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Draft Working Paper #1
« on: November 02, 2014, 03:48:41 PM »
APA Conflicts of Interests Commission
Draft Working Paper No. 1

1. Definition

Conflict of interest is a situation in which a public official has a private or other interest which is such as to influence, or appear to influence, the impartial and objective performance of his or her official duties.

2. Corruption

Conflict of interest is properly understood as a situation, not an action, and it is clear that a public official may find him or herself in a conflict of interest situation without actually behaving corruptly. The concept of conflict of interest does not refer to actual wrongdoing, but rather to the potential to engage in wrongdoing. Indeed, it is all but inevitable that a public official will face situations where the public interest s/he has been elected or appointed to serve will conflict with other interests to which s/he is subject.

Being in a conflict of interest situation itself is not the same thing as using one’s public office for private benefit. A public official who finds him or herself in one of the situations described above may or may not allow the interest that conflicts with the public interest wrongly affect his or her conduct.

3. Types

The types of interest that may come into conflict with the public interest are varied. The focus – and especially in conflict of interest laws - is usually upon personal interest, and is moreover usually understood as a personal financial interest. However, personal interests may be non-financial. The most obvious example of this is family interest – for example, the recruitment officer may have an interest in influencing hiring procedures to secure a position for his brother or cousin, without ever benefiting financially.

In addition to personal interests, there are also other interests to which an official may be subject which are not directly personal yet may come into conflict with the public interest. This is especially the case for elected officials. Members of parliament for example are or may be subject to the interests of their constituents and of their party, either of which may subject them to pressure to take decisions which are against the public interest. An obvious example is pressure to use their position for the electoral benefit of the political party of which they are a member.

It is not possible to simply prevent or prohibit all conflicts of interest.

4. Objectives

The objectives of conflict of interest regulation are therefore wider and in practice include the following:
•   To prevent conflict of interest situations arising, to the extent that this is possible and practical.
•   To establish rules that address conflict of interest situations where they do arise.
•   To provide guidance to public officials and enable them to protect themselves more easily.

5. Mechanisms

The mechanisms to achieve these objectives are:
•   prohibitions on holding certain functions or interests,
•   duties to declare personal interests, and
•   duties to be excluded from specific decision-making processes where a conflict of interest arises.

Codes of ethics/conduct are an essential mechanism due to the need for rules to be tailored to individual institutions. In addition, codes are more likely to encourage the internalisation of public service values – if they are formulated and approved in a consultative way.

6. Categories

The points made in previous sections apply to all three categories of officials :
•   civil servants,
•   members of the government, and
•   elected officials.

The implications for regulation are different however for different types of official. It is important to stress the importance not only of distinguishing conflict of interest from corruption, but also of realising that different types of official need to be regulated differently.

7. Process

Conflict of interest regulation – and any other regulations of official ethics – may be imposed from the top or developed in consultation with the officials who are to be subject to the regulations. Experience and common sense suggest strongly that the latter approach is preferable.

In order to function effectively, codes of conduct and other ethical rules need to be owned and internalised by those who are subject to them. A top-down approach which simply imposes rules and enforces compliance may encourage an instrumental attitude to the rules themselves on the part of civil servants (“I will ignore or circumvent this regulation unless the risk of getting caught is too high”).

8. Privacy

For both civil servants and elected officials, a very important issue to be resolved is the extent to which declarations of interests should be public. While the benefits of transparency are clear, they need to be balanced against the right to privacy, which is a principle of value in its own right.

Public disclosure is important as a mechanism for detecting conflicts of interest. The inherent difficulties of enforcement mean that the role of the media and public in scrutinising declarations can be crucial. However, it is a good idea to split the information contained in declarations into a public and non-public parts.

9. Enforcement

Effective and fair enforcement is critical in cases where violations of conflict of interest regulations occur or such violations are alleged or suspected. The most important issue concerning enforcement in general is to ensure that sanctions are commensurate with the scale of the violation.

10. Guidelines

The main lessons/recommendations for regulating conflict of interest contained in this paper so far may be summarised as follows:

•   It is vital to be realistic when designing regulations. Public officials (or persons close to them) will have external interests that can potentially come into conflict with the public interest they are appointed to pursue. This is the case especially for elected representatives. The aim of regulation should not therefore to be to prohibit any interest that might give rise to a conflict of interests.

•   Regulations should be introduced in such a way that those who are subject to them – be they civil servants or elected officials – regard them as their own. Regulations that are internalised will require less monitoring and enforcement than those that are imposed from above.

•   Reasonable prohibitions on external activities are important for civil servants. However, for elected officials the emphasis in regulation should be placed on duties to disclose personal interests, both as a condition of holding office and ad hoc where they are subject to an interest that may influence or appear to influence their conduct.

•   Duties to declare interests – especially financial ones – are of central importance in tackling conflict of interest, and should be in place for all the categories of official discussed above. However, it is vital to define such duties in such a way that they focus on relevant interests and relevant officials, and to ensure that the procedure for declaration is user-friendly. Duties to declare interests should also be balanced fairly with the right to privacy.

•   Regulations should also be designed to ensure that elected officials may not participate in matters in which they are subject to an obvious and specific conflict of interest, although it is very important to design the regulations such that MPs can perform their representative function.

•   In order to implement conflict of interest regulations (and more broadly, a code of conduct and ethics rules in general) within the legislature it is advisable to establish a permanent official (commissioner) responsible for overseeing the register of members’ interests, providing advice and guidance, dealing with complaints and reporting to the relevant parliamentary committee or parliament.

•   It is very important to take account of the pitfalls of implementation and enforcement in the civil service – in particular determining the right level of official to whom civil servants should report and be responsible, and ensuring that any central body responsible for oversight has sufficient capacity to do so.

Source:  Sitting on the fence: Conflicts of interest and how to regulate them, by Quentin Reed, Governance and Anti-Corruption Consultant, U4 Anti-Corruption Resource Centre, 2008