Gifts and benefits
The public rightly expects that government employees in NSW exercise their duties impartially and in a transparent manner, without any perceived undue influence. The offering and acceptance of gifts, benefits and hospitality is one of many red flags of corruption and presents a considerable risk to public sector authorities.
The NSW Public Service Commissioner’s directive 1 of 2014, Managing Gifts and Benefits: Minimum Standards requires relevant agency heads to implement minimum standards for the management of gifts and benefits in the NSW government sector.
Part 6 of The Model Code of Conduct and Procedures 2020 outlines how offers of gifts, benefits and hospitality are to be dealt with by council officials. Similarly, the NSW Government Supplier Code of Conduct makes explicit that suppliers must not at any time offer or provide any financial or non-financial benefits to NSW public officials.
While entities have their own policies, procedures and guidelines, which may vary in their prescriptiveness, the following overarching rule applies to all.
Public officials should not solicit or accept any gifts, benefits or hospitality that could be perceived as intended to influence them, or if they are more than token value. Offers of money in any form should never be accepted.
Perceptions are often at the core of deciding whether to accept an offer. Key issues to consider include: what is the perceived intention of the giver, and what would a reasonable member of the community perceive of a public official accepting a gift, benefit or hospitality (especially those most adversely affected, such as an unsuccessful tenderer)?
What are gifts, benefits and hospitality?
A gift or benefit is anything of value. It may be considered any item, service, prize, hospitality or travel offered by a person or other entity that has an intrinsic value and/or a value to the recipient, a member of their family, relation, friend or associate. It includes gifts or benefits from, for example, contractors, customers, clients, applicants, suppliers, potential suppliers or external organisations.
Hospitality is the reception and entertainment of guests. It includes refreshments or a service provided or promised to be provided by an individual or organisation to another.
In considering the value of a gift, benefit or hospitality, it is the highest of:
- the cost to the giver
- the retail or replacement cost of the gift, benefit or hospitality
- the value of the gift or benefit to the recipient.
Public officials should be mindful of the cumulative value of gifts, benefits and hospitality. For example, the cost of multiple coffees offered over the course of a year is likely to exceed an agency’s nominated monetary threshold for acceptance.
There are a number of general risks associated with gifts, benefits and hospitality. They include:
- the perception that public officials might be unduly influenced or open to bribery
- peoples’ tendency to feel a sense of indebtedness and reciprocate when they are given something, even where the gift, benefit or hospitality is of a modest value
- the conflict of interest that could be created between a public official’s duty and their personal interests because of the relationship with the gift-giver that could form
- the possibility of benefitting some individuals or organisations through influenced or unjust decisions, while unfairly disadvantaging others
- the risk a public official is compromised once they have accepted a gift (for example, they could be subject to threats of exposure unless they continue to provide preferable treatment to the giver)
- the potential for an organisation’s independence and reputation to be brought into disrepute.
There are also specific risks that relate to a public official’s work. Roles that have broad discretionary powers, and/or involve functions such as regulation, procurement, contract management and revenue collection, have high levels of risk attached to them. Public officials working in high-risk areas should decline any offers of gifts, benefits or hospitality, even when they have a low value.
To avoid any doubt, agencies should also take steps to inform relevant third parties, such as contractors and subcontractors, that the offering and acceptance of gifts, benefits and hospitality will not be tolerated. Agencies should also provide information to these groups about where to report attempts by public officials to facilitate such contributions.
Grey areas and guiding principles
While guidance around offering and receiving gifts, benefits and hospitality may seem straightforward, different circumstances can give rise to scenarios that require careful consideration. The Commission acknowledges there are some grey areas and has prepared some guiding principles below to help public officials and managers work through them.
- What does my agency policy say about gifts, benefits and hospitality?
- Does the policy include a token monetary threshold, allowing low-value items to be accepted (for example, $25)?
- Am I in a high-risk or sensitive role (for example, procurement, audit or regulation)?
- What perceptions would arise if I accepted the offer?
- Would accepting a gift, benefit or hospitality bring my agency into disrepute?
- Would refusal cause public embarrassment for an agency (for example, when gifts are offered in a ceremonial context by an overseas delegation)?
- Would accepting a gift, benefit or hospitality potentially foster a relationship that may give rise to a conflict of interest or a sense of obligation?
- Does the offer relate to my public office or is it more widely available to others?
| Example: upgrade
Aisha has to travel interstate for agency business. She books a flight with the agency’s contracted carrier and, upon check-in, realises she has been upgraded to business class. The airline’s contract expires at the end of the financial year after which time a new tender will be released. Aisha manages the business unit responsible for managing the forthcoming tender and the airline contract.
