Case Case 070273 - B and the Department of Agriculture, Fisheries and Food ("the Department")

Whether the decision of the Department to refuse to grant access to a request to which section 29 of the FOI Act applies, involving the release of the names of Irish companies which imported poultry meat from Brazil under EU regulations, is justified. The Department's decision was taken in accordance with section 27(3) of the FOI Act.

Case Summary

The Senior Investigator found that the third parties failed to meet their burden under section 34(12)(a) of the FOI Act of showing that the decision of the Department to grant access to the records at issue was not justified.  He affirmed the Department's decision and directed the release of the details at issue.  

Date of Decision: 21.10.2009

Review Application under the Freedom of Information Acts 1997 & 2003 (FOI Act) to the Information Commissioner

Background:

The Department's decision to refuse to release records arose from an FOI request made on 8 August 2007. The original requester sought "access to a summary of records concerning the company names and quantities allocated to each, for the two quarter periods in 2007 in respect of companies who have been granted a licence to import salted poultry meat under Community Regulation (EC) No. 616/2007".The regulations allow for the importation by EU companies of certain salted poultry meat and of certain chicken and turkey preparations into the EU from third countries, including Brazil, at preferential rates of duty. However, the request for records in this case related to licences to import poultry meat, salted or in brine, from Brazil only.

The Department formed the opinion that the records in question contain commercially sensitive information but that the public interest would be better served by release than non-release of the records. Therefore, the request was one to which section 29 of the FOI Act would apply and the Department undertook a process of formal consultation. Having completed this consultation process, the Department initially decided that the names of the companies should be withheld, but subsequently advised this Office that it had revised its decision and that now its position is that the names should in fact be released in the public interest. This review takes account of the Department's revised decision.

Section 29 of the FOI Act

Section 29 is relevant in cases where the public body has decided that the record(s) in question are actually protected by one of the relevant exemptions in the FOI Act (i.e. sections 26, 27, 28 - relating to information that is confidential, commercially sensitive or personal information about third parties, respectively) but that, based on the application of a public interest test, the record(s) should be released. Where section 29 applies, the public body is required to consult with the affected third parties before making a definite decision on whether or not the existing exemption, found to apply, should be set aside in the public interest. If the applicant or third parties, on receiving notice of the final decision of the public body, so wish, they may appeal that decision to this Office directly.

On 23 August 2007, the Department informed the third parties that it had formed the view (subject only to hearing the affected parties views) that, whereas section 27(1) would otherwise apply to exempt the records from release, the public interest would, on balance, be better served by granting than by refusing to grant the request. Subsequently, the Department received letters from some of the third parties objecting to the release of the records in question. It is noted that one third party informed the Department that it had no objection to the release of either its name or the quota which it was allocated under the scheme and therefore the information concerning this company was released by the Department to the applicant. Having considered the submissions from the other third parties, the Department, on 19 September 2007, advised the applicant that it had decided to withhold the records under section 27(1)(a) and (b) of the FOI Act on the basis that the information contained therein was commercially sensitive and that it was not in the public interest to release the records. The applicant then applied to this Office for a review of the Department's decision on 1 October 2007.

Conducted in accordance with section 34(2) of the FOI Act by Mr. Sean Garvey, Senior Investigator, Office of the Information Commissioner, authorised by the Information Commissioner ("the Commissioner") to conduct this review.

Scope of the Review

The original request sought details of both the company names and quantities allocated to each under the scheme for the two specified quarters in 2007. Mr. Ciarán O'Donohoe, Investigator with this Office, in his preliminary views letter of 22 September 2009, advised the applicant that in his opinion the names of the companies should be released but that the quantities awarded under licence should not. The applicant subsequently advised this Office that he accepted Mr. O Donohoe's preliminary view in relation to the non-release of quantities and that he was agreeable to confine the review to the issue of the release of the names of the companies.  Therefore, I will not give further consideration to the release of quantities issue other than in the context of considering whether the release of the companies names would also lead to the quantity allocated to them being revealed.

