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Whether the decision of the Council on a request to which section 38 of the FOI Act applied, to grant access to records relating to oil contamination with the redaction of certain information under sections 36(1) and 37(1) of the Act was justified

Conducted in accordance with section 22(2) of the FOI Act by Elizabeth Dolan, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

On 26 May 2015, the requester made an FOI request to the Council for access to nine files relating to oil pollution. Three of the files consisted of contamination assessment reports prepared by a third party. On 29 May 2015, the Council informed the third party in writing of its intention to release the three reports with the redaction of certain information which it decided was either commercially sensitive information (exempt under section 36) or personal information (exempt under section 37). The Council provided the third party with copies of the three reports with the redactions indicated. On 29 May 2015, a legal adviser to the third party informed the Council that the third party did not consent to the release of the redacted reports. On 12 June 2015, the Council informed the requester that third party reports fell within the ambit of his request and that it had notified the third party of its intention to release these reports with the redaction of commercially sensitive information. The Council informed the requester that the third party maintained that the reports were still commercially sensitive and that, in such cases, this Office would adjudicate on the Council's decision. On 16 June 2015, the Council informed the third party of its decision to release the three reports with the redaction of commercially sensitive information and of its right to appeal that decision. On 26 June 2015, the third party submitted an application to this Office for a review of the Council's decision. Both the third party and the Council made submissions in the course of this review.

When this Office checked with the Council, it confirmed that it had processed this request as one to which section 38 of the FOI Act applied. Section 38 applies to cases where the public body has decided that the records in question qualify for exemption under one or more of the relevant exemptions in the FOI Act (i.e. sections 35, 36 and 37 - relating to information that is confidential, commercially sensitive, or personal information about third parties, respectively) but that the records should be released in the public interest. Where section 38 applies, the public body is required to notify an affected third party before making a final decision on whether or not the exemption(s), otherwise found to apply, should be overridden in the public interest. The requester, or an affected third party, on receiving notice of the final decision of the public body, may apply directly for a review of that decision.

At this stage, I must bring the review to a close by the issue of a formal binding decision as the third party requires this. In conducting this review, I have had regard to correspondence between the requester and the Council, to correspondence between the third party and the Council, to correspondence between the Council and this Office, to correspondence between the third party and this Office, to the contents of the records at issue and to the provisions of the FOI Act.

Scope of Review

The scope of this review is confined to whether the third party has shown that the Council's decision to release parts of the three reports was not justified under sections 36 and 37 of the Act.

Preliminary Matters
The decision making procedure adopted by the Council in this case was not fully in accordance with the procedures set out in section 38 of the Act. While the Council told this Office that it had explained the matter to the parties by telephone, there is a statutory requirement to set out in the notification of decisions which exemption is being relied on where any part of the request is being refused. This is also the case even if the refusal is in the form of a redaction or part release of a record. In this case, the decision notifications make no reference to consideration of the public interest which is also a requirement of the Act. In particular, the decision maker must first decide that the records or parts thereof are exempt before forming a view as to whether the relevant exemption should be overridden in the public interest. Indeed, even though the requester would have had a right of appeal in respect of the withheld parts of the records (i.e. partial refusal of access), I can see no reference in the decision making records to the requester having been notified of this as required. The decision maker did, however, refer to a direct appeal to this Office and there was no internal review by the Council. In the circumstances, I accept that the Council intended to process the request as one to which section 38 of the Act applies and my review was carried out on that basis.

I appreciate that the operation of section 38 of the FOI Act can be complex and that it places heavy demands on FOI Bodies as regards time limits. However, the Central Policy Unit (CPU) of the Department of Expenditure and Public Reform publishes useful guidance and sample letters in relation to the operation of the FOI Act (including section 38) and it is difficult to understand why an FOI body would not have regard to such guidance or use the templates where relevant.

Section 22(12)(a) of the FOI Act provides that where a decision to grant a request to which section 38 applies is being reviewed by the Commissioner, there is a presumption that the granting of the requested access is justified unless the person (to whom the information relates) shows to the satisfaction of the Commissioner that the decision was not justified. Thus, in this case, the onus is on the third party to satisfy me that the Council's decision was not justified.

Section 18 of the FOI Act provides that if it is practicable, records may be granted in part, by excluding the exempt material. However, the Commissioner takes the view that neither the definition of a record under section 2 nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, the Commissioner is not in favour of the cutting or "dissecting" of records to such an extent. Section 18 shall not apply if the copy of the record provided would be misleading.

Analysis and Findings

Section 36 Commercially Sensitive Information
The third party does not specify which of the provisions of section 36 it is relying on. However, based on the submissions, it appears it is relying on sections 36(1)(a) and 36(1)(b) of the Act.

Section 36(1) of the FOI Act provides:-

"Subject to subsection (2), a head shall refuse to grant an FOI request if the record concerned contains-

(a) trade secrets of a person other than the requester concerned,

(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation."

