Conflict of interest in the public sector: the Victorian experience The 7th National Investigations Symposium Jo Carden, Director Ombudsman Victoria

What is the Ombudsman’s role? Resolution of individual complaints Systemic change within the public sector Cultural change

Why the Own Motion reports? On 13 March 2008 the Ombudsman tabled two reports in Parliament on the issue of conflict of interest under his own motion powers:  Conflict of interest in the public sector  Conflict of interest in local government

‘An ethical culture is the single most important factor in ensuring that the Victorian public sector retains the degree of public trust required in a modern democracy.’ ‘An organisation with sound ethical health will encourage staff to challenge subordinates, colleagues and superiors when a conflict of interest is apparent.’ George Brouwer, April 2008 Why ‘conflict of interest’?

... Frances Bacon … … Ballarat … Is this new?

How was the review conducted?  Own Motion  Previous enquiries and investigations  Previous annual reports  Selecting illustrative case studies  Review of the public sector framework  International trends and development  A report to inform Parliament: a useful format for the Victorian public sector

What is ‘conflict of interest’? Any conflict between the personal interests of a public officer and the officer’s duty to act in the public interest. Ought I to do this? Or should I do that? PublicPrivate

What are ‘personal interests’? For a public officer these include those of family members, friends, associates, organisations to which the officer belongs and other similar interests. These can be financial and non-financial.

When does a ‘conflict’ exist? Any situation where a public official could be influenced, or could be reasonably perceived by an outside observer to be influenced, by a private interest when performing an official function.

What is ‘acting in the public interest’? It encompasses obligations in regard to administration, ethics and performance, in accordance with the principles and values encompassed in the Public Administration Act.

 Secondary employment and post employment  Private business activity  Employment and business interests of family members, friends and associates of public officials  Membership of community groups and organisations  Families, relationships Local government specifically:  Gifts and hospitality  Outside employment and activities  Misuse of position  Misuse of information  Relations with councilors Where are the areas of concern?

Case study 10 - the complaint The Ombudsman received a complaint relating to Parks Victoria’s selection of a developer for a major redevelopment of Queenscliff Harbour. It was reported that the Chief Executive Officer (CEO) of Parks Victoria had taken an overseas holiday with a member of the consortium that was subsequently awarded the multi-million dollar tender.

The review found that there was no evidence that the personal relationship between the CEO and the tenderer had prevented the tender process from being fair and equitable. The review also established that the CEO had paid for the airfares and incidentals of the holiday, and this supported the conclusion that there was no benefit to him, or his related parties, from the tenderer. Case study 10 - the findings

What do you think?  What is my private interest?  What is my public duty?  Do I think there is a conflict?  Can I see a conflict in advance?  Would the reasonable man think there is a conflict?  What is my governance framework?  Are my actions and decisions transparent?  What attempts have I made to avoid a COI? Or manage a COI?  Is there a COI policy? Guidelines?  What are the values and code of conduct?  Do I need to disclose to anyone? Or record anything?  What does my contract say?

Case Study 14 - the complaint A complainant had applied unsuccessfully for a position at a regional agency. The complainant was advised by the agency that the successful applicant for the position was Ms X, who had been a member of the initial selection panel.

Case study 14 - findings Ms X was a panel member. She was not originally an applicant for the position, but had been appointed following the decision of the panel that none of the applicants were suitable. However, the agency did not re-commence the appointment process at that point; rather, the selection process was extended to include a new application from Ms X, who was subsequently appointed by the panel, of which, she was now no longer a member.

What do you think?  What is my private interest?  What is my public duty?  Do I think there is a conflict?  Can I see a conflict in advance?  Would the reasonable man think there is a conflict?  What is my governance framework?  Are my actions and decisions transparent?  What attempts have I made to avoid a COI? Or manage a COI?  Is there a COI policy? Guidelines?  What are the values and code of conduct?  Do I need to disclose to anyone? Or record anything?  What does my contract say?

Investigating: what is there?  Culture: codes of conduct, values, decision-making, internal complaints, whistleblower protection, COI policy and guidelines  Governance framework: corporate structure, accountability, delegations, COI register, gift register, risk management processes  Legislative framework  Regularity framework  Commercial: contracts and procurement processes  Previous complaints: same entity/sector/circumstances  Case law and public reports  Public interest: Hansard, media, customer satisfaction etc

Questions?