Quite separate from the issue of accountability to the public through freedom of information and similar obligations is the obligation of parties to a government contract to be accountable to the parliament.163 However, concerns about a diminution in that accountability with the increased involvement of the private sector have also arisen in respect to parliaments. These concerns have stemmed in part from difficulties parliaments have experienced in gaining access to contract documents, including those relating to PPP arrangements. For example, in relation to the M2 Motorway project in New South Wales, the NSW Parliament was denied access to the contract deed between the public sector roads authority and the private sector counterpart.164
The powers of parliamentary committees in respect of government contracts are not affected by contractual confidentiality provisions.165 Parliamentary Committees possess significant powers to invite, and if necessary, require the attendance of a person or the production of a document and to hear evidence either in public or in private.166 Two celebrated court cases in New South Wales have recently confirmed the right of the Parliament to call for documents from the executive.167 At the Commonwealth level, the power of the Senate and its committees to compel the attendance of witnesses, the giving of evidence and the production of documents is virtually unlimited, subject to two qualifications.168 However, the power to issue a summons for a witness to appear or make an order to produce documents are rarely used. As Odgers' Australian Senate Practice notes:
…the extent of the power has been frequently restated in recent years although the power itself has been seldom used.169
Even where the Senate or a committee has issued an order for the production of documents, it may choose not to exercise the full extent of its powers in the face of non-compliance with that order. An example of this situation arose in the course of the Senate Finance and Public Administration References Committee's recent inquiry into the governments IT outsourcing initiative. During the inquiry, the Minister for Finance and Administration used public interest immunity as a ground to deny access to the evaluation reports of a tender process. In that case, the Committee reported that it believed that it had not had adequate access to key documents and had not received clear, full and accurate information during its hearings that would enable it to make an informed decision on numerous important issues about the tendering process.170 The Committee reported that:
If a committee is faced with a refusal by a witness to attend or produce documents it has a range of options. The first is to report the refusal to the Senate where an outcome may be pursued with the full force of the Senate. Alternatively, it is open to committees not to exercise their powers and to agree to act in accordance with a witness's wishes. However, if the issue is of serious concern, the committee may identify an alternative avenue to resolve the matter, as was done after the Minister for Finance and Administration refused to provide documents relating to the unauthorised disclosure that occurred during the tendering of the Health Group's IT. In the case of this inquiry, the Auditor-General was requested to consider conducting an audit of the Health tender process.171
At the heart of this debate is the on-going problem of clearly defining the 'public interest'. It is generally acknowledged that there is some information held by government that ought not to be disclosed. Such immunity from disclosure is now usually known as public interest immunity. The public interest is, of course, fundamental to democratic governance and is an issue with which public officials, including auditors, and parliaments continue to grapple. This is certainly the case in regard to the extent to which commercial information should be protected by that immunity.
Public interest immunity claims are only claims, and the Senate does not accept them automatically.172 Odgers' Australian Senate Practice has reported that a common thread emerging from the deliberations of Senate committees regarding claims for public interest immunity is that the question is a political, and not a procedural one. Odger's further notes:
There appears to be a consensus that the struggle between the two principles involved, the executive's claim for confidentiality and the Parliament's right to know, must be resolved politically. In practice this means that whether, in any particular case, a government will release information which it would rather keep confidential depends on its political judgement as to whether disclosure of the information will be politically more damaging than not disclosing it, the latter course perhaps involving difficulty in the Senate or public disapprobation.173
In general, the roles and responsibilities of both public and private sector partners in relation to commercial-in-confidence issues have required clarification. All parties involved in service delivery must clearly understand their accountability requirements and their ultimate responsibility to the Parliament. This was highlighted during the IT outsourcing inquiry, with the Senate Finance and Public Administration References Committee noting that:
…during the inquiry, the Committee was frequently frustrated in its attempts to access key information required to closely examine and evaluate the Initiative. It became apparent to the Committee that the lack of transparency it encountered surrounding the outsourcing contracts was the result of two main areas of confusion:
● inconsistency and uncertainty as to what information, relating to managing the Initiative as a whole and government contracts, should remain confidential; and
● a lack of knowledge of parliamentary accountability obligations, in particular, the powers of parliamentary committees.174
Balancing commercial-in-confidence concerns against the public interest involve questions of judgement based on the merits of individual cases. Something that the IT outsourcing inquiry demonstrated is that Ministers and agencies have a choice about how they approach these types of issues. In that case, the Committee reported that in its opinion, the responsible agency:
…resorted, far too often and without grounds, to claims of commercial confidentiality to withhold or delay providing information.175
The Committee further reported that:
Throughout this inquiry, the Committee relied on the good offices of agencies involved in this tendering process to ensure that it was fully and properly informed and that the principles of accountability and fairness were upheld. The Committee believes that it has been ill-served by [the responsible agencies] and by the responsible minister.176
In light of its experience during the IT outsourcing inquiry, the Committee concluded that:
There is confusion in both the private and public sectors regarding parliamentary committees' right of access to information and their powers that adversely affects public and parliamentary accountability. A greater understanding of committee powers would significantly improve the effectiveness of parliamentary scrutiny and ensure that it proceeds more smoothly than has occurred during this inquiry.177
In this respect, the Australasian Council of Auditors-General has noted that:
The private sector must expect that, when it deals with the State, the disclosure requirements cannot merely be those that pertain to commercial transactions between two private sector entities. If the accountability arrangements are the same, insufficient weight will have been given to the need for the State to be accountable to the citizen.178
Updated Commonwealth Procurement Guidelines released subsequent to the Senate Order stipulated that agencies should include provisions in tender documentation and contracts that alert prospective providers to the public accountability requirements of the Commonwealth, including disclosure to Parliament and its Committees; and consider, on a case-by-case basis, what might be commercial-in-confidence when designing any contract.179
The recently released Commonwealth policy principles for the use of private financing place particular emphasis on the need for agencies to ensure that appropriate mechanisms are in place to meet established reporting requirements, such as disclosure of information to Parliamentary Committees. The policy principals require that private financing arrangements comply with financial reporting standards, the Senate Order on the reporting of contracts, and the Auditor-General's authority to access documents, information and premises under the Auditor-General Act 1997.180 The policy principals also provide that agencies should refer to criteria relation to confidential information identified in the ANAO audit in respect to the inclusion of commercial-in-confidence provisions in any successful private financing proposals.181