Case number: OIC-127651-M1N6D8

Whether the Housing Agency was justified in refusing access to Records including correspondence, minutes and reports relating to the assessment and review of AHBs by the Regulation Office of the Housing Agency

 

4 October 2023

 

Background

On 13 June 2022, the applicant submitted a detailed request to the Housing Agency (the Agency) for the following records relating to the regulation and assessment of Approved Housing Bodies (AHBs):

1. Regulatory Assessment Reports relating to AHBs (Tier 1, Tier 2, and Tier 3) that were classified as having an engagement level of either ‘High’ or ‘High/Medium’.

2. Regulatory Assessment Reports of any Tier 3 AHB classified as having an engagement level of ‘Medium’.

3. Any associated correspondence relating to those reports, including minutes of any meetings with the Regulation Office between the relevant AHB and the Regulation Office.

4. Letters sent by the Regulation Office between 2014 - 2019 to AHBs, which relate to their being removed from the AHB listing due to non-compliance with the Framework, as set out in the 2014 Annual Report of the Regulation Office.

5. The final and draft report issued to a particular AHB that was referenced in the minutes of a 21 March 2018 meeting of the Regulation Committee (meeting 22) as an “at risk organisation”

6. Any minutes/memo of the meeting held with the AHB in question

7. Copies of the correspondence (with any attachments, supporting documents and replying correspondence) sent by the Regulation Office to other organisations concerning this AHB.

8. Copies of any minutes/memo of a meeting between the Regulation Office and the Charities Regulator on April 11, 2018, that was referenced in paragraph 4c of the minutes of meeting 23 (April 26, 2018), and associated correspondence in respect of the reference that the CRA had requested “additional information”.

9. Copies of correspondence referenced in paragraph 7 of the minutes of meeting 23 (April 26, 2018) relating to an “at risk” organisation”.

10. Copies of any “organisation reviews” of any AHB carried out on behalf of the Regulation Office (externally) or done by the Regulation Office (in-house) from 2016 to 2019.

In its decision of 20 July 2022, the Agency identified 47 records as coming within the scope of the request, comprising 37 assessment reports from 2014 to 2019, the minutes of meeting 23 of the Regulation Committee, and nine records relating to an “at risk” AHB referred to at meetings 22 and 23 of the Committee. It refused access to all 37 assessment reports under sections 35(1)(b), 36(1)(b), 36(1)(c), and 40(1)(d) of the Act. It released a copy of the minutes of meeting 23 of the Regulation Committee. Of the records relating to the “at risk” AHB, it granted partial access to eight records and refused access to one, with the records withheld in whole or in part under sections 35(1)(b) 36(1)(b), 36(1)(c), and 37(1). On 21 July 2022, the applicant sought an internal review of the Agency’s decision, following which the Agency affirmed its decision. On 25 August 2022, the applicant applied to this Office for a review of the Agency’s decision.

I have now completed my review in accordance with section 22(2) of the FOI Act. During the review, the investigator notified fourteen affected AHB’s of the review and invited submissions. Some, but not all, of the AHB’s made submissions in response. In carrying out my review, I have regard to the correspondence between the applicant and the Agency as set out above and to the correspondence between this Office and all relevant parties on the matter. I have also had regard to the contents of the records at issue. I have decided to conclude this review by way of formal, binding decision.

Scope of Review

The review is concerned solely with whether the Agency was justified in its decision to refuse access, in whole or in part, to 46 records relating to the regulation and assessment of AHBs, under sections 35(1)(b), 36(1)(b), 36(1)(c), 37(1) and 40(1)(d) of the FOI Act.

Preliminary Matters                                                                        

Before I address the substantive issues arising, I would like to make a number of preliminary comments.

First, a review by this Office under section 22 of the FOI Act is de novo which means that in this case, it is based on the circumstances and the law as they apply on the date of the decision. It should be noted that a decision made by this Office in one particular case does not create a binding precedent for other cases.

Secondly, although I am obliged to give reasons for my decision, section 25(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. Accordingly, the extent to which I can describe the contents of the records at issue is somewhat limited.

Finally, it is relevant to note that the release of records under FOI is, in effect, regarded as release to the world at large given that the Act places no constraints on the uses to which the information contained in those records may be put.

