, Croatia joins the ranks of countries that have mandatory registration of lobbyists,” says Vlahović.

With the law on lobbying, Croatia joins the ranks of countries that have mandatory registration of lobbyists.

Before accepting contact with the lobbyist, the person being lobbied will be obliged to check whether the lobbyist is in the register. If it is determined that the lobbyist is not registered, has a ban on lobbying or has been deleted from the register and is trying to lobby or is lobbying, the person being lobbied should immediately notify the Commission. Otherwise, an administrative dispute may be initiated at the High Administrative Court based on the decisions of the Commission.

“All lobbyists, legal and natural persons, will have the obligation to submit a report on lobbying activities in the past year to the Commission once a year, because the law prescribes the content that will have to be included in the report, such as information about who the lobbyists met with, what was the agenda of the meeting and the goal of lobbying, who were the lobbied persons, what materials were provided to the lobbied person. However, it is stipulated that such information will not be publicly available. But if journalists in their investigative work ask the Commission for the Prevention of Conflicts of Interest to provide them with information on whether there have been lobbying activities in relation to a certain company or lobbied person, the Commission can decide to provide the requested information to the newsroom if it concludes that it is a so-called prevailing public interest”, says Vlahović.

The concept of lobbied person is introduced

In addition, the Act introduces the concept of a lobbied person, and it will include managing civil servants and officials of the executive and legislative authorities, including those at the local and regional levels, advisers and special advisers in ministries and heads of regional and local self-government, and certain persons in bodies with public authorities. Vlahović estimates that the Act will potentially cover up to 20,000 officials, i.e. three to four times more than are currently covered by the Act on Prevention of Conflict of Interest.

Vlahović explained how lobbying works in practice. He says he is aware that lobbying is often perceived negatively by the public – as influence peddling or bribery. However, he also claims that these are “scenarios from movies”.

“Lobbying is part of democratic trends in the West and an inseparable part of legislative and business procedures. When the law mentions communication with public authorities, we are not talking about communication in the corridor or in a cafe, but about the possibility to present the proposals and arguments of one side to the decision makers in a structured way. This is about exhaustive analyses, scientific papers, studies, expert opinions, legal interpretations that can benefit our goal, and it must not be against the public interest and the legal order. Communication with public authorities and its preparation is only a small part of our work, as we spend most of our work preparing materials and strategy, analyzing problems, communicating with a client…” Vlahović concluded.

Testimonials

Zagreb, 17 May 2024 – Vlahovic Group is proud to announce that it has obtained ISO 37001:2016 certification – Anti-Bribery Management System. With this certificate, issued by the renowned certification house Bureau Veritas, Vlahovic Group becomes the first consulting firm in its field in the entire European Union to have proven the existence of a robust anti-bribery risk management system. The scope of the certification covers consulting services related to public policies and relations with public authorities, i.e., to the core business of the company.

The ISO 37001 certificate is a globally recognized and recognizable anti-corruption standard. It confirms that Vlahovic Group has implemented a management system that includes procedures for identifying and managing bribery risks, as well as maintaining a high level of competence of employees and business partners who work for or on behalf of the company.

“The corporate sector from which our clients come treats interaction with public authorities as one of the riskiest areas in their line of business, and therefore we have recognized that the ISO anti-bribery certification is an additional step in proving our integrity. The services of professional lobbyists are in demand because their expertise and professional standards reduce the exposure of companies, especially those listed on the stock exchange. Therefore, we have decided to take a leading position in demonstrating the transparency and functionality of our internal business system, as we will thereby set the bar for all others. Although zero tolerance for any form of bribery has been and remains the business standard of Vlahovic Group, this certificate will certainly help us to strengthen trust in our company. In addition, we believe that it can also contribute to demystifying the work of professional lobbyists and further professionalizing the profession, not only in Croatia but also globally. Time will tell whether we have helped to set a new standard in the interest of the entire profession,” said Natko Vlahović, one of the pioneers of professional lobbying in Croatia and one of the co-authors of the first book in Croatian that professionally addresses the work of lobbyists.

The company carried out the multi-month implementation process of this ISO standard at the same time as it was engaged in the drafting and adoption of the first Lobbying Act in the Republic of Croatia, which enters into force on October 1, 2024. “We started before we knew what obligations would arise from the Lobbying Act, and although there is no obligation to certify in it, we realized that this is the only international anti-corruption standard that is complementary to the goals that the Act, and we as professional lobbyists, want to achieve, and those are to increase transparency, business ethics and responsibility,” said Natko Vlahović, director and founder of Vlahovic Group.

