Conflict of interest policy
1. Purpose
The purpose of this Policy is to clearly state Sustainability Victoria's (SV's) position on conflict of interest. This includes the requirement that employees avoid conflicts of interest wherever possible or identify, declare and actively manage any conflict. This policy details obligations and tools for identifying, avoiding and managing actual, potential and perceived conflicts of interest.
Employees will encounter conflicts of interest and, when this occurs, they must be identified and appropriately managed to ensure we earn and maintain the highest levels of integrity and public trust in SV and the broader public sector.
SV has issued this Policy to support behaviour consistent with the Code of Conduct for Victorian Public Sector Employees (the Code).
2. Scope
This Policy applies to all SV employees. This includes temporary agency employees, student placements, external assessors of grant programs, contractors and volunteers (employees) as well as external tenderers, suppliers, sponsors and other stakeholders (stakeholders). SV Board members are bound by the conflict of interest policy contained in the Corporate Governance Charter, the provisions of which, this Policy encompasses.
3. Policy principles
This Policy operates under the principle that there is a reasonable public expectation that where any real or perceived conflict of interest occurs it will be resolved in favour of the public interest rather than the employee's interest and to always put the public interest above private interests when carrying out official duties.
The need to recognise and manage conflicts of interest is an inevitable fact of organisational life. Each employee comes to SV with an established network of professional, financial and personal interests and, in the course of their employment at SV, acquires additional professional relationships. These may interfere or be perceived to interfere with impartial decision-making if not identified and managed appropriately. The management of risk associated with any actual, potential or perceived conflict of interest is fundamental if SV is to ensure the highest level of integrity and public trust is achieved and maintained.
This Policy is managed under the following principles:
- Public interest: All employees have a duty to place the public interest above their private interests when carrying out their official functions and by applying the public-sector values to their actions and decision-making (set out at section 7 in the Public Administration Act 2004).
- Accountability: All employees are accountable for avoiding wherever possible or identifying, declaring and managing any actual, potential or perceived conflict of interest. Employees with direct reports are accountable for overseeing the management of any conflicts of interest of their direct reports as well as modelling good practice and promoting awareness of conflict of interest policies and processes.
- Risk-based approach: SV will take a proactive approach to assessing and managing conflict of interest risks. Employees with direct reports will ensure they are aware of this Policy and adhere to these principles.
As a result, all staff must ensure that there are no real or apparent conflicts of interest with respect to:
- the misuse of influence to further personal and/or financial relationships, whether with colleagues or external stakeholders (refer to the VPS Code of Conduct);
- receipt of gifts or benefits for the employee or for someone else (i.e. family or other personal relationships) (refer to the Gifts, Benefits and Hospitality policy);
- external, private work including directorships and board memberships unless approved in accordance with the Outside Employment policy;
- use of confidential information (refer to the Confidentiality of Information policy).
4. Definitions
Conflict of interest
A conflict of interest is where an employee in the public sector, has interests, whether business or private, that could improperly influence, or be seen to adversely influence, their decisions or actions in the performance of their public duties in favour of their own interests, whether material or otherwise. The provision of gifts to employees, while not immediately presenting a conflict of interest may result in a future obligation or appearance of preferential treatment for the giver and therefore all gifts should also be reviewed under the Gifts, Benefits and Hospitality Policy. This conflict is not restricted to the conflict only benefitting the individual directly, but may result in an outcome that is not optimal for the management of the issue.
Conflicts may be actual, potential or perceived:
- Actual conflict of interest: there is a clear and identifiable conflict between an employee's public duties and their private interests.
- Potential conflict of interest: an employee has private interests that could conflict with their public duties. This refers to circumstances where it is foreseeable that a conflict may arise in future and steps should be taken now to mitigate that future risk.
- Perceived conflict of interest: the public or a third party could form the view that an employee's private interests could improperly influence their decisions or actions, now or in the future.
Private interest
A private interest means any private connection or relationship that can influence an employee in the pursuit of their work duties. Private interests include direct interests, such as an employee's own personal, family or friendships interests. They also include indirect interests, such as the personal, family or friendship interests of individuals or groups with whom the employee is or was closely associated.