The Regulation of AHBS

AHBs

AHBs are independent legal entities that own, lease and manage social housing. They are private not-for-profit organisations formed for the purpose of relieving housing need. They independently source housing on the open market. They compete with each other and also with private developers and/or landlords in bidding processes for houses and land for the provision of housing. They acquire units through leasing and management arrangements. They submit competitive bids to the Agency and local authorities where these entities have established competitive processes for the development of housing and invite AHBs to make bids.

In 2013, the relevant Minister launched the AHB Voluntary Regulation Code (the Code). The Code notes that Government housing policy places AHBs at the heart of social housing provision in the coming years. It describes itself as a stepping stone to a legally binding statutory regulatory framework and provides a context in which AHBs can sign up to voluntary regulation and oversight. It sets out key governance, management, measurement and financial requirements applicable to all AHBs to some extent and classifies AHBs as Tier 1, 2 or 3 depending on levels of risk. AHBs are required to sign up to the Code and to meet certain requirements before they are eligible for certain types of public funding as provided by bodies other than the Agency.

The Housing Agency acted as the interim regulator of AHBs under the Code until the establishment of the statutory regulator, the Approved Housing Bodies Regulatory Authority (AHBRA) in February 2021. AHBRA describes its purpose as supporting stronger governance and the financial viability of the AHB sector, with a particular focus on safeguarding the significant public investment made in the delivery of social housing by AHBs. The powers of the Authority were commenced in July 2022. Importantly, the Regulatory Framework within which AHBs now operate includes the registration for AHBs, the Standards for AHBs, monitoring and assessing of compliance, education and guidance.

As part of its Regulatory Framework, AHBRA will carry out a monitoring and assessment programme. Accordingly, all registered AHBs will be required to complete and submit an Annual Monitoring Form to AHBRA each year. AHBs will be asked to provide a range of data and information relating to their organisation in the areas of tenancy management, property and asset management, financial management and reporting and governance. Section 38 of the Housing (Regulation of Approved Housing Bodies) Act 2019, allows AHBRA carry out an assessment of compliance by an AHB, including a reactive assessment, should any material issues come to their attention. AHBs assessed will receive an assessment report which provides an overall regulatory outcome of compliant or non – compliant.

It is also relevant to note that in February 2018, the Central Statistics Office and Eurostat re-classified 14 Tier 3 AHBs to be part of the local Government sector. In general terms, this means that their debts could be moved onto the State's balance sheet. Eurostat considered that the AHBs concerned are controlled by government having regard to such matters as the low level of private sector funding, the exposure of government to certain financial risks and the AHBs’ non-market nature (e.g. their aims of relieving housing needs, the requirements not to distribute surpluses, profits etc. to members, the types of rent charged, etc.)

Case no 180291 and 102999

This review is similar in nature to two decisions this Office issued in case 180291 on 19 June 2019, and in case OIC-102999 on 25 May 2022. The records in case 180291 concerned a request to the Agency for Regulatory Assessment Reports. The Senior Investigator directed the release of the reports in the public interest. Records 1 to 37 in this case comprise similar regulatory assessment reports.

The decision in case 180291 was appealed to the High Court by the Housing Agency on 16 July 2019. The decision was set aside on 29 July 2020 with no requirement for a remittal for a fresh review. It is relevant to note that the decision in case no. 180291 issued before the Supreme Court issued its judgment in The Minister for Communications, Energy and Natural Resources v The Information Commissioner & Ors [2020] IESC 57 (the ENet judgment).

The records in case 102999 consisted of Engagement Regulatory Returns, which were submitted by Approved Housing Bodies (AHBs) to the Housing Agency. In that case, the Senior Investigator affirmed the Agency’s decision not to release the records on the basis that they contained commercially sensitive information and that the public interest would not, on balance, be better served by their release.

Analysis and Findings

The records in question

As noted above, I am limited in the descriptions which I can provide of the records at issue. However, I believe it would be useful to provide some high-level detail in respect of the records. Records 1 to 37 comprise Engagement Assessment Reports. The purpose of the reports was to determine whether the AHBs in question were in engagement with the Voluntary Regulation Code standards which were operated by the Agency. The reports make findings and recommendations in respect of a number of different categories, such as Governance, Finance and Performance Standards. The reports were prepared by Housing Agency staff, using information from the Annual Regulatory Returns that were submitted by the relevant AHBs. 

