Under sections 172 and 173 of the Local Government Act 2009, councillors are required to declare a conflict of interest and/or a material personal interest where one exists, or could reasonably be seen to exist.

There are increased penalties for failing to disclose possible conflicts of interest in both council and committee meetings. These penalties extend to fellow councillors who know that a conflict of interest exists and fail to advise council and the councillor concerned.

When declaring a conflict of interest or a material personal interest, the councillor also must declare the nature of their interest, for example:

‘I have a conflict of interest in the matter of this community grant application because I am President of the club concerned.’

If, at a council or committee meeting, a councillor is uncertain if their interest in a matter would be perceived as a conflict of interest, the councillor must make a declaration to that effect. Then, the issue would be discussed by those present at the meeting, and the councillor in question would abide by the majority decision.

Once a conflict of interest or material personal interest is declared, the councillor must leave the meeting, including the meeting area, area until the matter has been resolved by council.

The minutes then would record the names of councillors who declared conflicts of interest, the nature of those interests, council’s resolution, and the majority vote.
Councillors must take steps to avoid, resolve or disclose any conflicts of interest and protect the public interest. Councillors do this by making sure conflicts of interest are managed in an open and transparent manner.

Councillors must take steps to avoid, resolve or disclose any conflicts of interest and protect the public interest. Councillors do this by making sure conflicts of interest are managed in an open and transparent manner.

Legislation extracts

• Local Government Act 2009 – s172 Councillor’s material personal interest at a meeting
  
  

  172 Councillor’s material personal interest at a meeting (1) This section applies if— (a) a matter is to be discussed at a meeting of a local government, or any of its committees; and (b) the matter is not an ordinary business matter; and (c) a councillor has a material personal interest in the matter. Note— See the dictionary for the definition of an ordinary business matter. (2) A councillor has a material personal interest in the matter if any of the following persons stands to gain a benefit, or suffer a loss, (either directly or indirectly) depending on the outcome of the consideration of the matter at the meeting— (a) the councillor; (b) a spouse of the councillor; (c) a parent, child or sibling of the councillor; (d) a partner of the councillor; (e) an employer (other than a government entity) of the councillor; (f) an entity (other than a government entity) of which the councillor is a member; (g) another person prescribed under a regulation. (3) The councillor must— (a) inform the meeting of the councillor’s material personal interest in the matter; and (b) leave the meeting room (including any area set aside for the public), and stay out of the meeting room while the matter is being discussed and voted on. Maximum penalty— (a) if the councillor votes on the matter with an intention to gain a benefit, or avoid a loss, for the councillor or someone else—200 penalty units or 2 years imprisonment; or (b) otherwise—85 penalty units. (4) However, a councillor does not contravene subsection (3) by taking part in the meeting, or being in the chamber where the meeting is being conducted, if— (a) the councillor is a person to whom approval is given under subsection (5); and (b) the councillor is complying with all conditions on which the approval is given. (5) The Minister may, by signed notice, approve a councillor taking part in the meeting, or being in the chamber where the meeting is being conducted, if— (a) because of the number of councillors subject to the obligation under this section, conduct of the meeting would be obstructed if the approval were not given; or (b) it appears to the Minister to be in the interests of the local government area that the approval be given. (6) The Minister may give the approval subject to conditions stated in the notice. (7) The following information must be recorded in the minutes of the meeting, and on the local government’s website— (a) the name of the councillor who has the material personal interest, or possible material personal interest, in a matter; (b) the nature of the material personal interest, or possible material personal interest, as described by the councillor; (c) whether the councillor took part in the meeting, or was in the chamber during the meeting, under an approval under subsection (5).

• Local Government Act 2009 – s173 Councillor’s conflict of interest at a meeting
  
  

  173 Councillor’s conflict of interest at a meeting (1) This section applies if— (a) a matter is to be discussed at a meeting of a local government, or any of its committees; and (b) a councillor has a conflict of interest, or could reasonably be taken to have a conflict of interest, in the matter. (2) The councillor must inform the meeting about the councillor’s interest in the matter. Maximum penalty—100 penalty units. (3) A conflict of interest is a conflict between— a councillor’s personal interests (including personal interests arising from the councillor’s relationships or club memberships, for example); and the public interest; that might lead to a decision that is contrary to the public interest. (4) If the other persons who are entitled to vote at the meeting are informed about a councillor’s interest in a matter, by the councillor or someone else, the other persons must— (a) decide whether the councillor has a conflict of interest, or could reasonably be taken to have a conflict of interest, in the matter; and (b) if the other persons decide that is the case—direct the councillor to leave the meeting room (including any area set aside for the public), and stay out of the meeting room while the matter is being discussed and voted on. (5) The councillor must comply with the decision, unless the councillor has a reasonable excuse. Maximum penalty—100 penalty units. (6) Subsections (4) and (5) do not apply if a majority of the councillors at a meeting inform the meeting under subsection (2). (7) The following must be recorded in the minutes of the meeting, and on the local government’s website— (a) the name of the councillor who has a conflict of interest, or could reasonably be taken to have a conflict of interest; (b) the nature of the interest, as described by the councillor; (c) if the councillor voted on the matter—how the councillor voted on the matter; (d) how the majority of persons who were entitled to vote at the meeting voted on the matter.

• Local Government Act 2009 – s174 Duty to report another councillor’s material personal interest, conflict of interest or misconduct
  
  

  174 Duty to report another councillor’s material personal interest, conflict of interest or misconduct (1) This section applies if a councillor knows, or suspects on reasonable grounds, that another councillor has— (a) a material personal interest, or conflict of interest, in a matter before the local government; or (b) engaged in misconduct. (2) The councillor must, as soon as is practicable, report to— (a) for a material personal interest or conflict of interest— (i) if the material personal interest or conflict of interest arises at a meeting of a local government, or any of its committees—the person who is presiding over the meeting; or (ii) otherwise—the chief executive officer; or (b) for misconduct—the chief executive officer. (3) A person commits an offence if the person— (a) prejudices, or threatens to prejudice, the safety or career of another person because that other person or someone else complied with subsection (2); or (b) intimidates or harasses, or threatens to intimidate or harass, another person because that other person or someone else complied with subsection (2); or (c) takes any action that is, or is likely to be, detrimental to another person because that other person or someone else complied with subsection (2). Maximum penalty—100 penalty units or 2 years imprisonment