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Private Bodies and Public Corporations

last modified Sep 13, 2013 10:15 PM

Overview

Most ATI laws provide for access to information held by public corporations and/or private entities that perform public functions or receive public funds. Precisely which entities are covered often is unclear, however, given the multiplicity of kinds of entities that fall within this category.

First, there are state owned enterprises (SOEs), also called government owned corporations, which are defined by wikipedia as "legal entities created by a government to undertake commercial or business activities on behalf of an owner government. ... The defining characteristics are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public policy objectives, SOEs should be differentiated from other forms of government corporation or entity established to pursue purely non-financial objectives ...." (See Wikipedia) Most SOEs are established by government, but some commenced as private entities that were then nationalized. SOEs can be fully or partially owned by the government. For instance, in Israel, Jamaica and Serbia, a "government owned company" is defined as any company in which the government holds more than 50% of the shares.

SOEs are generally fully guaranteed by the government; For example, in Finland, state-run corporations (liikelaitos), even though responsible for their own finances, cannot be declared bankrupt; the state is the ultimate guarantor of their liabilities. In contrast, the state may own an interest, even a controlling interest, in ordinary limited liability corporations (discussed below as private entities that receive government funding).

SOEs are covered by most ATI regimes in Europe, the Americas and Africa (including Angola, South Africa and Uganda), by several in Asia (notably India, Japan, Nepal, the Philippines, South Korea and Thailand), and by Israel, Jamaica and New Zealand. However, China's Disclosure of Government Information Regulations, which entered into force in May 2008, do not apply to SOEs, and Indonesia's Law on Public Information Transparency, passed in April 2008, applies to SOEs only to a limited extent, pursuant to a compromise reached after civil society strongly objected to the government's efforts to exclude SOEs entirely. See subsection on Indonesia. The contentiousness of the issue in Indonesia suggests that coverage of SOEs, as well as private bodies that exercise public functions or receive private funds, is likely to be a major area of controversy as new laws are adopted, especially in Asia.

Second, there are private entities that exercise administrative authority, perform public functions or receive substantial public funds. These three elements are closely related, and there are considerable variations and lack of precision concerning what is understood to constitute "administrative authority" and "public functions," as well as concerning the amount of funding that constitutes "substantial."

Administrative authority in many countries means the authority to regulate, for instance, by professional licensing and standard-setting bodies. Such bodies are the subject of administrative (or public) law. Regarding the definition of "public function," not only are there variations among countries, but within countries. "Public functions" may be limited to public safety and security (protection of life and property), or may encompass a broad range of services, e.g., including health care.  Trash collection is considered a public function in most jurisdictions, but not in all. Armenia's ATI law enumerates functions of "public importance" expansively to include "sport, education, culture, social security, transport, communication and communal services."

Most entities that perform public functions also exercise administrative authority. Notable exceptions include government-financed broadcasters (whether state-controlled or independent), which do not exercise administrative authority, but in many countries are considered to perform a public function. Virtually all entities that perform public functions or exercise administrative authority receive substantial public financing, but some - such as professional licensing boards in some countries - may be substantially funded by membership dues.  Moreover, an entity could receive substantial public funding and yet perform other than public or administrative functions.  For instance, private institutions that receive funding for scientific research generally are not considered to perform a "public function" although their work furthers the public interest.  In addition, different objectives justify the varying transparency requirements. Knowing how public funds are spent is just one objective; holding an entity accountable that has authority over people's lives is a separate one.

Information held by private bodies that exercise "administrative authority" or perform "public functions" appears to be covered by the ATI laws of most European countries (though not the United Kingdom), as well as at least 11 other countries: 2 in Africa (Angola, South Africa); 6 in the Americas and Caribbean (Antigua and Barbuda, Belize, Canada, the Dominican Republic, Ecuador, Peru, and Trinidad and Tobago), and 3 in Asia and the Pacific (Australia, New Zealand and South Korea). Moreover, the Constitution of Panama was amended in 2004 to provide, in Article 43, for the right to access information held by private companies involved in work of a public nature as well as by the state. The constitutions of at least three other countries - Poland, Serbia and South Africa - expressly extend the right to information to state owned enterprises and/or private entities that exercise public functions as well as to public authorities. Indeed, South Africa's Constitution guarantees a right of access to "any information that is held by another person and that is required for the exercise or protection of any rights."

In a few additional countries, e.g., Israel and Jamaica, application of the ATI law to private bodies requires an order of the Minister of Justice or other responsible Minister. The laws of several of these countries - e.g., Canada, the Czech Republic, Hungary, Iceland, India, the Netherlands, Peru and Slovakia - specify that only information related to the public functions is subject to disclosure. Hungary's law usefully extends coverage so as also to include "matters related to their [the entities'] financial management," an extension which is implicit in most of the other laws.

