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Thursday, February 15, 2007

Government contract disclosures - nothings straightforward

The Age report yesterday "Brumby wins battle to keep EastLink costs secret"concerned a Victorian Court of Appeal decision in a long running saga over access under Freedom of Information to information about the $2.5billion EastLink road project. The Court of Appeal found an error of law in the decision of the Civil and Administrative Tribunal, and has now referred the matter back for a finding on whether the documents were prepared for submission to Cabinet.

The battle has really been over access to the "public sector comparator", the report that compares the cost of the project as a public private sector partnership, with the cost if the project was publicly funded. The Government is digging in, claiming to be defending the principle concerning disclosure of Cabinet documents, but it sounds a little hollow given commitments in the lead up to last year's Victorian election to be more open about public private partnerships.

While the Victorian Government continues to resist disclosure of this comparator, the NSW Government will be required to reveal "the components and quantum" for any public sector comparator used for a privately financed project with an estimated value of more than $150,000, as a result of the commencement on 1 January of the NSW Freedom of Information Amendment (Open Government—Disclosure of Contracts) Act 2006 No 115

Publication of the comparator is just a small part of broader pro active disclosure requirements contained in the amendment act. The NSW Government's guidance on the new requirements for disclosure of contracts and associated information is contained in this memorandum issued by the Premier to all ministers last month.

The mandatory requirements apply to any "agency" as defined in the NSW FOI Act, except State Owned Corporations, local councils, and in respect of any contract providing industry support entered into by the Department of State and Regional Development.

The law also provides for exclusion of "commercial in confidence" provisions of a contract: the contractor's financing arrangements, cost structure or profit margins, full base case financial model, intellectual property, and any matter the disclosure of which "would place the contractor at a substantial disadvantage in relation to others......whether at present or in the future".

This all seemed to be pretty straightforward when the amending act passed Parliament in a flurry late last year, but the Premier's Memorandum has surprisingly muddied the water.

For example, with no legislative support that I can find, it says that in addition to the exclusion of commercial in confidence provisions, contracts or other details do not need to be disclosed if information would be exempt if it were the subject of an application under the FOI Act. (updated - I was wrong in saying there was no legislative basis for this claim - see Small dose of FOI humble pie . It is in the amending Act, but the points below about the weaknesses that result are still, in my view valid).

Could this mean that an agency could refuse access to a contract or related document prepared for submission to Cabinet (Victorian deja vu); or under a whole range of other broad and general exemptions available in the FOI Act? What about simply including a confidentiality clause and then claiming the document exempt on grounds that disclosure could found an action for breach of confidence?

My guess is that the proponent of the legislation, the Independent Member for Bligh (and Lord Mayor of Sydney), Clover Moore would be somewhat surprised to learn that her proactive contract disclosure requirements aren't just subject to deletion of commercial in confidence provisions, but in the hands of some agencies out there could potentially be watered down significantly.

This concern is in additon to some scepticism about how the website for publication of NSW contract information will work, particularly its searchability and capacity to present the required information. The website in its current form is geared to providing information to tenderers. Those interested in government accountability have a different set of requirements.

Oh for something relatively simple like this Government Wide Reporting site of the Treasury Board of Canada.

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