Review for councils compliance with Code of Conduct Inspectorate review for councils’ compliance with Code of Conduct

Introduction

1. In October 2015, the Local Government (Improved Governance) Act 2015 amended the Local Government Act 1989 (Act) to provide the additional requirement that all incoming councillors must read their council’s Code of Conduct (Code) and make a declaration that they will abide by it. The reforms contained in this legislation had the broad aims of strengthening governance and leadership within the sector by providing councils with the capacity to manage and resolve poor conduct by individual councillors. The changes gave councils a clear role by establishing and creating a compliance mechanism to ensure adherence to their own Code.

2. The amendments to the Act required that a council must review and make any necessary amendments to their current Code within four months of 1 March 2016. This must be done by calling a special meeting solely for the purpose of reviewing the Code.

3. Within one month of any amendment being made to the Code, all councillors must make a declaration stating that they will abide by the revised Code. This declaration must be in writing and witnessed by the Chief Executive Officer.

4. In order to provide transparency and public access the Code must be made publicly available on the council’s website as soon as practicable after it is adopted.

5. The need for all councillors to commit and abide by the Code was reinforced by changes to the Act legislating that a failure to make a declaration to abide by the Code within the relevant time period is grounds for disqualification as a councillor under section 29. This disqualification provision comes into effect on 1 September 2016.

Review objective

Due to the significance and importance of the Code in underpinning the integrity and good governance of councils, on 19 July 2016, the Inspectorate commenced a review to determine councils’ compliance with the provisions of section 76C of the Act. This review was conducted in two stages:

Stage 1 – Sections 76C(1), 76C(2), 76C(3) and 76C(6)(c)  Review of council meeting minutes and policies contained on council websites to determine whether: (1) each council had held a Special Meeting by 4 July 2016, for the sole purpose of reviewing and adopting a Code; (2) each Code contained an internal resolution procedure for dealing with an alleged contravention of the Code by a councillor; and (3) each Code was available on each council’s website.

Stage 2 – Sections 76C(6A) and 76C(6B)  Request councils to provide evidence that each councillor, within one month of the adoption of the amendments to the Code, had made a declaration that they will abide by it. The councillors declarations must to be in writing and witnessed by the CEO.

Inspectorate findings

Stage 1 6. The review of the information contained on the websites on all Victorian councils found that all councils had adopted their revised Code, albeit with five councils not meeting strict compliance. Three councils - Hepburn, Towong, and Yarriambiack Shire Councils - adopted their Code after the specified date of 4 July 2016. Central Goldfields Shire Council adopted their Code at an ordinary council meeting and Buloke Shire Council adopted their Code on 17 February 2016, before the commencement of the legislation. See Table B.

7. The failure to meet the strict requirements of the legislation does not necessarily invalidate the Code but demonstrates shortcomings in governance or administrative processes. The Inspectorate has concerns that should a council or the State seek to invoke a provision of the code for an individual breach or invoke the disqualification provisions, there may be grounds to challenge any action based on the legitimacy of the Code adoption. The Inspectorate will write to those councils to reinforce them of the statutory requirements and that the adoption of the Code following the 2016 general elections will be monitored.

8. The review also found that all councils had included an internal resolution process to deal with alleged contraventions of the Code as is now required. The majority of councils had published the Code on their external-facing websites. Inspectorate staff liaised with seven councils to ensure they met the requirements of the legislation and provided transparency to their community by publishing their Codes. As at the date of this report, the Inspectorate is satisfied that all Victorian council websites contain their respective Codes.

Stage 2 9. On 2 August 2016, the Inspectorate wrote to all council CEOs requesting that they provide evidence of the written declarations of each councillor. These declarations were required to be in writing and witnessed by the CEO.

10. The Inspectorate found that 54 councils were fully compliant with the provisions of sections 76C(6A) and 76C(6B) of the Act. Each councillor had made a written declaration witnessed by the CEO within one month of the adoption of the Code, stating they would abide by the Code. The Inspectorate noted that councils currently being overseen by administrators - City of Brimbank, City of Greater Geelong and Rural City of Wangaratta councils - provided declarations signed by each of the administrators and witnessed by the CEO within one month of adopting an updated Code. A list of the fully compliant councils is shown in Table A.

11. The remaining 25 councils demonstrated varying degrees of non-compliance with the Act by either the entire council group or individual councillors.

12. The Inspectorate has received information and material to demonstrate the entire councillor groups of City of Ballarat, Central Goldfields Shire, City of Frankston and Mount Alexander Shire councils have not made written declarations witnessed by the CEO to abide by the Code within one month of its adoption.