Laws that apply to entities that receive public funds regardless of the functions they perform. A smaller, but steadily growing number of countries extends coverage, in addition, to entities that receive public funds without reference to whether or not they perform public functions. Applying ATI laws to such entities makes good sense:  the approach (a) avoids the uncertainties that flow from a lack of agreement as to what constitutes "public functions;" (b) is rational, given that (i) the public should be entitled to obtain information from, and hold accountable, entities that receive substantial public funds, and, in any event (ii) most entities that receive public funds perform functions that benefit the public; and (c) is fair, applying a common test across the board. In contrast, laws that are applicable to an enumerated list of entities, including some private entities, comply with the interest in certainty, but lack fairness.

Among the countries whose laws apply to private entities that receive substantial public funds regardless of the functions they perform are India and at least four European countries - Denmark, Ireland, Montenegro and Serbia. However, it should be noted that the ATI laws of two of these countries - Denmark and Ireland - provide that coverage shall be extended to private entities only pursuant to a specific order issued by the relevant minister and, at least in Ireland, few such private entities have yet been so designated. In the United Kingdom, the FOI Act similarly contemplates extension of its application to private entities pursuant to order of the Secretary of State; the government started a consultation in 2008 to consider whether the Act's coverage should indeed be so extended.

What constitutes "substantial public funds"? An interesting question is the amount of public funds required to subject private entities to ATI requirements. The laws of Denmark, Ireland, Serbia, and India suggest that more than 50% public funding should suffice: Denmark's law requires that the entity be "mainly" funded by government funds; Ireland's law requires that the entity be financed "wholly or in part" from the public purse; Serbia requires that an entity be "wholly or predominantly" funded; and India offers the most thoughtful (and far-reaching) approach . The RTI law applies to bodies that receive "grants or loans" (emphasis added) from Central or State government (presumably not including local governments) totaling more than the equivalent of about US$60,000 or 75% of their total budgets.

To whom are information requests submitted? Most laws that apply to private bodies treat them as public authorities for purposes of the ATI law and accordingly hold them responsible not only to publish information proactively but also to respond to ATI requests. However, the ATI laws of several countries - including Ireland and New Zealand - deem information held by private contractors that perform work for a government agency to be held by the contracting agency, and thus hold the contracting agency responsible to respond to ATI requests.

Problems with ATI laws that apply to private entities based on the functions they perform or the way in which public funds are granted or functions are delegated. Some ATI laws that apply to private entities that perform public functions or operate with public funds do so only if the delegation of public authority or grant of funding was pursuant to a law. For instance, the Council of Europe Convention on Access to Official Documents gives states the option to declare their intent to extend the coverage of their ATI laws to "natural or legal persons insofar as they perform public functions or operate with public funds, according to national law," pursuant to Article 1(2)(a)(ii)(3). The treaty's language is disappointing in at least three respects. First, the phrase "as provided for by national law" is unnecessarily restrictive. Entities may "perform public functions or operate with public funds" pursuant to a law (national or state), regulation, contract or other agreement, yet only those that do so pursuant to "national law" are covered by this optional treaty provision. Second, the very fact that the provision is optional is disappointing, reflecting the drafters' decision to exclude from the treaty's mandatory provisions all but the minimum standards accepted by influential Council of Europe member states. Third, the term "public function" is unclear; different countries understand the term differently. The drafters of the European Convention on Access to Official Documents recognized this ambiguity in paragraph 13 of the Explanatory Report that elaborates the Convention, yet provided no guidance.

Recommendation: It is important that bodies that rely significantly on public Funds to perform public functions should be covered by ATI legislation in order to address the specific problem of state functions being devolved to private bodies, sometimes precisely to avoid transparency and accountability requirements. ATI laws should apply to "natural or legal persons insofar as they perform public functions, exercise administrative authority or are substantially financed by public funds".

Alternatives to applying ATI laws to private entities based on functions they perform. Because of the difficulty of defining "public function," courts have tended to apply other tests, such as assessing the amount and impact of public funding, or the degree of control exercised by the government. For instance, in South Africa between 1994 and January 2000, the right of access to information was guaranteed by the Interim Constitution, which provided access to "all information held by the state or any of its organs [...] in so far as that information is required for the exercise or protection of any of their rights." The courts determined that a body constituted an "organ of the state" if the state exercised control over the body in question; the control test was easier to apply than one based on evaluating whether the functions were primarily public. As a result, coverage was extended to entities controlled by the state even if their nature might be private (Directory Advertising Cost Cutters v. Minister for Posts, Telecommunications and Broadcasting and Others 1996 (3) SA 800 (T); Korf v. Health Professions Council of South Africa 2000 (1) SA 1171 (T); Ngubane v. Meisch No and Another 2001 (1) SA 425 (N))

Several courts and tribunals - including in India and South Africa - have held that privatized companies come within the scope of their country's ATI law, even though they might not be controlled by government, by virtue of the fact that (a) they were substantially financed by the government given that the government had turned over significant assets to the company; or (b) they performed what traditionally had been a government function.

