The Senior Investigator varied the public body's decision and decided that some further parts of the record should be released.

Case Summary

Whether Shannon Development is justified in its decision to refuse to release further details in response to a request for access to parts of a record made under section 7 of the FOI Act on the basis that such details are exempt from release under the provisions of the FOI Act, in accordance with sections 21, 27, 28 and 31 of the FOI Act.

Date of Decision: 16.07.2010

Review Application under the Freedom of Information Acts 1997 & 2003 (FOI Act) to the Information Commissioner

Background:

The FOI request was made on 6 November 2007 to Shannon Development ("the public body"). The applicant sought information on:

"the details of the option to purchase agreement between [a named private company ("the affected party")] and Shannon Development for lands at ......... Specifically I would like to know the price agreed per hectare or acre as the case may be, the terms and conditions of the option, the timeframe should this not be covered by the aforementioned terms and conditions and the purpose for the purchase. Also I would like to know if there is an option agreed for further land purchase in the future and if so for what purpose".

The record in question is an Agreement entered into between Shannon Development and the affected party dated 19 April 2006 regarding the purchase of land for the development of a liquified natural gas (LNG) import and regasification terminal. The record consists of An Option to Purchase Agreement ( "the main record") and four schedules.

In its decision of 17 December 2007 the public body notified the applicant that it was granting access to some parts of the record (standard clauses that it considered common to its contracts) but were refusing access either in full or in part to the remaining parts of the record, in accordance with section 21, 27, 28 and 31 of the FOI Act. It also informed the applicant that in relation to the final part of his request that "there is no option agreed for further land purchases at .....and .... at this time".

On 11 February 2008 the requester sought an internal review of the public bodies decision to refuse access to the information sought in the original request. In its internal review decision of 22 February 2008 the public body upheld its original decision to refuse to release parts of the record. The applicant applied to this Office seeking a review of the public bodies decision on 29 April 2008. Both the applicant and public body were informed on 20 May 2008 that the Commissioner had decided to accept the application. In response the public body provided the Office with a schedule and a copy of the record involved and a submission outlining the reasons behind its decisions to grant access to parts of the record and to refuse access to other parts.

Mr Brian Murnane, Investigator of this Office, issued preliminary views to the public body and to the "y"solicitors (" y solicitors") representing the affected party to the agreement on 27 November 2009, setting out his views as to the parts of the record that would be potentially releasable. Following initial objections against any further release of parts of the record, the public body and (y solicitors) withdrew some of their objections to release of certain parts of the record but remained of the view that additional information should be exempt from release in accordance with the exemptions in sections 21, 27, 28 and 31(affected party only) of the FOI Act. On 17 February 2010 the public body administratively released to the applicant a redacted version of the full record.

Mr Murnane, subsequently engaged with the applicant with the purpose of a settlement of the case on the basis of the released parts of the record and informed him that, in his view, certain details contained in the agreement were exempt from release on the basis that the information concerned was either commercially sensitive or personal information of other parties. The applicant did not agree with the approach suggested by Mr Murnane. Mr Murnane subsequently advised the public body and (y solicitors) that the applicant was not prepared to settle the case on the basis of the parts of the record that had been released to him but wished for full access to all of the withheld parts of the record. He also advised them that failing agreement the case would proceed to a formal review and a binding decision. I also note that Mr Murnane indicated to the parties that, in his view, further parts of the record were potentially releasable, in the public interest, in accordance with section 21(2), 27(3) and 28(5) subject to confirmation that the option to purchase agreement was exercised by the parties involved.

In separate responses, the public body and (y solicitors) informed this Office that the status of the option agreement had altered since it had been initially negotiated. They advised that the agreement was under sensitive negotiations between the parties and that option to purchase the lands involved in the project was being deferred, by agreement between the parties, for at least a further 12 month period (i.e. until 19 May 2011 at the earliest). They contended that disclosure of any further information, could potentially effect future negotiations and that release at this stage could prejudice the sale and successful completion of what the parties consider to be a very significant project for the economic development of the Shannon Region. They contend that the information is particularly exempt from release under section 21(1)(c), 27(1)(b)(c) and 28(1) of the FOI Act and that the public interest did not warrant release of further parts of the record. (Ysolicitors) remain of the view that the exemption in section 31 of the Act also supports withholding release of any further information.

