Decision
Mr X and Department of Finance
From Office of the Information Commissioner (OIC)
Case number: OIC-92657-D7D9Y9
Published on
From Office of the Information Commissioner (OIC)
Case number: OIC-92657-D7D9Y9
Published on
Whether the Department was justified in refusing access to records relating to the Bank of Ireland and the Prudential Capital Assessment Review
27 January 2021
On 16 January 2020, the applicant made an FOI request to the Department for documents containing his name over a period from September to December 2011 involving a dispute between the applicant and the Bank of Ireland (the Bank), including internal documents around this. The applicant also requested correspondence between the Department and the Bank in relation to the shortfall under the Prudential Capital Assessment Review (PCAR), between June and December 2011. On 12 March 2020, the Department issued a decision. It granted access to certain information and refused access to the remaining records under sections 15(1)(d), 35(1)(a) and 36(1)(b) of the FOI Act. On 23 March 2020, the applicant applied for an internal review. On 7 April 2020, the Department issued an internal review decision, in which it affirmed its original decision. On 8 June 2020, the applicant applied to this Office for a review of the Department's decision.
In conducting 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 both parties, as well as the content of the records that were provided to this Office by the Department for the purposes of this review. I have also had regard to submissions obtained from the Bank.
During the review process, the Department clarified that only certain parts of Record 2 relate to the shortfall under PCAR. Accordingly, only those parts fall within the scope of the applicant’s FOI request and this review. The Department also clarified that Record 3 comprises an internal document, draft press release, and draft letter which the Department doubts was issued. The applicant sought access to correspondence between the Department and the Bank. Record 3 therefore does not fall within the scope of his FOI request or this review.
The Investigator brought both of these points to the applicant’s attention during the review process and he agrees with this definition of the scope. The applicant also agrees that Record 4 is available online and in the public domain and that the Department may refuse access to it under section 15(1)(d) of the FOI Act. There is therefore no need for me to review the refusal of access to Record 4. Accordingly, the question for me is whether the withheld information in Records 2, 5 and 6 within the scope of this review is exempt under sections 35(1) and 36(1)(b) of the FOI Act.
Before considering the exemptions claimed, I wish to note the following points. First, my jurisdiction under section 22 of the FOI Act is to make a new decision, in light of the facts and circumstances as they apply on the date of the review. The Courts have endorsed this approach.
Secondly, while I am required to give reasons for my decision under section 22(10) of the FOI Act, I am also required to take reasonable precautions to prevent disclosure of information in an exempt record, under section 25. This means that the extent to which I can describe the records and the level of detail I can discuss in my analysis are limited.
The Department claims section 35(1) of the FOI Act over Records 2 and 5. Section 35(2) disapplies section 35(1) to a record which is prepared by a head or any other person (being a director, or member of the staff of, an FOI body or a service provider) in the course of the performance of his or her functions unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than an FOI body or head or a director, or member of the staff of, an FOI body or of such a service provider. As section 35(1) does not apply where the records fall within the terms of section 35(2), I should consider section 35(2) at the outset. Records 2 and 5 were prepared by the Bank. The Bank is not an FOI body. Neither is it a service provider to the Department. Therefore section 35(2) does not apply.
Record 2 consists of detailed minutes of meetings of the Bank’s board, given by the Bank to the Department. It contains information related to the shortfall under PCAR, about documentation and matters under consideration by the Bank, decisions and resolutions taken by the Bank, advice received from legal advisors at the meetings and the names of various parties present. Record 5 is a document given by the Bank to the Department related to the shortfall under PCAR which outlines options and issues with each option. It is stated to include statements based on legal advice from internal and external legal advisers.
During the review, the Investigator sought clarification on the basis for the sharing of information between the Bank and the Department. The Department says that an agreement between the parties sets out certain requirements, including that the Bank provide certain information and that such information will be treated in confidence. However, it also says that: “the Bank of Ireland shares information with the Department on an open and cooperative basis. This goes well beyond the requirements imposed on it …[I]t is the Department’s view that this flow of information, currently provided on a transparent, cooperative and proactive manner could be very significantly curtailed should the records in question be released”. Taking these submissions into account, I consider it appropriate to address section 35(1)(a) first.
