(Posted 23/12/05)

Note:  References to Acts and formal procedures relate to New South Wales

The corruption risk areas explored in this discussion paper are:

Under the Local Government Act 1993 and Environmental Planning and Assessment Act 1979 (EP&A Act) councillors have different roles. These roles include involvement in preparing Local Environmental Plans (LEPs) for ministerial approval, deciding whether to grant development consent to a development application, and being a constituent representative. At times these roles can be perceived to be in conflict with each other.

As community representatives, councillors will inevitably experience non-pecuniary conflicts of interest when dealing with planning matters. Failure to effectively manage non-pecuniary conflicts of interest can undermine the integrity of the planning system.

Council officers can have recurring dealings with professional developers and architects. The frequency of contact between council officers and applicants can create the risk of regulatory capture.

Councils are the consent authority for the majority of development applications. Councils have conflicting roles in situations where they are land owners and land regulators.

Development proposals can include the purchase of council-owned land. Under section 55(3) of the Local Government Act a council does not have to invite tenders for the sale of land. This may be appropriate in some circumstances. However, councils need to take steps to ensure that they have obtained value for money in such circumstances.

Many councils engage consultants on a regular basis to assist in planning matters. These circumstances include:

• assistance with preparing LEPs and developing Development Control Plans (DCPs)

• the assessment of developments where a council has a conflict of roles

• the routine assessment of development applications when a council is experiencing a shortage of planning staff.

Consultants can also experience personal conflicts of interest that undermine their impartiality.

The ICAC appreciates that departures from development standards can be necessary to help create positive planning outcomes in some circumstances. However, given the potential for abuse of provisions such as State Environmental Planning Policy (SEPP) 1 it may be appropriate to consider the circumstances in which an oversight mechanism should be used.

Recent amendments to the EP&A Act provide a statutory framework for planning agreements. Planning agreements may facilitate the provision of public benefits that do not relate to the subject development. This potentially creates probity considerations including perceptions of the misuse of planning discretions.

Political donations and their potential impact on the integrity of the planning system remain a live issue. The ICAC is concerned about political donations from parties with an interest in a development outcome at both a local government and state level.