Case number: 100173

Whether the Department was justified in its decision to refuse a request for access to records made under section 7 of the FOI Act on the basis that records are exempt from release in accordance, variously, with sections 21, 26, 27 and 31 of the FOI Act.

Review Application under the Freedom of Information Acts 1997 & 2003 (FOI Act) to the Information Commissioner

Background

On 4 June 2010 the applicant made a request under section 7 of the FOI Act to the Department in which he sought:-

A copy of the letter from the Minister for Finance Brian Lenihan to the then chief executive of the National Treasury Management Agency (NTMA) Dr Michael Somers dated February 9th 2009 relating to the role of the NTMA.

  • A copy of the letter from the Minister to Dr Somers dated February 18th 2009 relating to the possible role for the NTMA.
  • A copy of the letter from Dr Somers to the Minister dated March 2nd 2009 relating to the NTMA's functions.
  • A copy of the letter from Dr Somers to the Minister dated June 15th 2009 relating to the liquidity of the banking system.
  • A copy of the letter from the Minister to Dr Somers dated July 3rd 2009 - a reply to the letter of June 15th 2009 from Dr Somers to the Minister.
  • A copy of the letter from Dr Somers to the Minister dated October 27th 2009 relating to the staffing of the National Asset Management Agency (NAMA).
  • A copy of the letter from Dr Somers to the Minister dated November 11th 2009 relating to the board of Nama".

 

These records are referred to in this decision as Records 1 - 7 following the order of the original request.

In its decision of 23 June 2010 the Department refused access to all seven records in accordance, variously, with sections 21, 26, 27, 28 and 31 of the FOI Act and considered that the balance of the public interest lay against release of the records. On 28 June 2010, the applicant sought an internal review of the Department's decision. In its internal review decision of 20 July 2010 the Department upheld its original decision to refuse to release the records. On 21 July 2010, the applicant applied to my Office for a review of the Department's decision.

In the course of my Office's contacts with the Department, during the course of this review, it agreed to the full release of Records 1 and 3 and to the release of Record 6 subject only to a minor redaction. In the course of the review the applicant also agreed to narrow the scope of the review to exclude Record 7.

In conducting the review, my Office received a submission from the applicant as well as detailed submissions from the Department in support of its case that the records remaining at issue should not be released. In particular, I should record that the Department gave detailed replies, and useful clarifications, in response to preliminary views which were put to it by my Office's investigator. As Records 2 and 4 contain references to third parties, my investigator also consulted with those third parties. In the case of Record 2, the third party involved had no objection to release of the information. Record 4 which was received by the Department from the NTMA, contains references to two other third parties: both the NTMA and one other party agreed with the views of the Department that the public interest and the economic interests of the State are better served by withholding the information in the record, while another party had no objections to release of the information.

In conducting this review I have had regard to

  • the application for review,
  • the submissions made by the applicant,
  • the submissions of, and clarifications provided by, the Department,
  • the content of the records at issue, and
  • the provisions of the FOI Act.

 

Scope of Review

The issue in this review is whether the Department is justified in its decision to refuse access to the records which have not been released to the applicant. These records, and the exemptions relied upon by the Department for refusing release, are as follows:

Record No. 2 is a letter dated 18 February 2009 from the Minister for Finance to the then Chief Executive of the NTMA, seeking the NTMA's assessment of a particular proposal. The Department initially claimed exemption under sections 21(1)(c), 31(1)(a) and (b) of the FOI Act. Subsequently, in the course of the review, it sought to rely also on the exemptions at section 27(1)(a) and (b) of the FOI Act.

Records No. 4 and 5 are letters from the then NTMA Chief Executive to the Minister for Finance and the response from the Minister. The letters, which concern the liquidity of the banking system, are dated 15 June 2009 and 3 July 2009. The Department initially claimed exemption under sections 26(1)(a) - for record 4 only - as well as section 31(1)(a) of the FOI Act. Subsequently, in the course of the review, it sought to rely also on the exemption at section 21(1)(c) of the FOI Act.

Record No. 6 is a letter dated 27 October 2009 from the then Chief Executive of the NTMA to the Minister relating to the staffing of the National Asset Management Agency. All but one sentence of this record has been released during the course of this review. The Department relies on the exemption at section 27(1)(c) of the FOI Act and possibly that at section 27(1)(a) for the continued refusal of the remaining sentence.

