PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY RULE
A rule for the Duty to Disclose Interests to support section 29 of the PGPA Act
Please note that this version of the rule to operationalise the Duty to Disclose Interests
provisions in section 29 of the PGPA Act has been developed for consultation.
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1. Introduction
Section 29 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act)
requires an official of a Commonwealth entity to disclose material personal interests that
relate to the affairs of the entity.
This section seeks to:


address circumstances where an official has material personal interests related to
the affairs of the official’s entity; and
implement arrangements that ensure accountability and transparency in the
operations of entities managing public resources.
The rules can provide further details about the types of material personal interests to be
disclosed, how and when disclosures are to be made, and the consequences for not
disclosing interest.
The requirements of section 29 of the PGPA Act are similar to those set out in the Public
Service Act Code of Conduct. The differences in requirements are relatively small. The Code
of Conduct in the Public Service Act sets out binding standards of behaviour for Australian
Public Service agency heads and employees, while the PGPA Act provides the basis for the
resource management framework for all commonwealth entities (corporate and noncorporate).
2. Intent and rationale of the proposed rule
The duty to disclose material personal interests related to the affairs of the entity is an
accepted standard of good governance and management. As demonstrated by the detailed
rules in the Corporations Act 2001, and the enabling legislation of most Commonwealth
entities, disclosure of interest requirements are almost always the subject of greater
scrutiny than other duties.
Therefore, the rule must establish clear and consistent requirements regarding the
disclosure of interests to ensure that there is appropriate transparency around the
management of interests.
The rule governs the disclosure of material personal interest involving (members of)
accountable authorities. It requires disclosure to the Minister where the accountable
authority is an individual and disclosure by a member to other members in a multi–member
accountable authority. The disclosure must be evidenced in writing, and the rule sets out
particular requirements on how this is to be done.
The rule also concerns officials who are not (a member of) an accountable authority and
requires them to make disclosures in writing. In other respects, an accountable authority
has the power to tailor the system for disclosure of interests as it applies to other officials in
the entity.
The rule is intended to complement the requirements that are specified in the enabling
legislation of various entities and in the Public Service Act 1999. For some entities there is a
degree of specificity outlined in legislation regarding conflicts that pertains to the specific
purposes of the entity. The requirements in the rule need to be read in conjunction with
those requirements.
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While the rule does not define ‘material’ this concept will be expanded upon in the guidance
material. As a starting point the concept of materiality will build on the existing precedents
established through case law, accounting standards and other relevant references. In
general terms materiality depends on the size and nature of the interest and the
surrounding circumstances.
3. Comparable Existing Legislative Requirements
The requirement to disclose material personal interests is found in section 27F of the
CAC Act. A duty is placed on a director to notify the other directors of a material personal
interest that relates to the affairs of the authority. The notice is required to detail the nature
and extent of the interest, the relation of the interest to the affairs of the authority, and
must be given at a directors’ meeting as soon as practicable after the director becomes
aware of the interest.
Subsection 27F(2) of the CAC Act provides a list of exemptions from the requirement to
disclose a material personal interest. This includes where notice has already been given or
standing notice has been provided. The CAC Act provision is based on directors’ duties
under the Corporations Act 2001 (Corporations Act), and carries a civil penalty provision that
carries a penalty of 10 penalty units for a breach. A breach is determined on a strict liability
basis.
In respect of Commonwealth companies, Division 2 of Part 2D.1 of Chapter 2C of the
Corporations Act applies. Directors of Commonwealth companies are required by Division 2
to disclose material personal interests relating to the affairs of the company. This is
enforced by ASIC.
There is no corresponding provision in the FMA Act. However, section 13 (Code of Conduct)
of the Public Service Act requires public servants to disclose, and take reasonable steps to
avoid, any conflict of interest (real or perceived) in connection with their employment.
For those FMA Act entities that do not employ staff under the Public Service Act, many have
enabling legislation that addresses the disclosure and management of conflicts of interest.
4. Proposed rule for Disclosure of Interests
This rule has been developed based on principles from the CAC Act, Corporations Act and
Public Service Act. The authority for the rule is found in section 29 of the PGPA Act.
Duty to disclose interests—circumstances in which the duty does not apply
The purpose of this rule is to set clear and consistent requirements regarding the disclosure of
interests by officials of Commonwealth entities.
