Case number: OIC-117522-G5W2T4

Whether the Department was justified in deciding to grant access to particular correspondence between the Company and senior officials in the Department in 2021, on the basis that while the records contained commercially sensitive information which had been provided in confidence, the public interest, on balance, favoured their release

 

13 May 2022

 

Background

This review arises from a decision made by the Department to grant a request to which section 38 of the FOI Act applies. Section 38 applies to cases where, at some stage in the decision making process, the public body has formed the view that the record(s) in question qualify for exemption under one or more of the relevant exemptions in the FOI Act (i.e. sections 35, 36 and 37 - relating to information that was obtained in confidence, is commercially sensitive, or is personal information relating to third parties, respectively) but that the records should be released in the public interest. Where section 38 applies, the public body is required to notify an affected third party before making a final decision on whether or not the exemption(s), otherwise found to apply, should be overridden in the public interest. The requester, or an affected third party, on receiving notice of the final decision of the public body, may apply directly for a review of that decision to this Office.

A request was made to the Department on 7 October 2021 for all correspondence, meeting minutes and documentation, held by Departmental staff at Assistant Secretary level and above, for the period 1 May to 31 August 2021 relating to four specified returns made by the named Company on the Lobbying Register, a register maintained by the Standards in Public Office Commission.

On 21 October 2021, the Department informed the Company that it had received the FOI request and that it was considering whether it should release 11 specific records, in redacted form, in the public interest. While it invited the Company to make a submission under section 38 of the FOI Act in relation to the records, it did not specify what exemption it deemed to be of relevance.

On 10 November 2021, the Company wrote to the Department objecting to the release of the records at issue. It argued that the records contained information provided to the Department in confidence and that section 35 applied. In addition, it said that the records contained commercially sensitive information and that section 36 also applied. The Company said that no public interest has been identified to justify the release of any of the records.

On 16 November 2021, the Department wrote to the Company stating that it had decided to release the 11 records identified as affecting its interests. On 29 November 2021, the Company sought a review by this Office of the Department’s decision.

I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the submission made by the Department to this Office and the Company’s submission to the Department on 10 November 2021 in which it objected to the release of the records. I have also had regard to the content of the records concerned. Both the Company and the original requester were invited to make submissions to this Office if they wished but they have not done so. I have decided to conclude this review by way of a formal, binding decision. In referring to the records at issue, I have adopted the numbering system used by the Department in the schedule of records it prepared when processing the request.

Scope of Review

In its submissions to this Office, the Department clarified that it considered section 35, which is concerned with the protection of information provided in confidence, to be of relevance but that the public interest would be better served by granting access to the records at issue. The Company’s position is that section 36, which is concerned with the protection of commercially sensitive information, also applies. Accordingly, this review is concerned with whether the Department was justified in its decision to grant access to the relevant records, numbered 1, 2, 5, 7, 9, 10, 11, 12, 13, 14 and 15.

Preliminary Matters                                                                        

It is important to note that decision to grant a request to which section 38 applies shall be presumed to have been justified unless the person concerned to whom subsection (2) of that section applies shows to the satisfaction of the Commissioner that the decision was not justified. This means that in this case, the onus rests with the Company of satisfying this Office that the Department’s decision to release its submission was not justified. This is not to say that only the arguments raised by the third party will be considered. The Commissioner takes the view that it would contravene the purposes of the FOI Act and be inconsistent with the public interest and/or the right of privacy if he were to direct the release of sensitive information in records simply because a third party failed to raise substantial arguments to justify the setting aside of the FOI body's public interest decision. Nonetheless, this provision does serve to reinforce the statutory position that, apart from section 38, the request would have fallen to be granted.

I also note that the Courts have recognised that a decision by this Office is by way of a hearing de novo in the light of the facts and circumstances applying at the date of the review by this Office, rather than any facts and circumstances that applied at an earlier date.

Analysis and Findings

The records at issue comprise letters and emails from the Company to the Department from May to July 2021. The intended result of the correspondence, as indicated by the Company on its returns to the public lobbying register (available at www.lobbying.ie ), was an efficient restoration of the industry in which the Company operates, after the Covid-19 pandemic and the swift implementation of various processes to support this.

Section 35 – Information obtained in confidence

Both the Department and the Company have indicated that they consider the records at issue to have been submitted in confidence. Section 35(1)(a) of the FOI Act provides for the protection of certain information given to FOI bodies in confidence.

In order for the section to apply, it is necessary to show the following:

that the information was given to an FOI body in confidence and,
that the information was given on the understanding that it would be treated by the body as confidential and,
that disclosure of the information would be likely to prejudice the giving to the body of further similar information from the same person or other persons and,
that it is of importance to the body that such further similar information should continue to be given to the body.

All four of these requirements must be satisfied for section 35(1)(a) to apply. Even then, the section is subject a public interest balancing test set out in section 35(3).

In its submission, the Department simply stated that it was of the view that section 35 applied to the records and that the information was given in confidence. However, it went on to say that the likelihood of the release of the records prejudicing the Department were considered minimal if at all likely. The Company essentially argued that all four tests for section 35(1)(a) to apply were met and that the Department was obliged to refuse to release the records under that section

It is the circumstances in which the information was imparted and received that are important in determining whether the first two requirements of section 35(1)(a) are met. In determining whether the information was given in confidence and on the understanding that it would be treated by the FOI body as confidential, a number of factors may be relevant. These include: the expectations of the person giving the information to the FOI body; any assurances sought or given regarding the information; the purpose for which the information was sought or provided; the practice, procedure or policy of the FOI body with regard to such information; any action which the FOI body may be expected to take in relation to the information; and the nature of the relationship between the provider of the information and the FOI body receiving it. The understanding of confidentiality may be express or implied.

