“If a member of the committee is an applicant for a grant, an actual conflict exists and they should remove themselves from any decision-making relating to the allocation of funds.”
“It isn’t wrong or unethical to have a conflict of interest, what is important is that it is identified and appropriately managed”
The Integrity Coordinating Group
The Integrity Coordinating Group (ICG) was formed to promote and strengthen integrity in Western Australian public authorities. ICG members support integrity through their independent roles under their own legislation, and also work collaboratively across the public sector.
Integrity in decision making
Decision makers need to demonstrate integrity by:
- serving the public interest
- using powers responsibly
- acting with honesty and transparency
- addressing improper conduct.
The Integrity in Decision Making guidelines
ICG supports building the capacity of public authorities, and their employees, to demonstrate integrity when making decisions.
These guidelines provide public authorities with information and practical tools about integrity in decision making, which can be used to stregthen and sustain their decision making processes.
Almost all functions performed in the public sector can potentially lead to conflict of interest situations. A conflict of interest in itself is not necessarily wrong or unethical, however, identifying and managing the situation is important. Managing conflicts of interest is all about risk management. Identifying at-risk functions in the organisation is the first step to managing the risks conflicts of interest present.
The allocation of public funds for various purposes needs to be a transparent process, free from bias or nepotism. It is often the case that committees established to determine grant allocations for community-based services comprise at least one member with private interests in the field competing for grants. This is not surprising given the subject knowledge and expertise that can be required for the committee to judge the merits of submissions.
Where such private interests exist, the individual needs to be aware of the perception that a conflict of interest exists, and take appropriate action. If a member of the committee is an applicant for a grant, an actual conflict exists and they should remove themselves from any decision-making relating to the allocation of funds.
The following scenario illustrates one example of how conflicts of interest may be identified and what strategies may be employed to manage them. The choice of strategies may vary across the sector, and will be dependent on the operating environment, legislative requirements and practical solutions.
Ahmad works as a senior planner for a Government organisation involved with the regulation and conservation of the environment. He has recently been promoted and has special responsibility for a particular region. As a minor part of his job, Ahmad sits on a panel that assesses grant applications from community groups, using his technical knowledge of environmental management and his specialist knowledge of the region, to assess the feasibility of the applications and their benefits.
His wife Devina is involved with an environment advocacy group, as an active and long-term member, although not as a Committee member or office bearer. The environment group applies to the organisation for a grant, seeking to rehabilitate some local wetlands adjacent to a high-profile tourist development the group has been vocally opposed to. It is a competitive grants round, as other groups are also seeking support for a diverse range of projects.
How to identify conflicts of interest
Although Devina does not stand to derive a financial benefit from the grant, her involvement with the group and its ideals give her a non-pecuniary interest in this matter. By association, Ahmad therefore has a private interest in conflict with his public duty. Even if Ahmad managed the situation internally and remained publicly a part of the grants process, it is likely that there would be a significant perception of conflict by other competing grant applicants and stakeholders.
The potential conflict inherent in this scenario is perhaps more significant. As a senior planner, Ahmad has influence over local projects such as the tourism development adjacent to the wetlands. This is a larger and more important part of his job than the grants process.
If Ahmad supports an application from a group publicly critical of a development, his impartiality may come under scrutiny by the tourism developers and supporters, either immediately, or later when an adverse decision is made by the organisation against the developers. It is important that Ahmad’s and the organisation’s actions withstand that scrutiny. In this case, Ahmad’s conflict of interest may discredit the organisation’s role as an impartial regulator of this tourism development, or even other local development projects.
How to manage conflicts of interest
Ahmad’s organisation has a Conflict of Interest policy that requires him to record his conflict and then consult with his supervisor on the best way to manage it. Ahmad believes that the conflict can be managed by restricting his involvement in the decisions pertaining to the grant application for wetlands rehabilitation.
He thinks he can still take part in the panel assessments for the other applications, and is concerned that to remove him completely would restrict important technical and local expertise from the panel process.
