Implementing Belcarra - Part one: Managing councillor conflicts of interest

The Local Government Electoral (Implementing Stage 1 of Belcarra) and Other Legislation Amendment Bill 2018 (Bill) was introduced to Queensland Parliament on 6 March 2018.

The Bill mirrors a Bill that was introduced in October 2017, but lapsed with the calling of the State Government election. It is pitched as the first stage of integrity reforms and stems from the Crime and Corruption Commission’s (CCC) ‘Operation Belcarra’¹ - an investigation into the council elections of 2016. The CCC made 31 recommendations in its report, with the present Bill serving to address a number of these. To do so, the Bill amends the City of Brisbane Act 2010 (COBA), the Electoral Act 1992 (EA), the Local Government Act 2009 (LGA), and the Local Government Electoral Act 2011 (LGEA).

The Bill’s main focus is on the prohibition of developer donations and addressing issues of conflict for local councillors.

Much of the media attention has been surrounding the prohibition of developer donations, which will be dealt with in part two of our article series. However, the changes to requirements around the interests of local councillors are significant and worthy of detailed review. The Bill aims to strike a balance between upholding the integrity of local government decision making and allowing local councillors to fulfil their political responsibilities. This is achieved by strengthening requirements around dealing with conflicts of interest (to uphold integrity), and providing a number of exceptions to allow local governments to continue to function.

Dealing with conflict pre-Belcarra

As the COBA and LGA currently stands, in circumstances where a matter (that is not an ordinary business matter) is to be discussed at a meeting, a councillor that has a real or perceived conflict of interest must inform the meeting and then decide (personally) whether or not they participate in the meeting in relation to the matter.² As will be demonstrated, one of the key amendments in the Bill takes this decision out of the hands of the individual and requires that the other councillors present at the meeting decide whether the conflicted councillor remains to participate.

The ‘interest’ amendments

The Bill makes reference to two ‘types’ of interests in the context of a council meeting, or a decision by a council employee or contractor -a material personal interest and a conflict of interest (real or perceived). While these interests are already defined in the current legislation, the Bill serves to highlight the definitions by providing them in stand-alone sections.³

“Material personal interest”

In respect of a material personal interest in the context of a council meeting, the Bill retains the present protocol by stipulating that the interest needs to be disclosed to the meeting and the councillor must then leave the place of meeting.⁴ In practice, this may require the councillor to remove themselves from the premises upon which the meeting is taking place. In the event that the majority of councillors at a meeting declare a personal interest, the council must then delegate the matter (to, for example, the mayor⁵) to make the decision, unless this is not possible. As outlined below, the Bill also imposes certain additional requirements with respect to a material personal interest.

“Conflicts of interest”

As indicated, the Bill aims to take any decision-making (regarding conflict of interests) out of the hands of the individual and strengthen requirements around dealing with these interests in the following ways:

• After a councillor informs a meeting of a potential conflict of interest, and where that councillor has not voluntarily left the meeting, it is up to the other councillors present to vote on whether there is indeed a real or perceived conflict of interest, as well as whether or not the councillor is permitted to stay and participate.
• Additional information is to be provided by a councillor when informing of an ‘interest’. In respect of a conflict of interest (real or perceived), this includes;
  • the nature of the interests, and if the interest arises by way of a relationship with, or gift from, another person;
  • the name of the person;
  • the nature of the relationships or value and date of receipt of the gift; and
  • the nature of the other person’s interests in the matter.
• If it concerns a material personal interest, then the councillor need disclose the name of the party that stands to benefit (or lose) from the outcome of the consideration of the matter, how that party stands to be so affected, if the person affected is not the councillor, then the nature of the relationship between the councillor and the party.
• Councillors need to notify the person presiding at a meeting if they reasonably believe or suspect another councillor at the meeting has a conflict of interest. Importantly, there is a protection around the provision of such information, with the Bill making it an offence for a councillor to take retaliatory action against a councillor for complying with their duty to notify.
• Penalties for failure to comply with obligations have been strengthened. In the most serious of instances, councillors may face heavy financial penalties or potential terms of imprisonment.
• It is an offence for a councillor with a material personal interest or real or perceived conflict of interest to attempt to influence or sway the vote or decision of another councillor or council employee /contractor in relation to that matter.

Additionally, the Bill provides that all details regarding the interest (including the name of the councillor, the particulars of the interest, the result of the vote by other councillors, and the outcome of the vote on the matter) must be recorded in the minutes of the meeting.

As noted, a number of exceptions to these requirements exist to ensure that while maintaining integrity, councillors are still able to fulfil their political responsibilities. More broadly, the issue of conflict of interest (or material personal interest) does not extend to “ordinary business matters”, as that term is defined by the COBA and the LGA.⁶ Looking at specific exceptions, in the event that a councillor’s attendance at a meeting is necessary to maintain a quorum, the Minister may permit their attendance by signed notice.

Takeaways

This snapshot demonstrates the aim of the Bill to bolster (and clarify) the management of councillor conflicts of interest in the local government sphere, and provide further guidance on how to approach conflicts. Whether the Bill is successful in achieving these aims remains to be seen. What is clear is that (particularly) local councils and elected representatives need to be across the proposed amendments and aware of the impact they might have on the operation of, and interaction between, local council and business.

For more information or discussion, please contact HopgoodGanim Lawyers Planning & Development team.

<sup>1. Crime and Corruption Commission, Operation Belcarra: A blueprint for integrity and addressing corruption risk in local government­ (October 2017).  
2. COBA, s175(5); LGA, s175(5).
3. The Bill, Clause 6 (s177B, s177D) and Clause 24 (s175B, s175D).
4. The Bill, Clause 6 (s177C) and Clause 24 (s175C).
5. Local Government Act 2009, s257(1)(a); City of Brisbane Act 2010, s238(1)(a).
6. Local Government Act 2009, Schedule 4; City of Brisbane Act 2010, Schedule 1.</sup>