Local Government Bill 2018

Division 2—Conflict of interest

Clause 164 subclause (1) contains definitions relevant to the conflict of interest provisions in this Division.

Subclause (2) states that a relevant person has a conflict of interest if they have either a general conflict of interest or a material conflict of interest.

A relevant person, being a person to whom the conflict of interest provisions apply, is defined to be a Councillor, member of a delegated committee or a member of Council staff.

The definitions of general conflict of interest and material conflict of interest are set out in clauses 165 and 166.

Clause 165 defines a general conflict of interest. A relevant person has a general conflict of interest—

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  when they have a private interest in a matter, being an interest that doesn't derive from their public duty as a Council official; and
  

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  where an impartial, fair minded person would consider that their private interest could result in them acting contrary to their public duty.
  

General conflict of interest is intentionally not defined in specific terms and relies on what a reasonable person would consider to be a conflict of interest. A failure to disclose a general conflict of interest under clauses 168 or 169 is not a criminal offence but it may be subject to disciplinary action, including through a Councillor Conduct Panel.

Clause 166 defines a material conflict of interest. This definition is intentionally specific and a failure to disclose a material conflict of interest when required under clause 168 is a criminal offence that may be prosecuted in a Court.

Subclause (1) provides that a relevant person has a material conflict of interest if an affected person stands to gain a benefit or suffer a loss depending on the outcome of the decision or action.

Subclause (2) states that the benefit or loss may be direct, indirect, pecuniary or non-pecuniary.

Subclause (3) describes who are affected persons for the purpose of subclause (1). An affected person includes the person with the conflict of interest. It also includes a member of that person's family, a body corporate of which they or their spouse are a director, their employer or business partner and any person from whom they have received a disclosable gift.

Clause (4) defines a disclosable gift for the purpose of subclause (3). It includes disclosable election campaign donations.

Clause 167 specifies a number circumstances where a conflict of interest does not arise. These exemptions apply to both general and material conflicts of interest.

This clause includes provision for Regulations to be made to exempt Councillors from conflicts of interest when making particular types of decisions or in particular circumstances. This is intended to allow certain decisions to be made by the elected Councillors where it would be unreasonable to exclude them, such as electing the Mayor or approving municipal rates and service charges.

Clause 168 describes the requirements for the disclosure of conflicts of interest and the consequences that follow from a failure to comply.

Subclause (1) describes the circumstances when a conflict of interest must be disclosed under this clause. This includes in Council and delegated committee meetings as well as in the exercise of a delegation or statutory function by a member of Council staff.

Subclause (2) describes the action that must be undertaken by a person with a conflict of interest. The person must disclose the conflict of interest in the manner required by the Council's Governance Rules and exclude themselves from the decision or action. It is intended that the specific procedures that should be followed to give effect to these requirements in Council and committee meetings will be a matter for each Council to determine and include in its Governance Rules. Similarly, the procedures to be followed by members of Council staff will be up to the CEO to determine.
Subclause (3) provides that a failure to comply with subclause (2) will be an offence if the failure relates to a material conflict of interest. This means that any relevant person specified in clause 164 may be prosecuted for failing to disclose a material conflict of interest and/or exclude themselves from the decision or action.

Subclause (4) provides that it will also be an offence for a Councillor to fail to comply with subclause (2) in regard to a general conflict of interest if the Councillor has been previously subject to a specified finding by a court or a Councillor Conduct Panel regarding a conflict of interest.

Subclause (5) provides that a Councillor who fails to comply with subclause (2) in regard to either a general or material conflict of interest may be subject to proceedings in a Councillor Conduct Panel for serious misconduct under clause 188. Clauses 192 and 193 ensure a Councillor cannot be subject to both a court prosecution and a Councillor Conduct Panel for the same failure.

Subclause (6) provides for the Mayor to notify the Chief Municipal Inspector if the failure to comply with subclause (2) is by the CEO. The Chief Municipal Inspector has powers under clause 217 to investigate breaches.

Subclause (7) provides for the CEO to notify the Chief Municipal Inspector if the failure to comply with subclause (2) is by another member of Council staff. The CEO must also deal with the matter in accordance with the staff Code of Conduct under clause 48.

Subclause (8) provides that if the failure to comply with subclause (2) is by a member of a delegated committee, other than a Councillor or staff member, the CEO must notify the Council and recommend action to be taken.

Clause 169 provides that a Councillor in a meeting conducted under the auspices of the Council, other than a Council or delegated committee meeting, must disclose a conflict of interest. The Councillor is required to act in accordance with the Council's Governance Rules having declared the conflict of interest.
This provision is intended to apply to non-decision-making meetings, such as advisory committees and briefings.

A failure to comply with the provisions of this clause will be grounds for an application to a Councillor Conduct Panel for a finding of serious misconduct under clause 188.