Whether the IDA was justified in refusing access to the majority of a client survey report under sections 29, 30, 35, 36 and 40 of the FOI Act
OIC-92084-D2T3P4
Background
In a request dated 5 March 2020, the applicant sought access to a specific client survey conducted on behalf of the IDA. On 6 April 2020, the IDA decided to part-grant the request. It withheld the vast majority of the record under sections 30, 35, 36, 37 and 40 of the FOI Act. The applicant sought an internal review of that decision, following which the IDA affirmed its decision. On 22 May 2020, the applicant sought a review by this Office of that decision.
I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the correspondence between the applicant and the IDA and to the correspondence between this Office and both parties on the matter. I have had regard to the contents of the record at issue. I have decided to conclude this review by way of a formal, binding decision. I wish to apologise at the outset for the lengthy delay in issuing this decision which was due to unforeseen staff absences.
Scope of the Review
The report which was initially part granted to the applicant was indicated to comprise 100 pages. The IDA initially granted access to pages 1, 2, 7, 23, 33, 53, 68, 91 and 100 and provided partial access to information contained on pages 3 and 4.
During the course of the review by this Office, the IDA reconsidered its position and indicated that it was now prepared to release additional information in the record. It provided a copy of the report at issue that ran to 102 pages. It indicated that due to an administrative error the redacted record as released to the applicant inadvertently excluded two pages. It further indicated that had these two pages been included in the record then they would have been redacted in full.
The IDA indicated that it was now prepared to release pages 3 and 4 in totality to the applicant as well as pages 1, 2, 7, 8, 11, 23, 33, 34, 39, 42, 43, 53, 59, 60, 68, 93 and 102. The IDA also indicated that it was prepared to release some information on pages 5, 9, 94, 95, 97, 98, 99 and 100 of the report to the applicant. The IDA specifically indicated that the passage of time had meant that certain information, relating to high-level growth prospects and headcount planning for forthcoming years, was no longer considered to be exempt as the time horizon for such information had now passed.
For the remainder of the record, the IDA argued that the various withheld parts were exempt from release under sections 29, 30, 35, 36 and 40 of the FOI Act. Accordingly, this review is concerned solely with the question of whether the IDA was justified in withholding the information in question under the under the various exemptions identified. All references to page numbers in the following decision relate to the numbering used by the IDA in the most recent report provided to this Office.
Preliminary Matter
In the course of his application to this Office the applicant argued that similar material was previously put into the public domain in redacted format through release to a politician in 2008 and subsequent media publication. The applicant further argued that it is of particular relevance to the current case that information from the redacted 2008 report was subsequently published in a national newspaper and, in his view, caused none of the harms anticipated by the IDA.
When the Investigator in this case put this argument to the IDA, it maintained its position that the release of the redacted 2008 report did result in information which was harmful to the Ireland’s prospects of attracting foreign direct investment being published in the media. It further indicated that there were a number of significant differences between the 2008 record and the record at issue in this case. In particular, it indicated that the current record contains much more detailed information and raw data, as well as focussing more on current transformational issues and opportunities. The IDA also argued that the release of the 2008 record was examined under the 1997 Freedom of Information Act and that section 40(1)(c) of the 2014 Act had no comparable provision in the 1997 Act and it considers that section to be of central relevance to the current case.
While I have noted the applicant’s comments in relation to the partial release of the 2008 record, it is well established that decisions of this Office are de novo and based on the circumstances and the law as they apply on the date of the decision. I will therefore consider the application of the various exemptions relied upon by the IDA to the record at issue in this case without reference to the partial release of the 2008 record. That said, I consider that the applicant’s arguments relate predominately to a public interest argument in favour of release, and I accept that the applicant has, essentially, pointed to a public interest in greater awareness amongst the public regarding the expenditure of public funds in emanations of the State and the operations of such entities. The applicant’s arguments will therefore be considered as part of any consideration of the public interest.
