Case 040275. Request for access to records relating to the development of the Derrybrien wind farm - whether information given in confidence - section 26(1)(a) - whether disclosure would constitute a breach of a duty of confidence - section 26(1)(b) - whether commercially sensitive information - section 27(1)(b) - whether public interest better served by release - section 27(3).

Case Summary

Facts

At issue in this case were (1) successful bid prices for Power Purchase Agreements to supply wind energy to the Electricity Supply Board (ESB) for a period of up to 15 years and (2) sale and option agreements for the sale of lands by Coillte Teoranta to a wind farm developer. The relevant records had been submitted to the Department during competitions administered under the Alternative Energy Requirement (AER) Programme. The Department had refused access to the relevant records under section 27. In the course of the review, the affected third parties argued that the sale and option agreements also contained confidential information that was exempt under section 26.

Decision

In light of the relevant submissions and the background information provided about the AER Programme, the Commissioner was satisfied that the bid prices were commercially sensitive within the meaning of section 27(1)(b). She noted that the bid prices did not represent the overall cost of the contracts, but rather were in the form of unit rates for the sale of a kilowatt-hour (kWh) of energy. In the circumstances, she accepted that knowledge of the precise bid prices could be used by competitors to undercut successful tenderers in future competitions. She also accepted that, as the unit rate at which developers are obliged to sell energy for up to 15 years, each bid price continues to have current value regardless of the possibility of future competitions and is a key factor in the competitive success of a particular wind energy project. In view of the ample information made available about the AER Programme by the Department outside of FOI, the Commissioner did not consider that disclosure of the precise bid prices at issue here would enhance the public interest in openness and accountability to a sufficient extent to outweigh the public interest factors against disclosure. Accordingly, she found that section 27(1)(b) applied.

However, the Commissioner found that the sale and option agreements should be released in full. In reaching her decision, the Commissioner relied on the judgment of the European Court of Justice in Case C-339/00, Ireland v. Commission of the European Communities [2003] ECR I-11757, finding that Coillte is a public enterprise wholly owned and controlled by the State.

The claims for exemption made under section 26 were not upheld for failure of proof and on the basis of the decision in Mr. Daniel Reed and the Department of Enterprise Trade and Employment, Case Number 000041 (9 April 2001). In pertinent part, having regard to Coillte's legal status as established by the judgment of the European Court of Justice, the Commissioner did not accept that Coillte would refuse to provide information to the relevant Ministers, the Department, or other public bodies that is of importance to the discharge of their statutory powers and functions.

The Commissioner did accept, with some hesitation, that the land prices in the sale and option agreements qualified as commercially sensitive information under section 27(1)(b). However, the Commissioner considered that Coillte's land transactions should be subject to public scrutiny given the company's legal status as a public enterprise wholly owned and controlled by the State. In the circumstances, the Commissioner found that, on balance, the public interest in full disclosure of the information at issue relating to the land transactions outweighed the public interest factors weighing against release. Accordingly, section 27(1) did not apply to the sale and option agreements.

Date of Decision: 24.06.2005

Our Reference: 040275

24.06.2005

Mr. Martin Collins Derrybrien Loughrea Co. Galway

Dear Mr. Collins,

I refer to the review of the decision of the Department of Communications, Marine & Natural Resources on your request for access under the Freedom of Information Acts, 1997 and 2003 ("the FOI Act") to records relating to the development of a wind farm at Derrybrien, Loughrea, Co. Galway. I have now completed my review of the Department's decision. Please accept my apologies for the delay which has arisen in concluding this review.

Background

In carrying out my review, I have had regard to your application for review and the oral and written submissions made by you and the Department. In addition, other relevant parties were notified of the review and given an opportunity to make submissions in accordance with sections 34(6) and (8) of the FOI Act. All such submissions have also received careful consideration. I have also examined the records at issue.

