Case number: 99314, 99318, 99319, 99321 & 99327
Appeal by ABC Ltd of separate decisions of the Office of the Comptroller and Auditor General, the Department of Health & Children, the Department of Social Community & Family Affairs, the Department of Public Enterprise and the Eastern Health Board to grant access to invoices received from ABC Ltd - whether information in invoices is given in confidence - sections 26(1)(a) and 26(1)(b) - whether information in invoices is commercially sensitive - sections 27(1)(a), 27(1)(b) and 27(1)(c) - public interest
ABC Ltd appealed the decisions of a number of public bodies to grant access to invoices received from ABC Ltd. ABC Ltd argued that the invoices were supplied in confidence and that the description of goods and services contained in the invoices amounted to commercially sensitive information.
The Commissioner affirmed the public bodies' decisions to grant access to the invoices in full. The Commissioner did not accept that the invoices were supplied in confidence as the invoices were supplied to facilitate payment to ABC Ltd and the public bodies themselves did not treat the information in a confidential manner.
While the invoices contained a description of the quantity, price and services delivered to the public bodies, the Commissioner did not accept that disclosure could reasonably be expected to result in a material financial loss to ABC Ltd, or could prejudice its competitive position. He explained that the information in the invoices was so general, brief and historic that it would be of very limited use to a competitor.
Although it was not strictly necessary to do so, the Commissioner considered the question of the public interest. While he acknowledged the public interest in persons being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result, he believed that, in the circumstances of this case, there was a stronger public interest in public bodies being open and accountable with regard to the use and value for money of public funds.
Our Reference: 99314, 99318, 99319, 99321 & 99327
Dear ABC Ltd
I refer to your application for a review of the decisions of the following public bodies to grant access to a number of invoices received from ABC Ltd.
Our reference No. Office of the Comptroller and Auditor General 99314 Department of Health & Children 99318 Department of Social Community & Family Affairs 99321 Department of Public Enterprise 99327 Eastern Health Board 99319
I have been authorised by the Information Commissioner to carry out that review on his behalf. I have now completed my review under section 34 of the Freedom of Information Act. In carrying out that review I have had regard to your correspondence with this Office, your original submissions to the public bodies concerned, and the decisions of the public bodies. I have also examined the records involved.
I note that on the 5 October 2000 Mr Nutley, Investigator, wrote to you outlining his preliminary view on the issues involved in these cases and offering you a period of three weeks in which to make any further comments you may have. As that period has now passed and as I have not heard from you, I have decided to conclude my review by issuing a formal decision.
In summary my decision is to grant access to the records or parts of records involved, with the exception of one invoice which was created before the commencement of the Freedom of Information Act.
My review is concerned solely with the question of whether the decision of the public bodies to grant access to the invoices or parts of invoices as described in Mr Nutley's letter of 5 October 2000 was correct. For the avoidance of doubt, I should point out that my decision is not concerned with the question of access to tender documents submitted by the company to the Department of Public Enterprise and the Department of Health and Children because the requester indicated subsequently to both departments that he no longer wished to have access to such documentation.
As explained to you in Mr Nutley's letter, the sections of the Freedom of Information Act relevant to this review are section 26, which relates to confidential information, and section 27 which relates to commercially sensitive information.
I should also again draw your attention to the terms of section 34(12) of the FOI Act. This provides that a decision to grant a request to which section 29 applies shall be presumed to have been justified unless the third party concerned shows to the satisfaction of the Information Commissioner that the decision was not justified. In the circumstances the onus rests with ABC Ltd of satisfying the Commissioner that the decisions by the public bodies listed above to release the records in this case are not justified.
I note that you did not make specific reference to this section in your submissions to the public bodies concerned. However, as you claimed that all information between a supplier and his client is "commercially confidential", it appears that you may be arguing that section 26 applies.
As the Commissioner explained in the case of OPW and Henry Ford & Son Ltd et al (ref no 98049, etc.), for section 26(1)(a) to apply it is necessary to show four things :
In order to meet the first two requirements of section 26(1)(a) there must be a mutual understanding that the information is to be treated in confidence. The invoices in this case were provided to the public bodies to facilitate payment to ABC Ltd as a result of the supply of goods and services. While you may claim that the invoices were given by you to the public bodies in confidence I do not accept that the bodies themselves either treated the information in a confidential manner or understood that such information was supplied in confidence. None of the public bodies involved has indicated or stated that it treated the invoices as confidential and none has found that section 26 of the Act applied in considering release of the material requested.
I therefore find that you have not shown to my satisfaction that section 26(1)(a) applies in this case.
To successfully invoke section 26(1)(b) it is necessary to show that disclosure would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment or otherwise by law. I note that you have made no argument that this is the case in this instance. I am not aware of any agreement or enactment which requires this information to be treated as confidential by the public bodies concerned. I am not satisfied that the information was imparted to the public bodies in circumstances imposing an equitable duty of confidence. In the circumstances, and bearing in mind the requirements of section 34(12) referred to above, I find that section 26(1)(b) does not apply.
Section 27 of the Act relates to the protection of three different classes of commercially sensitive information.
Section 27(1)(a) of the Act protects the trade secrets of the person concerned. Mr Nutley's letter of 5 October explained the Commissioner's approach, as set out in case number 98049, to the question of what constitutes a trade secret within the meaning of section 27(1)(a).
The information in the invoices lists the description, quantity and price of the goods or services delivered to the public bodies concerned. Apart from any other consideration, such information is, by definition, available to the customers of ABC Ltd concerned. In addition it does not appear of itself to be of any significant value at this stage to your competitors. In general, I would not expect information that would be called a 'trade secret' to appear in invoices.