Analysis and Findings
The withheld information comprises the majority of a report prepared following the completion of an IDA client survey in 2019. The report contains collated results and synthesised data derived from the responses of senior personnel in a wide range of companies involved with the IDA. Apart from mentioning groupings of companies, for example, by sector, the record at issue does not identify any individual undertakings and no statistical information appears to be tied to any identifiable individual entities. The IDA claimed exemption over the withheld parts of the client survey report under sections 29, 30, 35, 36 and 40 of the FOI Act.
Section 29 – Deliberative processes
The IDA refused access to pages 6, 9-10, 12-22, 24-32, 35-38, 44-52, 54-58, 61-67, 69-92, 96 and 101 on the basis of section 29. It also redacted certain information from pages 5, 9, 95, 97, 98, 99 and 100 on the basis of that section.
Section 29(1) provides for the discretionary refusal of a request if (a) the record concerned contains matter relating to the deliberative processes of an FOI body, including opinions, advice, recommendations and the results of consultations considered by the body for the purpose of those processes, and (b) the body considers that the granting of the request would be contrary to the public interest.
These are two independent requirements and the fact that the first is met carries no presumption that the second is also met. Furthermore, the public interest test at section 29(1)(b) is a strong test. Any arguments against release should be supported by the facts of the case and it should be shown how release of the record(s) would be contrary to the public interest.
The first requirement which must be met in order for section 29(1) to apply is that the record must contain matter relating to the ‘deliberative processes’ of an FOI body. An FOI body relying on this exemption should identify both the deliberative processes concerned and any matter in particular records which relates to these processes.
A deliberative process may be described as a thinking process which informs decision making in FOI bodies. It involves the gathering of information from a variety of sources and weighing or considering carefully all of the information and facts obtained with a view to making a decision or reflecting upon the reasons for or against a particular choice. Thus, it involves the consideration of various matters with a view to making a decision on a particular matter. It would, for example, include some weighing up or evaluation of competing options or the consideration of proposals or courses of action. The fact that a deliberative process exists and is ongoing does not mean that the exemption automatically applies without consideration of all the provisions of section 29. Equally, the fact that a deliberative process is at an end does not mean that the exemption automatically does not apply.
Any arguments against release under section 29 of the Act should be substantiated and supported by the facts of the case. It is important that the FOI body shows how granting access to the particular record(s) would be contrary to the public interest, e.g. by identifying a specific harm to the public interest flowing from release.
In its submission to this Office, the IDA argued that the records relate to a number of different deliberative processes and these deliberations are still ongoing. While noting that a new strategic plan has recently been published by the IDA, it nonetheless argued the information contained in the records continues to form part of ongoing deliberative processes, including those relating to the formulation of IDA’s response to the changing global business environment, the impact of the Brexit and the COVID-19 pandemic and global tax reform. The IDA also argued that the information in the client survey is relevant to the formation of Government policy on matters such as business competitiveness, infrastructure needs, regional investment, availability of skills for certain sectors and the tax policy of the state. It further argued that information in the relevant records includes what a representative sample looks like and this information and other information around methodology is currently being reviewed in preparation for the deliberations and discussions around the 2021/22 client survey.
Having considered the matter, I am satisfied that the record at issue does not contain recommendations, advice, and opinions, which in my view, relate to a deliberative process as envisaged by section 29. I consider that the information set out in the client survey comprises the amalgamated data following its biennial survey of client companies. While I accept that the information and data contained in the record may feed into deliberations by the IDA and wider Government I do not consider that the record itself relates to a deliberative process. I also do not consider that the report contains information which reveals details of any deliberations that may be underway in determining the scope of the 2021/22 client survey.
I should add that even if I were to find that section 29(1)(a) were to apply to apply to the record, I am satisfied that a number of sub-sections of section 29(2), which serve to disapply section 29(1) are relevant in part in the current case. For example, I consider that parts of the record contain factual information (section 29(2)(b) refers). I also consider that section 29(2)(d) relating to reports or analyses of the effectiveness of an FOI body in the performance of its functions may be relevant. However, given my conclusion on section 29(1)(a), I do not consider it necessary to consider the applicability of the various exceptions in section 29(2) to the record in this case.
