In June 2015, Brendan Howlin TD, the Minister for Public Expenditure and Reform brought a Memorandum to Government setting out a draft General Scheme designed to modernise, simplify and streamline the current legislative framework governing the disclosure of interests and other ethical obligations for public officials.
The public consultation period for observations and input on the proposed Public Sector Standards Bill 2015 (the “Bill”) expired on 11 September 2015. The Minister’s intention is to have the proposed Bill enacted as a priority to meet the Government’s commitment to consolidate local and national ethical requirements as set out in the Statement of Government Priorities 2014–2016 and to respond to the recommendations relating to conflicts of interest contained in the final report of the Mahon Tribunal.
The reforms are intended to compliment the measures already introduced on Protected Disclosures legislation, appointments to State Boards, Civil Service Accountability, Freedom of Information legislation and the recently enacted Regulation of Lobbying Act 2015.
On the basis of the information released, I have set out below the main reforms proposed:
- The repeal of the Standards in Public Office Act 2001, the Ethics in Public Office Act 1995 and Part 15 of the Local Government Act 2001 which governs the identification and management of conflicts of interest for public officials at both national and local level.
- Replacing the Standards in Public Office Commission with a Public Sector Standards Commissioner.
- The establishment of a set of over-arching integrity principles that will apply to all public officials. The principles will provide a framework for the revision, updating and improvement of codes of standard and behaviour for different categories of public officials.
- Head 19 of the proposed Bill provides for the development of a model code of conduct and the prevention of conflicts through education, training and research. It is proposed that all public officials must comply with the code in the performance of their duties and that public bodies may issue their own codes to meet particular requirements, based on the model code. The Commissioner may review such codes and advise on amendments where necessary. In any proceedings envisaged under the proposed Act, a Court may have regard to the code of conduct in place for that particular body.
- Establishing a more effective, streamlined and efficient process for the submission of periodic statements of interests. The statements will have to be reviewed every four months but no declaration (or nil statement) will be required unless there has been a significant change. The periodic statement of interests will significantly extend the personal and material scope of disclosures for public officials. Declarable interests will include political donations and there will be greater consistency and certainty on the rules governing limits on the receipt of gifts and travel benefits by public officials.
- Statutory prohibitions on the use of insider information, on the seeking or acceptance by public officials of benefits (including gifts and favours) to further their private interests, and on local elected representatives from dealing professionally with land in certain circumstances.
- The establishment of a new statutory board to address potential conflicts of interest as public officials take up roles in the private sector.
Public Sector Standards Commissioner
The proposed Bill provides for the replacement of the Standards in Public Office Commission with the establishment of a Public Sector Standards Commissioner who will have increased powers of sanction and enforcement along with a broader mandate in the provision of advice and guidance. The proposed Bill provides for the appointment of a Deputy Commissioner who will be independent from the Commissioner in terms of their investigative functions.
A report arising from any investigation will be provided to the Commissioner to adjudicate upon, thus ensuring the separation of power remains in place. This is seen as a key element in the proposed reforms, ensuring an effective and robust regulatory system.
The proposed Bill provides for an increase in the Commissioner’s powers of investigation and available sanctions. In respect of a breach or contravention of the proposed legislative provisions, the Commissioner may request the Deputy Commissioner to carry out an investigation where a complaint has been made. Of particular note is that the Commissioner may direct an investigation to be carried out in circumstances where the Commissioner considers that there may have been a breach or contravention of the Act even though a complaint has not been received.
A complaint may be dismissed if it is considered to be:
- frivolous or vexatious
- if it relates to a period where the subject individual was not a public official
- if it is made anonymously
- if it relates to a private matter
- if it is deemed more appropriate to be dealt with in the context of a Minister’s parliamentary accountability to the Oireachtas.
Following a preliminary inquiry, the Commissioner may dismiss the matter; provide advice or guidance to the public official; refer the matter to the relevant body; initiate a prosecution, or refer the matter to the Deputy Commissioner for further investigation.
It is anticipated that the Bill will provide for the power to:
- interview and compel the production of documents
- hold hearings if necessary (including outside the State), along with the power to summon witnesses and receive evidence both orally and by affidavit take sworn statements and to apply to the Courts to have the investigators directions complied with
- apply for a search and seizure warrant from the District Court (private papers of members of the Oireachtas or confidential papers of the Oireachtas are excluded), if required in exceptional circumstances.
At the conclusion of an investigation, the Commissioner will produce a report setting out his or her findings and recommended sanctions and send it to the person who is the subject of the investigation. Such reports will be published, and will be laid before the Houses of the Oireachtas where they relate to members.
