response to the standards committee consultation paper statutory registration of commercial...

8/4/2019 Response to the Standards Committee Consultation Paper Statutory Registration of Commercial Lobbyists-June 2001

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Response to the Standards Committee

Consultation paper Statutory Registrationof Commercial Lobbyists, June 2001

Dr. David Miller, William Dinan and Professor PhilipSchlesinger

Stirling Media Research Institute

Stirling University

Stirling FK9 4LA

August 2001


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Introduction

This submission deals with the questions outlined in the Standards Committee's

consultation document. We give a detailed response to the specific questions

below, but first we think it worthwhile to outline the general case for registration.

The rationale for the registration of lobbying is that there is a clear public interestin openness and disclosure. This is entirely consistent with the CSGs principles

and it would be a clear indication that the Scottish Parliament rejects of the status

quo of secrecy and convenience in favour of openness and accountability.

It is noteworthy that most of those engaged in lobbying the Parliament and the

Executive are opposed to any form of regulation or registration. They insist thatstatutory registration schemes are overly bureaucratic and incapable of tackling the

problems they seek to address. Such arguments ignore the fact that self-regulation

in the United Kingdom has patently failed either to expose impropriety (this hasonly been achieved through investigative journalism) or to make the business of

lobbying open and transparent, to both politicians and the public.

Opponents of registration use arguments that suit their own vested interest in

avoiding disclosure. The point of registration is not to impose barriers to

participation, but to allay public fears and cynicism about the interconnectionsbetween money, vested interests more generally (including the non-commercial

ones) and the political world. Such cynicism is highly damaging to a participatorydemocracy. The requirement for paid lobbyists to fill in a short declaration of

interests periodically is a small price to pay in building public confidence.

A definition of lobbying should be drawn widely so as to include anyone whose job

description (or part of whose job description) includes the provision of privateinformation or advice about the Scottish Parliament. It is quite possible for this

definition to be subject to some threshold. Currently, existing systems of regulation

adopt a variety of hurdles to be cleared before people have to register. Criteria vary,and might include the following: that lobbyists are paid to lobby; that they spend a

certain proportion of their time lobbying; that lobbying is part of their jobdescription; that they are regularly in contact with decision-makers. All who clear


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the chosen hurdle would have to disclose their activities. This broader approach has

the advantage of avoiding the potential anomalies inherent in targeting commercial

lobbyists alone.

We have been struck recently by the disparities between the public and private

debate on this issue. During our research we have been told by some lobbyists thatthey have changed their minds regarding the merits of registration. However they

do not wish to say so in public lest they contradict earlier statements on the record.It is also privately acknowledged by some that there may be a role for independentscrutiny of the finances involved in the Scottish lobbying business. Most bizarrely

one lobbyist told us that it is acceptable to offer a bribe to an MSP and thatresponsibility for accepting or rejecting such offers lies squarely with elected

politicians. Given such views there is a pressing need for the registration oflobbyists to complement the regulations to which elected representatives are bound.

We continue to believe that it is extremely important for the Executive to be

governed by a similar regulated approach to lobbying. We accept that thecommittee has no formal power to regulate the Executive, but it does have the

power to regulate the conduct of ministers, since they are also MSPs. The

committee will need to consider carefully how best to include ministers and theirstaff in any regulatory scheme. The committee could also, if it so chose,

recommend the registration of lobbying by the Executive itself. This stance would

have a strong moral force. Indeed, regulating lobbyists is likely to be seen as goodpractice which the Executive might want to follow.

Definition of lobbying

We note that there are a number of arguments in circulation about the difficulties of

disclosure.

Some continue to argue that registration would create an elite of lobbyists.However, registration does not confer status: it is intended to regulate conduct.

Some argue that registration will give advantages. If so, why is it that the same

people are not prepared to be registered themselves? It is important that thecommittee, and Parliament, make it clear that registered lobbyists do not have any

special status. The committee must ensure that registered lobbyists do not promote

themselves in such a manner and this might be part of a code of conduct for

lobbyists. This task would be made considerably easier over time if the register oflobbyists were extended beyond commercial lobbyists to include all those


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organised interests which spend money in seeking to influence the actions of MSPs

and their staff. If everyone is registered, the elite argument is simply redundant.

Others argue that MSPs should be the focus of regulation. If we want a fullyfunctioning democracy, it is surely not enough to put the onus of good conduct on

representatives in Parliament alone. We can also have a reasonable expectation thatthose who deal with MSPs will not try to corrupt them. We would certainly support

the principle that MSPs (and ministers') diaries and other documentation detailingcontacts and correspondence with lobbyists should be made public at regularintervals. However, if such a move were to be made in isolation, it would simply

fail to capture a key element of the lobbying process. The role of private interests(and private money) in politics is a key part of the general public cynicism about

politics. Openness and disclosure by lobbyists is vital if the hidden hand of privateinterest is to be meaningfully disclosed to a cynical public.

