Response to the Standards Committee Consultation paper Statutory Registration of Commercial Lobbyists, June 2001

Dr. David Miller, William Dinan and Professor Philip Schlesinger Stirling Media Research Institute

Stirling University Stirling FK9 4LA August 2001


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 interest in openness and disclosure. This is entirely consistent with the CSG’s 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 that statutory 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 has only 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 interconnections between money, vested interests more generally (including the non-commercial ones) and the political world. Such cynicism is highly damaging to a participatory democracy. 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 private information 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 job description; that they are regularly in contact with decision-makers. All who clear

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 that they 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 independent scrutiny 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 that responsibility for accepting or rejecting such offers lies squarely with elected politicians. Given such views there is a pressing need for the registration of lobbyists 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 the committee 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 their staff 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 good practice 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 the committee, 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 of lobbyists were extended beyond commercial lobbyists to include all those

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 fully functioning 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 that those who deal with MSPs will not try to corrupt them. We would certainly support the principle that MSPs (and ministers') diaries and other documentation detailing contacts and correspondence with lobbyists should be made public at regular intervals. 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 private interest 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 is merely 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 to privacy. We have taken advice on this. We understand that individuals and not corporations are covered by the Article. Furthermore, and more fundamentally, infringements of the right to privacy can occur in the national interest, 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 in certain 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 interest criteria. 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)

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 that remuneration is given for advice and information which is private, or is supplied on a limited-circulation subscription basis. This means that journalists are clearly excluded, since they publish what they produce. It is the hidden nature of the transaction which is what the public worry about. So the definition could usefully underline 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 lobbyists attempt to cultivate goodwill, or to monitor the views of given MSPs or civil servants. Lobbyists also sponsor awards ceremonies and provide hospitality which are often not directly related to securing specific decisions, but to securing goodwill 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 be expanded 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 sponsorships of awards and the like, the precise information to be disclosed might include either a 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 could encompass all the 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 county levels, 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 rules when 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

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 cover all paid lobbyists who spend a specified proportion 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 used elsewhere, however, would be a useful guide, and we propose something in the order of 25-33% of an average working week in any reporting period. (Alternatively, this could be expressed in terms of days worked in any reporting period. 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 the bigger NGOs and associations of the voluntary sector. It would also include all of the 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 the definition 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 there may be a problem in trying to exempt voluntary sector associations from the definition where they operate on a subscription basis. In our view, such organisations 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

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 as lobbyists.

Questions of legal privilege and client confidentiality are likely not to be serious obstacles 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 a number of lobbyists point out, this is anomalous as it will mean that a large corporation spending a significant sum on trying to influence legislation would not be required to disclose its activity. In our view, the definition of lobbying could usefully 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 on the 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 not known 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 is to 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.

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 no good reason why NGOs, charities, voluntary organisations and trades unions should be excluded from the scope of the proposed rules, if in-house lobbyists are to 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 to affect public as well as private bodies, pressure groups as well as government departments, trades unions as well as managerial 'fat cats'. It is inherently more open and transparent if all the interests spending significant sums of money on trying to influence Parliament are disclosed. This also includes government and other public bodies such as health trusts, nationalised industries, quangos and other bodies which may have cause to influence policy and legislation. The objection that very small organisations dependent on voluntary staff, and with only a few paid members, would be discouraged from lobbying is preposterous. Such organisations would not be required to register under any sensible scheme. A wide 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 be required to register. The SCVO advice and information bulletin is free to its members unless their annual turnover is £100,000 or more. Our understanding is that 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 it would contradict their earlier opposition.

Definitions A number of working definitions of lobbying are available. We have reviewed these 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

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 provides advice or information to that firm on the workings of the Scottish Parliament, or directly represents the interests of that firm with the intention of influencing the actions or views of MSPs, their staff or parliamentary officials. 3. Any employee of voluntary sector organisations, charities, governmental bodies, quangos, trades unions or other organisations, who provides advice or information to that body on the workings of the Scottish Parliament, or directly represents the interests of that body with the intention of influencing the 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 any reporting 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 disclosure from 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 issue concerned 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 some clients (whether in the private or public sector) may be reluctant to disclose their 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 the information is not always publicly accessible. The ASPA code does not

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 lobbyists provide 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 of topics. 4. There is likely to be little difficulty in disclosing fees or expenditure. At most, consultancies will have to change their auditing/billing procedure slightly. 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 in providing data on income and clients to the trade press (such as Marketing or PR Week). They appear to be able to break such data down into categories of work (such as public affairs/lobbying, business-tobusiness, 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 sentiments have 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 have much 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 payment of 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 from the 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 lag ought 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 find the simple task of disclosure too onerous. But in our view, such

