ICAC publication reminds public officers of their conflict of interest obligations
On 1 June 2021, the Independent Commissioner Against Corruption (the Commissioner) published a report titled ‘Identify, Disclose and Manage: Conflicts of Interest in Public Administration’ (the Report). The Report was published following what was described by the Commissioner as two “significant” investigations into a single agency which prompted her to publish the Report. A copy of the Report can be found here.
The Report is “intended as general advice” and serves as a timely reminder for public officers, including those employed in the South Australian local government sector, of the need to identify, disclose and manage conflicts of interest. However, the Report does not impose any additional obligations on local government councils, but rather reiterates that managing conflicts of interests will be determined by already applicable legislation, regulations and local policies. To this end, the Report refers to the conflict of interest provisions as set out in the Local Government Act 1999 (SA) (LG Act).
As our readers may be aware, the Statutes Amendment (Local Government Review) Act 2021 (Review Act) which recently passed both Houses of South Australia’s Parliament and was assented on 17 June 2021 (but is yet to commence), has made amendments to the conflict of interest provisions of the LG Act. A summary of the changes implemented by the Review Act can be found here.
The Review Act will replace the current three (3) tier conflict of interest scheme for elected members under the LG Act – being material, actual and perceived conflicts of interest – with a refined two (2) tier scheme. The new scheme retains material conflicts of interests (with amendments to its definition and scope) and replaces actual and perceived conflicts of interest with general conflicts of interest. Pursuant to Section 74 of the Review Act, general conflicts of interest are defined as:
‘74—General conflicts of interest
(1) Subject to section 75A, for the purposes of this Subdivision, a member of a council has a general conflict of interest in a matter to be discussed at a meeting of the council if an impartial, fair-minded person might consider that the member's private interests might result in the member acting in a manner that is contrary to their public duty.
(2) For the purposes of subsection (1)—
private interests means any direct or indirect interest of a member that does not derive from their public duty and does not include an interest that is only a matter of personal opinion or belief;
public duty means the responsibilities and obligations that a member has to members of the public in their role as a member.’
The conflict of interest provisions applied to employees under the LG Act have largely remained unchanged by the Review Act. However, the monetary penalty provisions that apply to breaches of the conflict of interest provisions have been removed.
Further, Section 120(6) of the LG Act, which deals with whether a person is closely associated with an employee of a council, will now include “a family company of the employee (within the meaning of Schedule 3) or a family trust of the employee (within the meaning of Schedule 3)” or a person who “has entered into, is seeking to enter into, or is otherwise involved in a negotiation or tendering process in connection with entering into, an agreement for the provision of professional or other services for which the employee would be entitled to receive a fee, commission or other reward”.
Chapter 7 Part 4 Division 1 of the LG Act, which comprises of Sections 108 – 120 and encompassed (among other things) conflict of interest provisions, has been rebranded as ‘Employee integrity and behaviour’. This Division is defined as an ‘integrity provision’. The Review Act has expanded Section 109 of the LG Act, which concerns the general duty of employees, to include the following:
'(3) An employee of a council must comply with the integrity provisions relating to employees.
(4) Contravention of, or failure to comply with, an integrity provision by an employee of a council constitutes a ground for suspending, dismissing or taking other disciplinary action against the employee.’
In effect, the expansion of Section 109 of the LG Act means a breach of an ‘integrity provision’ (which includes Sections of the LG Act concerning conflicts of interest) will now be grounds for “suspending, dismissing or taking other disciplinary action against the employee”. As such, councils will now have a clear scope to take action against an employee for a breach of the conflict of interest provisions. Additionally, the Review Act has also amended the Independent Commissioner Against Corruption Act 2012 (SA) (ICAC Act) to define the integrity provisions to be a code of conduct for employees and therefore falls within the scope of ‘misconduct’ as defined under the ICAC Act.
The Report serves as a timely reminder for council members and other public officers of their conflict of interest obligations and to ensure they are cognisant of the changes that are being implemented by the Review Act. We will continue to provide details of how the Review Act will affect local government in the coming months.
For more specific information on any of the material contained in this alert please contact Felice D’Agostino on +61 8210 1202 or fdagostino@normans.com.au, Dale Mazzachi on +61 8210 1221 or dmazzachi@normans.com.au or Thomas Tagirara on +61 8217 1337 or ttagirara@normans.com.au.