It has been suggested that a code of conduct for lobbyists would be a more positive

approach than the allegedly negative approach of registration. But registration ismerely a first step in forcing a presumption of openness into the system - so it is

not trivial. We do agree, however, that registration and disclosure should indeed be

coupled with a strong code containing positive ideals of good conduct.

It has been suggested that requiring corporations to disclose data is a potential

breach of Article 8 of the European Convention on Human Rights on the right toprivacy. We have taken advice on this. We understand that individuals

and notcorporations are covered by the Article. Furthermore, and more

fundamentally, infringements of the right to privacy can occur in the nationalinterest, subject to the test that they are 'proportionate'. According to the Scottish

Human Rights Centre:

The right to privacy is not an absolute right and may be breached incertain circumstances, including where it is in the national interest.

The creation of a register of lobbyists is proposed to prevent undue

influence on Parliament, thus this could fall under the national interestcriteria. Further, this is probably the least intrusive and most effective

means of achieving this end [and] therefore would probably be

deemed proportionate. (Communication to the authors, August 2001)


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18.1/18.2 definition of lobbying

In our view, the definition does not adequately cover the types of activities

undertaken by lobbyists. It is certainly true that lobbyists do provide advice and/or

information to third parties. But so do journalists. The key difference is thatremuneration is given for advice and information which isprivate, or is supplied on

a limited-circulation subscription basis. This means that journalists are clearlyexcluded, since they publish what they produce. It is thehidden nature of the

transaction which is what the public worry about. So the definition could usefullyunderline the private nature of the communication of information and advice.

Lobbyists do also directly represent specific interests in return for remuneration,with the intention of influencing the actions of MSPs, but this does not exhaust the

types of activity undertaken by lobbyists. As the lobbying industry itself points out,

not all lobbying is as focused as the definition assumes. It may be that lobbyistsattempt to cultivate goodwill, or to monitor the views of given MSPs or civilservants. Lobbyists also sponsor awards ceremonies and provide hospitality which

are often not directly related to securing specific decisions, but to securinggoodwill in general. Such activities are nonetheless related to the interests of

lobbying consultancies and their clients, and may be seen by the public as

potentially corrupting. Accordingly, we would recommend that the definition beexpanded to include all the activities of lobbyists in relation to Parliament, whether

they be related to specific decisions or not. In the case of generalised sponsorshipsof awards and the like, the precise information to be disclosed might include eithera listing of all clients served or by noting that the sponsorship or hospitality in

question had no single client. So while the concept of 'intention' is a useful one, we

consider that the definition could usefully be slightly wider. It couldencompass allthe work of lobbying, whether that include trying to change the mind

of a reluctant MSP or whether it be the dispensing of bonhomie by means of

sponsorship and hospitality.

A further objection relates to the supposed immunity of non-Scottish-based

consultancies to the registration scheme. This is based on little evidence. In the US

for example, there is no difficulty in regulating at the federal, state and countylevels, even though - at the county level - many consultancies are likely to be based

outside the 'jurisdiction'. English consultancies would clearly be subject to Scots

law when they practise in Scotland, and would be subject to parliamentary ruleswhen contacting MSPs or civil servants. Similar proposals to register lobbyists in

the Republic of Ireland are currently focused on those working in and around the

Dail, regardless of whether their companies are located or headquartered outwith

that state (information from Irish civil servants in communication with the authors,August 2001). In addition, it can be noted that at the national level, lobbyists from


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outside the US are caught by the Foreign Agents Registration Act, under which a

number of UK PR and lobbying consultancies currently disclose clients and fees.

18.3 Does the definition cover all lobbyists?

In our view, the definition does competently cover most commercial lobbyists.

However, it should be extended to coverallpaid lobbyists who spend a specifiedproportion of their time (in any reporting period) on lobbying. We have no strong

views on the precise proportion of time that might qualify. The practice usedelsewhere, however, would be a useful guide, and we propose something in theorder of 25-33% of an average working week in any reporting period.

(Alternatively, this could be expressed in terms of days worked in any reportingperiod. In the state of Wisconsin, for example, the figure is 15 days in the past 60).

This would have the advantage of excluding small and resource-poor organisations

from the requirement to register, but would include in-house lobbyists and thebigger NGOs and associations of the voluntary sector. It would also include all ofthe work done by full-time lobbyists in relation to Parliament regardless of how

small a percentage of their job it amounted to. What needs to be caught by thedefinition is the work of lobbying, under whatever euphemisms it travels.

We note that the proposed definition of lobbying, as set out in the consultation

paper (paragraph 17) fails to mention the staff of MSPs and parliamentary staff.Public servants are often key targets for commercial and other lobbyists and must

therefore be included in any definition.

18.4 Does the definition identify lobbyists required to register?

The definition does seem to identify the lobbyists required to register, though theremay be a problem in trying to exempt voluntary sector associations from the

definition where they operate on a subscription basis. In our view, suchorganisations should in any case be included in any scheme.

