Analyses of electronic commerce chapter of Trans-Pacific Partnership Agreement

Request to Ministry of Foreign Affairs and Trade for analyses of electronic commerce chapter of the Trans-Pacific Partnership Agreement and other trade negotiations – Sections 6(a), 6(b)(i), 9(2)(g)(i), 9(2)(h) and 9(2)(j) of the Official Information Act 1982 applied to most of the information – Countervailing public interest to the extent that a summary should be released of information withheld under 9(2) provisions – Information released where sections 6(a), 6(b)(i), 9(2)(g)(i), 9(2)(h) and 9(2)(j) did not apply – Anodyne information also released

Background

1. On 20 December 2017, the requester requested from the Ministry of Foreign Affairs and Trade (the Ministry):

…any analyses of the electronic commerce chapter of the Trans-Pacific Partnership Agreement^[[1]], and of other negotiations such as the Trade in Services Agreement (TiSA),^[[2]] that have been prepared by or for the Ministry, including its relationship to other chapters such as cross-border services, financial services and telecommunications.

2. On 2 May 2018, the Ministry released documents to the requester with redactions made on the basis that the information was outside the scope of the request, and under sections 6(a), 6(b)(i), 6(e)(vi), 9(2)(a), 9(2)(g)(i), 9(2)(h) and 9(2)(j) of the Official Information Act 1982 (OIA).

3. On 18 June 2018, the requester made a complaint about the Ministry’s decision. On 29 June 2020, the Chief Ombudsman issued his final opinion on the complaint to the requester and the Ministry.

Out of scope information

4. The Ministry provided the Ombudsman with certain information that it contended, and the Ombudsman accepted, was outside the scope of the request.

5. Some of this information was about other chapters of TPP and TiSA, and emails collating information to respond to the request.[3]

6. The Ombudsman nevertheless observed that other information was of an anodyne nature and that, in the absence of there being good reason to withhold it on the merits, it was open to the Ministry to decide proactively to release that information as a means to give effect to the OIA’s principle of availability.[4] The Ministry agreed to consider the release of this information on that basis.

Section 6 of OIA

Overview of sections 6(a), 6(b)(i) and 6(e)(vi)

7. Sections 6(a), 6(b)(i) and 6(e)(vi) of the OIA are conclusive grounds for withholding official information. Unlike the reasons for refusal set out in section 9 of the OIA, there is no requirement to consider whether the interest in withholding is outweighed by countervailing public interest considerations. Effectively, the OIA deems it to be in the public interest for information to be withheld where the requirements of section 6 have been met.

8. Sections 6(a) and 6(b)(i) are of a similar nature. Section 6(a) provides good reason to withhold information if its disclosure ‘would be likely to prejudice the security or defence of New Zealand or the international relations of the Government of New Zealand’. Section 6(b) provides for the withholding of information if its disclosure ‘would be likely … to prejudice the entrusting of information to the Government of New Zealand on a basis of confidence by the government of any other country or agency of such government or any international organisation’.

9. Section 6(e)(vi) provides for the withholding of information if disclosure ‘would be likely … to damage seriously the economy of New Zealand by disclosing prematurely decisions to change or continue Government economic or financial policies relating to … the entering into of overseas trade agreements’.

10. The Court of Appeal has interpreted the phrase ‘would be likely’ to mean ‘a serious or real and substantial risk to a protected interest, a risk that might well eventuate’.[5]

11. The High Court has interpreted section 6(e) as being one which ‘imposes a high threshold that requires the decision-maker to be satisfied that the economy will be damaged “seriously’’’.[6]

Analysis of withheld information

Information where sections 6(a) and 6(b)(i) applied

12. The Ombudsman formed the opinion that sections 6(a) and 6(b)(i) applied to the negotiating positions and proposals of other countries. It was clear that New Zealand came into possession of this information through its participation in negotiations with the countries concerned, and the information was provided with the expectation that confidentiality would be maintained.

