The FOIA aims at creating greater accountability for public spending, increased transparency about the value for money provided by contracts for public service delivery and, ultimately, better illumination of the background to major policy decisions.
FOIA creates the legal right for anyone to access a huge array of information on the actions of public bodies ranging from central and local government through the health and education sectors, the police and armed forces right down to parish councils.
The private sector has so far been slow to realise the implications that FOIA will have for them. Experience in countries that already have freedom of information laws (e.g. Canada, Australia and New Zealand) suggests that the majority of FOIA requests arise from the private sector delivery of public sector services. This means that journalists, pressure groups and competitors will soon be asking the government for information originating from the private sector, which may include commercially sensitive or confidential tender documents, contracts and even invoices.
The private sector needs to be aware that from January public bodies must disclose everything sought by way of an FOIA enquiry unless there is a justifiable reason for withholding it. FOIA requires the government to make information available on request within 20 days, unless one of the 23 exemptions applies (and the public body concerned chooses to apply it). Information may be exempt where it could prejudice a company’s commercial interests or is confidential – subject to public interest considerations – which means that almost anything is disclosable.
Companies will need to carefully consider in advance how to manage the risk of information about their contracts being made public as a result of FOIA requests. This applies particularly to companies who are likely to attract the interest of investigative journalists. They will need to work with their government customers to manage the information-handling process in a way that both allows the public authority to meet its legal obligations, and permits the company to minimise the risk of confidential and commercially sensitive information reaching the public domain.
There is no requirement for the government to consult companies before disclosure, nor is there a mechanism for companies to prevent it. Companies are therefore left with limited and potentially costly options. If they are forewarned they can talk to the public authority and try to persuade them not to disclose information or apply for an injunction preventing disclosure. Alternatively they can sue for damages after disclosure. Consequently, in order to minimise the risk of such damaging disclosures, companies should ensure their contracts require public sector customers to consult or notify them before they disclose information in response to a FOIA request.
Only by identifying the risks early and working with their public sector customers are companies going to be able to manage what will sometimes be conflicting imperatives – their own business interests in maintaining confidentiality in key areas and their customers’ FOIA compliance obligations. Contracts under negotiation now and in the future should build this in; contracts already signed may well benefit from variation to reduce the potential risk of such damaging disclosures.