Whether the Department was justified in redacting certain information from an audit report prepared by Pobal about a named company, under sections 30(1)(b), 36(1)(b) and 37(1) of the FOI Act

24 May 2021

Background

In a request dated 27 August 2019, the applicant submitted a request to the Department of Children and Youth Affairs (as it then was) for a copy of a report by a named individual about a named community service group (the company). The report in question is an audit report prepared by Pobal concerning the company. The company is limited by guarantee and is a registered charity. It provides a range of services to the local community, including childcare services. Fees are charged to the parents and guardians of the children for the services provided but these can be decreased by registering children in one of three childcare programmes operated by the Department. Funding for the childcare programmes is governed by contracts with the Department. In the period under audit, the company also received some early years capital funding, subject to contracts with Pobal.

On 6 December 2019, the Department refused the request under section 36(1)(b) of the FOI Act (commercial sensitivity). On 24 January 2020, the applicant sought an internal review of that decision, following which the Department varied its decision and granted partial access to the report, with certain information redacted under sections 30(1)(b) (functions of FOI bodies), 36(1)(b) and 37(1) (personal information). By letter dated 3 April 2020, the applicant sought a review by this Office of the Department’s decision.

During the course of the review, the Investigator notified the company of the request and invited it to make a submission on the matter. The company indicated that it objected to the release of the records.

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 correspondence between the applicant and the Department, as outlined above, and to the correspondence between this Office and the three relevant parties on the matter. I have also examined the records at issue. I have decided to conclude this review by way of a formal, binding decision. I wish to apologise for the delay in issuing this decision, which was primarily due to unforeseen staff resource issues.

Scope of the review

This review is concerned solely with whether the Department was justified in redacting certain parts of the report prepared by Pobal concerning the named company under sections 30(1)(b), 36(1)(b) and 37(1) of the FOI Act.

Preliminary Matters

Before I address the substantive issues arising, I would like to make a number of preliminary comments. First, I note that in his application for review to this Office, the applicant expressed concerns about the manner in which the company was being run. The applicant should note that under section 13(4) of the Act, any reason that a requester gives for a request must generally be disregarded when deciding whether to grant or refuse the request. This means that this Office cannot have regard to the applicant's motives for seeking access to the record at issue, except in so far as those motives reflect what might be regarded as public interest factors in favour of release of the information where the Act requires a consideration of the public interest.

Second, section 18(1) of the Act provides that if it is practicable to do so, access to an otherwise exempt record shall be granted by preparing a copy, in such form as the body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). I take the view that neither the definition of a record under section 2 of the Act 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, I am not in favour of the cutting or "dissecting" of records to such an extent. Being "practicable" necessarily means taking a reasonable and proportionate approach in determining whether to grant access to parts of records.

Finally, it should also be noted that while I am obliged to give reasons for my decision, section 25(3) of the Act requires that all reasonable precautions be taken in the course of a review to prevent disclosure of information contained in an exempt record. This means that I am limited in the description I can provide of the information that has been withheld in this case.

Analysis and Findings

As noted above, the Department refused access to parts of the report at issue under sections 30(1)(b), 36(1)(b) and 37(1) of the FOI Act. In my view, section 36(1)(b) is the most relevant to consider first in this instance.

Section 36(1)(b) – Commercial Sensitivity

Section 36(1)(b) provides that a request shall be refused if the record concerned contains

“financial, 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) does not apply if the public interest would, on balance, be better served by granting than by refusing the request (section 36(3) refers).

The essence of the test in section 36(1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release. The harm test in the first limb of section 36(1)(b) is whether disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.

The harm test at the second limb 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 Supreme Court confirmed in University College Cork v The Information Commissioner [2020] IESC 58 that the standard of proof in relation to the second limb is “very low”. Nevertheless, it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. The FOI body or the third party opposing release should explain why disclosure of the particular records could prejudice the competitive position of the third party.

In its submissions to this Office, the Department said the report provides considerable detail of the structure and workings of the company and examines the income streams and expenditure of the company. It argued that release would likely lead to the providers who are competitors to the company obtaining information which could reasonably be considered to place the company at a competitive disadvantage. It also argued that release might likely lead to unfair reputational damage to the company, which would likely lose business as a result. 

The company itself essentially argued that disclosure of the report in full would have the potential to unnecessarily damage its reputation, as well as the professional reputation of certain individuals in the organisation.

The information redacted under section 36(1)(b) includes details of Pobal’s compliance findings relating to the operation of childcare services and relating to the company’s financial procedures and arrangements. Having considered the information at issue, I am satisfied that its release could reasonably be expected to result in a material financial loss or gain to the company and could prejudice its competitive position. I find, therefore, that section 36(1)(b) applies

Section 36(3) – The Public Interest

Having found that section 36(1)(b) of the FOI Act applies, section 36(3) of the Act requires me to consider whether, on balance, the public interest would be better served by granting than by refusing access to the record at issue.

