Whether the Council was justified in refusing access, under section 36 of the FOI Act, to records relating to a tender for hire of landfill waste compactors

13 July 2021

Background

On 20 May 2020, the applicant submitted an FOI request to the Council for:

  • Schedule C to the Agreement between Galway County Council and [a named] Plant Hire Contractor (the Contractor) dated 2 August 2016; and
  • The tender submitted by the Contractor which is attached as a schedule to the Agreement dated 2 August 2016.

In a decision dated 15 June 2020, the Council refused access to the relevant records under section 36(1) of the FOI Act on the ground that the records contain commercially sensitive information. The applicant sought an internal review of that decision, following which the Council affirmed its original decision. On 29 October 2020, the applicant sought a review by this Office of the Council’s decision.

I have now completed my review in accordance with section 22(2) of the FOI Act.  In conducting the review, I have had regard to correspondence between the applicant and the Council as outlined above and to communications between this Office and both parties on the matter. In light of the nature and contents of the records at issue, this Office notified the Contractor of the review and invited it to make a submission on the matter. I have had regard to the submission it subsequently made. I have also had regard to the Public Procurement Guidelines for Goods and Services published by the Office of Government Procurement, and to the contents of the records at issue. I have decided to conclude this review by way of a formal, binding decision.

Scope of the Review

This review is concerned solely with whether the Council was justified in refusing access to Schedule C to the Agreement between the Contractor and the Council and the tender submitted by the Contractor under section 36(1) of the FOI Act.

Analysis and Findings

The Request for Tender and Records at issue

In May 2015, the Council sought tenders for the hire of duty and standby landfill waste compactors for a period of 36 months commencing in quarter three of 2015.  The tender specified that total operating hours would be 42.5 per week and the compactor will allow for waste compaction of up to 100,000 tonnes per annum. It specified that the two landfill compactors shall both be a maximum of 8 years old or have less than 8,000 machine hours at the date of tender, be a minimum of 48 tonnes in weight and a minimum of 525 horsepower. The contractor was also to provide a suitably qualified driver and fulfil certain health and safety and insurance requirements.

The records at issue contain the successful tender submitted by the Contractor to the Council. Schedule C to the Agreement between the Contractor and the Council is contained in the tender submitted by the Contractor at Appendix 2. This record lists hourly rates for six different options proposed by the Contractor to meet the Council’s needs. Appendix 1 lists the model, horsepower, year of manufacture, weight and machine hours of the compactor and standby compactor to be used in the case of each of the six options. The tender also contains details of the contractor’s turnover, insurance cover, tax details, health and safety record, experience, safety statement and a brochure.

The total value of the contract awarded to the contractor is published on the eTenders website.

The Council’s submission

In its internal review decision, the Council stated that the release of the records would give the Contractor’s competitors an insight into how they prepared their bid, the resources available to the Contractor for the particular type of activity and the unit rates charged. It stated that release of this information could prejudice the Contractor’s competitive position and, as such, the records are exempt under section 36(1)(b) of the Act. During the course of the review, this Office invited the Council to make focused submissions in support of its decision. The Council did not provide submissions and it stated that it no longer wished to rely on section 36(1)(b) of the Act in relation to the records.

The applicant’s submissions

The applicant states that the waste market has changed dramatically since the tender agreement was agreed in 2016. It states that there are currently only three active landfills accepting waste in the country. It states that two of the active landfills are privately owned while the third is a semi state facility. According to the applicant, all three landfills have their own compactors and one of them has a backup machine on long term hire with a plant hire company. The applicant contends that there is no market for the tendering of plant to landfills in Ireland and there is no competitive space within which the Contractor operates when it comes to landfill plant hire. It contends that any commercial sensitivity to the information sought that may have applied in 2016 no longer applies given the passage of time and the current waste market in Ireland.

The Contractor’s submissions

The Contractor submits that the market for tendering of specialised plant to landfills in Ireland still exists. It states that as recently as 29 October 2020, Tipperary County Council issued a public request for tenders for the hire of a landfill waste compactor and it provided this Office with a copy of that request for tenders. The Contractor submits that the records contain its methodology for delivery of the contract, which constitutes a trade secret. It submits that release of the records could prejudice its competitive position in future public tender competitions and in private contract negotiations.

The Contractor also submits that the records contain information of a confidential nature, which is exempt from disclosure on the basis of section 35 of the FOI Act. 

The Contractor states that it is currently involved in High Court proceedings and this legal dispute concerns contractual terms for the hire of specialised machinery at the time of creation of the requested records. It states that the release of the records could prejudice those proceedings.

Section 36(1)

Section 36(1) provides that an FOI body shall refuse to grant a request 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.

There are certain situations where, although section 36(1) applies, the request shall still be granted. These situations are specified in section 36(2). Section 36(3) provides that section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than by refusing the request.