I find, therefore, that section 29(1) does not apply to those parts of the record as set out above.
Section 30 – Functions and negotiations of FOI bodies
The IDA argued that all three sub-sections of section 30 apply to the record at issue. As it indicated that certain sub-sections apply to certain parts of the client survey report I propose to examine them individually.
Section 30(1)(a)
The IDA refused access to pages 6, 9-10, 12-22, 24-32, 35-38, 40-41, 44-52, 54-58, 61-67, 69-92, 96 and 101 on the basis of section 30(1)(a). It also redacted certain information from pages 5, 9, 94, 95, 97, 98, 99 and 100 on the basis of that section.
Section 30(1)(a) provides for the refusal of a request if the FOI body considers that access to the record concerned could reasonably be expected to prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of an FOI body or the procedures or methods employed for the conduct thereof.
Section 30(1)(a) envisages two potential types of "prejudice" or harm. The decision maker must hold the view that the release of the record could reasonably be expected to prejudice the "effectiveness" of the tests, examinations, investigations, inquiries or audits, or prejudice the "procedures or methods employed for the conduct thereof”. Where an FOI body relies on this provision, it should identify the potential harm in relation to the relevant function specified in paragraph (a) that might arise from disclosure. Having identified that harm, it should consider the reasonableness of any expectation that the harm will occur. The FOI body should explain how and why, in its opinion, release of the record(s) could reasonably be expected to give rise to the harm envisaged. A claim for exemption under section 30(1)(a) must be made on its merits, in light of the contents of each particular record concerned and the relevant facts and circumstances of the case.
Where a record is exempt under either section 30(1)(a), the public interest test at section 30(2) must be considered.
In its submission to this Office the IDA argued that there is no obligation on IDA client companies to participate in its client survey. It argued, that if companies do not participate then this will impede IDA in gathering sufficient data on the challenges and potential opportunities for foreign direct investment. It argued that without this information, it cannot work on addressing the barriers which their clients have identified and this would adversely impact decisions around new investments and expansion projects in the State, as well as the future sustainability of existing activities.
The IDA added that the client survey is carried out with the most senior members of the client’s Irish operation and the majority of survey interviews are carried out face-to-face, which allows for frank and open responses to the survey questions. The IDA indicated that more often than not the parent company would not be aware of these engagements. It further argued that were the information in the survey to be released it would damage the trust between the IDA and its clients in relation to the survey process and this would make clients less likely to participate or be as frank in future surveys.
Having regard to the contents of the records at issue, I do not accept the IDA’s arguments. Beyond general assertions the IDA has not explained how release of the collated results of the 2019 client survey would negatively impact on the participation by individual client companies in any future similar surveys. Given the general and non-specific nature of the information set out in the record, I do not consider it reasonable to conclude that client companies would hesitate in taking part in future surveys as a result of the release of the record at issue. I am therefore satisfied that section 30(1)(a) does not apply to the record.
Section 30(1)(b)
The IDA refused access to pages 6, 9-10, 12, 24-32, 35-38, 44-52, 54-56, 61-67, 69-92, 96 and 101 on the basis of section 30(1)(b). It also redacted certain information from pages 5, 9, 97, 98, 99 and 100 on the basis of that section.
Section 30(1)(b) provides for the refusal of a request if access to the record concerned could, in the opinion of the FOI body concerned, reasonably be expected to have a significant, adverse effect on the performance by an FOI body of any of its functions relating to management (including industrial relations and management of its staff).
This exemption is harm-based. In claiming exemption under section 30(1)(b), the FOI body concerned should identify the function relating to management concerned and identify the significant adverse effect on the performance of that function which is envisaged.
The body should also consider the reasonableness of the expectation that the harm will occur. In examining the merits of an FOI body’s view that the harm could reasonably be expected, this Office does not have to be satisfied that such an outcome will definitely occur. The test is not concerned with the question of probabilities or possibilities. It is concerned with whether or not the decision maker's expectation is reasonable.