Therefore, applying the test of 'trade secret' outlined to you by Mr Nutley I am not satisfied that the information contained in the invoices constitutes a 'trade secret'.
Section 27(1)(b) protects "...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, ........." .
I accept that the information in this case comes within the description "financial or commercial". As the Commissioner explained in the case of Telecom Eireann and Mr Mark Henry, (ref no 98114), the essence of the test in section 27(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The subsection protects information whose disclosure:
You have argued that release of ABC Ltd's prices and business transactions could prejudice the company's competitive position particularly as "details could be used to provide information to competing suppliers on matters such as the services in which ABC Ltd is engaged in". I also note that you particularly argued that information concerning prices, standard daily rates and descriptions of goods or services should not be disclosed.
The information in the invoices lists the prices and quantities of a number of computer related parts purchased by the public bodies concerned. The invoices also give a brief, general description of some consultancy services provided by ABC Ltd. The invoices range in date from 20 May 1998 to 23 April 1999. I accept that a competitor could learn some information from these invoices. However the information in the invoices is of limited use mainly because of its generality and brevity. The information is also 18 months old or older in most cases. Given the rate of change in the communications/IT industry and other factors such as changes in costs and increased competition, I am not satisfied that such dated information would be of anything other than very limited use to a competitor.
Therefore, having examined the material in the invoices, I am not satisfied that release of the information could reasonably be expected to result in a material financial loss or gain to ABC Ltd or could prejudice its competitive position.
Section 27(1)(c) provides that a head shall refuse to grant a request under section 7 if the record concerned contains-
" information whose disclosure 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 harm is certain to materialise, but whether it might do so. Having said that, I would expect 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. I would also expect such a person to be able to explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations. I note that you have made no argument that this is the case in this instance. In the circumstances, and having regard to the provisions of section 34(12), I am not satisfied that section 27(1)(c) applies.
In relation to invoice number 003446 dated 19 October 1998 held by the Eastern Health Board, I find that the record is a record created before the commencement of the Act for health boards. It does not contain any personal information about the person making the request and no argument has been put to me that access to the record is necessary or expedient to understand a record created after the commencement of the Act. I therefore find that no right of access to the record exists.
Since I have found that section 26 and section 27 do not apply in this case it is not strictly necessary for me to consider the question of the public interest. However, as some of the public bodies concerned took the view that, at the time of their decisions, the information was capable of coming within section 27 but that the public interest would, on balance, be better served by disclosure than non-disclosure in this case, I would like to make the following comments.
Commercially sensitive information (within the meaning of section 27(1)) or confidential information (within the meaning of section 26(1)) cannot be released under the Act unless it is considered that the public interest is better served by doing so. I accept that there is a legitimate public interest in persons being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result and it is this public interest which section 27(1) seeks to protect. However the Act also recognises, both in its long title and in its individual provisions that there is a significant public interest in public bodies being open and accountable.
In attempting to strike the balance between openness on the one hand and the need to protect commercially sensitive or confidential information on the other, the Commissioner has indicated that he must consider the positive public interest which is served by disclosure and the harm that might be caused by disclosure.
The positive public interest which would be served by disclosure of the price at which goods or services are supplied to a public body is the public interest in ensuring the maximum openness in relation to the use of public funds. Such openness is a significant aid to ensuring effective oversight of public expenditure, to ensuring the public obtains value for money, to preventing fraud and corruption and to preventing the waste or misuse of public funds.
This public interest in favour of disclosure has to be balanced against the harm which might be caused by disclosure. As I said earlier, I am not satisfied that release of the information contained in these invoices could reasonably be expected to result in a material financial loss to ABC Ltd or could prejudice its competitive position. Even if I were to accept that any such harm to the company could materialise, I would find it difficult to accord significant weight to this factor in deciding whether the public interest was better served by release in this case. In saying this, I have taken into account a number of factors. The first is that the information is historic and, of itself, discloses nothing about the policy adopted by the company or how it arrives at such prices. Because of this it seems to me that release of the information could not have the same adverse impact as, for example, the release of a trade secret comprising a secret process where release could result in a material loss to the party concerned.
I would also take into account that, apart from your assertion that release of details could be used to provide information to competing suppliers on matters such as the services in which ABC Ltd is engaged in, no further evidence was presented that the harms envisaged by section 27(1)(b) quoted above which you feel could occur, are likely to occur. In balancing the public interest, a prejudice which is no more than a mere possibility has to carry a great deal less weight than a prejudice which is likely to occur.
If I had to decide this matter on the basis of the public interest I would conclude that the advantages in terms of openness and accountability of disclosing where and on what public funds have been spent, outweigh the possible harm to your company and that the public interest is better served by release of the information.
I should note that the release of details concerning the IT systems of a public body could, conceivably, have security implications for the public body involved. Apart from the Eastern Health Board which deleted the brand name of its firewall, this is not an issue that was raised by the public bodies concerned. However, nothing in this decision should be taken as a direction to release information which would put at risk the security of the systems of the public bodies concerned.
Having completed my review under section 34(2) of the Act, I hereby affirm the decisions of the Office of the Comptroller and Auditor General, the Department of Health & Children, the Department of Social, Community & Family Affairs and the Department of Public Enterprise. I vary the decision of the Eastern Health Board in that I have decided that invoice number 003446 referred to above need not be released. These decisions are subject to the deletion of information which, if released, could be used to effect a breach of the security of the systems used by the public bodies concerned.
A party to a review, or any other person affected by a decision of the 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 4 weeks from the date of this letter.