COI FAQs for public officials
These FAQs are presented for educational and informational purposes and will be updated periodically. The information provided is general and your own unique situation must be considered in making decisions about conflicts of interest. This guide does not reduce the need for you to obtain your own advice.
Updated January 2020.
Understanding a conflict of interest (COI)
If I am honest, why is a COI a problem?
Even honest public officials may be unintentionally biased by their relationships and interests. In any case, public officials should be held to a high standard which means that they should not self-adjudicate when there may be a COI. To protect both the public official and their agency, COIs must therefore be disclosed and managed.
Do my private interests include the interests of people who are not close to me even though they are relatives, live next door to me or have some other connection to me?
In dealing with COIs, perceptions are extremely important. Even if you have no contact with a cousin or a neighbour, a reasonable person might assume that you could still be inclined to treat them differently from other people; either favouring them because of who they are or, conversely, disadvantaging them because of a rift or other factor.
What is an information barrier, and how do I set one up?
Information barriers (also known as ethics walls and previously called Chinese walls) are a method of protecting information in a COI situation by setting up structures and actions to prevent material being disclosed to a conflicted person. The measures involved in setting up an information barrier should be appropriate to the risks involved and may include elements such as:
- formal written procedures
- physical segregation of people
- securing information
- identifying all people with legitimate access to information
- an education program
- dealing with the potential for informal contact with the conflicted person
- monitoring and dealing with breaches of the information barrier.
Knowing if it’s a COI
Could a small gift give rise to a COI?
It is the relationship with the giver of the gift that causes a COI. Many people assume that because the gift was small there is no relationship and therefore no COI. Research has actually shown that there is a strong tendency for a person to be subconsciously influenced even by a small gift, and for the person typically not to realise that they have been influenced. It is therefore prudent, and appropriate, not to accept even small gifts from people where there is a high-probity expectation, including tenders, inspections and recruitments.
Is a COI affected by how often gifts, benefits or hospitality are given?
A person often builds up a strong relationship with a gift-giver when they are given multiple small gifts. Particularly with frequent small gifts, public officials typically do not want to be affected, but they often unintentionally are. If an official has received frequent, regular or multiple small gifts, they should typically disclose a COI because of the relationship formed. This applies even if they think that they have not been affected by the gifts.
Could accepting hospitality give rise to a COI?
The relationship that arises from accepting hospitality is very sensitive because of perceptions about the effect of hospitality. It is common for people to believe that hospitality is offered to public officials in order to influence them. In addition, your gifts policy should proscribe the acceptance of frequent small gifts that create the perception that a relationship has arisen with the gift-giver. This is particularly the case when the public official deals with the entity that is connected to the provision of hospitality.
Is it always a COI to transact as a public sector official with myself?
Transacting with yourself will involve a COI. For example, if you are deciding whether or not to grant your expenses claim, you have a COI. You should also avoid taking a role in transacting with yourself in order to protect yourself from scepticism if, for example, there is an error or unfavourable review of the matter.
Is it a COI if I ask a contractor from work to do some private work for me?
Depending on the circumstances, yes it could be a COI. For example, it would cause a COI if you supervised the contractor or if the contractor were to believe that you were in a position to help or disadvantage them at work (or influence others to do so). If you prevail on the contractor to undertake private work when your agency is paying for their time, it could be corrupt conduct.
If I have previously worked with someone, do I have a COI if I need to make a decision about them as part of an employment panel or if they want to come back as a contractor?
It depends on how close you were to them. Factors to consider might include how long you worked with them, how close was your desk or other work location to them, how well you got on with them at work and whether you mixed with them out of work. It is important to think about perceptions; would a reasonable person assume you were close enough for your relationship to constitute a personal interest?
What should I do if I am unsure about whether one of my personal interests, such as a distant relationship, constitutes a COI?
It can be difficult to view your own situation from the viewpoint of a detached, objective “reasonable person”. It is therefore recommended that you err on the side of caution and make a disclosure, even if you are unsure.
If a supplier with whom I deal at work offers me a job, is it a COI?
Yes, it could be perceived that you may favour the supplier through your work-related conduct.
COIs can involve relationships with people who are more than acquaintances; how can I tell if someone is “more than an acquaintance”?
Signs that someone is more than an acquaintance include that you and the person are:
- exchanging gifts
- socialising together outside of work
- having close family members regularly socialising together
- regularly communicating on social media
- frequently engaging in conversations at social functions
- working on a fundraising committee together
- playing on the same sporting team.
If everybody knows my COI, do I still have to declare it?
Yes, it is essential that you declare it according to the rules governing the disclosure in your agency. There are many reasons for this. One of the primary reasons is that there is often a tendency, even though it is wrong, for people who have not been informed formally of a COI to ignore that COI. They often do not know the full extent of the COI and, if they do consider it, may vastly underestimate the risks involved and the mitigation measures required.
In order to be dealt with transparently, COIs must be formally declared in accordance with a policy.
Do I need to declare a COI if some other process, such as the secondary employment or gifts and benefits policy, covers my situation?
Yes, you still need to declare a COI in writing to your manager in accordance with the COI rules. This is the case even if certain gifts or benefits are permissible under your policy or code of conduct or you have obtained permission for secondary employment. If you have a COI relating to your secondary employment, permission for that employment should typically be withdrawn.
