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109 THE LAW COMMISSION was asked whether agencies should be able to charge for time spent and expenses incurred in deciding whether or not to release information under the Official Information Act. The issue is another aspect of the administrative burden which agencies may encounter in meeting their responsibilities under the Act. We also consider two further issues:
110 In considering these issues we emphasise the principle of availability and the purposes of the Official Information Act.80 They should not be nullified by an unreasonable charging regime.
111 Section 15(1) requires an agency to decide “in what manner and for what charge (if any)” a request is to be granted. Section 15(2) requires any charge to be reasonable; regard may be had to the cost of the labour and materials involved in making the information available and to any costs incurred in responding to an urgent request.
112 Section 15(3) provides that the agency may require the whole or part of a charge to be paid in advance; but the requester has the option, on being told of the charge, not to proceed with the matter. As well, the Ombudsmen can consider complaints about charges: s 28(1)(b).
113 Section 47(d) authorises the making of regulations prescribing reasonable charges or scales of reasonable charges. No such regulations have in fact ever been made, and at one time doubts were raised whether charges could be imposed, at least by some of the organisations subject to the Act. Accordingly in 1989 both the Official Information Act and the Local Government Official Information and Meetings Act 1987 were amended. Section 15(1A) of the 1982 Act now provides that Ministers, departments and organisations may charge for the supply of official information under the Act (with the exception of personal information provided to natural persons under s 24, now dealt with by s 35 of the Privacy Act 1993).
114 Section 15(1A) and (2) of the Official Information Act makes it clear that any charge under the Act is for making information available. Other costs associated with the collection, production and transformation of information from one form to another fall outside the Act’s charging provisions. It is therefore implicit in the Act that agencies must distinguish between collection, production, transformation and dissemination costs.
115 The dissemination of public information itself takes place in many ways, including by publication, in the course of consultation, and in making information available upon request. There are inherent costs, but also well recognised benefits, in such activity.
116 Two of the benefits – improved quality of policy and lawmaking by means of increased participation, and the meeting of accountability expectations (whether legal or otherwise) – mirror the purposes of the Official Information Act.
117 Whatever the form in which information is disseminated, the pricing practice should not act as a disincentive to the public in obtaining access to, and using, information with consequent public policy benefits. Accordingly, in the Act the emphasis is on a reasonable charge for access, subject to external review, taking into account the costs of actually making the information available. Costs not subject to recovery must be carried by the agency both in infrastructural terms and in its administrative and budgeting arrangements.81
118 The power to charge is also only one of a number of procedural devices which the Act provides. The Act’s procedures were designed to maximise disclosure, enable efficient handling and disposition of the request, and minimise the cost barrier for the requester. Thus, instead of, or in addition to, a charge:
119 Instead of regulations, the government has from time to time issued guidelines on charging for requests under the Act. The existing guidelines date from February 1992.82 The guidelines “represent what the government regards as reasonable charges . . . and should be followed in all cases unless good reason exists for not doing so”. Agencies, including departments, are free to adopt their own approach but, as the guidelines remind them, charges are subject to review by the Ombudsmen. Some agencies (including some local authorities under the Local Government Official Information and Meetings Act) apply the guidelines as a matter of administrative practice; the Ombudsmen have upheld charges fixed by reference to the guidelines.
120 The guidelines distinguish three situations in a way which appears to conform with the principle and purposes stated in ss 4 and 5. First, in “the circumstances” and as a matter of discretion, the regular charge may be waived or reduced (para 7 of the guidelines). Among the possible reasons are financial hardship to the applicant, facilitating relations with the public and helping the department in its work, and enhancing the public interest. Secondly, the guidelines state that the first hour of time spent on a request, and photocopying of less than 20 pages, ought not to be charged for (paras 3 and 4: see also para 5). Finally, actual costs may be charged for producing and supplying information of commercial value (para 6.1).
121 The guidelines are broadly consistent with two initiatives adopted by government in 1997, the Policy Framework for Government Held Information developed by the State Services Commission,83 and guidelines concerning government information supply activities developed by the Treasury. The policy framework addresses the pricing issue by noting the benefits of dissemination and two peculiar characteristics of information:
122 With the objective of encouraging efficient production and dissemination of information, whether by government or the private sector, and the efficient usage of government-held or produced information, the policy framework incorporates the following principles:
Free dissemination of government-held information is appropriate where:
Pricing to recover the cost of dissemination is appropriate where:
Pricing to recover the cost of transformation is appropriate where:
Pricing to recover the full costs of information production and dissemination is appropriate where:
123 The pricing principles link charges for information to particular types of costs incurred by agencies. It is therefore critical that costs associated with each stage of the information “life-cycle”, from creation or collection through transformation to dissemination, be transparent and calculated according to a consistent methodology. The principles also distinguish between information whose dissemination is desirable for a public policy purpose, and information created for a commercial purpose. Sometimes the nature of information sought under the Act or disseminated by an agency will be a hybrid of these two types, in which case fair apportionment will be required. Transparency of transformation and distribution costs is especially important in these circumstances.
