Managing Conflict of Interest in the Public Service Managing Conflict of Interest « Managing Conflict of Interest in the Managing Conflict Public Service of Interest in the OECD GUIDELINES AND COUNTRY EXPERIENCES Conflicts of interest have become a key issue in public debate world-wide. New forms of Public Service conflict between individual private interests of public officials and their public duties arise as the public sector has become increasingly commercialised and works more closely with the business and non-profit sectors. Governments need to ensure that public officials perform OECD GUIDELINES AND COUNTRY their duties in a fair and unbiased way. The pressure comes from a society and a business EXPERIENCES community that are increasingly well-informed, and specifically from a general demand for unbiased and transparent public decision-making. The message is clear: official decisions should not be improperly affected by self-interest, the integrity of markets and fair business competition should be supported, and corrupt practices excluded. The OECD Guidelines for Managing Conflict of Interest in the Public Service provide the first international benchmark in this field. They help governments review and modernise their conflict-of-interest policies in the public sector. The report highlights trends, approaches and models across OECD countries in a EXPERIENCES OECD GUIDELINES AND COUNTRY comparative overview that also presents examples of innovative and recent solutions. Selected country case studies give more details on the implementation of policies in national contexts and on key elements of legal and institutional frameworks. The countries covered are Australia, Canada, France, Germany, New Zealand, Poland, Portugal and the United States. 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Managing Conflict of Interest in the Public Service OECD Guidelines and Overview ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). Publié en français sous le titre : Gérer les conflits d’intérêt dans le service public Lignes directrices de l’OCDE et expériences nationales © OECD 2003 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel. (33-1) 44 07 47 70, fax (33-1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France. FOREWORD Foreword Ensuring that the integrity of official decision-making is not compromised by public officials' private interests is a growing public concern. To answer that concern, the OECD surveyed the policies and practices of member countries and developed practical instruments for governments to modernise their conflict-of-interest policies. Based on the experiences of all 30 OECD member countries, this report presents the OECD Guidelines for Managing Conflict of Interest, the first international benchmark for a comprehensive review. A comparative overview highlights trends, approaches and models across OECD countries. And case studies provide more details on policy approaches, the key elements of legal and institutional frameworks and how the policy is implemented. The countries covered are Australia, Canada, France, Germany, New Zealand, Poland, Portugal and the United States. The OECD Guidelines were developed in collaboration with the Expert Group on Conflicts of Interest under the chairmanship of Howard R. Wilson, Ethics Counsellor of the Government of Canada, and under the direction of the OECD Public Management Committee. The OECD Council endorsed the Guidelines in the form of a Council Recommendation in June 2003. The report was prepared by János Bertók of the OECD Public Governance and Territorial Development Directorate, who would like to thank Neda Mansouri for her preparatory work and Howard Whitton for his continuous advice in the drafting process. The report is published under the responsibility of the Secretary-General of the OECD. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SERVICE – ISBN 92-64-10489-5 – © OECD 2003 3 TABLE OF CONTENTS Table of Contents Preface . 11 Executive Summary . 13 Part I OECD Guidelines for Managing Conflict of Interest in the Public Service A. A growing public concern. 22 B. Managing conflict of interest . 23 C. Core principles for managing conflict of interest . 25 D. Developing the policy framework . 27 E. Implementing the policy framework . 31 F. Recommendation of the OECD Council on Guidelines for Managing Conflict of Interest in the Public Service . 38 Part II Managing Conflict of Interest. A Comparative Overview of OECD Countries A. Introduction . 40 B. Scope of the OECD survey . 41 C. Formal sources of conflict-of-interest policy. 45 D. Managing conflict of interest: Approach and definition . 53 E. Identifying and resolving conflicting situations . 62 F. Incompatibility: Restricting unavoidable, serious and pervasive conflicts . 66 G. The need for positive management . 70 H. Consequences of breaching the policy . 75 I. Putting policy into practice: Information, consultation and monitoring compliance. 78 J. Assessing policy implementation: Procedures and driving forces. 85 K. Emerging issues and new developments . 91 Notes. 95 Bibliography. 98 MANAGING CONFLICT OF INTEREST IN THE PUBLIC SERVICE – ISBN 92-64-10489-5 – © OECD 2003 5 TABLE OF CONTENTS Part III The Experiences of OECD Countries A Principle-Based Approach in Devolved Management: The Australian Experience by Andrew Podger, Public Service Commissioner and Mary Reid, Senior Policy Adviser, Australian Public Service Commission . 101 A. The Australian Public Service Values and Code of Conduct . 102 B. Role of the Australian Public Service Commission. 105 C. Application of the measures to manage conflicts of interest . 108 Notes. 109 Annex 1. Australian Public Service Values . 110 Annex 2. Australian Public Service Code of Conduct . 112 Annex 3. The Bowen Code . 114 Annex 4. Principles and procedures for business appointments . 116 Annex 5. Procedures to deal with conflict of interest in market testing and outsourcing situations . 119 Annex 6. Criminal provisions. 121 Annex 7. Department of health and ageing policy on managing conflict of interest in committees. 123 Principles and Prevention: Meeting Canadians’ Expectations of Ethical Behaviour in Public Life by Howard Wilson, Ethics Counsellor, Government of Canada . 127 A. Summary . 128 B. Developing a modern framework for ethics issues in the Government of Canada . 128 C. The roles and responsibilities of the Office of the Ethics Counsellor . 137 D. Conclusion – A continually rising standard. 145 Notes. 146 Bibliography. 146 Prevention Through Updated Regulations and Sanctions: The French Experience by Emmanuelle Prada-Bordenave,