2G scam - Introspection time for PR firms

Public relations companies are telling their top executives not to go beyond the mandate they have received from their clients, even as many agencies with a large public affairs business agree that access to government officials has become difficult in the wake of the Niira Radia tape scandal.

Radia, who promoted PR firm Vaishnavi Communications and a clutch of other companies involved in public affairs and lobbying, has been under a storm after taped conversations were revealed which highlight her role in cabinet formation, amongst other things. Radia represents the Tata Group and some other major clients.

Says Dilip Cherian, a promoter of Perfect Relations, a leading PR agency: "We have told our senior team that they should stick to the original client mandate and limit their action in the public domain. We cannot allow our clients to get embarrassed and their reputations affected."

Others say they are seeing some impact of the leaks on PR firms.

"The impact is there. It is not uncommon to be painted with the same brush for the actions of a few individuals," says Roger Pereira, a veteran PR professional. He adds there are other concerns, too.

"Yes, I do find people a bit wary at this stage. Companies are careful and so are PR professionals. The problem is that PR is not as developed as advertising is. The emphasis is on quick wins, rather than long-term solutions. This mindset is leading to what we are now seeing."

PR agencies with a large public affairs business agree that business has got a temporary setback.

Says a founder of a leading PR agency based in Delhi: "There are two sides to this. While it is business as usual on the PR side of the business, the public affairs side has been affected.

There is a chasm. People are not comfortable speaking on the phone. I find even the media appears wary, following the leaking of the tapes. So, yes, being able to meet people in the government is becoming difficult at the moment. But I see this as a passing phase."

But most other agencies say the impact has been limited to a few agencies with a large lobbying or public affairs business.

Says N S Rajan, promoter of Mumbai-headquartered Sampark Communications: "We are not into public affairs but only in marketing communications. In that space, it is business as usual. I think the impact would be only on companies which offer public affairs and there are only half a dozen such firms."

Agrees Sunil Gautam, chairman, Hanmer MSL: "PR as an industry is maturing by the day. So, I don't see an impact of the tapes leaking out on the PR industry."

PR practitioners say lobbying was earlier limited to low-profile individuals and no one knew which clients they were handling.

Or, companies had senior managers handling corporate affairs, which dealt with the government.

"While some PR agencies went into the business, they found it difficult as most clients did not pay a fee for the time spent but a percentage when the work was done, always a grey area.

What Radia tried to do was to institutionalise the business and get the backing and the freedom to operate for large clients. But unlike in other countries where lobbying is more transparent, there are no rules here. There lies the problem," says a senior executive of a known PR firm.