MANAGING CONFLICTS OF INTEREST Maintaining Public Confidence

WHY BOTHER? Should limited resources be devoted to major cases of corruption? Conflicts of interests are inevitable – they must be dealt with if the public is to have faith in ‘the system’

DEFINITION OF CONFLICT OF INTEREST OECD definition: “A ‘conflict of interest’ involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities”

Definitions continued (2) Hong Kong ICAC: “…when the private interests of a public official compete or conflict with with the interests of the government or the official’s public duties.” “…private interests include the financial and other interests of the official, his family, his personal friends, clubs/groups to which he belongs and any person to whom he owes a favour or is obligated.”

Definitions continued (3) NSW Ombudsman: “The term ‘conflict of interests’ refers to situations where a conflict arises between a public duty and private interest which could influence the performance of official duties and responsibilities” “…situations in which their private interests conflict or might reasonably be perceived to conflict with their official duties.”

Identifying Conflicts of Interest Financial, economic and other interests Debts and assets Affiliations with companies and NGOs Affiliations with political parties, trade unions and professional associations Obligations to community, family, religious or ethnic groups

Areas of special concern Public-private sector interface (eg privatisation, corporatisation, acquisition) Government procurement Regulatory and inspectorial functions Government contracting Government employment and recruiting

Does a conflict exist? Definitions are ultimately of limited worth Public perception is the key Balance of reasonable conduct and reasonable expectations The ‘Sunshine Test’ System should place onus of proof on the official

Managing conflicts of interest Code of Conduct Clear guidelines Training and education Organisational culture of probity Disciplinary and other actions

Disciplinary and other actions Divestment of the interest (or blind trusts) Recusal of the official Restriction of access Transfer of the official Re-arrangement of official’s duties Resignation of official from private office Resignation of official from public office

Grey areas Inside information – need systems to protect commercially valuable information Outside employment – authorisation procedures are best practice Future employment – when was it negotiated? Is it in a related field? Gifts – nominal value? Ceremonial? Public?

Gifts A good test is to follow the GIFT test Genuine – is the gift genuine appreciation? Independent – does acceptance compromise independence? Free – is the gift free of any obligation in return? Transparent – does it pass the sunshine test?

An innovative idea Queensland Integrity Commissioner The Queensland Integrity Commissioner is an independent person who advises public officials on conflicts of interest. His role is purely advisory. He has no investigative or enforcement powers. Prevention is better than cure Part-time office to keep costs down

Useful websites ns/Publist_pdfs/fact%20sheets/PSA_FS3_Conflict.pdhttp:// ns/Publist_pdfs/fact%20sheets/PSA_FS3_Conflict.pd orruption.htmlhttp:// orruption.html

Case Study 1 You are the key IT nerd in your Ministry. You work on IT stuff all the time. A supplier offers you a loan of a new computer so that you can test it at home. You can keep it for as long as you like. You are on a committee that will determine purchasing of new computer gear. What should you do?

Case Study 2 The Ministry messenger has the dedicated use of a Ministry car. He is always ‘on call’. He is a good guy and everyone likes him. He performs all his official duties competently. You find out that he is running personal errands in the Ministry car during office hours when he is not performing official duties. Do you report him?