Source: https://www.oic.ie/decisions/d150082-M-Solicitors-and-Department/
Timestamp: 2018-05-26 23:39:37
Document Index: 750284646

Matched Legal Cases: ['art 1', 'arts 3', 'arts 4', 'arts 3', 'arts 4', 'arts 4', 'art 4', 'art 4', 'art 4']

M Solicitors and Department of Public Expenditure and Reform
Case number: 150082
Whether the Department was justified in refusing access to records concerning the award of the National Lottery licence under sections 35 and 36 of the FOI Act
This review has its background in a decision taken by the Minister for Public Expenditure and Reform in February 2014 to grant a 20 year licence to operate the National Lottery to Premier Lotteries Ireland (PLI), a consortium comprising Ontario Teachers' Pension Plan (the owner of the Camelot Group), An Post and An Post pension funds. In October 2013, the Minister had announced that PLI had been selected as the preferred applicant as it had met the essential requirements provided for under the terms of the competition and had submitted the highest licence fee proposal which was €405 million.
On 2 December 2014, the applicant, a firm of solicitors, submitted a request to the Department for all records held "in relation to:
- all proposals received from Premier Lotteries Ireland Limited submitting a bid for the award of the National Lottery licence;
- the National Lottery licence issued under the National Lottery Act 2013; and
- the specific amendments made to the draft licence to operate the National Lottery..."
The Department did not communicate its decision to the applicant within the four week time period stipulated by the FOI Act. On 2 February 2015 the applicant wrote to the Department to note that its request was deemed to have been refused and to request an internal review of this deemed refusal. By letter dated 18 February 2015, the Department refused the request under sections 35(1) and section 36(1)(b) of the FOI Act. On 19 March 2015, the applicant sought a review by my Office of the Department's decision.
During the course of this review, both the applicant and the Department were invited to make submissions. In accordance with section 22(6) of the FOI Act, Mr Simon Noone, Investigator, also invited the Regulator of the National Lottery (the Regulator) and PLI to make submissions. All four parties did so. Mr Noone subsequently notified PLI of his preliminary view that the Department had not justified its decision to refuse the request in its entirety and he invited it to make further submissions specifically in relation to the commercial sensitivity of the contents of certain records. PLI made a further submission by letter dated 11 September 2015.
I have decided to conclude this review by way of a formal binding decision. In conducting this review, I have had regard to the contents of the relevant records, to the correspondence between the applicant and the Department, and to the submissions of the parties.
The Department identified the final licence to operate the National Lottery (the final licence), the draft licence to operate the National Lottery (the draft licence), and PLI's response to the National Lottery Competition 2013 Request for Applications (the full RFA response), as coming within the scope of the request. During the course of the review, it became apparent that the Department held a redacted version of PLI's RFA response, which had been submitted to it by PLI.
The Department explained that the Request for Applications, which was issued to parties who were interested in bidding for the new licence, contained a provision asking applicants if they wished to indicate, in advance, a preference that any of the information supplied by them in response should not be disclosed because of its commercial sensitivity. Applicants were requested to clearly designate information included in the Application which was commercially sensitive. As the original FOI request included "all proposals received from Premier Lotteries Ireland Limited submitting a bid for the award of the National Lottery licence", I am satisfied that this redacted RFA response falls to be considered for release.
Accordingly, the scope of this review is concerned solely with whether the Department was justified in refusing access to the four records in question.
It should be noted that the courts have taken the view that records released under FOI are released without any restriction as to how they may be used and, thus, FOI release is regarded, in effect, as release to the world at large. Additionally, while I am required by section 22(10) of the FOI Act to give reasons for decisions, this is subject to the requirement of section 25(3) that I take all reasonable precautions during 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 contents of the records at issue is limited.
Furthermore, 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). Like my predecessors, 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.
The draft and final licences
In its internal review decision, the Department stated that it was refusing access to the draft and final licences under section 36(1)(b) of the FOI Act. In its submissions to my Office, PLI argued that access should be refused under sections 35 and 36. However, before I consider the applicability of the various exemptions, I wish to address arguments raised by the Department and the Regulator in relation to the relevance of his role to the FOI request.
Under section 26 of the National Lottery Act 2013 (the 2013 Act), the Regulator may grant a licence to a person authorising the holding of the National Lottery on behalf of the Minister. In his submissions to my Office, the Regulator explained that section 28(1) of the National Lottery Act 2013 (the 2013 Act) requires him to publish details of a licence or a code of practice under it. However, he cannot publish any details of a licence he deems to be commercially sensitive unless he considers that there is an overriding public interest compelling him to do so. He explained that he is currently considering what, if any, details of the licence are commercially sensitive and is consulting with PLI on the matter.
The Regulator argued that section 28 of the 2013 Act confers on him the exclusive statutory remit to decide what details of the licence or any code of practice under it be published, and what must not be published. He argued that the release of any records comprising or containing details of the licence under the FOI Act would usurp his statutory role under section 28. He further argued that under section 41(1)(a) of the FOI Act, access to records must be refused if disclosure is prohibited by law and that section 28(3) of the 2013 Act prohibits the publication of any details of the Licence which he deems to be commercially sensitive, unless he consider that there is an overriding public interest compelling him to do so.
Section 28 of the National Lottery Act 2013 states;
"(1) Subject to subsection (3), the Regulator shall publish details of a licence or a code of practice under it.
(2) In the event of a licence being amended under section 27, details of the amendment shall be published by the Regulator subject to subsection (3).
(3) Any details of a licence, including amendments to it, deemed by the Regulator to be commercially sensitive shall not be published unless the Regulator considers that there is an overriding public interest compelling him or her to do so.
(4) In the event of the Regulator deeming that details of a licence which are deemed by him or her to be commercially sensitive should be published in the public interest, he or she shall give the licence holder notice of his or her intention to do so and afford the licence holder an opportunity to make representations.
(5) In this section "commercially sensitive information" means --
(a) trade secrets of a person,
Section 41(1) of the FOI Act states;
"A head shall refuse to grant an FOI request if --
(b) the non-disclosure of the record is authorised by any such enactment in certain circumstances and the case is one in which the head would, pursuant to the enactment, refuse to disclose the record."
Essentially, section 41(1)(a) of the FOI Act provides for the mandatory refusal of access to a record whose disclosure is prohibited by other enactments. The section subordinates the access provisions of the FOI Act to all non-disclosure provisions in statutes except for those which are cited in the Third Schedule to the FOI Act. The 2013 Act is not specified in Schedule 3 of the FOI Act. Section 41(1)(b) of the FOI Act provides that a public body should refuse to grant a request made under the FOI Act where the non-disclosure of the record is authorised by some other legislation and where the public body would refuse access in accordance with that legislation.
I do not accept that disclosure of the licence is prohibited by section 28 of the 2013 Act. Section 28(3) prohibits the Regulator from publishing details of a licence which he deems to be commercially sensitive unless he considers that there is an overriding public interest in doing so. The provision comprises an exception to the general requirement to publish the licence under section 28(1) and I am satisfied that it does not amount to an absolute prohibition on publication. Clearly, it is open to the Regulator to publish the full licence, without any redactions, if he considers it appropriate to do so. Consequently, I am of the view that section 41(1)(a) of the FOI Act does not apply.
Furthermore, the request for access to records was, in this case, made to the Department for records held by it. I do not accept that it is open to the Department to refuse access to the licence under section 28(3). Accordingly, I find that section 41(1)(b) does not apply.
In their submissions to my Office, both the Department and PLI argued that the release of the records under FOI would undermine the role of the Regulator in relation to the publication of details of the National Lottery licence as stipulated in section 28 of the 2013 Act. The Regulator also argued that section 28 of the 2013 Act confers on him the exclusive statutory remit to decide what details of the licence should be published. I disagree. The fact remains that the FOI Act provides for a right of access to records held by public bodies unless they are exempt from release in accordance with one or more of the exemption provisions, the applicability of which I will consider below.
I will address section 36 first as it has been cited as a relevant exemption by both the Department and PLI. This is a mandatory exemption that protects commercially sensitive information. Section 36(1) states;
PLI has submitted that "[A] significant number of Licence provisions are particularly confidential/commercially sensitive to PLI (and associated entities) within the meaning of Section 36 for various reasons including due to the following (non-exhaustive) types of harm which would arise from disclosure:
- prejudice to PLI's on-going and future contractual negotiations with service providers...
- prejudice/financial loss to PLI in disputes between PLI and lottery service providers...
- security issues...
- adverse effects on PLI and/or related entities' position in the negotiation of future Lottery licences..."
In addition to the submissions from PLI and the affected parties, I believe it is appropriate for me to take cognisance of the views of the Regulator, as I accept that he has a special expertise in this matter given his statutory functions. In his submission to my Office, the Regulator outlined his preliminary view that the final licence contains some commercially sensitive details and that he was consulting with PLI. It is worth noting that the definition of commercially sensitive information contained in the 2013 Act is, in all material respects, identical to that set out in section 36(1) of the FOI Act.
Neither the Department nor PLI (in its original submissions), nor indeed the Regulator, identified specific provisions within the draft and final licences that they considered to be particularly commercially sensitive. In its second submission of 11 September 2015, PLI reiterated its view that the entirety of the licences should be protected from disclosure. Without prejudice to this argument, it then went on to contend that certain particular sections of the final licence (and corresponding sections in the draft licence) were commercially sensitive and should not be released. I will address the specific objections to release first, before considering the entirety of the licences. In doing so, I will adopt the numbering used by PLI in its "Annex 1", as submitted to my Office on 11 September 2015, when considering whether the particular sections claimed contain commercially sensitive information, and I will then consider the applicability of the section 36(3) public interest balancing test, where appropriate.
Insofar as sections 36(1)(b) and 36(1)(c) allow a public body to refuse to grant a request where access to the record sought could prejudice the competitive position of the person to whom the information relates in the conduct of his or her profession or business or could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates, I accept that the standard of proof necessary to meet these tests are considerably lower than the standard required to meet the test of "might reasonably be expected to". All that is required is the possibility of prejudice.
PLI argued that 11 separate provisions of the final licence and the corresponding provisions in the draft licence, where applicable, are exempt from release under section 36(1). It cited section 36(1)(a) in respect of provisions numbered 1 to 3, section 36(1)(b) in respect of all 11 provisions, section 36(1)(c) in respect of provisions numbered 1, 4, 5, and 11, and section 35(1) in respect of provision 11.
My Office has previously set out its approach to determining whether information qualifies as a trade secret of a person within the meaning of section 36(1)(a) of the FOI Act. The following factors are considered relevant to the determination:
My Office has also previously 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 the owner must limit the dissemination of it or at least not encourage or permit wide-spread publication. Having considered the contents of provisions 1 to 3 and PLI's arguments, I am not satisfied that the provisions contain trade secrets of PLI and I find, therefore, that section 36(1)(a) does not apply.
As I have outlined above, PLI cited section 36(1)(b) in respect of all 11 provisions and section 36(1)(c) in respect of provisions numbered 1, 4, 5, and 11. Given PLI's arguments and given also the relatively low standard of proof required for the section to apply, I am prepared to accept that section 36(1)(b) and/or 36(1)(c) applies to provisions 1, 2, 3, 5 and 8. I am not satisfied that either of the sections apply to the remaining provisions.
However, a finding that section 36(1) applies is not the end of the matter as I must also consider the public interest balancing test as set out in section 36(3). Indeed, even if I had found that one or both exemptions applied to all 11 provisions as claimed by PLI, the public interest balancing test would remain to be considered. PLI argued that there is a recognised public interest in commercial bodies conducting their affairs without undue intrusion and that there is a public interest in the successful operation of the National Lottery and the maximisation of the contributions to good causes, specifically recognised in the 2013 Act.
As I have outlined above, PLI was granted a 20 year licence to run the National Lottery on behalf of the Minister for Public Expenditure and Reform. When announcing the launch of the competition for the award of the licence, the Minister stated, among other things, that he was looking to boost the annual revenues that will be available for good causes on an ongoing basis by promoting the growth of the lottery and closely aligning the interests of the licensee and the State. Under the 2013 Act, in the exercise of his functions, the Regulator must seek to ensure that revenues allocated to good causes are as great as possible, subject to relevant terms contained in the licence. It seems to me that there is a significant public interest in optimising accountability and transparency in relation to the terms and conditions upon which PLI was licensed to run the National Lottery.
I am satisfied that, for the majority of provisions identified by PLI, the public interest in release outweighs that favouring redaction. The exception to this finding is provision 8 (clause 19.2 and 19.8 as highlighted by PLI, in final licence; not applicable to draft licence), which concerns the internal structure of PLI. In summary, therefore, I find that only provision 8 is exempt from release under section 36 of the FOI Act.
PLI cited section 35 of the FOI Act as a basis for withholding provision 11. I will deal with that argument in the section below.
PLI also cited section 31(1)(a) as a basis for withholding provisions 5 and 10. That section provides for the refusal of a request if the record concerned would be exempt from production in proceedings in a court on the ground of legal professional privilege. Previous decisions from my Office have accepted that legal professional privilege enables the client to maintain the confidentiality of two types of communication:
I am satisfied that the information set out in provisions 5 and 10 does not come within either limb of legal professional privilege and I find, therefore, that section 31(1)(a) does not apply.
On the matter of the arguments against release of the licence generally apart from the provisions already considered, I am of the view that the licence sets out relatively general principles and obligations concerning the running of the National Lottery, and the relationships between PLI and both the Minister and the Regulator. I am not satisfied that the information contained therein (save for the particular points raised by PLI, as addressed above) is of a level of specificity and/or detail, such that it contains trade secrets of PLI (section 36(1)(a)), or that its release could reasonably be expected to result in a material financial loss or gain to PLI or could prejudice the competitive position of PLI in the conduct of its business (section 36(1)(b)), or that its disclosure could prejudice the conduct or outcome of contractual or other negotiations in which PLI might be engaged (section 36(1)(c)). In this respect, I note that the licence for the United Kingdom National Lottery (which is run by a subsidiary of the Ontario Teachers' Pension Plan and which is one of the shareholders in PLI) has been published. It seems to me that much of the information contained in the UK lottery licence is similar to that set out in the licence granted to PLI which, in my view, weakens the contention that the release of the licence could result in commercial prejudice to PLI.
Consequently, I do not agree with the Department and PLI that the section 36(1) exemption is engaged. Even if I had, I am satisfied that the same public interest factors in favour and against release, as discussed above in respect of PLI's specific arguments, also apply to the general objection. As stated, I consider that there is a strong public interest in favour of release of the licence generally, and I am satisfied that the public interest against release is, overall, much weaker. Therefore, I find that, on balance, the public interest favours release of both the draft and final licences, with the exception of provision 8, comprising Clause 19.2 and part of 19.8.
This exemption protects information provided to an FOI body in confidence. There are two separate elements contained within this mandatory exemption. As PLI has not identified the element upon which it is seeking to rely, I will address each individually.
Section 35(1) states that;
"Subject to this section, a head shall refuse to grant an FOI request if --
(b) disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment (other than a provision specified in column (3) in Part 1 or 2 of Schedule 3 of an enactment specified in that Schedule) or otherwise by law."
Section 35(2) states that;
"Subsection (1) shall not apply 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."
While no evidence has been submitted to my Office on the matter, it would appear to me that the draft and final licences would have been prepared by the Department in this case. As such, section 35(1) cannot apply unless the disclosure of the records 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 the Department or its staff. Even if the licences could be said to have been prepared by parties other than the Department, I am satisfied that section 35(1)(a) would not apply as I do not accept that the information contained therein was given to the Department in confidence, given that the 2013 Act expressly provides for the publication of the licence. It seems to me that any information supplied by PLI was supplied on the understanding that it would subsequently be released (subject to the exception provided by section 28(3) of the 2013 Act). Nor do I accept that the disclosure of the licences would be likely to prejudice the giving of further similar information to the Department in the future.
On the matter of whether disclosure of the licences would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law, I am not aware of any such agreement or statute. However, I have considered whether an equitable duty of confidence may exist. The correct tests to apply in deciding whether there is a breach of an equitable duty of confidence are set out in the case of Coco v. A. N. Clark (Engineers) Limited [1968] F.S.R 415 (which is accepted as reflecting the Irish law on the subject - see, for example, House of Spring Gardens Limited v. Point Blank Limited [1984] I.R 611). The tests require that:
(1) the information has the necessary quality of confidence about it;
(2) the information was imparted in circumstances imposing an obligation of confidence and;
(3) there is an unauthorised use of that information to the detriment of the party communicating it.
With one exception, I do not accept that the information contained in the draft and final licences is such that it can be said to meet the necessary tests, given the provisions of the 2013 Act concerning publication of the licence. The exception to this is the information contained in provision 11 as identified by PLI in the annex submitted to my Office on 11 September 2015. That provision refers to Schedule 10 of the final licence (not applicable to the draft licence). Schedule 10 contains details of the financial arrangements relating to the Euromillions lottery that, according to PLI, was extracted from the private commercial agreements which govern that lottery. Based on the evidence presented by PLI, I am satisfied that the disclosure of this information would constitute a breach of a duty of confidence owed to the Euromillions partners. I find that the draft and final licences are not exempt from release under section 35(1), except for the information contained in Schedule 10 of the final licence, to which section 35(1)(b) applies.
In summary, therefore, I find that the draft and final licences are not exempt from release apart from
Clause 19.2 in the final licence (section 36)
Clause 19.8 in the final licence apart from the first paragraph (section 36(1)
Schedule 10 in the final licence (section 35(1))
The RFA response
The full RFA response consists of three volumes of documents, submitted by PLI to the Department in 2013. As I have outlined above, PLI submitted a redacted version of its RFA response following an invitation by the Department to indicate a preference that any of the information supplied by applicants should not be disclosed because of its commercial sensitivity. The redacted RFA response held by the Department contains the information that PLI did not highlight as commercially sensitive. Accordingly, I will firstly consider whether this record should be released, before addressing the full RFA response.
The redacted RFA response
PLI argues that the redacted RFA response is commercially sensitive and should not be released, notwithstanding the fact that it specifically submitted the redacted record with a view to protecting commercially sensitive information in the full RFA response. In its submissions to my Office, PLI argued that the entirety of the redacted response should be withheld under sections 35 and 36. If this argument is not accepted, it has submitted a large number of further redactions; and if this too is unsuccessful, it has submitted a much smaller number of specific redactions, accompanied by a submission in respect of each claimed redaction.
Turning first to PLI's contention that the entirety of the redacted RFA response should not be released under section 35, I do not accept that it was given to the Department on the understanding that it would be treated as confidential. In my view, the obvious implication of the Department inviting applicants to identify commercially sensitive information in the RFA response was that the redacted response was liable to be disclosed. I am satisfied that there was no reasonable or realistic expectation of confidentiality on the part of either PLI or the Department in relation to this record. Therefore, I find that section 35 does not apply to the redacted RFA response.
PLI also argued that the entirety of the redacted RFA response is exempt under section 36 and that subsections (1)(a) and (1)(b) are relevant. It has not, however, addressed the basic contradiction in its argument, whereby it is now claiming that a document that was submitted by it to the Department in order to prevent the disclosure of commercially sensitive information still contains such material. Notwithstanding this, however, I will address its arguments against release of the redacted RFA response.
On the applicability of section 36(1)(a), PLI states that the redacted RFA response constitutes a trade secret "as it represents a compilation of OTPPB's commercial strategy and approach to bidding which is not known to others and which gives OTPPB a competitive advantage in lottery bid situations." While the term "trade secrets" is not defined in the FOI Act, I consider that the redacted RFA response contains relatively general, non-specific information, and I do not believe that the release of this information would be of any meaningful value to PLI's competitors, or would be likely to cause real harm to PLI or to OTPPB. I am satisfied, having regard to the contents of the redacted RFA response, that it does not constitute a trade secret and I find that section 36(1)(a) does not apply.
Similarly, given the general nature of the redacted RFA response, I do not consider that it contains information as defined by subsection (1)(b), such that it would be appropriate to refuse access to the entire record. Indeed, presumably when PLI submitted the record to the Department, it also was of the opinion that it did not contain commercially sensitive information. Therefore, I find that section 36(1)(b) does not apply to the entire record.
In any event, even if I was to find that subsection (1)(a) and/or (1)(b) was applicable, I am satisfied that the public interest in favour of release of the redacted RFA response would outweigh the comparatively weaker public interest against disclosure, and therefore, I would find that the public interest balancing test contained in section 36(3) should apply to grant release of the redacted RFA response. I am satisfied that, in general, given the significance of the awarding of the national lottery licence to PLI, and the long length of that contract, the public interest favouring release of records that might otherwise be exempt on the basis of commercial sensitivity, is particularly strong in this instance.
As a secondary contention, PLI has identified a large number of additional redactions which it claims should be applied to the redacted RFA response before it is released. PLI has not raised specific arguments in respect of each of these additional redactions, but has submitted that access should be refused to what it claims is commercially sensitive information of PLI, OTPPB and Camelot UK. It states that:
- Release of the information would be damaging to OTPPB's competitive position in other lottery applications around the world, particularly in another specified jurisdiction.
- The redacted RFA response was submitted in September 2013, and that with the passage of time, much of the material within it has changed, and therefore to release this information would be misleading and could be misinterpreted.
- The redacted RFA response contains detailed security information, the release of which would be severely prejudicial.
- The redacted RFA response contains highly sensitive information about Camelot UK.
I have considered the numerous additional redactions sought by PLI, and I am of the opinion that (save insofar as discussed below) they should not be applied to the redacted RFA response. For the most part, I consider that the information is lacking in sufficient detail or specificity, such as that its release could give rise to the harms identified in section 36(1). It should be noted that my predecessor refused to recognise a public interest in the withholding of records in order to ensure that they are not misunderstood; see e.g. Case Number 98078 (Wall and Department of Health and Children). Furthermore, I believe that it is appropriate to treat the various considerations regarding the draft and final licences as separate to those relevant to the RFA response (both full and redacted), and I am not persuaded by suggestions that there should be some form of "trade off" between the amount and degree of redactions (if any) applied to the licence and to the RFA response.
Finally, PLI has submitted a much more limited number of further redactions, which it states are "focused mainly to protect PLI", and has provided specific justifications in respect of each additional redaction claimed, in its "Annex 4", submitted to my Office on 11 September 2015. My understanding is that PLI intends that the more general arguments, as set out above, should also be considered in conjunction with these individual submissions.
Having considered each of the claimed additional redactions in turn, I am satisfied that the majority should not be applied to the redacted RFA response, for similar reasons as set out above. I am of the view that most of the proposed redactions concern information that is of relatively general and non-specific nature, and I am not convinced that the release of the information could give rise to the harms identified in section 36(1). Additionally, some of the proposed redactions are claimed by PLI on the basis that release might lead to the information being misrepresented; however, as stated above, my Office has previously found that this is not a compelling argument for withholding records in such circumstances.
However, I am satisfied that a limited number of the specific additional redactions sought by PLI should be exempt under section 36. I accept PLI's arguments that the release of the following parts of the redacted RFA could reasonably be expected to result in a material financial loss to PLI or could prejudice its competitive position and I find that the public interest would not, on balance, be better served by the release of this this information:
The first paragraph of page 61 in section 4.3.2.b,
Paragraphs 4 and 5 of page 103 in section 4.3.2.3 in section 4.3.2.3,
The second, third and fourth bullet points on page 105,
The final three bullet points in column one of page 105,
All text after "... certifications in the security field" in column two of page 105, and
The two page document entitled "Financial Capacity - Section 4.4"
I would add that PLI also argued that the entire document described as "Letter from "Teachers" dated 19 September 2013" should be withheld from the redacted RFA. However the document in question does not form part of the copy of the redacted RFA that was made available to my Office by the Department. Accordingly, I have considered that document in the context of where it sits in the full RFA response as outlined below.
In conclusion, therefore, I find that the redacted RFA response is not exempt from release apart from the bulleted redactions as described above.
The full RFA response
The full RFA response comprises three volumes of documents, with each volume containing a number of components. For clarity, I have adopted the numbering system set out in the RFA in referring to the various components. Volume 1 contains an executive summary, and parts 3.2.4, 3.3.1, 4.2, 4.3.1, 4.3.1.1, 4.3.1.2, 4.3.2, 4.3.2.a, 4.3.2.b, 4.3.2.c, 4.3.2.1 to 4.3.2.7, 5.2 and 5.3. Volume 2 contains appendices A to I and appendices i to iv. Volume 3 contains parts 4.4.1 to 4.4.6.
Before considering the exemptions claimed, I should state, for the avoidance of doubt, that any information contained in the redacted RFA response to which I have found that access should be granted that is also contained in the full RFA response is consequently not exempt from release. I should also state that in considering whether the various parts of the full RFA response should be released, I have adopted the approach outlined in the Preliminary Matters section above in relation to the granting of partial access to records.
In its internal review decision letter, the Department stated that it had refused the request for access to the full RFA response under sections 35(1) and 36(1)(b). In PLI's submissions to my Office, it also contended that access should be refused on the grounds of sections 35 and 36.
I will address the section 36 exemption first. PLI has contended that the full RFA response contains information coming within the terms of paragraphs (a), (b) and (c) of subsection (1). For its part, the Department has argued that paragraph (b) is applicable. In its submissions to my Office, the Department stated that
"The information contained in the bid received...includes financial, commercial and technical information...The information concerns the financial position of the company, proof of financing, information relating to the Parent Company's resources, [and] the Company's Business Plan in relation to the operation of the Irish National Lottery. The bid also contains information concerning a number of companies with whom PLI intends to do business...[T]he position of [PLI] in bidding for any other business would be damaged as competitors would have key information in relation to the commercial plans, sources of finance and business associations...and could use this in the context of any other bidding situation which might arise..."
For its part, PLI has argued that
"[T]he disclosure of financial plans, product roadmaps, technical plans, marketing plans, targets/projected sales and budgets for the operation of the National Lottery could prejudice PLI and related entities by exposing their confidential business plans and methods...[S]imilarly, disclosure of PLI's research and development activity, proposed investments, promotional initiatives and channels activity plans could damage its competitive position by disclosing its confidential plans to competitors..."
Having considered the contents of each part (insofar as it contains information over and above that contained within the redacted version), I am satisfied that some of the parts contain information of a general and non-specific nature or that is otherwise in the public domain and that is not exempt under subsections (1)(a), (1)(b) or (1)(c). I find that the following parts are not exempt from release:
Parts 3.2.4, 3.3.1, 4.3.1, 4.3.1.2, 4.3.2, 4.3.2.7, 5.2 and 5.3.
Appendix A, Appendix I, Appendix i, Appendix ii, and Appendix iii.
The annual reports attaching to parts 4.4.1, 4.4.2 (except for the first two pages), 4.4.3, 4.4.5, and 4.4.6.
On the other hand, I find that the remainder of the full RFA contains detailed information concerning, among other things, PLI's business plan for the National Lottery, marketing strategies, banking and financial arrangements, and security features and agreements with certain third parties, and as such, in my opinion, these documents contain financial, commercial and technical information. Furthermore, I am willing to accept that, given the detailed and specific nature of the information provided, the release of this information could prejudice PLI's competitive position in the conduct of its business. Therefore, I accept that section 36(1)(b) is engaged in respect of these records. However, I am not satisfied that PLI has adequately demonstrated that these records contain trade secrets, or that their disclosure could prejudice the conduct or outcome of contractual or other negotiations involving PLI.
I consider that none of the exceptions set out in subsection (2) are applicable. Therefore, I must consider whether the public interest would, on balance, be better served by granting rather than refusing to grant the request for access.
In its submissions, the Department has argued that the public interest factors favouring release include
- the general requirement for openness and transparency, and
- the need to assure the public that the award of the terms of the licence was in accordance with the terms of the competition,
and that the factors opposing release include
- the need to ensure that bidders in other State run competitions are not deterred by the possibility of disclosure of sensitive information, and
- the risk that unsuccessful bids would also have to be disclosed.
In its submissions, PLI has stated that "there is a specific public interest in the successful operation of the National Lottery, the preservation of the reputation of the National Lottery, and the maximisation of the contribution to good causes...These key public interest goals could be damaged by the disclosure of commercially sensitive information...". In my view, the bidding competition for the National Lottery licence, which was won by PLI, was similar in many respects to other public tendering processes, and therefore I believe that the considerations of my Office in other cases involving tenders are relevant. The principal difference, as I see it, between this review and many of the other tender cases considered by my Office is that the competition for the National Lottery licence involved interested parties making financial bids for the right to operate the licence for twenty years, whereas other tenders have involved applicants setting out their price structure, and the successful party receiving payment from the public body for services carried out on its behalf. However, I am satisfied that, notwithstanding this difference, the same general approach should be taken by me in this instance as heretofore.
My Office has previously found that there is a public interest in openness, transparency and accountability of public bodies, particularly as regards the expenditure of public funds; see e.g. Case 140194 (X Solicitors and Westmeath County Council, available on www.oic.ie). As set out above, this case does not involve the expenditure of public funds, but rather the payment of money to the Exchequer in exchange for the right to a licence. However, I am satisfied that the public interest in favour of openness, transparency and accountability is not lessened in any way by this difference. Indeed, I consider that the interest is particularly strong in this instance, given the significant benefit conferred on PLI by the State in the awarding of the lottery licence.
Nevertheless, it seems to me that the public interest will be served to some extent, by the release of certain information that I have found not to be exempt. In particular, I believe that the disclosure of the licence awarded will shed significant light on the terms and conditions under which PLI holds the licence. In my view, the public interest in granting access to those additional parts of the full RFA that I believe to be exempt under section 36(1)(b) would not, on balance, be better served by their disclosure.
Accordingly, with the exception of the information contained in the redacted RFA response to which I have found that access should be granted, I find that the following parts of the full RFA are exempt under section 36(1)(b):
Parts 4.2, 4.3.1.1, 4.3.2.a, 4.3.2.b, 4.3.2.c, and 4.3.2.1 to 4.3.2.6.
Appendices B to H and appendix iv.
Part 4.4.1 (apart from the annual reports), part 4.4.2 (the first two pages), and part 4.4.4.
Having found that section 36 does not apply to certain parts of the full RFA response, I shall now consider the section 35 exemption claimed by the Department and by PLI.
In order for section 35(1)(a) to apply, four cumulative conditions must be met:
- The information must have been given to an FOI body in confidence;
- The information must have been given on the understanding that it would be treated as confidential;
- Disclosure must be likely to prejudice the future supply of such information;
- It must be of importance to the FOI body that such future supply should continue.
The Department has submitted that the RFA Response was given to it in confidence. It stated that "The Request for Applications which was issued by this Department to parties who were interested in bidding for the new licence stated that the information supplied by bidders would be treated as confidential. The RFA stated as follows: 'All responses to this RFA will be treated in confidence and every reasonable effort will be made by D/PER to ensure that no information contained therein will be communicated on behalf of D/PER or the Minister to any third party insofar as it is considered to be required under law, including the Freedom of Information Acts 1997 and 2003 or at the discretion of the Minister, in response to questions, debates or other parliamentary procedures in or of the Oireachtas or any of its committees.'"
PLI has submitted that its cover letter accompanying the RFA response "clearly indicated that the RFA Response contained confidential and commercially sensitive information...A subsequent letter...formally restated that the RFA Response contained confidential and commercially sensitive information and that PLI did not consent to the disclosure of any commercially sensitive information by or on behalf of DPER or its agents, whether pursuant to the FOI Act or otherwise. The RFA response was thus clearly given to DPER in confidence and on the understanding that it would be treated as confidential. Furthermore, DPER and other governmental agencies may receive fewer or less detailed bids in future processes if bidders are aware that same may well be disclosed. This may also apply to parties entering into negotiations with DPER and other governmental agencies..."
While PLI may well reasonably argue that the full RFA response was provided to the Department in confidence, I am not satisfied that the parties have demonstrated that it was given on the understanding that it would be treated as confidential. I take the view that an understanding of confidentiality has to be mutual; see, for example, Case 98049 (Henry Ford and OPW). I also take the view that, in tender cases, successful tender information loses confidentiality with respect to fee rates and other details necessary to understand the nature of the services contracted for; see e.g. Case No. 99183 (McKeever Rowan and Dept of Finance).
Therefore, I do not accept that the parties can reasonably have considered that the entirety of the full RFA response would be exempt from release on the basis of section 35, and indeed the provision in the Request for Applications relied upon by the Department acknowledges that information may be required to be released under the FOI Act. Consequently, I am of the opinion that the second condition has not been met in respect of the full RFA response, and I conclude that, insofar as it concerns those records that I have found should not be exempt from release on the grounds of commercial sensitivity, section 35(1)(a) does not apply.
With regard to section 35(1)(b), both the Department and PLI have contended that the release of the full RFA response would constitute a breach of a duty of confidence owed to PLI. The elements required to establish a duty of confidence have already been set out above. The Department has referred to the obligation of confidence being created by the provision within the Request for Applications (quoted above), and has submitted that the three elements of a duty of confidence have been met. However, As I have explained, my Office has previously found that, whereas tender information can have the necessary quality of confidence during the tender process, it may lose this confidentiality once the tender process has been completed; see Case 98049 (Henry Ford and OPW).
It seems to me that PLI's primary argument for the protection of the full RFA response is that it is commercially sensitive in its entirety. I do not accept this, nor do I accept that all of the information contained in the full RFA that was omitted from the redacted RFA is commercially sensitive. I have identified above those parts of the records that I consider not to be exempt under section 36(1)(b). Similarly, I find that the information contained in those parts does not have the necessary quality of confidence for section 35(1)(b) to apply.
In conclusion therefore, I am satisfied that the following parts of the full RFA response are not exempt from release and should be released to the applicant:
Having carried out a review under section 22(2) of the Act, I hereby vary the decision of the Department. I direct the release of the following:
the draft licence in full
the final licence, apart from Clause 19.2, Clause 19.8 (except for first paragraph), and Schedule 10
the redacted RFA response, apart from
the following parts of the full RFA response:
A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated by the applicant not later than eight weeks after notice of the decision is given, and by any other party not later than four weeks after notice of the decision is given.