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 CONFLICT OF INTEREST

Conflict of interest is about being transparent. Understanding what this means in the context of local government is essential to good governance.

Sections 77A to 81 of the Local Government Act 1989 define the specific circumstances that lead to a conflict of interest and describe what councillors and council officers must do if they believe there is a conflict. This includes direct and indirect interests, disclosure requirements, exemptions, provision of advice and registers of interest.

CONFLICT OF INTEREST AND LOCAL GOVERNMENT

Councillors and council officers should always be aware of the potential for conflict of interest.

In their roles as elected members and employees, they have been entrusted to govern on behalf of their communities. As such, they must ensure that they do not gain personal benefit from their positions in local government.

If they have personal interests in any of the decisions that they are part of as a government, public body or private enterprise, they must declare their interests and withdraw from the decision-making process. It is therefore very important for councillors and officers to understand and adhere to the legislative requirements.

Conflict of interest requirements apply to council meetings, special committee meetings, audit committees, and Section 223 Committees and Assemblies of Councillors.

Local Government Victoria has three useful guides on conflict of interest for councillors, council staff and council committees.

GOOD GOVERNANCE AND CONFLICT OF INTEREST

The following points are important for good governance.

Individuals must make their own decisions

Councillors and council staff must individually take responsibility for assessing whether they have conflicts of interest in any matter relating to their formal council roles. If the answer is yes, then they must act appropriately. This includes making a proper disclosure and not participating in the relevant decision.

Seeking advice is appropriate

Councillors and council staff should seek assistance or advice from other people when they think they may have a conflict of interest. These can include the mayor, fellow councillors, the Chief Executive Officer or other qualified officers. In some circumstances councillors may also need to obtain their own independent legal advice.

Individuals are accountable

Councillor or officers must ultimately assess whether they have a conflict of interest. Each councillor or officer is accountable for that assessment and the obligation to make the relevant declaration. This is regardless of any assistance or advice they may have received.

Conflict of interest is not a political weapon

Councillors should not use conflict of Interest as a weapon against each other. No councillor can determine that another councillor has a conflict of interest. That is for the individual alone (and a court if that councillor is charged with an alleged breach of the legislation). Using conflict of interest as a political weapon diminishes its importance as a principle of good conduct and natural justice.

CONFLICT OF INTEREST AND COMMUNITY REPRESENTATION

Sometimes councillors will be in a position where they are required to declare a conflict of interest even though their constituents expect them to participate in a decision. For example, a councillor may have a conflict of interest in a local planning decision which the community feels strongly about.

Because conflict of interest can impact on governance and perceptions of governance, it’s important that:

  • councillors ensure they thoroughly analyse the situation (and seek appropriate advice) to determine what is required by the legislation
  • Declare their conflicts in accordance with the provisions of the Act and remove themselves from the meeting
  • councillors clearly explain the situation to their constituents
  • the council and administration provide support to councillors, when required, to explain conflict of interest requirements to constituents.

Councillors should not, however, hide behind conflict of interest as a way of avoiding a vote on difficult issues in which they don’t have a conflict.

FACT

“Individuals must assess if they have a conflict of interest.”

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