FOI for private sector
OUT-LAW Radio, 01/11/2007
We talk to the Scottish Information Commissioner about plans
north and south of the border to extend freedom of information laws
to private companies.
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to OUT-LAW Radio, The weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever-changing laws that govern
technology today.
My name is Matthew Magee, and this week we hear from the
Scottish Information Commissioner who, together with the UK
Ministry of Justice, wants freedom of information legislation to
extend into the private sector.
But first, the news:
- Tarzan roar refused trade mark; and
- Pan-European finance starts today
Tarzan’s distinctive yell cannot be registered as a trade mark
because it is almost impossible to represent graphically, according
to a European trade mark ruling. Sounds can be registered as trade
marks, but the ruling could limit that to sounds that can be
written in standard musical notation.
The estate of Tarzan creator Edgar Rice Burroughs applied to
trade mark the sound with the help of two graphical representations
of it, but the Office for Harmonisation in the Internal Market
(OHIM) refused the application on appeal.
The sound was described in the case as a yell consisting of
"sustain, followed by ululation, followed by sustain, but at a
higher frequency, followed by ululation, followed by sustain at the
starting frequency". You might remember it, though, a little more
like this:
The OHIM ruling creates a problem for people trying to register
sound marks that are not music, since it said that musical notation
is the valid way to express sound files and some sounds cannot be
expressed in that way.
Pan-European regulation of large sections of the financial
services sector comes into force today, but the benefits of the
system will largely pass smaller firms by, according to the British
Banking Association (BBA).
The Markets in Financial Instruments Directive, or MiFID, is a
European directive which says that financial services firms should
be able to operate across Europe as long as they are accredited and
regulated in their home country.
But Brian Mairs of the BBA told OUT-LAW that the move is likely
to disproportionately benefit larger firms.
Maris: It is the big companies that have an international basis
that are interested in trading across borders, that want to open up
their business well beyond the UK. It should be easier for them to
trade, hopefully. Effectively it is economies of scale that smaller
firms might have problem, MiFID and its requirements are perhaps
more than smaller companies can conveniently bear.
That was this week's OUT-LAW news
There haven't been many things that have changed the culture of
government as much as freedom of information legislation. We, the
public, now have access to what ministers, MPs and civil servants
do with our money in our name.
The logic is clear: the organs of a democratic state should be
accountable to the people, not just once every five years at the
ballot box but down to the fine grained detail of government.
But should that now apply to the private sector? Just how far
should freedom of information laws go? There are signs it is about
to be extended into the boardrooms of private industry.
Last week the Scottish information commissioner Kevin Dunion
ordered the publishing of a private finance initiative contract
between the NHS and the builders and operators of the Edinburgh
Royal Infirmary, over-ruling objections that the contract was
confidential and commercially sensitive.
Later that week he railed against the fact that the use of PFI
is putting information on the provision of public services beyond
the electorate's reach.
Then the Ministry of Justice opened a consultation on the
extension of FOI laws to private companies who are providing public
services.
The tide certainly looks to be turning. Scottish commissioner
Kevin Dunion told us about his fears for the burgeoning culture of
accountability.
Dunion: My concern has been that far from the
Act being extended, certainly in Scotland, there is the danger that
the rights of access to information are going to be narrowed as a
tactical result of more and more public services being contracted
through either directly private companies or indeed through
charitable trusts and companies set up by public authorities. A PFI
contractor which may have a thirty year contract to carry out
activities previously done by the public authority directly, you
cannot request operational information from them.
Chris Pounder, an FOI specialist at Pinsent Masons, the law firm
behind out-law, outlined what the ministry of justice consultation
aims to do about that.
Pounder: If, say for example, a local authority
outsource council tax collection to Organisation X, Organisation X
would be outside the FOI framework whereas if it was internal it
would be inside the FOI framework, so the government's proposals
are to say well, if private sector contractors deal with public
sector operations then in relation to his operations they should be
subject to an FOI regime.
The hiving off of public services into the private sector is a
long-established government policy. With the public still
ambivalent about profits being made from services and some
controversial PFI projects attracting extensive public scrutiny,
the extension of the FOI regime into these rather murky waters is
not likely to be welcomed by practitioners.