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 and legislation they are lobbying on, and who commercial lobbyists are acting for. The electronic version of this registration scheme has won a number of awards for its innovations in American governance. The scheme aims to bypass ‘stealth lobbying’ by ‘emphasis, not on lobbyists, but on the real parties 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 be found at: 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 a system lies in its operability. The success of the registration scheme in Wisconsin is due in large part to the co-operation of all the agencies involved. We are encouraged that the leading 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 public affairs consultancies, we would comply with that. (APPC, 14 March 2001: Col 749) Given this support, and the current endeavours of the committee, we believe the 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. Voluntary disclosure is unlikely to capture adequate data on PR/lobbying consultancies engaged in dubious practice. We would invite the committee to consider the likelihood of a company such as Beattie Media voluntarily disclosing their

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's Frontline Scotland. (We attach a copy of the recently-leaked document 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. But presumably MSPs would not wish to find themselves targeted in such a way without 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 would make 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 have expressed 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.

Annex 1 Paper prepared for National Semiconductor Communications Plan



19 January, 1998


The circumstances which have led to the formulation of the following (draft) Crisis Management Communications Plan have included in chronological order:

The article in the November 16 edition of the Sunday Post - Scotland’s largest selling Sunday newspaper - highlighting lnverclyde Occupational Health Project’s attempts to encourage Scottish electronics workers who have allegedly suffered various medical problems, to take legal action against their employers (newspaper article appended) Confirmation that Frontline Scotland, BBC Scotland’s investigative documentary team, has begun collating information on female workers in the semi-conductor work who may have experienced reproductive health problems. Contact being established between the I.O.H.P. and the United States lawyers Amanda Hawes and Ted Smith, who have already been at the centre of much well-documented controversy in their country. The forthcoming publication of the results of the Health and Safety Executive’s Survey 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 media will 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 local newspapers - 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 Jim McCourt, 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 press’s interest being further development.

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

Our activities in Greenock to date have concentrated on:

Engaging the services of Beattie Media, UK’s leading media relations consultancy. Forming a Communications team comprising Mike Foltz (leader) Director of Human Resources, Bob Steel - Health and Safety Manager, Etta Gaughan – Occupational Health Advisor, Dr John Robertson -Company Doctor and Graham lsdale, Director of Beattie Media. Compiling a database of statements and facts on which communication releases can be rapidly formulated/developed from. Utilising Beattie Media female staff members to pose as "clean room" workers to elicit information directly from the "Frontline Scotland" researcher about the proposed content of the programme, the geographical range of the BBC’s interest, the general timetable for the production of the documentary, etc. Beginning to gather as much information as possible on lnverclyde Occupational Health Project and Jim McCourt. Establishing contact with possible "supporters" of National such as Argyll and Clyde Health Board and other semiconductor companies including NEC, Motorola, Seagate, Burr Brown. Set up a Communications operations office, complete with all necessary equipment such as P.C., telephones, etc. at National. Taking discreet soundings throughout the Greenock plant of employee interest in the Greenock Telegraph advertisement.

It is essential an agreed Communications Plan is in place quickly to protect the reputation of National Semiconductor and its employees. Clearly, the story could break locally or nationally at any time. At this time, there is little to be gained from pursuing any activity which will heighten

the awareness and interest of the media at large in what is an extremely controversial subject area. Evaluate the appropriateness and effectiveness of communicating to employees on and ongoing bases. Make every effort to keep employees appropriately informed without anticipating press coverage and/or "slant" of future press accounts. Until a direct approach is made seeking a response from National, our time and resources will be utilised to complete our preparations in line with the Communications Plan. When the approach is made, we should take all available opportunities to respond and to present our case in a positive and firm manner, using FACTS to demolish myths, 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 be aggressively supportive of clean room workers and ex-workers, It may be a no-win situation and a damage-limitation exercise, every effort should be made to achieve balance and accuracy in the programme and all other media coverage. 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 Semiconductor’s standard "key messages" /"must airs" and FACTS. Use, discreetly and sensitively, all available information to undermine the credibility of such individuals and groups. Make use of all known testimonial evidence from allies and supporters of the company and independent authorities such as the HSE. to underline the company’s first-class record and reputation in the field of health and safety, as well as eliciting new and authoritative testimonial evidence. Continue to modify and evolve the Plan as new information comes to light and as circumstances changes; such as, BBC researcher focus, other semiconductor companies attachment to and reaction to BBC activities, and HSE’s ownership and role regarding the issuance of the results of the "Miscarriages in the Semiconductor Industry Survey". Maintain a high degree of flexibility in the implementation of the Communications

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, the semiconductor industry, etc.

