4.1 Developing your policy
In every public sector organisation there are potential risks associated with gifts, benefits and hospitality. Embedding a policy within your organisation’s culture gives employees and business associates certainty about what your organisation requires of them. It is also an effective way to mitigate potential risks.
Organisations may adopt and build on the Victorian Public Sector Commission’s (VPSC’s) model policy for gifts, benefits and hospitality (available on the VPSC website at www.vpsc.vic.gov.au/resources/gifts-benefits-and-hospitality-resource-suite/). The model policy provides robust and consistent standards for applying the minimum accountabilities.
Key steps for developing your organisation’s gifts, benefits and hospitality policy:
- Consider using the VPSC’s model gifts, benefits and hospitality policy as the basis of your policy.
- Undertake background research including:
- examining your organisation’s regulatory frameworks;
- environmental scanning for good practice and common shortfalls in managing gifts, benefits and hospitality;
- consulting with employees and stakeholders;
- identifying related policy areas;
- understanding relevant cultural practices; and
- considering the topics set out in the model policy.
- Assess your organisation’s gifts, benefits and hospitality risks.
- Decide on your organisation’s policy position.
- Define the policy’s aims, objectives and key audiences.
- Develop the key principles and policy content.
- Discuss the principles and policy content at the executive level.
- Draft the policy and consult managers, employees and key stakeholders about the draft policy, including the relevant union.
- Implement the policy and publish it on your organisation’s intranet and website.
Public sector organisations should consider who needs to be involved in the policy development process. Consulting with employees and business associates encourages them to begin thinking about how gifts, benefits and hospitality risks may arise within your organisation. This will improve their understanding of the issue and engagement with the final policy.
4.1.1 Assess your risks
Risks to impartiality and integrity arising from providing or receiving gifts, benefits and hospitality may occur in any part of an organisation; although some activities have a higher risk than others. Your organisation’s policy should be informed by your organisation’s functions, the types of roles employees perform and their level of contact with customers, clients, members of the public and business associates.
Questions to assess your gifts, benefits and hospitality risks and how to manage them:
- In what circumstances might an offer be made to an employee and when, if at all, can they accept it? Issues to consider include why the offer was made and whether a conflict of interest could arise, the legitimate business benefit the offer provides and the public perception of acceptance.
- Are there particular roles or activities that are at greater risk of being compromised than others?
- Is there legislation, or government policy, prohibiting or impacting upon providing or receiving gifts, benefits and hospitality in certain situations (including the minimum accountabilities)?
- Do complaints or disciplinary cases involving the provision or acceptance of gifts, benefits and hospitality identify opportunities to implement increased risk mitigation measures?
- Does your organisation’s gifts, benefits and hospitality register identify any trends or key risks?
- In what circumstances might the organisation provide gifts, benefits or hospitality? Under what circumstances would this be appropriate? When would it be inappropriate?
- How would you explain your decision about the provision of the gift, benefit or hospitality publicly, or to those to whom you are accountable?
- Would case studies and scenarios help explain the type of situations employees may face during the course of their duties?
4.1.1.1 Conflict of interest risk
Addressing conflict of interest (actual, potential or perceived) is fundamental to ensuring high levels of integrity in the Victorian public sector. Activities that have a higher risk of conflict of interest, which your organisation should consider when developing its policy include:
Procurement and recruitment
- procuring goods or services;
- tendering for and managing contracts; and
- making appointments to positions.
Regulating individual or business activities
- inspecting, regulating, or monitoring standards, businesses, equipment or premises;
- issuing qualifications or licences; and
- issuing or reviewing fines or penalties.
Distributing goods, services or funds
- providing a service;
- allocating grants of public funds; and
- allocating subsidies, financial assistance, concessions, or other relief.
Making binding decisions
- issuing determinations on matters;
- passing binding judgments; and
- exercising powers over planning and land development.
4.1.2 Decide on the type of policy
Policies can require a total ban on the acceptance of gifts, benefits and hospitality, or allow acceptance in some circumstances. Your organisation should adopt the policy position that best suits its operating environment and risk profile.
