Australia: Significant law reforms proposed for Queensland system of local government

WHO SHOULD READ THIS

• Local Government Councillors, Chief Executive Officers, Local Government Officers, Local Government professionals and developers.

THINGS YOU NEED TO KNOW

• Queensland Parliament has introduced new legislation which will provide a more transparent and independent system to deal with councillor complaints as well as reinforce integrity in decisions and minimise corruption in relation to political donations.
• If enacted, the Bills will introduce a very new governance framework for Queensland local governments and provide for increased powers for the Local Government Minister, automatic suspension for councillors charged with a 'disciplinary offence' as well as the creation of new institutions such as the independent assessor who will play an important role in assessment, investigation and enforcement.

The Queensland parliament has passed two new Bills with an objective to provide for a more transparent and independent system to deal with councillor complaints as well as reinforce integrity in decisions and minimise corruption risk in relation to political donations. Late amendments to one of the Bills will, once enacted, increase the powers of the Local Government Minister to suspend or dissolve councillors. In addition these late amendments also provide for automatic suspension of a councillor charged with a 'disqualifying offence', notification requirements and retrospectivity in operation.

The Local Government (Councillor Complaints) and Other Legislation Amendment Bill 2018 (Qld) (Councillor Complaints Bill) seeks to significantly tighten the regulatory controls associated with councillor behaviour and complaint procedures.

The Local Government Electoral (Implementing Stage 1 of Belcarra) and Other Legislation Amendment Bill 2018 (Belcarra Bill) seeks to tighten the regulatory controls in relation to political donations from property developers as well as strengthen the processes associated with the management of conflicts of interest and material personal interest as well as bringing about further integrity based reforms.

The Bills are expected to receive royal assent this week.

THE LOCAL GOVERNMENT ELECTORAL (IMPLEMENTING STAGE 1 OF BELCARRA) AND OTHER LEGISLATION AMENDMENT BILL 2018 (QLD)

The Belcarra Bill arose out of the Crime and Corruption Commission's Operation Belcarra – a blueprint for integrity and addressing corruption risk in Local Government Report tabled in Parliament in October 2017.

The Bill was approved by the Legislative Assembly on 17 May 2018 (with amendments) and focuses on three key areas of reform:

• prohibitions on political donations from a 'prohibited donor' which generally means a 'property developer' or an industry representative a majority of whose members are property developers
• changed procedures around the requirements for declaration by councillors of a material personal interest and conflict of interest, and
• the more recent amendments moved on the floor of the Legislative Assembly which:
• • confer additional powers on the Local Government Minister to suspend or dissolve Council's elected councillors, including by conferring an additional 'public interest' ground, and
  • provide for automatic suspension and additional disclosure obligations on a councillor who is charged with a 'disqualifying offence'.

The recent amendments

One of the more controversial features of the Belcarra Bill are the more recent reforms proposed by the Local Government Minister, the Honourable Stirling Hinchliffe MP on the floor of the Legislative Assembly.

Under the current Local Government Act 2009 (Qld) (LGA), powers exist for the Local Government Minister to remove a councillor in certain circumstances or dissolve the whole of the Council and appoint an interim administrator on any of the following grounds if the Minister reasonably believes that a local government:

• has seriously or continuously breached the local government principles, or
• is incapable of performing its responsibilities.

In addition, the LGA provides for circumstances where a councillor is disqualified and cannot be a councillor if convicted of certain offences which are defined.

By the more recent amendments to the Belcarra Bill, once enacted, the Minister will have an additional power to suspend or dismiss every councillor if he or she forms the reasonable belief that it is otherwise in the public interest to do so. If the Minister acts under this power (or in accordance with the existing powers if reasonably satisfied the relevant circumstances exist) then he or she may recommend (in addition to a dissolution recommendation) that the Governor in Council suspend every councillor for a period that is no longer than the stated period and appoint an interim administrator to act in place of the councillors until the stated period ends.