124 The Treasury’s recent paper concerning government information supply activities noted that some departments were currently unable to break down costs into the categories of information production, transformation and dissemination. It therefore invited Ministers responsible for the purchase of government information outputs to:
125 These recommendations (and those in para 127) were accepted by the government in July 1997. The Treasury, in consultation with the State Services Commission, is now reviewing the implementation and impact of the pricing principles and the guidelines for government information supply (see para 127).
126 The Treasury paper’s broader concern was to ensure efficiency in the supply of government information products and services. It distinguished between core information outputs which must be supplied to achieve a desired policy outcome, and non-core outputs. It stated that there is currently little guidance to departments as to the scope of non-core information activities they should conduct. There are also inadequate mechanisms to ensure that the costs of core and non-core information outputs can be distinguished and separated to avoid the risk of cross-subsidisation.
127 The paper noted that budgetary pressures on departments and revenue generating targets set by government create incentives for departments to focus on non-core information outputs to sell to third parties, at the expense of core information outputs. Budgetary pressures and revenue targets may also encourage departments to engage in anti-competitive behaviour to discourage the provision of worthwhile information activities by private sector suppliers, who may be at least as efficient as government suppliers. The paper therefore recommended the adoption of guidelines concerning four matters:
The overall aim of the guidelines is to enhance the collection, compilation, transformation and dissemination of government information outputs.
128 In summary, the principles developed by the State Services Commission and the Treasury affect the production, collection, transformation and dissemination of government-held information, and the even more fundamental issue of what information the government should hold. They will therefore broadly define, on a continuing basis, the boundaries within which the official information regime operates.
129 The pricing principles are useful in considering the specific question which arises under the Law Commission’s terms of reference in relation to charging: whether agencies ought to be able to charge for time spent in deciding whether or not to grant a request.
130 The government’s charging guidelines specify that a charge is not to include “any allowance for . . . time spent deciding whether or not access should be allowed and in what form”. The charge can, however, include time spent “in reading or reviewing the information”, as well as establishing its location, actually locating and extracting it, and supervising access to it.86 The cut-off point, from which an agency can no longer charge, is when it starts to consider whether the withholding grounds apply to the information requested.
131 These passages in the guidelines reflect the opinion of the Ombudsmen that s 15(2) does not allow agencies to charge for time spent, or expenses incurred (including legal expenses), in deciding whether or not to release information.87 But whatever the legal position, should an agency be able to recover some or all of that expense?
132 This question is central to the cost of administering the Act, a cost which has grown steadily since the early 1980s as the Act has come to be used for specialised research purposes. It has been of concern to the prime ministers of successive governments.88
133 It has always been clear that agencies cannot charge for the work involved in deciding not to release information: that is the position in law and no-one appears to question it as a matter of policy.89 Similarly, the work involved in deciding not to release part of the information cannot and should not be charged for. The Commission’s view is that in principle the situation is no different if the decision is to release all the information requested. There should be no ability to charge for that phase of an agency’s work.
134 This approach is consistent both with the principle of availability and the pricing principles we set out in para 122. Particularly relevant is the principle that free dissemination of government-held information is appropriate where the dissemination to a target audience is desirable for a public policy purpose.
135 It is the function of the state to express its rules in a way that is “clear . . . [and] sufficiently stable to allow people to be guided by their knowledge of the content of the rules”.90 Each reasoned decision upon the principles whether to disclose ought to add to the government’s institutional capacity to deal more efficiently with future cases, as the body of relevant jurisprudence increases.91 That cost goes to the progressive improvement of the overall system of dealing with requests and is to that extent a public good; no equivalent benefit is received by the requester. On principle therefore the agency and not the requester should bear that cost.92
136 To the extent that the cost of the decision-making process is a problem for some agencies, the Commission thinks that the solution lies in the improved rules and procedures which are proposed for handling voluminous requests (see chapter 2). These measures will promote efficient administration of the Act and help keep under control the extent of the work (and any related expenses) in making decisions about the release of information and the form of release.
137 Accordingly, the Law Commission recommends no change to s 15 to allow agencies to charge for time spent in deciding whether or not to grant a request.
138 A second question about charging has been brought to our attention by the Ombudsmen and Ministers: how are charges to be fixed by organisations which are no longer funded or principally funded by the state, which must compete for funds with other public and private sector bodies, and which may generally be acting on a “user pays” basis?