The event was opened with an introductory letter by the Executive Director of AmCham Austria, Ms. Susanne Reisinger-Anders. “It is my pleasure to announce today the presentation of the Vlahović Group, whose topic we agreed on a few months ago, and which today’s circumstances make extremely relevant. We hope that our members will recognize the potential for investment in the energy sector in Southeast Europe. and we are glad to have experts here today who will bring us closer to these possibilities”, said the Executive Director of AmCham Austria.

Natko Vlahovic, CEO of the Vlahović Group, presented the portfolio of services and previous experiences of the company in representing investors from the energy sector in projects in Croatia and Western Balkan countries. We have been on the market for 10 years, and with a team of senior advisors covering sectoral policies such as energy, we are able to advocate the interests of investors, not only in Croatia but also in Slovenia, Serbia, Bosnia and Herzegovina, Kosovo, Albania, Montenegro and Northern Macedonia. The network of our regional associates in these countries allows us to identify the specifics of each market and to succeed in performing our methodology of government relations for our clients in each country.

Leo Dolezil, Senior Energy and Infrastructure Advisor at the Vlahovic Group gave an overview of the current state of the energy market in Europe. “High electricity prices are projected in the coming years and before the outbreak of war in Ukraine, the comparison of gas prices in recent months with those of last year seems almost unbelievable. In addition to turning to renewable sources, it is important to invest in developing the electricity distribution network to increase capacity”, said Dolezil. In the continuation of the lecture, he presented the investment opportunities and challenges of the energy sector on Croatian, Serbian and Bosnian markets. The business community that attended the lecture was interested in the experiences of setting up the LNG terminal on Krk and its prospects, the development of infrastructure for gas import from Azerbaijan and the possibility of financing projects from EU funds in the field of geothermal and solar energy.

The power-point presentation held will be shared with you upon your request at info@vlahovicgroup.com.

Testimonials

Natko Vlahovic, Founder and CEO of Vlahovic Group, the first professional lobbying company in Croatia, and an accredited lobbyist at the EU Parliament, demystifies an activity that is still associated with secrecy.

Although lobbying in the USA has been a normal business activity for decades with its rules and regulations, and somewhat shorter in the EU, in Croatia it is a novelty that a good part of the public and officials still connect with something mysterious and obscure.

On what is lobbying, what is the situation in this sector in the EU and Croatia, we are talking with Natko Vlahovic, founder and director of the first Croatian professional lobbying company, which operated during the COVID-19 crisis, and which demystifies business lobbying in Croatia, and this year marks the 10th anniversary of its operations.

How did the lobbying business develop after Croatia’s accession to the EU and what did it mean for lobbying?

Joining the EU has pushed lobbying into a much more professional space for advocacy. EU legislation and all decision-making processes after joining the Union have become far more demanding and in the background is a deep understanding of political decision-making.

Today, serious lobbying requires you to know every detail of the transposition of EU legislation, all relevant institutions, analyze external factors that may affect policy, and of course lobbyists are expected to achieve results, and that is effective advocacy and influence on the issue.

Business operations are much more complex no matter what the sector is. Nowadays, this job requires in-depth expertise, analysis and a systematic approach to the topic you are working on. There are no quick fixes, and the job itself can be very sensitive because it is subject to various political changes.

It is important to point out that Croatian institutions that are being lobbied, such as ministries, Parliament, Government, agencies, are much more closed than European institutions and it is much more difficult to achieve a quality dialogue on an important topic or upcoming regulation.

Who lobbies in Croatia? Can we say we have a lobbying industry?

The internal analysis we made in Vlahovic group shows that around 130 million EUR is spent annually on interest advocacy in Croatia. Of this amount, almost the smallest share, less than 10%, refers to those who declare themselves as professional lobbyists or policy consultants most often hired by the private sector.

It is in our interest to affirm lobbying as a profession and to bring closer to the public and decisionmakers what, for whom and for what purpose we work. The largest share of this “lobbying market”, more than 50%, refers to national business organizations, economic interest associations, clusters, professional and foreign chambers whose main interest is to advocate and promote the interests of its membership.

They act in the public and political spheres with the aim of influencing the policies that concern them. For them, too, the European Transparency Register in Brussels requires registration for access to EU institutions, as well as for trade unions and the NGO sector, which we did not include in the analysis.

We estimate that economic entities in Croatia have expenditures in the amount of 40-53 million EUR for lobbying, either through the costs of in-house lobbyists they employ or through spending that money on various events and campaigns in the media with the help of PR agencies, and many law firms generate revenue by providing lobbying-related services as well..

Lobbying as an institutionalized activity came from the US. What is the situation in the EU, and especially in Croatia?

