Protecting Third Party Information under FOI Legislation

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Examination of the protection available for vendor confidential information in public sector procurements in light of client concerns for public accountability and disclosure (including under FOI legislation).

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Protecting Third Party Information under FOI Legislation

  1. 1. <ul><li>PROTECTING THIRD PARTY INFORMATION </li></ul><ul><li>Richard Austin </li></ul><ul><li>November 26, 2009 </li></ul>
  2. 2. Protecting Third Party Information <ul><li>Introduction </li></ul><ul><li>Contractual Provisions </li></ul><ul><li>Freedom of Information Legislation </li></ul>
  3. 3. I. Introduction <ul><li>Vendor Confidential Information disclosed in: </li></ul><ul><li>RFI, RFQ and RFP responses </li></ul><ul><li>Responding to questions in the selection process </li></ul><ul><li>(Joint) Solution development </li></ul><ul><li>Contract and Statement of Work negotiations </li></ul><ul><li>Contract documents and performance reporting </li></ul><ul><li>Contract amendments and Change Orders </li></ul>
  4. 4. I. Introduction cont’d <ul><li>Vendors concerned to protect Confidential Information from: </li></ul><ul><li>Public Disclosure </li></ul><ul><li>Other customers including perhaps: </li></ul><ul><ul><li>other Governments </li></ul></ul><ul><ul><li>other departments of the same Government </li></ul></ul><ul><li>Competitors </li></ul><ul><li>Subcontractors and suppliers </li></ul><ul><li>Other third parties, e.g. Unions, media, etc. </li></ul>
  5. 5. I. Introduction cont’d <ul><li>One Perspective: </li></ul><ul><li>The overarching purpose of access to information legislation, then, is to facilitate democracy. It does so in two related ways. It helps to ensure first, that citizens have information required to participate meaningfully in the democratic process, and secondly, that politicians and bureaucrats remain accountable to the citizenry. </li></ul><ul><li>Parliament and the public cannot hope to call the government to account without an adequate knowledge of what is going on; nor can they hope to participate in the decision-making process and contribute their talents to the formation of policy and legislation if that process is hidden from view. Access laws operate on the premise that politically relevant information should be distributed as widely as possible . </li></ul><ul><li>Dagg v. Canada (Minister of Finance) (1997), 148 D.L.R. (4 th ) 385 </li></ul>
  6. 6. I. Introduction cont’d <ul><li>Another Perspective: </li></ul><ul><li>Confidential Information is our “P.I.”. It’s what differentiates us from our competitors and wannabe competitors. We don’t post it on Facebook or YouTube and we don’t want others to be able to so either. It’s as important to us to keep it confidential, away from our competitors and the public, as it is to the Government to protect the personal information of its citizens. </li></ul><ul><li>Anonymous Vendor Spokesperson </li></ul>
  7. 7. II. Contractual Provisions <ul><li>The contract deals with: </li></ul><ul><li>Definition of Vendor Confidential Information </li></ul><ul><li>Obligations of confidentiality </li></ul><ul><li>Exceptions to obligations of confidentiality </li></ul><ul><li>Ongoing issues </li></ul>
  8. 8. II. Vendor Confidential Information (defined) <ul><li>Type : </li></ul><ul><li>Technical, business, financial, personal, employee, operational, scientific, research or other information or data of the Vendor or its subcontractors </li></ul><ul><li>Other information regarding the Vendor or its subcontractors’ business, plans and markets </li></ul><ul><li>Form : </li></ul><ul><li>In whatsoever form or media, whether written, electronic, oral or visual </li></ul><ul><li>Designation as confidential : </li></ul><ul><li>At the time of disclosure or within thirty days thereafter, designated as confidential </li></ul><ul><li>By its sensitive nature should be treated as confidential </li></ul><ul><li>If it were information of the Government, would be treated as confidential by the Government </li></ul><ul><li>Vendor Confidential Information excludes Government Confidential Information </li></ul>
  9. 9. II. Obligations of Confidentiality <ul><li>Government may use or disclose Vendor Confidential Information only: </li></ul><ul><li>As required to perform its obligations/exercise its rights </li></ul><ul><li>To personnel of Government and subcontractors who have an actual need to know and have signed non-disclosure agreements </li></ul><ul><li>For the purposes of undertaking a procurement in connection with the selection of an alternate vendor provided: </li></ul><ul><ul><li>No pricing </li></ul></ul><ul><ul><li>Third party bidders execute an NDA with the Vendor </li></ul></ul><ul><ul><li>Only to extent required to complete the procurement </li></ul></ul><ul><li>As required by the provisions of applicable laws, e.g. under: </li></ul><ul><ul><li>Freedom of Information and Protection of Privacy Act </li></ul></ul><ul><ul><li>Ombudsman Act </li></ul></ul><ul><ul><li>Public Inquiries Act </li></ul></ul>