The applicant remains of the view that the remaining parts of the record that have been withheld by the public body should be released. He did not accept that an agreement that has been negotiated can still retain the level of commercial sensitivity particularly regarding the passage of time in relation to details on prices for land. In his view any consideration of the public interest should strongly favour release of the entire agreement. He requested a formal binding decision on the matter.

Conducted in accordance with section 34(2) of the FOI Act by Seán Garvey, Senior Investigator, Office of the Information Commissioner (authorised by the Information Commissioner to conduct this review).

Scope of Review

As indicated above, the record in question is an Option to Purchase Agreement between the public body and a private company, dated 19 April 2006, regarding the purchase lease to the company of 281 acres of a 600 acre landbank owned by the public body between [p] and [q] for the development of an liquified natural gas (LNG) import and regasification terminal.

Following release of parts of the record to the applicant, the scope of the review is confined to the parts of the record specified below. I intend to use the same numbering system and descriptions used by the public body in its correspondence with the applicant. For ease of reference I will use the term "option to purchase agreement" in relation to all of the documentation at issue relating to the land sale and lease options including the accompanying schedules.

Section 1: Definitions Details of Parties and Definitions: Paragraphs: 1.1.3, 1.1.10,1.1.11, 1.1.13, 1.1.16 , 1.1.17, 1.1.20 and 1.1.22.

Section 3: Option Fee: paragraphs 3.1, 3.2 and 3.3

Section 4: Exercise of Option -Option Notice: paragraphs from 4.1(i) to 4.6 inclusive.

Section 6: Extension of Option Period: First paragraph of clause 6, 6.1,6.2.(i) (part), 6.4 and 6.5 (part). S

Section 7: Increase in Option Price: Paragraphs 7.1, 7.2, 7.3, 7.4, 7.5, 7.6 and 7.8 :

Section 8. "Clause 8": Entire Section.

Section 14. Obligations of Shannon Development: paragraph 14.4.

Section 15. Representations and Warranties: paragraph 15.1

Section 26. Second Schedule. lines 4 and 5.

Section 27 -Third Schedule -the draft lease containing schedules 1-5: information in the Fourth sub-schedule of Schedule Three at subparagraphs 4.1(part), 4.2.1, 4.2 (part) also subparagraph 18.

Section 28 - Fourth Schedule - Specimen Deed of Covenant - Map: information in clauses D,E,F and G and map.

As part of his original request the applicant enquired if there was an option agreement for further land purchase. The public body has confirmed that there is no such agreement. The applicant has not sought a review of this response, and having considered the matter, I see no reason to dispute the public body's response on the matter. Accordingly, I will not consider that aspect of the original request further.

Submissions

.

Findings

Section 21 - Functions and Negotiations of Public Bodies.

This section provides as follows:

"21 - (1) A head may refuse to grant a request under section 7 if access to the record concerned could, in the opinion of the head, reasonably be expected to -

(c) disclose positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be, carried on by or on behalf of the Government or a public body.

(2) Subsection (1) shall not apply in relation to a case in which in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request under section 7 concerned."

Analysis and Findings.

Section 21(c).

Section 21(c) provides protection for negotiating positions of the Government or public body and the only requirement for the exemption to be met is that release of the records would disclose such positions. A public body must first identify the potential harm that it considers might arise from disclosure of the contents of the information contained in the agreement. Having identified that harm, it must then consider the reasonableness of any expectations that the harm will occur. In claiming that section 21(1) (c) applies, there must be a reasonable expectation of the anticipated harm arising from release. This exemption is subject to a public interest test provided for in section 21(2).

