The Official Information Act 1982 (“OIA”) governs access to information held by government agencies and certain public bodies (“agencies”). The purpose of the OIA is to promote transparency by making official information available to the public, enabling people to participate in government decision-making and hold public bodies accountable.
The OIA operates on the principle of availability, meaning official information must be made available unless there is a good reason to withhold it under the OIA.
While the OIA favours openness, it also recognises that some information requires protection. One such category is commercially sensitive information, where disclosure could prejudice legitimate commercial interests. In these situations, agencies must carefully consider whether the reasons for withholding the information outweigh any public interest in its release.
Commercial Grounds for Withholding Information Under the OIA
The OIA allows information to be withheld where disclosure would be likely to:
● Unreasonably prejudice a third party’s or agency’s commercial position;
● Prejudice a third party’s or an agency’s ability to carry out commercial activities; or
● Prejudice a third party’s or an agency’s ongoing or reasonably contemplated negotiations.
What Is Commercially Sensitive Information Under the OIA?
Examples of information that may be commercially sensitive include:
1 Detailed pricing schedules and pricing methodologies;
2 Business plans and marketing strategies;
3 Pending or future transactions; and
4 Information that could allow competitors to gain a competitive advantage.
Each request for information that might be commercially sensitive must be assessed on its own facts. General assertions of commercial sensitivity are unlikely to be sufficient if investigated by the Ombudsman. High-level information such as the identity of suppliers, the nature of services provided, and overall contract values is generally less likely to be commercially sensitive and will often need to be disclosed under the OIA.
What Does “Real and Substantial Prejudice” Actually Mean?
A common misconception is that information can be withheld simply because it is confidential or commercially sensitive. The agency must identify the specific commercial information needing protection, explain the likely harm that would result from disclosure, and demonstrate that the risk of prejudice is real and significant rather than speculative.
Commercial prejudice may arise where disclosure would:
● Enable competitors to undercut prices;
● Increase costs and reduce revenue or profits;
● Undermine negotiating leverage; or
● Damage reputation leading to a loss of business or trade by reduced customer, shareholder, or supplier confidence.
The crucial question is whether there is a clear link between the information requested and the harm that is said to result from disclosure.
Consulting Affected Parties Before Disclosing Information
When an OIA request involves information that may be commercially sensitive, agencies should consider consulting with affected parties before making a disclosure decision. Consultation allows suppliers, contractors, or other affected parties the chance to identify information they consider commercially sensitive, explain the commercial harm that could result from disclosure, and provide context to assist the agency’s assessment.
While third party views should be taken into account, the decision whether to withhold information ultimately rests with the agency, which must independently assess the withholding grounds and any public interest considerations. Consultation can help demonstrate that the agency has taken an informed and robust approach to its decision-making, particularly where current commercial arrangements or ongoing contracts are involved.
The Public Interest Test Under the OIA
Even where an agency has identified grounds to withhold information on the basis of commercial prejudice, it must still consider whether there is a public interest in disclosure. Relevant factors include promoting accountability for the expenditure of public funds or awarding contracts. If those considerations outweigh the reasons for withholding the information, the information may still need to be released.
Practical Steps for Responding to an OIA Request
When faced with an OIA request involving commercial information, agencies should:
1 Start from the assumption that information should be released;
2 Identify the specific information that may be commercially sensitive;
3 Focus on the particular information requested, rather than the document as a whole;
4 Consult affected third parties where appropriate;
5 Assess whether disclosure would cause real and substantial commercial prejudice;
6 Assess whether partial disclosure with redactions is possible;
7 Consider and document the public interest balancing exercise; and
8 Explain any refusal decision and advise the requester of their right to complain to the Ombudsman.
Concluding Comments
Navigating the OIA can be complex. Every request must be assessed on its own facts, and agencies need to carefully balance their obligations of transparency against legitimate grounds for withholding information.
If you have received an OIA request and are unsure how to respond or would like advice on drafting a response, the Commercial Team at Ford Sumner can assist.
For further information, please contact Sarah Churstain or Elizabeth Hughes, who regularly advise agencies on OIA matters.
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