It is sufficient for the FOI body to show that it expects an outcome and that its expectations are justifiable in the sense that there are adequate grounds for the expectations. The body should show the link between granting access to the record concerned and the harm identified. It should do this by reference to the specific record being considered for release and its submissions to this Office should be sufficiently detailed to demonstrate that link.
The wording of section 30(1)(b) makes it clear that the words "industrial relations and management of its staff" are, in the context of that section, a subset of "functions relating to management". Other than the specific references to industrial relations and the management of staff, section 30(1)(b) does not indicate what other management functions are embraced by the term "functions relating to management".
This Office takes the view that management is a word of wide import and that it is apt to cover a variety of activities of an FOI body apart from management of staff and industrial relations. It considers that the term “functions relating to management” covers such matters as strategic planning, the management of financial resources and the management of operational matters; management of operations, including reviewing how those operations are carried out, and devising and testing new methods of conducting the operations through the use of pilot projects; investigating complaints against a body, members of its staff and parties under contract to it; and attending to complaints from or about members of staff.
In its submissions, the IDA noted, as above, that “functions relating to management” extends to a number of different activities and includes strategic planning and the management of financial resources and operational matters. The IDA argued that it also includes the process of resource allocation and the process of evaluating and enhancing quality. The IDA’s position is that it can reasonably be expected that there would be significant adverse effects on strategic planning and management of financial resources and operational matters of the IDA, and on the process of evaluating and enhancing quality by the IDA, if the record was released.
The IDA submitted that, as participation in the survey is voluntary, release of the record could result in cooperation with such surveys being affected in the future. It said the client survey offers a formal channel for clients to provide direct feedback to the IDA, and to give their opinions relating to the business environment, experiences of operating in Ireland and perceptions of IDA support and performance. According to the IDA, it allows the IDA to obtain feedback from a representative section of its clients and to become aware of issues of particular importance to them.
The IDA further submitted that it generally produces a five-year strategy document and outputs of the client survey are considered as part of the IDA strategy development process, which is currently underway. According to the IDA, these outputs are key drivers in developing strategic initiatives and IDA policy. Without a comprehensive and effective client survey, the IDA said, it would not be in a position to address the areas of concern or opportunities for development highlighted by client companies. This could result in the IDA not targeting appropriate areas when developing the organisation’s strategy.
In its submissions, the IDA also stated that with regard to the process of evaluating and enhancing quality, if this comprehensive survey of clients did not take place, the IDA could be unaware of issues that are of concern the client companies and would as a result not be able to measures changes in the importance of certain issues to their clients. It would also impact on the IDA’s ability to improve the service and assistance it provides to its clients.
In essence the IDA’s argument is that release of the information in the client survey would have a significant adverse effect on its strategic planning and management of its financial resources. Having considered the matter carefully, and bearing in mind the provisions of section 22(12)(b), I am not satisfied that the IDA has explained the basis for a reasonable expectation that the harm envisaged could arise as a result of release. In this instance I find that the IDA has asserted the existence of potential significant adverse effects but has not tied these to the contents of any of the particular record at issue, or demonstrated how the contents of the particular record could reasonably be expected to result in the adverse outcomes envisaged. I am therefore satisfied that section 30(1)(b) does not apply to the record.
Section 30(1)(c)
The IDA refused access to pages 13-22, 24-32, 44-52, 54-56, 69-92, 96 and 101 of the client survey on the basis of section 30(1)(c). It also redacted certain information from pages 9, 98, 99 and 100 on the basis of that section.
Section 30(1)(c) provides for the refusal of a request where the body considers that access to the record concerned could reasonably be expected to 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 an FOI body.
The exemption does not contain a harm test but is subject to a 'public interest override' i.e. even where the requirements of subsection (1) have been met, the exemption does not apply where the public interest would, on balance, be better served by granting access than by refusing to grant the request. Any potential level of harm that may result from release would be relevant to the public interest considerations in section 30(2).