Some argue that including specific categories of people in the definition would be

problematic for a variety of reasons. We deal with these issues in turn:

Management consultants, accountants and lawyers


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A number of professional groupings have objected that they should not be required

to register. But it is evident that other professions engage in lobbying and when

they do so they should properly be subject to the same sorts of rules as lobbying

consultancies. For example, the Law Society in Scotland told us that they only

regulate solicitors when they operate as solicitors and not when they act aslobbyists.

Questions of legal privilege and client confidentiality are likely not to be seriousobstacles to the registration of lobbying activity carried out by lawyers,accountants, management consultants or any other intermediary hired on a

commercial basis.

In-house lobbyists

In-house lobbyists are currently not included in the definition of lobbying. As anumber of lobbyists point out, this is anomalous as it will mean that a largecorporation spending a significant sum on trying to influence legislation would not

be required to disclose its activity. In our view, the definition of lobbying couldusefully be expanded to include anyone whose job, or part of whose job, is to

engage in offering information or advice in private to their own organisation, or to

a third party, in return for remuneration. In-house lobbyists, together with the

commercial lobbyists, are by far the most active in lobbying for their own interests.This is because they are the bodies in Scottish politics with the greatest financial

resources and with the most to gain or lose from decision making. It is not only onthe grounds of fairness that we argue for their inclusion, but also because they play

a major role in the lobbying scene.

It has been suggested that in-house lobbyists be excluded because MSPs already

know who they represent. But, their activities are notknown to the wider public,

and it is the public to whom openness needs to be demonstrated.

Furthermore, there must be a real concern that commercial lobbying would simply

move in-house if the latter were exempted from the proposed registration scheme.

This could well undermine the very purpose of the registration initiative, which isto make transparent to the Scottish public the workings of their Parliament. Large

corporations are the main purchasers of commercial lobbying services and their

activities could easily remain secret without registration. We therefore request the

committee to reconsider the scope of the proposed scheme.


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NGOs, the voluntary sector and trades unions

Some NGOs seem to be worried that they will be included in the current definition

of lobbying. We would suggest that their inclusion be made explicit. There is nogood reason why NGOs, charities, voluntary organisations and trades unions

should be excluded from the scope of the proposed rules, if in-house lobbyists areto be included. Public worries are not simply about the role of big business in

politics, but about the more generalised prospect of corruption which can be seen toaffect public as well as private bodies, pressure groups as well as governmentdepartments, trades unions as well as managerial 'fat cats'. It is inherently more

open and transparent ifallthe interests spending significant sums of money ontrying to influence Parliament are disclosed. This also includes government and

other public bodies such as health trusts, nationalised industries, quangos and otherbodies which may have cause to influence policy and legislation.

The objection that very small organisations dependent on voluntary staff, and withonly a few paid members, would be discouraged from lobbying is preposterous.

Such organisations would not be required to register under any sensible scheme. Awide variety of regulatory systems already exists. To our knowledge, none requires

organisations with voluntary staff to register. In addition, it can be noted that as the

definition currently stands, only a very small number of large NGOs would berequired to register. The SCVO advice and information bulletin is free to its

members unless their annual turnover is 100,000 or more. Our understanding isthat only around 12 of the biggest NGOs in Scotland pay for this service and would

be included under the current definition. Furthermore, our information suggests that

a number of organisations in the voluntary sector have now come round to the view

that registration is appropriate, but have difficulties in saying this in public since itwould contradict their earlier opposition.

Definitions

A number of working definitions of lobbying are available. We have reviewedthese and propose that the following definition be adopted:

The registration of lobbyists targeting the Scottish Parliament shall cover:

1. Any company or professional firm, partnership, or individual working alone,whose services include, either in whole or in part, the provision of private

advice and/or information to a third party on the workings of the Scottish

Parliament, or the direct representation of any interests, in return for


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remuneration, with the intention of (directly or indirectly) influencing the

actions or views of MSPs, their staff or parliamentary officials.

2. Any employee of a private corporation, company or firm who providesadvice or information to that firm on the workings of the Scottish

Parliament, or directly represents the interests of that firm with the intentionof influencing the actions or views of MSPs, their staff or parliamentary

officials.

3. Any employee of voluntary sector organisations, charities, governmentalbodies, quangos, trades unions or other organisations, who provides adviceor information to that body on the workings of the Scottish Parliament, or

directly represents the interests of that body with the intention of influencingthe actions or views of MSPs, their staff or parliamentary officials.

Registration will be waived where any employee of an organisation under 2, or 3,

above works for less than 25 per cent of their time on lobbying activities in anyreporting period.

Disclosure

The difficulties of disclosure are likely to be slight. As we noted in a previous

submission, a number of consultancies currently practising in Scotland (as part of

multinational PR/lobbying firms) already have in-house experience of disclosurefrom other jurisdictions, such as in North America. Lobbyists there seem to have

little difficulty in complying with requirements to disclose names, clients, fees, etc.

in a full and timely manner.