13. Nine councils - Benalla Rural City, Campaspe Shire, Cardinia Shire, City of Greater Shepparton, City of Hobsons Bay, Moyne Shire, Borough of Queenscliffe, West Wimmera Shire and City of Wyndham - have provided signed endorsements from all of their councillors of the updated Code. These did not contain declarations that the councillor would “abide” by the Code and the process followed reflects usual practice of councils when adopting or endorsing policies and not the specific legislated process for the Code.

14. The review found four councillors who have either refused to make a declaration or have made representation they have made a declaration unwillingly. Councillor Buckley from East Gippsland Shire Council has refused to make the declaration and Councillor Chapman from Greater Bendigo Shire Council signed with the letters “V.C.” before the signature which is understood to be an abbreviation for the Latin term vi coactus meaning ‘under constraint’. In addition, the CEO did not witness this declaration. Councillor Fraser from Mornington Peninsula Shire Council and Councillor Sullivan from Moorabool Shire Council made representations as part of the declaration that the declaration was not made willingly.

15. A further five councillors from various councils have not made the declaration within the legislated timeframe of one month after their respective councils adopted the Code.

16. Information regarding councils whose entire councillor group is non-compliant with sections 76C(6A) and section 76C(6B) is shown in Table C.

17. Information regarding each council who has at least one councillor who is non-compliant with sections 76C(6A) and section 76C(6B) is shown in Table D.

Outcomes

18. In accordance with the Act, the Inspectorate finds that Ballarat, Central Goldfields, Frankston and Mount Alexander councils have all failed to meet the requirements of the legislation and as of 1 September 2016, all councillors of those councils will be disqualified.

19. In addition, the Inspectorate finds that Benalla, Campaspe, Cardinia, Shepparton, Hobsons Bay, Moyne, Queenscliffe, West Wimmera and Wyndham councils have endorsed or adopted their Code but there is no evidence of each councillor making the declaration to abide by it. The Inspectorate is of the view the provisions in the legislation requiring a councillor to make a declaration to abide by the Code is separate to the adoption or endorsement of the policy and expressly clear in the Act. Accordingly, the Inspectorate is of the opinion that all councillors from these nine councils have not met the requirements of the legislation and will be disqualified as of 1 September 2016.

20. The Inspectorate notes that the disqualification of all councillors will necessitate the appointment of administrators for a seven week period until the 2016 general council elections are decided.

21. The Inspectorate review determined that nine individual councillors have not met the requirements of the legislation with Councillor Buckley from East Gippsland electing not to make the declaration to abide by the Code and Councillor Chapman from City of Greater Bendigo, Councillor Fraser from Mornington Peninsula Shire Council and Councillor Sullivan from Moorabool Shire Council making representations as part of the declaration that the declaration was not made willingly. Noting that Councillor Chapman also did not make the declaration before the CEO as required by the legislation.

22. Councillor Zographos from City of Monash, Councillor Teti from City of Moreland, and Councillors Murphy and Power from Baw Baw Shire Council all made the declaration outside of the required time and accordingly will be disqualified as of 1 September 2016. 23. Councillor Battista from Southern Grampians Shire Council made the declaration within the timeframe but before the council Governance Coordinator, not the CEO as required in the legislation. Accordingly, as of 1 September 2016 he will be disqualified.

Table A

The Inspectorate has established that a significant majority of councils were fully compliant with section 76C of the Act.

Each of the councils listed on table A below were fully compliant. They adopted their Code by 4 July 2016 and each councillor has made a written declaration to abide by the Code. Moreover, each has done so within a month of the adoption of the Code and has had it witnessed by the CEO.

1. Alpine Shire Council 29. Maribyrnong City Council 2. Ararat Rural City Council 30. Maroondah City Council 3. Banyule City Council 31. Melbourne City Council 4. Bass Coast Shire Council 32. Melton Shire Council 5. Bayside City Council 33. Mildura Rural City Council 6. Boroondara City Council 34. Mitchell Shire Council 7. Brimbank City Council 35. Moira Shire Council 8. Casey City Council 36. Moonee Valley City Council 9. Colac Otway Shire Council 37. Murrindindi Shire Council 10. Corangamite Shire Council 38. Nillumbik Shire Council 11. Darebin City Council 39. Northern Grampians Shire 12. Gannawarra Shire Council Council 13. Glen Eira City Council 40. Port Phillip City Council 14. Glenelg Shire Council 41. Pyrenees Shire Council 15. Golden Plains Shire Council 42. South Gippsland Shire Council 16. Greater Dandenong City Council 43. Stonnington City Council 17. Greater Geelong City Council 44. Strathbogie Shire Council 18. Hindmarsh Shire Council 45. Surf Coast Shire Council 19. Horsham Rural City Council 46. Swan Hill Rural City Council 20. Hume City Council 47. Wangaratta Rural City Council 21. Indigo Shire Council 48. Warrnambool City Council 22. Kingston City Council 49. Wellington Shire Council 23. Knox City Council 50. Whitehorse City Council 24. Latrobe City Council 51. Whittlesea City Council 25. Loddon Shire Council 52. Wodonga City Council 26. Macedon Ranges Shire Council 53. Yarra City Council 27. Manningham City Council 54. Yarra Ranges Shire Council 28. Mansfield Shire Council

Table B

This table identifies councils who did not meet strict compliance when adopting their revised Codes.