139 An example gives this issue concrete content. Crown research institutes are principally funded by grants from the Foundation for Research, Science and Technology and by contracts for commercial activities. The institutes may compete with the private sector for those grants and contracts. If a scientist spends time answering an official information request and that time is costed at the guideline rate (which may be less than half the time-costing of the scientist involved), the official information work is being subsidised by the competitive work. Is that consistent with the emphasis on financial transparency in the Public Finance Act 1989, or with the equal position of the public body in relation to its competitors?93
140 Much of the work done by public sector agencies (including many departments) is of commercial value to others, whether competitors or not. The issue here is whether the results of developing information from one form (eg, raw statistical data) into a more valuable form, using taxpayer resources, should be available to the taxpayer without charge except in relation to the cost of dissemination.
141 The pricing principles in relation to government-held information draw the distinction in terms of whether the information is “created for the commercial purpose of sale at a profit” (para 122). Where it is, full cost-recovery can be justified, but only where the other pricing principles (including those which promote dissemination to a target audience in the public interest) are not prejudiced.
142 The answer to many questions about charging in this area will often depend on the facts. It is a matter of judgment first whether one of the withholding provisions applies, and if not, what charge is appropriate. How many requests do use up valuable time of qualified personnel? To what extent is the official information work being “subsidised” by other activities of the agency? The government’s charging guidelines will assist in setting an appropriate charge if information is to be released under the Act.
143 But the guidelines are not decisive. For instance, if a Crown research institute undertakes research on a commercial basis for a client, and charges that client for the creation of that information or the transformation of raw data into another form, a subsequent request for the created information could be charged for at a higher rate than the guidelines provide, because the Official Information Act should not be used as a means to avoid paying for government research.94 In some cases the ability to recover costs will arise through the commercial production and sale of the information (or the prospect of it) completely outside the ambit of the Act. In that event the request may be refused: s 18(d). Alternatively the request could be refused on one of the withholding grounds in s 9, in which case any charge could include the costs of creating or transforming that information in accordance with the State Services Commission’s pricing principles.
144 Assessing the scope of the issue is important. We consider that the broader issue of access to, and protection of, scientific research carried out by Crown bodies should not be addressed simply by way of the charging regime under the Act. The State Services Commission’s policy framework on government-held information is a useful starting point in considering the broader issue.
145 The Law Commission does not propose any change to the legislation to enable agencies undertaking commercial activities for profit to charge in any way different from other agencies. The test should remain one of reasonableness, as qualified by s 15(2). The government’s 1992 guidelines on charging should be revised, to conform with the more recent work of the State Services Commission.
146 Another issue which has come to our attention is what principles should govern the imposition of charges for requests by members of Parliament and parliamentary research units. Charges are ordinarily not imposed on MPs or staff of parliamentary research units.95 This practice has been observed by successive governments. We support the practice and consider it important that it remain unchanged.
147 The Act has been used extensively by parliamentary research units since the late 1980s. As noted in chapter 1 of this report, MMP has seen the number of research units grow. The government has reported a substantial increase in the volume and complexity of official information requests from those sources, and from MPs themselves, since the 1996 election. Such is the growth in requests that the Prime Minister has recently considered the use of charges to recover some of the costs of responding to them.96
148 There are important reasons for not charging MPs and parliamentary research units for requests, including the Opposition’s limited resources, and the constitutional importance of the Act (and the parliamentary question procedure) as means of keeping the executive accountable to the legislature. Scrutiny and control over the activities of the government have long been recognised as amongst Parliament’s most important functions. Indeed, s 4 of the Act expressly refers to “the principle of the Executive Government’s responsibility to Parliament”. Because of the whip system and other forms of party discipline, the scrutiny and control functions in practice fall largely on the Opposition; to exercise them effectively it must have access to information. Replies to Opposition requests for official information and parliamentary questions, published or broadcast in the media, in turn form an important source of information to the public about the activities of government.
149 This issue has come to prominence only recently; as it was not included in our draft report we have not had the benefit of a full range of opinion on this matter.97 We have already stated our support for the practice of not charging MPs and research units, and consider that some of the current pressures may be addressed in two ways. First, the resourcing arrangements for opposition members of Parliament, and for those co-ordinating the government’s response to these requests, must be adequate to allow each side to meet their responsibilities under the Act.98 This leads into the second point: as the Prime Minister points out it is the generalised requests which are the most problematic. Our recommendations in relation to large and broadly defined requests would give the government greater scope to refuse requests which involve a substantial diversion of resources. On the other hand, our reformulation of the obligation to help refine broad requests at the earlier stage is designed to reduce the instances in which this ground for withholding becomes relevant (see chapter 2).
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