We note that the consultation document (paragraph 21) lists MSPs contacted as

'information to be disclosed'. We would point to 'Lobbygate' where a key issueconcerned contacts between a minister's staff and lobbyists. We would suggest that

lobbyists should disclose information on their contacts with MSPs' staff and

parliamentary officials.

1. We see no problems with disclosing staff names.

2. Disclosure of clients is likewise unlikely to be a problem. We note that someclients (whether in the private or public sector) may be reluctant to disclosetheir use of lobbying services, but it will not be difficult for them to do so.

Some clients do currently prefer anonymity and it is the function of a

scheme of registration to pull back the veil that obscures lobbying activities

in Scotland. The PRCA and APPC already require disclosure, although theinformation is not always publicly accessible. The ASPA code does not


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require client information to be disclosed. The IPR code of conduct actually

goes further and forbids the disclosure of client information, without the

express approval of the client. These varied stances indicate the problem of

industry codes, which in practice may actually inhibit rather then promote,

openness.

3. Disclosing subject matter is also not likely to be problematic. Some lobbyistsprovide either a general or a tailored information service for clients. It is

quite possible to disclose this activity as part of a more specific disclosure oftopics.

4. There is likely to be little difficulty in disclosing fees or expenditure. Atmost, consultancies will have to change their auditing/billing procedureslightly. As we note above, a number of consultancies involved in lobbying

in Scotland already have in-house experience of complying with disclosure.In addition, lobbyists and PR consultancies appear to have little difficulty inproviding data on income and clients to the trade press (such

asMarketingorPR Week). They appear to be able to break such data down

into categories of work (such as public affairs/lobbying, business-to-business, internal communications, etc.) and have done so regularly since at

least the early 1980s. We also note that figures supplied to the trade press are

subject to audit, which also appears to be acceptable to many consultancies.In fact, it has been suggested to us by a senior Scottish public affairs

practitioner that the auditing of lobbying income disclosed in a statutory

register would be relatively easy to accomplish. Of course, such sentimentshave not so far surfaced in the public testimony of the lobbying industry to

Parliament. Nevertheless, the suggestion that disclosures should be subject

to some sort of audit as part of a wider regulatory function seems to havemuch to commend it. There might well be a role for Audit Scotland here.

Certainly, this would help to allay some public fears about the hidden hand

of money and special interests in politics.

5. Contingency fees: We have no knowledge about how common the paymentof these is. But we would suggest that the committee cover this eventuality

in any system of registration.

6. The only difficulty in maintaining a live document are likely to derive fromthe reluctance of lobbyists to co-operate. It depends on how often lobbyists

are required to disclose information and how user-friendly the registration

system is. Once a month might be reasonable, but equally a three-month lagought not to be too problematic and would have the advantage of

synchronising with lobbyists' internal accounting and reporting procedures.

Very small organisations with no paid lobbying staff would doubtless findthe simple task of disclosure too onerous. But in our view, such


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organisations should not be caught by the registration of lobbying in the first

place.

We would recommend a registration system similar to the one operated in

Wisconsin, which includes information on who is lobbying, what issues andlegislation they are lobbying on, and who commercial lobbyists are acting

for. The electronic version of this registration scheme has won a number ofawards for its innovations in American governance. The scheme aims to

bypass stealth lobbying by emphasis, not on lobbyists, but on the realparties in interest, the businesses, trade and professional associations,governments, and citizen groups that pay lobbyists to try to influence state

law; identifies the specific bills, rules, and budget topics they seek to affect;and disseminates that information daily via the internet, not as a historical

record but as current news. We recommend that committee members take

the time to familiarise themselves with the Wisconsin scheme. It can befound at:

http://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.ht

m

The Wisconsin system is a particularly good example because it brings

together registration of lobbyists with the conduct of elected members. Most

importantly it is very easily accessible on the Web. The value of such asystem lies in its operability.

The success of the registration scheme in Wisconsin is due in large part tothe co-operation of all the agencies involved. We are encouraged that theleading representative bodies for commercial lobbyists in Scotland, in their

oral evidence to the committee, have pledged to work with Parliament on

this matter:

ASPA believes in openness and co-operation. We will continue to

work with the Parliament and the committee whatever decision they

take. (ASPA, 14 March 2001, Col 733)

If there were a political will to introduce a statutory register for publicaffairs consultancies, we would comply with that. (APPC, 14 March

2001: Col 749)

Given this support, and the current endeavours of the committee, we believethe proposed registration scheme is indeed workable and will contribute to

the openness of Scottish democracy.

