Business may have missed the boat on FOI reform

The business community has been hard to spot in the debate in recent years about the need for improved transparency and accountability, in particular freedom of information reform. The Federal Government Exposure Draft Freedom of Information Reform Bill released in March drew over 40 submissions but only one identifiably from business, from the Australian Chamber of Commerce and Industry (Submission 28 here). The submission was primarily concerned about the proposal that all information covered by the business affairs exemption should be subject to a public interest test. Here is an extract:

"Under the Bill business information falls into a category of a “conditionally exempt document” (CED) (cl.31A). The key difference proposed under the Bill, is that the Minister/Agency must disclose CED document unless it is contrary to the “public interest” (see cl.11A(5)). This is a significant change to the existing regime. ACCI does not support such measures without clear evidence that its benefits would outweigh its costs or potential prejudice to the business community. Such documents should remain exempt, unless waived voluntarily by the business concerned. These provisions were created to balance the commercial interests of a firm, and are still required for firms to operate on a profitable and viable basis. By shifting such documents into a CED class, now exposes prejudice to a firm which is what the existing provisions are intended to protect and prevent. A CED document will generally be released under the proposed framework unless it is not in the public interest.... A presumption of disclosure is therefore created which will require an affected person or firm to defend. This is unnecessary burdensome and will impose costs and resources on a person or firm, where there does not appear to be any justification. ACCI is not aware of any inherent problem with the current framework or systemic issues identified by Government, the Courts or the community. The PI test also requires Government to decide whether complicated, sensitive and commercial information should be released. Whilst the current laws require an examination and assessment as to whether it is an exempt document, the proposals in the Bill requires the added task of then determining whether it is not in the public interest according to a range of criteria. How will the Government determine whether a document is or isn’t a trade secret and then assess the public interest to determine whether it should not be released?

... ACCI is concerned that trade secrets, by their very nature, are extremely sensitive information. This should remain as exempt information under the Bill. Other documents that could cause potential damage to a person or firm if released should continue to be exempt.

ACCI Recommendation
1. The Government should continue to exempt business documents from FOI regime. They should not be CED documents.

2. Given the potential for damaging a firm’s legitimate interests, the Government should continue to exempt trade secrets (s.43(1)(a)), information having a commercial value that would be, or could reasonably be expected to be destroyed or diminished if the information were disclosed (s.43(1)(b)) and documents which would, or could reasonably be expected to, unreasonably affect that person or business adversely (s 43(1)(c)(i)).

The submission went on to point out other problems with the public interest test in the Exposure Draft, and the proposed slight shift in the consultation requirements for business affairs information prior to disclosure.There was also a strong "don't go there" regarding an announcement by the Minister John Faulkner in March that the Government intended to ask the Australian Law Reform Commission to examine whether the FOI Act should be extended to the private sector- there hasn't been a word from the Government since about that.

On the state FOI reform front, however, the very things ACCI is worried about federally have come to pass, with the Queensland Act in force from 1 July and the NSW Act to commence early in 2010.Publicly at least there wasn't a submission from business on the proposals eventually adopted, or a complaint since about the dire consequences.

Queensland's Right to Information Act requires consideration to be given to the public interest against disclosure in various circumstances including relevantly, where

" Disclosure of the information could reasonably be expected to prejudice trade secrets, business affairs or research of an agency or person."

However this is to be weighed against public interest considerations in favour of disclosure. Of the considerations listed, the following could, in some circumstances, be relevant to disclosure of business affairs information held by a government agency:

" Disclosure of the information could reasonably be expected to promote open discussion of public affairs and enhance the Government’s accountability.

Disclosure of the information could reasonably be expected to contribute to positive and informed debate on important issues or matters of serious interest.

Disclosure of the information could reasonably be expected to reveal the reason for a government decision and any background or contextual information that informed the
decision.

Disclosure of the information could reasonably be expected to contribute to the protection of the environment.

Disclosure of the information could reasonably be expected to reveal environmental or health risks or measures relating to public health and safety.

Disclosure of the information could reasonably be expected to contribute to innovation and the facilitation of research.

The NSW Government Information (Public Access) Act adopts a similar approach. The test in regard to business affairs information involves weighing the public interest against disclosure of information that may be expected to

(c) diminish the competitive commercial value of any information to any person,or

(d) prejudice any person’s legitimate business, commercial, professional or financial interests,

against any relevant public interest considerations that favour disclosure. The starting point is the public interest in disclosure of information held by a government agency generally (Section 5), with examples given(Section 12) of specific pro-disclosure considerations including:

a) Disclosure of the information could reasonably be expected to promote open discussion of public affairs, enhance Government accountability or contribute to positive and informed debate on issues of public importance.

(b) Disclosure of the information could reasonably be expected to inform the public about the operations of agencies and, in particular, their policies and practices for dealing with members of the public.

(c) Disclosure of the information could reasonably be expected to ensure effective oversight of the expenditure of public funds.

Both Queensland (Section 37) and NSW (Section 54) also shift from the "must consult prior to disclosure of information concerning business affairs" position that the ACCI argues should remain in the Federal Act, to only requiring consultation when there is a reasonable expectation that the third party would be concerned at the prospect of disclosure, the change proposed in the Federal Exposure draft.

If these changes have been introduced into state legislation without fuss, the Federal Government shouldn't be dissuaded by the ACCI from proceeding with its plans.