Scope of Review

As you know, the Department initially identified only six records relating to the development of the Derrybrien wind farm to which access had been refused. As no schedule had previously been made available by the Department, these six records were described to you for the first time in a letter dated 20 December 2004 by Ms. Melanie Campbell, Investigator. In response to Ms. Campbell's letter, you raised an issue regarding the adequacy of the Department's search for relevant records. Investigation of the search issue revealed that the Department had taken an unduly narrow interpretation of your request. Following further contacts with this Office, the Department released numerous additional records to you accompanied by appropriate schedules.

As the schedules included a description of the records refused, you were able to identify specifically the items of information remaining of interest to you. Having considered the matter, you agreed to narrow the scope of your request to the bid prices and sale and option agreements relevant to the Derrybrien wind farm project. Accordingly, this review is now concerned solely with the question of whether the Department's refusal to grant access to the following records, or parts thereof, is justified:

• Alternative Energy Requirement (AER) V file

• AER VI file

Findings

Under section 34(12)(b) of the FOI Act, a decision to refuse to grant access to a record is presumed not to have been justified unless it is shown to my satisfaction that the decision was justified. This provision has the effect of placing the burden of proof in this matter on the Department and any other relevant party wishing to support the Department's decision to refuse access to the records at issue.

The Department claims that section 27 of the FOI Act applies in this case. The affected third parties also argue that the sale and option agreements contain confidential information that is exempt under section 26 of the FOI Act.

Bid Prices

Section 27 of the FOI Act provides protection for three different classes of commercially sensitive information as follows:

 "27.- "(1) Subject to subsection (2), a head shall refuse to grant a request under section 7 if the record concerned contains- 

a) trade secrets of a person other than the requester concerned,

b) 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, or

c) information whose disclosurecould prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates."

Each of the AER applications in this case contains the price that was tendered for a Power Purchase Agreement (PPA) to supply wind energy to the Electricity Supply Board (ESB) for a period not exceeding 15 years. The Department has submitted background information to explain the significance of the bid prices.

Ireland is obliged under international and European Union (EU) law to reduce greenhouse emissions for the generation of electricity from fossil fuel. Pursuant to EU Directive 2001/77/EC, over 13% of electricity consumption must be derived from renewable energy sources by the year 2010. The Directive specifies that "Member States shall take appropriate steps to encourage greater consumption of electricity produced from renewable energy sources in conformity with the national indicative targets" required under the Directive. The Directive also states: "It is important to utilise the strength of the market forces and the internal market and make electricity produced from renewable energy sources competitive and attractive to European citizens."

According to a press release dated 4 February 2002, the purpose of the AER Programme is to support the building of new renewable energy powered electricity generating stations. Such support is required, because renewable energy technologies cannot yet compete with conventional electricity generation in an open competitive market. The press release further explains:

"The support is access to a power purchase contract with the ESB (assuming the successful applicants can comply with the conditions of the contract). The ESB contracts to purchase all the output of the selected stations at guaranteed prices for up to fifteen years. This generates sufficient confidence for investors to secure finance which would not otherwise be provided. The projects are then 'bankable'. Only projects accepted by the Minister of State are entitled to conclude such contracts.

Successful applicants are those who comply with the terms and conditions of the competition and who offer to sell the electricity to the ESB at the lowest price at or below the cap price previously notified to the market in each technology in the published terms and conditions of the competition."

Six AER competitions have been held since the Programme was launched in 1995. It is not yet certain whether there will be a seventh competition, but the Department states that it is likely. According to the Department's website, the Minister announced in April 2005 that "the next market support mechanism for renewables will be based on a fixed feed-in tariff system", which "will be designed specifically to encourage new capacity development and will only apply to newly built projects".

Having considered the relevant submissions and the background information about the AER Programme, I am satisfied that the bid prices, including the payment rate provided on the AER VI application which specifies how the price is to be paid, are commercially sensitive within the meaning of section 27(1)(b) of the FOI Act. The AER Programme is designed to make renewable energy technologies competitive yet sustainable. Instead of providing a system of direct supports or subvention, which would be contrary to EU policy, the Department administers the Programme by ensuring that the lowest qualifying bidders are awarded contracts for a period of up to 15 years. The bid prices, however, do not represent the overall cost of the contracts, but rather are in the form of unit rates for the sale of a kilowatt-hour (kWh) of energy. For instance, as publicly reported by the Department, the bid prices for the supply of large wind energy in the AER V competition ranged from 4.547 to 4.812 eurocents per kWh. Thus, a seemingly small difference in bid prices amounts to a substantial sum over the duration of a contract.

