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TGA advisory committee guidelines
Declarations of interests, managing conflicts of interests and confidentiality obligations, Version 1.9, August 2016
E. Disclosure of interests in relation to matters being considered by the committee
It is recognised and accepted that given the nature of members' professional expertise and the fact that in Australia there are a limited number of people with expertise and experience in relevant fields, members will, from time to time, have an interest in matters being considered by the committee.
Subregulation 42(4) to (7) provides the mechanism for handling such interests. The fact a member has such an interest does not automatically however preclude the person from participating in the matter providing that:
- the member declares the interest if it is 'material' to the matter under subregulation 42(4) of the Regulations
- in the absence of all members who have disclosed an interest in the matter, the committee considers in accordance with Regulation 42(5) whether the member can be present during any deliberations on the matter or take part in any decision on the matter, which may include the committee discussing the nature of the interest, the extent to which it is 'material' and to which it may affect or appear to affect the committee's deliberation of the matter
- the committee takes the necessary action to nullify or mitigate any potential conflict in an open and transparent matter
- the fact that the interest was declared and the manner in which the committee dealt with the disclosure is appropriately recorded in the minutes of the meeting.
Irrespective of what interests a member has included in their annual or previous meeting declarations, a member must comply with the requirements in subregulation 42(4) in relation to disclosing interests at every meeting they attend as a member.
Subregulation 42(4) to (7) requirements in relation to a committee meeting
Any member (including the Chair) who is aware that he or she has a direct or indirect material personal interest (whether pecuniary or not) in a matter being considered, or about to be considered at the meeting, must disclose, without delay, the nature of the interest at, or before the meeting of the committee. The same rule applies to members of any subcommittee of the committee. A copy of the subregulations is at Attachment A.
1. Being 'aware' of having an interest
It is the responsibility of each member to consider whether their interests are such that an obligation arises under subregulation 42(4) to disclose that interest. Members should, as soon as they become aware of any matter that will be considered at a meeting, carefully consider whether it is a matter in relation to which they have such an obligation, taking into account the subject matter of the item, the nature, currency and extent of the interest they have, the nature of the issues that the committee is being asked to comment on, whether the member is being asked to comment specifically on the matter etc. This will usually be when the list of items on the agenda is sent out by the committee secretariat but should occur whenever consideration of a matter by the committee comes to the member's notice.
It may only be when a matter is actually under consideration by the committee that a member becomes aware of their interest (where for instance, unanticipated issues arise in the discussion). In such a case the member should disclose it without delay (see below).
As the Chair and secretariat have access to members' declaration of interests forms they will also be aware of situations where a member would be required to disclose an interest in relation to a matter. In some instances, the Chair or the secretariat may contact the member if they are aware of an interest that the member has not declared.
2. 'Material' interests
Whether a personal interest is 'material' or not to the matter, will be an issue of judgement in all the circumstances of the case. If the interest is so remote or insignificant that it could not reasonably be regarded as being likely to influence any decision the member might make in relation to the matter, then it may not be 'material'.
However, members are advised to 'err on the side of caution' and disclose any interest that could possibly be regarded as 'material' and allow the committee to consider whether it is 'material' and if so, whether the member should participate in consideration of the matter.
3. Disclosing 'without delay'
If having seen the list of agenda items, or at any later time, a member comes to a view that he or she may have a 'material' interest in the matter, the member should contact the Chair (or acting Chair or Secretary if the Chair is not available) as soon as possible and inform them of the nature of the interest in the relevant matter.
If the member believes that the interest is such that they should not take part in the committee's consideration of that matter, the Chair should be advised as soon as possible. This allows the Chair to consider whether other arrangements need to be put in place for consideration of that item, such as arranging for additional external expertise to be sought.
If a member becomes aware of a material interest in a matter only when the matter is under consideration by the committee, the member must bring it to the attention of the Chair immediately and absent themselves from the room so that the committee can consider, in accordance with subregulation 42(5), whether and if so to what extent, the member can be present during further consideration of the matter.
If the member is the Chair, the disclosure should be made to the acting Chair or the Secretary of the committee.
4. Disclosing the 'nature' of the interest
A member who becomes aware that he or she has an interest in a matter on the agenda has the option, after having declared the nature of the interest as required by subregulation 42(4), of volunteering not to be present during the committee's consideration of the matter. This would be appropriate where it is clear that the interest is such that a conflict of interest exists or where it may appear to exist to a reasonable observer. It may also be appropriate where the member does not wish to provide details about the nature of the interest for personal reasons.
