12.69 Regulation 2.1(4) of the Public Service Regulations prohibits an APS employee from disclosing information which the employee has obtained or generated in connection with his or her employment if the information:
(a) was, or is to be, communicated in confidence within the government; or
(b) was received in confidence by the government from a person or persons outside the government;
whether or not the disclosure would found an action for breach of confidence.
12.70 The Explanatory Statement for the 2006 regulation advises that:
Information will be taken to be received in confidence by the government from a person or persons outside the government where the provision of the information is subject to an express confidentiality condition (whether in a contract or otherwise), and in other circumstances where it is clear that the information is provided on the basis that it is to be used only for the purpose for which it is provided. Again, the nature and context of the information may make it clear that the information is disclosed on a confidential basis (eg information provided by a foreign State about its likely position in a treaty negotiation or information provided by a commercial entity which would be useful to its competitors).
12.71 The Explanatory Statement notes that other circumstances that may indicate that the information has been given in confidence include where information is given to an employee on the understanding that it is only to be disclosed in the course of official duties—for example, where the information has been given a security classification.
12.72 In DP 74, the ALRC noted the substantial overlap between reg 2.1(4)—information communicated in confidence—and the ALRC’s proposed revisions to reg 2.1(3)—information which, if disclosed, would be prejudicial to the effective working of government either on the basis of the nature of the information or the circumstances of its disclosure.
12.73 One indication that the disclosure of information could prejudice the effective working of government on the basis of the nature of the information is the availability of an exemption under the FOI Act. Several FOI exemptions are relevant to confidential information. First, an exemption applies where the disclosure of a document under the FOI Act ‘would found an action, by a person (other than an agency or the Commonwealth), for breach of confidence’. A further exemption applies if disclosure
would divulge any information or matter communicated in confidence by or on behalf of a foreign government, an authority of a foreign government or an international organisation to the Government of the Commonwealth, to an authority of the Commonwealth or to a person receiving the communication on behalf of the Commonwealth or of an authority of the Commonwealth.
12.74 The disclosure of confidential information by an APS employee could also prejudice the effective working of government on the basis of the circumstances of the disclosure. This is likely to be the case, for example, in relation to the disclosure of security classified information.
12.75 As discussed in Chapter 3, the equitable action for breach of confidence applies to ‘confidential information improperly or surreptitiously obtained or of information imparted in confidence which ought not to be divulged’. In Commonwealth v Fairfax, the High Court discussed how this principle could apply to government information. The Court held that, beyond simply demonstrating the confidential nature of the information, the government must show that it would be to its detriment for the information to be communicated. The claim to confidentiality will be determined ‘by reference to the public interest’—only those disclosures that are likely to injure the public interest will be protected.
Submissions and consultations
12.76 In DP 74, the ALRC proposed that the express prohibition on the disclosure of information communicated in confidence set out in reg 2.1(4) should be removed. This was supported by a number of government and other stakeholders.
12.77 However, several Australian Government agencies were strongly of the view that a separate provision for the protection of confidential information should be retained—even where they acknowledged that such disclosures were likely to fall within the scope of ‘prejudice to the effective working of government’. The ACC, for example, submitted that a provision that clearly applied to confidential information provided stronger protection for information that is provided in confidence to it for the national criminal intelligence database. This was considered preferable to relying on ‘implications drawn from a broad provision about the effective working of government’. This position was consistent with advice from the APSC that, in developing reg 2.1, some agencies were keen to ensure that all confidential information was explicitly covered by the regulation.
12.78 Where there is no reasonable likelihood that disclosure would result in prejudice to the effective working of government, the ALRC is not convinced that there is a valid public policy basis for exposing an APS employee to disciplinary action. Consistently with this view, the prohibition on the disclosure of confidential information set out in reg 2.1(4) of the Public Service Regulations is unnecessary and should be removed.
12.79 This recommendation recognises the important balance between the public interests in protecting certain information from disclosure, as against the public interests in facilitating open and accountable government. The recommendation also accords with limitations that have been placed on the protection of confidential information held by government pursuant to the equitable doctrine.
12.80 In other parts of this Report, the ALRC has considered the protection of confidential information held by the Australian Government through the operation of criminal sanctions. Generally, the ALRC has expressed the view that a Commonwealth officer should only be subject to criminal proceedings for disclosing confidential information where the particular disclosure caused, or was reasonably likely, or intended to cause, harm to an essential public interest—for example, damage to the flow of information between governments and international organisations.
12.81 In Chapter 8, the ALRC accepts that a tightly defined subset of confidential information may be given protection as a category of information under criminal secrecy offences, without the need to prove that the disclosure of that information caused, or was likely or intended to cause, harm. An APS employee who discloses confidential information in breach of any such offence may be subject to administrative proceedings through s 13(4) of the Public Service Act.
Recommendation 12–3 The express prohibition on the disclosure of information communicated in confidence set out in reg 2.1(4) of the Public Service Regulations 1999 (Cth) should be removed.
Public Service Regulations 1999 (Cth) reg 2.1(4).
 Explanatory Statement, Public Service Amendment Regulations (No 1) 2006 (Cth) (SLO No 183 of 2006), 3.
Freedom of Information Act 1982 (Cth) s 45. The exemption does not apply to certain official documents unless the disclosure would constitute a breach of confidence owed to a person or body other than: a minister or ministerial officer or an Australian Government agency or officer of an agency. The Exposure Draft, Freedom of Information Amendment (Reform) Bill 2009 (Cth) does not amend this exemption.
Freedom of Information Act 1982 (Cth) s 33(b). An equivalent exemption applies to information or matter communicated in confidence by or on behalf of a state: s 33A. The Exposure Draft, Freedom of Information Amendment (Reform) Bill 2009 (Cth) does not amend these exemptions.
 The security classification system for the Australian Government is discussed in Ch 14.
Commonwealth v Fairfax (1980) 147 CLR 39, 50, citing Lord Ashburton v Pope (1913) 2 Ch 469, 475.
Commonwealth v Fairfax (1980) 147 CLR 39, 52.
 Australian Law Reform Commission, Review of Secrecy Laws, Discussion Paper 74 (2009), Proposal
 Department of Human Services, Submission SR 83, 8 September 2009; Department of Health and Ageing, Submission SR 81, 28 August 2009; R Fraser, Submission SR 78, 21 August 2009; Department of Families, Housing, Community Services and Indigenous Affairs, Submission SR 68, 14 August 2009; Civil Liberties Australia, Submission SR 47, 27 July 2009.
 See, eg, Australian Transaction Reports and Analysis Centre, Submission SR 73, 17 August 2009; Australian Taxation Office, Submission SR 55, 7 August 2009.
 See, eg, Australian Transaction Reports and Analysis Centre, Submission SR 73, 17 August 2009.
 Australian Crime Commission, Submission SR 75, 19 August 2009.
 Australian Public Service Commission, Submission SR 56, 7 August 2009.
Commonwealth v Fairfax (1980) 147 CLR 39.
 The term ‘essential public interest’ is defined in Ch 1.
 See Ch 5.
 Recommendation 8–2.
 As noted above, Public Service Act 1999 (Cth) s 13(4) requires an APS employee, when acting in the course of APS employment, to comply with all applicable Australian laws.