Public Sector Standards draft General Scheme of a Bill 2015
REGULATORY IMPACT ANALYSIS
June 2015
SUMMARY OF REGULATORY IMPACT ASSESSMENT (RIA)
Department: Public Expenditure and Reform
Title of Legislation: Public Sector Standards Bill 2015
Stage: Drafting
Date: June 2015
Related Publications:
Contact for enquiries: Kieran Sheedy. Telephone: 6045729
Policy options considered:
1. Do nothing and rely on current legislative framework
2. Make piecemeal changes to the existing complex and fragmented framework
3. Create new simplified and consolidated framework incorporating significant reform measures
Preferred option: Option 3 is considered the best option to achieve the modernisation, simplification and reform
of the current legislative framework and the strengthening and rationalisation of the current institutional
arrangements.
OPTIONS
Costs
Option 1
No direct
financial costs
Option 2
No substantial
financial costs
Option 3
Additional
staffing and
administrative
costs
Benefits
Impacts
No benefit
Would reflect negatively on Government
commitment to reform in this area and leave
current unsatisfactory arrangements in place.
Administratively simpler
Would reflect negatively on Government
commitment. Result may not be as coherent
or comprehensive and reform momentum may
be lost.
Will modernise, simplify and reform
current framework and strengthen and
rationalisation existing institutional
arrangements.
Fully meets Government commitments. Will
contribute to prevention of corruption and
enforcement of ethical standards. Will bolster
confidence in integrity of political system.
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REGULATORY IMPACT ASSESSMENT (RIA)
1
Summary
1.1
2
3
This Regulatory Impact Analysis (RIA) examines the proposed Public Sector
Standards General draft Scheme of a Bill 2015.
Policy Context
2.1
The Programme for Government sets out an extensive programme of legislative
reforms to strengthen public governance and enhance openness transparency and
accountability. The Department of Public Expenditure and Reform has now prepared
the Public Sector Standards General draft Scheme 2015 for consideration by
Government to address the commitments contained the Statement of Government
Priorities 2014-2016 “…to publish legislation to consolidate local and national ethics
requirements and give effect to the recommendations of the tribunals.”
2.2
The effectiveness of the ethical framework in managing conflicts of interest1 arising
for public officials2 is integral to the quality and efficacy of public governance and in
addressing corruption risks. Minimising corruption risks, and ensuring that conflicts
between the public interest and private interests of public officials in the performance
of their duties are regulated, is central to maximising the value generated and
contribution made by the public sector.
2.3
There is a significant body of research highlighting internationally the important
linkage between the quality of public institutions and long-term economic and social
sustainability. Moreover, there are a number of significant examples in Ireland’s
history – most recently the banking and financial crisis where institutional weaknesses
and governance failures have given rise to very substantial economic and social costs.
Objectives
3.1
In addition to meeting the Government’s commitment contained in the Statement of
Government Priorities, the key objectives of the reform proposals set out in this paper
are to:


Significantly enhance the existing framework for identifying, disclosing and
managing conflicts of interest as well as minimising corruption risks;
Strengthen public trust in public administration by reinforcing the standards
required from public officials in performance of their functions;
1
According to the OECD a conflict of interest involves a conflict between the public duty and private interests of
a public official, in which the public official has private-capacity interests which could improperly influence the
performance of their official duties and responsibilities.
2
In this paper the term ‘public official’ has a broad definition and includes in addition to all public service
employees, public representatives at both local and national level as well as chairpersons and members of
boards of public bodies.
2




4
Achieve a shift towards a more dynamic and risk-based system of compliance;
Ensure that the institutional framework for oversight, investigation and
enforcement is robust and effective;
Put in place a consistent, coherent and proportionate ethics framework for all
public officials at both local and national level which is calibrated to conflict of
interest and corruption risks; and
Ensure Ireland’s disclosure and conflict of interest framework corresponds to
international best practice and is appropriately balanced to other important public
policy objectives including safeguarding privacy and encouraging participation in
public life.
Background
4.1
Existing legislative framework
The statutory provisions that underpin the current system have developed in a
piecemeal fashion and are fragmented across a number of statutes, with separate
regimes for disclosure of interests, sanctions, disclosure of donations and other ethics
requirements at national level and local level. This has created a lack of clarity and
level of uncertainty regarding what rules apply in any specific case as well as impacting
adversely on the credibility of the ethics regime owing to the anomalies created by the
different obligations that apply.