(1)
For paragraph 29(2)(a) of the Act, this section prescribes circumstances in which
subsection 29(1) of the Act (which requires an official of a Commonwealth entity who has a
material personal interest that relates to the affairs of the entity to disclose the interest) does
not apply.
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Official who is the accountable authority—how and when to disclose interest
(1)
For paragraph 29(2)(b) of the Act, this section prescribes how and when an official of a
Commonwealth entity who:
(a)
is the accountable authority of the entity; and
(b)
has a material personal interest that relates to the affairs of the entity;
must disclose that interest.
(2)
The official must disclose the interest, in writing, to the entity’s responsible Minister.
(3)
The disclosure must include details of:
(a)
the nature and extent of the interest; and
(b)
how the interest relates to the affairs of the entity.
(4)
The official must make the disclosure:
(a)
as soon as practicable after the official becomes aware of the interest; and
(b)
if there is a change in the nature or extent of the interest after the official has disclosed
the interest under this section—as soon as practicable after the official becomes aware
of that change.
Official who is a member of the accountable authority—how and when to disclose interests
(1)
For paragraph 29(2)(b) of the Act, this section prescribes how and when an official of a
Commonwealth entity who:
(a)
is a member of the accountable authority of the entity; and
(b)
has a material personal interest that relates to the affairs of the entity;
must disclose that interest.
(2)
The official must disclose the interest, orally or in writing, to each other member of the
accountable authority.
(3)
The disclosure must include details of:
(a)
the nature and extent of the interest; and
(b)
how the interest relates to the affairs of the entity.
(4)
The official must make the disclosure at a meeting of the members of the accountable
authority:
(a)
as soon as practicable after the official becomes aware of the interest; and
(b)
if there is a change in the nature or extent of the interest after the official has disclosed
the interest under this section—as soon as practicable after the official becomes aware
of that change.
(5)
The disclosure must be recorded in the minutes of the meeting.
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Official who is a member of the accountable authority—consequences of having interests
(1)
For paragraphs 29(2)(c) and 102(a), (b) and (d) of the Act, this section prescribes
consequences arising for an official of a Commonwealth entity who:
(a)
is a member of the accountable authority of the entity; and
(b)
has a material personal interest.
(2)
If a matter in which the official has the interest is being considered at a meeting of the
members of the accountable authority, the official must not:
(a)
be present while the matter is being considered at the meeting; or
(b)
vote on the matter.
(3)
However, if:
(a)
the members of the accountable authority who do not have a material personal interest
in the matter have decided that the official is not disqualified from being present or
voting (or both), and the decision is recorded in the minutes of a meeting of the
members; or
(b)
the responsible Minister for the entity has declared, in writing, that the official may be
present or vote (or both);
then the official may be present or vote (or both) in accordance with the declaration or
decision.
(4)
The Minister may only make the declaration under 3(b) if:
(a)
(b)
(5)
the number of members of the accountable authority entitled to be present and vote on
the matter would be less than the quorum for a members’ meeting if the member were
not allowed to vote on the matter at the meeting; and
the matter needs to be dealt with urgently, or if there is some other compelling reason
for the matter being dealt with at the members’ meeting.
A contravention of this section by an official does not affect the validity of any resolution.
Official who is not an accountable authority or a member of an accountable authority
(1)
For paragraph 29(2)(b) of the Act, this section prescribes how and when an official of a
Commonwealth entity who:
(a)
is not the accountable authority or a member of the accountable authority of the entity;
and
(b)
has a material personal interest that relates to the affairs of the entity;
must disclose that interest.
(2)
The official must disclose the interest in writing consistent with requirements established by
the accountable authority.
Note: The Public Service Act 1999 sets out a Code of Conduct for persons covered by that
Act which includes the requirement to disclose, and take reasonable steps to avoid, real and
apparent conflicts of interest in connection with their APS employment (subsection 13(7)),
and the Australian Public Service Commissioner issues guidance from time to time on the
application of this provision.
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5. Date of Effect
The substantive provisions of the PGPA Act will commence on 1 July 2014 and it is intended
that this rule will commence at the same time. This will ensure continuity of requirements
currently in place under existing arrangements.
