ANTI-CORRUPTION INSIGHT SERIES
The introduction of the National Anti-Corruption Commission (NACC) has resulted in a considerable shift in what the Commonwealth Government focuses on in managing its operations and functions, an obvious change being increased awareness of the concept of ‘corruption’.
There is no universal definition of corruption. It is a fluid and evolving concept. However, to assist this change in focus from the Commonwealth Government:
- The Commonwealth Fraud and Corruption Control Framework 2024 (Framework)[1] now provides a definition for corruption
- Materials from the NACC Commissioner and other sources have confirmed that conflicts of interest will be the primary focus in targeting corruption at the federal level
In this insight, we look at:
- How ‘corruption’ is defined and why conflicts of interest are being prioritised
- What a ‘conflict of interest’ is
- A strategy to best manage conflicts of interest
The definition of ‘corruption’ and the focus on conflicts of interest
Taking inspiration from the definition of ‘corrupt conduct’ in the National Anti-Corruption Commission Act 2022 (Cth)[2], the Framework defines corruption as:
‘… any conduct that does or could compromise the integrity, accountability or probity of public administration.’ [3]
This is an incredibly broad definition, but it has been deliberately drafted this way to ensure that all kinds of corruption in executing public functions, including new or emerging forms of corruption, can be caught.
However, it is evident that within this broad scope of corruption, the NACC is focused on particular kinds of conduct. In a 23 February 2024 speech the Commissioner for the NACC, The Hon Paul Brereton AM RFD SC, confirmed that conflicts of interest are the NACC’s ‘first focus’ by stating that: [4]
- There is a conflict of interest at the heart of almost every case of corruption
- Conflicts of interest cannot be prevented, so the issue becomes how to effectively identify, understand and manage conflicts of interest to prevent them from developing into integrity issues
- There previously has not been sufficient guidance on conflicts of interest for the public sector
It is not only the NACC that is focused on conflicts of interest, as they are referenced in several key sources by other public sector bodies.[5]
Accordingly, it is critical that public servants gain a clear and thorough understanding of conflicts of interest to ensure that, when they inevitably arise, they do not cause issues down the line. After all, even the most senior of public servants can be caught up in integrity issues stemming from conflicts of interest.[6]
What is a conflict of interest?
In the government context, conflicts of interest arise in any situation where there is, or may appear to be, divergence of interest between a person’s personal interests and their public duties and responsibilities.
There are three kinds of conflicts of interest, which we will illustrate through the following example:
‘A public servant is involved in evaluating tenders as part of a procurement for Department X.
A close relative of the public servant works for a company intending to submit a tender response for the procurement.’
See n 1 above, page 40.
For example, https://www.counterfraud.gov.au/sites/default/files/2024-06/info-sheet-element-5-preventing-fraud-and-corruption.pdf, pages 10 and 11.
DEFINITION
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EXAMPLE
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Example
uses 2
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Actual
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Where a public servant is being influenced by a conflict of interest |
The public servant has discussed the tender evaluation process with their relative outside of official channels |
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Perceived
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Where a third party may form the view that the public servant is influenced by a conflict of interest, whether or not this is actually the case |
It is unclear if the public servant has discussed any part of the tender with their relative |
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Potential
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Where a public servant could be influenced by a conflict of interest |
The public servant and their relative catch up on a regular basis, such that they will meet several times whilst the tender process is on foot |
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As the definition and the types are quite broad, conflicts of interest can easily arise in the day to day operations of the public service and can’t be avoided in some circumstances. Accordingly, it is critical that they are managed effectively.
How do I manage a conflict of interest?
There is a significant amount of guidance available on how to manage conflicts of interest, most of which is tailored towards what a public servant is likely to encounter during the course of their employment. We have highlighted three general tips below which will be critical in effectively managing conflicts of interest.
Identify early
Given how readily conflicts of interest can arise, it is critical that they are identified early so any detrimental effects can be nullified. Substantive and regular training will greatly assist in being able to identify conflicts of interest independently and as they occur. Dedicated conflict of interest policies is a useful supplement in case more tailored guidance is required.
Register clearly
Maintaining an accurate and up-to-date register is critical for ensuring that conflicts do not compromise any departmental processes, whether they are in the past, present or future. This is particularly the case where public servants are required by law to do so. For example, ACT public servants are required by section 9(1)(b) of the Public Sector Management Act 1994 (ACT) to declare or manage conflicts of interests that cannot reasonably be avoided. There is a Conflict of Interest Disclosure Form available to ACT public servants on the ACTPS Employment Portal, which once completed is retained by the relevant business unit or per directorate specific guidelines.[7]
Monitor effectively
Not all conflicts of interest will infect a public servant’s ability to generally do their job. Conflicts can potentially inhibit parts of a public servant’s employment, such as a specific function or dealing with a specific stakeholder. It is prudent to regularly check what conflicts you have identified to see if they no longer cause any issues. Of course, the opposite also holds as it is possible for conflicts you have previously assessed as immaterial to become material at a later stage.
Keen to read more? Please see our previous anti-corruption insight which provided an overview of the NACC’s operations and notable developments in the anti-corruption space one year on from the NACC’s commencement.