In addition, by these more recent amendments to the Belcarra Bill, a definition of a 'disqualifying offence' is provided. Adjustments are also made to the definition of 'integrity offence' and a new definition of 'serious integrity offence' is provided. Both of those definitions link to a schedule which lists a series of offences under the Criminal Code and other laws. These integrity related offences and the other listed offences, being a 'treason offence' and an 'electoral offence' are all 'disqualifying offences'.

Critically the more recent amendments to the Belcarra Bill provide for automatic suspension for a councillor if charged with a 'disqualifying offence' and this means that the councillor must no longer act as a councillor and must immediately give a notice to the Minister, Council's chief executive officer and, if the councillor is not the Mayor, the Mayor. An offence with a maximum penalty of 100 penalty units exists if notice is not given.

The notice must state the provision of the law against which the councillor is charged and the day the councillor was charged. The councillor is entitled to be paid remuneration as a councillor during the period of suspension but the remuneration does not include an amount payable to a councillor for performing a particular responsibility, including, for example, attending a Council meeting or committee meeting. Whether the suspension ends will depend on the outcome of the charge and whether or not the councillor is convicted of the 'disqualifying offence'. If the councillor is not convicted and the proceeding otherwise ends then the period of suspension ends and the councillor returns to office.

The amendments relating to the 'disqualifying offence' provisions are retrospective and will apply to councillors who have been charged with a 'disqualifying offence' but the outcome of the proceeding has not been determined prior to the commencement of these new laws. Accordingly, those affected councillors will be automatically suspended upon the commencement of the new laws and will have notification obligations to the persons noted above.

The amendments also deal with the situation of a councillor who was convicted of a 'disqualifying offence' before the commencement but that offence was not a 'disqualifying offence' prior to commencement. Automatic suspension and notification requirements also apply to that councillor.

Prohibitions on 'Property Developer' political donations

The Belcarra Bill also provides for reforms to the Local Government Electoral Act 2011 (Qld) to make it unlawful for a prohibited donor to make a political donation. A 'prohibited donor' means a property developer or an industry representative organisation, a majority of whose members are property developers but does not include an entity for whom the Electoral Commissioner has determined is not a prohibited donor. The term 'political donation' is broadly defined.

Substantial penalties exist for non-compliance, being a maximum penalty of 400 penalty units or two year's imprisonment or, if a person knowingly participates directly or indirectly, in a scheme to circumvent a prohibition about political donations the maximum penalty is 1,500 penalty units or ten year's imprisonment.

Changes to Material Personal Interest and Conflict of Interest Requirements and Responsibilities

The Belcarra Bill provides for reforms to the LGA and the City of Brisbane Act 2010 (Qld) (CBA) in relation to the requirements around material personal interest (MPI) and conflict of interest (COI). For MPI disclosures to a meeting where the matter is not an 'ordinary business matter' there are no substantial changes to the current provisions, however more particularisation on the nature of the disclosure to be made will exist. The disclosure must include the following matters about the interest:

• the name of the person or entity who stands to gain a benefit, or suffer a loss, depending on the outcome of the consideration of the matter at the meeting
• how the person or other entity stands to gain the benefit or suffer the loss, and
• if the person or other entity stands to gain the benefit or suffer the loss is not a councillor – the nature of the councillor's relationship to the person or entity.

In addition, where a majority of councillors have an MPI, Council must delegate deciding the matter unless deciding the matter cannot be delegated.

The more substantial changes arise in relation to issues pertaining to COI. More particularisation is required in relation to a COI disclosure in that the councillor must inform the meeting about the councillor's personal interest in the matter (real COI or perceived COI) including the following particulars about the interest:

• the nature of the interests
• if the councillor's personal interests arise because of the councillor's relationship with, or receipt of a gift from, another person:
• • the name of the other person
  • the nature of the relationship or value and date of receipt of the gift, and
  • the nature of the other person's interest in the matter.

For the first time in legislation, the failure to provide the relevant COI disclosure will constitute an offence with a maximum penalty of 100 penalty units or one year's imprisonment.