All of the records at issue are concerned with the issue of the reopening of the sector following the imposition of restrictions arising from the Covid-19 pandemic. They contain, among other things, details of the Company’s concerns and suggestions relating to the reopening and discussions on the various possible solutions and related issues. Records 2, 5, 7, 9, 10, 11, 12, 13 and 14 are all emails from a representative of the Company to the Department regarding setting up meetings, proposing agenda items for those meetings, following up on issues discussed at the meetings, and highlighting various concerns of the Company about the progress being made. All of the emails were copied to one or more individuals representing other private sector organisations or other government Departments /state agencies.

It seems to me that the purpose of the emails was both administrative and to seek to influence the Department’s decision making processes on the matter of the reopening of the sector. Given their contents and the apparent purposes of the records, I find it difficult to accept that the Company could reasonably have expected that the records would be treated as confidential.

In the circumstances, I find it difficult to accept that the Company can reasonably argue that it understood that it was communicating with the Department in confidence and on the understanding that it would be treated by the Department in confidence. Moreover, I am not satisfied that the third condition is met. It seems to me that the disclosure of the records at issue would not prejudice the Company giving further similar information to the Department in the future, in circumstances where it was essentially seeking to protect and further its own interests in ensuring a speedy re-opening of its sector.

Record 1 is a letter sent by a senior representative of the Company to an Assistant Secretary in the Department in May 2021, and is marked ‘Strictly Private & Confidential’. Record 15 is a letter sent by the Chief Executive to the same Assistant Secretary in July 2021. Both of these letters set out the Company’s views on what actions need to be taken in order to reopen the sector. As with the email records discussed above, I do not accept that the release of the information contained in records 1 or 15, could prejudice the Company from giving further similar information to the Department. It is in the Company’s interests to engage with the Department and to share its views and perspectives in an effort to influence Departmental decision making on the matter. I find that the third requirement in section 35(1)(a) is not met for either of these records.

As all four requirements must be fulfilled for section 35(1)(a) to apply, I find that section 35(1)(a) does not apply to any of the records at issue. As I have found section 35(1)(a) not to apply, there is no requirement for me to consider the public interest test under section 35(3).

Section 36 - Commercially sensitive information

Section 36(1) provides that an FOI body shall refuse to grant a request if the record concerned contains:

trade secrets of a person other than the requester concerned,
financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation, or
information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

Section 36(3) provides that section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than by refusing the request. The Company argued that section 36(1)(b) and 36(1)(c) applied to the records at issue.

Section 36(1)(b)

The essence of the test in section 36(1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release. The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable. The standard of proof in relation to the second limb of section 36(1)(b) is low; all that is required is the possibility of prejudice with the only requirement being that disclosure "could prejudice the competitive position" of the person concerned.

The Supreme Court in University College Cork v The Information Commissioner [2020] IESC 58 confirmed that the standard of proof in relation to the second limb of section 36(1)(b) is “very low”. Nevertheless, it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice its competitive position.

The Company said that the records contained commercial information of a highly sensitive nature, including its potential future operational plans which, if disclosed, could result in a material financial loss to the Company, potentially impacting sales, investor confidence and ultimately share prices and could prejudice the Company in the conduct of its business.

Having carefully examined each of the records at issue, I note that in addition to administrative matters around the arranging of meetings, they contain various views and concerns of the Company about the re-opening in 2021 of the sector in which the Company operates, and the progress being made by the Department and others in relation to this. It seems to me that the concerns raised by the Company in the records are applicable to the industry in general rather than specifically to the Company itself. I do not accept that the records contain a level of detail about the Company’s operational plans, or anything else, that could be useful to its competitors. In fact, I note that all of the records that are emails (2, 5, 7, 9, 10, 11, 12, 13 and 14) are copied to a representative of one of Company’s competitors. Moreover, the records are all at least 10 months old and developments in relation to the reopening of the sector has evolved significantly since then. While the Company has set out the harms it envisages from the release of the records, it has not explained how these harms could arise as a result of the release of the specific information contained in the records. Nor can I see how such harms might arise. I find that section 36(1)(b) does not apply.

Section 36(1)(c)

Pursuant to section 36(1)(c), access to a record must be refused where the disclosure of information contained in the record could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. The standard of proof required to meet this exemption is relatively low in the sense that the test is not whether prejudice or harm is certain to materialise but whether it might do so. Having said that, the Commissioner expects that a person seeking to rely on this exemption would be able to show that contractual or other negotiations were in train or were reasonably foreseen which might be affected by the disclosure and explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations.

The Company simply said that disclosure of the records could prejudice the Company in current and ongoing contractual or other negotiations with third parties. It did not specify which contractual or other negotiations were in train and might be affected, or explain how disclosure could have an impact on such negotiations. Having regard to the content of the regards, it seems to me that the Company may have been referring to negotiations with the Department on the reopening of the sector. As noted above, this review is de novo and carried out in light of the facts and circumstances at this time. The records concerned are at least 10 months old and were referred to in the Company’s lobbying return in 2021. The actions sought by the Company at that point in terms of reopening the sector have already taken place. I cannot see how the release of the records could prejudice the conduct or outcome of contractual or other negotiations of the Company. I find that section 36(1)(c) does not apply.

As I have found neither section 36(1)(b) nor 36(1)(c) to apply, there is no requirement for me to consider the public interest test under section 36(3).

In conclusion, therefore, I find that the Department was justified in its decision to grant access to the relevant records.

Decision

Having carried out a review under section 22(2) of the FOI Act, I affirm the decision of the Department to grant access to the records at issue, on the basis that they are not exempt from release under section 35 or section 36 of the FOI Act.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

 

Stephen Rafferty
Senior Investigator