  10. 10. Exceptions to Confidentiality Obligations <ul><li>Obligations of Confidentiality do not apply to Vendor Confidential Information that: </li></ul><ul><li>Was, at the time of disclosure, in the public domain </li></ul><ul><li>After disclosure, is published or becomes part of the public domain through no fault of the Government or its subcontractors </li></ul><ul><li>Was in the Government’s possession at the time of disclosure and was not subject to a pre-existing confidentiality obligation </li></ul><ul><li>Was disclosed independently to the Government by a third party who was not subject to a confidentiality obligation in respect thereof </li></ul><ul><li>Independently developed without use of any of the Vendor Confidential Information </li></ul><ul><li>Is disclosed with the Vendor’s prior approval. </li></ul>
  11. 11. Ongoing Issues <ul><li>Symmetry of confidentiality obligations and liabilities </li></ul><ul><li>Limits of liability </li></ul><ul><li>Government’s right to disclose Vendor Confidential Information to prevent any actual or reasonably anticipated breach of : </li></ul><ul><ul><li>Applicable Laws </li></ul></ul><ul><ul><li>Privacy obligations </li></ul></ul><ul><ul><li>Agreement </li></ul></ul><ul><li>Government’s right to disclose Vendor Confidential Information as required to comply with Government Policies </li></ul><ul><li>Inclusion of Contract terms within definition of Vendor Confidential Information </li></ul>
  12. 12. III. Freedom of Information Legislation <ul><li>Freedom of Information and Protection of Privacy Act (Ontario) </li></ul><ul><li>1. The purposes of this Act are, </li></ul><ul><li>to provide a right of access to information under the control of institutions in accordance with the principles that, </li></ul><ul><li>(i) information should be available to the public, </li></ul><ul><li>(ii) necessary exemptions from the right of access should be limited and specific, and </li></ul><ul><li>(iii) decisions on the disclosure of government information should be reviewed independently of government; </li></ul>
  13. 13. III. FOI Legislation cont`d <ul><li>17(1) A head shall refuse to disclose a record that reveals a trade secret or scientific, technical, commercial, financial or labour relations information, supplied in confidence implicitly or explicitly, where the disclosure could reasonably be expected to, </li></ul><ul><li>prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization; </li></ul><ul><li>result in similar information no longer being supplied to the institution where it is in the public interest that similar information continue to be so supplied; </li></ul><ul><li>result in undue loss or gain to any person, group, committee or financial institution or agency; or </li></ul><ul><li>reveal information supplied to or the report of a conciliation officer, mediator, labour relations officer or other person appointed to resolve a labour relations dispute. </li></ul>
  14. 14. III. FOI Legislation cont`d <ul><li>The Act contains the following other exemptions from disclosure : </li></ul><ul><li>Section 12 Cabinet records </li></ul><ul><li>Section 13 Advice to Government </li></ul><ul><li>Section 14 Law Enforcement </li></ul><ul><li>Section 14.1 Civil Remedies Act, 2001 </li></ul><ul><li>Section 14.2 Prohibiting Profiting from Recounting Crimes Act, 2002 </li></ul><ul><li>Section 15 Relations with other governments </li></ul><ul><li>Section 16 Defence </li></ul><ul><li>Section 18 Economic and other interests of Ontario </li></ul><ul><li>Section 18.1 Information with respect to closed meetings </li></ul><ul><li>Section 19 Solicitor-client privilege </li></ul><ul><li>Section 20 Danger to safety or health </li></ul><ul><li>Section 21 Personal Privacy </li></ul><ul><li>Section 21.1 Species at Risk </li></ul><ul><li>Section 22 Information soon to be published </li></ul>
  15. 15. III. FOI Legislation cont`d <ul><li>Exemptions in Section 17 (and elsewhere) subject to: </li></ul><ul><li>11(1) Despite any other provision of this Act, a head shall, as soon as practicable, disclose any record to the public or persons affected if the head has reasonable and probable grounds to believe that it is in the public interest to do so and that the record reveals a grave environmental, health or safety hazard to the public. </li></ul><ul><li>23. An exemption from disclosure of a record under sections 13, 15, 17, 18, 20, 21 and 21.1 does not apply where a compelling public interest in the disclosure of the record clearly outweighs the purpose of the exemption . </li></ul>
