2. INTRODUCTION2.1 Concepts of <strong>the</strong> <strong>public</strong> <strong>in</strong>terestThere are at least two concepts of <strong>the</strong> <strong>public</strong> <strong>in</strong>terest:• One concept applies <strong>the</strong> words literally: <strong>the</strong> <strong>public</strong> <strong>in</strong>terest is thus anyth<strong>in</strong>g of <strong>in</strong>terest to<strong>the</strong> <strong>public</strong>. However, matters that are <strong>for</strong> <strong>the</strong> <strong>public</strong> benefit are not necessarily <strong>the</strong> sameth<strong>in</strong>g as matters which <strong>the</strong> <strong>public</strong> f<strong>in</strong>ds <strong>in</strong>terest<strong>in</strong>g. We do not regard <strong>the</strong> degree to whicha matter is thought ‘<strong>in</strong>terest<strong>in</strong>g’ as <strong>in</strong>dicative of someth<strong>in</strong>g be<strong>in</strong>g a <strong>public</strong> <strong>in</strong>terest matterand do not dwell on this concept.• Instead we focus primarily <strong>in</strong> this report on a different usage of <strong>the</strong> concept – whengovernments, regulators and o<strong>the</strong>rs <strong>in</strong>tervene <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest <strong>in</strong> <strong>the</strong> course of peoplego<strong>in</strong>g about <strong>the</strong>ir own bus<strong>in</strong>ess <strong>in</strong> <strong>the</strong>ir own <strong>in</strong>terest. Freedom to act <strong>in</strong> accordance withone’s own wishes is a key <strong>public</strong> want and <strong>in</strong>terference with that needs a clear justification.<strong>Act<strong>in</strong>g</strong>, or appear<strong>in</strong>g to act, <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest is not a general requirement <strong>for</strong> all or <strong>in</strong>deedmost actions by <strong>in</strong>dividuals or organisations, However, some are required to do so as a result of<strong>the</strong>ir remit and o<strong>the</strong>rs choose to do so through, <strong>for</strong> example, a sense of duty, or as a means ofenhanc<strong>in</strong>g <strong>the</strong>ir reputation and <strong>in</strong>fluence. As a result, <strong>the</strong> phrase ’<strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest’ is usedby governments, politicians, regulators, lobby groups, professional bodies, journalists, activists,bus<strong>in</strong>esses <strong>in</strong> <strong>the</strong> <strong>public</strong> eye, academics and o<strong>the</strong>rs to justify a wide range of policy proposalsand actions that affect more than a small circle of people. In addition <strong>in</strong>dividuals will sometimesover-ride normal convention (<strong>for</strong> example confidentiality of private deal<strong>in</strong>gs) because <strong>the</strong>ybelieve that over-ride to be <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest.<strong>ICAEW</strong> is one of <strong>the</strong> professional bodies <strong>in</strong> that list, both <strong>in</strong> its own conduct and <strong>in</strong>tentions and<strong>in</strong> its representations to governments and o<strong>the</strong>r regulators. An understand<strong>in</strong>g of <strong>the</strong> conceptand how it is used is <strong>the</strong>re<strong>for</strong>e critical to <strong>ICAEW</strong> directly, as well as to governments, o<strong>the</strong>rregulators and o<strong>the</strong>rs advocat<strong>in</strong>g an action <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest, and to <strong>the</strong> <strong>public</strong> whose<strong>in</strong>terest is taken to be promoted by so many <strong>in</strong> <strong>the</strong>ir name.2.2 Usage of <strong>the</strong> <strong>public</strong> <strong>in</strong>terestA brief trawl of <strong>the</strong> <strong>in</strong>ternet via a website search eng<strong>in</strong>e picks up numerous references to actionor <strong>in</strong>action be<strong>in</strong>g justified ‘<strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest’.Panel 2.1: Examples of usages of <strong>the</strong> <strong>public</strong> <strong>in</strong>terest• ‘Not <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest’ to release picture of pub killer’. 1• ‘The primary objective of <strong>the</strong> Subord<strong>in</strong>ate Legislation Act 1992 is to reduce <strong>the</strong> burden ofregulation on <strong>the</strong> Tasmanian community. The Act aims to ensure that only effective, efficientand necessary subord<strong>in</strong>ate legislation is made and that, <strong>in</strong> cases where it imposes a costor burden on <strong>the</strong> Tasmanian community, it is justified as be<strong>in</strong>g <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest’. 