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Conflict of Interest

  • Category
    Ethics
  • Published
    14th Jun, 2021

The Board of Control for Cricket in India’s (BCCI) ethics officer has adjudged Tamil Nadu Cricket Association president to be in conflict of interest. This is the first time the ethics officer has found a state association president to be in a position of conflict.

Context

The Board of Control for Cricket in India’s (BCCI) ethics officer has adjudged Tamil Nadu Cricket Association president to be in conflict of interest. This is the first time the ethics officer has found a state association president to be in a position of conflict.

Background

  • Rupa, who is the daughter of former BCCI president, became the TNCA president in 2019.
  • Following a plea, the ethics officer held that Rupa was perceived to be in conflict for holding two posts – TNCA president and one of the directors of India Cements Limited, which in turn runs Chennai Super Kings Cricket Limited.
  • The Ethics officer held “Undoubtedly, Rupa has at least indirect (if not direct) interest in CSKCL which has entered into an agreement/contract with the BCCI, thus attracting one of the forms of conflict of interest.”

Analysis

What is Conflict of Interest (CoI)?

  • Conflict of interest may arise in situations where a legislator benefits directly or indirectly in a private capacity from the conduct of his public duties. Interest could be of two broad categories; pecuniary or non-pecuniary interest.
    • Pecuniary interests involve an actual or potential financial gain or loss.
    • Non-pecuniary interest does not have a financial component.
  • They may arise from personal or family relationships, or involvement in sporting, social or cultural activities.

Different types of CoI

The following types of typical conflicts of interest listed in seven categories by Canadian political scientists Ken Kernaghan and John Langford:

  1. Self-dealing: For example, you work for government and use your official position to secure a contract for a private consulting company you own. Another instance is using your government position to get a summer job for your daughter.
  2. Accepting benefits: Bribery is one example; substantial [non token] gifts are another. For example, you are the purchasing agent for your department and you accept a case of liquor from a major supplier.
  3. Influence peddling: Here, the professional solicits benefits in exchange for using her influence to unfairly advance the interests of a particular party.
  4. Using your employer’s property for private advantage: This could be as blatant as stealing office supplies for home use. Or it might be a bit more subtle, say, using software which is licensed to your employer for private consulting work of your own. In the first case, the employer’s permission eliminates the conflict; while in the second, it doesn’t.
  5. Using confidential information: While working for a private client, you learn that the client is planning to buy land in your region. You quickly rush out and buy the land in your wife’s name.
  6. Outside employment or moonlighting:An example would be setting up a business on the side that is in direct competition with your employer. Another case would be taking on so many outside clients that you don’t have the time and energy to devote to your regular employer.
  7. Post-employment: Here a dicey situation can be one in which a person who resigns from public or private employment and goes into business in the same area. For example, a former public servant sets up a practice lobbying the former department in which she was employed.

Mechanism to check CoI

In order to minimise possible misuse of public office, various broad levels of regulations are used.

  • Declaration: Office bearers may be required to disclose interests where they hold pecuniary interests (income from employment, shareholding, and directorship) and non-pecuniary interests (membership of an interest group).
  • Recusal: In some cases, the office bearers may be asked not to participate in the discussion or vote on a topic where there may be a conflict of interest.
  • Incompatibility: Office bearers may be prohibited from holding office of profit or some types of private jobs. There may also be some restriction related to post-tenure employment.
  • Regulation of Gifts and Travel: There may be restrictions on the value and source of gifts that an office bearer may receive.

Comparison of CoI policies in other countries related to legislators/ministers

  • USA
    • Code of Conduct gives detailed guidelines such as prohibition of gifts, conflict of interest, and intermingling of a member’s personal and campaign funds.
    • Members cannot occupy certain posts simultaneously. They are required to file annual disclosure statements and are banned from lobbying for a year after their tenure is over
  • UK
    • Members must declare all relevant past and potential interest before debating an issue in Parliament or a committee.
    • Members are required to register their pecuniary interest. They cannot be employed in certain posts during tenure (such as armed forces, police, and clergy).
  • Australia
    • The federal Parliament has a Ministerial Code (some states have Codes of Conduct for MPs). There are provision for registers of pecuniary interest, lobbyist registers and codes governing the post separation employment of Ministers
  • Canada
    • Ministers must follow the Conflict of Interest and Post-Employment Code that outlines ethical standards and private and public interests. It prohibits use of information obtained officially for personal gain.
    • All Members are barred from voting on matters in which they have pecuniary interest.
    • There is a lobbyist registration system. Ministers cannot engage in an outside profession or actively in business.

Conclusion

It is important therefore, to manage these conflicts of interest in the public space through institutional mechanisms, a system of penalties in case of violations and a strict disclosure system. Most importantly, however, this problem can only be combated through the participation of office bearers in maintaining the spirit and letter of the Code of Conduct in their organisation.

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