Cinneadh
Mr X and Arts Council
Ó Oifig an Choimisinéara Faisnéise
Cásuimhir: OIC-151518-X0L9J0
Foilsithe
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Ó Oifig an Choimisinéara Faisnéise
Cásuimhir: OIC-151518-X0L9J0
Foilsithe
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Whether the Arts Council was justified in refusing access, under section 36(1)(b) of the FOI Act, to valuations that it commissioned of its arts collection since 1 January 2020
In a request dated 29 March 2024, the applicant sought access to any valuations that the Arts Council commissioned of its arts collection since 1 January 2020.
In response, the Arts Council provided what it termed as the ‘net book value’ of its art collection outside of the FOI Act for the years 2020 to 2022 as published in its annual report for the relevant years. It also provided the overall figure for 2023 which was due to be published in the upcoming annual report for that year. The applicant responded to say that the scope of his request went much further than the overall value of the collection and asked that the Arts Council proceed to process his request.
As the Arts Council did not issue a decision within the statutory timeframe, the applicant sought an internal review of the deemed refusal of his request. On 14 August 2024, the Arts Council refused access to a record containing the information sought under section 36(1)(b) of the FOI Act. On 26 August 2024, the applicant applied to this Office for a review of the Arts Council’s decision. When accepting the application for review, this Office invited the applicant to make submissions in relation to the review. No such submissions were received. We also invited the Arts Council to make submissions and duly received same.
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 submissions of the Arts Council and to the contents of the record at issue. I have decided to conclude this review by way of a formal, binding decision.
This review is solely concerned with whether the Arts Council was justified in its decision to refuse access, under section 36(1)(b) of the FOI Act, to valuations that it commissioned of its arts collection since 1 January 2020.
The record at issue in this case comprises an extensive list of the various objects of art and includes the title of each object, the person to whom the object is attributed, the classification (painting, print etc.), and the estimated valuation of each object in each of the years from 2020 to 2023.
Section 36(1)(b) provides for the mandatory refusal of a request if the record concerned contains financial, commercial, scientific, 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. Section 36(1) does not apply if the public interest would, on balance, be better served by granting the request (section 36(3) refers).
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 considers 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. We do not have to be satisfied that the adverse effect will definitely occur. It is sufficient for the FOI body to show that it expects such an outcome and that its expectations are reasonable, in the sense that there are adequate grounds for them.
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 this exemption. However, we take the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity. While an FOI body may have particular expertise in an area, unless it is readily apparent how the release of the information might cause the relevant harm, we expect the FOI body making the claim to provide a specific and coherent explanation in support of its position.
In its submissions to this Office, the Arts Council said it appoints a suitably qualified independent expert Fine Art valuer provider to carry out annual inventory and valuation services. It said the current valuer was initially contracted in 2020 for a period of three years with the right to extend the contract for a further three years. It said that based on their expert knowledge, the valuer provides a desktop valuation and inventory of the collection in years one and two of their contract, followed by an in-depth valuation and inventory in year three. It said that in most cases, the valuation assigned to each individual piece is separate and distinct from any purchase price which may have been paid for the acquisition. It added, however, that where an artwork has been newly acquired within the year of the Financial report the current valuation is recorded as the purchase price.
The Arts Council further said that historically, it valued its collection at cost in its Financial Statements. It said that following the adoption of Financial Reporting Standards FRS102, the collection is now reported at fair value. It said FRS 102 requires that valuations should be made on a regular basis to ensure that the carrying amounts, reported in the Financial Statements, do not differ from fair value at the end of the reporting period. It said current values are also, crucially, required for insurance purposes. It said the annual valuation of artworks is undertaken on the basis of primarily ensuring that the Arts Council can both accurately report on the fair value of its assets, and having in place adequate insurance coverage for the works of art in its care. It said it does not acquire artwork for the collection on a speculative basis and, as per published policy, would never seek to deaccession any artwork for financial gain. It said that as such, the detailed figures set out in the valuation each year are gathered to ensure that its reporting and accounting can be as accurate and transparent as possible in line with its responsibilities as a public body.
The Arts Council said the make-up of the Irish visual arts market, against which any current valuations must be measured, is very small in nature. It said that in terms of an indigenous market, it is comprised primarily of a small number of auction houses (selling work on the secondary market), a small number of commercial galleries representing their groups of Irish artists, and direct sales of work from independent artists which, it said, is the predominant mode of its engagement with the market as part the purchasing process for the collection. In the context of Irish art sales, it said it is important to note this very limited pool of collectors (both private individuals and public organisations) who regularly acquire work, and the limited number of commercial galleries representing artists in Ireland compared to, say, the UK and the London art market. It said the nature of the Arts Council Collection, which is comprised of artworks acquired over 60+ years, requires that the valuer must consider;
• The market value of older artworks (by both living and deceased mid to later career artists) being sold on the secondary art market i.e. at auction),
• Contemporary sales of artworks from Irish artists within commercial galleries nationally as well as abroad,
• Artworks by practitioners rarely, if ever, represented in commercial market sales (for example artists working in performance, dynamic community-based arts practices, time-based media work)
The Arts Council said that given the primary role of maintaining a fair valuation estimate for the collection is to support accurate accounting and insurance, it is not undertaken with the intention of releasing individual price and/or valuation figures on a year-by-year basis pertaining to each artist whose work has been historically purchased.