Records 39 to 46 concern the Agency’s engagement with, and regulation of, one at-risk Tier 2 AHB. The records include a draft report, report and correspondence to various departments and other public bodies in relation to poor governance practices displayed by the particular AHB. The records have been partially released, with the redaction of all information that could identify the organisation and its directors and other financial details. Without going into extensive detail, the matter involved a considerable financial contribution, involving public funds, from the AHB to two private companies in circumstances where it was determined that a conflict of interest existed.

Record 47 comprises a report carried out by a third party consultant in respect of governance practices within another named AHB. More specifically, the report relates to the implementation of recommendations following the initial external review, and the appraisal of the AHBs progress towards compliance with the recommendations in that original report. Access to the report has been refused in full by the Agency.

Section 35 – Information Obtained in Confidence                                                                     

The Housing Agency refused access to records 1 to 37 and record 47 under section 35(1)(b). That section provides for the refusal of a request where the disclosure of the information concerned would constitute a breach of duty of confidence provided for by an agreement, enactment or otherwise by law.

Before I consider the applicability of section 35(1)(b), I consider it appropriate to first examine whether section 35(2) serves to disapply section 35(1). Section 35(2) provides that subsection (1) shall not apply to a record which is prepared by a head or any other person (being a director or staff member of an FOI body or a service provider) in the course of the performance of his or her functions "unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than an FOI body or head or a director, or member of staff of an FOI body or of such a service provider." The net effect of section 35(2) is that if the record at issue has been prepared by an FOI body or a service provider, then the person to whom a duty of confidence is owed cannot be an FOI body or its staff or a service provider. If it is, then section 35(1) cannot apply.

The term “service provider” is defined as “a person who, at the time the request was made, was not an FOI body but was providing a service for an FOI body under a contract for services and contract for services in this definition includes an administrative arrangement between an FOI body and another person”.

The Agency explained that record 47 was provided to it by the specific AHB, and is a record prepared by a service provider to the AHB, and not a service provider of the Agency. Accordingly, section 35(2) is of no relevance to record 47. On the other hand, records 1 to 37 were prepared by the Agency. The Agency’s argument is that the release of the records would involve a breach of a duty of confidence owed to the relevant AHBs. While the importance of AHBs as central to the State’s provision of social housing cannot be understated, I am satisfied that they are not providing a service for an FOI body under a contract for services. AHBs are independent not-for-profit organisations whose purpose is the provision and management of housing for people who cannot afford private sector rents, to purchase their own homes or for people with disabilities. AHBs receive grants through Capital grant schemes to assist in the provision of these services. Some offer non-housing services, such as group meals, social activities and welfare advice. I find that this is not a case where section 35(2) serves to disapply section 35(1)(b). Accordingly, I will proceed to consider the applicability of section 35(1)b) to the records.

Section 35(1)(b)

Section 35(1)(b) of the Act provides that an FOI body shall refuse to grant an FOI request if disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment (other than a provision of an enactment specified in Schedule 3) or otherwise by law. A duty of confidence provided for “otherwise by law” is generally accepted to include a duty of confidence arising in equity. This Office accepts that breach of an equitable duty of confidence is comprehended by section 35(1)(b).

In its submissions, the Agency argued that the information in the records was given to it on a confidential basis, and that while there is no statutory prohibition, or written agreement that sets out rights and obligations as regards the maintenance of confidentiality of the information provided, nevertheless, given the surrounding circumstances the information was submitted on the understanding that any onward disclosure would breach a duty of confidence, provided for in equity. The Agency argued that this determination is supported by comments in the Voluntary Regulation Code (VRC), the interim Regulation Committee (iRC) Protocol and the Regulatory Return Guidance Note.

The Agency noted the following statements in the VRC:

“The final regulatory assessment report will then be supplied to the AHB and, if requested by the AHB, to third parties such as financial institutions. It is expected that a positive assessment report will be of assistance to an AHB in its dealings with external stakeholders.”

