City of Burnside Elected Member Composite Training Felice D’Agostino Partner
Overview of Workshop • Conflict of interest • Informal gatherings • Role of elected members on external boards
Conflict of Interest
Key Terms • Material conflicts of interest • Actual conflicts of interest • Perceived conflicts of interest
Material Conflicts of Interest Section 73 • You have a material conflict of interest in a matter to be discussed at a meeting of the Council if you would: – gain a benefit, or suffer a loss; – directly or indirectly; and – whether of a person or pecuniary nature depending on the outcome of the consideration of the matter at the meeting.
Material Conflicts of Interest Who Else? • your relative • body corporate of which you are a director • proprietary company in which you are a shareholder • a beneficiary under a trust or an object of a discretionary trust of which you are a trustee; • your partner; • a person from whom you have received, or might reasonably be expected to receive, a fee, commission or other reward for providing professional or other services; and • a person of a prescribed class (none so far prescribed)
Exemptions Section 73(2) You will not be taken to have a material conflict of interest where: • the benefit or loss would be enjoyed (or suffered) in common with all or a substantial proportion of the ratepayers, electors or residents of the Council area; or • your relative (except for your spouse or domestic partner) has an interest and you do not know, and could not reasonably be expected to know, of the interest
Exemptions Members of an Agency or Instrumentality of the Crown If you are a member, officer or employee of an agency or instrumentality of the Crown, you will be regarded as having a material conflict of interest only if the matter directly concerns that agency or instrumentality of the Crown. An agency or instrumentality of the Crown includes: • an administrative unit of the Public Service • a body corporate comprised of, or including or having a governing body comprised of or including, a Minister or Ministers of the Crown or a person or persons appointed by the Governor or a Minister or other agency or instrumentality of the Crown
Dealing with Material Conflicts of Interest If you have a material conflict of interest in a matter to be discussed at a meeting of the Council, you must: • inform the meeting of your material conflict of interest in the matter; and • leave the meeting room (including any area set aside for the public) so that you cannot view or hear any discussion or voting at the meeting, and stay out of the meeting room while the matter is being discussed and voted on.
Approval by Minister You will not have contravened Section 74(1) if you have been granted approval by the Minister and you are complying with the conditions of the approval. The Minister may grant you an approval to take part in the meeting, or be in the Chamber, if: • due to the number of members having a material conflict of interest, conduct of the meeting would be obstructed if the approval were not given or; • it appears to the Minister to be in the interests of the Council’s community and area
Recording a Disclosed Material Conflict of Interest If you have disclosed a material conflict of interest, the minutes of the meeting and a website determined by the CEO must record: • your description of the nature of the interest; and • if applicable, that you took part in the meeting, or were in the Chamber during the meeting under the Minister’s approval. Material conflicts of interest provisions do not apply to a matter of ordinary business of the Council of a kind prescribed by regulation.
Maximum Penalty If you vote on the matter: $15,000 or 4 years imprisonment In any other case: $5,000
Actual and Perceived Conflicts of Interest What is a Conflict of Interest? - Section 75 A conflict of interest is a conflict between: – your interests (whether direct, indirect, personal and/or pecuniary); and – the public interest that might lead to a decision that is contrary to the public interest
Actual and Perceived Conflicts of Interest Section 75A(1) If, in relation to a matter to be discussed at a meeting of a Council, you: • have a conflict of interest in the matter (an actual conflict of interest); or • could reasonably be taken, from the perspective of an impartial, fair-minded person, to have a conflict of interest in the matter (a perceived conflict of interest), you must deal with the actual or perceived conflict of interest in a transparent and accountable way.
Exemptions – Actual and Perceived You will not be regarded as having an actual or perceived conflict of interest merely where: • you have an engagement with a community group, sporting club or similar organisation undertaken in your capacity as a Council member; • you are a member of a political party; • you are a member of a community group, sporting club or similar organisation (except if you are an office holder for the organisation);
Exemptions – Actual and Perceived • you were a student of a particular school, or you are involved with a school as a parent of a student at the school • you are nominated or appointed as a member of a board of a corporation or other association if you were nominated for appointment by Council; • and other prescribed circumstances. You also will not be taken to have a conflict of interest in a matter if the interest in the matter is held common with all or a substantial proportion of the ratepayers, electors or residents of the Council area.
Dealing with Actual and Perceived Conflicts of Interest Section 75A(1) Where you have: • an actual conflict of interest; or • a perceived conflict of interest you must deal with the actual or perceived conflict of interest in a transparent and accountable way. What is considered a transparent and accountable way?
Dealing with Actual and Perceived Conflicts of Interest Inform: Section 75A(2) You must inform the meeting: • of your interest in the matter; and • if you propose to participate in the meeting, how you intend to deal with the actual or perceived conflict of interest
Dealing with Actual and Perceived Conflicts of Interest Is there a Quorum: Section 75A(3) If a quorum at a meeting cannot be formed because you propose to exclude yourself pursuant to Section 75(1), you will not be taken to have contravened Section 75A(1) by participating in the meeting in relation to the matter, if your attendance, together with any other required number of members, forms a quorum for the meeting. Participating includes, for example, voting.
Dealing with Actual and Perceived Conflicts of Interest Section 75A(5) To avoid doubt, it is declared that non-participation in a Council meeting is not the only way in which the Council member may appropriately deal in a transparent and accountable way with the actual or perceived conflict of interest of the Council member in a matter to be discussed at the meeting
Dealing with Actual and Perceived Conflicts of Interest Ordinary Business of the Council: Section 75A(6) Section 75 does not apply to a matter of ordinary business of the Council of a kind prescribed by regulation
Dealing with Actual and Perceived Conflicts of Interest Committees and Subsidiaries: Section 75B The conflict of interest provisions extends to: • committees; • members of committees; • subsidiaries; and • board members of a subsidiary
Local Government (General) Variation Regulations 2016 • Came into force 24 November 2016 • Amended the Local Government (General) Regulations 2013 • Main changes: – conflict of interest – ordinary business exemption – informal gatherings
Conflict of Interest: Ordinary Business Exemption The ‘ordinary business’ exemption applies to all types of conflicts of interest
Ordinary Business Matters Exemption • Section 12 ‘representation review’ • Allowances and benefits policy (only if policy treats all members equally) • Training and development policy • Strategic management plan • Annual business plan • Budget • Declaration of rates (other than separate rate) or charge with the character of a rate • Matters already discussed before a subsidiary or committee of the Council (where the interest which arises is the interest of the Council)
Subsidiary and Committee Ordinary Business Matters Exemption • See new Reg 8AAA(1)(h), and 8AAB • Meant to deal with difficulties that Councils, subsidiaries, regional subsidiaries and committees presently face • ‘The relevant interest in the matter is the interest of the Council’
For Members on Committees, Single-council subsidiaries and regional subsidiaries: • An interest which arises at a committee/subsidiary meeting will be ‘ordinary business’ if: – the matter relates to the purpose for which the committee/subsidiary was established; and – The relevant 'interest' is of the Council Note: 'substantial proportion of constituent Councils' test for regional subsidiaries]
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