4.1.2.1 Policy that bans the acceptance of any gift, benefit or hospitality
A policy of refusing all offers of gifts, benefits and hospitality is simple to administer and understand, and avoids risks to impartiality, integrity and accountability. This approach is appropriate for organisations with a high-risk profile or a low likelihood of receiving offers; for example, organisations that do not liaise with external business associates, or who have integrity, regulatory or quasi-judicial functions.
If adopting this approach, the policy should include strategies for declining gifts, benefits and hospitality without causing offence or embarrassment.
4.1.2.2 Policy that allows the acceptance of some gifts, benefits and hospitality
A total ban on accepting offers of gifts, benefits and hospitality may be impractical for some organisations. For example, where staff often receive offers through frequent contact with clients, foreign dignitaries and members of the public; or if the organisation has low risk functions. Liaising with external stakeholders may be intrinsic to fulfilling your organisation’s roles and functions. For example, providing hospitality or facilitating external stakeholder groups may be part of doing business.
Policies that allow individuals to accept some offers of gifts, benefits or hospitality need to establish clear processes for acceptance. In particular, your organisation’s policy should provide guidance on:
- when there is (or is not) a legitimate business reason for accepting an offer; and
- identifying and managing actual, potential or perceived conflicts of interest.
4.1.2.3 Ceremonial gifts
Your organisation’s policy can direct individuals to accept ceremonial gifts on behalf of your organisation, even if your policy bans the acceptance of other types of gifts. Ceremonial gifts need to be recorded on your organisation’s internal register but do not need to be published.
Ceremonial gifts are treated separately to other types of gifts because:
- they are the property of your organisation, irrespective of value, and are less likely to create a conflict of interest; and
- refusing ceremonial gifts may cause offence or embarrassment to the organisation, community or government who offered the gift.
4.1.3 Principles and policy content
Gifts, benefits and hospitality policies should encourage behaviours that earn and sustain community and government trust. Key high level principles for applying a gifts, benefits and hospitality policy are:
- Impartiality – individuals place the public interest above their private interests when carrying out their duties. They refuse offers of gifts, benefits and hospitality that could reasonably be perceived as influencing them or undermining the integrity of their organisation.
- Accountability – individuals are accountable for appropriately responding to and providing gifts, benefits and hospitality. Managers are accountable for modelling good practice, promoting awareness and overseeing their direct reports’ management of gifts, benefits and hospitality.
- Integrity – individuals strive to earn and sustain public trust and avoid any real or apparent conflicts of interest when offering or responding to gifts, benefits and hospitality.
- Risk-based approach – organisations ensure gifts, benefits and hospitality risks are appropriately assessed and managed. Individuals with direct reports communicate the risks inherent in their team’s work and monitor the risks to which their direct reports are exposed.
Topics your gifts, benefits and hospitality policy should cover:
- Policy purpose (why have the policy).
- Application (who the policy applies to).
- Policy principles.
- Minimum accountabilities.
- Key definitions (e.g. definitions of token offer; business benefit; gifts, benefits and hospitality).
- Considerations for staff when offered or offering gifts, benefits and hospitality (particularly conflict of interest and legitimate business benefit).
- Processes including:
- declaring, recording and managing offers of gifts, benefits and hospitality;
- determining which gifts, benefits and hospitality can be accepted and which must be declined;
- determining the scale, cost and nature of the gifts, benefits or hospitality that can be provided; and
- monitoring and reporting on the acceptance and provision of gifts, benefits and hospitality.
- Links to related policies (e.g. the organisation’s conflict of interest policy).
- How employees can report suspected breaches of the policy.
- How the organisation will respond to breaches of the policy.
- Advice or further information.
4.1.4 Breaches of the policy
Your organisation’s gifts, benefits and hospitality policy should articulate a clear process for employees to report suspected inducements or attempted bribery, either to the head of the organisation or a senior delegate. Employees who observe corrupt conduct in their colleagues (e.g. accepting a bribe) can also make a protected disclosure directly to the Independent Broad-based Anti-corruption Commission (IBAC).
Organisations must also have a clear policy on managing breaches of its gifts, benefits and hospitality policy. This should outline any disciplinary action that may be taken, including dismissal, when employees fail to adhere to its policy. This includes when an employee fails to avoid, wherever possible, or identify, declare and manage a conflict of interest related to gifts, benefits and hospitality.
