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Public service authorities seem reluctant to discuss sex, or even more mundane social relationships. Photo: Steve Baccon

Here is a conundrum almost all Canberra public servants will face in their career, sometimes regularly. You are sitting on a panel that is assessing bids - whether for a job, a grant or a supply contract. You soon realise you know one of the applicants.

Social relationships can bias procurement and recruitment outcomes, perhaps far more so than financial interests. 

What you do next, however, is far from clear. If the applicant is a relative, the right response is obvious: you declare the conflict of interest (or at least the perception of a conflict) and withdraw from the panel. If they are a close friend, you do the same.

But what if the applicant is a friendly acquaintance - perhaps a former colleague, or someone with whom you play sport or share a drink every few months or so?

What if you had a sexual relationship with the applicant a few years back? One could argue your ethical duty is to declare the tryst and either withdraw from the panel or let your boss decide whether the fling poses an insurmountable conflict. But if you are unwilling to share details of your intimate relationships with your manager (and I assume many people would feel that way), you are likely to keep mum and plough on with the process, regardless of your ethico-legal duties.

Even the less awkward way to opt out - declare a potential conflict but omit any explicit details of that conflict - may raise eyebrows and spark gossip. Your manager, perhaps frustrated by the delay, might demand to know why they must now find a replacement panel member. For many people, the temptation to maintain one's privacy and avoid declaring such a relationship will outweigh the incentives to act in a clearly ethical (and lawful) way.

Send your confidential public service tips to ps@canberratimes.com.au.

Conflicts of interest in government are a potentially vast problem: they can skew how billions of dollars of taxpayers' money are spent each year. Most of the resulting public scrutiny is on parliamentarians' financial interests. This is important but it misses an obvious point: public servants, not politicians, are behind most spending decisions. Ministers are unaware of the vast majority of purchases and recruitment decisions that they nominally authorise.

Yet while transparency of parliamentarians' financial interests, via an updated public register, is seen as a crucial safeguard against corruption, the private interests of bureaucrats remain a mystery. Every public servant must by law ''take reasonable steps to avoid any conflict of interest (real or apparent)'' in connection with their work, but the interpretation of this legislation varies depending on your workplace. All senior executives must declare their conflicts in writing to their agency head, but an Auditor-General's report on this topic, published last week, found that, in some agencies, it was unclear whether more junior officers needed to report their conflicts. The audit also found that, while almost all agency heads issued instructions to staff about conflicts of interest, ''these usually contained very little information''.

A bigger problem, unmentioned in the audit report, is that the bureaucracy tends to focus on managing its ''easy'' conflicts: its staff's financial interests (such as which company shares they hold) and the direct interests of their immediate family members (such as where they work).

Yet public servants receive little advice, if any, on the most common potential conflicts of interest they will face: those that involve social relationships. Unfortunately, the Auditor-General's 100-page report lacked any case studies of conflicts of interest that might have illustrated the ethical principles at play. Rather, it assessed whether each agency had an appropriate policy ''framework'' and associated documents and protocols; important stuff, yes, but the existence of guidelines does not automatically mean staff understand how to act.

The Public Service Commission has published a few hypothetical examples of public servants' potential conflicts, though, again, they focus on the relatively straightforward ones: financial interests and family members. So I asked the commission's head of ethics, Karin Fisher, to help sort through some of the relationships discussed above: the acquaintance, the former colleague, the ex-lover. If I was sitting on a panel, which type of relationship must I declare? Which would be significant enough to prompt me to withdraw from the panel?

Alas, she said providing answers to hypothetical questions ''is difficult as conflicts of interests are usually highly contextual''. She added that agencies generally advised that, if staff were unsure about whether a conflict existed, ''they should discuss the matter with their manager in the first instance''. That hardly helps if you would prefer not to tell your manager with whom you had slept, but Fisher did add that the commission's ethics advisory service offers ''confidential advice on these matters'' to public servants.

For thousands of years, scholars have taught ethics not by discussing principles or ''overarching frameworks'' but by arguing over examples. If you are unprepared to discuss hypothetical cases, you are not really prepared to discuss the principles involved.

Nonetheless, public service authorities seem reluctant to discuss sex, or even more mundane social relationships. Yet we should not kid ourselves: they can greatly bias procurement and recruitment outcomes, perhaps far more so than staff's shareholdings. Canberra is still a smallish place; it is even smaller within each professional field. Public servants will inevitably befriend some of the people with whom they have business dealings. It is crucial that they are not confused about how to manage these friendships.

Yet this conundrum became even less clear this week, due to a slight change to the Public Service Act. Previously, the code of conduct required all public servants to ''disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment''. As of July 1, they must still avoid a conflict but need only declare it if it involves a ''material personal interest''. What does that mean? Essentially, if a public servant decides that a potential interest will not affect their work, they need not mention it to anyone.

It has just become a little easier for public servants to suppress any knowledge of their relationships, sexual or otherwise, and to justify doing so legally. This will certainly help protect government employees' privacy, but who knows what it will cost the public.

Markus Mannheim edits the Informant.