On the matter of how the release of the information at issue might give rise to any of the harms outlined in section 36(1)(b), the Arts Council said that an artist selling their work may reasonably change the pricing depending on the potential buyer, and that this market planning should be theirs to disclose if they so wish. It said that when engaging with an artist as regards any potential purchase, it explicitly requests that they fairly price their work to fully reflect their time and effort as well as its importance to their practice. It said it does not seek or accept any discount from an artist when purchasing work. It added, however, that an individual artist may have a reasonable desire to see their work enter a public national collection such as that held by the Arts Council due to the public engagement, career development and opportunities for future presentation an acquisition like this would offer, and therefore price work differently than if they were selling to a private collector. It said that on that basis, disclosing individual figures paid or valued by the Arts Council for works could serve to distort the market for artists' sales.
The Arts Council further added that it has always kept abreast of the development of artist moving image, experimental film and video works and said it holds a significant amount of these artworks in the collection. It said these works have been digitised and backed up for protection, and therefore, in relation to valuation of these works for insurance purposes, its valuer has taken the decision to reduce the values for these works due to the fact that replacement/reproduction of works if damaged would not require the same process as physical objects. It argued that releasing these figures as valuations may further complicate the market for these artists and their representative galleries for selling future editions of these works, or indeed new film and video.
In sum, the Arts Council said that in circumstances where;
• the valuation of an individual work in its collection is not based on any speculative position;
• artists may vary the prices offered to different buyers, at different times, and in different circumstances;
• In the particular case of works such as digital artworks where the insurance / replacement cost would reasonably be expected to be considerably lower than the intrinsic value of the work; and
• the fact of a particular work being part of a prestigious national collection might reasonably be seen to have a distorted impact on public perceptions of value;
it follows that the competitive position of any artist whose work is on the list could be prejudiced by disclosure of the information, especially where the information would be taken at face value and without any of the context outlined.
Having considered its submissions, I am satisfied that the Arts Council has satisfactorily explained how the release of the individual valuation of works of art could reasonably be expected to give rise to the harms outlined in section 36(1)(b). While I have no doubt that the valuation of a work of art is generally informed by objective criteria, it seems to me that subjective personal taste is also likely to play a part in any purchase or sale of such works. I also accept that artists may vary the prices offered to different buyers, at different times, and in different circumstances. Therefore, while I accept that the Arts Council’s collection is now reported at fair value, I also fully accept that the release of individual valuations could reasonably be expected to impact the price an artist may wish to charge for other works and the price potential buyers might be willing to pay. I also accept the Arts Council’s argument that the release of the valuation of works such as digital artworks where the insurance / replacement cost would reasonably be expected to be considerably lower than the intrinsic value of the work, could reasonably be expected to impact the sale of other works by the same artist. In the circumstances, I find that section 36(1)(b) applies to the record at issue.
However, that is not the end of the matter, as sections 36(2) and 36(3) provide for the release of information to which section 36(1) is found to apply in certain circumstances. Accordingly, I must consider whether sections 36(2) or (3) serve to disapply section 36(10(b) in this case.
I am satisfied that none of the circumstances identified at section 36(2) arises in this case and that section 26(2) does not serve to disapply section 36(1)(b). Section 36(3) 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 refusing to grant the request.
In its submission to this Office, the Arts Council said there is a clear public interest in knowing where public money is being spent. On the other hand, it said there is also a public interest in the Arts Council being able to add to its collection, which is continually shown in various venues and locations around the country to the public benefit. It said its ability to continue do so would be irreparably damaged were artists to feel that their own future sales and indeed their careers would be disadvantaged by the release of information contained in the record at issue. It added that there is a public interest in the art market in Ireland not being unduly distorted by the release of any valuations undertaken on behalf of a prestigious national collection, without the wider accompanying context.
In considering where the balance of the public interest lies in this case, I have had regard to section 11(3) of the FOI Act which provides that in performing any functions under the Act, an FOI body must have regard to, among other things, the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principles of transparency in government and public affairs and the need to strengthen the accountability and improve the quality of decision making of FOI bodies. However, in doing so, I have also had regard to the judgment of the Supreme Court inThe Minister for Communications, Energy & Natural Resources v. Information Commissioner [2020] IESC 57 (the Enet case). In that case, the Supreme Court found that a general principle of openness does not suffice to direct release of records in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”. Moreover, the Court found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and that this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request.
It seems to me that there is a public interest in the release of information relating to the value of the artworks owed by the Arts Council in circumstances where public monies were used to acquire such pieces. That said, that public interest has arguably been served to a significant degree by the annual publication of the overall valuation of the art collection. It is also important to note that, as set out above, with the exception of artwork acquired within the year of valuation, the value assigned to specific artworks in the record at issue is not necessarily reflective of the price paid for the piece. I note that the particular collection has been acquired over sixty years and therefore I would consider that with respect to works that have been in the collection for a number of decades, the valuation assigned to such pieces may be considerably different to the purchase price paid. In my view, the public interest in the disclosure of the valuation the Arts Council has placed on individual works of art is significantly less that the public interest in the disclosure of the price it may have paid for such works.
Moreover, section 36(1) itself reflects the public interest in the protection of commercially sensitive information of third parties. There is also a legitimate public interest in persons being able to engage in commercial transactions with public bodies without fear of commercial harm. As a general principle, this Office does not consider that the FOI Act was designed as a means by which the operations of private enterprises were to be opened up to scrutiny.
Having carefully considered the matter, I am not satisfied that any sufficiently specific, cogent and fact-based reason exists in this case to tip the balance in favour of release of the information at issue. I find, therefore, that section 36(3) does not apply.
In conclusion, therefore, I find that the Arts Council was justified in refusing access, under section 36(1)(b) of the Act, to valuations that it commissioned of its arts collection since 1 January 2020.
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the decision of the Arts Council to refuse access, under section 36(1)(b) of the FOI Act, to valuations that it commissioned of its arts collection since 1 January 2020.
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