4.2
The operation of the current ethics regime is excessively bureaucratic, requiring the
preparation of paper-based returns by a large number of public officials and its
effectiveness in identifying and addressing potential conflicts of interest has been
questioned.
4.3
Responsibilities for the provision of advice, the development of guidelines and the
putting in place of Codes of Conduct is distributed among a range of different bodies
(i.e. SIPO Commission, the Committees on Members’ Interests of both Houses, the
Minister for Public Expenditure and Reform and the individual public sector bodies)
and there are no statutory principles guiding the conduct of public officials. While
there are a number of detailed sectoral codes in place, it is not evident that their
contents meet their intended purpose of serving to inform on ethical requirements and
guide conduct and behaviour on a day-to-day basis.
4.4
The SIPO Commission has played a crucial role in fostering and seeking to develop
and strengthen the ethics regime through the recommendations made in its Annual
Reports. However, given the increasing demands of successfully overseeing the
regulatory system and in light of the significant expansion in the scope of the regime
under the proposed legislation as well as the increased powers envisaged under it, the
current part-time, ex-officio model is unlikely to be fully aligned with future
requirements.
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4.5
Review of International Best Practice3
The development of the proposals to address the current situation has been
significantly influenced by OECD and World Bank guidance on international best
practice as well as recommendations from the recent Council of Europe evaluation of
corruption prevention in Ireland as it pertains to parliamentarians.4
4.6
The OECD recommends that a modern conflict of interest policy should seek to
achieve a balanced approach to controlling the exercise of private interests. The
OECD points out that conflict of interest control requires information about interests
that have the potential to influence the discharge of official duties, rather than a
necessarily all-encompassing picture of all income, assets, outside business and other
activities. The OECD also stresses that it is debatable whether a single declaration
system should apply to all branches of power and to all levels of officials and that there
is no convincing evidence that covering the broadest possible circle necessarily leads
to more effective prevention of corruption.
4.7
The World Bank notes that there is no single optimal approach to Income and Asset
Disclosure (IAD) system design and implementation. It concludes that excessively
ambitious scope and coverage can compromise the effectiveness and credibility of an
IAD regime. It considers that credible scrutiny of the content of declarations is
essential. The OECD notes in this regard that there should be a balance between
systematic verification according to strict criteria and an ad hoc approach such as
acting on specific warnings or other signals.
4.8
The Council of Europe evaluation recommended:


4.9
replacing the existing ethical framework with a consolidated values-based
framework
enhancement and expansion of the personal and material scope of the existing
disclosure regime; and
the establishment of an independent monitoring mechanism for such disclosures.
Mahon Tribunal Report5
The final report of the Mahon Tribunal published in 2012 contained anti-corruption
principles and a series of recommendations including in relation to conflict of interests.
The recommendations, drawing from international best practice and in light of the
3
Key documents are: http://www.oecd.org/corruption/ethics/managingconflictofinterestinthepublicservice.htm
; OECD (2011), Asset Declarations for Public Officials: A Tool to Prevent Corruption,
http://dx.doi.org/10.1787/9789264095281-en. Using Asset Disclosure for Identifying Politically Exposed Persons
– www.worldbank.org/amlcft; and Public Office, Private Interests – Accountability through Income and Asset
Disclosure (2012) –http://star.worldbank.org/star/.
4
http://www.coe.int/t/dghl/monitoring/greco/evaluations/round4/Eval%20IV/GrecoEval4(2014)3_Ireland_EN.p
df
5
The Moriarty Tribunal also had one recommendation in relation to the audit of the financial affairs of Office
Holders under the Ethics Acts by an inspector appointed by SIPO.
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matters investigated by the Tribunal, pointed to the need for a far-reaching overhaul of
Ireland’s ethics regime. The approach adopted goes beyond that proposed by the
Tribunal by proposing the repeal of the current legislation and the establishment of
single, integrated and coherent statutory framework in contrast to the proposed
amendment of the existing disparate legislation envisaged by the Tribunal. It has been
a priority to ensure that the Tribunal’s recommendations are implemented in a manner
which is legally feasible and operationally practical in light of the international
guidance advising a targeted risk-based approach to addressing corruption risks. Other
important considerations that have guided that approach relate to the need to support
other important public policy objectives including for example safeguarding privacy
and supporting participation in public life.