4.2 Implementing your policy
Development of a policy is the first step to managing gifts, benefits and hospitality. However, even the most comprehensive policy is ineffective if it is not implemented properly. Organisational culture has a much greater effect on how employees behave than policies and procedures. Research conducted by the VPSC indicates that an employee’s belief that their manager acts ethically has more impact on their perceptions of integrity than does their knowledge of organisational policies and procedures.
Your organisation’s gifts, benefits and hospitality policy should also be embedded in other relevant organisational policies and procedures, including those related to conflict of interest and procurement.
4.2.1 Education and training
Education, training, leadership and communication are critical to implementing a policy. When an organisation adopts a participatory approach to policy development, the education process will begin during this engagement. Having employees, managers and stakeholders involved in the development process encourages understanding and a sense of ownership of the policy.
Ongoing training and education about the policy and associated procedures are essential for embedding it within an organisation. This should form part of the induction process for public officials when discussing the public sector values of integrity, impartiality and accountability and how these values apply to their role. Face-to-face training or short videos featuring senior leaders may also be considered for employees undertaking higher risk activities.
Specific training for all employees is desirable but is not always feasible. However it may be possible to provide newsletters, items on your organisation’s intranet or other electronic communications at key times to maximise awareness.
Managing gifts, benefits and hospitality appropriately is likely to require employees to use their judgment when applying their organisation’s policy and adhering to the minimum accountabilities. To support employees in exercising their judgment, it is important to provide education and training in:
- identifying if there is a legitimate business benefit or a conflict of interest in accepting an offer; and
- understanding when accepting a gift, benefit or hospitality will bring themselves, their organisation or the public sector into disrepute.
4.2.2 Leadership
Research indicates that leadership is fundamental to embedding the appropriate values and behaviours in an organisation’s culture. Leadership is also central to successfully implementing a gifts, benefits and hospitality policy. It must be clear to all within the organisation that the head of the organisation and senior leaders sponsor and comply with the policy and will enforce adherence to it, including taking decisive action in response to breaches.
This sponsorship and support must be expressed in what is said as well as in the way that leaders and managers behave. Designating a senior manager as a contact person for discussing issues relating to gifts, benefits and hospitality may assist with reinforcing the importance of your organisation’s policy.
4.2.3 Communication
An effective communication strategy is critical to implementing your organisation’s policy. It should target internal and external audiences, including general employees, employees in high-risk roles or with high-risk responsibilities, and managers who need to manage their own risks as well as assist employees with managing gifts, benefits and hospitality issues.
It is also important to communicate the policy to business associates, including clients, customers or current or prospective suppliers. At a minimum, your organisation should:
- Communicate to business associates your organisation’s position on the offering of gifts, benefits and hospitality to its employees, and that acting contrary to this position may result in contract re-negotiation or termination.
- Communicate to employees your organisation’s gifts, benefits and hospitality policy and processes and that a breach of the policy or the minimum accountabilities may constitute a breach of binding Codes of Conduct, or constitute criminal or corrupt conduct and result in disciplinary action.
- Publish the policy and register on your website.
If the policy allows employees to accept some offers, your organisation should communicate to business associates (including prospective and current suppliers) that an offer should not be made and will be refused if it conflicts with the minimum accountabilities.
Communicating the policy directly to business associates and more broadly on the organisation’s website sets clear expectations about how the organisation expects people to conduct themselves with respect to gifts, benefits and hospitality. It will also assist in building an ethical reputation. It demonstrates to employees that senior leadership are committed to the policy and to encouraging the types of behaviours that earn and sustain community and government trust.
Organisations can also consider targeted communication to remind people of their responsibilities at critical times (such as during holiday periods like Christmas, during industry association trade fairs and events, or before a procurement or recruitment process). The risk assessment will have identified key activities and functions and this should be used to tailor communications.
Other ways to communicate your organisation’s policy position include:
- broadcasting the policy in brochures, posters and other publicity;
- referring to the policy in contracts and other corporate documents;
- suggesting a way of declining the gift, benefit or hospitality in person and explaining the policy;
- suggested wording for letters returning a gift that has been delivered to the office or workplace;
- suggesting alternative means for clients to express their appreciation to front line employees such as a clearly sign-posted feedback box; or
- explaining the policy to conference organisers at the time of accepting a speaking engagement so the host knows not to offer non-token gifts in appreciation for the presentation.