It said the VRC is a core document in an AHB deciding to sign up voluntarily to the Code, and that it deemed this element of the Code to be significant in the understanding that

the Regulation Office would ensure that all documents and information prepared in respect of the AHB would be held on a confidential basis, and only onward-disclosed to particular third parties if requested by the AHB, and for the benefit of the AHB. It said there is also an implicit acknowledgement in the above-quoted provision that a less-than-positive assessment report will be detrimental to an AHB in its dealings with external stakeholders.

The Agency added that the VRC encouraged AHBs to submit to voluntary regulation, on the basis that information provided by the VRC would only be used for regulation/assessment purposes, and would be re-stated back to the AHB in an assessment, which assessment it described as “clearly sensitive and confidential but capable of assisting with AHBs’ relations with third parties (with prior AHB consent to disclosure), and, in some cases, capable of causing detriment if externalised”.

On the matter of the relevance of the iRC Protocol, the Agency said it forms part of the Voluntary Code. It referenced “Section 11 - Sharing of Information and Data”, which states the following:

“The regulation and supply functions of the Housing Agency rely for their effectiveness on, among other things, a range of information and knowledge which is obtained from a variety of sources including from Approved Housing Bodies. Some of this information and knowledge is in the public domain. Other information and knowledge are provided specifically for regulatory or supply purposes and/or are supplied on the basis that they are provided only for a specified purpose and/or that they are commercially sensitive or confidential for other reasons.”

The Agency said the iRC Protocol clearly identifies that the AHBs will supply information based on the understanding that information not in the public domain that is provided by AHBs to the Agency for regulatory or other specified limited purposes, will be considered confidential and commercially sensitive, treated and maintained as confidential and used only for such purposes (and not, for example, and in particular, onward-disclosed to any third party). It argued, therefore, that the information provided to the Agency was understood by all parties to be submitted in confidence, and to be treated as confidential.

The Agency also referenced the Guidance on completing returns in support of its position. It said that in submitting their returns to the Agency, each organisation is doing so on the basis that the information contained in the return will only be provided to authorised key contacts within the Housing Agency. It said this is clearly provided for in the guidance.

A number of AHBs provided submissions in respect of the confidentiality provisions of section 35. A number of the AHBs argued that it would be breach of confidence to subvert the openness and willingness of AHBs to engage on a voluntary basis, and this is not altered because the new regulatory regime commenced.

The applicant argued that the concerns about damaging the future cooperation with, or supply of information to, the Agency should the records be released are moot now that the Regulation Office is no longer in situ. He noted that AHBs are obliged to co-operate with the new regulator. He also noted that there is nothing in writing, in legislation, the voluntary code, or the IRC Protocol, that guaranteed the AHBs that information to the Housing Agency would be exempt from FOI.

In the Supreme Court decision in the case of Mahon v Post Publications Ltd [2007] 3 I.R. 338 Fennelly J confirmed that the requirements for a successful action based on a breach of an equitable duty of confidence, at least in a commercial setting, are found in the judgment of Megarry J in Coco v. A. N. Clark (Engineers) Ltd. [1969] R.P.C. 41, at 47:

“[T]hree elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself ... must 'have the necessary quality of confidence about it'. Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it."

Fennelly J summarised or restated the requirements of what he called “the contours” of the equitable doctrine of confidence as follows:

1. “the information must in fact be confidential or secret: it must ... “have the necessary quality of confidence about it”;

2. it must have been communicated by the possessor of the information in circumstances which impose an obligation of confidence or trust on the person receiving it;

3. it must be wrongfully communicated by the person receiving it or by another person who is aware of the obligation of confidence.”

I have adopted this approach in considering whether disclosure of the information in records 1 to 37 and record 47 would constitute a breach of an equitable duty of confidence. I note that in case 180291, when considering the applicability of section 35(1)(b) to similar regulatory inspection reports, the Senior Investigator concluded that the second requirement had not been met, namely that the information in the reports was not imparted in in circumstances which impose an obligation of confidence on the Agency. Her conclusion was based, among other things, on her view that compliance with the Regulation Code did not appear to be truly voluntary as she noted that only AHBs who subscribed to the Code would receive additional funding. She noted that the Department of Environment, Community and Local Government issued Circular 15/26 on 15 April 2016, which provided that:

  • only those AHBs who have signed up to the Code by 1 June 2016 will be eligible for funding under various schemes for assistance in 2016.
  • from 1 January 2017, only those AHBs that have signed up to the Code and undergone a satisfactory assessment will be considered eligible for funding under the schemes.