It is also anticipated that the Bill will establish a range of offences for intentionally or recklessly retaining prohibited gifts; seeking or accepting rewards for any act done or not done by virtue of being a public official; making a declaration that is false or misleading or failing to make a declaration of interests; failing to comply with tax clearance obligations and failing to comply with investigations or obstructing the Commissioner.
In adjudicating on the report of the Deputy Commissioner, the Commissioner may:
- if the contravention does not constitute a breach or is a minor breach, give advice or guidance or refer the matter to the relevant public body
- impose an administrative sanction of censure or warning giving a direction to an official to undertake actions to ensure compliance with the legislative provisions
- issue a recommendation to suspend or disqualify the public official.
An appeal in respect of these sanctions shall be made to the High Court within 21 days of receiving notification of the decision.
The Commissioner may also prosecute summarily or refer the matter to the Director of Public Prosecutions. The Commissioner additionally has the option of issuing a fixed penalty notice amounting to €200 in respect of a summary offence. On conviction, a court may:
- for a summary offence, impose a class B fine or an imprisonment term of up to 12 months or both
- for an indictable offence, impose a fine of up to €100,000 or an imprisonment term of up to five years or both
- suspend a non-elected public official from their position for 12 months where a person is convicted of a summary offence, or for a period the court may specify if convicted on indictment
- disqualify a non-elected person from holding office as a particular category of official for 12 months where they are convicted of a summary offence, or for a period the court may specify if convicted on indictment.
In respect of elected officials, the proposed Bill provides that following a summary conviction either House of the Oireachtas may suspend (but not disqualify) a member for a period up to 12 months. Longer periods of suspension may be applied by the Houses to members in respect of conviction on indictment.
Public official – a graduated framework for disclosure obligations
According to the OECD1 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.”
The draft general scheme for the proposed Bill provides a broad definition of a ‘public official’ as being a person who holds or held a position of employee, director or other official under three separate categories, that is:
- Category A – elected politicians, special advisers, chairpersons and CEOs of public bodies and those on remuneration at Deputy Secretary level and above in the public sector.
- Category B – those on remuneration between principal officer level and Deputy Secretary in the public sector or a member of the board of a public body (excluding the chairperson).
- Category C – all other public officials.
Public declarable interests
A ‘public declarable interest’ is an interest arising from the date in which the official applies for a position through to the period of 12 months after they cease to be a public official. The periodic disclosure regime proposed is extensive and requires the declaration of financial and other beneficial interests.
Private declarable interests
It is here that the concept of a private declarable interest is introduced. Certain interests such as liabilities over a certain threshold and gifts given by relatives in a private capacity are to be disclosed periodically by senior officials and politicians only, on a confidential basis. The disclosures are not published. These interests include:
- the amount of income from each source
- personal liabilities and assets over €50,000 (other than pensions or a charge on the family home)
- gifts over €200 given by non-relatives for reasons not connected with the official’s functions
- travel, accommodation and related facilities over €600 given by a person who is not a relative and is not connected with the performance of official functions.
Ad hoc disclosures
The proposed Bill stresses the importance of ad hoc disclosures which are made if and when a conflict of interest arises. This will apply to all public officials and extends the personal scope of such disclosures to include the interests of connected parties2.
Statements of interest
The proposed Bill intends to put in place a central ethics declaration procedure, by moving to a situation where public officials and public bodies are automatically brought within the scope of the legislation.
Frequency of disclosure
The existing annual disclosure system is being amended so that once the first declaration is made no further declarations will be required unless there is a significant change in interests. Interests will need to be reviewed three times per year (continuing until 12 months after the person ceases to be a public official).
These will have similar obligations as Category A officials. However, there will be no requirement to disclose private interests. Category B public officials will be required to comply with the general principles and standards of conduct in the legislation and the codes that will be adopted. Disclosures for this category of public officials will be made to the head of their relevant organisation as opposed to the Commissioner and will not be published.
The proposed Bill provides that all other public officials not detailed in categories A and B will be classified as Category C public officials. This will be the largest category of public officials containing members of staff of a public body including civil servants, local authority staff, the Master and Deputy Master of the High Court, the Taxing Master, County Registrars, Property Arbitrators and non-judicial members of the Court Services Board.
They will have the same obligations as categories A and B in relation to complying with the general principles, standards of conduct and the codes that will be adopted. They will not however be required to submit details of either public or private declarable interests or furnish a tax clearance certificate.
The proposed Bill sets out extensive obligations in respect of the submission of declarable interests applicable to the newly categorised definition of public officials. Whilst the Bill will be subject to debate and amendment before the Oireachtas, the broad powers of the proposed Public Sector Standards Commissioner require careful consideration.
As such, organisations are advised to seek legal advice on their obligations in contemplation of this proposed Bill being a priority for the current Government.