Business interest
A business interest means any business connection or relationship that can influence an employee in the pursuit of their work duties. Business interests include direct interests, such as an employee's professional or business interests. They also include indirect interests, such as the professional or business interests of individuals or groups with whom the employee is, or was recently, closely associated, such as a previous employer, business relationship or ownership of shares. A business conflict of interest specifically relates to the SV employee's previous or current business relationship to an entity with whom in their role the employee has a commercial or decision-making responsibility, however minor, with the business entity in question.
Types of interests
Pecuniary
These interests may be financial, which includes any actual, potential or perceived financial gain or loss. Money does not need to actually change hands for an interest to be pecuniary. Individuals have a pecuniary interest if they (or a relative, or a close associate) own property, hold shares, have a position in a company bidding for government work, or receive benefits such as concessions, discounts, gifts or hospitality from a particular source.
Non-pecuniary
This includes any tendency toward favour or prejudice the individual, their family or personal relationships that result from personal or family relationships, such as friendships, enemies or sporting, cultural or social activities.
Consensual personal relationships
Consensual personal relationships include consensual sexual, intimate and/or romantic relationships between adults of any sex or gender identity. Relationships of this kind may be on a casual, periodic or regular basis and may or may not constitute a primary relationship.
A familial relationship of spouse or de facto partner also constitutes a consensual personal relationship.
5. Policy statement
SV aims to build and sustain a culture of integrity by taking steps to ensure that as far as reasonably possible, conflicts of interest are avoided and that where conflicts do arise, they are identified, declared and managed fairly, effectively and transparently.
Employees must:
- take reasonable steps to restrict the extent to which a private interest could compromise, or be seen to compromise, their impartiality when carrying out their official duties;
- abstain from involvement in official decisions and actions that could reasonably be seen to be compromised by their private interests and affiliations;
- avoid private action in which they could be seen to have an improper advantage from inside information they might have access to because of their official duties;
- not use their official position or government resources for private gain;
- ensure that there can be no perception that they have received an improper benefit that may influence the performance of their official duties; and
- not take improper advantage of their official position or privileged information gained in that position when seeking employment outside the public sector.
6. Procedure
Employees must avoid wherever possible or identify, declare and manage conflict of interest in accordance with this Policy.
The following procedure will be applied in order to manage any conflict of interest that cannot be avoided and ensure all employees are treated consistently and fairly.
(a) Identify conflict of interest
Employees should regularly consider the relationship between their private and business interests and their public duties in order to identify any conflict of interest (for example, in recruitment, before major projects, tender decisions, legal proceedings or policy development).
Private relationships, including family relationships, business relationships and consensual personal relationships carry a high risk of conflict with public duties and should form part of this consideration.
Additionally, employees with direct reports must consider the risk profile of their team and its functions and ensure direct reports are aware of any increased risks of conflict of interest in their work.
While conflicts of interest may occur in any part of SV, some functions and activities are higher risk than others and may require increased risk mitigation measures.
The following functions are high risk within SV (not exhaustive):
- Recruitment;
- Procurement, contract management and tendering;
- Internal committee governance;
- Grant assessments;
- Award panels; and
- Sponsorships.
(b) Declare conflict of interest
Any conflict of interest must be declared, even if there is only a potential for conflict.
Employees should discuss any conflict of interest with:
- their manager; or
- a designated disclosure officer (e.g. People, Culture & Capability (PC&C) Manager for employment-related conflicts or Legal & Governance (L&G) for procurement and grant-related conflicts); or
- a designated management representative.
Employees are to complete and submit a Conflict of Interest Declaration and Management form. The declaration form sets out specific instructions for completing and submitting the form and details a conflict of interest management plan.
Employees should also complete the declaration form in the following circumstances, regardless of whether a conflict of interest is identified:
- They are on a procurement assessment panel.
- They are on a grants project team (includes assessment panel, team members and all decision makers).
- They are on an awards selection panel, such as the Premier's Sustainability Awards.
Employees with direct reports must work with the employee to manage the conflict of interest and related risks and provide completed declaration forms to either PC&C (for employment-related declarations) or L&G (for procurement- and grant-related declarations) for risk management, reporting and auditing purposes.
