Demystifying myths against open contracting

March 19, 2020

Blog by Hope Muli, original publication on East Africa Hivos

Contestation against the adoption of the open contracting approach in government have revolved around national security concerns in the procurement of  military equipment citing ‘the contravention of confidentiality clauses and privacy rights’. In various jurisdictions these arguments for blanket non- disclosure have been discredited.

National security interests and the opening up of defense contracts continues to drive debates and innovations in many countries.  Legitimate national security interest refers to genuine purposes whose primary impact is to protect a country’s security as articulated with national and international law. This contravenes blanket national security claims that deter proactive disclosure of information contained in defense contracts. In Australia defense contracts are partially disclosed with their database showing only 2.7 per cent of their data-sets indicated as confidential. South Korea customizes its disclosure of defense contracts to its audiences and categorizes the disclosure defense budget items based on the level of secrecy.

Tshwane principles and contracting

The Global Principles on National Security and the Right to Information also called the Tshwane Principles state that, reasons for withholding of information sensitive to national security shall be time-bound and includes information about,

(i) On-going defense plans, capabilities and operations for the length of time that the information is of Use. Classified information should specify the date, conditions, or event on which the classification shall lapse.

(ii) Production, use of technical data, weapons systems inventions and other military capabilities, including communications systems.

Tshwane principles also state that illegitimate national security interest claims include arguments whose real purpose and impact is to protect government officials from exposure of wrongdoing, public embarrassment, human rights violations and non-compliance to laws.

In relation to commercial contracts, government officials have severally issued statements clarifying that they’d wish to disclose public contracting information to citizens, but, blanket clauses in the contract forbid them from doing so. This argument does not hold because contracts are not above national constitutions and laws such as Access to Information laws.

Disclosure or non-disclosure

Public interest overrides blanket non- disclosure with the exception of commercially sensitive information such as trade secrets and or proprietary material that may undermine a company’s competitiveness. Public interest tests conducted using public interest impact assessment tools are utilized to determine contentious disclosures in United Kingdom, Australia, Canada and Ireland.  n cases of commercially sensitive information, some countries have designed and adopted contracting templates that exclude provision of proprietary material, avoiding such related conflicts from the onset.

Many countries disclose technical and financial proposals as well as potential prices as soon as the contracts have been awarded. In addition, some of the information claimed to be confidential is already in the public domain published by the companies themselves. This includes names of company owners, directors, niches, aggregated pricing, rates, services offered, sourcing details, company geographic coverage, worth of partnerships entered into captured in annual reports, share prices and stakes held in other companies found in stock exchanges.

Right to privacy

The right to privacy is a fundamental human right that must be respected and protected. Full disclosure of personal data is an intrusion of an individual’s life and may expose individuals to harassment, identity theft, fraud, black mail, threats,   intimidation, violence and cyber-attacks. There should be clear guidelines, standards, tools and practice on the information that is to be shared, how it is archived and later disposed of.

On the other hand governments use public funds to deliver public goods, services and works. Citizens have a right to know: who, when, where and how their money is spent as well as public contracting is conducted.

The respect for privacy rights has to be balanced with the right of citizens to know. Disclosure that respects and protects privacy rights and also advances the right to know, has been addressed through anonymizing and aggregating disclosure of personal data in public contracts. Examples of anonymized disclosure include the partial disclosure of identity card numbers, personal income tax numbers, dates of birth amongst others.

Majority of the countries’ laws require the disclosure of physical addresses of the companies as well as the names and nationalities of company owners, directors and recently beneficial owners. Assessment of potential harm and its impact along with public interests tests are done and have from severally led to full disclosure. Lastly, it is illogical that some international companies exercise full disclosure of contracts they hold in some countries and refuse to do the same in other countries. Their argument for this behavior being that, the laws of the latter countries do not compel such compliance, otherwise they would do so.  This further gets more confounding when the governments of the latter countries claim that these companies insist on blanket non-disclosure and confidentiality clauses, thereby defeating the claims placed in the first place.

It is imperative that all citizens demand their public officials put public interest above the interests of companies’. In cases of lawful exemptions, public officials must demonstrate reasons for any non-disclosure for example through refusal notices that explain redaction based on the law. This notices must be bound to a timeline and stipulate the expected date of full disclosure. This removes the possibility perpetual non-disclosure of any public contract.

When governments assure citizens say that everything was done above board, it follows that citizens must be able to access all the relevant information and scrutinize it, then affirm, yes, everything was above board or not.