3. Managing Conflicts of Interest

Conflicts of interest are a reality

A conflict of interest can arise at any time and is something that is inevitable. A conflict of interest is not in itself illegal. It is unavoidable that at some point in their work, public officials will encounter a situation in which they face conflicting interests, because they have families, friends, outside businesses or professions, investments, property interests, and other type of connections. Any one of these connections can result in a conflict of interest and therefore needs to be properly managed.

As such, the majority of public organisations have decided to develop a conflict-of-interest policy that helps officials to manage conflicts of interest. The aim of an effective conflict-of-interest policy is to ensure impartiality and fulfilment of public duties and official responsibilities, uninfluenced by considerations of private benefit.

Defining a conflict of interest

The OECD Guidelines on Managing Conflict of Interest in the Public Service (2003) distinguish between three types of conflict of interest:

An actual conflict of interest involves a conflict between the public duty and private interests of a public official, in which the public official has private interests which could improperly influence the performance of their official duties and responsibilities.
An apparent conflict of interest can be said to exist where it appears that a public official’s private interests could improperly influence the performance of their duties, but this is not the case.
A potential conflict of interest arises when a public official has private interests which are such that a conflict-of-interest situation would arise if the official were to become involved in relevant (i.e. conflicting) official responsibilities in the future.

In short, public officials have a conflict of interest when their ability to be objective could be impaired by their own interest or the interest of their family members or business associates.

For example, you might be responsible for a task, but also have a link to the person you are interacting with such as the owner of a company you have shares in or a person you have a private connection with. If unresolved, it could have negative impacts on the official duties and responsibilities and impartiality. You might, consciously or subconsciously, be influenced to take a decision that prioritises private interests over the public interest. In addition, the perception could arise among the public that their interests were ignored and private interests prioritised.

If you find yourself in one of those situations bear in mind that the law doesn’t prohibit you from having a conflict. What the law prohibits is a person in the public service acting on those conflicts of interest. It is that action that can violate the law and betray the public’s trust.

Identifying a Private Interest

Private interests that could impact on a public official’s duties can include:

Financial or pecuniary interests
Personal affiliations and associations
Family interests
Private-capacity activity (such as ownership of a private business, participation on a Board of Directors, etc.)
Previous relevant employment

Areas that present a higher risk of conflict of interest than others

Human Resource Management	Public Procurement	Other areas
Outside employment Pre and Post- employment Recruitment and Promotion	Tendering Bid evaluation Contract award	Decision & Policy-making Inside Information Gifts and other benefits

Examples of conflict-of-interest situations

Self-dealing	The official benefits by using their official capacity to conduct business with themselves in a private capacity — for example, giving a contract to a firm that they own
Accepting benefits	The official accepts a benefit from a person they conduct official business with.
Influence peddling	The official seeks a benefit in return for preferential treatment from a person they conduct official business with.
Abusing government property	The official uses government property for private purposes
Abusing confidential information	The official profits by using government information that is not available to the general public
Outside employment impacting on public employment	The official works for additional remuneration at jobs outside government. For example, if the demands of the outside employment affect the time or energy devoted to the public position, a conflict arises
Post public employment related to previous public positions held	The official uses information or contacts acquired while in a government position to benefit him- or herself, or others, after he/she leaves his public position

Resolving a conflict-of-interest situation

When faced with an actual conflict of interest, public officials must disclose the conflict of interest. To avoid that a conflict-of-interest situation leads to corruption any private interests that might impact on their work should be disclosed. However, in some cases disclosure is not sufficient to resolve the conflict-of-interest and some additional steps are be necessary, such as:

Divestment or liquidation of the conflicting interest
Recusal from involvement in an affected decision-making process
Restriction of access to particular information
Transfer to a non-conflicting position
Assignment of the conflicting interest in a genuinely “blind trust”
Resignation

If a public official recuses himself or herself, it means that he or she will step away from any and every aspect of that issue. Recusal should include refraining from any of these actions:

Voting
Deciding
Discussing
Deliberating
Recommending
Reviewing
Inspecting
Investigating
Any other action that could influence a decision

Keep in mind that recusal would not just mean that the public employee must be removed from the final decision. It means that he or she cannot participate in any part of the process such as reviewing plans, discussing the project with co-workers or making recommendations on a contract.

When something within your responsibilities could have a definite and direct impact on you, your family or business associate, complete disclosure is the appropriate course of action to decide how to resolve the conflict of interest.

Key points to remember

A conflict of interest occurs when a public official’s ability to be objective is impaired because of personal, family or business interest or beliefs
A conflict of interest is common and is not automatically illegal, acting on the conflict of interest is illegal
A conflict of interest can be resolved by either eliminating the conflicting interest or by recusing oneself from every aspect of the decision-making process relating to that particular situation

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