Recommendation: Businesses often complain about the extension of transparency requirements to private entities. They make several claims, to which there generally are sound responses. To the extent that they raise legitimate concerns, some adjustments to ATI laws could be made. First, while businesses may not relish transparency, most legitimate businesses do not object to transparency per se; rather they seek a basic level of predictability, rationality and fairness. Concerning the level of public funding that should subject an entity to disclosure requirements, such terms as "mainly" or "predominantly" funded by government should suffice, to the extent that they are understood to mean more than 50 percent government ownership. In contrast, application of an ATI law, such as Armenia's, to "private organizations that have a monopoly or leading role in the goods market," runs into predictability and rationality problems. What constitutes a "leading role"? And, if the phrase is to apply at all, why only to the goods market? Why not also to services? Making an ATI law applicable to private entities that receive substantial public funding (more than 50% of their income, or over a certain absolute amount, or substantial public assets at less than fair market value),  responds to public and business interests in rationality, certainty and fairness.

Second, SOEs and other private entities often complain that transparency obligations impose unfair competitive disadvantages vis-à-vis non-obliged private competitors. One response is that government funding gives entities a substantial competitive advantage; this is all the more the case regarding SOEs, which generally are fully or largely indemnified by the government.  A second response is that studies have shown that in fact transparency requirements do not place SOEs at a comparative disadvantage, or at least not a significant one. A third response is that private entities should only need to disclose information about their public functions. This is an approach taken by several countries, including the Netherlands. The Netherlands, furthermore, has charted an unusual approach by requiring private entities that could be viewed as competitive with public entities to be subject to the same transparency obligations as the public entities. However, this approach raises a rationality question: why should information that was available to the public be removed from public reach simply by virtue of the privatization of what was once a public company? If the only reason for transparency were to be able to monitor the expenditure of public funds, such a step could make sense, but generally transparency requirements are justified by other reasons as well, such as the public's right to know about decisions that will affect their lives concerning basic services, such as electricity, natural gas or water.

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Public Media

A few ATI laws expressly exempt public media from their coverage. For instance, Canada's ATI Act (Section 68.1) provides that its provisions do not apply to the work of the Canadian Broadcasting Corporation. In contrast, the FOI laws of the United Kingdom and Ireland cover public broadcasters (including the BBC, Channel 4 and Gaelic Media Services) except for information that is held, in the United Kingdom, for the purposes of journalism, art or literature (Schedule I, Sect 6) and in Ireland, covering information only in respect of non-programmatic functions (management, administration, finance, commercial communications and the making of contracts). The UK's Information Tribunal, which decides appeals from the Information Commissioner's decisions, in 2007 ruled that the BBC had to disclose minutes of a meeting of the BBC Board of Governors regarding the BBC's coverage of a news story of high public interest and the termination of employment of its Director General. Slovene National TV is covered by the ATI Act because it is a public service contractor. The Information Commissioner has decided a few cases ordering SNTV to disclose information, including salaries of the management and top ten paid journalists.

From time to time, public broadcasters have argued that they should not be required to disclose information because compelled disclosure would violate their media freedom and independence. The following case from Korea provides sound reasoning for rejecting that broad claim under the given circumstances.

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Private Bodies Covered Indirectly

In most countries, requesters may obtain information from government agencies that the agencies have collected. In many of these countries - including India, the Netherlands and the United States - the authority for some such "indirect" public access is conferred by the RTI law itself, although other laws impose the obligation to report the information to government. India's RTI Act is exceptional in that, if a citizen requests information that a public authority may collect, but has not collected, the authority is obliged to collect the information and make it available to the requester.  Many European countries grant a right of indirect access to environmental information under the Aarhus Convention.

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Archive

You will find detailed country information that is not regularly updated in our Archive.