Applying the principles
Aisha’s role is high risk because she works in the area that manages the airline’s contract. Accepting the upgrade could create a perceived sense of indebtedness and it would be appropriate for Aisha to decline the offer in this circumstance.
Example: door prize
Felix attends a work-related conference with the support and approval of his manager. The focus of the conference is within his agency’s purview and relevant to Felix’s project. He attends dinner on the first day, which is included in the overall cost of the ticket. Unbeknown to Felix, all dinner attendees are automatically entered into a raffle. He wins third prize and receives two Gold Class movie tickets.
Applying the principles
The gifts, benefits and hospitality policy at Felix’s agency states that employees should not accept gifts of more than $25 in value in a single instance. Combined, the tickets retail for just less than $90. The tickets remain the property of Felix’s agency because he attended the conference in an official capacity. He advises his manager, who in consultation with management, determines the way in which the tickets will be disposed.
Hua is presenting on behalf of her agency at a council sister-city ceremony attended by the mayor and the minister for local government. At the end of her speech, she is presented with a gift. The gift has cultural significance and to refuse would likely be considered a slight to the person offering the gift.
Applying the principles
Since the gift is culturally significant, it would be offensive to refuse it in this circumstance. The appropriate course of action for Hua would be to accept the gift in the moment, return it to the office and advise management, which will determine how it will be used. Such gifts typically become the property of the agency and may be placed on display.
Example: the basis for the offer
Ahmet is a public official working in a large town centre. The local cafe on the ground floor of his building offers a 10% discount to all local office workers between 3pm and 4 pm.
Applying the principles
The benefit is clearly unrelated to Ahmet’s public role and is widely available to others. Acceptance of the discount would not raise any probity concerns.
Refusing gifts, benefits and hospitality
Public officials should always be mindful that people might want to cultivate a relationship with them because of their role. The best course of action is to politely refuse any gifts, benefits or hospitality unless the above principles can be confidently worked through and the conditions enabling acceptance can be met.
Gifts, benefits and hospitality that do not meet the criteria of an agency’s policy or code of conduct should be refused, no matter how insistent the person making the offer. Such offers should also be declared or otherwise reported to management. As a general rule, the intended recipient of a gift, benefit or hospitality should not determine whether to accept or refuse. It is preferable for a manager or other designated officer to make the determination, which should be documented.
Most agency policies specify a token value, which allows staff to consider accepting low-value items. This is designed to permit normal business courtesies such as tea or coffee, which are unlikely to have an improper, influencing effect. However, agencies should be wary of gifts that might be incorrectly valued at below the permitted token amount.
If gifts are provided in a way that is not possible for them to be returned, public officials should make a declaration or other form of written record for their manager of the circumstances surrounding the receipt of the gift and how it was handled. After consultation with management, the gift might be donated to charity, disposed of, auctioned to staff or used as a raffle prize.
Following are examples of occasions where gifts and benefits should be refused.
Example: offers from suppliers
A supplier wishes to thank Matteo for his efforts in managing a project to its successful completion. The supplier had meant to organise an official gift on behalf of the company but has pressing matters and needs to be elsewhere. He reaches into his wallet, gives Matteo $20 cash and tells him to shout his girlfriend a couple of drinks.
Applying the principles
Accepting cash in any form is never appropriate. It is also not acceptable for public officials to accept gifts from suppliers. Matteo should refuse the money and report the offer to management.
Example: product offers from tenderers
Lisa is sitting on a tender panel for a large government contract in relation to office supplies. One of the tenderers offers Lisa free product samples including packs of pens and notepads embossed with her agency’s logo.
Appropriate course of action
Lisa should not accept the offer because doing so could raise issues of perceived favouritism or bias. Lisa should immediately disclose the offer to management, the chair of the tender committee and the probity auditor associated with the tender panel.
Gifts, benefits, hospitality and bribes
Corruptly receiving a gift or benefit is an offence under both the common law and NSW legislation. The offence extends to the offering or seeking of a gift or benefit.
If public officials are offered a gift or benefit where they believe the intention of the person was to bribe them or influence the way they work, they must report it immediately to their manager and/or in accordance with their agency’s reporting procedures.
Under section 11 of the Independent Commission Against Corruption Act 1988, the head of the agency concerned must inform the ICAC about any matter that they suspect on reasonable grounds may concern corrupt conduct.
The reporting agency should also consider exactly how future relations should be conducted with the person or other entity who offered the gift, benefit or hospitality.
Support for decision-making
A flow chart on gifts, benefits and hospitality has been designed to help public officials decide whether to accept, declare, or refuse gifts. Further information is also provided in an accompanying YouTube video on gifts, hospitality and bribes. It is important public officials consult their agency’s code of conduct for requirements such as nominated monetary thresholds and declaration requirements.
Updated July 2021