Local Council push for more open government limited by privacy laws

How much do privacy laws and commercial-in-confidence provisions restrict the information Councils can publish about tenders and contracts?

Background

The Local Government Regulation 2012 ("the Regulation") requires Councils to publish, as soon as practicable after entering into a large-sized contractual arrangement, relevant details of the contractual arrangement on their website, and display the relevant details in a conspicuous place in their public office.  A large-sized contractual arrangement is worth $200,000.00 or more (exclusive of GST).

The relevant details are:

• the person with whom the Council has entered into the contractual arrangement;
• the value of the contractual arrangement; and
• the purpose of the contractual arrangement.

To promote open, transparent government, Councils have expressed a desire to publish on their websites:

• additional information relating to large-sized contractual arrangements; and
• information relating to medium-sized contractual arrangements (worth $15,000.00 or more but less than $200,000.00 (exclusive of GST)).

Issue

What legal hurdles stand in the way of Councils publishing information in addition to what the Regulation requires?

Consideration

Before a Council may enter into a medium-sized contractual arrangement, it must first seek quotes.  For a large-sized contractual arrangement, it must first seek tenders.  If a Council publishes information contained in a tender or a quote without the submitter's consent then, depending on the nature of the information published, the submitter may make a privacy complaint or pursue an action for breach of confidence.

Information Privacy

The Information Privacy Act 2009 ("the IP Act") regulates the use and disclosure of a natural person's personal information (companies do not have personal information).  A person's name and address are examples of personal information that would be contained within a tender or quote.

Councils are required to publish the supplier's name on their website after entering into a large-sized contractual arrangement.  Councils are not required to publish any other personal information for a large-sized contractual arrangement.

The IP Act requires Councils to comply with the Information Privacy Principles ("the IPPs").  The IPPs require Councils to use personal information only for the purpose for which it was collected.  Information collected via a tender or quotation process is not usually collected with a view to the information being published to the world at large.  If a Council publishes personal information without the submitter's consent, the Council may be in breach of its obligations under the IP Act.  The submitter whose personal information has been published may elect to make a privacy complaint.

However, to the extent that the Regulation requires the publication of personal information (as detailed above), the publication does not breach Council's obligation to comply with the IPPs.

Breach of Confidence

Publication without the submitter's consent may also expose a Council to an equitable action for breach of confidence.

Three elements must be satisfied for an action for breach of confidence to succeed:

• the information must have the necessary quality of confidence about it;
• the information must have been imparted in circumstances importing an obligation of confidence; and
• there must be an unauthorised use of the information to the detriment of the party communicating it.

The price that a company or a natural person is seeking to be paid to supply particular goods or services is not generally known to the public.  It is information that the tenderer, or entity submitting the quote, may not want its competitors to know.  Pricing information is commercial information that has the necessary quality of confidence about it. 

A reasonable person would realise that tenders and quotes are confidential to the extent that they involve the disclosure of pricing information.  If a Council wants to publish information of this nature, the Council needs to include appropriate clauses within the documents that are issued to the public inviting the lodgement of tenders or quotes.  The clauses should specifically disclose how, and the extent to which, the Council intends to publish the content of the relevant tender or quote to the world at large.

However, and once again, to the extent that the Regulation requires the publication of confidential information, for example, the value of a large-sized contractual arrangement, the publication will not expose Council to an equitable action for breach of confidence.

For comprehensive advice that is tailored to your Council's circumstances, email Elizabeth Neilson or James Neilson at King & Company Solicitors, or call us today on (07) 3243 0000.