4.10
5
Changing role of Standards in Public Office Commission
The Electoral Acts require the Standards in Public Office Commission (SIPO) to
monitor and report on the acceptance and disclosure of donations made to fund the
political system. As set out in a recent consultation paper published by the Department
of the Environment, Community and Local Government, it is suggested that the role
of SIPO under the Electoral Acts should be assigned to the proposed new Electoral
Commission. Further consideration will need to be given to the main options, which
are for the Public Sector Standards Commissioner to take on the roles currently
exercised by SIPO under the Electoral Acts pending the establishment of the Electoral
Commission, or for SIPO to remain in place following the creation of the Public Sector
Standards Commissioner solely to exercise its current functions under the Electoral
Act pending the establishment of the Electoral Commission.
Options
5.1
The costs, benefits and other impacts of following alternative options are set out below:



To do nothing
Piecemeal amendment of the existing legislation
Significant overhaul and reform following review of existing framework,
international best practice and recommendations of interested parties
Option 1: Do Nothing
5.2
5.3
5.4
Costs
No direct financial costs will be incurred by the State if the legislation is not
implemented.
Benefits
No benefit would arise if nothing is done.
Other impacts
The “do nothing” option would reflect negatively on the Government’s commitment
“…to publish legislation to consolidate local and national ethics requirements and
give effect to the recommendations of the tribunals.”
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5.5
It would result in a failure to address the Mahon Tribunal Recommendations in any
form or to implement the GRECO recommendations to replace the existing ethical
framework with a consolidated values-based framework; to enhance and expand the
personal and material scope of the existing disclosure regime; and to establish an
independent monitoring mechanism for such disclosures.
5.6
It would leave in place a framework that is not in line with international best practice;
is fragmented, unclear and excessively bureaucratic legislative; and that has separate
regimes for disclosure of interests, sanctions, disclosure of donations and other ethics
requirements at national level and local level. The responsibility of the provision of
advice, and the putting in place of Codes of Conduct, would remain distributed among
a number of different bodies and the efficacy of the Codes to inform on ethical
requirements and guide conduct and behaviour on a day-to-day basis effectiveness
would remain in doubt, as would the effectiveness of the current system to identify and
address potential conflicts of interest.
Option 2: Piecemeal amendment of the existing legislation
5.7
5.8
5.9
5.10
5.11
The single alternative implementation option in terms of the objectives of the
legislation would be the piecemeal amendment of the current legislation.
Costs
Aside from incidental administrative costs, there are no substantial financial costs to
the State of amending the existing legislative framework on a piecemeal basis. This
would, however, be a substantially less efficient method of delivering the objective in
terms of staff deployment and the utilisation of the time of those who would be
involved in progressing it, including the staff of the Department of Public Expenditure
and Reform and of Office of the Parliamentary Counsel and the members of the
Oireachtas.
Benefits
The processing of a narrower suite of individual reforms is administratively simpler
and individual elements can be delivered sooner.
Other Impacts
This option would reflect negatively on the Government’s commitment to legislative
reform in this area. Implementation of individual items on a piecemeal basis may be
simpler to achieve administratively but:
 the overall outcome may not be as coherent or as comprehensive as option 3.
 the complexity of the existing framework would not be alleviated;
 by increasing the number of pieces of legislation that would need to considered
and interpreted by those affected, the framework would become even more
fragmented and more difficult to comprehend than at present.
There is also a danger that momentum to complete this important initiative could be
lost. In that case some of the unsatisfactory elements of the existing system would stay
in place for longer than would otherwise be the case, or perhaps indefinitely.
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Option 3: Significant overhaul and reform
5.12
The proposals in the draft General Scheme of the Public Sector Standards Bill are for
a comprehensive and far-reaching reform, consolidation and modernisation of the
current framework. Key elements of the reforms include:








5.13
Replacing the Standards in Public Office Commission with a Public Sector
Standards Commissioner who will have increased powers and, through the
establishment of a Deputy Commissioner (who will be independent in terms of the
investigations functions), will implement more streamlined and improved
complaints and investigations procedures. The Commissioner will have stronger
powers of sanction and enforcement in relation to a range of newly created offences
as well as a broader role in the provision of advice and guidance;
Establishing in legislation a set of over-arching integrity principles that will apply
to all public officials and utilising these to provide a framework for the revision,
updating and improvement of codes of standard and behaviour for different
categories of public officials;
Strengthening the legal obligation for public officials to disclose as a matter of
routine actual and potential conflicts of interest that arise in the context of the
performance of their duties;
Establishing a more effective, streamlined and efficient process for the submission
of periodic statements of interests. These will have to be reviewed every 4 months
but no declaration (or nil statement) will be required unless there has been a
significant change;
Significantly extending the personal and material scope of disclosures for public
officials, with common definitions applying at national and local level. Declarable
interests will include political donations and there will be greater consistency and
certainty on the rules governing limits on the receipt of gifts and travel benefits by
public officials.