In Mr. Mark Henry and the Office of Public Works, Case Number 98188 (25 June 2001), the former Commissioner, Mr. Kevin Murphy, acknowledged the possibility that tender prices could be used to derive damaging information about a company's pricing strategy. He also referred to tender-related cases in other jurisdictions in which detailed pricing information, such as the unit rates of a successful tenderer, has been found to be exempt from disclosure under provisions corresponding to section 27(1)(b) of the FOI Act.

In this case, the AER Programme has been successful in achieving competitive tendering, with both the AER V and VI competitions having been oversubscribed. In the circumstances, I accept that knowledge of the precise bid prices could be used by competitors to undercut successful tenderers in future competitions. See, e.g., Dalrymple Shire Council and Department of Main Roads (1998) 4 QAR 474 (para. 40) (observing that "the other prices quoted in the schedules are given in unit rates using the type of basic unit measurements at which a business is liable to measure its basic costs of service performance, and their disclosure could, in my view, have considerable commercial sensitivity"). As explained by Saorgus Energy Ltd. ("Saorgus"), the affected third party who submitted the bids: "[A]n updated equivalent of the [bid] price can be readily calculated by adjusting the [bid] price for equipment inflation etc. If it is assumed that the [bid] price was as competitive as the applicant could make it, the result is that its disclosure would bring significant commercial disadvantage to the applicant in later dealings. In effect, disclosure of the bid will devalue the relevant property/project significantly and this damage would be irreparable."

Moreover, I accept that, as the unit rate at which developers are obliged to sell energy for up to 15 years, each bid price continues to have current value regardless of the possibility of future competitions and is a key factor in the competitive success of a particular wind energy project. If other variables, such as the costs of labour and supplies, could be determined by competitors or other knowledgeable parties, it seems to me that the bid price could be used to estimate the profitability of the project. I conclude that disclosure of a successful bid price could reasonably be expected to result in a material financial loss to the affected third party or could prejudice the competitive position of the affected third party in the energy market.

Section 27(1) does not apply if the public interest would, on balance, be better served by granting rather than by refusing the request (section 27(3) refers). You express your view of the public interest as follows:

"[T]he AER Programme is a disaster and is creating a 'cut throat competition' which is driving developers towards large-scale projects onto our environmentally-sensitive mountaintops. The current system has been carefully crafted to facilitate 'big business' and state owned companies such as Coillte (a huge landowner), the ESB and large construction firms. . . . The fundamental question to be answered is why is it of such critical importance to protect companies that might be affected by disclosure of information, which should be in the public domain? We have no confidence in the totally unacceptable situation where the Department of Communications, Marine & Natural Resources are [sic] responsible for Coillte, the ESB and the awarding of the AER contracts."  

I agree that there is a public interest in openness and transparency in relation to the Department's administration of the AER Programme. Moreover, while the PPAs tendered for do not involve the expenditure of public funds, they do impose a levy, actual or potential, on customers of licensed electricity suppliers. However, as noted by Ms. Campbell, ample information about the AER Programme is already made available by the Department outside of FOI (see www.dcmnr.ie), including a report on bid prices following the conclusion of a competition that provides a general weighted spread of the successful bids. It is from the report on bid prices for the AER V competition that the information referred to above on the range of successful bids for the supply of large wind energy was supplied. In a draft report on the bid prices for the AER VI competition, the Department explains:

"Individual applicants in AER VI have declared their individual bid prices to be commercially sensitive. On the other hand these bids have a direct relationship, actual or potential, with a public service levy imposed on customers of licensed electricity suppliers. This list provides indicatives [sic] prices and projects submitted within those indicative prices. The list balances the declared commercially sensitive status of actual bid prices with the public interest in identifying in broad terms the potential costs arising from AER VI."

