On 15 February 2018 the applicant made a request for access to detailed sets of financial accounts for the National Aquatic Centre for the years 2014 to 2017.  The NSCDA refused the request under section 40(2)(n) of the FOI Act on 15 March 2018.  The applicant subsequently applied for an internal review and the original decision was upheld by the NSCDA on the basis of sections 40 and 36 on 3 May 2018.  The applicant applied to this Office for a review of the NSCDA's decision.  

 

I have decided to conclude this review by way of a formal, binding decision. In conducting the review, I have had regard to the correspondence between the NSCDA and the applicant as described above. I have also had regard to the correspondence between this Office and both the NSCDA and the applicant on the matter as well as to the record the subject of the review.  

 

 

 

The NSCDA identified one record as coming within the scope of the applicant's request.  The record consists of an extract from the NSCDA's accounts and is an income and expenditure account for the NAC for the years 2014, 2015 and 2016.  At the time of the review, the accounts for 2017 had not yet been completed.  

 

It should also be noted that during the course of the review the NSCDA provided the applicant with copies of its statutory accounts, which are publicly available, for the years 2014, 2015 and 2016. Again, the accounts for the year 2017 were not yet finalised.  

 

This review is therefore concerned with whether or not the NSCDA was justified in refusing access to one record, namely the income and expenditure account of the NAC for the years 2014, 2015 and 2016, on the basis of sections 36 and 40 of the FOI Act.  

 

 

 

It is important to note that under section 22(12)(b) of the FOI Act, a decision to refuse to grant a request shall be presumed not to have been justified unless the body satisfies the Commissioner that its decision was justified. This places the onus on the NSCDA of satisfying this Office that its decision in respect of the record was justified.

 

 

Section 36(1)(b) is a mandatory exemption that must be applied to certain types of information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation. The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release.

 

The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". The Commissioner takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.

 

The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the "could reasonably be expected" test in the first part of this exemption. However, the Commissioner takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.

 

In the High Court case ofWestwood Club v The Information Commissioner[2014] IEHC 375, Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position. As mentioned above, the standard of proof required in the second part of section 36(1)(b) is relatively low, in the sense that the test is not whether prejudice is certain to materialise but whether it could do so. 

 

The applicant states that he has received similar information from other FOI bodies and that nothing in the record sought could prejudice the competitive position of the NSCDA.  He goes on to state that the NSCDA has not identified a specific harm that would arise from release of the record, but rather has just stated that releasing information on its commercial activities would place it at a competitive disadvantage.  

 

The applicant sets out that the NAC was constructed using public funds in the amount of €62.5 million and also receives an annual operational subsidy through Sports Ireland.  He highlights the requirements contained in the FOI Act to achieve greater openness in the activities of FOI bodies and submits that in order to achieve greater transparency and accountability it is important that the use of those public monies is made available to the public.  

 

The NSCDA acknowledges that it receives some grant funding from Sport Ireland but states that this represents a minority of its income (28%) that contributes to covering the costs of providing training and competition facilities to Sport Ireland-funded athletes and National Governing Bodies of Sport.  It notes that the remaining 72% of its income is derived from commercial activities and to release details of its income and expenditure would place it at a commercial disadvantage by comparison with its private sector counterparts who are not required to disclose such information. 

 

The NSCDA submits that, insofar as the commercial aspects of its operations are concerned (which includes in largest part the NAC), it should be treated no differently to any other limited liability company because it operates with an overall commercial remit and is required to compete for business in the market with a similar costs base to private operators.  It notes that, if released, the record would be in the public domain and the information could be used by a competitor.  It was submitted that this request should be treated no differently to the types of FOI requests received by public bodies for access to private tender information, where the FOI bodies in those cases are not generally required to disclose detailed methodologies for the calculation of the service provider fees.  

