Managing a conflict of interest

Last updated: 14 August 2023
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Purpose of this Guidance

To illustrate:

  • how conflicts of interest relating to Sustainability Victoria (SV) grant programs can arise in practice; and
  • approaches to analysing the situation, assessing the risks and developing a plan to manage them.

What is conflict of interest?

A conflict of interest is where a person has private interests that could improperly influence, or be seen to influence, their decisions or actions in the performance of their public duties.

In the Victorian Public Sector (VPS) Code of Conduct and SV’s Conflict of Interest Policy, the term ‘conflict of interest’ includes actual, potential or perceived conflicts of interest.

  • An actual conflict of interest is a real conflict between a person’s public duties and private interests.
  • A potential conflict of interest occurs when a person has private interests that could conflict with public duties. This refers to circumstances where it is foreseeable that a conflict may arise in future and steps should be taken now to mitigate that future risk.
  • A perceived conflict of interest is when the public or a third party could form the view that a person’s.

private interests could improperly influence decisions or actions, now or in the future.

The term “conflict of interest” also includes conflicts between different work roles and competing work duties, sometimes called “conflict of duties”.

Why is conflict of interest management important in grants processes?

Conflicts of interest can lead to bias or lack of impartiality in decision making. They can also damage public and industry perception of SV and the broader public sector by giving the impression that SV has or may have acted improperly.

Competitive government processes such as procurements and grants have been identified by the Independent Broad-based Anti-Corruption Commission (IBAC) in its ‘red flag’ reports as possible vectors for corruption. This is one reason why grants programs such as “Sports Rorts” are often the focus of audits or integrity investigations.

Grants processes must be conducted with high standards of probity so that government, the community and industry have trust in the grants processes administered by SV. Doing this will also assist SV to:

  • Demonstrate that it is achieving the best possible value for money outcomes through its grants funding.
  • Ensure that the conduct of the grants process does not attract criticism or controversy that tarnishes the reputation of SV and its programs.
  • Provide for a defensible audit trail.

Embedding conflict of interest management into SV grants processes will not only help to manage corruption and reputational risks, but it will also ensure that consequential risks, such as unmanaged, poorly managed or unidentified conflicts of interest, are not inadvertently overlooked or prematurely dismissed.

Key guidance

Conflict of interest should be avoided wherever possible or declared and managed appropriately. This is essential to integrity and community trust in the Victorian public sector.

A conflict of interest could arise when:

  • An SV staff member involved in the design, management or assessment of a grant program has a personal, professional or business interest or relationship that may conflict with the performance of their official duties or may be perceived to affect their independence.
  • External assessment panel members have conflicting employment responsibilities such as supporting grant applicants develop their business and obtain government funding.
  • Consulting organisations engaged to provide technical and specialist advice to assessment panels may have pre-existing relationships with SV applicants that could compromise their independence.

Recommended process for managing conflict of interest

  1. Identify – actively consider whether you have a conflict. Read guidance and SV policies, attend briefings, seek advice where appropriate.
  2. Declare – disclose actual, potential and perceived conflicts that you have identified using the appropriate form and updating the disclosure from time to time as required.
  3. Manage – using the management plan and confirm compliance as requested.
  4. Authorise – obtain sign off from relevant SV person to accept the conflict and associated management plan (subject to advice from Legal & Governance where required).

Conflict of interest scenarios

  • Scenario 1: An SV employee consults with an industry consultant about the design of a forthcoming grant program and the consultant submits a grant application.
  • Scenario 2: Failure to declare a conflict of interest.
  • Scenario 3: An SV employee involved in assessing grant applications receives a job offer from an applicant.
  • Scenario 4: A VPS colleague involved in an SV grant assessment has another role to support particular businesses to obtain government funding and one of those businesses is an applicant.
  • Scenario 5: An SV consultant providing technical assessment of grant applications wishes to provide other professional services to a grant applicant.
  • Scenario 6: A relative or a friend of an SV employee involved in the grant program works at or is on the board of an applicant.

Read the conflict of interest scenarios and recommended actions.

Where can I find more information?