Having regard to the content of the records and the submissions of the parties, I am satisfied that section 36(1)(b) is the relevant exemption provision to consider. 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 standard of proof in relation to the second limb of section 36(1)(b) is very low. All that is required is the possibility of prejudice with the only requirement being that disclosure "could prejudice the competitive position" of the person concerned.

The Supreme Court in University College Cork v The Information Commissioner [2020] IESC 58 confirmed that the standard of proof in relation to the second limb of section 36(1)(b) is “very low”. Nevertheless, 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 its competitive position.

I accept that the number of landfills operating in Ireland has significantly reduced in recent years. However, the applicant itself states that one of the active landfills has a backup machine on long-term hire with a plant hire company. I do not accept there is no competitive space within which the contractor operates when it comes to landfill plant hire. I note in this regard, a request for tenders in respect of landfill waste compactors recently issued by Tipperary County Council. I am satisfied that release of the information at issue into the public domain could prejudice the Contractor’s competitive position in future contractual negotiations or tender competitions for landfill plant hire. I find, therefore that section 36(1)(b) applies to the records at issue.

Section 36(2)

Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arises in this case.

Section 36(3) The Public Interest

Having found that section 36(1)(b) of the FOI Act applies in respect of the specific records and parts thereof set out above, I shall now consider section 36(3) of the FOI Act.  The public interest balancing test in section 36(3) expressly acknowledges the potential for harm arising from the release of a record. Therefore, while release of the record might give rise to one or more of the harms identified in section 36(1) of the FOI Act, this alone does not provide a sufficient basis for concluding that the public interest would be better served by refusing the request. The public interest test involves a balancing exercise between the public interest served by granting the request and the public interest served by refusing it. The FOI body must carry out that balancing exercise, by weighing the competing interests at play in the particular circumstances of a request, and then explain the basis on which it has decided where the balance of the public interest lies.

The applicant contends that the public interest would best be served by the release of the requested records, as the public have an interest in ensuring transparency and accountability in respect of such agreements entered into by the Council, which concern public assets, in this case a public waste facility.

The contractor submits that there is no public interest in the hire rates of specialised machinery or in the methodology of this work. According to the contractor, only a competitor, or a party to the High Court proceedings in which it is involved would have an interest in receipt of the records and it contends that the Act does not envisage facilitating these narrow sectional interests.

In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. To summarise, section 11(3) recognises the need to enhance public scrutiny and accountability of government and public affairs, with particular regard to the activities and decision making of FOI bodies. However, it is important to note that in The Minister for Communications, Energy and Natural Resources and the Information Commissioner & Ors [2020] IESC 57 (the Enet judgment), the Supreme Court found that a general principle of openness does not suffice to direct release of records in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”. It also found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request. It stated that “… the scheme of the Act is to make the refusal of certain records mandatory, unless the public interest could, following an analysis of the contents, rationally be said to lead to the conclusion that disclosure of the records is in the public interest by reason of their contents.”

The Supreme Court went on to state that the public interest test involves a “weighing of the respective private and public interests in the analysis of the records at issue”. In this regard, it did not disturb the guidance the Court had previously given in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v. the Information Commissioner [2011] IESC 26, in which it noted that a public interest ("a true public interest recognised by means of a well-known and established policy, adopted by the Oireachtas, or by law") should be distinguished from a private interest.

In the context of determining whether to grant a request in the public interest, the reasons given for the request may be considered only insofar as they reflect a true public interest found in the contents of the documents themselves, i.e. insofar as the concerns raised in relation to the request may also be matters of general concern to the wider public. The Contractor states that the records would only be of interest to a competitor or a party to the High Court proceedings in which it is involved and release of the records could prejudice those proceedings. It is possible, however, that a private interest in making a request could be accompanied by a public interest in disclosure. It is important, therefore, to consider established public policy in relation to public procurement and tender competitions.

The Government’s National Public Procurement Policy Framework, available on the website of the Office of Government Procurement (OGP) at https://ogp.gov.ie/national-public-procurement-policy-framework/, sets out the overarching policy framework for public procurement in Ireland, including the procurement procedures to be followed by Government Departments and State Bodies under national and EU rules. The OGP has published “Public Procurement Guidelines for Goods and Services”. The Guidelines provide as follows:

“Bodies subject to Freedom of Information Legislation are required to provide the following details in relation to public procurement under the Model Publication Scheme, published by the Department of Public Expenditure and Reform in July 2016:

  • procurement policies
  • a link to all current tender competitions on the eTenders website
  • public contracts awarded including contract type, contractor, value, award date, duration and brief description (tabular format) over €25,000 (exclusive of VAT) for both ICT and other contracts”

I note that the tender process in this case was completed before the publication of the Model Publication Scheme. However, it seems to me that the Scheme reflects a Government policy of transparency in relation to the value of contracts awarded. In my view, that policy is relevant to the tender issued by the Council in this case for the hire of landfill waste compactors. While no tender related records are subject to release or exemption on a class basis, it is my view that the Scheme highlights a recognised public interest in certain elements of a successful tender, after such time as a contract has been awarded.