The successful implementation of the Communications Plan will depend on our ability to: 1. Ensure our key messages and "must-airs" are incorporated in all newspaper and magazine articles and radio and television programmes. 2. Broaden media interest at all times, ensuring the focus of that interest is on the semiconductor industry at large and not specifically National Semiconductor. This would be consolidated by the use of industry spokespersons rather than company spokesperson when dealing with the press. 3. Adopt a partnership approach in responding to the media by linking with other semi-conductor manufacturers, and other supporters of either National or the 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 on speculation and emotional outpourings of individuals and groups with an axe to grind. 5. Maintain an open two way dialogue with appropriate members of the corporate Public Relations, Communications, Environment Health and Safety and Human Resources groups.

1. Establish a "Statements and Facts" data base, which includes "key messages" and "must airs" on which press releases can be compiled quickly and easily. 2. The identification of a company spokesperson(s) and provide appropriate

media training as necessary. 3. Identification of allies from local and national governmental organisations and others in the semi-conductor industry. Work to influence understanding of issues and seek participation in damage control.

(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 and property." National’s first concern is the health and safety of its workers.

National designs-in safeguards and engineering controls to provide safe operations. These include protective gear and equipment as well as training and workplace monitoring.

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

We routinely monitor chemical levels of our fabs which continue to be significantly less than those mandated by law. In addition, the U. S. Bureau of Labor Statistics has shown that National’s incident rate is far below the average for all manufacturing industries.

The Company has procedures in place encouraging employees to report all concerns or issues regarding worker health and safety at any time without fear of reprisal.

The Company maintains a standard for continuos improvement in environmental, 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 paramount importance on the well-being of our workforce, National Semiconductor has established an environmental health and safety record that is among not only the best 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 and procedures that will allow us to operate to the highest standards in providing a safe and healthy working environment. We are responsible, caring and fully involved members of the community in which we operate." National encourages it’s employees to be active in the community. The Community Care Program is supported by a voluntary group of employees who

develop, organise and manage employee led community care initiatives and volunteer event/drives in the lnverclyde area. Members of the management publicly support Inverclyde Council initiatives such as lnverclyde Drugs Initiative. National is also 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 a comprehensive Occupational Health Department which stores and updates a confidential medical record file for each employee. Sickness information is strictly confidential and data is evaluated by Occupational Health professionals in order to identify and analyse any emerging trends. ON GOING INITIATIVES We routinely monitor chemical levels which continue to be significantly less than those 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 appropriate procedures and practices. The Greenock Site’s EH&S Team was recognised in 1997 for their Risk Assessment, Medical Recordkeeping, Medical Travel Assistance Programs and for outstanding documentation. National Semiconductor in Greenock has a comprehensive risk-assessment process that has been adopted as a model by other semi-conductor and non semiconductor companies around the world. National provides to employees and their immediate family members and Employee Assistance Programme, at no cost, that provides 24 hour/i days per week/365 days per year telephone counselling support for personal and medical care issues and concerns. FACTS In addition to achieving British Standard BS 7750 and International Standard ISO 14001 certification, National Semiconductor (U.K.) Ltd. won the 1995 and 1996 National Safety Award from the British Safety Council (BSC), the largest organisation in Europe dedicated to improving safety in the work place. This award recognises the Site’s overall commitment to employee health and safety, as well as its exemplary safety performance as measured against the industry average. National Greenock is the first semiconductor company in the UKto gain 1S014001 certification. The number of recordable/reportable injuries and illnesses at our fabrication plant is more than FIVE TIMES LOWER than the U.S. industry average, as recorded by the

U.S. Semiconductor Industry Association. During 1997 over 1 million hours were worked without ANY reportable injuries at the Greenock plant. National’s Occupational Health Department records reflect that during the period from 1994 to present there have been 172 pregnancies of employees and 5 miscarriages. Three of these 5 employees that miscarried later had normal births during this period. By comparison, National Semiconductor’s miscarriage rates compared 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 injuries and illnesses times the normal hours worked in a year divided by total hours worked.) Semiconductor Industry in US: 3.30% National Semiconductor total: 1.61 % National Semiconductor, Greenock: .60% The National Radiological Protection Board, our radiation protection advisors, visited the Site in June 1 997 to inspect the equipment which provides ionising radiation and found all control systems were in place Greenock has invested over $_________ during the last four fiscal year in Environmental Health and Safety. We plan on investing and additional $_________ this fiscal year to ensure continual improvement in our environmental, health and safety performance.