PC&C will enter the employment-related information on the Conflict of Interest Register and place the declaration on the employee's personnel file.
Grants and procurement declaration forms will be recorded in the relevant grant or procurement management system maintained by L&G.
All other conflict of interest declarations (for instance for an awards panel or an internal committee group) will be managed by the person or team responsible for that activity.
In instances of receipts and offers of gifts refer to the Gifts, Benefits and Hospitality Policy and Gifts Register.
(c) Manage conflict of interest
Employees' conflict of interest management plans will ensure conflicts are managed and resolved in favour of the public interest rather than that of the employee and will be based on the following mitigation strategies:
- Restrict: restrictions are placed on the employee's involvement in the matter.
- Recruit: a disinterested third party is used to oversee part or all of the process that deals with the matter. In most circumstances, a subordinate would not be considered a disinterested third party.
- Remove: the employee removes themselves, or is removed, from the matter.
- Relinquish or Resign: the employee relinquishes the private interest that is creating the conflict. Where relinquishing the interest is not possible (e.g. relationship with family) and the conflict cannot be managed in the public interest using one of the other options above, the employee may consider resigning.
Employees with direct reports should review management plans regularly to ensure they remain effective (for example, annually, before recruitment decisions are made, major projects, tender decisions or policy development).
SV's Audit, Risk & Finance Committee will receive a report annually on the administration and quality control of the conflict of interest declaration process at SV.
7. Annual declaration and management of private interests
The following employees must complete the Declaration and Management of Private Interests Form upon appointment, annually after appointment and within five working days after the employee's circumstances change (i.e. their circumstances as they relate to the topics covered in the declaration form):
- All Executive Officers.
- Board appointees.
- Employees assessed by SV as warranting declaration of private interests on the basis of potential, perceived or actual conflict of interest risk under this Policy.
- Executive level employees holding a financial delegation.
The declaration form sets out specific instructions for the employee and their manager or authorised representative for completing and submitting the form. It also provides instructions and guidance to employees, including that an employee is only required to record family interests that are known to them and that may reasonably raise an expectation of a conflict of interest. Where family members are in a direct hierarchical relationship, this relationship must be disclosed.
8. Related documents
- Public Administration Act 2004
- Code of Conduct for Victorian Public Sector Employees 2015
- Code of Conduct for Directors of Victorian Public Entities 2016
- Victorian Public Sector Commission Gifts, Benefits and Hospitality Management Guide
- Victorian Public Sector Commission Managing Conflicts of Interest: a Guide to Policy Development and Implementation
- Equal Opportunity Act 2010
- Charter of Human Rights and Responsibilities Act 2006
- Privacy and Data Protection Act 2014
- Fair Work Act 2009 (Cth)
- Declaration and Management of Private Interests Form
- Declaration and Management of Conflict of Interest Form
- Grants Conflict of Interest Declaration and Action Plan Form
- VPSC A Guide to Applying the COI Policy Principles.
9. Authorisation
This Board is responsible for approving this Policy. The Policy is to be reviewed at least once every three years.
10. Breaches
An employee's failure to avoid wherever possible or identify, declare and manage a conflict of interest in accordance with this Policy could lead to disciplinary action including dismissal (consistent with the relevant industrial instrument and legislation). Contractors may be subject to contract re-negotiation, including termination.
Additionally, actions inconsistent with this Policy may constitute misconduct under the Public Administration Act 2004, which includes:
- breaches of the Code, such as sections covering conflict of interest (section 3.7), public trust (section 3.9), gifts and benefits (section 4.2), and use of official information (section 3.4); and
- employees making improper use of their position.
For further information on managing breaches of this Policy, please contact PC&C Manager.
11. Speak up
Employees who consider that conflict of interest within SV may not have been declared or is not being appropriately managed should speak up and notify their manager or authorised representative.
SV will take decisive action, including possible disciplinary action, against employees who discriminate against or victimise those who speak up in good faith.
12. Contacts for further information
A conflict of interest is not always clear to those who have them. Employees who are unsure about a possible conflict of interest, or the application of this Policy, should ask their manager, PC&C Manager or L&G for advice.