People know that I come from the industry and have relationships. Do I still need to declare each one?
Yes, you still need to declare your individual COIs. It is not enough to make a general declaration that you have relationships with many people in an industry. Your declaration would need to be more precise and meaningful than that. Some relationships are likely to be close and some are likely to be at the level of acquaintances. You would need to disclose relationships that are more than acquaintances as COIs.
Is it okay to rely on disclosure of an interest to affected and interested parties as a method of managing that COI?
Generally, informing affected and interested parties about a COI should not be relied on as the only way of managing a COI. It is common for managers and affected staff to underestimate the level of bias that can still arise from a COI. Consequently, additional management options are advisable.
Why is a management plan necessary? Shouldn’t we be trusted to put our public duty ahead of our personal interest?
Culturally, there are so many traditions that encourage us to put our personal interests first, including sentiments such as “blood is thicker than water”, “family first”, “be loyal to your friends”, “always return a favour” and “everyone does it so you would be a fool not to”.
We might want to do the right thing but someone, such as a friend or family member, might expect us to favour them and be outraged if we do not. It is also important to remember that a reasonable person may still perceive that a private interest would be favoured, regardless of whether it is.
Consequently, it is essential that your manager determines a formal way to manage a COI that meets probity requirements and withstands scrutiny. A management plan also protects a public official from unreasonable demands from people connected to them.
I have declared a COI and I disagree with my manager’s plan for managing the COI. Do I have to comply?
Yes, as a public official you have an obligation to act with integrity in the public interest and put your agency’s interest ahead of your personal interest. You therefore need to follow your employer’s direction in resolving the COI. This will encourage a high standing for both your agency and yourself.
If I have no formal involvement in the matter that is the subject of the COI, can I still have an informal or behind-the-scenes involvement?
If it has been decided that you should have no involvement in a matter because of a COI, you should have no involvement whatsoever in lobbying, trying to influence colleagues or other entities, or in any way pushing your private interest. You may be allowed to support your private interest as a member of the public acting within the limitations applied to a member of the public. You may not utilise your access to people at or through work or in any way use any special-access abilities.
Can I access confidential or commercially sensitive government information at work that relates to my private interest?
You should not access or use confidential or commercially sensitive information connected to your private interest at work.
If I have a business on the side that conflicts with my public duties, can I still use my agency’s resources at work?
It would be an abuse of your position for you to use your agency’s resources for your private business. Having a COI means that you should not use the resources of your agency for your private interest.
With regard to social media, what should I consider in relation to COIs?
You should be careful not to post any communications, including photographs, which suggest that you are close to a third party with whom you deal at work. An example is not providing statements or comments that others might perceive as endorsements of a supplier’s products or services, or the capabilities of a contractor or similar entity. It is important to think about how your post might be perceived, particularly by those whom you inspect, regulate or purchase from. You should not criticise your agency’s decisions on social media sites connected with the other entity concerned.
Is it okay for a staff member, who is subordinate to me, to decide on how my COI should be managed?
It is not acceptable for a subordinate to decide on actions to manage a COI. There is a significant risk that a subordinate would allow their manager to act in ways that are against the public interest, not because their manager told them to, but because they did not want to risk upsetting their manager. Explicit instructions are not needed in these situations to cause a subordinate to tolerate unethical conduct. Subordinates are typically not allowed to make decisions about their manager’s COIs because such decisions would fail to meet perceptions of fairness.
Dealing with the COIs of contractors
Why does it matter if an organisation undertaking work for us or representing us has a COI?
Your suppliers are entitled to act commercially, however, they should be required to disclose and properly manage any COI that could impact on their performance. For example, public trust in your agency would be undermined if a company conducting inspections on behalf of your agency were unreasonably lenient in the inspection of another company owned by the same shareholders.
Does it matter if a contractor puts one of our public officials in a COI position?
Yes, this matters. Putting public officials in a COI situation undermines your agency’s ability to act with integrity, and potentially reduces the public’s trust in your agency. For example, if a contractor offered a well-paid comfortable job to an official on a tender panel, there would be a legitimate concern that the contractor expected the official to favour them in the award of the tender.
Should funding and grant agreements address COIs?
In many cases, it is appropriate to have clauses in the contract governing the funding or grant, especially if there is potential for resources to be misused, operations to be affected or a perception that it is inappropriate for the entity to have a COI. In addition, there should generally be a statement of business ethics or similar document covering integrity matters.
Understanding COI processes and structures
Should COIs be addressed in our risk management strategy?
Risk managers should ensure that strategic, operational and project risk assessments have adequately considered the risks associated with COIs, including their mitigation. In many cases, serious, undeclared or poorly managed COIs have resulted in significant reputational damage, compensation and other financial losses, senior management distraction, impairment to operations and undermined the implementation of strategies.
What role does internal audit have in the relation to COIs?
Internal audit should undertake sufficient work to obtain assurance that the structure and processes established by your agency are adequate to deal with COIs and that there is a genuine culture of compliance. This would usually include periodic reviews of COI declarations and management plans to assess whether the declarations appear adequate, complete and accurate, and that the management actions have been followed and monitored.
Audit activities should also include whether the COI policy is easily accessible and has been appropriately distributed, and whether staff have received adequate training.
Updated December 2019.