Factors weighing against disclosure, on the other hand, include the public interest in the protection of commercially sensitive information. I also consider that there is a strong public interest in Ireland meeting its international and European obligations to reduce greenhouse emissions. While you disagree with the manner in which the Department has chosen to meet those obligations through competitive tendering under the AER Programme, I am mindful that the Department is acting in accordance with EU policy, which, as noted above, recognises the importance of making "electricity produced from renewable energy sources competitive and attractive to European citizens". It seems to me that the release of commercially sensitive information through FOI could undermine the Programme. In view of the ample information made available about the AER Programme by the Department outside of FOI, I do not believe that disclosure of the precise bid prices at issue here would enhance the public interest in openness and accountability to a sufficient extent to outweigh the public interest factors against disclosure. Accordingly, I find that section 27(1)(b) applies to records number 12 and 28 of the AER V file and to record number 11 of the AER VI file.

Sale and Option Agreements

The remaining records at issue consist of (as re-organised following the contacts with the Department described in detail below): (1) an option agreement completed between Saorgus and Coillte Teoranta, dated 27 October 1999, for the purchase of sites, including the Derrybrien property, during a specified period ending 31 December 2001; attached schedules setting out the "Particulars and Conditions of Sale of Property at Derrybrien" and the "Particulars and Conditions of Sale of Property at Caheranearl", including purchase prices; a letter from Coillte dated 28 November 2001 stating that it has agreed terms with Saorgus in respect of an option to purchase lands at Derrybrien for the purpose of wind farm development; and a map labelled "Derrybrien Extension Galway OS 124 (copy)"; (2) completed sale agreements between Saorgus and Coillte for the properties at Derrybrien and Caheranearl, respectively, both dated 24 December 2001. For ease of reference, I have used the term "sale and option agreements" in relation to all of the documents at issue relating to the land sales.

Comments on the Conduct of the Parties

The questionable conduct of the Department and the affected third parties with respect to these records deserves comment here. In response to Ms. Campbell's letter of notification of the review, Saorgus initially did not object to the release of the sale and option agreements subject to the deletion of all pricing information, including any references to option payments and deposits. Saorgus compared the commercial sensitivity of the land prices to that of the price paid for wind turbines. Saorgus stated:

"If our competitors know the price at which we can purchase land, they may be able to bring pressure to bear on other landowners to similarly lower prices. Alternatively, the information can be used in a back-analysis of our business model. Either of these results would be a commercial disadvantage for our business. We would contend that no significant public interest could be served by publication of such dealings and that no counterbalance to the significant damage that would be caused to the competitiveness of our company would be achievable."

In formulating her preliminary view, Ms. Campbell considered that the pricing information in the sale and option agreements was historic and therefore less commercially sensitive than the bid prices. However, given the low threshold to the definition of commercially sensitive information on the basis of prejudice to a company's competitive position, Ms. Campbell was willing to accept that section 27(1)(b) could apply.

On the question of the public interest, though, your submission in response to Ms. Campbell's preliminary view letter emphasised that the seller of the land in question was not just any "other landowner", but rather a "State owned company". Accordingly, on 18 January 2005, Ms. Campbell wrote to Coillte to advise the company of your persuasive argument that there is a public interest in openness and accountability with respect to the property transactions conducted by Coillte. Ms. Campbell noted that, although Coillte is not a public body within the meaning of the FOI Act, it is a commercial semi-state company. She also stated her understanding that Coillte owns and manages property in Ireland as an agent of the State. In the event that her understanding was incorrect, Ms. Campbell expressly requested Coillte to clarify the status of the lands that are the subject of the sale and option agreements and the nature of the business conducted by Coillte insofar as it relates to this review.