13. Given the nature of the information and circumstances in which New Zealand received the information, the Ombudsman considered that disclosure of the information raised the real and substantial risk of prejudicing the international relations of the New Zealand government with the relevant countries, and the future entrusting of information to the New Zealand government on a basis of confidence by these and other countries.

14. In the Ombudsman’s view this harm would arise not only through disclosure of the information which was provided confidentially to the government of New Zealand, but also by confirming whether material published by WikiLeaks alleged to reveal the position of other countries was the same as the TiSA material held by New Zealand.

Information where sections 6(a) and 6(b)(i) did not apply

15. The Ombudsman was not, in the circumstances, persuaded that the disclosure of certain information would raise a real and substantial risk of prejudicing the New Zealand government’s international relations with the relevant countries, or the future entrusting of information to the New Zealand government by these and other countries.

16. In the main, the information was not about other negotiating partners’ positions or proposals, was not information that was supplied to New Zealand by other negotiating partners, or was not information which, if disclosed, would have revealed discussions between New Zealand and other negotiating partners.

Section 6(e)(vi) did not apply

17. The Ombudsman concluded section 6(e)(vi) did not apply to any of the information the Ministry withheld on that ground. It was not evident the information at issue concerned a decision to change or continue a government economic or financial policy relating to entering into an overseas trade agreement.

Section 9(2)(h) of OIA

Overview of section 9(2)(h)

18. Section 9(2)(h) of the OIA provides good reason to withhold official information if it is ‘necessary to maintain legal professional privilege’, and pursuant to section 9(1), that interest is not ‘outweighed by other considerations which render it desirable, in the public interest, to make that information available’.

19. Legal professional privilege is a public policy privilege designed to protect confidential communications between solicitor and client. There are two aspects to the law relating to legal professional privilege: solicitor/client privilege; and litigation privilege.

20. It is well established that agencies and Ministers have the same rights as private organisations to obtain legal advice. For the purposes of the application of legal professional privilege, it is immaterial whether the lawyer providing the advice is in independent practice or is employed in-house.

21. Legal professional privilege has long been regarded as ‘a fundamental element in the administration of justice’.[7] As such, the public interest in ensuring the maintenance of the privilege is very high. Given the strength of the public interest in ensuring the maintenance of legal professional privilege, any public interest consideration in favour of release would need to be particularly strong to outweigh the section 9(2)(h) interest.

Analysis of withheld information

Information where section 9(2)(h) applied

22. The Ombudsman concluded that certain communications with, and advice provided by, the Ministry’s Trade Law Unit were legally privileged. The relevant privilege was ‘solicitor/client’ privilege, which extends to communications between a solicitor, acting in that capacity, and the client for the purposes of seeking or giving legal advice or assistance. There was no information to suggest privilege had been waived. Withholding the information was therefore necessary to maintain legal professional privilege.

Information where section 9(2)(h) did not apply

23. The Ombudsman concluded that solicitor/client privilege did not apply to protect certain information. The Ministry did not make out the claim that the communications were between a solicitor, acting in that capacity, and their client, and that the communications in question were for the predominant purpose of seeking or giving legal advice.

24. Litigation privilege was not a relevant consideration in this case as no legal proceedings were in train or reasonably in contemplation.

Section 9(2)(j) of OIA

Overview of section 9(2)(j)

25. Section 9(2)(j) of the OIA provides good reason to withhold official information if it is ‘necessary to enable’ the agency ‘holding the information’ to carry on negotiations without prejudice or disadvantage, and under section 9(1), that interest is not ‘outweighed by other considerations which render it desirable, in the public interest, to make that information available’.

26. The term ‘necessary’ means reasonably necessary as held by the High Court in Television New Zealand v Ombudsman.[8] In a separate judgment, the High Court interpreted ‘necessary’ to mean ‘essential’.[9] Previous Ombudsmen have preferred the test of ‘reasonable necessity’ over ‘strict necessity’, and that was the approach the Ombudsman adopted in his investigation and review of this case.