Ahmad’s manager has a longer experience of the tensions and stakeholder issues surrounding development applications and environmental regulation, and is concerned more about the perceived and potential, than immediate conflict of interest. As such, she asks Ahmad to remove himself from the process for this whole grant round, and make a public statement as to why.
Further, she suggests to Ahmad that if he is to continue in this senior role with significant influence over local resource use, he needs to consider the potential for future conflicts of interest arising from his wife’s involvement with the environment advocacy group.
The 6 Ps
Public duty versus private interests
Do I have personal or private interests that may conflict, or be perceived to conflict with my public duty?
Could there be benefits for me now, or in the future, that could cast doubt on my objectivity?
Remember, perception is important. How will my involvement in the decision/action be viewed by others?
Does my involvement in the decision appear fair and reasonable in all the circumstances?
Presence of mind
What are the consequences if I ignore a conflict of interest? What if my involvement was questioned publicly?
Have I made any promises or commitments in relation to the matter? Do I stand to gain or lose from the proposed action/decision?
The 6 Rs
Recording the disclosure of a conflict of interest in a register is an important first step, however this does not necessarily resolve the conflict. It may be necessary to assess the situation and determine whether one or more of the following strategies is also required:
It may be appropriate to restrict your involvement in the matter, for example, refrain from taking part in debate about a specific issue, abstain from voting on decisions, and/or restrict access to information relating to the conflict of interest. If this situation occurs frequently, and an ongoing conflict of interest is likely, other options may need to be considered.
If it is not practical to restrict your involvement, an independent third party may need to be engaged to participate in, oversee, or review the integrity of the decision-making process.
Removal from involvement in the matter altogether is the best option when ad hoc or recruitment strategies are not feasible, or appropriate.
Relinquishing the personal or private interests may be a valid strategy for ensuring there is no conflict with your public duty. This may be the relinquishment of shares, or membership of a club or association.
Resignation may be an option if the conflict of interest cannot be resolved in any other way, particularly where conflicting private interests cannot be relinquished.
- Public Sector Management Act 1994
- Financial Administration and audit Act 1985 and Treasurer's Instructions
- State Supply Commission Act 1991
- Code of Ethics and Conduct
- The Public Sector Commission Western Australian Public Sector Code of Ethics (reprinted December 2010)
- Agency Codes of Conduct
Policy and Guidelines
- Department of Local Government (1999) Financial interests handbook: for local governments in Western Australia
- Department of Local Government and Regional Development (2000) Disclosure of interests affecting impartiality (Local Government Operational Guidelines, No. 1)
- State Supply Commission (2004) Funding and purchasing community services policy
Where can I seek further advice?
It is important to first discuss the situation with a supervisor or senior colleague. You may also contact:
State Supply Commission
4th Floor, Optima Centre
16 Parkland Road
OSBORNE PARK WA 6014
Telephone: (08) 6551 1500
Freecall: 1800 806 599 (Country only)
Department of Local Government
PO Box R1250
PERTH WA 6844
Telephone: (08) 9217 1500
Freecall: 1800 620 511 (Country only)
Some other titles in this series
Available at www.publicsector.wa.gov.au/icg:
- Managing procurement processes, tenders and contracts
- Sponsorship from the private sector
- Wearing two hats–dual roles as a public officer
- Getting on Board–representative members on Boards and Committees
- Gifts, benefits and hospitality
- Recruitment, selection and appointment
- Secondary employment
ICG is grateful for the support of Queensland’s Crime and Misconduct Commission (CMC) and the New South Wales Independent Commission Against Corruption (ICAC), and acknowledges that much of the content developed by CMC/ICAC in Managing Conflicts of Interest in the Public Sector: Toolkit has been adopted by ICG, with some modification and adaptation for the Western Australian environment.
This information does not constitute legal advice and ICG accepts no liability for the accuracy of the information, or for any act or omission done in reliance on the information provided, or for any consequences, whether direct or indirect, of any such act or omission.
© Corruption and Crime Commission, Information Commissioner, Office of the Auditor General, Public Sector Commission, and the Parliamentary Commissioner for Administrative Investigations 2011.