Another important requirement which bears similarities to a previous version of the CBA and LGA relates to a situation where a councillor informs the meeting of the councillor's personal interest in a matter and the councillor has not voluntarily left and stayed away from the place where the meeting is being held while the matter is discussed and voted on.

In those circumstances, under the Belcarra Bill the other councillors must decide whether the councillor has a real COI or perceived COI in the matter and if they so decide, direct the councillor to either leave the meeting or participate in the meeting in relation to the matter, including by voting on the matter.

It is an offence for a councillor to not comply with a direction for the councillor to leave and stay away from the meeting with a maximum penalty of 100 penalty units or one year's imprisonment.
If the majority of councillors at the meeting inform the meeting about the personal interests, Council must delegate deciding the matter unless deciding the matter cannot be delegated.

The Minister may give approval to a councillor participating in the meeting if the relevant majority of councillors present have disclosed an MPI or COI and deciding the matter cannot be delegated.

There is a duty on a councillor to report another councillor's MPI or COI and a failure to do so can result in the matter being misconduct upon which disciplinary action may be taken.

An offence is provided if a person takes retaliatory action against a councillor who reports another councillor's MPI or COI with a maximum penalty of 167 penalty units or two year's imprisonment.

Offences also exist restricting a councillor who has an MPI or COI from attempting to influence another councillor, local government employee or contractor to vote, decide or otherwise deal with the matter in a particular way with a maximum penalty of 200 penalty units or one year's imprisonment

The record keeping provisions relating to MPI and COI continue to exist.

LOCAL GOVERNMENT (COUNCILLOR COMPLAINTS) AND OTHER LEGISLATION AMENDMENT BILL 2018 (QLD)

The Councillor Complaints Bill was approved by the Legislative Assembly on 17 May 2018 and proposes to amend the Public Service Act 2008 (Qld) and the LGA. The Councillor Complaints Bill does not amend the CBA.

The objective of the Bill is to implement the government's response to the Independent Councillor Complaints Review Panel's Report, the Councillor Complaints Review: A fair, effective and efficient framework, to provide for a simpler, more streamlined system for making, investigating and determining complaints about councillor conduct in Queensland. Concerns included the role of local government chief executive officers in assessing complaints, the inability to seek a review of decisions and the need to better ensure natural justice for all parties.

The Councillor Complaints Bill is intended to provide for a simpler, more streamlined system for making, investigating and determining councillor complaints by:

• giving the Local Government Minister power to make a code of conduct that sets out the standards of behaviour for councillors
• allowing the Department of Local Government, Racing and Multicultural Affairs to make model meeting procedures that must either be adopted by the local government or the local government can prepare and adopt other procedures (not inconsistent with the model meeting procedures)
• providing definitions of key terms like 'inappropriate conduct' and 'misconduct'
• establishing an independent State assessor authority to investigate complaints rather than the local government's chief executive officer with that new authority to have clear investigative powers
• requiring local governments to adopt an investigation policy about how they deal with suspected inappropriate conduct of councillors, and
• introducing more clarity on the process for the independent State assessor to refer a complaint back to the Council (inappropriate conduct) or to the established Councillor Conduct Tribunal (misconduct).

The role of the new independent assessor who is responsible for investigating conduct related complaints and referring matters to the Conduct Tribunal for misconduct will be a new and important feature of the new reforms. In addition, the independent assessor has powers to appoint investigators who have the following functions:

• to investigate the conduct of councillors under the new Chapter 5A, Part 3 of the LGA as directed by the assessor
• to investigate whether specific offences have been committed against a 'conduct provision' of the LGA
• to enforce compliance with the conduct provisions, and
• to investigate whether an occasion has arisen for the exercise of powers in relation to a conduct provision.

The independent assessor is also an investigator. Investigators will have powers of entry, powers to require information and other enforcement related powers.