In the meantime, Ms. Campbell was compelled on 31 January 2005 to return the Department's files that had been forwarded to this Office in order for the Department to make a decision on the additional records identified as falling within the scope of your request following your search query and for the preparation of appropriate schedules. On 3 February 2005, Ms. Campbell received a very strongly worded submission from Saorgus expressing its amazement that I "would force a government department to release information that was submitted to it in commercial confidence as part of a state-sponsored competitive tender." Saorgus suggests to me that "such practices, particularly where no demonstrable public good can be achieved, have already led to a general unwillingness to transmit any such information in writing to or between public bodies." Saorgus also describes to me how it intends to conduct its future dealings with public bodies accordingly. In relation to the land prices as issue, Saorgus states:

"We submitted the land prices sought under this Derrybrien appeal to the DCMNR as part of an AER5 tender. The information needed by DCMNR was that the lands had been secured and that we were in a position to deliver on the project if our tender was accepted. We did not need to have the commercial aspects of the land transfer included, just that we had secured the land. Therefore, additional information that was incidental to the information which was required was submitted. We thereforeregard the submission of this information to the DCMNR as a mistake in the first place."

Subsequently, on 23 February 2005, the Department's files were returned to this Office with appropriate schedules but without the sale and option agreements. Section 37 of the FOI Act entitles me to require any person who is in the possession of information or has a record in his or her power or control that, in my opinion, is relevant to the purposes of a review under section 34 to furnish any such information or record for my examination. Nevertheless, it seems that Saorgus asked the Department not to return the sale and option agreements to my Office, and, pending the receipt of the advice of the Attorney General on the matter, the Department complied with this request. The documents were ultimately provided on 8 March 2005 on foot of the Attorney General's advice.

This is the eighth year in which the FOI Act has been in effect in Ireland and numerous tender-related decisions have issued from this Office. It is therefore difficult to comprehend how a company tendering for a contract in a competition administered by a public body could greet the potential for the release of tender-related records held by the public body with amazement. Saorgus' reaction in this case is all the more puzzling given the fact that AER application forms expressly advise applicants in bold and italicised lettering of the possibility of disclosure of records held by the Department under FOI. In any event, it seems to me that the Department should have been well aware of my authority under section 37 without having to seek the advice of the Attorney General before returning records to my Office that are the subject of a review under section 34.

I consider Coillte's conduct, however, to be particularly egregious. In response to Ms. Campbell's letter dated 18 January 2005, Coillte made a submission dated 16 February 2005 formally objecting to the release of the sale and option agreements. Coillte stated, among other things, that Ms. Campbell's understanding of its legal status and its role in managing lands in Ireland was incorrect. According to the submission, Coillte is a private limited company registered under the Companies Act 1963-2003 that was established under the Forestry Act 1988 to operate forestry and forestry-related businesses commercially. It does not provide public services and it receives no public funding for its business activities other than that available to any private company. Coillte further stated:

"Coillte is not an extension of a Government department neither is it an agency, nor under the control of, any Government department. While the shareholders in the company are the Minister for Agriculture and Food and the Minister for Finance, management of the company is the legal responsibility of the Board of Directors of the Company whose duties are set out in company law and in the Forestry Act 1988.

The relationship between the company and the Minister for Agriculture is the same as that between any private or public limited company and its shareholders. In relation to Coillte's forests and other land these are wholly owned by the company to whom the lands were transferred by virtue of Section 39(1) of the Forestry Act 1988. The lands are not managedon behalf of the State in contrast for example with National Parks that are owned by the State and managed on behalf of the State by the National Parks and Wildlife Service.

In this context, the lands owned by the company are, in law, private property and the transaction which is the subject of the request is a private law transaction between two entities neither of which is subject to the Freedom of Information Acts."

I consider that, notwithstanding my powers under section 37 of the FOI Act, Coillte has provided me with an incomplete description of its legal status. Coillte's submission makes no mention whatsoever of the binding judgment of the European Court of Justice in which Coillte's view of its status as a private company was rejected. In Case C-339/00, Ireland v. Commission of the European Communities [2003] ECR I-11757, the Court (Fifth Chamber) held that, "as a public undertaking" [emphasis added], Coillte was not eligible to receive grant aid under an EU afforestation scheme. In its recital of the facts, the Court noted that the Irish State had owned and directly managed approximately 400,000 hectares of forest until the end of the 1980s. The Forestry Act 1988 authorised the incorporation of Coillte "to develop forestry and perform functions previously exercised by the Minister for Finance and the Ministry for Energy." Following its incorporation on 8 December 1988 as a "'private company'" under the Companies Act 1963, the Minister for Finance acquired all the shares in Coillte, but the company was nevertheless under an obligation to exercise its activities independently of the State and on a purely commercial basis. Ireland therefore claimed that Coillte qualified as a "private-law legal person" within the meaning of Article 2(2)(b) of Council Regulation (EEC) No 2080/92 of 30 June 1992 which had instituted the afforestation scheme in question.