The Senior Investigator considered it to be in an AHB's financial and overall interests not only to sign up to the Code but to engage fully with the assessment process.

While I agree that it was, indeed, in an AHB's financial and overall interests not only to sign up to the Code but to engage fully with the assessment process, I do not agree that this means that the Code could not be considered truly voluntary. Indeed, it is relevant, in my view, to note that a number of AHBs did not opt in to voluntary regulation at the time, and yet continued to provide the services that all AHBs provide.

As I have outlined above, AHBRA now provides for the regulation of all AHBs. While there is no doubt that the voluntary process was intended a means of encouraging AHBs to prepare for this, and was important for the oversight of the large public investment made, the process was voluntary. As such, it seems to me that any information the AHB’s may have imparted in the course of such assessments was imparted in accordance with the terms of the Code. Having regard to the voluntary nature of the Code, I accept that the AHBs who opted in to the regulation standards at the time, did so on the understanding that the information provided would be treated as confidential. I am satisfied that the second requirement is therefore met in this case.

Having examined the records at issue, I also accept that the information contained in records 1 to 37 and record 47 has the necessary quality of confidence about it. The records concern the Governance, Finance and Performance Standards of the various AHBs. I am satisfied that such information concerns the private affairs of the AHBs. Notwithstanding the services they provide, AHBs are not public bodies for the purposes of the FOI Act. I am satisfied that the information in the records has the necessary quality of confidence about it and that the first requirement for an equitable duty of confidence to exist is met.

On the matter of the third requirement for an equitable duty of confidence to exist, this Office considers that where disclosure of the information would result in an unauthorised use to the detriment of the party who communicated it or where it is wrongfully communicated by the person receiving it or by another person who is aware of the obligation of confidence, the third requirement of establishing breach of an equitable

duty of confidence is met. It seems to me that the AHBs in question reasonably expected that the information in the records at issue would not be released to any third party and that it was obtained by the Agency solely for the purposes of its assessment functions. In the circumstances, I am satisfied that the third requirement is also met in this case.

I note the applicant’s argument that any concerns about damaging the future cooperation with, or supply of information to, the Agency should the records be released are moot now that the Regulation Office is no longer in situ. Even if his assertion is correct, this does not mean that the AHBs did not provide relevant information to the Agency in confidence or that the other requirements for an equitable duty of confidence to exist cannot be met, nor does the fact that the AHBs are now obliged to co-operate with the new regulator mean that the requirements are not met in respect of the particular records at issue. I would add, however, that my findings in this case are directly related to the fact that the AHBs were voluntarily operating in a pre-statutory framework. It seems to me that the potential release of any future regulatory inspection reports must necessarily have regard to the particular circumstances arising, including the statutory framework under which such inspections are carried out.

In conclusion, I find that section 35(1)(b) applies to records 1 to 37 record 47. For the sake of completeness, I should note that while section 35(1)(b) is not subject to the general public interest balancing test in section 35(3), it is established that the action for breach of confidence is itself subject to a public interest defence. However, this Office accepts that the public interest grounds which may justify or excuse a breach of a duty of confidence are quite narrow and include, for example, the revelation of wrongdoing or danger to the public. No such issues arise in this case. Accordingly, I find that the Agency was justified in refusing access to records 1 to 37 and record 47 under section 35(1)(b) of the Act.

Section 36(1) – Commercially Sensitive Information

Section 36(1) of the FOI Act provides a mandatory exemption for what is generally described as commercially sensitive information. The Agency cited section 36(1)(b) in support of its refusal of all of the records at issue. As I have already found records 1 to 37 and record 47 to be exempt under section 35(1)(b), I need to consider its applicability to records 39 to 46 only. 

Section 36(1)(b) provides for the mandatory refusal of a request where the records sought contain information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation. The essence of the test in section 36(1)(b) is not the nature of the information but the nature of 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 harm test in the second part of section 36(1)(b) is that disclosure of the information “could prejudice the competitive position” of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the “could reasonably be expected” test in the first part of the exemption. However, this Office takes the view that, in invoking “prejudice”, the damage which could occur must be specified with a reasonable degree of clarity.