The US has taken full advantage of lobbying in both the public and private sectors for a good 150 years, although the first regulation came in the 1930s. American lobbying is very aggressive in our terms, but it is required in the relentless competition of the free market. There are a lot of interests that want to have the right information at the right time.

Brussels has also experienced a real renaissance in the last ten years. Every serious business organization has someone in charge of monitoring European affairs. It is a large and serious industry without which no decisions are made.

Croatian lobbying practices began to develop more seriously after joining the EU, as the importance of political advocacy became much more important to the private sector. As a new member, we had to introduce a lot of new laws that necessarily change market relations, which entails the activation of interests, and thus a certain level of analysis and lobbying.

Basically, it is only positive and good both for strengthening the capacity of our institutions and for the private sector that is still not agile enough in following key developments or does not react in time by expressing its policy position.

According to your estimates, at least in the EU, how much lobbying is aimed at politics today, and how much at business?

The essence of running a business is advocacy and fighting in the market where they try to regulate you in different ways and with different motives. The whole policy is to lobby different interests. Every decision made by an EU institution has been lobbied for months.

It is difficult to give a precise answer, but lobbying in Brussels for both business and the member states, the industry is worth several billion EUR. Trade and strong lobbying are expected among member states when it comes to political decisions in the EU institutions, but it is less clear how much is spent and what was obtained.

What is the situation with the regulatory framework for this in our country?

The Ministry of Justice and Administration announced the adoption of the first Law on Lobbying at the end of this year. This regulation has been long awaited and a working group has been formed to deal with this area.

It is expected that we will get a public register of all those who lobby in an organized way and try to influence the decisions of public authorities, this registration should be mandatory, it is in the public interest to know who influences Croatian institutions. I hope we can achieve that.

To what extent is lobbying recognized by the public and institutions as an activity, and to what extent do you still encounter prejudices about “hunting in the dark” or similar?

Decisionmakers must not allow themselves to work with “unverified” lobbyists, those who are unregistered or simply self-proclaimed consultants, as this puts them in an awkward and potentially problematic situation. This is one level of “protection”.

We in Croatia had quite a number of scandals where some kind of lobbying was mentioned, but in fact we had public officials who were corrupt and did their job catastrophically badly. Legitimate lobbying should be clearly separated from any corruption.

This is an area that must be constantly worked on, and the best way to improve it is the Law on Lobbying, which determines the basic rules of conduct.

How do you tell the difference between ‘lobbying as an activity’ and trying to influence some processes by pressure, trade in influence or ubiquitous myth?

Quite simply, attempting to influence some processes by trading influence or bribery is a criminal offense. And that should qualify as a crime, not lobbying. The person offering the bribe is a criminal, as is the person receiving it.

Lobbying never seeks a solution that is illegal, but tries to influence the political or legislative process with more or less success through argumentation, knowledge of the political process and an ethical and transparent approach. There is no reason to equate lobbying with the activities described in the Penal Code.

How much has lobbying become more important for Croatia with the accession to the EU, because most of the processes that affect our country are passed in Brussels?

National representatives in all three EU legislative levers participate in the EU legislative process through committees in the Commission, working groups in the Council and committees in Parliament. Each member wants to make EU regulations more favorable for their country, successfully or not.

For example, to lobby for the interests of Croatian agriculture means very close cooperation with our representatives in Brussels, and after the adoption of the EU directive to cooperate on the best solutions within the framework set by the directive.

The transposition of EU directives into the national legislative framework is a complex process, and the end-result strongly depends on the quality of communication between the private sector and regulators, of course in cases where regulation concerns the economy.

Do you have any examples, which you can and may mention, of successful lobbying or situations where quality lobbying would bring much better or even different results for Croatia or entities in our country?

We often work on cases in which the regulator decides on solutions that preserve the monopolistic position of individual entities, most often those in state ownership or related to the state. Abolishing the monopolistic position of any entity in the market is always a victory for Croatia and Croatian citizens.

One of such campaigns was the liberalization of the taxi services market, we worked on bringing a floating LNG terminal on the Island of Krk, machines for the return of returnable plastic packaging, as well as many other projects where we help to reach the desired solution.

As I have already mentioned, in-depth expertise of the sector is important for successful lobbying, and then the problem that needs to be solved. You need to know the whole ecosystem in which an individual entity operates, both technologically and socially, politically and ultimately regulatorily, at both national and EU levels.

People in ministries working on regulatory frameworks cannot know what opportunities the private sector has at its disposal, nor that there are any solutions at all, especially technological ones. Also, they cannot know all the examples of EU best practices in a sector. Lobbyists provide regulators and political stakeholders with key information and offers acceptable solutions.

