Conflicts of Interest

Introduction

The many nuances of discussions on ethics make the topic endless. All sides of any issue could be argued valiantly and find support from legitimate philosophical authorities. Utilitarianism — the philosophy stating that the best action in a situation is the one that brings most advantages to the most people (Cambridge Dictionary, 2021) — could be used to promote progress and decency, or decadence and destruction, depending strictly on how it is applied.

When dealing with matters of accountability, policy and laws have been of the conclusion that the interests of the collective outweigh the interests of the few. To illustrate this we look at the trends in public policy and law surrounding “conflict of interest”. This essay addresses common elements and key differences in definitions adopted by key authorities as well as the definition used by Mexican law.

What It Is

The first hurdle in developing any field of knowledge is defining its basic notions. In issues of public policy and accountability, one key concept is “conflict of interest”, and the task of defining it has been attempted academics, practitioners, and other recognized authorities in the field.

1. UNCAC

The United Nations Convention Against Corruption has addressed the issue, however it does not provide a singular definition of; rather it addresses the issue indirectly. Its Article 7 mandates that “[each] State Party shall […] endeavour to adopt, maintain and strengthen systems that promote transparency and prevent conflicts of interest” (United Nations, 2003, p. 11). In close connection, it highlights the importance of implementing these systems based on several values of integrity (United Nations, 2003), thereby setting forth the principles that underpin the notion of conflict of interest.

2. OECD 2003 Recommendation

The Recommendation of the Council on OECD Guidelines for Managing Conflict of Interest in the Public Service attempts to define it as “a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities” (Organisation for Economic Cooperation and Development, 2003, p. 6).

The OECD definition is useful mainly because its simplicity can be of great help in identifying specific conducts that can be deemed improper.

3. Other Authorities

Anti-Corruption academia, with its many constituents and varied levels of rigor, has also aimed to address the issue to fully understand it and effectively manage it. Transparency International has consistently defined conflict of interest as “[Any situation] where an individual or the entity for which they work […] is confronted with choosing between the duties and demands of their position and their own private interests” (Transparency International, 2021). Separately several EU regulations and codes have addressed the matter. The definition set by Guidelines for Conflict-Of-Interest Policies in EU Decentralised Agencies issued by the European Commission (p. 4); it identifies conflict of interest as “a situation where the impartiality and objectivity of a decision, opinion or recommendation of an Agency is or might be perceived as being compromised by a personal interest held or entrusted to a given individual”. Finally, the Recommendation on Codes of Conduct for Public Officials Rec(2000) 10 of the Committee of Ministers of the Council of Europe of 11 May 2000 (the “Council of Europe Recommendation”) reads:

“Conflict of interest arises from a situation in which the public official has a private interest which is such as to influence, or appear to influence, the impartial and objective performance of his or her official duties. […] The public official’s private interest includes any advantage to himself or herself, to his or her family, close relatives, friends and persons or organisations with whom he or she has or has had business or political relations. It includes also any liability, whether financial or civil, relating thereto” (Committee of Ministers of the Council of Europe, 2000, p. 5).

4. Mexican law

In addition to the above definitions, it is worth noting the country experience of Mexican law. As part of the 2015 anti-corruption reform, the Mexican congress enacted new provisions concerning accountability and integrated them into the General Law on Administrative Liability[1] — a statute regulating liability proceedings and accountability obligations of Mexican public officials, such as declarations of interests. Article 3 of said statute states that “[conflict] of Interest [is the] potential affectation of the impartial and objective performance of functions of public officials due to personal, family or business interests” (General Congress of the Mexican United States, 2016).

5. Ample definition

In the interest of clarity we explore the common elements of the above definitions to understand their scope and limitations, and focus on contrasting the definition used in Mexican law with these elements.

The elements deduced from these definitions are:

Opposition of Interests

A confrontation of benefits; not always a direct confrontation, and the benefits (or interests) involved are not always clearly identified.

Duty/Public Interest

Interest ascribed to the benefits of the collective, an organization, or the public in general. This interest is vested by appointment, ethics or sense of duty.

Private-Capacity Interests, All

Any interests that do not further public benefit or duty. They can include interests of the self, close relations, or organizations.

Interest of Self, Only

Interest that furthers the only benefit of the person in the position of trust.

Public Officials, Only

The contention that conflict of interest can only affect public officials, excluding people in other positions of trust.

Anyone in a Position of Trust

The contention that conflict of interest can affect any person in a position of trust.

Improper Influence

The effects of the opposition of interests; they can be actual, possible or apparent.

A holistic definition could be:

“Conflict of interest is the real, possible, or apparent opposition of (A) any private-capacity interests of an individual; and (B) the duty said individual has to the interests of the organization she serves”.

The Mexican Experience

Evidently the definition Mexican law uses lacks key elements. Yes, it acknowledges “private-capacity interests” yet it determines only public officials are affected by conflict, and only refers to possible conflict, obviating actual and apparent conflicts. However, articles 46 – 48 of the cited statute require that officials file a declaration of interest “to inform and establish the body of interests of a public official in order to ascertain when they conflict with her office duties” (General Congress of the Mexican United States, 2016) and that the National Anti-Corruption System issue the official forms. Said forms require that officials disclose information concerning broad information on interests of the official herself, spouses and dependents (Citizenship Participation Committe of the National Anti-Corruption System, 2018).

When examined closely it is clear that most deficiencies of the law are “cured” by the official formats. The notable exception is the omission of apparent conflicts; a relatively minor oversight. Regretfully, the National Anti-Corruption system has yet to be fully implemented and there is not sufficient data to explore what results it has yielded.

Conclusions

The most cursory research would reveal the evident; the issue of defining conflict of interest has been widely explored. Nevertheless, there is still great need to implement a unified definition. To control anything, aside from defining it, it never hurts to measure it, and if the international community aims to control conflict of interest, there needs to be some consensus in defining it. This cannot be an easy task and finding the proper medium may be even harder; the UNCAC would have been an ideal opportunity to establish a unified definition, as it is globally binding and largely unquestionable. There are, however, other fora, such as the UNGASS which, of late, has devoted great attention to matters concerning corruption.

Notwithstanding, the efforts made by international authorities and organizations, and national governments to manage conflict of interest despite not having a single unified definition are to be commended.

References (Harvard – Anglia)

Cambridge Dictionary, 2021. Utilitarianism, Cambridge: Cambridge University Press.

Citizenship Participation Committe of the National Anti-Corruption System (Comité de Participación Ciudadana del Sistema Nacional Anticorrupción), 2018. Forms for Declarations of Assets and Interests (Formatos de Declaración Patrimonial y de Intereses). Mexico: s.n.

Committee of Ministers of the Council of Europe, 2000. Recommendation on codes of conduct for public officials Rec(2000) 10. Strasbourg: s.n.

European Commission, 2013. Guidelines for Conflict-Of-Interest Policies in EU Decentralised Agencies. Brussels: s.n.

General Congress of the Mexican United States (Congreso General de los Estados Unidos Mexicanos), 2016. General Law on Administrative Liability (Ley General de Responsabilidades Administrativas). Mexico: s.n.

Organisation for Economic Cooperation and Development, 2003. Recommendation of the Council on OECD Guidelines for Managing Conflict of Interest in the Public Service. Paris: s.n.

Transparency International, 2021. Corruptionary, Conflict of Interest. Berlin: s.n.

United Nations, 2003. United Nations Convention Against Corruption. Merida: s.n.

Vos, E., Athanasiadou, N. & Dohmen, L., 2020. EU Agencies and Conflicts of Interests. Brussels: s.n.

[1] Ley General de Responsabilidades Administrativas.