A Declaration of Independence – Conflicts of Interest

Councillor Conduct Confusion

Over 4 years in to the sweeping amendments to the councillor conduct provisions in the Local Government Act 2009, are we any clearer on precisely when a councillor has a declarable conflict of interest that must be disclosed when participating in a decision?  I believe the answer is neither yes nor no, rather, slow but steady. 

This is not unsurprising given that the amendments represented, and sought to implement, a shift in culture and consciousness in local government to be embedded into daily practice.   What makes it even more challenging is that we have many experienced Councillors with years of practice in, and understanding of, the former councillor conduct regime.  It is not an easy task to change past practices or thinking…especially when our Councillors are engaging in such high volume and high value decisions at an incredibly rapid rate in an increasingly complex legal, political and social environment. 

Local governance is not for the faint-hearted, that’s for sure.  However, neither is one running blind into a field full of potholes (or perhaps for some, more aptly described as craters) without a sensor sounding a subtle alarm when one’s foot is skirting the edges of an abyss.  What’s even more encouraging is that the alarm trigger can be put into a few short and simple pointers and need not culminate in a head-scratching, hair-raising or even hair-pulling exercise.  Remember, that’s what lawyers are for.

Perhaps one doesn’t need to be Julie Andrews to understand that the very beginning is a very good place to start.  And our starting place, to be used as a guiding light and never to be extinguished, is a deep appreciation of the overall purpose of the Councillor conduct provisions: to ensure that matters are dealt with by local government in an ACCOUNTABLE and TRANSPARENT way so that the public’s CONFIDENCE in the INTEGRITY of the system is maintained.  This underlying purpose permeates the provisions and must always be viewed (and put into practice) in this light.  It is because of this that the councillor conduct provisions are far-reaching and given broad interpretation by the Councillor Conduct Tribunal.

One common misunderstanding is that the test for whether a conflict of interest exists in a matter includes an assessment of whether the personal interest in fact would or would not impair the Councillor’s judgment. Many Councillors conclude that they don’t have a conflict of interest in a matter that they need to declare because they are confident that the interest is not of such significance to them that it would influence their decision-making.  However, and fundamentally, the test is not subjective (dealing with the state of mind of the particular Councillor) but objective (dealing with the ‘fair-minded observer’). 

The question to ask oneself is therefore simply this:  could a lay observer reasonably apprehend the possibility that the Councillor’s decision-making might be influenced by their personal interest in the matter?  If the answer is in the affirmative, then subject to any of the exceptions contained in the Act, a declarable conflict of interest in the matter must be declared in accordance with the process set out in the Act. 

There are, however, limits to this very broad assessment.  The apprehension must be reasonable and is to be assessed by taking a common sense approach.  Further, there must exist a real and sensible possibility that a councillor’s judgment might be impaired by the conflict of interest. 

Remember, a conflict of interest in a matter (or suspected conflict of interest) does not automatically exclude a Councillor from participating in the decision. It simply becomes a matter for the remaining eligible Councillors to decide the ‘conflicted’ Councillor’s continued participation.

Where does that leave us?  The overarching purpose of the councillor conduct provisions of transparency and accountability dictates a cautious approach, as do the repeated calls of the Councillor Conduct Tribunal to Councillors in its decisions.  So, when navigating that field of potholes, keep the big picture in mind as a guiding light and remember: it’s not about whether a particular Councillor’s judgment would in fact be influenced, but whether the fair-minded observer, not knowing the Councillor personally, might think that there’s a possibility that the Councillor’s judgment might be influenced.  Because in this environment, a possibility is all it takes.

For those complicated matters in a complex environment, email Tim Fynes-Clinton or Kirsty Ling, or call us today on (07) 3243 0000.