An FOI body relying on section 30(1)(c) should identify the relevant negotiations at issue. Relevant factors in considering whether there is a negotiation include whether the FOI body was trying to reach some compromise or some mutual agreement. An FOI body relying on this exemption must show to the Commissioner that release of the record could reasonably be expected to disclose positions taken (or to be taken), etc., for the purpose of any negotiations.
The IDA argued that the information in the client survey can reasonably be expected to disclose plans, procedures or criteria in relation to the negotiations which it carries out on a continuous basis with various companies considering investing in Ireland. It indicated that it uses the feedback in the survey from existing client companies in order to develop these plans, procedures and criteria and it has specifically indicated that the survey plays an important role in developing IDA’s approach to negotiations with companies wishing to invest in Ireland. The IDA further indicated that the survey contains information relating to the effects of Brexit and as well as US tax and trade policy on its client companies and that such information informs the IDA’s advice to Government on these matters.
Having considered the matter, I do not consider the nature of the information set out in the client survey could reasonably be expected to disclose positions taken or plans, procedures etc. to be used for the purpose of negotiations by the IDA. The views of client companies on the challenges faced by their operations, the service being provided by the IDA, the strategic direction of the IDA and the wider global competitive environment, in my view, is not information envisaged by section 30(1)(c). I therefore do not accept that section 30(1)(c) applies to the information in the client survey. I find that the IDA was not justified in refusing access to that information under section 30(1)(c).
In light of my findings there is no need for me to consider the public interest test at section 30(2).
Section 35 – Information provided in confidence
The IDA refused access to all outstanding pages of the report, in whole or in part, on the basis of section 35(1)(a). That section applies to a record containing information given to an FOI body in confidence. Four requirements must be satisfied for a record to be exempt under section 35(1)(a): the information was given to an FOI body in confidence; the information was given on the understanding that it would be treated by the FOI body as confidential; 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; and it is important to the body that such further similar information should continue to be given to the body. All four requirements as outlined in section 35(1)(a) cited above must be satisfied in order for a record to be considered exempt from release under section 35(1)(a).
Section 35(2) provides 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.
Section 2 of the FOI Act defines “service provider” as “a person who, at the time the request was made, was not an FOI body, but was providing a service for an FOI body under a contract for services and contract for services in this definition includes an administrative arrangement between an FOI body and another person”.
As section 35(1) does not apply if the records fall within the terms of section 35(2), I should consider section 35(2) at the outset. The IDA confirmed that the survey was prepared by a service provider. Therefore, pursuant to section 35(2), section 35(1) will not apply to the records at issue unless disclosing them would constitute a breach of a duty of confidence owed to a person other than an FOI body/service provider etc. under an agreement or statute or otherwise by law. The IDA indicated that it considers that a duty of confidence was owed to those client companies which participated in the survey.
The IDA argued that there is no obligation on IDA client companies to participate in the information gathering exercise which fed into the client survey. It indicated that companies participate in the survey on the implied understanding that the information they provide is confidential and that it will be treated as such. It argued that if it were the case that companies were to choose not to participate in future surveys of this nature then it would be impeded in gathering information on the barriers faced by their client companies in operating and expanding in Ireland. The IDA further argued that if such information could not be gathered then it would prohibit the IDA in seeking to overcome the barriers identified and thereby addressing the concerns raised by the client companies and their parent companies. It indicated that such information is necessary to prepare and revise its marketing strategy in response to its clients’ needs and thereby attract foreign investment in furtherance of its statutory functions.
The IDA has not pointed to a duty of confidence provided for by a provision of an agreement or enactment. I must therefore consider whether a duty of confidence provided for "otherwise by law" arises. Such a duty is generally accepted to include a duty of confidence arising in equity. In Mahon v Post Publications Ltd [2007] 3 IR 338, the Supreme Court summarised the requirements of the equitable duty of confidence as follows: the information must in fact be confidential or secret: it must have the necessary quality of confidence about it; it must have been communicated by the possessor of the information in circumstances which impose an obligation of confidence or trust on the person receiving it; it must be wrongfully communicated by the person receiving it or by another person who is aware of the obligation of confidence.