Submissions

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Findings

In conducting this review, I have had regard to the submissions of the Department as well as the applicant's submissions (including those made to the Department), the submissions of the third parties, the contents of the records, other relevant material and the provisions of the FOI Act. 

As the only issue in this case is whether the records should be released in the public interest, the arguments made are relevant to this review only where they can be construed as public interest arguments.

Section 27(1)

It is clear from its contacts with the applicant and the affected parties that the Department accepts that the records are commercially sensitive and the exemption at section 27(1) applies to them. Section 27(1) provides as follows:

" ... a head shall refuse to grant a request under section 7 if the record concerned contains....

(a) trade secrets of a person other than the requester concerned

(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation".

However, where it is found that section 27(1) applies, there is a further provision within section 27, at sub-section (3), which provides for the release of information which is commercially sensitive where such release is in the public interest.

Section 27(3) - The Public Interest

Section 27(3) of the FOI Act provides that the exemptions contained in section 27(1) do not apply to a case:

"in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request...."

I will now consider whether the names of the companies, as included on the licences, should be released in the public interest.   

As set out in section 34(12)(a) of the FOI Act, where a decision to grant a request to which section 29 applies is being reviewed by the Commissioner, there is a presumption that the granting of the requested access is justified unless the person (to whom the information relates) "shows to the satisfaction of the Commissioner that the decision was not justified". Thus, in this case, the onus is on the third party companies to satisfy the Commissioner that the decision to grant access to the names of the companies in the public interest is not justified.

In considering the public interest factors for and against the release of the companies' names on the relevant records, I have had regard to the public interest factors raised by all parties and I set out my consideration of these below.

Submissions from Third Parties

One of the points put forward against release of the names of the companies was that it would be difficult for importers to procure poultry products in Brazil and it would enable Brazilian exporters to manipulate produce price to the commercial detriment of successful companies. The point was also made that failure by a company to procure the amount of product for which they had received a quota would result in the forfeiture of some of the security put forward by the company in accordance with the terms of the scheme.

In order for a company based in the EU to be eligible to get a licence to import poultry meat at a preferential duty rate under the scheme they must either (a) provide documentary evidence that they have either imported from or exported to a third country a certain prescribed minimum quantity of poultry meat in both of the previous two 12 month periods prior to application, or (b) have processed a certain quantity of poultry meat in both of the previous two 12 month periods prior to application. The Department informed this Office that the regulations governing this scheme are already in the public domain as they are freely available on the internet. In his preliminary views letter of 22 September 2009, Mr. O'Donohoe took this to mean that Brazilian exporters would be aware, using publicly available information, that once they deal with a particular EU company for more that two years that the company becomes eligible for a licence under the scheme that entitles them to a certain level of imports at a preferential rate of duty, even if they do not know for certain the exact volume of such imports. I agree with Mr. O'Donohoe's comments on this point. I also agree with his comment that it is possible for a Brazilian exporter, even if it has no track record of dealing with a particular EU company, to assume that the company has a quota under the scheme. In view of this, I find that the companies have not demonstrated that the release of the names, which would confirm their status as the holders of licences and which would entitle them to import poultry meat a preferential rate of duty, would lead to price manipulation by the Brazilian exporter to the detriment of the companies or make it any more difficult to procure poultry meat products in Brazil.

One of the companies suggested that anti-competitive practices such as "predatory" takeovers could ensue if this information is disclosed as large traders may seek to buy out smaller ones to increase their licence application entitlements. Such buy-outs are a feature of the commercial world and while this is an opinion on what could potentially happen, I do not believe that a compelling case has been made to show that this outcome is more likely to happen as a result of release of the records in this case than would happen otherwise.

It was also suggested that the release of the names could be used to advantage by a trader in a similar business to the company, and that the release of the names of the companies could disrupt existing supplier/customer relationships, which have been built up over many years, between European importers and Brazilian exporters. While in both cases a harm has been identified, it has not been demonstrated how these harms would come about through release of the records. Therefore the provisions of section 34(12)(a) concerning satisfying the Commissioner as outlined above have not been met.