6. Additional guidance
Additional guidance will be prepared in the following areas:
 the types of interests to be disclosed, including:
o the meaning of “material personal interest”;
o disclosure of perceived and/or potential interest;
 better practice in relation to disclosures (including a detailed hierarchy of disclosure
and how disclosure might be managed);
 dealing with interests after disclosure (including implications for quorums); and
 the consequences of failing to disclose a material personal interest.
Finance will also assist entities to develop internal policies and procedures to address the
issue of disclosures, particularly for officials who are not an accountable authority or
members of an accountable authority.
There is existing guidance issued by the Australian Public Service Commissioner concerning
the declaration of interests by senior APS employees and other staff whose responsibilities
also require them to be particularly transparent about their private interests. This guidance,
which is currently being updated, will also provide a useful reference point in regard to the
operation of this rule.
7. Linkages to other Elements of Reform
The duty to disclose interests is one of the general duties of officials under the PGPA Act,
and has linkages to:
 the duty to act with care and diligence (PGPA Act section 25);
 the duty to act in good faith and for a proper purpose (PGPA Act section 26);
 the duty not to improperly use one’s position (PGPA Act section 27);
 the duty not to improperly use information (PGPA Act section 28); and
 sections 30 to 32 of the PGPA Act as they relates to breaches of the general duties
and interactions with other laws.
The duty to disclose interests also demonstrates the importance of transparency and
accountability in resource management in the Commonwealth.
8. Impact
This rule is expected to have minimal impact on entity operations, as it reflects
requirements already applicable to FMA and CAC bodies.
9. Issue for consideration and feedback

What interests, if any, should be excluded from disclosure?
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Attachment A
Existing provisions: Material Personal Interest – Director’s Duty to Disclose
Commonwealth Authorities and Companies Act 1997 – Section 27F (Material personal
interest – director’s duty to disclose)
Director’s duty to notify other directors of material personal interest when conflict arises
(1) A director of a Commonwealth authority who has a material personal interest in a matter
that relates to the affairs of the authority must give the other directors notice of the
interest unless subsection (2) says otherwise.
Penalty: 10 penalty units.
(1A) For an offence based on subsection (1), strict liability applies to the circumstance that the
director of the authority has a material personal interest in a matter that relates to the
affairs of the authority.
Note:
For strict liability, see section 6.1 of the Criminal Code.
(2) The director does not need to give notice of an interest under subsection (1) if:
(a) the interest:
(i) arises in relation to the director’s remuneration as a director of the authority;
or
(ii) relates to a contract that insures, or would insure, the director against
liabilities the director incurs as an officer of the authority (but only if the
contract does not make the authority or a subsidiary of the authority the
insurer); or
(iii) relates to any payment by the authority or a subsidiary of the authority in
respect of an indemnity permitted under section 27M or any contract relating
to such an indemnity; or
(iv) is in a contract, or proposed contract, with, or for the benefit of, or on behalf
of, a subsidiary of the authority and arises merely because the director is a
director of the subsidiary; or
(b) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the interest
and its relation to the affairs of the authority under subsection (1);
(ii) if a person who was not a director of the authority at the time when the notice
under subsection (1) was given is appointed as a director of the authority—the
notice is given to that person;
(iii) the nature or extent of the interest has not materially increased above that
disclosed in the notice; or
(c) the director has given a standing notice of the nature and extent of the interest
under section 27G and the notice is still effective in relation to the interest.
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the authority; and
(b) be given at a directors’ meeting as soon as practicable after the director becomes
aware of his or her interest in the matter.
The details must be recorded in the minutes of the meeting.
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Effect of contravention by director
(4) A contravention of this section by a director does not affect the validity of any act,
transaction, agreement, instrument, resolution or other thing.
Corporations Act 2001 – Section 191 (Material personal interest – director’s duty to
disclose)
Director’s duty to notify other directors of material personal interest when conflict arises
(1) A director of a company who has a material personal interest in a matter that relates to
the affairs of the company must give the other directors notice of the interest unless
subsection (2) says otherwise.
(1A) For an offence based on subsection (1), strict liability applies to the circumstance, that
the director of a company has a material personal interest in a matter that relates to the
affairs of the company.
Note:
For strict liability, see section 6.1 of the Criminal Code.