I note that in correspondence with the applicant, the public body and with (y solicitors), Mr Murnane indicated that it was this Office's view, in line with previous decisions by the Information Commissioner, that while the negotiation process is ongoing, information disclosing positions taken or to be taken by the public body, would be likely to qualify for exemption. Furthermore, there may be occasions where such information would qualify for exemption after the negotiations had been completed, depending on the contents of the agreement at issue and the likelihood of similar or related negotiations taking place in the future. He further indicated that while the initial record was agreed by the parties in 2006 he was of the view that if negotiations were taking place and the options to finalise the agreement had not been exercised, then, the exemption under section 21(c) potentially applied, subject to public interest considerations. He also indicated to the parties that if negotiations had been completed and the options exercised, the public interest test would, in his view, favour release of certain information, which he identified in a schedule that accompanied those views.

The public body and (y solicitors) in response contended that access to the remaining parts of the agreement should be withheld on the basis that the specific information is the subject of far more sensitive negotiations between the parties involved compared to the period when the initial FOI request was first considered in December 2007. They accepted that the initial record was agreed by the parties in 2006 but contend that as the options within the agreement remained to be exercised their ability to continue to negotiate on those parts of the agreement warrants protection by the exemption in section 21(1)(c). (Y solicitors) in particular cited previous decisions by the Information Commissioner in support of that view and further contended that the harm involved from release would outweigh any public interest in release

The applicant indicated that even if the exemption under section 21(c) applies to withholding release of the information, the public interest factors can only in his view favour release of the information.

Conclusions

Having examined the withheld parts of the record at issue and in the light of the submissions by the parties involved, I accept that, while the negotiation process is ongoing, information disclosing positions taken or to be taken by the public body, would be likely to qualify for exemption.Even though the initial record was agreed by the parties involved in 2006 and would in normal circumstances be considered to be historic, in this case events have proven otherwise. I accept that further negotiations in relation to the options involved are continuing between the parties involved. Therefore in my view, a harm has been identified together with a reasonable expectation that it could occur through the release of the information held in those parts of the record. Accordingly section 21(1)(c) can be properly cited to withhold parts of the record and I find accordingly. However, I must consider whether, on balance, the public interest would be better served by granting rather then by refusing to grant the request for access to the information.

The Public Interest - section 21(2)

Section 21(2) of the FOI Act provides that the exemption contained in section 21(c) does not"apply in relation to a case in which in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request under section 7 concerned."

Relevant Public Interest Considerations

To apply section 21(2), it is necessary to identify the various public interests served by the release of a particular record as well as those served by the withholding of that record. Relative weights must then be applied to these conflicting public interests and a judgement made as to which set of public interests outweighs the other. Mr Murnane set out the factors he believed appropriate in addressing the public interest for release in the context of section 21(2) and for withholding release, so there is no need for me to reiterate all of them here. (Y solicitors) strongly contend that the public interest factors at this particular point favouring withholding release of certain parts of the record.

Public Interest arguments for Release

In summary I consider the following to be the main public interest factors in favour of the release of the information in this case.

• the public interest in individuals being able to exercise their rights under the FOI Act on order to enhance their understanding of the reasons for courses of action taken by a public body in this case Shannon Development;
• the public interest in members of the public having the reassurance and knowledge that public bodies in their provision of a high level of service can disclose certain information, in the public interest, relating to negotiations; and
• the public interest in increasing the openness, transparency and accountability in the conduct of public business including the reasons for the decisions behind such activities.

Public Interest arguments against Release.

I consider the following to be the main public interest factors which favour withholding parts of the records having regard to the submissions made to date to this Office:

• the public interest in ensuring that FOI is not used to release information relating to sensitive negotiations,
• the public interest in the ability of a public body to be able to properly carry out negotiations on behalf of the public unhindered and negotiate in its best interests, until agreements are finalised; and
• the public interest in bodies, including private companies, being able to negotiate in confidence with public bodies, without fear of disclosure of information.