To establish that an equitable duty of confidence exists, it should be shown that the information has the necessary quality of confidence. Factors relevant for consideration in this regard include, for example, whether the information is confidential or secret or concerns private matters. I am not satisfied that the information in the client survey has the necessary quality of confidence for an equitable duty of confidence to arise or that it was communicated in circumstances which imposed an obligation of confidence or trust on the IDA. As I have noted above, apart from mentioning groupings of companies, for example, by sector, the records at issue do not identify any individual undertakings and no statistical information appears to be tied to any identifiable individual entities. Accordingly, I find that the disclosure of the information concerned would constitute a breach of a duty of confidence owed to the IDA’s client companies. As such, I find that section 35(1)(a) cannot apply.
Section 36 – Commercially sensitive information
The IDA refused access to all outstanding pages of the report, in whole or in part, on the basis of sections 36(1)(b) and 36(1)(c).
Section 36(1)(b) must be applied to certain types of 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 the person in the conduct of his or her profession or business or otherwise in his or her occupation.
Section 36(1)(c) provides for the refusal of a request if the record sought contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.
The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material financial loss or gain". The Commissioner takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.
The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice” the competitive position of the person in the conduct of their business or profession. The standard of proof to be met here is lower than the "could reasonably be expected" test in the first part of the exemption. However, the Commissioner takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
In the High Court case of Westwood Club v The Information Commissioner [2014] IEHC 375 (the Westwood case), Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position.
The IDA argued that the client survey contains financial and commercial information of its client companies, including information relating to the companies’ financial position, addressable markets, marketing strategies as well as information relating to business challenges and growth plans. It further argued that the client survey contains financial and commercial information relevant to the IDA itself. It argued that this information allows the IDA to assess its performance and it informs the commercial positions taken by the IDA when entering into agreements with investor companies and shapes the strategies adopted in relation to financial and commercial decisions. It argued that such information would be valuable to competitor state investment agencies and would be used by such entities to attract FDI investment, to the detriment of the IDA.
Having examined the record at issue I cannot see any information in the client survey whose release might give rise to the harms identified in sections 36(1)(b) or (c) in respect of the client companies. I consider that the information set out in the report comprises the collated responses from the individual companies and at no point is specific information relating to a specific company set out. I consider that the client survey, by virtue of its non-specific nature, cannot said to be commercially sensitive. I therefore find that the IDA has not satisfied this Office that sections 36(1)(b) or (c) apply to protect the interests of those companies which responded to the client survey.
As outlined above, the IDA also argued that sections 36(1)(b) and (c) apply to protect its own interests. I must admit that it is not entirely clear to me that section 36 was intended to protect the commercial interests of FOI bodies. The exemption is one of three sections of the Act which serves to protect the interests of third parties, along with section 35 (protecting confidential information) and section 37 (protecting personal information). The Act contains a formal notification process where the FOI body is considering the release of such information relating to third parties in the public interest. In my view, there are other exemptions contained in the Act that serve to protect the related interests of FOI bodies which have also been invoked by the IDA in this matter.
Nevertheless, this Office has, in the past, accepted that there is uncertainty on the matter and that depending on the circumstances of the case, the FOI Act does not prohibit an FOI body, either as a decision making body or as a third party applicant to his Office, from relying on the provisions of section 36 to protect its interests.
In this case, the IDA argued that the disclosure of the information in the client survey could negatively impact its interests vis-à-vis investor companies as well as other state investment agencies. It seems to me that the IDA's arguments are more appropriate for consideration under section 30, which I have dealt with above, and section 40, which I will deal with below. However, for the purposes of section 36, I see nothing in the record whose release could reasonably be expected to result in a material financial loss or gain to the IDA or could prejudice the competitive position of the IDA. Likewise, I do not consider that release of the information in the client survey could prejudice the outcome of negotiations.