Achieving that the regulator recognizes the potential and opportunities of individual industries and incorporates that potential into the regulatory framework is always a victory and a win-win situation.

The objective is for the regulator to pass a workable and effective regulation within which the entire sector in free market competition can deliver the best possible result that always benefits the Croatian economy and strengthens the overall national capacity in that sector.

The key is the openness and interest of regulators and political stakeholders towards the economy on the one hand, and the responsibility of the economy towards citizens on the other.

Source: Poslovni.hr

Testimonials

Vlahovic Group, a consultancy that has been providing professional lobbying and consulting services related to political processes in Croatia for a decade, is expanding its portfolio of services and further strengthening its expertise.

The company used this crisis period to bring together a team of senior advisors – nine experts with years of experience covering agriculture and food safety, healthcare, tax and finance, defense, energy and infrastructure, environment and circular economy, international relations, marketing and branding, and digital advocacy. “We approach lobbying in a sectoral manner, and in order to advocate business interests with even more success, we must have in-depth expertise in the areas with most economic and regulatory processes in our market”, said the CEO Natko Vlahovic. The company started out as a family firm 30 years ago, as one of the first private companies in the Croatian court register at the dawn of market economy in 1990. The 30^th anniversary was marked by naming the first partner in the company’s history, with an increase in working capital that now amounts to €134,000. “Miljenko Pekic, as a long-term colleague, became the first partner. This sets a roadmap for other employees as well. It is how we see the future of the company, that those who work hard to grow the company today, also participate in its management through partnerships tomorrow. By increasing the working capital, we send an additional message of responsibility and accountability behind our name and business operations”, said Natko Vlahovic.

The company has also been strengthened in terms of business operations in the Western Balkans markets, through a network of associates covering 9 countries from Vienna to Skopje and Tirana. “Since the firm’s clients are mostly multinational companies, there is a need for us to do business in several countries at the same time with the same level of quality. We are their primary point of contact when it comes to a project in one of the neighboring countries”, explained Vlahovic and added that the company has done a complete rebranding in the last year while maintaining the identity of the first independent lobbying company in the region. Along with professionalism, ethics and transparency remain the cornerstone of the firm’s business operations, therefore Vlahovic Group stays committed to the goal of having a regulated lobbying profession in Croatia. Lobbying is a legitimate business function, and this would provide a framework for the significant improvement of relations between the private sector and politics, leading to a greater understanding that corruptive practices are incompatible with the professional methodology of lobbying.

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Natko Vlahovic, CEO of Vlahovic Group, gave a statement for an article about the Croatian lobbying industry in a Croatian daily newspaper Jutarnji list. He pointed out that, according to preliminary calculations made by Vlahovic Group, the total worth of the Croatian lobbying industry at the moment is approximately €133 million. From that sum, about  €40 million is spent annually on the event industry and advertising with the aim of creating political influence, about €10 million is spent annually by companies on their in-house lobbyists and associated activities, while professional consulting firms and lawyers gross about €20 million on lobbying services per year. The business associations (Croatian Chamber of Commerce, Croatian Employers’ Association, Croatian Banking Association, Croatian Tourism Association, and other foreign and professional chambers) spend approx. €60 million annually.

“Our rough estimate is that at least 500 people engage in lobbying and related activities in Croatia”, said Natko Vlahovic. However, out of only 6 professional Croatian consultants/lobbyists accredited within the EU’s Transparency Register for access to European Parliament premises, 5 are representatives of Vlahovic Group. The problem is in the lack of proper regulation of lobbying as a profession which opened the market for everyone. In Croatia today not only professional consultants/lobbyists lobby, but also business associations, NGOs, trade unions, lawyers, and in-house lobbyists.

According to the assessment of the Croatian Society of Lobbyists, of which Natko Vlahovic is Vice-President, there are at least 30 companies in Croatia that provide lobbying services, but most of them do not publicly declare that. Only 9 of these companies are registered in the EU’s Transparency Register, while there are 72 registered subjects from Croatia in total.

One of the key reasons for such secrecy is the negative perception of the term lobbying, and domestic misunderstanding of the lobbying service. Therefore, according to Vlahovic, professional lobbying services in Croatia today are mostly used by foreign investors and multinational companies that require the highest level of legal compliance in articulating and advocating business interests. For these clients, any entry into the “gray zone” means intolerable reputational and legal risk.

Link to the entire article in Croatian: Jutarnji List

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Our CEO Natko Vlahovic was approached by Glas Slavonije to give his take on the procedures behind absorbing the €22 billion of EU funds.

