Corruption Matters - May 2019 | Issue 53

Home > What happens when private interest becomes personal advantage?

What happens when private interest becomes personal advantage?

There are hundreds of thousands of people working in, and for, the NSW public sector. It is almost certain, therefore, that an official’s personal interest will conflict with their public duty at some point during their tenure. Knowing how to identify, disclose and manage a conflict of interest is paramount, and a new ICAC publication helps agencies do just that.

“Experience has taught us that most forms of corrupt conduct involve a conflict of interest which has been concealed, understated, mismanaged or abused,” says Lewis Rangott, ICAC Executive Director, Corruption Prevention. “Of course, a conflict of interest is not in itself corrupt; the issue is how it’s handled or not handled.”

“It is essential that employees – and, importantly, suppliers, volunteers and contractors – working for, and within, the public sector understand what constitutes a conflict of interest and what responsibilities we have.”

There are four elements to consider when determining whether a conflict of interest exists.

• Does the person have a personal interest?
  
  
• Does the person have a public duty?
  
  
• Is there a connection between the personal interest and the public duty?
  
  
• Could a reasonable person perceive that the personal interest might be favoured?

The reasonable-person test helps determine how a hypothetical, fair-minded and informed observer would decide whether there is a conflict of interest. A conflict of interest does not necessarily exist because of one person’s opinion; the situation must be assessed objectively.

“Conflicts of interest should always be declared promptly and in writing,” says Mr Rangott. “Most agencies require disclosures to be made to their manager and recorded in a central register. Each conflict of interest is then managed and monitored appropriately.” 

The new publication, Managing conflicts of interest in the NSW public sector, sets out a broad control framework for public sector agencies to consider.

Tips to minimise risk

• Establish a conflicts of interest policy.
  
  
• Identify and manage vulnerable units and branches.
  
  
• Avoid unnecessary conflicts of interest.
  
  
• Disclose personal interests and conflicts of interests.
  
  
• Manage and monitor conflicts of interest.
  
  
• Be proactive.
  
  
• Evaluate and audit the control framework.
  
  
• Deal with breaches.