If the member does not volunteer to not be present then the member will need to provide sufficient detail about the nature, currency and extent of the interest for the committee (in the member's absence) to come to a view on:
- whether or not the member can be present during any part of the committee's deliberation on the matter or take part in any decision of the committee on the matter if the member can be present, in what capacity and for how much of the committee's consideration of the matter (see below).
5. The committee 'otherwise determines'
The committee would usually consider interests disclosed by a member at the meeting itself. However, it may be that in unusual cases the Chair (or acting Chair where the Chair is disclosing) will need to seek the views of members about the disclosure of a member prior to the meeting if an issue arises about whether agenda item documents will be provided to that member.
What does the committee consider in determining whether a member should be present?
Any member who discloses a material personal interest in relation to a matter for consideration by the committee cannot be present during any deliberation, or take part in any decision, on that matter by the committee unless the committee "otherwise determines" (subregulation 42(5)).
Neither that member, nor any other member who has disclosed such an interest in the same matter, can be present when the committee makes a determination about whether or not the member can participate in the consideration of the matter (subregulation 42(6)). This ensures that the personal interests of each member cannot be seen to influence how the personal interests of another member are managed by the committee.
There are no legislative rules about how a committee determines whether a member who has disclosed an interest in a matter should be present or absent during deliberations on the matter or take part in any decision on the matter. The committee should be guided in its consideration by the principle that its deliberations on a matter not be 'tainted' (or be seen to be tainted) by any suggestion that members were not able to bring an independent, objective and impartial view to the matter, not influenced by the member's personal interests.
The committee should consider whether the nature, currency and extent of the member's interest would mean in fact that the member cannot bring an independent, objective and impartial view to consideration of the matter. As well, whether a reasonable observer might conclude that the member cannot bring an independent, objective and impartial view to that consideration.
Over time the committee will develop precedents about how particular situations are dealt with; these will help guide the committee in considering future disclosures made by members of that committee. There must be consistency in how the committee deals with what might be seen as similar fact situations, the records kept of previous decisions of the committee would provide a source of information for that purpose (with appropriate privacy considerations). However, each situation in which the committee has to determine how to deal with a member's disclosure has to be treated on its merits, taking account of the particular facts.
Even though each of the TGA committees are subject to the same rules on disclosure, there is no requirement or expectation that they would necessarily come to the same conclusion about disclosure by a member given their different subject matters, functions and membership.
What options does the committee have in managing conflicts?
There are a number of options available to committees for managing a conflict of interest. In coming to a view about the 'materiality' of the interest, and depending on the nature of the interest and the item, they might include:
- allowing the member to participate fully in the deliberation by the committee and in any decision about making recommendations
- allowing the member to participate in discussion but not in making a decision about a recommendation
- allowing the member to be present to answer questions or provide specific advice on particular matters or of a technical nature, but not to participate in discussion or in making a decision about a recommendation
- excluding the member wholly from consideration of the matter.
The extent of interest which will be acceptable is a question of judgement, but given the sensitivity of so many of the issues coming before TGA committees, a conservative approach is recommended. If the appearance of a conflict of interest is likely to undermine or raise questions about the credibility of the committee's deliberations, the committee should take appropriate action to avoid or minimise that impact.
In assessing the appropriate response, members of the committee should take account of both the actual conflict and of the perception of conflict. The perception of a conflict of interest is as important as (and much more common than) any actual conflict of interest.
In determining whether there is a possible conflict (or perception of one), it is not necessary to show that the person's conduct is affected, but only that there is an actual or perceived conflict between a member's interests and his or her obligations as a member of a committee. There will always be borderline cases, where arguments both for and against the view that a conflict will exist; for example, a member of a committee may honestly believe that a shareholding in a pharmaceutical company would not affect his or her ability to make an impartial decision in respect to a product manufactured by the company, and that his or her objectivity would not be impaired. However, the fact that there are, or there may be perceived to be, two competing interests is what is relevant in determining the existence of a conflict, notwithstanding that the member maintains that they are able to disregard one of those interests.
What the committee decides to do in any given situation may be affected by the committee's consideration of the availability of the necessary advice and expertise for the purposes of consideration of the matter. Where the interest is so 'material' and there is a risk of a perception of conflict, the committee may decide to defer consideration of the matter so an alternative source of advice or expertise can be secured.
This should only occur in rare cases where the member is unable to disclose his or her interest sufficiently early, consequently precluding the Chair from making alternative arrangements.