7. The need for sanctions. Adequate sanctions are indeed necessary. Voluntarydisclosure is unlikely to capture adequate data on PR/lobbying consultancies

engaged in dubious practice. We would invite the committee to consider thelikelihood of a company such as Beattie Media voluntarily disclosing their
http://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.htmhttp://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.htmhttp://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.htmhttp://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.htmhttp://ethics.state.wi.us/LobbyingRegistrationReports/LobbyingOverview.htm


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strategy for National Semiconductor without the threat of penalties. This

strategy apparently included the covert surveillance of a trade union activist

and the impersonation by Beattie Media staff of workers at National

Semiconductor in order to gather intelligence on an edition of the

BBC'sFrontline Scotland. (We attach a copy of the recently-leakeddocument outlining the PR strategy of National Semiconductor for perusal

by the committee). Of course, such a strategy would not necessarily be

caught by the current proposals as it did not target the Parliament. Butpresumably MSPs would not wish to find themselves targeted in such a waywithout this being disclosed. In addition, it may be worth considering,

whether the adoption of such tactics (whether or not they target Parliament)might well regarded as a breach of a proposed code of conduct.

8. Level of sanctions: We would suggest that the level of fine be commensurate

with the offence. A rising scale of fines would be appropriate and it wouldmake sense to relate this to the ability to pay, on the basis of a percentage of

the annual turnover of the organisation in question.

We are happy to supply further evidence to the committee and to provide any

information we can in writing or in person. We also note that a number of North

American civil servants currently engaged in the registration of lobbying haveexpressed to us their willingness to give evidence to Parliament either in person or

via satellite. We would be happy to put the committee in touch with such people,should the committee so wish.


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Annex 1

Paper prepared for National Semiconductor Communications Plan

CONFIDENTIAL

NATIONALSEMICONDUCTOR

(U.K.) Ltd. (Greenock)

COMMUNICATIONS PLAN

19 January, 1998


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1

SITUATION ANALYSISThe circumstances which have led to the formulation of the following (draft) CrisisManagement Communications Plan have included in chronological order:

The article in the November 16 edition of the Sunday Post - Scotlands largestselling Sunday newspaper - highlighting lnverclyde Occupational HealthProjects attempts to encourage Scottish electronics workers who haveallegedly suffered various medical problems, to take legal action against theiremployers (newspaper article appended)

Confirmation that Frontline Scotland, BBC Scotlands investigativedocumentary team, has begun collating information on female workers in thesemi-conductor work who may have experienced reproductive healthproblems.

Contact being established between the I.O.H.P. and the United States lawyersAmanda Hawes and Ted Smith, who have already been at the centre of muchwell-documented controversy in their country.

The forthcoming publication of the results of the Health and Safety ExecutivesSurvey of Miscarriages in the Semiconductor Industry.

As of Friday, January 16, media interest in this country appears to be confined to"Frontline Scotland". However, the Scottish, and possibly UK, print and radio mediawill undoubtedly pick up the story at some stage.

In the immediate future, fresh press activity may be kindled by:

1. The adverts placed by a Frontline Scotland researcher in at least three localnewspapers - the Greenock Telegraph (January 12,1998), the Ardrossan and

Saltcoats Herald in Ayrshire and the West Lothian Courier (both January 15,1998).

2. A further approach to the media by Ted Smith/Amanda Hawes and/or JimMcCourt, the self-styled co-ordinator of the I.O.H.P.

3. USA based news stories USA Today ran related stories on January 12th,13th & 14th and the potential of the UK presss interest being furtherdevelopment.


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4. Media interest related to the H.S.E. survey and results, due to be releasedin March.

PROGRESS TO DATE

Our activities in Greenock to date have concentrated on:

Engaging the services of Beattie Media, UKs leading media relationsconsultancy.

Forming a Communications team comprising Mike Foltz (leader) Director ofHuman Resources, Bob Steel - Health and Safety Manager, Etta Gaughan

Occupational Health Advisor, Dr John Robertson -Company Doctor andGraham lsdale, Director of Beattie Media.

Compiling a database of statements and facts on which communicationreleases can be rapidly formulated/developed from.

Utilising Beattie Media female staff members to pose as "clean room" workersto elicit information directly from the "Frontline Scotland" researcher about theproposed content of the programme, the geographical range of the BBCsinterest, the general timetable for the production of the documentary, etc.

Beginning to gather as much information as possible on lnverclydeOccupational Health Project and Jim McCourt.

Establishing contact with possible "supporters" of National such as Argyll andClyde Health Board and other semiconductor companies including NEC,Motorola, Seagate, Burr Brown.

Set up a Communications operations office, complete with all necessaryequipment such as P.C., telephones, etc. at National.

Taking discreet soundings throughout the Greenock plant of employee interestin the Greenock Telegraph advertisement.

STRATEGY

It is essential an agreed Communications Plan is in place quickly to protect thereputation of National Semiconductor and its employees. Clearly, the story couldbreak locally or nationally at any time.

At this time, there is little to be gained from pursuing any activity which will heighten


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the awareness and interest of the media at large in what is an extremelycontroversial subject area.

Evaluate the appropriateness and effectiveness of communicating to employees on

and ongoing bases. Make every effort to keep employees appropriately informedwithout anticipating press coverage and/or "slant" of future press accounts.

Until a direct approach is made seeking a response from National, our time andresources will be utilised to complete our preparations in line with theCommunications Plan.

