Ridout: Interpreting the Conflicts of Interest Rule to Avoid Absurdity
There has been some discussion on whether Minister Shanmugam was in conflict, in renting a House from SLA which is a statutory board under MinLaw. There was also a full discussion in Parliament on the topic.
Ultimately, this boils down to a basic point.
What follows, immediately below, is the tl;dr (“too long, didn’t read!”) version. For those who are interested in the more detailed legal points, specifically as they relate to Clause 3 of the Code, I have also set some further points out, below.
[TL;DR]
Actual, apparent, or conceivable conflict: What do they mean?
At the heart of it, you are essentially talking about someone being pulled in opposing directions, because his personal interest and public duty may diverge in a given situation.
Whether such conflict arises, depends on the facts — namely, whether one has a public duty and a personal interest that are at odds in a specific situation.
In the case of 26 Ridout, Minister Shanmugam had a personal interest in the tenancy. So he declared his interest and recused himself completely from having any role to play as Minister.
He was not in any position to make (or influence) any decision which SLA made, regarding the tenancy.
Once he removed himself from the process, he then had no duty to discharge, in relation to the matter. Thus, there was and could be no conflict, of any kind.
That is the straight answer, in this case: Declaration & recusal. No duty, so no conflict.
However, some have put out an alternative interpretation.
They say: if others might possibly perceive you to be in conflict, then you are in conflict, however unreasonable the perception is, or even if the perception is based on a fundamental misapprehension of the facts.
Does not matter that you have recused yourself, and that there was no duty; as long as someone can conceivably believe that you are in conflict because of a perceived (albeit erroneous) belief that a duty existed, you are in breach.
This reasoning is absurd.
First, that is not what the Code says. (See more below.)
Second, if we accept this wrong view, we will be creating a new principle, with quite unreasonable outcomes. Let me provide a few examples.
The Minister for Transport will not be able to bid for a COE for his car since LTA, which is in charge of conducting the bidding process, comes under him.
The son of the Minister for National Development cannot apply for public housing because HDB, which comes under the Minister, sets the price for flats, and conducts the allocation exercises.
And so on.
The Code doesn’t suggest this and to imply in such a condition is, in my view, wrong.
[ Detailed legal points ]
Actual conflict: This is addressed in both Clauses 3.1 & 3.2 of the Code. It arises when you have a private interest, and a concurrent public duty, and you discharge that public duty in a way that runs up against that private interest. The two are in direct conflict.
Where an actual conflict arises, the Minister must dispose of the financial interest that gives rise to the conflict.
Minister Shanmugam had a personal interest in the rental but, as I said, he declared his interest and recused himself from his public duty — he made no decision for MinLaw or SLA on the matter. So, there was no actual conflict. MPs on both sides of the House accepted this.
Apparent conflict: This is addressed in Clause 3.1 of the Code. It relates to perceptions that might arise, concerning how one has exercised a public function — in other words, a duty must exist, be performed, and the question is whether how the duty has been performed can be perceived as conflicting with the Minister’s private financial interest, even if there is no actual conflict. It would be imprudent to allow an impression of conflict to arise from a Minister’s actions in his official capacity. If a Minister’s discharge of a public duty would give rise to such a perception, then the financial interest giving rise to the perception must also be disposed of under Clause 3.7 .
But one does not even get there, if there was recusal, and no public function was exercised to begin with. An apparent conflict can thus only arise if there is both (1) a private financial interest in a matter; and (2) the person performs a duty, which might be perceived as placing him in a position of conflict.
Minister Shanmugam, however, took steps to avoid being in a position where he could perform any public duty in relation to the rental — he removed himself from the chain of command. A separate decision-making channel was set up reporting to other Ministers.
There could be no apparent conflict arising from any exercise of a public function — because, quite simply, there was no exercise of any public function, which could have conveyed the impression that a conflict had arisen; he did not act in a public capacity or acquire any privileged information in his public capacity.
Conceivable conflict: This is addressed in Clause 3.2 of the Code. A conflict can be “conceivable” where it is either actual or apparent (see above), or in certain cases potential. The latter arises where one has both a private financial interest and a public duty, and he may potentially make a decision pursuant to that public duty, which touches on that interest. Here, given the state of affairs, it was not conceivable that such a conflict would arise, because Minister Shanmugam, having made a declaration and recused himself, was not going to exercise any public duty, in respect of the lease.
Several who have written on the subject, made the fundamental error, of conflating these terms and creating confusion. They say not only that the Code prohibits apparent conflicts and conceivable conflicts, but any conflicts which may conceivably be perceived. This constitutes a tortured interpretation of the text. It also does not make sense. In essence, this means: if others might possibly perceive you to be in conflict, then you are in conflict, however unreasonable the perception is, or even if the perception is based on a misapprehension of the facts. Such a view is, absurd.
[ Clause 3 of the Code ]
Clause 3.1 : A Minister must scrupulously avoid any actual or apparent conflict of interest between his office and his private financial interests. Such a conflict, or a perception of conflict, can arise –
(a) from the exercise of powers or influence in a way that benefits or may be seen to benefit private interests held; or
(b) from using special knowledge acquired in the course of his activities as Minister to bring benefit or avoid loss (or could arouse reasonable suspicion of this) in relation to his private financial interests.
Clause 3.2 : A Minister therefore must never enter into any transactions whereby his private financial interest might, even conceivably, come into conflict with his public duty.
…
Clause 3.7 : In circumstances where private interests and public duty conflict, the Minister must dispose of the financial interest giving rise to the conflict. Where there is a doubt, he should relinquish or dispose of the financial interest giving rise to the actual or perceived conflict.