Application of graduated approach, with the declarations of interests of politicians
and senior officials being made to the Commissioner and published; private
declarable interests (such as liabilities over certain thresholds) will also be
disclosed confidentially by public representatives and the most senior officials, and
will not be published
The imposition of statutory prohibitions on the use of insider information, on the
seeking or acceptance by public officials of benefits (including gifts and favours
etc.) to further their private interests, and on local elected representatives from
dealing professionally with land in certain circumstances; and
Establishing a new statutory board to address potential conflicts of interest as
public officials take-up roles in the private sector by merging the Outside
Appointments Board (OAB) for the Civil Service and Local Authority system.
Costs:
There will be direct Exchequer costs, in terms of staffing and other administrative costs
arising. There will be a positive impact on the Exchequer in terms of the reduction in
the administrative burden on public officials in that less returns will be required and
the system for bringing bodies within the ethics regime will be much more efficient.
Benefits
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5.14
This option would deliver on the objectives set out in paragraph 3, by significantly
strengthening the current ethics regime to address corruption risks and perceived
corruption risks. For control and identification of conflicts of interest to be successful,
it is crucial that public officials can make skilled judgements as to what in their
particular role and personal circumstances could give rise to a conflict. The role of
Commissioner in education and research together with strengthened codes of conduct
and statutory principles will ensure that the consideration of standards will be a
significant factor for those performing public office.
5.15
The reforms proposed complement the further measures introduced in the areas of
whistleblower protection, the Ombudsman, Parliamentary inquiries, the appointment
system to State Boards, civil service accountability and Freedom of Information in
building a system of public governance that underpins openness, transparency,
accountability and integrity of public administration government.
5.16
Other Impacts
National Competitiveness
The strengthening and reform of the Ethics legislative framework is a key element of
the Government’s programme of reforms to increase the openness, transparency and
accountability of public governance in Ireland. There is evidence internationally that
open, transparent and accountable public governance increases the effectiveness of
public institutions, which in turn underpins the long-term sustainability of economic
performance.
5.17
The Socially Excluded and Vulnerable Groups
There are no impacts for Socially Excluded and Vulnerable Groups
5.18
The Environment
There are no impacts for the environment.
5.19
5.20
5.21
5.22
Economic Market, including Consumer and Competition Impacts.
The strengthening and reform of the Ethics legislative framework is not expected to
have any material impact on the economic market over and above the beneficial effect
that might be expected in the longer-term on Ireland’s international reputation and
long-term sustainable rate of economic growth through the adoption and embedding
in the practice of public administration in Ireland of policies promoting openness,
transparency and accountability.
The Rights of Citizens
The strengthening and reform of the existing Ethics legislative framework will make
a significant contribution to prevention of corruption and the enforcement of ethical
standards of behaviour by public officials.
North-South and East-West Relations
There are no impacts for North-South / East-West relations.
Impact on Employment
The strengthening and reform of the Ethics legislative framework is not expected to
have any material impact on employment over and above the beneficial effect that
might be expected in the longer-term on Ireland’s international reputation and long8
term sustainable rate of economic growth through the adoption and embedding in the
practice of public administration in Ireland of policies promoting openness,
transparency and accountability.
5.23
5.24
6
Enforcement and Compliance
The Bill will deliver a system that will enable the detection and potentially the
prosecution of corrupt acts; that will remind public officials of the duty to
accountability that comes with public office and ensure that the consideration of ethics
issues is a significant factor for those performing public functions. It will bolster
confidence in the integrity of the public sector and the political system by providing
for the scrutiny of the finance of public officials and political parties.
It will not increase existing administrative demands on public bodies beyond those that
currently apply and will simplify them in some cases.
Consultation
6.1
The draft Scheme has been developed in light of international best practice as set out
by the OECD, World Bank and the Council of Europe and of the relevant
recommendations of the Tribunals as well as recommendations received SIPO and the
Oireachtas.