Preliminary Matters

Before dealing with the exemptions claimed, I wish to make two points. The first is that, while I am required by section 34(10) of the FOI Act to give reasons for my decisions, this is subject to the requirement of section 43 that I take all reasonable precautions to prevent disclosure of information contained in an exempt record during the course of a review. I also have to refrain from disclosing information which a public body contends is contained in an exempt record so as to preserve that party's right of further appeal to the High Court. These constraints mean that, in the present case, the extent of the reasons that I can give is somewhat limited.

Findings

Records 2, 4 and 5
The Department maintains that information contained in records Records 2, 4 and 5 is properly withheld from release in accordance with sections 21(1)(c) and 31(1)(a) of the FOI Act. It has also cited the exemptions contained in sections 26 and 27 in support of its arguments for refusing access to one or more of each of the three records.

Section 21 - Functions and Negotiations of Public Bodies
Section 21 provides as follows:

"21 - (1) A head may refuse to grant a request under section 7 if access to the record concerned could, in the opinion of the head, reasonably be expected to -

( a ) prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of a public body or the procedures or methods employed for the conduct thereof,
( b ) have a significant, adverse effect on the performance by a public of any of its functions relating to management (including industrial relations and management of its staff), or
( c ) disclose positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be, carried on by or on behalf of the Government or a public body.

 

(2) Subsection (1) shall not apply in relation to a case in which in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request under section 7 concerned."

Section 21 does not constitute a mandatory exemption; it is one which "may" be applied. Also while sections 21(1)(a) and (b) involve a harm test ("prejudice" and "significant, adverse effect" respectively), section 21(1)(c) does not contain a harm test. For the section 21(1)(c) exemption to be engaged, it is sufficient that the record concerned could reasonably be expected to disclose positions etc. There is no requirement to take a view on the consequences of that disclosure.

From my examination of Records 2, 4 and 5, I am satisfied that they do disclose " positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be, carried on by or on behalf of the Government or a public body." However, in line with section 21(2), the exemption is dis-applied where the public interest, on balance, is better served by granting the request than by refusing it.

I deal later in this decision with the question of the public interest.

Section 31 - Financial and Economic Interests of the State and Public Bodies
The Department claims that the exemption in sections 31(1)(a) applies to Records 2, 4 and 5; in addition, it claims that section 31(1)(b) applies also to Record 2. Section 31(1) provides:

"31. (1) A head may refuse to grant a request under section 7 in relation to a record (and, in particular, but without prejudice to the generality otherwise of this subsection, to a record to which subsection (2) applies) if, in the opinion of the head:

(a) access to the record could reasonably be expected to have a serious adverse effect on the financial interests of the State or on the ability of the Government to manage the national economy;

(b) premature disclosure of the information contained in the record could reasonably be expected to result in undue disturbance of the ordinary course of business generally, or any particular class of business, in the State and access to the record would involve disclosure of the information that would, in all circumstances, be premature, or

(c) access to the record could reasonably be expected to result in an unwarranted benefit or loss to a person or class of persons.

Section 31(2)(a) to (o) lists 15 separate categories of information to which section 31(1) applies. The Department has identified section 31(2)(e) as being of particular relevance; it concerns a record relating to:

(e) the regulation or supervision by or on behalf of the State or a public body of the business of banking or insurance or the lending of money or of other financial business or of institutions or other persons carrying on any of the businesses aforesaid; "

Record 2 is a letter dated 18 February 2009 from the Minister for Finance to the then Chief Executive of the NTMA, seeking the NTMA's assessment of a particular proposal. Records 4 and 5 are letters to do with the liquidity of the banking system from the then NTMA Chief Executive to the Minister for Finance and the response from the Minister. The letters are dated 15 June 2009 and 3 July 2009. Record 4 is in the nature of a proposal from the NTMA and Record 5 constitutes a reply to that proposal. In the event, the proposal was not acted upon. While I am satisfied that all three records are captured by the category of information identified at section 31(2)(e) of the FOI Act, the real test is whether any of the harms envisaged in sub-section (1) can reasonably be expected to result consequent on disclosure of a record.

As I have indicated above, I am constrained in the extent to which I can give reasons for my decisions in this case. This is primarily due to the fact that full disclosure of the arguments advanced by the Department as to harms which, it considers, could reasonably be expected to arise if the records at issue were to be released could, in effect, give rise to those same harms if I accept its arguments. However, I can say that in essence, the Department argues that disclosure of the records at issue could cause the financial markets to take a negative view of Ireland's capacity to repay borrowing. As such, given the current economic climate, it considers that disclosure of the records could reasonably be expected to have a serious adverse effect on the financial interests of the State or on the ability of the Government to manage the national economy. Having carefully considered the Department's arguments on this point, I accept that it is reasonable to expect that such harm will arise. Accordingly, I am satisfied that, on the face of it, Records 2, 4 and 5 qualify for exemption under section 31(1)(a) of the FOI Act.