 

It was submitted by the public body that, given that 72% of NSCDA Operations' income is derived from commercial activities, the release of specific details in relation to how the NSCDA generates this income and the sources of that income, along with a breakdown of the costs associated with generating the income would put it at a commercial disadvantage in the leisure and recreational industry in circumstances where its commercial competitors are not required to provide this information.  It stated that release would also cause commercial prejudice when vying for private commercial events as well as national and international sporting and leisure events, as key information in relation to costs and income associated with securing and hosting these events would become known.  

 

As noted earlier in this decision, the burden of proof is on the public body to justify its decision to refuse access to the record.  The NSCDA stated repeatedly that to release this information would put it at a commercial disadvantage in circumstances where its competitors are not required to produce this information.  However, it is not clear to me how a competitor might use this information to gain a commercial advantage.  The record consists of one page, with a number of categories showing a complete figure for certain income streams and complete figures for categories of expenditure.  There is no detailed breakdown of rates charged or methodologies used to generate income.  For example, there is nothing in this record that shows the rates charged to commercial customers for private events such that a competitor could use that information to undercut an NAC tender for such business.  The applicant also noted that he was not seeking a detailed breakdown of the various income streams, nor detailed information on employee renumeration.  As regards income, it is simply not the case that the record discloses detailed methodologies or unit costs in relation to activities or expenditure.  It is the case that, generally, entrance fee rates would be publicly available.    

 

The question for me in the first instance is whether it is reasonable to expect a material loss or gain from the release of this record.  The NSCDA has not shown how a competitor may use this information to their advantage.  I am therefore not satisfied that it is reasonable to expect a material loss or gain from release of this basic information, nor that disclosure of the information "could prejudice the competitive position" of the NSCDA in the conduct of its business.  

 

Simply because an FOI body generates commercial income that does not mean that any record relating to this income is automatically commercially sensitive and that release will cause harm.  It is for an FOI body to show how the expectation of any such harm is reasonable.  In this case, the NSCDA has not shown how that harm would arise from release of the relatively basic information contained in the record and therefore I do not see how such an expectation is reasonable.  I would possibly have a different view if the record contained information relating to detailed strategies and costings aimed at generating private income, or indeed disclosing the results of such strategies and costings, but that is not the case with the record.  Rather, it is a simple income and expenditure account and I have not been shown how any of the information contained in that account could be used to prejudice the NAC's competitive position or result in a material loss or gain.  The NSCDA stated that commercial prejudice would be caused if key information in relation to costs and income associated with securing and hosting certain events were to become known.  In my view, this record does not contain such key information as the information that it does contain is in such an abbreviated, general format.  

 

I note the NSCDA's argument that it should be treated as a limited liability company for the purposes of its commercial activities.  However, the fact is that it is an FOI body and it is responsible for managing public facilities and public funds.  There are a number of entities that are either excluded entirely from the remit of the FOI Act or are designated as partially included agencies such that only records relating to certain aspects of their activities are potentially accessible under FOI.  It was entirely open to legislators to include the NSCDA in either of these categories, but this was not done.   

 

I find that, in the circumstances of this case, the NSCDA has not justified its decision that section 36(1)(b) applies to this record.  Even if I were satisfied that section 36(1)(b) applied, this exemption is subject to a public interest test and, for the sake of completeness, I will also address this.  

 

 

In considering where the balance of the public interest lies, I accept that there is a legitimate public interest in persons being able to conduct commercial transactions without fear of suffering commercially as a result.  

 

However, there is, as the NSCDA acknowledged, a strong public interest in the enhancement of openness, transparency and accountability in public bodies. Indeed, I am conscious that section 11(3) of the FOI Act requires public bodies, in performing functions under the Act, to have regard to, among other things, the need to achieve greater openness in their activities, to promote adherence by them to the principles of transparency in government and public affairs, and to strengthen their accountability.  It is noteworthy that the FOI Act is concerned with enhancing accountability and transparency of public bodies, not private commercial entities.  