Having regard to the provisions of section 22(12)(b) outlined above, I therefore find that the IDA has not satisfied this Office that sections 36(1)(b) or (c) apply to the client survey.
Section 40 – Financial & Economic Interests of the State
The IDA refused access to all outstanding pages of the report, in whole or in part, on the basis of sections 40(1)(a), 40(1)(b), 40(1)(c) and 40(1)(d).
Section 40(1)(a) provides that a request may be refused if the head of the body is of the opinion that access to the record could reasonably be expected to have a serious, adverse effect on the financial interests of the State. Section 40(1)(b) provides for the refusal of a request where the body considers that premature disclosure of 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 the circumstances, be premature'. Section 40(1)(c) provides that a head may refuse to grant an FOI request in relation to a record if, in the opinion of the head, access to the record could reasonably be expected to have a negative impact on decisions by enterprises to invest or expand in the State, on their research activities or on the effectiveness of the industrial development strategy of the State, particularly in relation to the strategies of other states. Section 40(1)(d) of the FOI Act provides for the discretionary refusal of an FOI request where, in the opinion of the FOI body, access to the record could reasonably be expected to result in an unwarranted benefit or loss to a person or class of persons.
Section 40(1) may be applied to any record, but particularly those of a sort described in section 40(2) of the FOI Act. The IDA identified sections 40(2)(j), (k), (m) and (p) as relevant, which are as follows:
‘‘(j) foreign investment in enterprises in the State,
(k) industrial development in the State,
….
(m) trade secrets or financial, commercial, industrial, scientific or technical information belonging to the State or a public body, that are of substantial value or reasonably likely to be of substantial value,
…
(p) investment or provision of financial support by or on behalf of the State or a public body’’
However, the mere fact that a record falls within one or more of the categories described in section 40(2) does not mean that the record qualifies for exemption. On or more of the provisions of section 40(1) must also apply. It should also be noted that the exemption provided for by section 40(1) of the Act is subject to a public interest test. Section 40(3) of the Act provides that section 40(1) will not apply in circumstances where the FOI body considers that the public interest would, on balance, be better served by granting than by refusing to grant the FOI request.
For section 40(1) to apply, the potential harm that might arise from disclosure must be identified and the expectation that the harm will occur must be reasonable. In examining the merits of a body’s view that the harm could reasonably be expected, this Office does not have to be satisfied that such an outcome will definitely occur. The test is not concerned with the question of probabilities or possibilities but rather whether or not the decision maker's expectation is reasonable. It is sufficient for the body to show that it expects an outcome and that its expectations are justifiable in the sense that there are adequate grounds for the expectations.
Consideration should also be given to what disclosure of the record would actually reveal. For example, where the information contained in the record is already known or in the public domain, it may not be reasonable to expect that prejudice or harm would result from its disclosure. The time at which the FOI decision is being made may also be relevant. It is possible that the release of the record could not reasonably be expected to result in the harm envisaged due to the passage of time.
The majority of the arguments made by the IDA under section 40 relate to the provisions of sections 40(1)(a) and 40(1)(c). The IDA argued that disclosing information in the relevant record relating to the views of IDA client companies would negatively impact on the effectiveness of the industrial development strategy of the State. It further argued that the information to which access has been refused in the client survey contains details on the sectors, analysis, methodologies and regions where IDA client companies are located and as such provides an overall snapshot of the profile of such companies. It also argued that, given the scale and importance of the FDI sector in Ireland, any negative impact to such investment would have a serious adverse effect on the financial interests of the State, particularly in relation to tax revenue.