COUNCIL ISSUE Buloke Shire Council Council adopted policy on 17 February 2016, before the commencement of the legislation.

Central Goldfields Council adopted policy at an ordinary meeting of council, not a Shire Council special meeting for the sole purpose of adopting the revised Code. Hepburn Shire Council Council adopted policy on 19 July 2016, after the specified date of 4 July 2016.

Towong Shire Council Council adopted policy on 5 July 2016, after the specified date of 4 July 2016.

Yarriambiack Shire Council adopted policy on 13 July 2016, after the specified date of Council 4 July 2016.

Table C

While most councils were compliant with the legislation there were a range of administrative and process shortcomings that impacted on some other councils’ ability to comply. The table below lists these councils and provides explanation as to why they failed to fully comply.

COUNCIL ISSUE Ballarat City Council Declarations:  Not completed by councillors.  Not witnessed by CEO.  Not made within one month of the Code being adopted.

Benalla Rural City Council  All councillors signed an endorsement of the Code; not a declaration to abide by it.  Two councillors did not sign the endorsement within one month of the code being adopted.

Campaspe Shire Council  All councillors signed an endorsement of the Code; not a declaration to abide by it.  Endorsement of Code not witnessed in writing by the CEO.

Cardinia Shire Council  All councillors signed a “commitment to the Principles”; not a declaration to abide by the Code.

Central Goldfields Shire Declarations: Council  Not made within one month of the Code being adopted.

Frankston City Council Declarations:  Not witnessed by the CEO  Not made within one month of the Code being adopted.

Greater Shepparton City  All councillors signed an endorsement of the Code; Council not a declaration to abide by it.

Hobsons Bay City Council  All councillors signed an endorsement of the Code; not a declaration to abide by it.

Mount Alexander Shire Declarations: Council  Not completed by councillors.  Not witnessed by CEO.  Not made within one month of the Code being adopted.

Moyne Shire Council  All councillors signed an endorsement of the Code; not a declaration to abide by it. Borough of Queenscliffe  All councillors signed an endorsement of the Code; Council not a declaration to abide by it.  Endorsement of Code not witnessed in writing by the CEO.

West Wimmera Shire  All councillors signed an endorsement of the Council Code; not a declaration to abide by it.

Wyndham City Council  All councillors signed to “reaffirm their commitment to the Code”; not a declaration to abide by it.

Table D

While we acknowledge the efforts of the majority of councils and councillors to comply with the requirements of the Act, the table below sets out the particular circumstances of individual councillors who have not met the mandated requirements.

Councils with at least one non–compliant councillor

COUNCIL ISSUE Baw Baw Shire Council  Two councillors failed to make a written declaration to abide by the Code witnessed by the CEO, within a month of the Code’s adoption.

East Gippsland Shire Council  One councillor refused to make a written declaration to abide by the Code witnessed by the CEO, within a month of the Code’s adoption.

Greater Bendigo City Council  One councillor failed to make a written declaration to abide by the Code witnessed by the CEO, within a month of the Code’s adoption. Upon signing late, before the Governance Officer, the Councillor expressed they were signing the declaration under duress.

Monash City Council  One councillor failed to make a written declaration to abide by the Code witnessed by the CEO, within a month of the Code’s adoption.

Moorabool Shire Council  One councillor made a written declaration to abide by the Code witnessed by the CEO, within a month of the Code’s adoption. The declaration contains a written statement indicating his disagreement with the process.

Moreland City Council  One councillor, who was on unapproved leave, failed to make a written declaration to abide by the Code witnessed by the CEO within a month of the Code’s adoption.

Mornington Peninsula Shire  One councillor made a written declaration to abide by Council the Code witnessed by the CEO, within one month of the Code’s adoption. However upon signing, the councillor included the statement “signed under protest”.

Southern Grampians Shire  One councillor failed to make a written declaration to Council abide by the Code witnessed by the CEO, within a month of the Code’s adoption. Council has advised that due to an administrative error, the councillor’s declaration was signed before council’s Governance Officer and not the CEO.