Through answering three well-thought questions, Natko underlined all the necessary prerequisites for withdrawing the funds at disposal. The crisis will sure be felt across many sectors, that is why Croatia must first put forward a National Development Strategy, outlining the priorities. This will create a framework for drafting other operational documents and it is highly important to honor all required procedures when public funds are in question.

Natko reiterated the need to include the private sector in the preparation of projects that aim to withdraw EU funds. Entrepreneurs know exactly what they need to weather the storm, they can react swiftly, and they have concrete ideas that can help the economy. It would be prudent for the government to include them as much as possible.

The interview was concluded with reaffirming the need for meaningful reforms and a strong belief that the new 7-year financial period will be a successful one for Croatia.

Read the full interview in Croatian: Natko Vlahovic – Glas Slavonije_5.9.2020.

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Public policies influence businesses, whether they stimulate them or hinder them. Legislators and governments can pass and implement policies that generate policy-driven growth or introduce measures that endanger certain industries. Once the Brussels business community came to this realization, European business associations emerged as one of the most utilized means of influencing and advocacy. Brussels is the battleground for top level European business advocacy in the EU. Nowadays, we witness many business competitors unite under at least one umbrella to advocate and promote mutual interest of their industry. These competitors continuously invest money in the operational engine of the business association, because they believe in a certain return on that investment. One can question if this belief is rational and justified, is the juice really worth the squeeze? Indeed, it is!

The EU Defence Funds Offensive

In Brussels, almost every industrial sector has its own association to safeguard the sector’s interest and monitor the EU legislative juggernaut. For example, the chemical industry has CEFIC, PlasticsEurope represents plastics manufacturers and ASD protects the interests of the aerospace and defence industry. ASD is comprised of members such as Saab, which develops Gripen fighter aircrafts, Airbus, BAE Systems and Rolls-Royce which, besides luxury automobiles, produces aircraft engines as well. In 2016, ASD masterfully conducted an advocacy campaign directed towards the Dutch rotating presidency of the Council, i.e. the Dutch Defence Minister. The aim was to make the funds from the EU’s Preparatory Action on Defence Research (PADR) allocated to the industry. The PADR research program was worth around €90 million, all publicly funded. ASD managed to not only secure these funds for industry research, but to keep the intellectual property rights (IPR) to the research results. Although the latter request was somewhat watered down in the process, allowing member states access to the results, the industry secured a deal in which they are paid twice for the same research. The deal did not only generate a return on investment, but a return on the return on investment.

A 5-star Effort for 4-star Hotels

Having a strong coalition united by a common interest increases your chances of success. In Croatia, this logic initially did not drive to the creation of many business associations. The Croatian Banking Association (HUB) and the Croatian Independent Software Exporters (CISEx), founded in 1999 and 2011 respectively, were among the pioneers of advocacy through sectoral business associations. However, Croatia has recently seen more business associations emerge, such as the Croatian Tourism Association (HUT) in 2018 or CroAI in 2020, and some older ones, such as AmCham Croatia, receiving more media attention and becoming more vocal in their mission. HUT was founded recently but wasted no time in advocating for the interest of its most prominent members – Valamar Riviera, Arena Hospitality Group, Maistra and Plava Laguna. With a former Croatian Tourism Minister at its operative helm, HUT had all preconditions to become an advocacy powerhouse. Their most recent success is the work regarding amendments of the Investment Incentives Act early this year. The Ministry of Economy, Entrepreneurship and Crafts drafted amendments that repealed incentives for large tourism enterprises when building or renovating 4-star hotels in Croatia. In the last 7 years, the government incentivized a total of 453 projects, with approximately €2,7 billion. HUT conducted a multi-stakeholder advocacy campaign that resulted in success. The Ministry decided to drop its intention to repeal the said incentives, thus allowing large tourism enterprises to keep receiving government incentives for both 4-star and 5-star hotel investments.

Over the years, associations have proven they can produce the goods on wider issues, ones that target all industrial competitors alike, but are limited on issues endangering company-specific business models. Although cooperating on policy issues that allow consensus, business associations are comprised of fierce sectoral competitors who often cannot reach consensus on certain matters. As evident in practice, competitors that can temporarily suspend particular interests and work together on a mutual issue, through their associations, will reap the rewards. In that case, membership is a small investment for a potentially large return, provided the association’s internal policy is clear and precise.

Author:

Fabijan Popovic is an accredited lobbyist in the European Parliament who serves as an Account Manager at Vlahovic Group Government Relations.

Source: Magazine of the American Chamber of Commerce in Croatia – News & Views, No. 1/2020

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