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, September 2023 – Vlahovic Group conducted the “Investment in Government Relations and Public Affairs Functions by Companies Operating in CEE” research project. We are excited to share with you the first results which provide unique market insights into this sector and a new perspective from a generally unexplored industry in the region.

Vlahovic Group is constantly striving to improve our services to better serve the needs of our clients and to raise the awareness of the value public affairs and government relations bring. Following this commitment, VG conducted a survey among multinational companies operating in the CEE and Western Balkans/Adria regions to gain a deeper understanding of their current and projected practices and spending budgets for public affairs service providers.

The objective of the “Investment in Government Relations and Public Affairs Functions by Companies Operating in CEE” research project is to highlight the value of government relations and public affairs services and to encourage investing in larger budgets for more complex and multimarket public affairs campaigns. We believe the survey results make an important step towards achieving it because the available information can help multinational corporations in evaluating how to use their public affairs budget.

Here are the key takeaways from our research:

1. 1. Recognition of value: CEE market recognizes the value and potential of public affairs service providers as 64% of our respondents have previously engaged with them
   2. Budget insights: On average, companies in the CEE region allocate approximately €37,000 annually for public affairs activities
   3. Demand drivers: Primary driving forces behind the utilization of public affairs services in this region are: regulatory framework changes, country-specific investment cycles and country-specific political trends

The entire survey results are available by clicking on the pictures above, or here.

We hope that these insights will bring value to your organization as you navigate the intricate landscape of public affairs and government relations in the CEE and Western Balkans/Adria regions.

In case you would like to share your questions and observations, or discuss how Vlahovic Group can further support your public affairs efforts in the Western Balkans/Adria region, please do not hesitate to reach out to us.

Vlahovic Group stays committed to positioning and developing public affairs in the CEE markets.

Zagreb, December 16, 2022 – Vlahovic Group CEO, Natko Vlahovic, was a guest of the “Good Morning, Croatia” talk show on Croatian Radio Television (HRT). He presented news about the drafting process of the first Lobbying Act, which the Government of the Republic of Croatia is currently working on, and which is expected to be adopted in 2023. He also shared his thoughts on the development of the lobbying profession in Croatia and what such legal regulation would mean for its further development. If you are interested in the Croatian advocacy industry, please watch the entire interview below.

Testimonials

Zagreb, October 7, 2022 – Marking the 10th anniversary of the company, Vlahovic Group’s CEO Natko Vlahovic shared his thoughts on the company and profession’s development in an interview for News & Views Magazine by AmCham Croatia.

In the past twenty years, you have gained renowned international experience in lobbying practice, i.e. professional advocacy of interests. Although the term lobbying is used quite broadly, how would you describe what a professional lobbyist does?

You are right, the term lobbying is used quite pejoratively. In the narrowest sense, a professional lobbyist is a consultant with expertise in public policies, regulatory affairs and government relations. But it is essential to say that lobbying is not only done by professional lobbyists but also by interest associations, professional and foreign chambers, NGOs, trade unions, law offices, in house corporate lobbyists, and, of course, governments. One only has to look at the EU Transparency Register to get an accurate picture of what the lobbying scene in Brussels looks like. The register is mandatory for everyone who wants to influence EU policies and legislators. There are up to 30,000 people lobbying in Brussels, and only a part of them are professional consultants – lobbyists. Lobbying, like public relations or law practice, has its methodology, high standards of transparency and business ethics. It neither begins nor ends with arranging a meeting, and the perception of sitting at dinner parties is entirely wrong. However, unlike movies, lobbying is an office job. It requires a lot of analytics, research and study of matter. So, there is a lot more work on the case in terms of preparing a strategy on how to lobby, with whom and when, preparing arguments and various communication tools, and creating a win-win situation for both parties. There is a lot of this work, let’s call it detailed, precise work so that you can come up with an argument and convince someone that you have the right solution.

You have touched upon the EU Transparency Register. What is the legal regulation of lobbying in Croatia?

Legal regulation of lobbying is one of the critical anti-corruption measures. Professional and declared lobbyists, such as Vlahovic Group, are at the forefront of demands for transparency and legal regulation of lobbying. Last year, the government established a working group to draft a bill that should regulate access to political decision-makers. We believe it will contribute to the understanding that lobbying is an integral part of the democratic process and that lobbyists can help to see the implications of the solutions proposed by the legislators better and in advance. I think a significant step forward would be the introduction of a mandatory public register to bring unregistered lobbying into the sphere of illegal pressure on decision makers. After all, many countries in the EU have such laws, even some neighboring non-EU countries.

Besides Brussels, another “lobbyist bubble” is Washington DC. How is Washington different from Europe?