Relevant cases

 

Relevant Cases

Title:Country:Year:Court / Arbiter:
ADC v. PAMI Argentina 2012 Supreme The right of access to public information is provided for in the Constitution. The state has the duty to adopt legislative or regulatory measures to guarantee this right. There is a direct and immediate relationship between access to public information and the distribution of public advertising budgets.
Chavez v. National Housing Authority Philippines 2007 Supreme The 1987 Constitution provides that, despite a lack of enabling law that could require government bodies to publicly disclose information related to government projects and policies, there is a still a duty to permit access to such information.
Claase v. Information Officer of South African Airways South Africa 2006 Appellate A retired pilot was entitled, under the Promotion of Access to Information Act (PAIA), to a record held by a private airlines because he was able to establish that the record existed and that he needed it to protect a right.
Clutchco (Pty) Ltd v. Davis South Africa 2005 Supreme Constitution and ATI Act allow for access to information held by private parties when reasonably required; the petitioner shareholder’s need for corporate documents was insufficiently pressing in this case.
Dj. Zanni vs Zhilkomservis No.3 Housing Company Russia 2011 First instance Housing companies have to disclose budgetary and other information concerning their activities. Information can only be withheld if it falls under and an exemption stipulated by law.
Electronics and Computer Software Export Promotion Council v. Central Information Commission & Navneet Kaur India 2008 Appellate The Court ruled that a “trade facilitation organization” is a public authority that must abide by the RTI Act because it (a) receives financial support from the government, and (b) is subject to some administrative control, including that it is audited by a government department, reports to the central government through a department, and receives department assignments.
Elizabeth Flores Negri v. Rector of the National University of Asunción Paraguay 2007 First instance The Paraguayan Constitution provides that people have the right to petition governmental authorities for information as well as the right to be provided with that information, unless the authority timely responds with an exception specifically provided for by the American Converntion of Human Rights and related regional jurisprudence.
Gergely v. Ministry of Development and Economics ("the Gripen case") Hungary 2008 Appellate The Ministry of Defense, as an organ performing state functions, is obliged to disclose a list of deliverables, determined in the framework of an offset agreement between Hungary and Sweden. The fact that the overall offset procedure has not been finalized does not mean that all related documents were preparatory documents. RTI law overwrites private agreements on non-disclosure.
Han v. Korean Broadcasting System South Korea 2008 Appellate Korean Broadcasting System is a public institution and as such has to disclose a tape of a news documentary that has never been broadcasted. Disclosure does not violate media freedom under the Constitution and the Broadcasting Act because the request was not for broadcasting of the information and it cannot be regarded as a restriction to or interference with freedom of the press or freedom and independence of programming.
Institute for Democracy in South Africa v. African National Congress, et al. South Africa 2005 Appellate Access to information may only be pursued through the Promotion of Access to Information Act (not through Section 32 of the Constitution). Political parties are considered “private bodies” when access to information about private donations is sought.
M & G Media Ltd v. 2010 FIFA World Cup Organising Committee South Africa Ltd. South Africa 2010 Appellate A non-government entity is a public body, and must disclose records about tender proceedings if the nature of the power and functions performed — with respect to the particular records — are public. If the entity is a private body, it must still disclose the records to the press because access to information enables the press to exercise the right to media freedom.
Mittalsteel South Africa LTD (Formerly Iscor Ltd) v. Hlatshwayo South Africa 2006 Supreme The definition of “public bodies” subject to disclosure under PAIA includes state-owned companies that perform a government function and are under the control of the state, even if indirectly, and a formerly state-owned iron company must thus release records of meeting minutes.
Nairobi Law Monthly Company Limited v. Kenya Electricity Generating Company and Others Kenya 2013 First instance A legal person does not enjoy the rights of the “citizens” to access information held by the state or by another person (private body) under Article 35(1) of the Kenyan Constitution. In order to enforce the right to request information held by another person (private body), a citizen must show that (i) the information is held by a person (not the state) and (ii) the information is required for the exercise or protection of another right. However, a journalists and media outlets may not claim that such information is required for the protection of their rights under Article 33 (freedom of expression) and Article 34 (freedom of the press), because such interpretation would blur the distinction intended by the Constitution in making the two distinct provisions in Article 35(1) and would give the media a special status that elevates it above other entities.
Public & Private Development Centre v. Power Holding Company of Nigeria & the Honorable Attorney-General of the Federation Nigeria 2013 First instance Disclosure of information about an already-awarded contract —one that is no longer in the stages of negotiations — does not interfere with the rights of the third party contractor.
The Information Commissioner of Canada v. The Executive Director of the Canadian Transportation Accident Investigation and Safety Board and NAV CANADA Canada 2006 Appellate Air Traffic Control communications do not fall under the financial, commercial, scientific or technical information exemption because they do not constitute commercial or technical information. They are also not protected under the Privacy Act since communications themselves are not personal information.
Transnet Ltd. and Another v. SA Metal Machinery Co (PTY) Ltd. South Africa 2005 Supreme Parties relying on harm to third party interests to justify refusals must show that these harms are "not simply possible, but probable". A confidentiality clause cannot shield a contract of a state company with a third party from disclosure. Requesters need not show legitimate reasons for requesting information.