When the approach is made, we should take all available opportunities to respondand to present our case in a positive and firm manner, using FACTS to demolishmyths, half-truths and inaccuracies which are very often deployed by the media to

whip up a storm and create a sensational storyline.Although the format of the "Frontline Scotland" programme is very likely to beaggressively supportive of clean room workers and ex-workers,

It may be a no-win situation and a damage-limitation exercise, every effort should bemade to achieve balance and accuracy in the programme and all other mediacoverage.

The mechanisms for communicating with the press would include press releases,press statements, interviews with selected (well-briefed) Greenock personnel and

press briefings.

Base communications and responses on National Semiconductors standard "keymessages" /"must airs" and FACTS.

Use, discreetly and sensitively, all available information to undermine the credibilityof such individuals and groups.

Make use of all known testimonial evidence from allies and supporters of thecompany and independent authorities such as the HSE. to underline the companys

first-class record and reputation in the field of health and safety, as well as elicitingnew and authoritative testimonial evidence.

Continue to modify and evolve the Plan as new information comes to light and ascircumstances changes; such as, BBC researcher focus, other semiconductorcompanies attachment to and reaction to BBC activities, and HSEs ownership androle regarding the issuance of the results of the "Miscarriages in the SemiconductorIndustry Survey".

Maintain a high degree of flexibility in the implementation of the Communications


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Plan to take account of such factors as:

the particular publication or radio or television programme pursuing the story;

the individual reporter who is compiling information;

the angle he/she is taking.

Seek to broaden the focus of the BBC Frontline on the HSE Miscarriage Study, thesemiconductor industry, etc.

AIMS/OBJECTIVES

The successful implementation of the Communications Plan will depend on ourability to:

1. Ensure our key messages and "must-airs" are incorporated in all newspaperand magazine articles and radio and television programmes.

2. Broaden media interest at all times, ensuring the focus of that interest is onthe semiconductor industry at large and not specifically NationalSemiconductor. This would be consolidated by the use of industryspokespersons rather than company spokesperson when dealing with thepress.

3. Adopt a partnership approach in responding to the media by linking withother semi-conductor manufacturers, and other supporters of either National orthe industry generally, to present a united, co

-ordinated front in challenging inaccurate and sensationalist reporting.

4. Dissuade the media, when possible, to desist from basing their reports onspeculation and emotional outpourings of individuals and groups with an axeto grind.

5. Maintain an open two way dialogue with appropriate members of thecorporate Public Relations, Communications, Environment Health and Safetyand Human Resources groups.

COMMUNICATIONS PLAN (COMPONENTS)

1. Establish a "Statements and Facts" data base, which includes "keymessages" and "must airs" on which press releases can be compiled quicklyand easily.

2. The identification of a company spokesperson(s) and provide appropriate


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media training as necessary.

3. Identification of allies from local and national governmental organisationsand others in the semi-conductor industry. Work to influence understanding of

issues and seek participation in damage control.

STATEMENTS AND FACTS" DATA BASE

(Additional material can be found in the 2 page Q&As provide by LuAnn Jenkins)

GENERAL(*s= Key Messages/Must Airs)

* National Semiconductor is committed to "preserving life before product andproperty." Nationals first concern is the health and safety of its workers.

* National designs-in safeguards and engineering controls to provide safeoperations.These include protective gear and equipment as well as training and workplacemonitoring.

* National trains its employees about the potential chemical hazards and properchemical handling procedures.

* We routinely monitor chemical levels of our fabs which continue to be significantlyless than those mandated by law. In addition, the U. S. Bureau of Labor Statisticshas shown that Nationals incident rate is far below the average for all manufacturing

industries.

* The Company has procedures in place encouraging employees to report allconcerns or issues regarding worker health and safety at any time without fear ofreprisal.

*The Company maintains a standard for continuos improvement inenvironmental,health and safety performance.

"National Semiconductor would like to emphasise that the health and safety of ALL

employees is an absolute number one priority. In placing such paramountimportance on the well-being of our workforce, National Semiconductor hasestablished an environmental health and safety record that is among not only thebest in the United Kingdom, but also among the best in Europe and the world.

As responsible employers and neighbours, we are committed to the systems andprocedures that will allow us to operate to the highest standards in providing a safeand healthy working environment.

We are responsible, caring and fully involved members of the community in which

we operate." National encourages its employees to be active in the community. TheCommunity Care Program is supported by a voluntary group of employees who


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develop, organise and manage employee led community care initiatives andvolunteer event/drives in the lnverclyde area. Members of the management publiclysupport Inverclyde Council initiatives such as lnverclyde Drugs Initiative. National isalso proud to be a sponsor of The Cutty Sark Tall Ships Races to be held in

Greenock in 1999.

Supporting our management of occupational health and safety, we have acomprehensive Occupational Health Department which stores and updates aconfidential medical record file for each employee. Sickness information is strictlyconfidential and data is evaluated by Occupational Health professionals in order toidentify and analyse any emerging trends.