6.2
The Standards in Public Office Commission, the Department of Justice and Equality,
the Houses of the Oireachtas Commission, the Department of Environment,
Community and Local Government, and the Office of the Attorney General were
consulted in relation to proposals contained in the draf General Scheme and the draft
Scheme was circulated to all Government Departments for observations prior to the
submission of the draft Scheme to Government.
6.3
It is proposed to submit the draft General Scheme of the Bill for consideration by the
Joint Oireachtas Committee on Finance, Public Expenditure and Reform and to request
the Committee’s views and recommendations on the proposed reform of the current
ethics legislation. Relevant elected Authorities/Committees will also be consulted.
This will provide the Oireachtas Committee with the opportunity to consult civil
society groups, advocacy groups and individuals with expertise in ethics, enabling
them to provide input and to develop the General Scheme.
6.4
It is also proposed to publish the draft General Scheme on the Department’s website
together with a policy paper on the legislative proposals based on the information and
analysis contained in this Memorandum, to inform and encourage public debate and to
act as a basis for further public consultation on the proposed Bill.
6.5
The Minister intends to consult with the Minister for Environment, Community and
Local Government on the appropriate transitional arrangements for the Standards in
Public Office Commission’s role under the Electoral Acts in advance of the
establishment of the Electoral Commission and on the case for aligning within the
proposed legislative framework statutory provisions relating to political donations.
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7
Review
7.1
8
The reporting role of the Public Sector Standards Commissioner both in the annual
report which is laid before the Houses of the Oireachtas and on special reports which
may be sought by the Minister or prepared on the Commissioner’s own initiative will
be an essential part of the ongoing process for review of the implementation of the
Bill, once enacted.
Alignment with Better Regulation Principles
Necessity
8.1
The proposed legislation is necessary to deliver the commitments included in the
Programme for Government relating to ethics and the commitment in the Statement of
Government Priorities 2014-2016 “…to publish legislation to consolidate local and
national ethics requirements and give effect to the recommendations of the tribunals.”
8.2
The legislation does not give rise to any additional regulatory, compliance or
administrative burden on individuals or organisations outside of the public sector.
Effectiveness
8.3
The proposed legislation is designed to secure the Programme for Government
commitments as effectively as possible. As referred to above, it will provide for
consistency in ethics related processes and duties across the public sector and will
streamline responsibility for overseeing compliance with rules, on seeking and
providing advice, for developing guidelines, carrying out investigations, implementing
sanctions and developing Codes of Conduct.
Proportionality
8.4
The objectives set out in the Programme for Government in relation to Ethics cannot
be achieved other than by legislation.
Transparency
8.5
The development of the proposed legislation has been informed by consultations with
key stakeholders. A significant effort has been made to simplify and modernise the
existing legislative framework and to ensure that it is easily comprehended by users.
The Code of Conduct for Ethics which will be developed under the proposed
legislation, and related guidelines, are expected to provide clarity and further
information on key aspects of the legislation.
Accountability
8.6
The Bill will provide a high level of clarity on the roles and ethics responsibilities of
public officials.
Consistency
8.7
The proposed legislation will achieve a greater consistency in the implementation of
ethics related processes and duties across the public sector.
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Conclusions
10
9.1
The main positive benefit from the strengthening and reform of the Ethics legislative
framework relates to its contribution to prevention of corruption and ensuring that the
consideration of ethical standards will be a significant factor for those performing
public office.
9.2
The reforms proposed complement the further measures introduced in the areas of
whistleblower protection, the Ombudsman, Parliamentary inquiries, the appointment
system to State Boards, civil service accountability and Freedom of Information in
building a system of public governance that underpins openness, transparency,
accountability and integrity of public administration government.
9.3
It is strongly recommended that that Option 3 is the best approach to achieve the
modernisation, simplification and reform of the current legislative framework and the
strengthening and rationalisation of the current institutional arrangements. The reforms
proposed will provide for consistency in ethics related processes and duties across the
public sector and ensure that conflicts of interest can be appropriately identified and
controlled. They will also ensure that the recommendations of the Tribunals in relation
ethics in public office will be implemented in a proportionate manner and strike an
appropriate balance between strengthening the regulatory framework for combating
the risk of corruption and conflicts of interest and other important public policy
objectives.
Government Reform Unit
Department of Public Expenditure and Reform
June 2015
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