Assessment and Conclusion

Overall I consider that there is a public interest favouring the release of certain information contained in parts of the record that would show how the public body performed its functions in relation to the land transfer, but at the same time there is also a strong and compelling public interest in protecting other information that remains the subject of negotiations. I therefore find on this basis that the public interest is, on balance, in better served by granting than by refusing to grant the request to the parts of the record as listed in the Schedule to this decision.

Section 27. Commercially Sensitive Information

This section provides as follows:

""Section 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 disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.

As none of the parties involved cited the exemption in section 27(1)(a) regarding trade secrets, I consider that it has no relevance to this case and the only provisions I need to consider are those in sections 27(1)(b) and (c).

In his preliminary views, Mr Murnane informed the public body and (y solicitors) that the exemptions in sections 27(1)(b) and 27(1)(c) did potentially apply but raised questions as to whether disclosure of the information in the record, could give rise to the possible harm as envisaged in the exemption. He informed them that the essence of the test in section 27(1)(b) or (c) is not the nature of the information but the nature of the harm which might be occasioned by its release.

In responses the public body and (y solicitors) contended that release of specific information relating to the purchase price of land had the potential to cause serious harm, with (y solicitors) particularly contending that the land prices in the record would reveal potential future price which does not actualize until the option in the agreement is exercised. In their view it would be premature to release the option price for lands because it was not a price that the public body had received for the lands in question. They also indicated that any public interest in the price achieved for such lands should not be releasable until the price is achieved. In further correspondence Mr Murnane indicated he accepted that an arguable case was being made to this Office, that the release of any information relating to the potential price to be paid for lands (categorised as the "Option Price" in the agreement) could potentially damage either the public body or the affected party. In line with previous decisions by the Commissioner he indicated that the information is properly withheld until the option to purchase is exercised. Once the option is exercised the information becomes historic and is releasable. As to release of information, in relation to the annual "option fee" paid by the affected party to the public body for the years 2006, 2007, 2008 and 2009 and other information for which exemptions under section 27(1) were being claimed, he did not see what harm could emerge from release of that specific information.

Both the public body and (y solicitors) withdrew their objections to release of the specific details of the Option Fee contained in the record. They continued to contend that the exemptions in sections 27(1)(b) or 27(1)(c) applied in relation to other parts of the record that related to the potential income that might derive from the sale price of the land and to the details of the amount of lands involved in the agreement, on the basis that those parts of the agreement were under active negotiations between the public body and the affected party. They specifically submitted that no further financial information or associated information held in parts of the record should be released. They particularly contend that it is vital for them to be able to conduct sensitive commercial negotiations in relation to those parts of the agreement that are being withheld. They also argued that as negotiations between the parties are not concluded it would be both misleading and prejudicial to any successful completion of the sale of land, if the withheld information, was to be disclosed at this point in time. They contend that the public interest balance favours withholding release of further information until such time as the options in the agreement are exercised by the affected party.

The applicant fundamentally disagreed and considered that the details of the option price for the land itself should be publicly available, even if the option has not been exercised. This in his view is the key element to the entire agreement and there are strong and overwhelming public interest in release of such information.

Conclusions

Having considered the submissions and from examination of the records, I agree with Mr Murnane’s preliminary views that section 27(1)(b) and 27(1)(c) does apply and accept that such harms might be occasioned by release of the requested information in relation to the option price for the land. In my view the parties have demonstrated that the harms identified in their submissions could reasonably be expected to occur from the release of certain information contained in the records and thereby potentially effect their businesses.

I am therefore of the view that financial and other information in the record is potentially exempt in accordance with sections 27(1)(b) or 27(1)(c) and find accordingly. As it my view that section 27(1) applies, it is necessary for me to consider the application of the public interest override in the context of section 27(3) of the FOI Act.