However, this is not the end of the matter because, as with section 21, the section 31 exemption is dis-applied where the public interest, on balance, is better served by granting the request than by refusing it.

Public Interest Test
Section 21 of the FOI Act recognises the public interest in protecting the functions and negotiations of public bodies. Section 31 recognises that there is a public interest in protecting the State and public bodies from loss or prejudice. The FOI Act in its totality recognises the public interest in promoting and achieving transparency in government. The exercise required by sections 21(2) and 31(3) is to weigh, in the circumstances of this case, the extent to which the public interest is served both by the refusal and by the granting of the request and to judge where, on balance, the public interest is better served.

In conducting this exercise in this particular case it is relevant to consider the extent to which release of the records might undermine the public interest in protecting the functions and negotiations of public bodies in so far as they relate to the financial interests of the State and possible effects of release in negotiations in the financial environment. It is also relevant to consider the extent to which release of the records might undermine the public interest in protecting the financial and economic interests of the State and the possible effects of release on those financial and economic interests and on the Government's ability to manage the national economy.

In my view the prospect that release of records causing significant harm as claimed by the Department with the type of consequences suggested by it, cannot be lightly disregarded or dismissed, especially given the uncertainty and volatility of international markets. While the Department has asserted that release of the records will have negative consequences for how it performs its functions and engages in negotiations, I am not satisfied that it has supported this assertion to any real extent. However, I consider that the release of a record which could reasonably be expected to have a serious adverse affect on the financial interests of the State should only be contemplated where there is a significant public interest served by releasing such a record. I recognise, as claimed by the applicant, that the public interest in transparency is served only where records are released and that refusing release is contrary to the public interest in achieving transparency. In this case, however, having accepted the Department's contention that the release of the records could reasonably be expected to have a serious adverse affect on the financial interests of the State, I do not believe that the public interest in achieving transparency is sufficient to outweigh the public interest in ensuring that such harm does not arise. Indeed, I am not aware of any overwhelming public interest in this case that could rightly set aside the public interest in protecting the financial interests of the State. Therefore, I am satisfied, on balance, that public interest is better served by affirming the Department's decision and find that the exemption at section 31(1)(a) applies.

Having found that section 31(1)(a) applies, I do not consider it necessary to consider the Department's arguments in relation to the applicability of sections 26 and 27 to the records at issue.

Record 6
The Department claims that the exemptions in section 27(1)(c) applies to the redacted portion of Record 6. Section 27, in relevant part, provides as follows:

"27-(1) Subject to subsection (2), a head shall refuse to grant a request under section 7 if the record concerned contains-

(a)....,

(b)... , or

(c) information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

Record 6 is a letter dated 27 October 2009 from the then Chief Executive of the NTMA to the Minister relating to the staffing of the National Asset Management Agency. All but one sentence of this record has been released during the course of this review. The Department relies on the exemption at section 27(1)(c) of the FOI Act for the continued refusal of the remaining sentence.

In this case, the entity to whom the information relates is the NTMA and any prejudice arising from disclosure of the record would be suffered by that agency. Having examined the redacted sentence of Record 6, I am satisfied that its disclosure "could prejudice the conduct or outcome of contractual or other negotiations" of the NTMA and that, on the face of it, section 27(1)(c) applies.

Section 27(3) provides that the exemptions contained in section 27(1) do not apply to a case "in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request.....". In this instance, the key public interest considerations are the value of transparency in relation to the conduct of government, on the one hand, and the value in protecting an entity (in this case the NTMA) from prejudice in relation to contractual or other negotiations, on the other hand. In the case of Record 6, the public interest in transparency has already been served by the release of all but one sentence of record. My view that the release of the redacted sentence of the record will not contribute in any significant way to the further serving of the public interest in transparency. On the other hand, I am satisfied that release of the redacted sentence might well be prejudicial to the NTMA in the conduct of contractual or other negotiations. I am satisfied, in these particular circumstances, that the balance of the public interest lies in withholding the redacted sentence. I find therefore that the redacted sentence in Record 6 is exempt from release by virtue of section 27(1)(c) of the FOI Act.

Decision

Having carried out a review under section 34(2) of the Freedom of Information Act 1997, as amended, I hereby affirm the decision of the Department of Finance in relation to Records 2, 4 and 5 and 6.

Right of Appeal

A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks from the date on which notice of the decision was given to the person bringing the appeal.

Emily O'Reilly,
Information Commissioner
29 June 2012