Responsibilities are conferred on 'local government officials' (defined as the mayor, a councillor or chief executive officer of the local government) who becomes aware of information indicating a councillor may have engaged in conduct that would be inappropriate conduct or misconduct to give notice to the independent assessor about the councillor's conduct. The duties for a 'public official' to refer suspected corrupt conduct to the Crime and Corruption Commission under the Crime and Corruption Act 2001 (Qld) remains as an independent obligation.

A 'behavioural standard' is a standard of behaviour for councillors set out in the code of conduct. A definition is also provided for 'unsuitable meeting conduct' which is conduct that happens during a local government meeting and contravenes a behavioural standard. The Chairperson of a local government meeting has powers to deal with unsuitable meeting conduct during the relevant meeting.

The Councillor Complaints Bill also consolidates the existing panel and tribunal into one entity called the Councillor Conduct Tribunal.

Councillor Complaints Bill – inappropriate conduct

The Councillor Complaints Bill provides that conduct of a councillor is inappropriate conduct if the conduct contravenes:

• a behavioural standard
• a policy, procedure or resolution of the local government
• an order of the chairperson of a local government meeting for the councillor to leave and stay away from the place at which the meeting is being held, or
• unsuitable meeting conduct on three occasions within a period of one year.

If the independent assessor determines that the complaint relates to 'inappropriate conduct' it is referred back to the Council for investigation.

If, after investigating a councillor's conduct, the local government decides the councillor has engaged in inappropriate conduct, the local government may decide to take no action, or make one or more of the following orders requiring:

• public admission of inappropriate conduct by the councillor
• reprimand of the councillor for the conduct
• attendance at training or counselling to address the councillor's conduct, including at the councillor's expense;
• exclusion of the councillor from a stated local government meeting
• the removal or resignation of the councillor from a position representing the local government, other than office of councillor
• treating the same type of conduct if engaged in again as misconduct, and
• reimbursement by the councillor to the local government for all or some of the costs arising from the councillor's inappropriate conduct.

Councillor Complaints Bill – misconduct

The Bill provides that conduct of a councillor is misconduct if the conduct:

• involves or adversely affects, directly or indirectly, the honest and impartial performance of the councillor's functions or the exercise of the councillor's powers
• involves a breach of the trust in the councillor either knowingly or recklessly
• involves a misuse of information or material acquired in, or in connection with, the performance of the councillor's functions
• contravenes:
• • an order of the local government or Conduct Tribunal
  • the acceptable requests guidelines of the local government
  • a local government policy about reimbursement, or
  • specified offences under the LGA.
• is part of a course of conduct leading to the local government taking action to discipline the councillor for inappropriate conduct on three occasions within a period of one year, or
• has been stated in an order of the local government that if the councillor engages in the same type of conduct again, it will be dealt with as misconduct.

If the independent assessor is reasonably satisfied the councillor has engaged in misconduct, the assessor may apply to the Conduct Tribunal to decide whether the councillor has engaged is misconduct.

If, after investigating a councillor's conduct, the Conduct Tribunal decides the councillor has engaged in misconduct, the Conduct Tribunal may decide to take no action, or take disciplinary actions which are similar to the orders that a local government can make in relation to inappropriate conduct but can also include the following actions:

• recommendations to the Local Government Minister that the councillor be suspended from office for a stated period or from performing particular functions of the office, or
• recommendations to the Local Government Minister that the councillor be dismissed from office.

Transitional Provisions

The Councillor Complaints Bill also provides for transitional arrangements in relation to the existing councillor complaints depending upon whether the complaint had reached the stage of assessment.

CONCLUSION

The reforms proposed by the Belcarra Bill and the Councillor Complaints Bill are substantial. If enacted, the Bills will introduce a new governance framework for Queensland local governments. This includes increased powers for the Local Government Minister to dissolve or suspend councillors, automatic suspension for councillors charged with a 'disqualifying offence' as well as the creation of new institutions such as the independent assessor who will play an important role in assessment, investigation and enforcement.

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