The Public Sector Ethics Act 1994 sets out ethical principles that local governments, statutory bodies, public universities and departmental employees and their contractors must follow. They include:
- integrity and impartiality
- promoting the public good
- commitment to the system of government
- accountability and transparency.
Maintaining integrity in public administration requires employees to put the interests of the public first, and to address any conflict of interest in the public’s favour.
While definitions vary, conflicts of interest in the public sector arise where an employees’ duties and responsibilities to serve the public interest conflict with their personal interests. These personal interests:
- may be financial or non-financial
- can involve avoiding a personal financial or non-financial loss (as opposed to creating a gain)
- can be indirect, involving related parties (such as interests in companies) and family members (who may benefit instead of them).
The Crime and Corruption Commission’s (CCC) Prevention in Focus is a series of case studies that discusses various conflicts of interest scenarios. Its June 2018 article on conflicts of interest, Crime and corruption prosper when individuals put their private interests before the public interest, identifies that allegations that employees have misused their authority, which includes matters involving conflicts of interest, are the second most commonly received complaints at the CCC (after failure of duty).
Recent local government legislative changes introduce new conflict of interest requirements
Changes to the local government legislation to strengthen governance and public confidence in how decisions are made commenced from October 2020. The changes include new conflict of interest requirements and have introduced two defined terms—prescribed conflict of interest and declarable conflict of interest. The former is where you must not participate in decisions, and the later is where you must declare the interest and you may choose to leave or be asked to leave by other councillors.
The legislation explains the circumstances where conflicts of interest exist—such as the difference between a prescribed or declarable conflict of interest—and the actions that must be taken. For example, it outlines financial thresholds for gifts, loans, and travel benefits from donors, and when a person should not participate in the decision or they can make a declaration and continue to participate in the decision-making process.
Penalties for non-compliance can be significant. A councillor who intentionally fails to declare a prescribed conflict of interest can face a maximum penalty of up to two years imprisonment.
The Department of State Development, Infrastructure, Local Government and Planning has released three documents to accompany these changes:
- an updated Code of Conduct for Councillors in Queensland
- an updated Model Meeting Procedures
- a factsheet with examples for councillors, Managing conflicts of interest for councillors.
Further information on the local government reform is contained on the department’s website: Local government reform.
The Office of the Independent Assessor’s media release dated 3 August 2020 discusses the top five issues that saw councillors referred to the Councillor Conduct Tribunal. They were:
How do you manage conflicts of interest?
Systems for managing conflicts of interest should comprise policies, procedures and tools that link together:
- policies—individual entities should tailor these to their circumstances and provide clear guidance and expectations around how employees should assess and manage conflicts of interest
- codes of conduct—entities should clarify who codes of conduct apply to, for example, employees, contractors, and/or local government councillors. Remember—the Public Sector Ethics Act 1994 also applies to contractors. Entities should also ensure all employees receive annual training around the entity’s codes of conduct
- registers of interests and conflict of interest declarations—entities and employees should be aware that legislative requirements exist for certain positions, such as local government councillor’s registers of interests. Where registers of interest are in place, entities need to regularly update these on a timely basis following any change in circumstances. They should establish procedures to obtain declarations in other high-risk areas, such as for staff involved in tenders and procurement. Declarations and registers of interest need to be written clearly to ensure users understand what is in scope, and the principles they are trying to achieve
- risk management processes—entities should establish appropriate risk treatment plans and ongoing monitoring within their operations, regardless of their size
- procedures—entities should establish procedures and mechanisms for managing conflicts of interest before a conflict is declared. For example, restricting participation in decision making where a conflict of interest exists.
The Queensland Integrity Commissioner—Annual Report 2019–2020—received 307 formal requests for ethics and integrity advice in 2019–20:
‘For Mayors and Councillors and Members of the Legislative Assembly, the main reason for seeking advice related to a decision before them that had the potential to materially affect the value of their residential or investment property…’.
- Code of Conduct for the Queensland public service
- Managing conflicts of interest in the NSW public sector April 2019 (Independent Commission Against Corruption)
- Managing conflicts of interest in the Public Sector Toolkit
- Managing Conflicts of Interest in the Public Sector—guidelines and toolkit (CCC)
- Conflicts of interest – are you managing yours appropriately? (CCC)
- Managing conflicts of interest: A guide for the public sector (New Zealand Auditor-General)