Turning the Spotlight on Conflicts of Duties

The August 2024 address by the ICAC Chief Commissioner, the Hon John Hatzistergos AM, at this year’s Australian Public Sector Anti-Corruption Conference has turned the spotlight on much misunderstood probity issue: Conflicts of Duties.

Among other things, a conflict of duties can call into question the extent to which an agency is upholding the principles of fairness and impartiality in the performance of its duties.

Whereas a conflict of interest occurs where a public official’s public duties and private interests are, or appear to be, in conflict, a conflict of duties is quite different, as are the risk mitigation strategies for dealing with it.

Applying the reasonable person test, the ICAC’s definition indicates the circumstances in which a conflict of duties can occur are where a public official or agency’s duties are incompatible or in tension. Circumstances in which a public official or agency favours one public duty over another also forms part of the ICAC definition.

Among other contexts, conflicts in duties can arise at the level of local government where councils exercise responsibilities as the owner and developer of assets as well as a duty as a regulator and consent authority. In 2020, for example, the NSW Ombudsman issued a report which found that a local council had:

• allowed an unfinished council-owned facility to be used for public functions and in so doing breached the Environmental Planning and Assessment Act
• failed to take compliance action against itself for the breach.

The council had, in other words, failed to manage the conflict between its commercial duty to ratepayers to make money from an asset on the one hand (that is, the unfinished council-owned facility) and a regulatory duty to ensure compliance with the Environmental Planning and Assessment Act on the other.

A common strategy used by Noble Shore probity advisors when providing advice on this risk is to recommend the segregation of staff responsibilities. In other words, to separate out decision-making responsibilities and assign them to different individuals, ensuring that one is not reporting to another in the same line of management. Where there is a linear process, such as a market engagement, segregations of responsibility can be put in place to ensure that no one staff member has end to end decision-making delegation.

This, however, is one of many strategies that may be contemplated in assessing and mitigating the risks associated with a conflict of duties.

Noble Shore’s probity advisors are experienced in identifying conflict of duties risks in market engagements or grant assessment processes. We work with our clients to identify risks and put in place workable and flexible mitigation strategies.