2• ‘Preventive detention of a person <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest is justified and courts cannot <strong>in</strong>terferewith it unless <strong>the</strong>re are “exceptional” circumstances, <strong>the</strong> Supreme Court has said’. 3• ‘Not <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest to reopen <strong>the</strong> dispute between Western Cape Judge-President…and <strong>the</strong> judges of <strong>the</strong> Constitutional Court’. 4• ‘Sector consolidation may be aga<strong>in</strong>st <strong>the</strong> <strong>public</strong> <strong>in</strong>terest <strong>in</strong> many circumstances’. 5• ‘The High Court on Sunday ordered law en<strong>for</strong>cers not to requisition private vehiclesexcept <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest’. 61Eastern Daily Press, ‘Not <strong>in</strong> <strong>the</strong> Public Interest’.2Tasmania Department of Treasury and F<strong>in</strong>ance, ‘Subord<strong>in</strong>ate Legislation Act 1992’.3The Times of India, ‘ Preventive Detention <strong>in</strong> Public Interest is Justified: SC’.4Bus<strong>in</strong>ess Day, ‘Hlophe Rerun ‘Not <strong>in</strong> <strong>the</strong> Public Interest’, says JSC’.5Gosl<strong>in</strong>g, The Rise of <strong>the</strong> Public Services Industry.6Dhaka Mirror, ‘HC Forbids Vehicle Requisition Except <strong>in</strong> Public Interest’.10Introduction
These examples alone cover such diverse areas as privacy, regulation, security, legal proceed<strong>in</strong>gs,competition, and government powers.But, <strong>for</strong> all its usage, do we know what people mean when <strong>the</strong>y talk about ‘<strong>the</strong> <strong>public</strong> <strong>in</strong>terest’?Do <strong>the</strong>y know what <strong>the</strong>y mean? Do <strong>the</strong>y have enough knowledge to decide what action is best<strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest? Is it just a smokescreen to justify self-<strong>in</strong>terest? How can a presumptionthat this is <strong>the</strong> case be countered?<strong>ICAEW</strong>’s Market Foundations thought leadership programme looks at conditions necessary <strong>for</strong>market efficiency, <strong>in</strong> which <strong>in</strong>dividuals, as buyers and sellers, make <strong>the</strong>ir own decisions and goabout <strong>the</strong>ir own affairs. Sometimes <strong>in</strong>tervention is necessary to achieve specific requirements bysociety, to correct faults <strong>in</strong> markets, and to create an <strong>in</strong>frastructure where none would o<strong>the</strong>rwiseexist. 7 One of <strong>the</strong> key conditions necessary <strong>for</strong> markets to be effective is trust and this extendsto those <strong>in</strong>terven<strong>in</strong>g <strong>in</strong> markets <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest. This report builds on academic and o<strong>the</strong>rwrit<strong>in</strong>gs on <strong>the</strong> subject, and seeks to promote debate on <strong>the</strong> use of a notion used to justify somuch, enhanc<strong>in</strong>g confidence <strong>in</strong> markets and elsewhere: not all of society operates with<strong>in</strong> marketstructures at all times, but <strong>the</strong> <strong>public</strong> <strong>in</strong>terest as a concept is no less important <strong>in</strong> non-market areas.While <strong>the</strong> report looks at <strong>public</strong> <strong>in</strong>terest from a general perspective, <strong>the</strong>re is a discussion of <strong>the</strong>position of <strong>the</strong> accountancy profession, and <strong>ICAEW</strong> <strong>in</strong> particular, <strong>in</strong> a number of chapters, byway of illustration.Terms o<strong>the</strong>r than ‘<strong>the</strong> <strong>public</strong> <strong>in</strong>terest’ can be used, largely <strong>in</strong>terchangeably. Examples <strong>in</strong>clude<strong>public</strong> welfare, <strong>the</strong> <strong>public</strong> good, and <strong>the</strong> common good – <strong>the</strong> latter <strong>in</strong> <strong>the</strong> sense of <strong>the</strong> <strong>public</strong>hav<strong>in</strong>g a common purpose, ra<strong>the</strong>r than goods to which <strong>the</strong>re is common access. 