As I have outlined above, records 39 to 46 concern the Agency’s engagement with, and regulation of an at-risk Tier 2 AHB. The records have been partially released. It is important to note that the vast majority of the information contained in records 39 to 46 has been released. In essence, the information withheld comprises information that would allow for the identification of the relevant AHB and some limited financial information relating to that AHB.

In its submissions, the Agency noted that AHBs are independent legal entities, owning, leasing and managing social housing, which operate within the same competitive market as other AHBs and the wider housing development community. It argued that although voluntary regulation process is not in place anymore, the information provided by the AHBs is nevertheless commercially sensitive and was provided with the understanding of confidence at the time.

It is clear from those parts of the records to which access has been granted that significant concerns arose in relation to governance and oversight issues within the relevant AHB. While the records date back to 2018, I am satisfied, in light of the competitive nature of the market in which the AHBs operate, that the release of the redacted information could prejudice the competitive position of the AHB in the conduct of its business and that section 36(1)(b) applies to the redacted information.

However, that is not the end of the matter as section 36(1)(b) is subject to section 36(3) which provides that section 36(1) does not apply where the FOI body considers that the public interest would, on balance, be better served by granting than by refusing to grant the FOI request.

The Public Interest

On the matter of the type of public interest factors that might be considered in support of the release of the information at issue in this case, I have had regard to the findings of the Supreme Court in the ENet judgment referenced above. In her judgment, Baker J. indicated that the public interest the public interest in disclosure must be something more than the general public interest in disclosure and transparency in public undertakings. She noted that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and found that “this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request.” She found that there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure.

In his correspondence with the Agency, the applicant made detailed submissions as to why all of the records sought should be released in the public interest. It should be noted, however, that only the redactions in records 39 to 47 fall to be considered under section 36(3). Nevertheless, I consider it appropriate to reference all of the relevant arguments made.

The applicant argued that as AHBs are almost entirely funded by taxpayers’ money, poor or sub-standard corporate governance at AHBs risks wasting public money. He noted that this Office had previously found that openness in relation to the use of public funds was “... a significant aid to ensuring effective oversight of public expenditure, to ensuring effective oversight of public expenditure, to ensuring the public obtains value for money, to prevent fraud and corruption and to prevent the waste or misuse of public funds.”

The applicant further argued that the reclassification of Tier 3 AHBs by Eurostat in 2018 as being part of the Local Government Sector and the reclassification of several Tier 2 AHBs in 2020 is significant as it recognises that AHBs form a part of local government. He argued that they are not the same as private, for-profit companies that are involved in housing provision which sell their services to the public or the local government sector. He said AHBs are distinct from private commercially enterprises, whose primary motive is profit and which are not taxpayer funded. He argued, therefore, that the public should be able to examine and interrogate how AHBs are managed, operated, and regulated.

The applicant further argued that even for those AHBs that have been not technically classified as being under local government by Eurostat/the CSO, the point remains that taxpayers' money almost entirely funds these. He argued that they should not be shielded from scrutiny. He also suggested that the fact that local authorities are also tasked with regulating AHBs is further evidence of how AHBs are essentially a part of local government.

The applicant also said that AHBs provide social and affordable housing to people on lower incomes, some of whom may have been homeless. He said some AHBs specialise in providing homes to people with intellectual or physical disabilities, while others work with older people. He said these groups of people can be particularly vulnerable and that this feature underscores the importance of the AHBs being fully transparent concerning their governance, especially if this involves the identification of shortcomings or non-compliance with legislation.

The applicant further argued that the Agency's Regulation Office has repeatedly stressed how transparent and accountable the regulatory Framework for AHBs is, how AHBs are required to act openly and transparently, and how AHBs are expected to be accountable. He referenced come of its literature and public statements in support of this point. He also referenced the Charities Governance Code which stresses how charities are expected to act in a transparent fashion

The applicant also said that the Agency’s Interim Regulation Committee / Regulation Office had limited power to sanction AHBs. He suggested that poorly performing AHBs should therefore be exposed through the release of the records sought.

