Cyprus Mail
Property

Conflict of interest in local authorities

documents

The principles of transparency, good administration and natural justice, as documented in the relevant legislation, impose the obligation on every Councilor or Local Authority Executive to disclose immediately to the Council or Community the nature of every pecuniary or other interest that he/she may have at any case, matter or contract with the Local Authority and abstain from the discussion or the decision-making process. The duty to disclose any conflict of interest regards both direct and indirect interests which any councilor may have. The duty to disclose seems to include issues regarding employment, salary, term, terms of employment, promotion, behaviour, termination of employment, suspension of employment or retirement of persons who are in such a relationship with the councilor. Furthermore, the councilors or the employees of Local Authorities have to abstain from participation, either personally or through a company, in public tenders called by the Local Authority, or submit bids for the provision of services or the execution of works or the provision of goods in the Local Authority at which they serve.

Law L.7(I)/2008 regards conflicts of interest in the execution of councilors’ powers, imposes obligations and duties on them and provides for the imposition of penalties on all members of the Local Authorities’ Boards. Furthermore, the law designates specific actions, activities or capacities which councilors are prohibited from undertaking, such as the provision of legal, audit, accounting, consulting services, the participation in a company, partnership, joint venture or business to which a contract was awarded or will be awarded for the supply of goods or the execution of projects or the provision of any services, the submission of a bid or the undertaking of a contract.

Nevertheless, an exclusion is provided from the relevant prohibition in the event that the aforesaid activities, actions or capacities do not regard services, projects or goods being the subject matter of transactions with the legal entity of public law at which such executives/directors are appointed or serve. Simultaneously, the law establishes the obligation on every councilor to disclose in writing any conflict of interest that he/she may already have which does not allow him/her to accept his election, except if he signs a prior written undertaking to relinquish, alienate or terminate the said pecuniary transaction, relationship or capacity which causes the conflict of interest, within reasonable time. The aforesaid legislation also provides that all the actions, contracts, privileges, or other grants of rights which have been made for the benefit of the councilor under circumstances which constitute a conflict of interest on his behalf are void ab initio, irrespective of any other legal consequences that he/she may have. Furthermore, an investigation committee is established, either ex officio or upon a complaint or a written disclosure or admission from the councilor involved of the conflict of interest and the said committee compiles a report which is delivered to the Executive Organ of the Local Authority.

The bills drafted for the reform of local self-government may incorporate provisions making reference to and strengthening the aforesaid duties, cultivating a culture of transparency and good administration within the Local Authorities’ Boards of Directors. The strengthening of this duty to disclose in instances of conflict of interest may be achieved through relevant provisions for the imposition of penalties or the criminalization of such behaviors, especially when the councilor or executive involved secures a pecuniary or other kind of interest from his/her choice to conceal his conflict of interest. Additionally, or alternatively, a conviction or an admission on behalf of a councilor of the commission of a criminal offence could simultaneously lead to the immediate suspension of his capacity and duties as a councilor, as well as the deprivation of his right to participate in the next election process as a candidate.

 

George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected], www.coucounislaw.com

 


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