Managing conflicts of interest within Queensland Local Government

By Joshua Brown, General Counsel and Compliance Manager

Local government bodies in Queensland are entrusted with the important task of procuring goods and services for their communities. The decisions they make in this process can significantly impact their constituents. Therefore, upholding trust, integrity, good governance, and impartiality is of utmost importance for the success of local governments. Given the high level of public scrutiny they face, it becomes crucial to carefully consider and effectively manage conflicts of interest in the context of procurement.

Defining Conflicts of Interest:

Understanding what conflicts of interest are and how to recognize and address them is a critical issue in the realm of local government procurement. In simple terms, a conflict of interest occurs when an individual's personal affiliations or interests may influence, or even appear to influence, their ability to impartially carry out their official duties in the procurement process.

Conflicts can be financial or non-financial, and there are three types to be aware of:

• Actual Conflicts: Where a person’s objectivity is influenced by their private interests.
• Perceived Conflicts: Where a person’s objectively appears to be influenced by their private interests or associations.
• Potential Conflicts: Where a person’s objectivity will have or will be perceived to be influenced by future private interests or associations.

It is important to consider both direct and indirect conflicts, including third-party interests related to an individual, including their partner, friends, or familial related interests

Responsibilities for Managing Conflicts of Interest in Local Government Procurement:

Within the realm of local government, all employees and elected members share the responsibility and accountability of managing conflicts of interest. This responsibility is underpinned by state legislation, specifically the Local Government Act 2009 (Qld) and the Public Sector Ethics Act 2009 (Qld). The Public Sector Ethics Act sets forth foundational ethical principles applicable to local governments, including:

• maintaining integrity and impartiality,
• promoting the public good,
• ensuring transparency and accountability, and
• demonstrating a commitment to good governance.

Therefore, local government employees involved in procurement need to understand the definition and practical implications of conflicts of interest and how to effectively manage them.

Effective Conflict Management Strategies:

Effectively managing conflicts of interest should be a top priority for local government procurement professionals. Employing the following fundamental tools in conjunction can help to ensure conflicts are appropriately managed:

Clear Conflict of Interest Policies and Procedures:

• Local government entities should establish straightforward policies and procedures that clearly define conflicts of interest and provide explicit instructions and clear guidance on their management. Regular review of these policies and procedures, at least once a year, is crucial to keep them up to date and relevant. It is also advisable to align the conflict of interest policy with other governance documents, policies, and procedures within the local government procurement framework.

Conflict of Interest Registers and Interest Declarations:

• Implementing and maintaining conflict of interest registers and interest declarations should be a mandatory requirement, especially for procurement professionals. However, for the sake of good governance and transparency, it is recommended to implement and regularly update these registers and declarations. Clear policies and procedures should support the use and applicability of these registers and declarations.

Comprehensive Training for All Levels of Local Government:

• Policies and procedures alone are ineffective if not widely understood. Regular training and refreshers on conflict of interest responsibilities should be provided to all local government employees, contractors involved directly or indirectly in the procurement process. This ensures a common understanding of conflict of interest principles and promotes compliance.

Documented Conflict of Interest Management Processes:

• Developing approved conflict of interest management processes and plans specifically tailored to local government procurement is critical for effective conflict management. These processes should provide clear guidance on how conflicts of interest should be identified, assessed, managed, and escalated within the procurement context. Transparency and a focus on addressing conflicts of interest in favour of the public interest should be key components of these processes. Clear communication channels and reporting mechanisms should be established to ensure that conflicts are addressed promptly and appropriately.

Conclusion:

Effective conflict management in local government procurement helps build trust, integrity, and public confidence, thereby enhancing the delivery of government services in the best interest of Queensland communities. Conflicts of interest are an inevitable reality in the procurement landscape, carrying significant, reputational, and legal risks if not properly managed. To mitigate these risks, local governments should establish robust conflict of interest policies and procedures specifically tailored to procurement processes. Regular training programs should be conducted to ensure understanding and compliance, and documented conflict of interest management processes should be developed to provide clear guidance and transparency in addressing conflicts of interest in procurement decision-making.