There are other parts of the record that do not relate to either financial matters or the amount of land take involved in the project that I consider are not commercially sensitive and should be released. I find accordingly. As it is my view that those parts of the record are not exempt under section 27, there is no need for me to consider the public interest as provided in section 27(3) in relation to them. These parts of the record are listed in the Schedule.

The Public Interest Test and section 27(3)

The public interest test at section 27(3) of the FOI Act, is similar to that at section 21(2). It provides that the exemptions contained in section 27(1) do not apply to a case "in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request....".

As I set out my view in my consideration of section 21(2) as to how the public interest test should in general be applied, I do not need to repeat that view here as I consider them to be relevant in considering the application of section 27(3).

Both the public body and (y solicitors) contend that on balance the public interest is better served by refusing to grant the request for access to financial information especially relating to land prices and related information, rather than by granting it. The applicant has asked this Office to take an expansive view of the application of the public interest irrespective of previous decisions made by the Commissioner and contends that on balance the public interest is better served by granting the request for access to information rather than by refusing to grant it. Mr Murnane has previously set out the factors he believed appropriate in addressing the public interest factors for and against release in the context of section 27(3) so there is no need for me to restate all of them here, but I summarise below what I consider relevant to the circumstances of this case.

Public Interest Arguments for Release

These include-

• the public interest in members of the public having reassurances and knowledge that public bodies, in the provision of a high level of service, can disclose certain sensitive and commercial information, that relates to bodies providing services for the State; and
• the public interest in increasing the openness and transparency of the process by which the obligation of public bodies, to release financial information involving a dedicated public asset (landbank), contributes to achieving value for money in relation to the development of the Irish energy sector.

Public Interest Arguments against Release

These factors include-

• the need to ensure that FOI is not used to release highly sensitive commercial information of a public body and a private company;
• the public interest in the ability of a public body to be able to provide a high level of public reassurance that they fully protect from disclosure information that is actually highly sensitive, and
• the requirement for the public body and a private company to be in a position to successfully conduct its business and negotiate in its best interests, including financial and other material interests, until agreements are finalised.

Assessment and Conclusions

In the particular circumstances of this case I consider that there is a public interest in safeguarding against release of commercial and sensitive information that could reasonably inhibit the parties involved in continuing to be free to engage with each other in the best interest of the Irish LNG energy sector. I therefore agree with Mr Murnane that on that basis the public interest would be better served by refusing to grant the request than by granting the request to those parts of the record listed in the Schedule. I find accordingly.

Section 28 - Personal Information

Section 28(1) of the FOI Act provides that a head of a public body shall refuse to grant access to a record if, in the opinion of the head access to the record concerned would involve the disclosure of personal information, unless the public interest in release outweighs the right to privacy of the individual to whom the information relates (section 28(5)). Personal information is defined in section 2(1) of the FOI Act as "information about an identifiable individual"that includes "(x) the name of the individual where it appears with other personal information relating to the individual or where disclosure of the name would, or would be likely to, establish that any personal information held by the public body concerned relates to the individual " and "(xi) information relating to property of the individual (including the nature of the individual's title to property)".The public body and (y solicitors) contend that information in two separate parts of the record disclose the personal information of a landowner other than the applicant, and information relating to other landowners identified as local farmers with short-term lettings or grazing rights. The public body contends that such information is personal and exempt from release under section 28(1) of the FOI Act.

I note that Mr Murnane in his preliminary views agreed, and I share that view in relation to the identified landowner. Regarding the other landowners identified as local farmers, Shannon Development has confirmed it is publicly known that local farmers have grazing rights on the lands in question but that the identities of these farmers are not revealed in the record. On this basis, as release of that part of the record would not lead to the identities of those farmers being revealed, in my view that information is not "about an identifiable individual" and therefore does not meet the definition of personal. I find accordingly. I am therefore satisfied that section 28(1) only applies to part of the record in at issue in relation to the identified landowner. The exemption provided by section 28(1) is subject to the application of the public interest as provided for in section 28(5). I consider the matter below.

