Australia: Belcarra legislation aims to make major changes to conflict of interest rules for Queensland local councillors

Proposed legislation implementing recommendations of the Crime and Corruption Commission's 'Operation Belcarra' report would result in major changes to the conflict of interest rules governing Queensland's local government councillors.

On 12 October 2017, the Queensland Government introduced the Local Government (Implementing Belcarra) and Other Legislation Amendment Bill 2017 (Qld) (Bill) into Parliament.

The Bill seeks to implement recommendations of the Crime and Corruption Commission (CCC), arising from the CCC's recent 'Operation Belcarra' inquiry into local government corruption and integrity issues.

While it is the Bill's proposed ban on developer donations that has drawn the most media attention, the Bill also proposes major changes to the conflict of interest rules governing Queensland's local councillors.

Local government councillors and officers need to be aware of these changes, as they will have important consequences for how local governments manage councillor conflicts of interest.

PROBLEMS WITH THE CURRENT FRAMEWORK

The CCC's Operation Belcarra inquiry identified inconsistent views and widespread confusion among councillors regarding how to appropriately manage conflicts of interest.1 In part, the CCC considered that this was due to the open-ended (and often unclear) requirements of the current legal framework.2

The current framework under the Local Government Act 2009 (Qld) (LGA) (and the equivalent City of Brisbane Act 2010 (Qld)) distinguishes between 'material personal interests' and other 'conflicts of interest'.

For material personal interests, the rules are reasonably clear. A councillor will have a material personal interest in a matter to be discussed at a local government meeting if the councillor or certain related persons (eg a spouse or employer) will gain a benefit or suffer a loss, directly or indirectly, from the matter.3 If a councillor has a material personal interest, they must "inform the meeting of" the interest and, generally, leave the room while the matter is discussed and voted on.4

The rules for other conflicts of interest, however, are far more open-ended.

A councillor will have a conflict of interest in a matter if there is a conflict between their personal interests and the public interest that might lead to a decision that is contrary to the public interest.5

If a councillor has, or could reasonably be taken to have, a conflict of interest in a matter to be discussed at a local government meeting, the LGA's key requirement is merely a broad obligation to deal with the conflict in "a transparent and accountable way".6 The councillor is required to "inform the meeting of" the councillor's relevant interests, and how they intend to deal with the conflict, but dealing with the conflict is otherwise left to the councillor's individual discretion7.

The LGA also expressly allows a councillor with a conflict of interest to participate in a meeting, including by voting, if their attendance is necessary to form quorum.8 This has proved particularly problematic in circumstances where multiple councillors are affected by the same conflict. An example of this would be if multiple councillors campaigned as a group, and received a campaign contribution from a person whose interests then arose at a local government meeting. In such circumstances, if necessary to make quorum, the group of councillors could vote on the matter despite the potential conflict, potentially even constituting a majority of votes.

Given these weaknesses in the current framework, it is perhaps unsurprising that the CCC concluded that the "key problem underlying the failure of some councillors" to appropriately manage conflicts of interest is that the LGA provides a broad discretion for managing conflicts, but little guidance as to the exercise of that discretion.9

WHAT REFORMS DOES THE BILL PROPOSE?

In media and political commentary around councillors conflicts, it is often suggested that councillors affected by conflict issues should simply be prohibited from any involvement in decision-making relating to the conflict.

While this may have some initial appeal, a blanket prohibition would be an overly simplistic response. As the CCC has recognised,10 such an approach could undermine the responsibility of councillors to act as political representatives by participating in local government decision-making.

This highlights the tension in providing a legal framework that maintains the integrity of local government decision-making, while also allowing councillors to continue in their roles as elected representatives.

The CCC's recommendations, and the Bill, seek to overcome this tension through a balanced approach – not imposing a blanket prohibition on involvement in decision-making, but still providing for a more rigorous framework.

5 KEY CHANGES PROPOSED BY THE BILL

Outlined below are 5 key elements of the Bill's proposed amendments to the conflicts regime.