The Agency argued that the AHBs who have submitted to voluntary regulation in a pre-statutory context have furthered the public interest by doing something which was not required by law, and that even if one could point to a public interest that was served by release of any such exempt information, it would be outweighed by the public interest in upholding the rights and legitimate interests of the information-rights holders (the AHBs) to maintain the confidentiality and secrecy of that information. The Agency said it believes that the public interest will be met on a sector wide basis, without discrimination between bodies, through the forthcoming statutory framework which will include the publication of compliance reports. The Agency also noted the comments of the Supreme Court in the ENet judgment, namely that there must be something more than the general public interest in disclosure and the reason must be found from the scrutiny of the contents of the record, and the balancing of the interests of commercial sensitivity or confidentiality against the public interest in the disclosure of that content. It argued that “[t]he contents of the records ought, therefore, to reveal something specific that it is strongly in the public interest to reveal – like corruption or bribery, or whatever - and not merely account for something – say, the expenditure of public funds”. It argued that there is nothing of such a nature in the contents of the records and, accordingly, that the exemptions it relied that are subject to public interest overrides should not be overridden by the application of such override provisions, as there is nothing to balance against the public interest served by non-disclosure on the ground of upholding the interests protected by the provisions concerned.

The AHBs argued that the public interest in release of the records must stem from the contents themselves and not merely “spending of public money”, and that it is not in the public interest that bodies engaged in a voluntary assessment/regulation process on the basis that it is confidential should have that undermined later by release of data. Certain AHBs argued that this would have a knock on effect in terms of the willingness of any bodies in a similar situation to engage in processes of voluntary regulation.

My Analysis

In considering where the balance of the public interest lies in this case, a key factor, in my view, is the fact that the Agency obtained the relevant information in the records at issue against a background of a Voluntary Regulation Code. While I fully accept that there were significant financial incentives for the AHBs to sign up to the Code and to engage fully with the assessment process, the fact remains that the Code was voluntary. In such circumstances, it seems to me that AHBs were entitled to expect that commercially sensitive information would not be disclosed to the world at large.

I am also cognisant of the relevant comments of the Supreme Court in the ENet judgment, namely that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity, that “this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request”, and that there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure.

As I have mentioned above, the records in question contain details of significant concerns in relation to governance and oversight issues within the relevant AHB. It seems to me that the disclosure of the identification of the relevant AHB could reasonably be expected to have a considerable reputational impact on the AHB. In my view, a distinction can be drawn between the public interest in disclosing information which relates purely to the business of a third party and information which relates to the activities of an FOI body e.g the development of policy, the exercise of a regulatory function or the use of state resources. As a general principle, I do not believe that the FOI Act was designed as a means by which the operations of private enterprises were to be opened up to scrutiny. In this case, while I acknowledge the reclassification by the Central Statistics Office and Eurostat of certain AHBs as part of the local Government sector, the fact remains that they are private enterprises and are not public bodies for the purposes of the FOI Act.

I do, however, consider that there is a significant public interest in knowing how the Agency carried out its regulatory role in the case of AHBs, particularly in light of the significant public funding involved. Where the information of a third party and FOI body overlap, this Office aims to strike a balance between ensuring openness on the part of an FOI body and limiting the impact of disclosure on the affairs of a third party. In this case, it seems to me that by releasing the majority of the information in the records at issue whilst redacting certain identifying information, the Agency has sought to strike a similar balance between allow the applicant and “the world at large” an insight into how the Regulation Office exercised its statutory functions, whilst simultaneously seeking to ensure that the AHB’s competitive position was not unduly adversely affected.

In the particular circumstances arising in this case, i.e. the voluntary code to which the AHBs prescribed to pre a statutory framework for regulation, I consider that there is a strong public interest in ensuring the candid engagement of any third party to such a pre –statutory framework, through the maintenance of the confidentiality of their commercially sensitive information. 

Having carefully weighed the competing public interest factors in favour of and against release of the relevant parts of the records at issue, I find that the public interest would, on balance, be better served by withholding the information at issue. I find, therefore, that the Agency was justified in redacting, under section 36(1)(b) of the act, certain information from the records at issue.

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the Agency’s decision to refuse access, under sections 35(1)(b) and 36(1)(b) of the FOI Act, to the records at issue.

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