New Conflict Laws In Effect: But What's Still Unclear?

The new conflict of interest laws that came into effect on 12 October 2020 will already be old hat for councillors and Council officers who have spent the last several months preparing for the changes. 

However, while the concepts of “prescribed conflicts of interest” and “declarable conflicts of interest” will be well understood, some of the new changes to the Local Government Act 2009 (“LGA”) live in greyer areas.

Ordinary business matters

The conflict of interest provisions in Chapter 5B of the LGA does not apply to “ordinary business matters”.  These matters are defined in section 150EF of the LGA.

One of those matters includes if the Councillor (or their close associate or related party, or relevant donor) stands to gain a benefit or suffer a loss in relation to the matter in question, that is no greater than the benefit or loss that a significant proportion of persons in the local government area stand to gain or lose.

The two elements to this exception – the “no greater benefit” test and the “significant proportion” test – have not been considered in any detail by any Court or conduct tribunal.  It remains to be seen how broadly this exception applies.

Indigenous council trustee meetings

Do the conflict provisions apply to meetings of indigenous local governments that are sitting in the indigenous local government’s capacity as trustee of land (ie, a meeting under section 83(3)(c) of the LGA)? 

The LGA does not put this beyond doubt, but our view is that the answer is yes.

In section 150EE of the LGA, the LGA sets out when a person, including a councillor, participates in a decision that might give rise to the need to use the conflict of interest provisions.  The following specific examples of “participating in a decision” are included in section 150EE:

  • If the councillor or other person is wholly or partly responsible for making the decision—considering or discussing the matter to which the decision relates before the decision is made;
  • considering, discussing or voting on the decision in a local government meeting;
  • considering or making the decision under an Act, a delegation or another authority.

Close personal relationships

A declarable conflict of interest arises can arise if a councillor has, or could reasonably be presumed to have, a conflict with the public interest in respect of not only the councillor’s own personal interests but the personal interests of a related party.

Related parties are defined in section 150EP(1) of the LGA, and includes persons in a close personal relationship with the councillor.

Most people will be aware of the recent high-profile case in New South Wales State politics, and that example goes to show there can be some murkiness around what is and isn’t a close personal relationship.

Take the cautious view 

Conflict matters can be fraught with difficulty, and councillors throughout Queensland are justifiably concerned about ensuring that they comply with the legislation, but at the same time that they do not over-cautiously declare conflicts and step out of decision-making, therefore depriving themselves of the opportunity to do the job they were elected to do.

However, whilst the new regime in the LGA goes part of the way to clarifying some of the ambiguity that existed before, there are clearly some issues that are not without doubt.  There are also very serious consequences imposed on councillors who are found to have breached the legislation.

In view of that, until some of these ambiguities are resolved, we think councillors should tread carefully and take the cautious view, particularly where one of the grey areas like the ones outlined above arise.

Preston Law has extensive experience advising on identifying and managing conflicts. If you have any queries, please contact our local government team.

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