ON GOING INITIATIVES

We routinely monitor chemical levels which continue to be significantly less thanthose required by law.

Internal EH&S audits are conducted annually by Greenock and corporate EH&S.personnel. The purpose of these audits is to ensure compliance to the appropriateprocedures and practices. The Greenock Sites EH&S Team was recognised in 1997for their Risk Assessment, Medical Recordkeeping, Medical Travel AssistancePrograms and for outstanding documentation.

National Semiconductor in Greenock has a comprehensive risk-assessment processthat has been adopted as a model by other semi-conductor and non semiconductorcompanies around the world.

National provides to employees and their immediate family members and EmployeeAssistance Programme, at no cost, that provides 24 hour/i days per week/365 daysper year telephone counselling support for personal and medical care issues andconcerns.

FACTS

In addition to achieving British Standard BS 7750 and International Standard ISO

14001 certification, National Semiconductor (U.K.) Ltd. won the 1995 and 1996National Safety Award from the British Safety Council (BSC), the largestorganisation in Europe dedicated to improving safety in the work place. This awardrecognises the Sites overall commitment to employee health and safety, as well asits exemplary safety performance as measured against the industry average.National Greenock is the first semiconductor company in the UKto gain 1S014001certification.

The number of recordable/reportable injuries and illnesses at our fabrication plant ismore than FIVE TIMES LOWER than the U.S. industry average, as recorded by the


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U.S. Semiconductor Industry Association.

During 1997 over 1 million hours were worked without ANY reportable injuries at theGreenock plant.

Nationals Occupational Health Department records reflect that during the periodfrom 1994 to present there have been 172 pregnancies of employees and 5miscarriages. Three of these 5 employees that miscarried later had normal birthsduring this period. By comparison, National Semiconductors miscarriage ratescompared favourably to:

National Semiconductor: 2.9%

UK Nationally: 10.0%

lnverclyde area 20.0%

National Semiconductor compares favourably regarding "recordable/reportable"injuries and illnesses based on the Semiconductor Industry Association (S IA)figures (This is a US association that measures and reports the number of injuriesand illnesses times the normal hours worked in a year divided by total hoursworked.)

Semiconductor Industry in US: 3.30%

National Semiconductor total: 1.61 %

National Semiconductor, Greenock: .60%

The National Radiological Protection Board, our radiation protection advisors, visitedthe Site in June 1 997 to inspect the equipment which provides ionising radiation andfound all control systems were in place

Greenock has invested over $_________ during the last four fiscal year inEnvironmental Health and Safety. We plan on investing and additional $_________

this fiscal year to ensure continual improvement in our environmental, health andsafety performance.

REGULATION COMPLIANCE

The Greenock site complies with ALL relevant company standards and UKlegislation, including the following:

Health and Safety at Work Act (1974);

Management of Health and Safety at Work Regulations (1992);


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Workplace (Health Safety and Welfare) Regulations (1992);

Provision and Use of Work Equipment Regulations (1992);

Personal Protective Equipment at Work Regulations (1992);

Manual Handling Operations Regulations (1992);

Health and Safety (Display Screen Equipment) (1992).

Noise at Work Regulations (1989)

Control of Substances Hazardous to Health Regulations 1997 (as revised);

Health and Safety (Consultation with Employees) Regulations (1996).

Through the Semiconductor/Health and Safety Executive Joint Working Group,National Semiconductor works very closely with the HSE and other semiconductormanufacturers in the UK to ensure we are at the forefront of health and safetypractices.

EMPLOYEE INVOLVEMENT

National Semiconductor (Greenock) is committed to ensuring all employees areconsulted on environmental, health and safety matters.

The Greenock Site Safety Committee, which is comprised of employeerepresentatives from all levels of the Site, (Operators, Technicians, Supervisors,Environmental, Health & Safety staff and Management) meet regularly to discuss allaspects of EH&S. The remit of the committee is to ensure the issue of health andsafety at work is a two-way process between the Company and its employees.

National Semiconductor Greenock also has a Environment Health & Safety Council,a management team that meets monthly to review EH &S S. statistics, monitorcompliance to procedures, review progress to audit findings and discuss all aspectsof EH&S.

Members of Nationals EH&S staff, which includes the Occupational Health group,are active participants in the lnverclyde Occupational Health and Safety Group, theUK semiconductor Joint Working Group which includes representatives from theHealth & Safety Executive (HSE) and are members of European SemiconductorSafety Association.

As part of Nationals EH&S culture, good safety performance is included in the sitesgoals and objectives.

In Greenock, EH&S is one of six elements in the recognition scheme, called Local


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Heroes., The recognition scheme is used to encourage participation in EH&Sinitiatives and recognise and reward any employee who contributes positively toEH&S. In line with this we recognise employees who excel in the EH&S field."Breakfast for Champions" is a Corporate event which identifies site champions who

are then nominated to the overall title of "Superchamp". The Greenock siterepresentative was the 1997 "Supercham p and he was rewarded at an eventattended by local dignitaries.

