Conflict of Interest Management plans

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Contents

Purpose

The purpose of this toolkit is to explore common types of conflicts of interest that can arise for APS employees, and provide practical examples of how to manage them. The guide supports APS employees and their managers to work through the risks posed by real and apparent conflicts of interest and to establish effective management plans.

A conflict of interest exists when a public official or other person has a personal interest, or another duty, that could affect or be affected by how the public official or person performs their public or official functions or duties.

While conflicts of interest are a common ethical issue for APS employees at all levels and are sometimes unavoidable, complying with obligations to identify conflicts of interest, avoid them if possible, and disclose and manage them when they are unavoidable, is vital to maintaining confidence and trust in the integrity of the APS.

All APS employees are required to take reasonable steps to avoid conflicts of interest, and to declare personal interests that could come into conflict with their APS responsibilities. Employees and their managers have a joint responsibility to ensure that conflicts of interest are managed appropriately.

For further information about conflicts of interest please refer to:

Additional information and resources relating to conflict of interest management are located on the APSC’s website.

What is a conflict of interest management plan?

While it is an employee’s responsibility to declare personal interests that could give rise to a conflict, it is a shared responsibility between the employee and their agency to assess the interest and manage any conflicts that arise from it.

Managers play a vital role in this risk management process by providing advice and approval to employees and facilitating assurance to the agency through conflict of interest management plans.

A conflict of interest management plan is a document that identifies a specific conflict of interest and sets out the actions that will be taken to manage the risks arising from the conflict. Having a management plan in place ensures there is a shared understanding and agreement between the employee and their manager—and any other affected parties—about how the conflict will be managed, and helps maintain trust in the integrity of the agency and the APS.

A management plan does not have to follow a particular format or be overly detailed, although your agency may have a specific template that should be used. The agreed plan should be recorded centrally to enable appropriate oversight, monitoring, and assurance.

Managing a conflict of interest is an active process. Management plans are not ‘set and forget’ documents—they should be reviewed at regular intervals and updated if the situation changes. Regular check-ins are helpful (at a minimum annually), as is reviewing conflict risks at the start of any project or high-risk activity. A conflict management plan should specify the manager who is responsible for monitoring and evaluating the plan.

Is there a real, apparent or potential conflict?

Knowing whether a conflict of interest is real, apparent or potential will help you assess the risks of the conflict and determine an appropriate management plan.

  • A real conflict of interest exists where you have a personal interest or competing duty that could affect or be affected by the way you perform your public or official functions or duties.
  • An apparent conflict of interest exists where a reasonable person might think that you have a personal interest, relationship or competing duty that could affect, or be affected by, the way you perform your public or official functions or duties, even though there is no real conflict of interest.
  • A potential conflict of interest is where there is a real possibility that you will have a personal interest, relationship, or competing duty that could affect or be affected by the way you perform your public or official functions or duties in the future.

A personal interest includes financial and non-financial interests, including personal and professional relationships and associations as well as competing public or official functions or duties.

A material personal interest is an interest that can sensibly give rise to a real or apparent conflict of interest. Personal interests do not give rise to a conflict of interest unless there is a real or sensible possibility of conflict (not simply a remote or theoretical possibility of conflict).

The appearance of a conflict can be just as damaging to public confidence in the integrity of the APS as an actual conflict. This means that both real and apparent conflicts of interest must be declared and managed appropriately.

For further details on each type of conflict of interest, please refer to the NACC’s Conflicts of Interest and Corrupt Conduct: A Guide of Public Officials.

Know the risks

Understanding the risks that conflicts of interest can pose to your agency’s business, your team’s functions, and your role or duties will help you identify them when they arise, and put in place management plans when they cannot be avoided.

When making or reviewing a conflict of interest declaration and considering appropriate mitigation strategies for the management plan, the following questions are useful for employees and managers to think about when assessing risk:

  • What is the nature of the personal interest?
    • Is it ‘material’, or remote or theoretical?
    • Is it significant to the person (like secondary employment or a valuable financial investment)?
    • Is it unavoidable or pre-existing (like a personal or professional relationship)?
  • What is the person’s role, or their specific duties?
    • Are they in a position that is highly visible or relates to an integrity function?
    • Do their duties involve high-conflict risk activities all the time, or only occasionally?
  • What are the agency’s functions, enterprise risks, and risk appetite?
    • Is the person’s personal interest or conflict an identified risk that requires specific controls to be applied (such as regulatory duties requiring strict information and external engagement controls)?
  • Is the conflict risk real or apparent?
    • Does the conflict actually impact the person’s ability to perform their duties?
    • Could an outside observer reasonably perceive the conflict to impact the person’s ability to perform their duties?
  • What is the likelihood of a conflict of interest arising?
    • Could the material personal interest affect the person’s ability to perform their duties right now, or at some point the future?
    • Would the risk increase if circumstances change?
  • What are the consequences of not managing conflict risk effectively (e.g. legal, financial, reputational, etc.)?
    • What are the adverse impacts or damage that could reasonably be foreseen to occur?
    • Can the consequence(s) be prevented, and, if so, how?