8 While we use<strong>the</strong> <strong>public</strong> <strong>in</strong>terest throughout, <strong>the</strong> same issues apply to use of <strong>the</strong>se o<strong>the</strong>r terms.There are a number of areas where more work would be useful: this is a wide-rang<strong>in</strong>g topic andthis report looks at many of <strong>the</strong> areas covered at a relatively high level.2.3 Application of <strong>the</strong> <strong>public</strong> <strong>in</strong>terestWe do not seek to produce a detailed def<strong>in</strong>ition of <strong>the</strong> <strong>public</strong> <strong>in</strong>terest. Where <strong>the</strong>re are specificdef<strong>in</strong>itions used, <strong>the</strong>y tend to be <strong>for</strong> a very particular purpose o<strong>the</strong>r than determ<strong>in</strong><strong>in</strong>g whe<strong>the</strong>ran action is or is not <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest.Panel 2.2: Example of def<strong>in</strong>ition of <strong>public</strong> <strong>in</strong>terest from a specific perspectiveA policy position paper by <strong>the</strong> International Federation of Accountants (IFAC) takes a broadlyutilitarian approach to <strong>the</strong> <strong>public</strong> <strong>in</strong>terest, def<strong>in</strong><strong>in</strong>g it as ‘<strong>the</strong> net benefits derived <strong>for</strong>, andprocedural rigour employed on behalf of, all society <strong>in</strong> relation to any action, decision orpolicy’. 9 Throughout <strong>the</strong> rest of our report we refer to <strong>the</strong> need <strong>for</strong> transparent process butregard that as a means to an end ra<strong>the</strong>r than part of <strong>the</strong> end <strong>in</strong> itself. There<strong>for</strong>e we would not<strong>in</strong>clude ‘procedural rigour’ with<strong>in</strong> a def<strong>in</strong>ition. However, as IFAC observes <strong>in</strong> its paper, <strong>the</strong>sources used <strong>in</strong> determ<strong>in</strong><strong>in</strong>g <strong>the</strong> def<strong>in</strong>ition <strong>in</strong>cluded ‘IFAC’s own body of documents, whichultimately govern <strong>the</strong> mission of <strong>the</strong> organization. These reflect IFAC’s orientation on mattersconcern<strong>in</strong>g regulation, governance, and <strong>the</strong> marketplace <strong>for</strong> account<strong>in</strong>g and audit.’ 10 In o<strong>the</strong>rwords, <strong>the</strong> def<strong>in</strong>ition reflects IFAC’s own perspective, as, among o<strong>the</strong>r th<strong>in</strong>gs, a standard-setter.As discussed through <strong>the</strong> rest of this report, <strong>the</strong> range of variables is great and we suggest that<strong>the</strong> <strong>public</strong> <strong>in</strong>terest is heavily context driven (even with<strong>in</strong> an organisation such as <strong>ICAEW</strong>) and afixed detailed def<strong>in</strong>ition would be unable to keep up with future developments. An example ofa similar view from <strong>the</strong> UK government is a comment <strong>in</strong> <strong>the</strong> consultation paper accompany<strong>in</strong>g<strong>the</strong> draft Defamation Bill 2011: ‘… <strong>in</strong> view of <strong>the</strong> very wide range of matters which are of <strong>public</strong><strong>in</strong>terest and <strong>the</strong> sensitivity of this to factual circumstances, attempt<strong>in</strong>g to def<strong>in</strong>e it [<strong>the</strong> <strong>public</strong><strong>in</strong>terest] <strong>in</strong> statute would be fraught with problems.’ 11More relevant than a detailed def<strong>in</strong>ition, <strong>in</strong> our view, is <strong>the</strong> outcome: that actions asserted to be<strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest are, and can be, assessed as be<strong>in</strong>g <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest. This can take time:a measure aimed at long-term benefit will need to be assessed over <strong>the</strong> long term. However,<strong>for</strong> people or organisations to assert that <strong>the</strong>y act <strong>in</strong> <strong>the</strong> <strong>public</strong> <strong>in</strong>terest is of little value: <strong>in</strong>deedit can be dangerous to <strong>the</strong>ir reputation if <strong>the</strong>y make such an assertion but fail to deliver. It is farmore important and of more last<strong>in</strong>g value that o<strong>the</strong>rs can see that <strong>the</strong>y actually do act <strong>in</strong> <strong>the</strong><strong>public</strong> <strong>in</strong>terest.7www.icaew.com/marketfoundations.8Lewis, ‘The Common Good <strong>in</strong> Classical Political Philosophy’.9International Federation of Accountants, Policy Position Paper 5: A Def<strong>in</strong>ition of <strong>the</strong> Public Interest.10Ibid.11M<strong>in</strong>istry of Justice, ‘Draft Defamation Bill’.Introduction11
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9. IMPLEMENTATIONA proposed action
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9.2.1 Government authorityAt the st
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12. The framework proposes a signif
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ibliographyAdler, Jonathan H, Perve
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Goldstein, Eric A, ‘Defining the
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Persky, Joseph, ‘Retrospectives:
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The ICAEW is a founder member of th