Bad RM no excuse for stonewalling FOI: Information Commissioner

Information Commissioner Timothy Pilgrim has ruled that poor record-keeping practices are no reason for the Australian Securities and Investments Commission (ASIC) to charge exorbitant fees for a journalist’s FOI request.

The Australian newspaper had sought correspondence between ASIC and the National Australia Bank (NAB) following reports that ASIC had allowed NAB to check and alter one of the regulator’s press releases, to determine whether this was a one-off or a regular occurrence.

The FOI request was made in February 2015. Three months later, on May 1st 2015, ASIC responded that the request would cost $A4,380 to process and claimed it required “228 hours search and retrieval time and 45 hours of decision making time.”

ASIC submitted that ‘[a]s the Scope of the request covered multiple matters over a long period of time, collating relevant documents required considerable coordination and input’.

In his decision to strike out the $4380 fee, Mr Pilgrim noted “While the FOI Act does not mandate particular methods of storage of documents by agencies, in processing an FOI request an agency cannot shift its costs resulting from an inefficient records management system to an FOI applicant.

“ASIC’s own detailed breakdown of work done demonstrates the inefficiency of its document handling system.

“An underlying assumption in calculating search and retrieval time is that the agency or minister maintains a high quality record system. Search and retrieval time is to be calculated on the basis that a document will be found in the place indicated in the agency’s or minister’s filing system (reg 2(2)(a)) or, if no such indication is given, in the place that reasonably should have been indicated in the filing system (reg 2(2)(b)). The ‘filing system’ of an agency or minister should be taken as including central registries as well as other authorised systems used to record the location of documents.”

“Time used by an officer in searching for a document that is not where it ought to be, or that is not listed in the official filing system, cannot be charged to an applicant. In summary, applicants cannot be disadvantaged by poor or inefficient record keeping by agencies or ministers.”

ASIC had submitted that its search and retrieval estimate included 25 hours for one officer of the Financial Adviser team to:

  • search his own email in-box and relevant folders
  • request three Executive Assistants to search three email in-boxes and provide to him any relevant documents, which he then ‘perused’
  • liaise with IT to obtain access to a former staff member’s inbox and conduct a search of it, and
  • save 49 relevant documents

According to ASIC’s own published Guidelines on records retention, all “emails messages and correspondence documenting discussions with senior management, external agencies, businesses, industry professionals and other individuals that involve decisions and advice regarding financial or legal issues or other key work processes and courses of action” should be captured in the corporate record-keeping system.

Mr Pilgrim observed that “While the scope of the request is specific, in that the applicant is seeking various background documents relating to 12 nominated ASIC media releases, it is clear from ASIC’s submissions that documents relating to the preparation of each media release were not filed together nor were they effectively categorised and readily retrievable through an appropriately configured records management system.

“Rather, on receipt of the request it is apparent that ASIC had to discuss with a significant number of officers the likely locale of relevant documents and carry out searches of many separate electronic storage areas (and in one case hardcopy notes). This includes searches of a large number of particular employees’ email accounts, at least one of whom had left the organisation.

“It is therefore apparent that many of the documents at issue were not integrated into a records management system which could readily identify and collate relevant documents.

“I consider that efficient record keeping could have documents relevant to each media release located either together in a single file or effectively categorised and readily retrievable through an appropriately configured records management system. Had this been done, it is apparent that much of the manual search and retrieval work that ASIC had to undertake in response to the request could have been avoided.”

A 2016 advertisement for an Information Governance Manager at ASIC highlighted a “significant technology transformation” underway at the Federal Government Agency in a number of areas such as virtualisation, mobility, cloud & roll out of Microsoft applications in the enterprise such as Microsoft Dynamics, SharePoint and SQL services.

In 2007 ASIC received increased funding of $A116.7 million over four years to “invest in essential business support tools including electronic document and records management systems and data warehousing.”

Mr Pilgrim also ordered ASIC to entirely waive the fee because the request, which The Australian filed two years ago, was in the public interest

“The FOI request was lodged following reports in February [2015] that ASIC allowed NAB to check and alter a media release dealing with serious problems with its Navigator wealth management platform.

“These reports came amid a crisis of confidence in the financial services industry and ASIC’s enforcement of the law regulating financial service licensees, especially big banks.

“The question that therefore arises and underpins the FOI request is: was this a one-off or has ASIC regularly allowed the regulated population, especially large institutions, to edit its output?

“This is self-evidently a matter of wide public importance. The documents deal with ASIC’s administration of the law covering hundreds of thousands of customers and hundreds of millions of dollars,” said Mr Pilgrim.

“The documents in this case relate to ASIC’s regulation of major corporate financial institutions. The applicant is seeking access to documents that would potentially provide insight into ASIC’s relationships with those institutions. Specifically, whether, or to what extent ASIC has allowed those institutions to contribute to the content of its media releases.

“I agree with ASIC that there is a general public interest in the matters to which the request relates. I also agree with the applicant that ‘ASIC’s administration of the law covers hundreds of thousands of [financial institution’s] customers...’, which is a substantial section of the Australian public. In my view, giving the applicant access to the documents in this case may serve to better inform the public of ASIC’s regulatory processes and would likely contribute towards increasing scrutiny, discussion, comment and review of the Government’s activities.”

The full judgement is available HERE.