27. ‘Negotiations’ are not just consultations or discussions (although they can include them). There must be at least two parties at arm’s length each seeking to obtain a result favourable to itself and a belief by both that this is possible. The ‘negotiations’ in question should generally be in train or reasonably contemplated.

28. Section 9(2)(j) does not protect all information relating to particular negotiations; it only protects information that, if disclosed, would prejudice or disadvantage the agency in negotiations. ‘Prejudice’ means the agency’s ability to conduct or conclude the negotiations would be impaired.[10] ‘Disadvantage’ is less adverse than ‘prejudice’, and in this context means the circumstances or conditions of negotiation would be less favourable to the agency.[11]

29. Prejudice or disadvantage may arise where disclosure would benefit the agency’s negotiating opponent. Premature release of information that would reveal an agency’s negotiating position or strategy, including their top or bottom line, potential trade-offs, or fall-back position (alternative or second choice option) may put the agency at a bargaining disadvantage. This could assist the other party to argue for more favourable terms or extract concessions.

30. Prejudice or disadvantage may also arise where disclosure would inhibit the other party to the negotiation. It may also arise where disclosure would detrimentally affect the relationship between the negotiating parties, leading to reduced co-operation and information sharing, and decreasing the likelihood of compromise. Negotiations may become more complex and take longer to complete as each party assesses the risks associated with the release into the public domain of information given and received.

Analysis of withheld information

Information where section 9(2)(j) applied

31. The Ombudsman accepted that section 9(2)(j) applied to details of discussions about draft proposals and issues that arose during negotiations, and consideration of the approaches New Zealand could take. The information remained relevant as the same kind of proposals and issues were being discussed in other negotiations.

32. It was evident from the respective documents relating to TPP and TiSA negotiations that both negotiations covered similar subjects in the e-commerce area. The TiSA negotiations have not been completed, and although no further negotiating rounds have occurred since the 21st round in December 2016, a resumption of negotiations is expected.

33. There are other current or future trade negotiations involving e-commerce. New Zealand is currently engaged in free trade negotiations with the European Union.[12] In another area, WTO-centred exploratory work undertaken following the Joint Ministerial Statement on E-Commerce issued at the Buenos Aires 11^th WTO Ministerial Conference in December 2017 progressed to an announcement in January 2019 that plurilateral negotiations on e-commerce involving New Zealand and around 70 other members of the WTO would be launched.[13]

34. The Ministry has been and will continue to be directly involved with such negotiations. Disclosure of the information would provide current and prospective negotiating partners with detailed insight into New Zealand’s thinking on particular issues, assisting them to argue more favourable terms or argue concessions. Certain redactions were therefore, in the view of the Ombudsman, reasonably necessary to avoid prejudice or disadvantage to the negotiations.

Information where section 9(2)(j) did not apply

35. The Ombudsman was not persuaded that the disclosure of certain information would prejudice or disadvantage the Ministry in current or future negotiations. The information did not reveal New Zealand’s proposals or thinking about e-commerce issues in negotiations.

Section 9(2)(g)(i) of OIA

Overview of section 9(2)(g)(i)

36. Section 9(2)(g)(i) of the OIA provides good reason to withhold official information if it is necessary to maintain the effective conduct of public affairs through the free and frank expression of opinions by, between, or to Ministers or officers and employees of an agency, and that interest is not ‘outweighed by other considerations which render it desirable, in the public interest, to make that information available’.

37. The provision recognises that the effective conduct of public affairs can require the candid and unreserved expression of opinions, and that public exposure of those opinions can sometimes have a chilling effect on people’s willingness to express themselves openly, honestly, and completely in the future.

38. The information at issue does not necessarily have to be free and frank opinion material itself to attract protection under section 9(2)(g)(i). Rather, the key issue is:

• whether the release of the information, regardless of its nature and content, would inhibit the exchange of free and frank opinions in the future; and
• that inhibition would prejudice the effective conduct of public affairs.