In its arguments before the Court, Ireland claimed that the fact that Coillte is a public undertaking wholly owned by the State did not preclude it from being a private-law legal person. Ireland conceded, however, that in two previous judgments, the Court had ruled that Coillte was a "'public authority whose public supply contracts are subject to control by the State.'" Moreover, in presenting its argument that Coillte is a public undertaking entirely subject to State control, the Commission noted: "Not only does the State hold all the shares in the company and appoint its officers but it may also intervene in its financing. Coillte Teoranta is also subject to obligations to provide public services, compliance with which is monitored by the State."

In reaching its judgment against Ireland, the Court made the following findings: 

"In the present case, Ireland itself has stated that Coillte Teoranta is and always has been a public undertaking wholly owned by the State. Moreover, the Court has already held in Connemara Machine Turf and Commission v. Ireland that the company was controlled by the State and no new evidence has been adduced which might show that this was no longer the case in the financial years 1997 and 1998. Neither the company's obligation to manage its affairs on a commercial basis nor the fact, alleged by Ireland, that the State does not, in practice, intervene in the company's management can prevail over the finding that the company is wholly owned and controlled by the State and that the State could therefore intervene. It follows that Coillte Teoranta is not private-law legal person for the purposes of Article 2(2)(b) of Regulation No 2080/92."

It is readily apparent from the references to earlier judgments that the Court's view of Coillte as a public undertaking wholly owned and controlled by the State is not limited to the purposes of Regulation No 2080/92. In the circumstances, I consider Coillte's failure to include in its submission any reference to the Court's ruling on its status as unfortunate at best.

Turning now to the claims for exemption made by the affected third parties, I note that both argue that the records contain confidential as well as commercially sensitive information. I will first address the claim made for exemption under section 26.

Section 26

Section 26(1) states that "Subject to the provisions of this section, a head shall refuse to grant a request under section 7 if-

(a) the record concerned contains information given to a public body concerned in confidence and on the understanding that it would be treated by it as confidential (including such information as aforesaid that a person was required by law, or could have been required by the body pursuant to law, to give to the body) and, in the opinion of the head, its disclosure would be likely to prejudice the giving to the body of further similar information from the same person or other persons and it is of importance to the body that such further similar information as aforesaid should continue to be given to the body, or (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) of the Third Schedule of an enactment specified in that Schedule) or otherwise by law".

For section 26(1)(a) to apply, four requirements must be met, namely:

• that the information was given in confidence,
• that the information was given on the understanding that it would be treated as confidential,
• that the disclosure of the information would be likely to prejudice the giving to the body of further similar information from the same person or other persons in the future, and
• that it is of importance to the body that such further similar information should continue to be given to the body.

In this case, the parties argue that the sale and option agreements relate to confidential, commercial transactions and were given to the Department by Saorgus in confidence. Coillte indicates that the Department has acknowledged the confidential nature of the records and therefore a mutual understanding of confidence exists. The submissions of both Coillte and Saorgus strongly suggest that disclosure would have a prejudicial effect on the provision to the Department of confidential, commercial information in the future by themselves or other parties. Coillte states: "It would be totally absurd were Coillte put in a position whereby it could not advise its shareholders of the detail of significant commercial land transactions out of concern that such obviously commercially sensitive information would be put in the public domain." Coillte also expresses concern that disclosure in this case would provide "an irresistible precedent to compel the disclosure of all past and future similar transactions. The company would necessarily be the subject of enquiries, controversy and debate, of no particular benefit and would require to allocate disproportionate resources to this end."