Section 36(1)(a)- Trade Secrets
Section 36(1)(a) applies to a record containing trade secrets of someone other than the requester. The Commissioner takes the view that this provision protects the secrecy of a product or operation or some form of information which is strictly guarded by the company. The Commissioner has accepted that a trade secret is information used in the trade or business which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret and that owner must limit the dissemination of it or at least not encourage or permit widespread publication. It is also accepted that an exact definition of a trade secret is not possible and that some factors to be considered in determining whether information is a trade secret are:

(i) the extent to which the information is known outside of the business concerned;

(ii) the extent to which it is known by employees and others involved in the business;

(iv) the value of the information to the business and to its competitors;(v) the amount of effort or money expended by the business in developing the information;(vi) the ease or difficulty with which the information could be properly acquired or duplicated by others.

(iii) the extent of measures taken by the business to guard the secrecy of the information;

The third party argues that the three reports at issue are its intellectual property. It states that the template, format and content of the reports have been developed over a considerable period of time and contain a specific approach to the assessment and remediation of oil contamination. The third party claims that the proprietary information contained in the reports has resulted in it gaining a competitive advantage in the market and that release of the reports would significantly prejudice it in the conduct of its business. The third party also states that it is not aware of any similar reports which are in the public domain.

The Council states that when it is informed of an oil spillage causing pollution, it requires the relevant property owner to engage a company to carry out pollution remediation. The Council says that as part of this process it requires the appointed company to provide it with a report which must include certain key information. According to the Council, while the format of these reports differs between companies, the contents of the reports are very similar and reflect the Council's requirements. The Council contends that the reports at issue do not differ to any great extent from reports submitted to the Council by other companies. The Council argues that the third party's reports are not based on some secret tried and tested formula which gives it a unique commercial advantage.

Section 25(3) of the Act requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. This means that the description which I can give of the records at issue is limited. I can say that record one is a site investigation report into a diesel spill at commercial premises. Records two and three are site characterisation/assessment reports into oil spills at residential premises. The content of all three reports is similar. Each report includes the following sections: Introduction, Investigation, Conclusion, and Recommendations.

In the context of this review, the issue in relation to section 36(1)(a) is whether the criteria and techniques for oil remediation detailed in the third party's report constitute a trade secret. I accept that the third party's reports contain a specific approach to remediation of oil contamination; however, criteria and techniques for oil remediation are known outside the third party's company. I am not satisfied that the third party's competitors need the information contained in these reports in order to compete with the third party. Members of the public who avail of the services of a remediation company are provided with an assessment report by the company. In all likelihood, there are a number of such reports from various companies in circulation. I am not satisfied that the third party has demonstrated that the reports contain a trade secret and I find that they are not exempt under section 36(1)(a) of the Act.

Section 36(1)(b)- Financial loss or gain
The harm test in the first part of subsection (1)(b) is that disclosure of the information "could reasonably be expected to result in material financial loss or gain". The Commissioner takes the view that the test to be applied in this regard is not concerned with the question of probabilities or possibilities, but with whether the decision maker's expectation is reasonable. The nature of the harm envisaged and a basis for a claim that such harm could reasonably be expected to result from disclosure of the particular information in the record(s) at issue should be shown by an FOI body or a third party relying on this provision in section 36(1)(b).

The harm test in the second part of subsection (1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of his or her profession or business. The standard of proof necessary to meet this test is considerably lower than the standard required to meet the test of "could reasonably be expected to" in the first part of section 36(1)(b). While the degree of harm required to meet the harm test in the second part of this provision is lower than required to meet the test in the first part, the Commissioner takes the view that, in invoking the phrase "prejudice" the damage which could occur as a result of disclosure of the information must be specified with a reasonable degree of clarity. Factors that have been taken into account by the Commissioner and that may be relevant in considering the application of section 36(1)(b) include, for example, the availability otherwise of the information and whether it is in the public domain; the passage of time; and the broader context and rate of change in the relevant industry.

The third party contends that as a result of its specific approach, it has gained a strong position in the market in which it operates. It argues that if its reports are released it will suffer a material financial loss. The third party states that it believes that the requester is one of its competitors who has requested this information with a view to securing a competitive advantage over it. The third party contends that the redactions indicated by the Council do not protect its commercially sensitive information. In particular, it states that the names of individuals and commercial entities who have instructed it, the names of its employees, job reference numbers and laboratory references have not been redacted. The third party contends that this information is commercially sensitive as it could identify its clients and its release will prejudice its competitive position.

The Council states that companies appointed to carry out oil spill remediation follow a similar approach. The company goes on site, carries out a preliminary assessment, lays out its terms of reference and how it intends to fulfil these. It outlines its investigation, gives its findings and issues its recommendations for remediation. The Council argues that this process is similar amongst all companies. It says that release of the reports will not cause the third party's business to suffer a material financial loss; neither will release prejudice its competitive position.

