GOVERNMENT RELATIONS

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“GR is outside the legal business, that`s a rule in the world practice, although it contains elements of jurisprudence,” said Oleksandra Pavlenko, Managing Partner of Pavlenko Legal Group.

Recently, Pavlenko Legal Group has become the first Ukrainian law firm registered in the Transparency Register, the European Register of Lobbying Companies. We spoke to Oleksandra Pavlenko, Managing Partner of Pavlenko Legal Group, about Ukrainian realities and the world experience of Government Relations (GR), about the effectiveness of various GR models, as well as about the complementarity of jurisprudence and lobbying.

– Last year, in an interview to our edition, you called the GR practice one of your main priorities. What has been achieved this year?

– In May we were recognized as the “Law Firm of the Year in the field of GR”. It was especially pleasant that this nomination was introduced for the first time in many years of the existence of the Legal Awards, and we became its first owner. Secondly, I want to note that the company`s profile in the sphere of GR has significantly enlarged. Today we are working with the State Property Fund of Ukraine, with the Ministry of Infrastructure, with many state companies in order to conduct a dialogue with the business on specific GR projects. We also cooperate with private business, with potential investors who enter the country. We also achieved a lot in terms of strengthening our competence: we implemented a very important educational project, which not only gave knowledge about GR to the business, but also improved the qualifications of our employees. In general, I am satisfied with the dynamics of our GR practice.

– Has the situation with the regulation of this activity in our country changed?

– The situation is changing. Four draft laws, which are close to our sphere, have been submitted to the Parliament. Two of them, the basic and an alternative one, relate directly to lobbying. We drafted one of them. A draft law on advocacy, lobbying for public interests, and a presidential draft law on the disclosure of information on the work of civil society institutions were also registered.

We have rocked the information field to such an extent that effective draft laws in the fields of business lobbying and promotion of public interests have been submitted to the Parliament. We have been able to prove the consistency of this idea in the Presidential Administration and now we are working together to adopt a unified draft law to replace all previously registered ones.

– And what are the prospects, including the time frame?

– We do not set clear deadlines, since it is of utmost importance to go through the whole process correctly, so as not to miss the right understanding. Every law, which is adopted hastily, is distorted to such an extent that it is very difficult for people to understand what it is and what it aims at.

We have spent a lot of time on the correct construction of the information space. The faction of Petro Poroshenko Block, a part of “Narodnyi Front”, and other deputies support us. Thanks to the fact that we reached the Presidential Administration and proved that lobbying is necessary primarily as an anti-corruption mechanism, now the process will go much faster. We hope that the unified draft law will be submitted to the parliament by the end of the year and at this session it will be voted at least in first reading. These are real plans, which are now being discussed in the deputy corps.

– Does the information wave you raised contribute somehow to changing the perception of GR and lobbying in society?

– The prejudiced attitude to lobbying is still there. It will take several years of practice after the adoption of the law to change the perception. At the same time, by launching the ELAP educational project, we have been able to showcase the opportunities and benefits of GR to the big business (the project involved DTEK, Metinvest Group, other corporations). Without our help, the public sector is well aware what an advocacy is, and those who are an old hand at grants, know this even better than business. And all the others, including the professional community and government officials, mostly perceive information from TV screens. After passing the draft law in the first reading, we plan to hold seminars for the bureaucratic audience.

Properly structured information policy is extremely important for lobbying, and for the law on lobbying, is even more so.

– This summer your company was registered in the Transparency Register. Is this the first step to bringing up practice beyond Ukraine?

– I would call this a reversible lane movement. This was done mostly to work with foreigners here in the Ukraine. We need to clearly understand our competencies: we are strong here, strong in our roots. And our local capabilities exceed our capabilities in Europe and in the world, although we can certainly carry out projects in the EU. Besides, we have significantly strengthened our position in the work with the US Congress.

Foreigners are studying our market. They want to understand how they can invest (it is not true that investors are leaving: business that is ready to take risks is coming here). They know what GR is because they worked with it in other countries and want to have a reliable partner here. Few of such investors will turn to legal companies since in the world practice, GR, as a rule, is outside the legal business, although it contains elements of jurisprudence. We want any investor coming to our country to see that we are really doing this. In order to clearly see our status: if we went to the European registry – then we are transparent, we were not afraid of transparency – it means we disclosed our profits,  and if we disclosed them, we officially work in the GR sphere and earn on it.

We are also beginning to receive proposals for joint projects with European GR specialists who lack the Ukrainian competence.

– Is Ukrainian business interested in lobbying its interests in Europe?

– The interest is small because there are problems with information. We are living in the post-Soviet state, whatever one may say, it is the territory of fear. Some fears remain: business is not quite ready to enter Europe and lobby its interests, break trade barriers, and present its products in a way to make them competitive. The fear factor holds back. I believe that fellow lawyers working in international trade will help the business to gain confidence, and we will be those who are hired to work in the European Parliament and the European Commission. After inclusion in the European register, our team had the opportunity to officially enter the building of the European Parliament, and insist on meetings with the European commissioners.

– And do you consider the state as a client?

– Yes, we do. And a very active one. I would even say that this is my strategic goal. Now we are working with some ministries and state-owned companies. Usually we are talking about areas where there is a strong need to attract a potential partner. This can be PPP, leasing, concession (I believe that the law will be adopted). This is infrastructure, construction, the areas in which it is impossible to find partners, doing nothing for this. And such structures as ours are in demand. We are competent in jurisprudence, we understand how to move in the world, we know how to build a dialogue between government and business.

But I, of course, would like more orders from the Cabinet of Ministers of Ukraine. While we are working with ministries, we are increasing our turnover, and this also brings profit.