The Public Interest Test

Section 28(5), provides:

"(5) Where, as respect a request under section 7 the grant of which would, but for this subsection, fall to be refused under subsection (1), in the opinion of the head concerned, on balance -

(a) the public interest that the request should be granted outweighs the public interest that the right to privacy of the individual to whom the information relates should be upheld, or

(b) the grant of the request would benefit the individual aforesaid, the head may, subject to section 29, grant the request."

No argument has been made, nor do I find any basis for concluding, that the release of the record at issue would be to the benefit of the third party concerned. On that basis I find that section 28(5)(b) does not apply in this case. I must therefore consider whether the information in the record should be released in the public interest in accordance with section 28(5)(a).

I believe that where section 28(5)(a) is to be applied, it is necessary to identify the public interest served by the release of the particular record(s) and to weigh that public interest against the public interest in preserving the right to privacy of the individual(s) concerned.

Assessment of where the balance of the public interest lies

The public interest in respecting the right to privacy is a very strong public interest and is adverted to explicitly in the Long Title to the FOI Act. In weighing up the relative strengths of these opposing public interests, an attempt must be made to measure the actual benefit which would result from the release of the record in question.

Mr Murnane set out what he considered to be the relevant public interest factors in his preliminary views to the parties and I see no need for me to repeat them here. Both the public body and (y solicitors) contend that the public interest is better served by refusing to grant the request rather than by granting it. The applicant considers that the information should be released in the public interest.

Having examined the record which contains limited personal information on one particular landowner who is identified by name, my view is that the public interest in releasing the name of the individual landowner does not justify overriding that person's right to privacy.

Accordingly I find that in the two parts of record where an individual landowner is identified by name have been properly withheld in accordance with section 28(1) and that section 28(5) does not apply. I specify those two parts of the record in the Schedule attached to this decision.

Application of section 31(1)

(Y solicitors) have argued that this section applies to the record. It provides as follows -

"31. (1) A head may refuse to grant a request under section 7 in relation to a record (and, in particular, but without prejudice to the generality otherwise of this subsection, to a record to which subsection (2) applies) if, in the opinion of the head:

(b) premature disclosure of the information contained in the record could reasonably be expected to result in undue disturbance of the ordinary course of business generally, or any particular class of business, in the State and access to the record would involve disclosure of the information that would, in all circumstances, be premature, or

(c) access to the record could reasonably be expected to result in an unwarranted benefit or loss to a person or class of persons.

(2) This subsection applies to a record relating to .....

(i)property held by or on behalf of the State or a public body and transactions or proposed or contemplated transactions involving such property. "

The public body initially contended that 31(1)(b) applied to the record but following correspondence with the Office no longer contends that this is the case.

(Y solicitors) contend that the exemptions in section 31 (1)(b) and 31(1)(c) apply as release of the information could be expected to result in undue disturbance and unwarranted loss to their client and also effect LNG gas importation into the State. Mr Murnane informed (y solicitors) of his preliminary view that section 31 is intended to protect the financial and economic interests of the State and of public bodies in the broadest sense and that no arguable case had been made by them that the scale of financial loss to the State set out in Section 31 could be readily likely to follow release of the information in this case. I share Mr Murnane's view and in the absence of any further compelling arguments on the application of section 31 from (y solicitors) , I find accordingly.

Section 31 has a public interest test at section 31(3) but as I have found that neither sections 31(1)(b) nor (c) apply to the record, I do not need to consider section 31(3) any further.

Decision

Having carried out a review under section 34(2) of the Freedom of Information Act 1997, as amended, I hereby vary the decision of Shannon Development in this case I direct the release of certain information contained in record and confirm the decision in relation to other parts of the record. Details are set out in the accompanying Schedule.

Right of Appeal

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 on which notice of the decision was given to the person bringing the appeal.

Seán Garvey

Senior Investigator

16 July 2010