As regards the third party's argument that names of its clients and employees together with reference numbers are all commercially sensitive, I note that with the exception of the names of the third party's employees, this information is in fact redacted in the three reports. The Council redacted details of the third party's job reference numbers and laboratory sampling numbers on the basis that this information is commercially sensitive. The Council has also redacted details of the third party's pricing. I am satisfied that this information is not generally available. I accept that release of this information could prejudice the third party by allowing competitors access to its customers or pricing structures. I am satisfied that this information is exempt under section 36(1)(b) of the Act and I find accordingly.

The Council has not redacted the names of the third party's employees, insurance company employees or loss adjustors. I cannot see how this information could reasonably be expected to cause the third party a material financial loss or gain for its competitors or could prejudice its competitive position and I can find nothing in the submissions to justify the section 36 exemption. I find that section 36(1)(b) is not applicable to this information. I consider below whether the relevant names are exempt under section 37 of the Act.

Section 36(3) the Public Interest
Section 36(3) provides that, subject to section 38, subsection (1) does not apply in relation to a case in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the FOI request.

It is necessary for me to consider the public interest balancing test only in relation to those parts of the records withheld by the Council which I have found above to be exempt under section 36(1)(b) i.e. the client names, the reference numbers and pricing details. I note that this is not a case in which the Council has spent public funds on a service provided by the third party. The Council holds these reports due to particular requirements imposed in relation to pollution cases. It seems to me that any public interest in openness and transparency and in ensuring that the Council is informed about contaminated sites and pollution remediation would be served by the release of those parts of the reports which I have found not to qualify for the section 36 exemption. Given that the arrangements between the third party and its clients are essentially private commercial arrangements, I do not see how the public interest would be better served by releasing them. I am satisfied that on balance, the public interest would be better served by refusing access to the redacted names, reference numbers and pricing details to which section 36(1)(b) applies and I find accordingly.

Section 37(1) Personal Information
Section 37(1) is a mandatory exemption which requires the FOI body to refuse a request, subject to the other provisions of section 37, where it considers that access to the record concerned would involve the disclosure of personal information relating to an individual other than the requester. The FOI Act defines the term "personal information" as information about an identifiable individual that either (a) would, in the ordinary course of events, be known only to the individual or members of the family, or friends, of the individual or (b) is held by an FOI body on the understanding that it would be treated by the body as confidential. The definition also contains a list of 14 specific types of information including information relating to the employment or employment history and to the property of the individual. Certain categories of information are expressly excluded from the definition of personal information; these include information on persons who are directors, staff members or hold any position remunerated from public funds in an FOI body and, in the case of service providers to FOI bodies, the name of individuals or information relating to the service or terms of a contract or information recorded for the provision of the service. The definition of "service provider" includes persons providing a service to an FOI body under a contract for services or administrative arrangement.

In this case the Council has redacted the names and addresses of the third party's clients, and any maps or reference to local landmarks which would identify the third party's clients. I have found these to be exempt under section 36(1)(b) above. As outlined above, the Council has not redacted the names of third parties' employees, insurance company employees or the names of loss adjustors. I am satisfied that these individuals are providing a service for private individuals or businesses rather than for an FOI body and that the names are personal information which is exempt under section 37(1) of the Act subject to the other provisions of that section.

Section 37 (5) - The Public Interest
I am satisfied that the provisions of section 37(2) in relation to various exceptions to this mandatory exemption do not apply. Therefore, those parts of the records are exempt unless section 37(5) applies: -

" ...Where, as respects an FOI request the grant of which would, but for this subsection, fall to be refused under subsection (1), in the opinion of the head concerned, on balance --

(a) the public interest that the request should be granted outweighs the public interest that the right to privacy of the individual to whom the information relates should be upheld, or

(b) the grant of the request would benefit the individual aforesaid, the head may, subject to section 38 , grant the request."

I cannot see how granting the request insofar as it covers the redacted names would benefit the individuals concerned and consequently I find that paragraph (b) does not apply.

In respect of paragraph (a), I am satisfied that the public interest in this case in openness and accountability is met to a considerable extent by the release of the redacted records to the requester. The FOI Act itself recognises the public interest in ensuring openness and accountability of FOI bodies. However, the language of section 37 and the Long Title to the Act also recognises a very strong public interest in protecting the right of privacy which has a constitutional dimension. I find that the public interest that the request should be granted in full does not outweigh the public interest that the right to privacy of the individuals concerned -who are neither employed by the Council nor by its service providers in relation to the service at issue in the records - should be upheld. I find therefore that section 37(5)(a) does not apply in this case.

Decision

Having carried out a review under section 22(2) of the Freedom of Information Act 2014, I vary the decision of the Council as follows:

(i) I affirm the Council's decision to refuse access under section 36(1)(b) to pricing information; job reference numbers; laboratory reference numbers.

(ii) I affirm the Council's decision to refuse access to names and addresses of the third party's clients; maps of site locations; landmarks which identify site locations.

(iii) I annul the Council's decision to release the following which I find is exempt under section 37(1) of the Act: names of the third party's employees, insurance company employees and loss adjustors.

I direct the Council to redact this information from the records and release the remainder to the requester .

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 by the requester not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

Elizabeth Dolan
Senior Investigator