Surely. I had the opportunity to work in both capitals and get to know the scene intimately. Washington DC is the “birthplace” of lobbying and K Street sets the trends. American companies came to Brussels with their lobbying style, but they had to adapt and fix cultural differences. Almost every government uses lobbyists in Washington as they are part of the political fabric of the city. While the practice in the US is that lobbying services are associated with and provided by law firms, in Brussels, lobbying firms usually provide a broad spectrum of communications services, including digital advocacy and grassroots lobbying.

You started your career in diplomacy in Washington, you represented the interests of Croatian craftsmen in Brussels working for the chamber, and since 2012 you have been running your own company. How much does experience from different perspectives help?

For ten years now, Vlahovic Group has been representing and advocating the interests of the private sector before public authorities in Croatia, Brussels and the Western Balkans. In principle, previous experience of working in the public sector is very important for a lobbyist. And for the sake of understanding the methodology of work of public services and for the easier establishment of contacts. Equally important is the understanding of the interests of business entities and effective client management. We always try to win for our clients and find the best possible solutions that are acceptable. But for a good lobbyist, passion for an in-depth understanding of political processes is an essential ingredient.

How much have the expectations of professional lobbyists changed in the past ten years?

Clients are looking for help with much more complex projects than before. The political environment has changed tremendously after Covid. Issues have changed. Digital, energy, environment and defense sectors are hot now. More in-depth expertise across all sectors is crucial. Vlahovic Group has recently formed the Advisory Group with experts from various public policy fields and appointed former president H.E. Ivo Josipovic as the Chairman of the Advisory Group to help us navigate the region. In general, since we joined the EU, most decisions are made in Brussels, and companies should shift their focus to Brussels but also engage in influencing Croatia’s position so their voices can be heard as soon as the EU drafting phase or national implementation phase starts, depending on the type of the legislative act.

Where do you see Vlahovic Group in ten years?

The Western Balkans is the area of our interest. That’s why Vlahovic Group is expanding to Serbia and we have set up a new company there together with our partners. We believe that AmCham members, who in principle pay a lot of attention to compliance, will recognize that they can get top-quality lobbying services from us in Serbia as well. As for Croatia and the region, we wish to raise awareness of the positive aspects of the lobbying profession among political decision-makers and companies. We believe this will lead to the further professionalization of the lobbying scene and contribute to the transparency of political processes.

Link to the full article (pages 16-17).

Testimonials

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

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

It is necessary to open a dialogue between public and private sectors and look at new perspectives for managing financial risks from natural disasters, it was concluded at a policy discussion organized by the Croatian Employers’ Association, the world’s largest insurance broker Marsh, global reinsurance broker Guy Carpenter (both from Marsh McLennan) and Vlahovic Group LLC.

According to the recent World Bank study “Financial Risk and Opportunities to Build Resilience in Europe”, whose findings were presented to the participants, Croatia ranks 4th in the EU in terms of 100-year natural disaster in terms of government liabilities relative to GDP. 

The approach that the World Bank promotes in the management of financial risks of natural disasters is to classify risks into layers according to frequency and severity and to determine the financial instruments of coverage adequate to that classification. Accordingly, budget reserves and reallocations can cover frequent minor hazards, medium ones are recommended to be covered from additional sources such as contingency funds, while for the rarest but also the most financially demanding hazards, such as those that have recently hit Croatia, the transfer of risk through insurance instrument is recommended. Natural disaster insurance enables the transfer of disaster risk to insurance and reinsurance companies and is a well-known practice in EU Member States and even neighboring countries in the region.

Mario Baotic, a London-based managing director at Guy Carpenter, global reinsurer intermediary, explained how parametric insurance works. “If the state insures itself against a natural disaster such as an earthquake, there is no need to wait for damage assessments. As soon as the intensity of the earthquake is above the agreed parameter, the payment is activated, and governments dispose of funds freely and invest them where they are most needed”, Baotic explained, saying that the practice is to form the so-called national disaster insurance pool require the cooperation of the national insurance sector, the international reinsurance sector, development banks, and the commitment and support of the government. “Everyone has to work together to build a successful model”, Baotic said.

The financial and physical resilience of the crisis management system should be built at the same time by considering new models to strengthen the overall capacity of the crisis response system and to climate changes, which are an increasing challenge, concluded the expert panel attended by State Secretary Zdravko Zrinusic and the head of the Sector for disaster risk reduction in the Civil Protection Directorate Drazen Stajduhar, while the current model of earthquake reconstruction was presented by the State Secretary in the Ministry of Construction Zeljko Uhlir.

Testimonials