The Greenock site complies with ALL relevant company standards and UK legislation, 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 semiconductor manufacturers in the UK to ensure we are at the forefront of health and safety practices. EMPLOYEE INVOLVEMENT National Semiconductor (Greenock) is committed to ensuring all employees are consulted on environmental, health and safety matters. The Greenock Site Safety Committee, which is comprised of employee representatives from all levels of the Site, (Operators, Technicians, Supervisors, Environmental, Health & Safety staff and Management) meet regularly to discuss all aspects of EH&S. The remit of the committee is to ensure the issue of health and safety 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, monitor compliance to procedures, review progress to audit findings and discuss all aspects of EH&S. Members of National’s EH&S staff, which includes the Occupational Health group, are active participants in the lnverclyde Occupational Health and Safety Group, the UK semiconductor Joint Working Group which includes representatives from the Health & Safety Executive (HSE) and are members of European Semiconductor Safety Association. As part of National’s EH&S culture, good safety performance is included in the sites goals and objectives. In Greenock, EH&S is one of six elements in the recognition scheme, called Local

Heroes., The recognition scheme is used to encourage participation in EH&S initiatives and recognise and reward any employee who contributes positively to EH&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 site representative was the 1997 "Supercham p’ and he was rewarded at an event attended by local dignitaries. SAFE WORKING PRACTICES As a precautionary measure, Greenock requires all new hires to satisfactorily pass a pre-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 receives internal and external training as well as assessments of mock incidents. Team members are trained to apply procedures and systems to assess and deal with emergency situations that might jeopardise the health and/or safety of employees and/or have an impact on the environment. Greenock’s program is partially based on a California fire brigade program and has served as a model for other organisations. Greenock’s Safety Manager recently made a presentation to the Semiconductor Safety 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 and other health concerns. She connects employees with lnverclyde Council services and/or, as appropriate, with National’s "Company" doctor. In determining appropriate health and safety controls, we follow a "hierarchy of choices". This means that, if possible, we will eliminate the hazard (e.g. National discontinued 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. Controls include the provision of enclosed equipment, local exhaust ventilation, personnel protective equipment for personnel and the relevant training required to operate these systems and handle chemical safely. Systems and practices are in place to encourage employees to report all concerns or issues regarding worker health and safety at any time without fear of reprisals. All Clean Room employees are trained and require to demonstrate their understanding of the company’s safety procedures and policies formally on an annual basis. This safety certification process includes chemical handling, gas safety, ergonomics and work procedures. Failure to demonstrate proficiency in these

areas results in employees being removed from the manufacturing process to receive additional training. In conjunction with our safe working practices and employee support, we have Occupational Hygiene data which shows we have systems and procedures to support compliance dating back to the early 1970s. All aspects of legislation are covered including chemical safety and noise surveys. MONITORING GASES AND CHEMICALS Occupational exposure limits (OELs) for chemicals are set by UK Regulators. We routinely monitor the working environment for chemicals by both personnel and/or spot sampling. The results of this testing is shared with the individual concerned and the 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 of safe containment and engineering controls to prevent release. The primary purpose of the gas detection systems is to continuously analyse workplace air samples and record results. Air monitoring is performed to approved governmental and industry standards. Sampling includes any location where there is a potential for a gas and chemical leaks or spills. It includes both "occupied" areas, like cleanroom fabs containing process personnel and "unoccupied" areas like gas supply rooms which are infrequently visited by support personnel. The detection systems alarm below current safety levels which are laid down by the Health and Safety Executive. RESEARCH/STUDIES National Semiconductor is one of six semiconductor companies In the UK who volunteered to participate in the Health and Safety Executive (HSE) study of Miscarriages in Women Working in the Semiconductor Industry. (The other companies were OPS, Philips, Newport Wafer Fab, Fujitsu and Motorola.) In doing so, HSE medical researchers were given full access to our plant and held 25 meetings with 485 female employees, of which 400 volunteered to participate and were interviewed in confidence. The results of the study are expected to be published in March 1998. National periodically conducts health studies as part of its ongoing monitoring and medical surveillance programs. National helped fund and participated in the 1992 Semiconductor Industry Association Worker Health Study on the effects of ethylene glycol ethers (EGEs) on the reproductive on the reproductive health of female fab employees.

National Semiconductor’s environmental, health and safety (EHS) policy statement sets an underlying philosophy by which we live. In every aspect of business our standards of operation concentrate on safety, accountability and environmental responsibility. STATEMENT As a quality organisation, National Semiconductor is committed to maintaining a standard that ensures continual improvement in environmental, health and safety performance. National Semiconductor and its employees are dedicated to: - meeting and exceeding the requirements defined by applicable environmental, health and safety laws, regulations and Company standards, - actively pursuing waste and emission reductions to the air, land and water through recycling and other measures that reduce environmental impacts and conserve natural resources - including environmental considerations and the health and safety of employees in product design and business planning, - providing adequate safeguards and engineering controls for safe operation, - educating employees in safe work practices and environmental protection measures, - instilling all employees with the responsibility for adhering to environmental, health and safety standards, - seeking suppliers and vendors dedicated to environmental, health and safety responsibility, - measuring and reporting our environmental, health and safety performance, - sharing environmental, health and safety information and expertise with others, - being responsible members of the communities in which we live - providing programs and information to help employees lead a safe and healthful way of life.

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