 

In this instance, the NSCDA appears to be making the argument that it is both a public body and a commercial entity.  As noted above, it submitted that it should not be treated any differently to a limited liability company in respect of its commercial income.  While I do not accept that position for the reasons stated above, I do accept that commercial activities are carried out at the NAC.  However, one of the difficulties with the NSCDA's argument is that it is not clear to me how much public funding the NAC receives and what portion of its income is commercially generated.  The NSCDA discusses its public funding from the perspective of the organisation as a whole.  The 28% of income coming from public sources represents 28% of the entire NSCDA Operations income and is not specific to the NAC.  This income is divided as required between the NAC, Sport Ireland National Indoor Arena and Morton Stadium, Santry.  I have no specific information on the proportion that the NAC receives.  Further, the applicant's argument that this facility was constructed using public funds and that there is a public interest in how that investment is managed is relevant.  The NSCDA itself considered a public interest factor in favour of release to include providing additional openness, transparency, accountability and value for money in the use of public funds.  

 

The NSCDA put forward several arguments against the release of the record, including that the public interest was largely satisfied as the statutory accounts submitted to the Companies Registration Office clearly show the level of public funding received by NSCDA Operations.  It noted that this was minority funding and stated that the company's commercial operations (and cost competitiveness) are not subsidised by its public funding.  It stated that the publicly funded element of NSCDA's activities is fully transparent as it is disclosed in both Sport Ireland's annual report and also in the filed financial statements of the company itself.  

 

As regards the public interest being satisfied, at least in part, by release of the statutory accounts for NSCDA, I must also give weight to the fact that the consolidated accounts disclose only the annual turnover for the NAC for the years 2014 - 2016.  

 

I accept that there is some transparency in this regard in the filing of the NSCDA accounts.  The question for me is whether any potential commercial harm arising from release of the record the subject of this review would outweigh any further enhancement of transparency regarding the operation and management of the NAC by the NSCDA.  In circumstances where the NSCDA has not pointed me to what commercial harm could arise from the disclosure of the record, I find that the public interest in enhancing openness, transparency and accountability in the management of a facility that was built with, and in receipt of, public funds outweighs any potential commercial harm.  

 

I find therefore that, even if section 36(1)(b) applied to this record, the public interest would favour release.  

 

 

Section 40 protects, generally speaking, certain records relating to the financial and economic interests of the State. Section 40(1)(d) is a discretionary exemption that provides for a refusal to grant access to records whose release could reasonably be expected to result in an unwarranted benefit or loss to a person or class of persons. Where an FOI body relies on section 40(1), this Office expects it to identify the potential harm - unwarranted benefit or loss to a person or class of persons- that might arise from disclosure. It must also consider the reasonableness of any expectation that the harm will occur. 

 

Section 40(1)(d) may be applied to any record, but particularly those of a sort described in section 40(2) of the FOI Act.  It is the NSCDA's position that the records are of a sort specified at sections 40(2)(m), (n), (o) and (p) of the FOI Act, which are exempt under section 40(1)(d) of the Act. Those sections include records relating to the following: 

 

(m)trade secrets or financial, commercial, industrial, scientific or technical information belonging to the State or a public body, that are of substantial value or reasonably likely to be of substantial value

 

(n)information the disclosure of which could reasonably be expected to affect adversely the competitive position of a public body in relation to activities carried on by it on a commercial basis

 

(o)the economic or financial circumstances of a public body,

 

(p)investment or provision of financial support by or on behalf of the State or a public body.

 

Similar to its reliance on section 36(1)(b), the NSCDA submitted that release of the record would provide competitors with a commercial advantage.  As set out above, I am not satisfied that release of the record could reasonably be expected to result in an unwarranted benefit to competitors of the NAC.  It is not clear to me how the information contained in the record could be used by a competitor to gain a commercial advantage or unwarranted benefit.  Consequently, I find that the NSCDA has not justified its application of  the section 40(1)(d) exemption and the record should therefore be released.  

 

 

 

Having carried out a review under section 22(2) of the FOI Act, I hereby annul the decision of the NSCDA and direct release of the record the subject of this review.  

 

 

 

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.