Although the Department has not expressly invoked section 26, its conduct in this review suggests that any understanding of confidence was mutual. I am therefore satisfied that the first two requirements of section 26(1)(a) have been met. However, Saorgus, the party that submitted the sale and option agreements to the Department, has stated that it does not object to their release subject to the deletion of all pricing information. The pricing information, by Saorgus' own admission, was extraneous to the information required by the Department in order to carry out its function of administering the AER competitions. The checklists of documents to be submitted with the AER applications confirm, in pertinent part, that evidence of ownership would have been sufficient. In Mr. Daniel Reed and the Department of Enterprise Trade and Employment, Case Number 000041 (9 April 2001), my predecessor explained that extraneous information, i.e. information unrelated to the exercise of the statutory powers and functions of the Department or its Minister, is not generally protected under section 26(1)(a). Thus, while I accept that disclosure of the pricing information in the sale and option agreements would be likely to prejudice the giving by Saorgus and other developers of similar such extraneous commercial information in the future, I do not accept that it is of importance to the Department to continue to receive such information. Moreover, I do not accept that the release of the extraneous information in this case is likely to prejudice the giving to the Department by Saorgus or other developers of information that is relevant to the administration of the AER Programme in the future.

I further note that I reject any suggestion by Coillte that it would withhold details of significant commercial land transactions from its sole shareholders, the Minister for Agriculture and Food and the Minister for Finance. The judgment of the European Court of Justice discussed above establishes that Coillte is wholly owned and controlled by the State and that the State could intervene in the management of its affairs. In the circumstances, I do not accept that Coillte would refuse to provide information to the relevant Ministers, the Department, or other public bodies that is of importance to the discharge of their statutory powers and functions. I conclude that section 26(1)(a) does not apply.

No showing has been made that a duty of confidence exists within the meaning of section 26(1)(b). In its submission, Coillte asserts generally in relation to its arguments under section 27 that contracts such as the commercial agreement completed between itself and Saorgus "are subject to a confidentiality clause", but it has not specifically identified or presented evidence of any such provision applicable to the sale and option agreements at issue in this case. Therefore, having regard to the provisions of section 34(12)(b), I find that section 26(1)(b) does not apply.

In light of my finding that section 26(1)(a) does not apply, it is not necessary for me to address the issue of the public interest as it arises under section 26(3). However, I address the public interest below in relation to section 27(3).

Section 27

As referenced above, Saorgus has argued that disclosure of the pricing information in the sale and option agreements could be used by competitors to purchase land for similar prices. Saorgus also considers that the information could be used in conducting back-analyses of its business model.

Coillte contends that disclosure of the pricing information, as well as unspecified other information contained in the documents that "may appear neutral", would give an unfair commercial advantage to Saorgus' competitors in their dealings with Coillte and put Coillte at a commercial disadvantage by revealing information about its valuation model that is relevant to other land sales. Coillte further argues that the sale and option agreements remain commercially sensitive notwithstanding the passage of time given the ongoing nature of the Derrybrien wind farm project, including construction of the wind farm itself. Coillte also claims that the valuation of the Derrybrien site is relevant to ongoing negotiations with other parties in relation to possible wind farm sales and therefore "it is clearly injurious to Coillte's and its shareholders' interests to have this information disclosed."

I find no basis whatsoever for concluding that the sale and option agreements, apart from the pricing information therein, include commercially sensitive information within the meaning of section 27(1) of the FOI Act. In relation to the pricing information, I note that the documents show that the prices were agreed in October 1999 and that the sales were completed in December 2001. In Cannon and Australian Quality Egg Farm Limited (1994) 1 QAR 491 (para. 56), the Queensland Information Commissioner observed: "[I]nformation which is aged or out-of-date has no remaining commercial value . . . and it may be that the value of information relating to a major, "one-off" commercial transaction, such as the sale of a government property, is spent once the transaction is consummated". Indeed, in some jurisdictions, disclosure of similar such land prices seems to be a matter of routine unless some special circumstance exists, such as an incomplete transaction. See, e.g., Ontario Realty Corporation, Information and Privacy Commissioner, Ontario, Order PO-1964, Nov. 8, 2001 (purchase price available through title search). I further note that, as the sale and option agreements include no details to show how the land prices were calculated, I do not accept that disclosure would reveal any information relating to Coillte's approach to valuation or its valuation model.