In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. Section 11(3) provides that an FOI body must have regard to 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, it is important to note that in The Minister for Communications, Energy and Natural Resources v The Information Commissioner & Ors [2020] IESC 57, the Supreme Court held that general principles of openness and transparency do not provide a sufficient basis for directing the release of otherwise exempt information in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”.

The Court also found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request. It stated that “the scheme of the Act is to make the refusal of certain records mandatory, unless the public interest could, following an analysis of the contents, rationally be said to lead to the conclusion that disclosure of the records is in the public interest by reason of their contents.”

Following receipt of his application for review, this Office invited the applicant to make a submission on any matter he considered relevant to the review. He was directed to our website, where we have published a significant amount of guidance and other materials, which outline our interpretation of the FOI Act, including the mechanics of various exemptions. The applicant did not elect to provide such a submission. Nevertheless, in his application for review, he outlined certain concerns he has about the Company and its operations and indicated that, in seeking the information at issue, he was motivated to see that taxpayers’ money was spent wisely. I accept that the applicant has, in essence, argued that there is a public interest in release because the full contents of the report could shed light on issues of concern regarding the company, its finances and the manner in which it has conducted its business, particularly in the context of the expenditure of public monies.

In its internal review decision, the Department said it had considered the strong public interest in ensuring that there is openness and transparency in the management and deployment of public funds. However, it also said that there is a strong public interest in ensuring that the interests of bodies are protected. It noted that the information released included information around grant funding and it decided that, on balance, the public interest favoured withholding the remaining information at issue.

This Office takes the view that while the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations, it was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny. Having carefully examined the contents of the records and considered the information before me, I am not aware of any sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure of the information at issue. Accordingly, I consider that the public interest would not, on balance, be better served by its release.

In conclusion, therefore, I find that the Department was justified in refusing access to the relevant parts of the report under section 36(1) of the FOI Act.

Section 30(1)(b) – Functions of FOI Bodies

The Department decided to redact some parts of the report under both sections 30(1)(b) and 36(1)(b). Given my finding that the Department was justified in redacting the information at issue under section 36(1)(b), it is not necessary for me to consider the Department’s arguments in relation to section 30(1)(b).

Section 37(1) – Personal Information

The Department has refused access to parts of pages 4, 5, 6, 9, and 10 under section 37(1). The information in question includes information regarding staff work history, qualifications, and work practices of identifiable individuals.

Section 37(1) of the FOI Act provides that, subject to the other provisions of the section, an FOI body shall refuse a request if access to the record concerned would involve the disclosure of personal information. This does not apply where the information involved relates to the requester (section 37(2)(a) refers). For the purposes of the Act, personal information is defined as information about an identifiable individual that either (a) would ordinarily 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 that body as confidential. The definition also details fourteen specific categories of information that is personal information without prejudice to the generality of the foregoing definition, including (iii) information relating to the employment or employment history of the individual.

I am satisfied that the information at issue is personal information within the meaning of section 37. I find, therefore, that section 37(1) applies.

Section 37(2) of the FOI Act sets out certain circumstances in which section 37(1) does not apply. I am satisfied that none of those circumstances arise in this case. Section 37(5) of the FOI Act provides that a request that would fall to be refused under section 37(1) may still be granted where, on balance, (a) the public interest that the request should be granted outweighs the right to privacy of the individual to whom the information relates, or (b) the grant of the information would be to the benefit of the person to whom the information relates.

I am satisfied that the release of the information at issue would not be to the benefit of the individuals concerned and that section 37(5)(b) does not apply. In relation to paragraph (a), I must consider whether the public interest in granting the request outweighs, on balance, the public interest in protecting the right of privacy of the individuals to whom the information relates.

The FOI Act also recognises the public interest in the protection of the right to privacy. This is evident both in the language of section 37 and in the Long Title to the Act (which makes clear that the release of records under FOI must be consistent with the right to privacy). It is also worth noting that the right to privacy has a constitutional dimension, as one of the unenumerated personal rights under the Constitution. Privacy rights will therefore be set aside only where the public interest served by granting the request (and breaching those rights) is sufficiently strong to outweigh the public interest in protecting privacy. As mentioned, I am also cognisant that the release of records under FOI is, in effect, regarded as release to the world at large, given that the Act places no constraints on the uses to which the information contained in those records may be put.

As noted earlier, the company objected to release in simple terms, stating that disclosure would have the potential to unnecessarily damage its reputation, as well as the professional reputation of certain individuals in the organisation. The Department contends that there is no public interest in release that outweighs the public interest in protecting the privacy rights of the individuals involved. As above, the applicant’s public interest concerns essentially focus on the appropriateness of the company’s spending of public monies.

Having regard to the nature of the information at issue, I am aware of no public interest factors in favour of its release that, on balance, outweigh the right to privacy of the individuals to whom the information relates. I find, therefore, that subsection (5)(a) does not apply. Accordingly, I find that the Department was justified in redacting, under section 37(1), certain information from pages 4, 5, 6, 9, and 10.

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the Department’s decision to redact certain information from the report sought under sections 36(1)(b) and 37(1) of the FOI Act.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

 

Stephen Rafferty

Senior Investigator