With regard to the release of the names of companies which would reveal that part of a companies product is sourced in Brazil, some of the third party companies involved have contended that disclosure of this information would allow local interest groups to negatively target those who were awarded licences to import from Brazil. It is contended that there is a reasonable fear that this could result in a loss of custom through their customers  not wanting to be associated with such negative publicity. In addition, it has been contended that this information could lead to inaccurate assumptions being made against certain importers which could adversely affect some of Ireland's best known and valued brands.

I have considered the issues raised by the third parties which I take to mean that consumers may avoid purchasing products from these companies or retailers may no longer be willing to keep stocks of the products of these companies because they source some of their poultry requirements in Brazil. In my opinion openness and accountability are important issues which could potentially concern consumer confidence in food quality and safety. In view of this, I believe that the consumer has a right to know the source of imported food products. Regarding possible negative consequences of the releasing of this information, the poultry meat to which this request refers is from EU approved Brazilian exporters and no case has been made to this Office that there is a food quality or safety issue concerning it. In view of this, I do not believe that the arguments about potential negative publicity and inaccurate assumptions should carry sufficient weight as to overcome the need for openness and transparency. Should any such negative publicity or inaccurate assumptions arise it is open to the individual companies, the EU and the Department to counteract any such comments.

The point was made by one of the companies that they felt, as it was an all EU scheme, that it would be fair and equitable and in the spirit of the scheme if any release was consistent across member states and not confined to a particular member state to its detriment. I note that there has been a whole move towards openness and transparency of payments made by the EU under various agricultural schemes. An example of this is that information on the amount of grants paid under EU schemes to individual farmers under the CAP scheme has recently been made publicly available. In previous decisions, the Commissioner decided that information on recipients and amounts of EU agricultural grants paid should be released. While I accept that there are differences between the current case and those cases, the Commissioner took decisions to release information concerning Irish recipients under the FOI Act at a time when information concerning grants to recipients in other EU countries was not disclosed. I am not aware of any negative impact arising from those decisions and no compelling case has been made to this Office as to how the fact that licence holders in other EU countries have not been named would of itself put Irish companies at a disadvantage over their EU counterparts. One of the key public interest considerations in conducting any review of this nature, is ensuring that there is sufficient openness and transparency with regard to the way in which the public body administers the scheme. Indeed, the FOI Act recognises, both in its long title and in its individual provisions that there is a significant public interest in government being open and accountable. Some of the companies made the point that the scheme itself is very open and transparent as the regulations governing it and the results on an aggregate basis are published by the European Union and therefore are already in the public domain and that the regulations are policed by Customs and Excise and the Department. The point has also been made that the origin of all imported product is policed and governed under the EU labelling regulations and the Food Safety Authority. In addition, one of the companies that they "acknowledge that there is a public interest element in knowing how a public body performs its regulatory functions and being able to form an opinion as to whether those functions are being discharged, surely this would be better satisfied by the Department releasing a document outlining its procedures for how the various checks are carried out on applicants. I don't see how merely releasing the names satisfies this factor". While in general, this Office would welcome any proposal to release additional information into the public domain our review is confined to the issues raised in the original FOI request (i.e. names of the companies and quantities for the two periods specifically referred to by the applicant). I would also say with regard to the points made that I do not accept that the existence of current safeguards in relation to the administering of a scheme such as this means that there is no public interest in creating further safeguards. The very existence of secrecy carries with it the scope for abuse.  

It was also contended that the release of the names would be anti-competitive and could also result in higher prices for the general public. While a harm has been identified, again it has not been demonstrated how this harm would come about through release of the records. Therefore the provisions of section 34(12)(a), as outlined above, concerning satisfying the Commissioner have not been met.

This scheme arose out of EU Regulations which include provisions relating to the importation of salted poultry meat from third countries, including Brazil and Thailand. In accordance with EU regulations, the EU allowed for a certain overall quota of poultry meat to be imported from third countries upon which a preferential rate of duty was to be paid by importers. In its role as administrator of the scheme in Ireland, the main functions of the Department are to vet the applications from companies for licences under the scheme and to issue such licences. The quantities awarded in the licences are dependent on the levels prescribed by the EU each quarter by way of regulation. The regulations also set out the minimum and maximum quantities for which each company can apply.