However, I note that the AER Programme requires successful applicants to build new electricity generating plants. Therefore, I accept that the price paid for the land on which to build could be relevant to a developer's "business model" as one of the variables in the overall profitability of the project. If the costs of building and operating the plant were high in relation to the bid price, this would presumably negatively affect profitability, and vice versa. However, unlike the bid price, which represents the unit rate at which the developer is bound to sell electricity for up to 15 years, the land prices at issue here relate to transactions that were completed over three years ago. It also seems to me that the land prices would be an unknown variable of any real significance to competitors and other interested parties only if the prices were way out of line with market value. Otherwise, an estimate of the land prices could be made based on contemporaneous valuations of comparative sites.

The significance of the land prices in this case to Saorgus' business model is brought into further question by the fact that Saorgus has sold the Derrybrien wind farm project to Hibernian Wind Power Ltd. ("Hibernian"). Like Saorgus, Hibernian was notified of this review, but its submission refers to the sale and option agreements that were entered into with Saorgus rather than the sale and option agreements at issue.

Nevertheless, as Ms. Campbell explained, a low threshold applies in determining whether information is commercially sensitive on the basis of prejudice to a company's competitive position. The test is not whether harm is certain to materialise, but whether it might do so. In the circumstances, I accept, with some hesitation, that the prices paid for the properties at Derrybrien and Caheranearl qualify as commercially sensitive information within the meaning of section 27(1)(b).

On the question of where the public interest lies, I find that the factors weighing against disclosure in this case are the public interest in the proper preservation of confidences and the public interest in protecting the commercially sensitive information of a private company. In relation to the bid prices, I have also found that the release of commercially sensitive information through FOI could undermine the AER Programme, which is designed to make renewable energy technologies competitive yet sustainable in accordance with EU policy. However, as indicated, I do not consider that the pricing information in the sale and option agreements has the same level of commercial sensitivity or value as the bid prices. Moreover, as submission of such information to the Department is unnecessary, I do not consider that its release in this case would undermine the AER Programme in any significant manner.

Weighing in favour of release is the fact, as you have indicated, that the sale of land by Coillte to a company such as Saorgus is not a commercial property transaction between two private companies. Coillte's lands were previously owned outright and managed directly by the State. Pursuant to section 39(1) of the Forestry Act, 1988, the lands were transferred to Coillte, a company set up by the State for the purpose of carrying on "the business of forestry and related activities on a commercial basis and in accordance with efficient silvicultural practices" (section 12(1) of the Forestry Act, 1988 refers). However, as the European Court of Justice has ruled, Coillte is wholly owned and controlled by the State. Accordingly, I consider that Coillte's land transactions should be subject to public scrutiny. See generally Ontario Realty Corporation, Order PO-1964 (referenced above) (noting that information about the sale of land by the Ontario Realty Corporation is "inherently a matter of public interest" and that the public interest in disclosure may be "compelling" where extraordinary circumstances exist); Vynque Pty Ltd and Department of Primary Industries (1998) 4 QAR 393 (finding "that there is a strong public interest in scrutinising the Department's dealings with [a third party], to ensure that they have a proper commercial basis, and that the Department is properly monitoring the extraction operations and discharging its public duties with respect to its responsibility for the management of a public resource").

In the circumstances, I find that, on balance, the public interest in full disclosure of the information at issue relating to the land transactions outweighs the public interest factors weighing against release. Accordingly, section 27(1) does not apply.

Decision

Having carried out a review under section 34(2) of the FOI Act, I hereby vary the decision of the Department as described above.

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 not later than eight weeks from the date of this letter.

Yours sincerely

Emily O'Reilly
Information Commissioner