39. There is an expectation that officials will provide robust, unbiased and comprehensive advice, and not be easily deterred from expressing their views by the possibility of future disclosure. However, this does not necessarily mean that everything done by an official in the course of their duty should be open to public scrutiny and there may be a need to protect some information in the circumstances contemplated by section 9(2)(g)(i).

Analysis of withheld information

Information where section 9(2)(g)(i) applied

40. The Ombudsman concluded section 9(2)(g)(i) applied to certain advice provided to the Minister as well as the contents of certain discussions between officials generated while negotiations were in train, where the supply of forthright and timely comments in the circumstances were of the essence.

41. While officials should not be easily deterred from expressing their views in the future, the Ombudsman accepted that if the particular information was disclosed, officials would be less willing to commit to writing their free and frank views on trade matters under negotiation, or their views would be constrained by concerns as to how they might be construed when disclosed to a third party.

42. There was an interest in New Zealand having a comprehensive and considered approach on the issues under discussion in negotiations. The ability of officials to express their thinking uninhibitedly and in a timely manner was essential to achieving that. The Ombudsman was therefore of the view that it was necessary to withhold the information of this nature to maintain the effective conduct of public affairs.

Information where section 9(2)(g)(i) did not apply

43. The Ombudsman was not persuaded that disclosure of certain information would inhibit the expression of free and frank opinions in the future, such that the effective conduct of public affairs would be prejudiced. The nature of the information was not free and frank or was not of kind that the Ombudsman considered was necessary to withhold to maintain the effective conduct of public affairs.

Countervailing public interest

Overview of public interest considerations

44. Before deciding whether an agency was justified in withholding information under sections 9(2)(h), 9(2)(j) or 9(2)(g)(i) of the OIA, the Ombudsman must consider whether the interests in withholding the information was ‘outweighed by other considerations which render it desirable, in the public interest, to make that information available’.

45. While the term ‘public interest’ is not defined in the OIA, the underlying ‘principle of availability’ and the purposes of the OIA, expressed in section 4, assist in considering the public interest. The OIA recognises explicitly, in section 4(a), the public interest in promoting public participation in the making and administration of laws and policies; and the accountability of Ministers and officials. These are acknowledged as contributing towards respect for the law and good government, which are themselves in the public interest.

46. The disclosure of information that enables the public to participate in decision-making processes is premised on the concept that informed public participation leads to better decisions that are more likely to be accepted. The decision-making processes may be in respect of the individual requester, a section of the public, or the public more generally.

47. There is also a public interest in the disclosure of information that illuminates the government, ministerial decision-making processes, including the advice and options considered, and the reasons for the decision.

48. In the context of international trade negotiations, the public interest extends to international decision-making procedures and processes in which New Zealand engages. The Law Commission noted the increasing importance of international processes of advice and law-making on the making of domestic public policy and law. It said:[14]

…If public participation is to be effective, then open process which the Official Information Act emphasises will have to extend to information held by the New Zealand government about the international processes in which it is involved. Once the international processes are complete, there may be no real role for New Zealand interests to play. The Clerk of the House has recently observed:

“One problem with globalisation is that people can lose control over decisions on the rules that affect how their society is governed. Moving rule-making to an international plane exacerbates the danger of remoteness which is already present at a national level.”

49. The Commission considered ‘there will be increasing pressure on the government to ensure appropriate consultation in the international processes, and the national processes which inform them’.[15]

Analysis of countervailing public interest in this case

Requester’s concerns

50. The requester requested the analyses of the electronic commerce chapter because the requester was concerned the provisions the New Zealand government had signed in TPP/CPTPP, and that was being negotiated in TiSA, would constrain New Zealand’s domestic regulatory autonomy. If the same provisions are implemented in other international trade agreements involving New Zealand, the obligations imposed by the provisions would become consolidated in ways that the New Zealand government could not undo.

51. It was the requester’s view that electronic commerce was ‘barely discussed’ in the National Interest Analysis reports for TPP and CPTPP, and ‘the regulatory constraints of most concern were never mentioned’.