I asked Dunion if these probes might frighten off the private
partners for government projects.
Dunion: Well I do not have any view upon
whether or not PFI and PPP, are a good or desirable thing. That is
not my concern, but I do have a view as to whether or not contracts
can only be entered into over a prolonged period of time, 20 or 30
years, spending billions of pounds of public money in the
expectation that not a single word of that contract, the terms and
conditions, the amount being paid, the performance criteria, any
failings in performance but not a word over the next 30 years will
be heard. I think that flies in the face of the purposes of freedom
of information and my view is that the price of doing business with
the public sector should be transparency. In the code of practice
drawn up, certainly by the Scottish government, prior to the Act
coming into effect, they made it quite clear for example that
public authorities should not enter into confidentiality agreements
on such contracts or indeed on any contracts. So I think there
cannot be any expectation by the private sector that they can get
these vast sums of public money and yet they cannot be exposed to
any public accountability or scrutiny.
The Ministry of Justice is looking at making this shift with its
consultation on changing the law. But Dunion did not wait so long.
In his ruling on the Edinburgh Royal Infirmary he went some way to
making these changes a reality today.
A request for the 1.2 billion pound contract under which the ERI
would be run for 30 years was rejected by NHS Lothian and the PFI
operator consort because the parties claimed that the information
was confidential and commercially sensitive.
Dunion: said that the whole contract cannot be
protected in this way. He asked NHS Lothian to provide
justification for any specifically commercially sensitive parts of
it. They didn't, so he ordered the publishing of the whole
contract.
If nothing else, the episode shows that authorities would do
well to engage with the commissioner's process. Dunion also
explained how it could be done better.
Dunion: It is up to the authority to set out
its arguments and its conclusions in the submissions that it makes
to me and to the legislation. I think the lessons from here to
Scotland is, for goodness sake, take this extremely seriously and
the best way to do that is, when drawing up the contract, to have
regard to the code of practice which we have in Scotland and which
exists elsewhere in the UK which suggests that companies and
authorities in drawing up contracts should assume that either the
information should be proactively put into the public domain or
will at least be requested, and therefore should identify and
preferably put into a side schedule, genuinely sensitive
information and secondly, when you receive and FOI request, for
goodness sake, not to assume that simply a certain commercial
confidentiality is going to get you anywhere, it clearly will
not.
Dunion: emphasised that there is no such thing
as commercial confidentiality in FOI. Something is either
confidential – and there are tight, technical definitions of that
that don't include contracts like the ERI's – or it is commercially
sensitive. And Dunion is perfectly prepared to put the public
interest in revelation above commercial sensitivity.
Dunion: When dealing with commercial
sensitivity the public interest has to be taken into account. I
think that the public interest and expenditure are in excess of for
example The Royal Infirmary of Edinburgh contract which is over £1
billion over thirty years. No doubt there is very significant
public interest in getting transparency in that spending and the
decision making, arising from that spending.
So how should private companies cope? The most important thing
for now, says Pounder, is to heed the warning. He also offers
practical advice which chimes closely with the Scottish
commissioner's on how to put a contract together.
Pounder: It is a warning to the private sector
to be very careful how you interact with the public sector. Where a
private sector body interacts with a public authority it should be
aware of the FOIs obligations that are around and be able to
identify what information needs special protection and then if
there were to be an FOI request to that information then the public
authority should consult with the private sector body.
Private sector companies taking on public business, then, need
to take significant care when dealing with FOI requests, and public
authorities need to engage a little more with the process, perhaps,
than NHS Lothian did. Dunion, for one, isn't giving up any time
soon.
Dunion: The FOI Act should follow the money and
if the money is being spent on public functions whether it is
directly from the public authority or a private contractor then
information about that should be made available to people and they
should get as a matter of right not on a voluntary basis.
That's all we have time for this week, thanks for listening.
Magee: Why not get in touch with OUT-LAW Radio? Do you know of a
technology law story? We'd love to hear from you on radio@out-law.com.
Make sure you tune in next week; for now, goodbye.
OUT-LAW Radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons, and the Tarzan yell was
Johnny Weissmuller from the 1932 film Tarzan the Ape Man.