Section 35(1)(a) of the FOI Act applies to a record containing information given to an FOI body in confidence. Four requirements must be satisfied for a record to be exempt under section 35(1)(a):
Section 35(1)(a) does not apply where the public interest would, on balance, be better served by granting than by refusing to grant the FOI request (see section 35(3)).
As noted above, Record 2 comprises board minutes from the Bank. The Department says that the information in such minutes is highly valuable for its timely understanding of issues facing the sector. It says that although the Bank’s practice was to provide minutes to the Department, this changed due to concerns around the level of confidential information being provided. Since 2015, the Department accesses the board minutes on the Bank’s premises. The Department says that there is a real and serious risk that the Bank may take action to reduce the current flow of valuable information should the Department release such information. This is particularly the case having regard to concerns the Bank has raised in the past about the disclosure of corporate information into the public domain either by way of FOI or otherwise. It says that there is a public interest in the Department continuing to access these papers.
As also noted above, Record 5 is a document given to the Department by the Bank, which refers to PCAR. It contains detailed information on capital-raising options and is stated to contain some legally privileged information. The Department submits that disclosing this kind of information could cause the Bank to withhold such information. It says that in addition to board minutes, the Bank shares confidential and commercially sensitive information with it on an ongoing basis, which is a valuable supplement to its understanding of the banking sector. It says that there is a public interest in the Department continuing to access such information. Furthermore, it says that it is reasonable to expect that other banks would reconsider the basis on which they share information with the Department and reduce the level of information provided, which would not be in the public interest.
I have examined the specific content of both records and considered the Department’s submissions. I accept that the Bank gave the information concerned to the Department for specific purposes and in the expectation that it would not be disseminated further. I therefore accept that these records were given by the Bank to the Department in confidence and on the understanding that they would be treated by the Department as confidential. Given the Department’s function, I also accept that it is important for it to continue to receive further similar information from the Bank. I am satisfied that the Department finds this ongoing flow of information to be valuable to the exercise of its functions. I am further satisfied that disclosure would be likely to prejudice the giving of further similar information from the Bank to the Department. This is particularly in respect of the concerns expressed about the board papers and subsequent change in practice.
Having found that section 35(1)(a) applies to Records 2 and 5, I am then required to consider whether the public interest would, on balance, be better served by granting than by refusing to grant the FOI request, under section 35(3). On the one hand, section 35 itself recognises a public interest in protecting confidentiality. In this case, I accept that there is a public interest in protecting the confidentiality of these particular records, which serves the flow of information from the Bank to the Department. On the other hand, I must consider whether there is a public interest in disclosing the specific content of these records.
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 and the Information Commissioner & Ors [2020] IESC 57, 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”.
I have described the content of the records above. I find no relevant public interest in disclosing the specific content of these records, which, on balance, outweighs the public interest in the confidentiality of these records, which serves the flow of information from the Bank to the Department. I am therefore satisfied that the public interest would be better served by refusing access to them. I find that the Department was justified in refusing access to Records 2 and 5 under section 35(1)(a) of the FOI Act.
Record 6 is a letter from the Minister of Finance to the Bank from 2011. The Department did not claim section 35 over this record in its original or internal review decisions. It says that insofar as it is concerned, Record 6 does not squarely fall within the provisions of section 35. It says that nonetheless, confidentiality is linked to commercial sensitivity and releasing Record 6 in an unplanned fashion would be inimical to the intentions and interests of the parties and other financial institutions subject to the same obligations. It says that the Bank confirmed that such release would prejudice the ongoing provision of information to the Minister. As noted below, the Bank says that Record 6 is private, confidential and commercially sensitive. It did not address section 35 in its submissions. I have examined the content of Record 6 and had regard to the parties’ submissions. In the circumstances, there is no basis for me to find that section 35 applies to Record 6. I agree with the Department’s position that Record 6 does not fall squarely with the provisions of section 35. I will now consider Record 6 under section 36 of the FOI Act.
The Department claims section 36(1)(b) of the FOI Act over Record 6. Section 36(1)(b) provides that an FOI body shall refuse to grant an FOI request if the record concerned contains 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. 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 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 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, this Office takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
Section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than refusing the request (section 36(3) refers).