– You mentioned the strengthening of your positions in Washington. Can you tell us more about it?

– I had a very busy summer. I visited America and China. I managed to visit two completely different countries and to immerse in them deep enough. I spent a month in both countries. The work was directly related to GR. In particular, in Washington, I studied the activities of large GR agencies and law companies working in this field. Part of the work was conducted in the US Congress. I managed to see how to built up relations with parliamentarians properly, how draft laws are promoted; what to do when society opposes, business wants, and the state is afraid. We studied all these technologies, especially how to work with the legal part of the project, when there are gaps in the legislative regulation. Jurisprudence rules! (laughs). If there is no legal component, it is impossible to implement the GR project. In any case, it is necessary to write the text of the draft law or draft resolution, develop a plan, and work with the business. Washington is the Mecca of world lobbying; there you can really learn all of this. There is nothing common with the series “House of Cards” – it’s hard work, but interesting because of its openness. Now I am in constant communication with several Washington law firms working in the field of GR. They show me how they draw up contracts, how they work with a client, and how the work with Congress is organized from a legal point of view. It is a very interesting aspect, which in our country has not been specially considered before.

Washington was interesting to me also because the United States remains a partner of Ukraine, no matter what one says, and I wanted to know how it is possible to attract America’s support in implementing a project in Ukraine.

– What is GR in China?

– This is a completely different element. We also talked about the dialogue between business and government, but somewhat in a different perspective. China is now one of the main investors in the world, including Ukraine. There is an investment strategy, a trade plan, the state is moving very powerfully and is investing only in semi-public projects. Projects of public-private partnership, concessions (in the future) of infrastructure facilities, lease of state assets – this is the layer of their interests in Ukraine. As a state, China is investing money in the economy of other countries, doing this through business. There are very unusual rules for us, Europeans – a private investment in the country should receive the approval of the Chinese government. In China, they clearly monitor where and how much they invest, and this is a kind of PPP in the territory of China, which they go to other countries with. It is a nation with a clear plan and with very certain pro-state discipline. It is not easy to make friends with them. In order to build work with the Chinese in Ukraine, you need to go to China, what, in fact, was done.

In Ukraine we work with the Chinese trade mission on several projects, so it was important to understand how they function and how they are going to work with our state. I spent a month in Beijing, a month of meetings with officials and work as a part of large foreign delegation of Ukraine-like countries that are hoping for a Chinese investor.

This is a different philosophy, another GR, a lobbying which moves differently, which that does not resemble either Ukrainian, European, or American lobbying.

– And whose GR is stronger? Which lobbyists are most effective?

– Oh, they are re all completely different. It is good that I managed to see all this. I would say that for me the European model now stands in third place due to its populism. In Europe, all are very cautious; sometimes so cautious that it does not reach the point. All actions are carefully thought out; maybe, therefore they are very few.

Americans are more open and they are risk-takers, they take more actions and get more results. Moreover, they are ready to make mistakes. Chinese, however, make one well-thought-out step and are right on target. A hundred years spent for strategy is not a problem for them. The whole business is being adjusted to this, as well as all the lobbying structures. There are no liberties, no independent games of private companies, and everyone follows the global Chinese policy.

China turned out to be very interesting in this aspect. I think that Chinese lobbying model deserves a second place. Well, on the first place is, of course, the US.

– What foreign experience is advisable to implement in Ukraine?

– In a unified draft law, prepared to replace the existing ones, almost everything has been taken into account. The only question where we did not agree was whether the activities of the GR specialist should be absolute, that is, whether it is necessary to introduce any restrictions on engaging in other activities at the legislative level. It seems that this will be the subject of a major discussion in the parliament.

– What is your point of view?

– I always try to be objective. In this case, it hampers me. In my opinion, the activity in the field of GR should be absolute. From the point of view of benefits for the state and society, lobbyists should not be afraid to declare themselves as working in this field and implement the whole chain of promotion of the draft law, filling it with the essence from the position of lawyers, building communication with the authority, eliminating all possible obstacles and shortcomings. Such people should clearly show where they get their income from, and declare it.

It is important to make the Ukrainian register of lobbyists transparent so that there would not be those who consider themselves “just a lawyer” and “want to attend committee meetings.” Let there be few GR specialists, but they will not be afraid to say what they do.

– Back to the activities of your company, tell me, what is the proportion between the legal practice and GR? And how do they interact?

– The practice of GR has doubled and now accounts for about a third of the firm’s orders, and the rest is judicial practice. Our new partner Denis Maistrenko, who works in structuring finance and assets in M&A field and with foreign jurisdictions, performed himself very well.

To understand what is happening in the country from the point of view of GR specialist is useful while supporting legal projects with a state element. For example, we have recently supported one project related to the completion of the corporatization of Ukrzaliznytsya. And understanding how the Ministry of Infrastructure works has helped us very much in this (absolutely judicial) case. So these are mutually complementary things that, I would say, expand the horizon.

– What are your future plans?

– I plan not to stop the development of GR practice, intend to powerfully announce us in Europe and the US. There are proposals to return to work in government. For now, I am considering them, and will agree only if they are projects in the field of public-private partnership and development of the country as an investment-attractive object. It is important for me that the country begins to thrive precisely because of its resources.

I would like my team to be recognized by European investors who come here, and I want them to count on us as the point of entry for the interaction of business and government.

Of course, I would like to receive the state as a client. I take for this a year or two.

To vote this year for the draft law on lobbying in the first reading is also a plan.

I plan to meet my birthday in the Holy Land. I am praying to God in the hope for a happy personal life.

(Interviewed by Alexey NASADYUK,

Publishing house “Yuridicheskaya Praktika”)