The scandal around Volkswagen’s so-called “defeat devices”, which are banned across the EU, increased this week with the company’s CEO resigning, but the fallout looks set to cast a wider shadow over both the car industry as a whole and industry lobbing in general.
The upshot has seen regulators from both the European Union and Germany in the dock for cosying up to Volkswagen – and other car manufacturers – over the last decade, accusing them of ensuring that environmental laws across the continent, if not completely favourable, were at least amenable to them.
This week the European Commission addressed the European Parliament’s Environment Committee and defended the current EU laws on NOx particulates, but admitted there were concerns over the type approval systems which ensure the safety and emissions of cars on the market, adding there had been doubts over the accuracy of the laboratory tests.
On Thursday Elżbieta BieÅ„kowska, Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs, asked EU Member States to launch investigations to assess the severity of this problem in Europe, referencing the Commission’s commitment to “zero tolerance on fraud and rigorous compliance with EU rules”.
Industry wide issue
Europe’s problem is that this type approval system varies between EU Member States, and hence it is difficult to get a full view of the issue.
Moreover, it is still unclear how many vehicles on Europe’s roads are affected, although German Transport Minister Alexander Dobrindt this week suggested that this was significant, with over 11 million cars worldwide fitted with the device.
The European Automobile Manufacturers Association, ACEA, was quoted as stating this week that: “There is no evidence that this is an industry-wide issue” – but even if it isn’t, the fallout will most definitely be industry-wide, with regulators expected to increase the severity of existing laws and more strictly enforce the current ones.
This is also a reputational issue, not just for Volkswagen, but the entire sector. Vehicle recalls have dogged a number of companies of late, but a scandal of this size cannot leave other carmakers untouched.
Indeed, the issue has also raised questions about industry influence in general. In recent years, the Commission has significantly increased the transparency of its interactions with lobbyists, to the point where the public now has access to the individual diaries of all the Commissioners.
Hence, if Commissioner Bienkowska or any of her colleagues choose to meet with Volkswagen or an NGO, it is made public.
Greater scrutiny for lobbyists?
Moreover, lobbyists are now encouraged to sign up to a voluntary – although defacto obligatory – lobbying register.
According to its entry, Volkswagen claims to have 43 employees working to various degrees on lobbying the EU institutions and says it spends €3.3 million doing so.
Anti-corporate NGOs will point to this figure as proof alone of Volkswagen’s influence in the corridors of power, and are expected themselves to up the ante and call out those organisations which they believe have too much influence.
As a direct result of this scandal, business lobbyists in Brussels can expect greater scrutiny and – perhaps – greater scepticism of their motives from an electorate which has long been suspicious of the profession.
EU decision-makers too can expect to be in the spotlight, and their relations with large companies monitored and assessed to an even greater extent than is currently the case.
In recent years the EU Institutions have made great strides towards transparency, to the extent that many were beginning to wonder whether yet more transparency is actually desirable or achievable. This latest scandal would seem to suggest that this road has still to be fully travelled.