52. It was also the requester’s view that officials had taken a narrow approach to the electronic commerce issues in negotiations; an approach that was more in the interests of the technology and exporting industries than the public at large.

Public interest in participation

53. The Ombudsman accepted that participation of the public in understanding and debating the electronic commerce provisions is a relevant public interest consideration.

54. International trade agreements are in the eyes of the public a double-edged sword. They are welcomed by some as beneficial to the wellbeing and growth of New Zealand but at the same time they raise concern among some around the perceived loss of sovereignty, specifically the ability of New Zealanders to determine the laws of this country. Such competing narratives are not unexpected in a public debate. The essential element, however, for a proper public debate of the issues is information.

55. The Ministry has held public presentations and consultations during TPP, CPTPP and TiSA negotiations. Versions of the full TPP agreement were made available in November 2015 and January 2016.[16] The CPTPP agreement text was released in February 2018.[17] National Interest Analysis reports for TPP[18] and CPTPP[19] were published by the Ministry. As with the ratification of any free trade agreement, TPP and CPTPP underwent an examination by the Foreign Affairs, Defence and Trade Select Committee. The Committee provided its reports on the agreements to Parliament.[20] In a broad sense, the processes and information released to date goes some way to meeting the public interest by providing the public with a general understanding of the electronic commerce provisions, and an opportunity to make submissions.

56. However, the information that was requested drills down into the final provisions in the electronic commerce chapter; it seeks a greater understanding of New Zealand’s contribution to the final electronic commerce provisions. The disclosure of the requested information would enhance the public’s understanding of the considerations behind the electronic commerce provisions, and that in turn could lead to a more informed public debate of their merits.

57. It is clear that electronic commerce is relevant to current and future trade negotiations. The withheld information therefore has ongoing public policy implications. In that respect, disclosure of analyses from TPP and TiSA could enable the public’s effective participation in framing New Zealand’s approach to electronic commerce in current and future trade negotiations.

Public interest in transparency and accountability

58. Transparency and accountability of officials and the government for their actions and decisions on the electronic commerce Articles in TPP and TiSA is a further public interest consideration.

59. The requested information would help facilitate the analysis of the reasons New Zealand has agreed to the electronic commerce provisions – the options that were considered and advice on the various matters in negotiations.

Weighing the competing considerations

60. There is a delicate balance between openness and the need to withhold information, the release of which may prejudice particular interests. The Danks Committee, which recommended the enactment of the OIA, recognised this, noting that ‘no country where access to official information has become an issue has the case been made for complete openness’,[21] and the one area which ‘poses great difficulties is the need for balance – balance between the presumption that greater openness should be sought, and the need for protection in certain sensitive areas’.[22]

61. A comprehensive disclosure of officials’ analysis and advice on the electronic commerce matters would enhance the public’s understanding and scrutiny of the provisions in the TPP/CPTPP agreement, and those under negotiations in TiSA. However, at the same time, that kind of disclosure would reveal New Zealand’s positions to existing or future negotiating partners. In high stakes international trade negotiations, there is an interest in protecting New Zealand’s positions in negotiations. There is also an interest in officials seeking and receiving legal advice on the draft texts, engaging in uninhibited discussions about the proposals and issues, and advising the Minister frankly on the various matters in negotiations, represented by the relevant withholding grounds within section 9.

62. Having considered the information at issue and the competing interests, the Ombudsman considered that the public interest in release outweighed the need to withhold, but only to the extent that a detailed summary of the information should be released. Release of a detailed summary of the information would meet the interest in the public’s effective participation in debating the subject; and the transparency and accountability of officials and the government on the electronic commerce provisions New Zealand signed up to in TPP/CPTPP.

Outcome

63. The Ministry released to the requester:

a. anodyne information;

b. the information where sections 6(a), 6(b)(i), 6(e)(vi), 9(2)(g)(i), 9(2)(h) and 9(2)(j) did not apply.

c. a summary, which the Ombudsman considered to be adequate, of the information that was withheld under the 9(2) provisions.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.