SAFE WORKING PRACTICES

As a precautionary measure, Greenock requires all new hires to satisfactorily pass apre-employment drug screen to help ensure the safety of co-workers.

National maintains a fully functional volunteer Emergency Response Team that is

made up of engineers, technicians, supervisors and managers. This Team receivesinternal and external training as well as assessments of mock incidents. Teammembers are trained to apply procedures and systems to assess and deal withemergency situations that might jeopardise the health and/or safety of employeesand/or have an impact on the environment. Greenocks program is partially based ona California fire brigade program and has served as a model for other organisations.Greenocks Safety Manager recently made a presentation to the SemiconductorSafety Association in Ireland.

National has a qualified and certified occupational health nurse on site. She is also a

trained counsellor and provides counsel regarding bereavement, miscarriages,alcohol/substance abuse, marital problems, family problems, debt, disability andother health concerns. She connects employees with lnverclyde Council servicesand/or, as appropriate, with Nationals "Company" doctor.

In determining appropriate health and safety controls, we follow a "hierarchy ofchoices". This means that, if possible, we will eliminate the hazard (e.g. Nationaldiscontinued the use of ethylene glycols in 1993).

If a safer alternative is identified, we will implement its use. If this is not feasible, we

implement an engineered solution to minimise the risk to employees. Controlsinclude the provision of enclosed equipment, local exhaust ventilation, personnelprotective equipment for personnel and the relevant training required to operatethese systems and handle chemical safely.

Systems and practices are in place to encourage employees to report all concernsor issues regarding worker health and safety at any time without fear of reprisals.

All Clean Room employees are trained and require to demonstrate theirunderstanding of the companys safety procedures and policies formally on an

annual basis. This safety certification process includes chemical handling, gassafety, ergonomics and work procedures. Failure to demonstrate proficiency in these


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areas results in employees being removed from the manufacturing process toreceive additional training.

In conjunction with our safe working practices and employee support, we have

Occupational Hygiene data which shows we have systems and procedures tosupport compliance dating back to the early 1970s. All aspects of legislation arecovered including chemical safety and noise surveys.

MONITORING GASES AND CHEMICALS

Occupational exposure limits (OELs) for chemicals are set by UK Regulators. Weroutinely monitor the working environment for chemicals by both personnel and/orspot sampling. The results of this testing is shared with the individual concerned andthe relevant manager. This testing has clearly indicated that our procedures and

controls are protecting our employees.Gas and chemical safety is ensured at National Semiconductor through a system ofsafe containment and engineering controls to prevent release.

The primary purpose of the gas detection systems is to continuously analyseworkplace air samples and record results. Air monitoring is performed to approvedgovernmental and industry standards. Sampling includes any location where there isa potential for a gas and chemical leaks or spills. It includes both "occupied" areas,like cleanroom fabs containing process personnel and "unoccupied" areas like gassupply rooms which are infrequently visited by support personnel. The detectionsystems alarm below current safety levels which are laid down by the Health andSafety Executive.

RESEARCH/STUDIES

National Semiconductor is one of six semiconductor companies In the UK whovolunteered to participate in the Health and Safety Executive (HSE) study ofMiscarriages in Women Working in the Semiconductor Industry. (The othercompanies were OPS, Philips, Newport Wafer Fab, Fujitsu and Motorola.) In doingso, HSE medical researchers were given full access to our plant and held 25meetings with 485 female employees, of which 400 volunteered to participate andwere interviewed in confidence. The results of the study are expected to bepublished in March 1998.

National periodically conducts health studies as part of its ongoing monitoring andmedical surveillance programs. National helped fund and participated in the 1992Semiconductor Industry Association Worker Health Study on the effects of ethyleneglycol ethers (EGEs) on the reproductive on the reproductive health of female fabemployees.

EHS POLICY STATEMENT


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National Semiconductors environmental, health and safety (EHS) policy statementsets an underlying philosophy by which we live. In every aspect of business ourstandards of operation concentrate on safety, accountability and environmentalresponsibility.

STATEMENT

As a quality organisation, National Semiconductor is committed to maintaining astandard that ensures continual improvement in environmental, health and safetyperformance. National Semiconductor and its employees are dedicated to:

- meeting and exceeding the requirements defined by applicable

environmental, health and safety laws, regulations and Companystandards,

- actively pursuing waste and emission reductions to the air, land andwater through recycling and other measures that reduce environmentalimpacts and conserve natural resources

- including environmental considerations and the health and safety ofemployees in product design and business planning,

- providing adequate safeguards and engineering controls for safeoperation,

- educating employees in safe work practices and environmentalprotection measures,

- instilling all employees with the responsibility for adhering toenvironmental, health and safety standards,

- seeking suppliers and vendors dedicated to environmental, health andsafety responsibility,

- measuring and reporting our environmental, health and safetyperformance,

- sharing environmental, health and safety information and expertise withothers,

- being responsible members of the communities in which we live

- providing programs and information to help employees lead a safe andhealthful way of life.

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