  1. More detailed disclosure. The Bill would expand the LGA's disclosure obligations by requiring more detailed disclosure about material personal interests and other conflicts of interest. For a material personal interest, this would include details about the nature of the benefit or loss and, where the interest relates to a person other than the councillor, the councillor's relationship to the person.11 For other conflicts of interest (i.e. other than material personal interests), the disclosure would need to include particulars about the nature of the interest and, if the conflict relates to a gift from or relationship with another person, the name of the person and details about the gift or relationship.12
  2. Consideration of conflicts by other councillors. The Bill would remove the LGA's broad discretion for councillors to decide how to manage their own conflicts of interest. Instead, the Bill proposes a new process whereby if an affected councillor decides not to leave a meeting after disclosing a conflict of interest, the other councillors would need to decide whether the councillor must leave, and not participate in, the meeting.13
  3. Delegation in cases of majority conflicts. As noted above, the LGA allows councillors to participate in decision-making, despite a conflict of interest, where necessary for quorum, even if a majority of councillors are affected by the conflict. The Bill would address this by requiring that, if a majority of councillors are affected by a conflict (or a material personal interest), the decision must be delegated to the local government's chief executive officer.14
  4. Obligations to report on other councillors. In its Operation Belcarra report, the CCC identified that public confidence is undermined where one councillor remains silent about another's conflict of interest.15 To address this, the Bill would require a councillor to inform the chair of a meeting if they suspect, on reasonable grounds, that another councillor has an undisclosed material personal interest or conflict of interest.16 In turn, the Bill would make it an offence for the conflicted councillor to take any retaliatory action against the other councillor.17
  5. Prohibition on improper influencing. The Bill would also introduce new offences prohibiting a councillor who has a material personal interest or conflict of interest in a matter from influencing (or attempting to influence):
    • other councillors at local government meetings (including of committees); and
    • local government employees or contractors authorised to decide or deal with the matter.18

LOOKING FORWARD

If enacted, the changes proposed in the Bill would strengthen Queensland's framework for managing local government councillor conflicts of interest.

While this reform is welcome, Queensland's local governments will need to ensure that their councillors understand their new obligations and responsibilities, and this may require clarification of some aspects of the Bill.

The proposed new influencing offences are likely to prove particularly challenging, as the Bill does not define 'influence', and there may be disagreement as to what constitutes influencing or attempting to influence a councillor or employee/contractor. If interpreted too broadly, or approached in an overly-cautious way, there is a risk that the offences may have an unintended 'chilling effect' that causes councillors to be less active in their roles as elected representatives.

On the other hand, the anti-influencing offence relating to other councillors may be too narrow in some respects. The offence for local government employees and contractors applies broadly where the employee or contractor "is authorised to decide or otherwise deal with the matter".19 In contrast, the offence relating to other councillors only applies to influencing "at a meeting of the local government or any of its committees".20 This means that it would not apply in many other circumstances where one councillor may seek to influence others.

Accordingly, while the Bill's more transparent and clearer regime would generally be a positive outcome, some clarification may be necessary. Local governments will need to carefully consider how they go about ensuring that their councillors understand, and are able to comply with, the new requirements.

Footnotes

1 CCC, "Operation Belcarra: A Blueprint for integrity and addressing corruption risk in local government", October 2017, available at http://www.ccc.qld.gov.au/corruption/operation-belcarra-public-hearing/report/operation-belcarra-a-blueprint-for-integrity-and-addressing-corruption-risk-in-local-government.pdf (Belcarra Report), pages 81-2.

2 Belcarra Report, page 82.

3 LGA, section 172(2).

4 LGA, section 172(5).

5 LGA, section 173(2).

6 LGA, section 173(4).

7 LGA, section 173(5).

8 LGA, sections 173(6) and (7).

9 Belcarra Report, pages 82-3.

10 Belcarra Report, page 83.

11 Bill, clause 24 (section 175C(2)).

12 Bill, clause 24 (section 175E(2)).

13 Bill, clause 24 (sections 175E(3) and (4).

14 Bill, clause 24 (sections 175C(3) and 175E(6))

15 Belcarra Report, page 84.

16 Bill, clause 24 (section 175G(2)).

17 Bill, clause 24 (section 175H).

18 Bill, clause 24 (sections 175I(1) and (2)).

19 Bill, clause 24 (section 175I(2)).

20 Bill, clause 24 (section 175I(1)).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions