The Freedom of Information Act 1991 (FOI Act) requires agencies to provide greater access to contracts entered into by an agency.

An agency includes State Government agencies, Local Government Authorities (ie Councils) and Universities.

Business Affairs Exemption and Contracts

The Business Affairs exemption in clause 7 of Schedule 1 to the FOI Act does not apply to contracts. That is, agencies are not able to claim a contract document exempt and, therefore, not consider it for release, merely because it is a contract containing business affairs.

Since clause 7 does not apply to contracts entered into after 1 January 2005, there is no obligation on agencies to consult third parties under section 27 of the FOI Act before providing access to the contract. However, the obligation to consult third parties under the other consultation sections, ie sections 25, 26 or 28 still applies, where relevant.

Confidential Information and Contracts

The Confidential Information exemption in clause 13 of Schedule 1 cannot be claimed in relation to a contract unless the contract contains a confidentiality clause that was approved before the contract was executed.

Depending on the agency will determine who must approve the confidentiality clause:

• for State Government agencies, approval must be sought from the Minister responsible.
• in the case of Local Government, the Elected Members of a Council could be the body appointed by the Council as responsible for approving confidentiality clauses.
• for Universities, it could be the Vice Chancellor.

This process for approving confidentiality clauses should be formalised and recorded in writing.

It should be noted that approval of confidentiality clauses only needs to be sought where the contract is imposing an obligation of confidence on the government party. If the contract imposes confidential obligations on other parties to the contract such as a consultant, contractor or supplier, the inclusion of a confidentiality clause does not require approval.

When to use a Confidentiality Clause in a Contract

During the preparation and negotiation of contracts every effort must be made to avoid incurring an obligation of confidentiality on the part of the State Government agency, Local Government council or the University.  Seeking approval to include confidentiality clauses in contracts should be used only as a last resort.

Delegation of the Power to Approve Confidentiality Clauses

State Government, Local Government and Universities may delegate the authority to approve confidentiality clauses in contracts.  For example:

• the Minister responsible for a State Government agency may delegate the power to a specified person or the holder of a specified office, or
• where the Elected Members of a Council are appointed as the appropriate body to give approvals, they may delegate this authority to the Chief Executive Officer of the Council, or other officers within the Council. The same applies to Universities.

If delegation to approve confidentiality clauses does occur, it is important that the delegation process be documented appropriately and reviewed regularly.

The power to approve confidentiality clauses cannot be sub-delegated.

Contract Disclosure

Premier and Cabinet Circular 27 (State Government only)

The State Government’s Contract Disclosure Policy, issued as Premier and Cabinet Circular No 27 - Disclosure of Government Contracts (PC027), is not to be confused with confidentiality clauses under the FOI Act.  PC027 relates to the public disclosure of contracts on the Government’s Tenders & Contracts website. PC027 provides Chief Executives of State Government agencies the power to exempt parts of a contract from public disclosure on the Tenders and Contracts website. This will not affect an agency’s obligation to disclose a contract where an exemption cannot be claimed under FOI.

The definition of an ‘eligible contract’ in PC027 should not be confused with the meaning of a ‘contract’ as it appears in the FOI Act. The word ‘contract’ is not specifically defined in the FOI Act and should, therefore, be given its general legal meaning.

Local Government and Universities

Agencies should look to make contract documents available outside the FOI process, where appropriate. This will help reduce the impact on agency resources required to process and manage FOI and it will help make agencies more open and accountable.

Reporting Requirements

Clause 13(6) of Schedule 1 to the FOI Act requires agencies to report a contract that includes a confidentiality clause to the Minister responsible for administering the FOI Act as soon as practicable after it is approved. The term ‘as soon as practicable’ means as soon as practicable after the contract has been executed (ie signed by both parties).

See our Contacts Containing Confidentiality Clauses for more information on how to report these clauses.

See our FOI Annual Reporting Guideline for more information about the reporting requirements of agencies under the FOI Act.