(2) The director does not need to give notice of an interest under subsection (1) if:
(a) the interest:
(i) arises because the director is a member of the company and is held in common
with the other members of the company; or
(ii) arises in relation to the director’s remuneration as a director of the company;
or
(iii) relates to a contract the company is proposing to enter into that is subject to
approval by the members and will not impose any obligation on the company
if it is not approved by the members; or
(iv) arises merely because the director is a guarantor or has given an indemnity or
security for all or part of a loan (or proposed loan) to the company; or
(v) arises merely because the director has a right of subrogation in relation to a
guarantee or indemnity referred to in subparagraph (iv); or
(vi) relates to a contract that insures, or would insure, the director against
liabilities the director incurs as an officer of the company (but only if the
contract does not make the company or a related body corporate the insurer);
or
(vii) relates to any payment by the company or a related body corporate in respect
of an indemnity permitted under section 199A or any contract relating to such
an indemnity; or
(viii) is in a contract, or proposed contract, with, or for the benefit of, or on behalf
of, a related body corporate and arises merely because the director is a director
of the related body corporate; or
(b) the company is a proprietary company and the other directors are aware of the
nature and extent of the interest and its relation to the affairs of the company; or
(c) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the interest
and its relation to the affairs of the company under subsection (1);
(ii) if a person who was not a director of the company at the time when the notice
under subsection (1) was given is appointed as a director of the company—the
notice is given to that person;
(iii) the nature or extent of the interest has not materially increased above that
disclosed in the notice; or
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(d) the director has given a standing notice of the nature and extent of the interest
under section 192 and the notice is still effective in relation to the interest.
Note:
Subparagraph (c)(ii)—the notice may be given to the person referred to in this subparagraph by
someone other than the director to whose interests it relates (for example, by the secretary).
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the company; and
(b) be given at a directors’ meeting as soon as practicable after the director becomes
aware of their interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the validity of any act,
transaction, agreement, instrument, resolution or other thing.
Section does not apply to single director proprietary company
(5) This section does not apply to a proprietary company that has only 1 director.
Public Service Act 1999 – section 13 (Code of Conduct)
(1) An APS employee must behave honestly and with integrity in connection with APS
employment.
(2) An APS employee must act with care and diligence in connection with APS
employment.
(3) An APS employee, when acting in connection with APS employment, must treat
everyone with respect and courtesy, and without harassment.
(4) An APS employee, when acting in connection with APS employment, must comply with
all applicable Australian laws. For this purpose, Australian law means:
(a) any Act (including this Act), or any instrument made under an Act; or
(b) any law of a State or Territory, including any instrument made under such a law.
(5) An APS employee must comply with any lawful and reasonable direction given by
someone in the employee’s Agency who has authority to give the direction.
(6) An APS employee must maintain appropriate confidentiality about dealings that the
employee has with any Minister or Minister’s member of staff.
(7) An APS employee must disclose, and take reasonable steps to avoid, any conflict of
interest (real or apparent) in connection with APS employment.
(8) An APS employee must use Commonwealth resources in a proper manner.
(9) An APS employee must not provide false or misleading information in response to a
request for information that is made for official purposes in connection with the
employee’s APS employment.
(10) An APS employee must not make improper use of:
(a) inside information; or
(b) the employee’s duties, status, power or authority;
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in order to gain, or seek to gain, a benefit or advantage for the employee or for any
other person.
(11) An APS employee must at all times behave in a way that upholds:
(a) the APS Values and APS Employment Principles; and
(b) the integrity and good reputation of the employee’s Agency and the APS.
(12) An APS employee on duty overseas must at all times behave in a way that upholds the
good reputation of Australia.
(13) An APS employee must comply with any other conduct requirement that is prescribed by
the regulations.
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Attachment B
Public Governance, Performance and Accountability Act 2013
Section 29 - Duty to Disclosure Interests
(1) An official of a Commonwealth entity who has a material personal interest that relates to
the affairs of the entity must disclose details of the interest.
(2) The rules may do the following:
(a) prescribe circumstances in which subsection (1) does not apply;
(b) prescribe how and when an interest must be disclosed;
(c) prescribe the consequences of disclosing an interest (for example, that the
official must not participate at a meeting about a matter or vote on the
matter).
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