  16. 16. III. FOI Legislation cont`d <ul><li>What Section 17 requires: </li></ul><ul><ul><li>For section 17(1) to apply, the institution and/or the third parties must satisfy each part of the following three-part test: </li></ul></ul><ul><ul><li>1. the record must reveal information that is a trade secret or scientific, technical, commercial, financial or labour relations information; and </li></ul></ul><ul><ul><li>2. the information must have been supplied to the institution in confidence, either implicitly or explicitly; and </li></ul></ul><ul><ul><li>3. the prospect of disclosure of the record must give rise to a reasonable expectation that one of the harms specified in paragraph (a), (b), (c) and/or (d) of section 17(1) will occur </li></ul></ul><ul><ul><ul><ul><li>Office of the Information and Privacy Commissioner, Order PO-2618 (2007), available at http://www.ipc.on.ca/images/Findings/up-po_2618.pdf </li></ul></ul></ul></ul>
  17. 17. III. FOI Legislation cont`d <ul><li>For information to have been “supplied”: </li></ul><ul><ul><li>Because the information in a contract is typically the product of a negotiation process between two parties, the content of contracts involving an institution and an affected party will not normally qualify as having been “supplied” for the purposes of section 17(1) of the Act. Records of this nature have been the subject of a number of past orders of this office. In general, the conclusions reached in these orders is that for such information to have been “supplied”, it must be the same as that originally provided by the affected party, not information that has resulted from negotiations between the institution and the affected party. </li></ul></ul><ul><ul><li>The fact, however, that a contract is preceded by little negotiation, or that the contract substantially reflects terms proposed by a third party, does not lead to a conclusion that the information in the contract was “supplied” within the meaning of section 17(1). The terms of a contract have been found not to meet the criterion of having been “supplied” by a third party, even where they were proposed by the third party and agreed to with little discussion (see Order P-1545). (emphasis added) </li></ul></ul><ul><ul><ul><ul><li>Office of the Information and Privacy Commissioner, Order PO-2018 (2002), available at http://www.ipc.on.ca/images/Findings/Attached_PDF/PO-2018.pdf </li></ul></ul></ul></ul>
  18. 18. III. FOI Legislation cont`d <ul><li>“ Reasonable expectation” of Section 17(1) harms: </li></ul><ul><ul><li>To meet this part of the test, the party resisting disclosure must provide “detailed and convincing” evidence to establish a “reasonable expectation of harm”. Evidence amounting to speculation of possible harm is not sufficient [Ontario (Workers’ Compensation Board) v. Ontario (Assistant Information and Privacy Commissioner) (1998), 41 O.R. (3d) 464 (C.A.)]. </li></ul></ul><ul><ul><li>The failure of a party resisting disclosure to provide detailed and convincing evidence will not necessarily defeat the claim for exemption where harm can be inferred from other circumstances. However, only in exceptional circumstances would such a determination be made on the basis of anything other than the records at issue and the evidence provided by a party in discharging its onus [Order PO-2020] . </li></ul></ul><ul><ul><ul><li>Office of the Information and Privacy Commissioner, Order PO-2618 (2007), available at http://www.ipc.on.ca/images/Findings/up-po_2618.pdf </li></ul></ul></ul>
  19. 19. III. FOI Legislation cont`d <ul><li>See also: </li></ul><ul><li>Office of the Information and Privacy Commissioner (Ontario), Order PO-2018 (2002); available at http://www.ipc.on.ca/images/Findings/Attached_PDF/PO-2018.pdf (no authority for conditional disclosure under the Act (other than s. 21(1)(e)) </li></ul><ul><li>Office of the Information and Privacy Commissioner (BC), Order F09-04; available at http://www.oipc.bc.ca/orders/2009/OrderF09-04.pdf (disclosure of BC outsourcing contract, no mandatory obligation to disclose) </li></ul><ul><li>Office of the Information and Privacy Commissioner (BC), Order F08-22; available at http://www.oipc.bc.ca/orders/OrderF08-22.pdf (public body was not authorized by section 17(1) to refuse to disclose pricing in a contract addendum and change order) </li></ul><ul><li>Freedom of Information Legislation of Manitoba, Saskatchewan, New Brunswick, Northwest Territories and Nunavut </li></ul>
  20. 20. III. FOI Legislation cont` <ul><li>Freedom of Information and Protection of Privacy Act (Sask.): </li></ul><ul><li>19(1) Subject to Part V and this section, a head shall refuse to give access to a record that contains: </li></ul><ul><li>(a) trade secrets of a third party; </li></ul><ul><li>(b) financial, commercial, scientific, technical or labour relations information that is supplied in confidence, implicitly or explicitly, to a government institution by a third party; </li></ul><ul><li>(c) information, the disclosure of which could reasonably be expected to: </li></ul><ul><li>(i) result in financial loss or gain to; </li></ul><ul><li>(ii) prejudice the competitive position of; or </li></ul><ul><li>(iii) interfere with the contractual or other negotiations of; </li></ul><ul><li>a third party; ... </li></ul>
  21. 21. <ul><li>Questions?? </li></ul>

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