The Department says that Record 6 contains specific details about commercially sensitive matters including dividends, corporate governance, employment and remuneration. It submits that it would prejudice the Bank and negatively impact its reputation if competitors and the public became aware of the terms. The Department says that as the State is a shareholder in the Bank, this would not be in the public interest. The Department says that it is wholly inappropriate for a confidential legal agreement between the Department and the Bank to be made public.
The Investigator obtained the Bank’s submissions on Record 6. The Bank says that Record 6 is a private contractual arrangement, which contains confidential and commercially sensitive information. The Bank says that this information is not otherwise in the public domain, except in a very high level way as required by listing rules. The Bank says that it is current and not historical and outlines detailed requirements which are private to the parties. The Bank says that it is inimical to tightly negotiated commitments that this document would be released at an unscheduled later date.
I have examined the specific content of the record and considered the parties’ submissions. As noted above, Record 6 is a letter from the Minister of Finance to the Bank from 2011. 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 and the passage of time.
During the review, the Investigator asked the Department to confirm the extent to which any information in the records was publicly known. The Department says that Record 6 is a legal agreement which remains in force and has never been released. I accept this. However, I consider the content of Record 4, which is in the public domain, to be relevant. Record 4 says:
“it is a condition of the Transaction Agreement that by 31 July 2011 the Bank will give a number of commitments to the Minister for Finance in respect of its lending, corporate governance, preference dividend payment and remuneration practices, to be set out in a letter from the Minister of Finance to the Bank”.
Page 252 of Record 4 summarises the nature of those commitments in relation to lending, preference stock, corporate governance and remuneration. It then states:
“if the Minister’s Letter contains commitments that are materially different to the expected scope of the commitments summarised in this Document, it will be necessary to publish a supplemental circular and/or prospectus or seek further Stockholder approval, under the Listing Rules and/or the Prospectus Regulations for the entry into the Minister’s Letter”.
The Department and the Bank describe the agreement provided for in Record 6 as private and confidential; yet, the fact is that a public document discloses in summary form what its main commitments are expected to be and says that if they are materially different, supplemental information will be published.
The Investigator also asked the Department to comment on the relevance of the age of Record 6. The Department reiterates that the agreement remains in place and it would be wholly inappropriate for details of a confidential legal agreement, which remains in place, to be put into the public domain. I accept that the agreement is current but also note that some (not all) details in it are now historic, as they relate to periods of time that have since passed.
For section 36(1)(b) to apply, there must be a link between disclosure and the harms alleged. Neither the Department nor the Bank has explained how the release of Record 6 might give rise to the harms identified in section 36. In the High Court case of Westwood Club v The Information Commissioner [2014] IEHC 375, Cross J. held that 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. A party opposing release should explain why disclosure of the particular records could prejudice their financial position. As the Supreme Court observed in the Minister for Communications case, it is not sufficient for the FOI body to merely assert that disclosure could prejudice its competitive position; an FOI body must also have a reasonable basis for that position. In the circumstances, I am not satisfied that disclosing the specific content of Record 6 could prejudice the Bank’s competitive position or could reasonably be expected to result in material loss to it.
In reaching this conclusion, I have had particular regard to the level of information about the Minister’s letter and therefore the content of Record 6 that is already known. I acknowledge that Record 6 contains more detail about the commitments concerned. However, having examined the content of this further detail, I am not satisfied that disclosure could result in the harms alleged. It seems to me that the Minister’s letter serves primarily to ensure that the commitments are given legal force in the form of an agreement and that the main points, if not all the detail, of the commitments are summarised publicly. I have also considered the fact that certain information relates to periods of time which have now passed. As that information is now historic, I consider that any possibility of harm in respect of it is remote.
In conclusion, I find that section 36(1)(b) does not apply to Record 6. I am therefore not required to go on to consider the public interest under section 36(3) of the FOI Act. I find that the Department was not justified in refusing access to Record 6 under section 36(1)(b) of the FOI Act.
Having carried out a review under section 22(2) of the FOI Act, I vary the Department’s decision. I affirm its decision on Records 2 and 5 under section 35(1)(a) of the FOI Act. I annul its decision on Record 6 and direct its release.
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 applicant 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.
Deirdre McGoldrick
Senior Investigator