The IDA further argued that the public availability of such information would be of substantial value to similar agencies in other countries who themselves are seeking to attract investment. It argued that its ability to compete for the limited pool of foreign direct investment would be negatively affected, most particularly through competitor countries targeting sectors what are perceived to have limited growth prospects in Ireland. It argued that if information relating to growth prospects for individual sectors and regions were to be released then any negative results relating to specific sectors may come to the attention of foreign enterprises considering investment or expansion in the State. It argued that it is reasonable to expect that such negative results would have an adverse effect on the decision of such enterprises to invest or expand in Ireland. Similarly, if the positive factors with respect to the companies’ experience in Ireland where to be made publically available, the IDA argued that this would allow competing countries to target areas for development and alter their national strategies to allow them compete with Ireland.
The IDA specifically highlighted the information in the client survey relating to challenges post-Brexit and US tax changes and argued that release of this information would negatively impact on the industrial development strategy of the State. In particular, the IDA argued that while it continues to analyse and assess the effects of Brexit, it is anticipated that it will affect Ireland’s foreign direct investment competitiveness. It argued that the IDA must be in a position to develop strategies in response to the impact of Brexit and if such information is released it would allow competitor countries less impacted by the fallout of Brexit to capitalise on any negative effects or weaknesses revealed by the survey.
In a similar vein, the IDA argued that the information in the client survey relating to US economic policy could be used by competitor countries to undermine confidence in Ireland as a location for investment by US companies. Finally, the IDA argued that the State must be in a positon to participate in the ongoing negotiations on global tax reform at the OECD with every possible advantage and it argued that release of information in the report relating to the influence of tax changes on FDI may influence these negotiations to the detriment of the State.
With regard to section 40(1)(b), the IDA argued that release of the information in the client survey would reasonably be expected to unduly disturb a particular class of business in the State, namely foreign direct investment by new and existing business into the State. In particular, the IDA recalled that it recently published a new Strategic Plan and information in the client survey underpins and forms the basis of the Strategic Plan itself. It further argued that during the period of the current Strategic Plan, which runs until 2024, any release of this information would premature as it would impact on the effectiveness of the Plan.
With regard to section 40(1)(d), the IDA argued that knowledge of the information in the record would affect negotiations between the IDA and new and existing companies through conferring an unwarranted benefit on such companies and associated loss to the IDA. It also argued that knowledge of the information would convey an unwarranted benefit on state investment agencies in other countries as it may lead to them attracting investment that would not have been forthcoming without knowledge of such information.
Having considered the matter, I am not satisfied that disclosing the information in the client survey could reasonably be expected to have a serious adverse effect on the financial interests of the State. I find it quite difficult to accept that the release of the information in the client survey could negatively impact on the IDA’s work to attract and retain foreign direct investment to the extent argued in its submissions. I also do not consider that disclosure could reasonably be expected to have a negative impact on decisions by enterprises to invest or expand in the State or on the effectiveness of the industrial development strategy of the State.
In relation to the IDA’s argument that the release of the record could provide competitor countries with detailed information in relation to Ireland’s FDI strategy, it is not evident to me that such harms could reasonably be expected to follow from the record’s release. I consider that the information in the client survey is sufficiently high level and general, such that any third party would not gain the necessary insight from the information contained in the record that would enable it to do so.
Neither am I persuaded that release of this information could reasonably be expected to result in an undue disturbance of the ordinary course of business in the State. In addition, I am not satisfied that there are credible claims in relation to the expected unwarranted benefit or loss which would accrue following the release of the information concerned.
As such, I find that the IDA has not shown how the release of the records could reasonably be expected to give rise to the harms identified in the exemptions, nor is it apparent to me as to how such harms might arise. I therefore find that the IDA was not justified in refusing access to the remaining information under sections 40(1)(a), 40(1)(b), 40(1)(c) and 40(1)(d) of the FOI Act.
Given this finding, I am not required to consider the public interest balancing test under section 40(3) of the FOI Act.
Decision
Having carried out a review under section 22 (2) of the Freedom of Information Act 2014, I hereby annul the IDA’s decision to refuse access to various parts of the 2019 client survey. I find it was not justified in refusing access to information contained in the report on the basis of sections 29, 30, 35, 36 and 40 of the FOI Act and direct its release in full.
Right of Appeal
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Stephen Rafferty
Senior Investigator