As set out above, Appendix 1 lists the model, horsepower, year etc. of compactor to be used in the case of six different options proposed by the contractor. Appendix 2 lists hourly rates for each of these six options. It is my view that release of the successful option chosen by the Council would allow for an insight into what the Council received and the value for money achieved. On this basis, I find that the public interest would be better served by the release of the successful option selected by the Council as contained in Appendix 1 and Appendix 2 of the tender. In finding that the public interest would be better served by the release of those parts of the tender, I have also had regard to the fact that the information at issue dates from 2015.

On the other hand, I find that the public interest would be better served by withholding the remaining information. It is worth stating that as a general principle, the purpose of the FOI Act is to achieve greater openness and accountability in the activities of public bodies. It was not designed as a means by which the operations of private enterprises were to be opened up to similar scrutiny. The release of the remainder of the tender documentation would involve the disclosure of details of the contractor’s turnover, tax affairs, relevant experience etc. I am not satisfied that, on balance, the public interest would be better served by the release of this type of information to which section 36(1)(b) applies to the extent that overriding the commercial sensitivity of that information would be justified.

Section 35(1)- Information obtained in confidence

The Contractor also submitted that the records at issue contain information provided in confidence and are exempt under sections 35(1)(a) or (b) of the FOI Act. I will only section 35(1) of the FOI Act in relation to the information that I have not found to be exempt under section 36 above, namely the successful option selected by the Council contained in Appendix 1 and Appendix 2.

Section 35(1)(a) provides for the protection of information given to an FOI body in confidence. For the exemption to apply, it is necessary to show the following: that the information contained in the records was given to an FOI body in confidence; that it 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 FOI body of further similar information from the same or other persons, and that it is of importance to the body that such further similar information should continue to be given to it. I note that the Instruction for Tenderers provides that while the parties will undertake to hold confidential any confidential information received from the other party, this is subject to the Council’s obligations under the FOI Act as follows:

13. Freedom of Information Act

Each of the parties will undertake to use their reasonable endeavours to hold confidential any confidential information received from the other party, subject to the Client obligations under the law, including (if applicable) the provisions of the Freedom of Information Act, 1997 and 2003. The Tenderer will agree that, should it wish any confidential information supplied by it to the Client not to be disclosed, because of its commercial sensitivity, it will, when supplying such information, identify same and specify the reasons for its sensitivity. The Client will consult with the Tenderer about such sensitive information before making a decision regarding release of such information under the Freedom of Information Acts 1997 and 2003. However, the client will give no undertaking that such information will not be released under the provisions of the Freedom of Information Acts 1997 and 2003 and the final decision on whether or not to release such information rest with the Client or as set out in the Freedom of Information Acts 1997 and 2003.

The Contractor has provided this Office with an extract of its Agreement with the Council. Clause 8 of the Agreement provides that the Council shall consult with the Contractor in respect of any request it receives for information related to the Agreement. The Contractor shall identify any commercially sensitive information that is not to be disclosed. The Council will consult the Contractor about this information before making a decision on the FOI request. However, the final decision on disclosure rests with this Office and ultimately the courts.

In communications with this Office, the Council states that the Contractor did not identify any commercially sensitive information when supplying information to the Council.  For its part, the Contractor states that the Council did not consult with it before making a decision on the FOI request as required. It submits that the requested records are the subject of a written confidentiality agreement it has with the Council. The Contractor provided this Office with a separate confidentiality agreement it signed with the Council. This agreement appears to impose certain obligations on the Contractor in respect of information provided to it by the Council, it does not appear to impose similar obligations on the Council. In any event, this agreement post-dates the submission of the tender by the Contractor.

I do not accept that the tender submitted by the Contractor can be said to have been given in confidence and on the understanding that it would be treated as confidential in the absence of any indication in this regard by the contractor, and given the wording of the Instruction for Tenderers. I find, therefore, that section 35(1)(a) does not apply to the records at issue. A record is exempt under section 35(1)(b) where disclosure of the information would constitute a breach of a duty of confidence provided by agreement, enactment or otherwise by law. I am not aware of any agreement between the parties at the time of the submission of the tender, which provides for such a duty of confidence. As such, I am not satisfied that the partial release of the records at issue would constitute a breach of a duty of confidence provided by agreement or enactment or otherwise by law. I find that section 35(1)(b) does not apply in this case.

Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby vary the decision of the Council in this case. I direct the release of the successful option selected by the Council contained in Appendix 1 and Appendix 2 of the tender. I affirm its decision in relation to the remainder of the information.

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 by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

Deirdre McGoldrick

Senior Investigator



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