It’s also useful to understand your agency’s risk profile, which is usually outlined in enterprise risk assessment register and control documents. Do those documents consider conflict of interest risk specifically? If so, are there minimum requirements for how they should be managed across the agency, or for specific agency functions?

Integrity and regulatory agencies may have a lower risk tolerance and a higher need for conflict of interest risk controls to be in place for all employees, regardless of their particular roles or duties. Likewise, individuals and teams that manage high-conflict risk activities on a day-to-day basis—not just occasionally—would be expected to pay close attention to managing their conflicts of interest; and their managers would be expected to review the identification of personal interests and proposed management strategies carefully to effectively manage risk.

Develop a management plan

Decisions about appropriate management plans should be made in consultation between employees and managers, and other relevant areas of the agency if necessary, according to the risk assessment. In submitting a conflict declaration and management plan for their manager’s review, employees must turn their mind to what steps they will take to manage the conflict.

In turn, managers have an obligation to ensure that the proposed management actions are practical, lawful, compliant with agency policy and other legislation, can be supported by agency systems, and are able to be monitored and, if necessary, enforced through performance management processes or conduct actions.

Common management strategies

There are six common strategies used to manage conflicts of interest based on the level of risk. These are known as the 6 Rs:

Register the material personal interest to create visibility and awareness.

Restrict an employee’s access to information or participation in a process.

Recruit a third party to provide oversight to a process, activity or stream of work.

Remove an employee from a task or reassign them to alternative duties.

Relinquish or divest a personal interest to ensure the conflict is resolved.

Resign from a position or specific role to resolve the conflict.

These strategies can be used separately or in combination to mitigate the risks posed by different conflicts of interest and support the integrity of decisions and processes.

For more information about the 6 Rs and their application, please consult the Department of Finance’s Resource Management Guide 208 – Managing conflict of interest and confidentiality.

What these strategies look like in management plans will vary depending on the nature and context of the conflict. Common mitigation and management activities can include:

  • Taking no further action but continuing to monitor the conflict
  • Advising colleagues (or stakeholders) of the conflict and any management strategies that are in place
  • Reminding employees of their obligations around the use or disclosure of confidential information
  • Limiting the employee's access to information about the matter-for example, by restricting access to files or ensuring the employee steps out of a meeting when the interest is discussed
  • Restricting duties to an advisory role with no decision-making or financial delegation
  • Agreeing not to communicate with particular parties (at all, or about specific matters) for the duration of the employee’s role or a particular activity (e.g. a procurement or recruitment process)
  • Implementing closer oversight, review, or supervision of duties
  • Involving additional staff in decision making on the matter-for example, by having a colleague in another team peer review or a panel make a decision instead of one individual
  • Including an independent third party to oversee part or all of a task or process
  • Engaging a subject matter expert to review work
  • Reallocating a task or decision to someone else
  • Changing the employee's duties within the team
  • Transferring the employee to a different team, either temporarily or permanently
  • Declining or resigning from secondary employment (paid or unpaid)
  • Relinquishing ownership or control of a financial interest (and providing appropriate evidence)

Ongoing conflict management

Once a management plan has been put in place, managers must identify an appropriate review date so the plan can be assessed and amended if required—synchronising conflict declarations and management plan reviews to the performance management cycle or financial year are practical options. Any reviews conducted, or updates to plans, must be recorded, attached to the original conflict of interest declaration and management plan.

Keeping declarations and management plans in centralised agency record keeping systems is the best way for employees, managers and agency integrity teams to maintain records, and actively monitor, review and update declared conflicts and management plans over time.

Appropriate system access controls can be applied to ensure personal privacy where necessary, but remember that transparency of individuals’ declared conflicts and management strategies can itself be an appropriate and effective risk control.

Managers should seek advice from a range of internal or external sources when they feel unsure about discussing conflicts of interest with their direct reports or teams, or if they have concerns when assessing conflict declarations and management plans. In the first instance employees, should seek advice from their supervisor or next level manager, or the corporate team responsible for managing the agency’s conflict of interest policy.

Other sources of advice include agency Integrity Champions, Ethics Contact Officers, and the APSC’s Ethics Advisory Service.

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Acknowledgement of Country

The APSC acknowledges the Traditional Custodians of Country throughout Australia and recognises the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures and to Elders both past and present.