The fact that successful applicants for licences had a benefit conferred upon them by way of receiving a quota of certain salted poultry meat upon which they would pay a preferential rate of excise duty and the resulting foregoing of public monies, adds to the importance of ensuring that there is openness and transparency regarding the administration of the scheme by the public body. It could be argued that transparency in how a public body operates is a vital safeguard against administrative abuses and inefficiencies. The release of the names of the companies who benefitted from the quotas would add to the openness and transparency of the way in which the scheme was administered by the Department.

Would disclosure of names lead to disclosure of the quantities?

It has been implied by some of the third party companies in submissions to this Office, that to release the names of the companies, who were awarded licences under the scheme, would also effectively mean that their market share of the Brazilian market would be disclosed, in view of the level of information concerning quotas which is publicly available about the scheme.  However, I note that it is open to any company, once it satisfies the criteria, to apply for any amount of a quota under the scheme once the amount falls between the minimum and the maximum prescribed by regulation. Therefore, I agree with Mr. O'Donohoe in that I do not accept that disclosure that a company has benefitted from the scheme automatically leads to disclosure of the quantity which they were awarded under the scheme. Indeed, this is evidenced by the fact that successful companies applied for varying amounts between the minimum and maximum for the two quarters in 2007 originally sought by the applicant.

It is also noted that companies can also import poultry products from EU approved Brazilian exporters outside of this licensed scheme, once they pay the full rate of duty on it. This means that companies who are eligible under the scheme could import amounts of poultry over and above their quotas and companies who do not have quotas at all under the scheme can also import poultry from Brazil, albeit at full duty rates. It is also possible for additional companies, not previously in receipt of a quota under the scheme, to apply for quotas under the scheme. In view of this, a distinction can be drawn between the amount of poultry imported from Brazil under the scheme and the overall amount of poultry imported from Brazil. Therefore, I find that disclosure of the names would neither lead to disclosure of the amount each company had been allocated under the scheme nor their market share of the overall Brazilian poultry importation market. On this basis, I agree with Mr. O'Donohoe in that I do not accept the argument made that the release of the names inadvertently means that the market share of each company is released.

Summary

In summary, the public interest factors which I have taken into account favouring the release of the records include the following:

  • the public interest in members of the public knowing how a public body performs its functions, and being able to form an opinion as to whether those functions are being properly discharged
  • the public interest in the consumer being aware of the source of produce in the marketplace; and
  • the public interest in increasing the openness and transparency in the administration of  a scheme which confers a financial benefit on successful companies through granting them a licence to import a certain quantity of salted poultry meat from third countries at a preferential rate of duty.

The public interest factors favouring the withholding of the records include:

  • the public interest in the person or business concerned not being unduly impeded in the effective pursuit of its business
  • the public interest in ensuring that all EU member states were treated equally concerning disclosure and not confined to a particular member state to its detriment
  • the public interest in ensuring that the consumer is not misled or confused about the source of poultry meat as the fact that a company has a licence does not necessarily mean that the meat imported into the EU under that licence is destined for the Irish marketplace. This is because the meat could be cleared by the Irish company at EU ports and distributed across Europe without coming into Ireland at all
  • the public interest in the possibility of negative consumer reaction to confirmation that a quantity of poultry meat in the Irish market is sourced from Brazil
  • the public interest, as contended by one of the companies, in the possibility that disclosure would be anti-competitive and could also result in higher prices for the general public ; and
  • the public interest in protecting the companies who were awarded licences under the scheme against any possible commercial damage through any negative targeting by local interest groups of companies which import poultry products from Brazil.

Therefore, having considered the points submitted by the third parties, I find that the public interest would, on balance, be better served by disclosing the names of the companies who were awarded quotas in the relevant periods rather than by withholding them.

Decision

Having carried out a review under section 34(2) of the Freedom of Information Act 1997, as amended, I affirm the decision of the Department and direct the release of the names of the companies.

Appeal

A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision.  Such an appeal must be initiated not later than eight weeks from the date of this decision.

 

Seán Garvey

Senior Investigator

21 October 2009