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Complaint no. LA/CES/555 concerning an alleged contravention of the Councillors' Code of Conduct by Councillors Angus Campbell, Archibald K Campbell, Peter Carlin, Alexander A Macdonald, Annie MacDonald, Norman A Macdonald, John Mackay, Donald Manford and (former) Councillor Angus Nicolson of Comhairle nan Eilean Siar

1. Complaint number LA/CES/555 alleged a contravention of the Councillors' Code of Conduct ("the Code") by Councillors Angus Campbell, Archibald K Campbell, Peter Carlin, Alexander A Macdonald, Annie MacDonald, Norman A Macdonald, John Mackay, Donald Manford and (former) Councillor Angus Nicolson ("the respondents").

2. It was alleged that the respondents had contravened the Code, in particular, that:

- Councillors Archibald K Campbell, Peter Carlin and John Mackay had contravened paragraphs 3.18 and 3.19 (Appointments to Partner Organisations), paragraphs 4.1 and 4.2 (Registration of Interests) and paragraph 4.21 (Non-Financial Interests);

- Councillors Angus Campbell, Archibald K Campbell, Peter Carlin, Alexander A Macdonald and John Mackay had contravened paragraphs 5.1 to 5.4 (Declaration of Interests), paragraph 5.5 (Interests which Require Declaration), paragraphs 5.9 and 5.10 (Non-Financial Interests), paragraphs 5.14 and 5.15 (Making a Declaration), paragraphs 5.16 to 5.18 (Effect of Declaration) and paragraphs 7.2, 7.3, 7.8 and 7.11 (Dealing with Planning Applications);

- Councillors Annie MacDonald, Norman A Macdonald, Donald Manford and Angus Nicolson had contravened paragraphs 7.2, 7.3, 7.10 and 7.11 (Dealing with Planning Applications).

3. The background to the complaint was the Comhairle's declared objectives of achieving optimum benefit and mitigating any adverse impact from wind farm developments in the Western Isles through community benefit contributions from developers. To pursue the objectives the Comhairle set up a Member/Officer Working Group ("the M/O WG") and a Focus Group and established the Western Isles Development Trust ("the WIDT").

4. The person complaining ("the complainant") alleged that Councillors Archibald K Campbell, Peter Carlin and John Mackay (who were appointed by the Comhairle as Directors of WIDT) should have registered their interest as Directors in the Members' Register of Interests and that Councillors Angus Campbell, Archibald K Campbell, Peter Carlin, Alexander A Macdonald and John Mackay failed to declare their Directorships of WIDT when dealing with wind farm planning applications at Comhairle Committees. In addition, the complainant questioned whether, as members of the M/O WG or the Focus Group and having been involved in community benefit negotiations with wind farm developers, it was proper for Councillors Norman A Macdonald, Annie Macdonald, Donald Manford and Angus Nicolson to have been involved in taking decisions on the planning applications which would yield that benefit.

It is relevant to point out that Councillors' appointments as Directors of WIDT and as members of the M/O WG and the Focus Group all terminated on 2 May 2007. Appointments to these bodies will be made by the new by elected Council.

5. The first complaint alleged that as WIDT stands to make significant financial gains from renewable energy developments in the Western Isles those councillors who were Directors of WIDT had a significant conflict of interest (with their position as members of the Comhairle) which they should have registered. The complainant considered that Councillors Angus Campbell and Alexander A Macdonald set a precedent by registering their Directorships and, by implication, that Councillors Archibald K Campbell, Peter Carlin and John Mackay should also have done so. The complainant cited paragraphs 3.18 and 3.19 of the Code along with paragraphs 4.1, 4.2 and 4.21 as being relevant.

6. Paragraphs 3.18 and 3.19 relate to councillors who are appointed to partner organisations. The provisions are advisory in nature rather than specific rules relating to the registration of interests which are in section 4 of the Code. Paragraphs 4.1 and 4.2 offer general advice regarding the registration of interests, the more specific and relevant provisions being in paragraphs 4.3 and 4.21. Paragraph 4.3 states that a councillor has a registerable interest where he or she receives remuneration by virtue of being a director of an undertaking. Paragraph 4.12 states that directorships which themselves are not remunerated but where the organisation is a subsidiary of, or a parent of, a company or undertaking in which the councillor holds a remunerated directorship must also be registered.

7. The Monitoring Officer confirmed that councillors who were Directors of WIDT received no fees, salaries or dividends and that no councillors stand to gain personally from any community benefit received. Accordingly, in the absence of receipt of any remuneration arising from their directorships, or of any other personal financial benefit or potential benefit, I found that the respondents did not have a financial interest and were not required to register their directorships of WIDT under paragraphs 4.3 or 4.12 of the Code.

8. Paragraph 4.21 of the Code states that non-financial interests should be registered and defines such interests as those which members of the public might reasonably think could influence a councillor's actions, speeches or votes in the Council. The paragraph cites membership of public bodies, companies, clubs, societies and organisations such as trade unions and voluntary organisations as interests which should be registered.

9. The Comhairle has not yet decided whether any community benefit received will be channelled through WIDT or through a Charitable Trust still to be set up and, in any event, the objectives of WIDT provide for community benefit to be distributed for the benefit of communities throughout the Western Isles. As the Directors of WIDT (only 5 out of 12 of which are comprised of members of the Comhairle) do not stand to gain personally from any community benefit which may be received by WIDT the respondents' interest is of a non-financial nature. Having regard to the fact that the respondents had been appointed by the Comhairle to the Trust, that the nature of any benefit to the Trust will in itself be public and that any benefit to the Trust is speculative, and given the terms of paragraph 4.21 of the Code, I did not consider that - in all circumstances - it could reasonably be concluded that there was an obligation on Councillors Archibald K Campbell, Peter Carlin and John Mackay to have registered their Directorships in WIDT as a non-financial interest in the Members' Register of Interests and I found accordingly. I did, however, observe that this matter requires to be kept under review by the respondents and circumstances may require councillors appointed to these positions to consider registering their directorships in the future. In this connection, I commended paragraphs 80 and 81 of the Standards Commission's Guidance which came into effect on 03 May 2007.

10. The second complaint alleged that, despite a demonstrable link between the financial interests of WIDT and decisions taken by the Comhairle relating to renewable energy developments, none of the five respondents who were members of WIDT declared their directorships at Comhairle Committees which dealt with wind farm applications. The complainant cited paragraphs 5.1 to 5.5, 5.9, 5.10, 5.14 to 5.18, 7.2, 7.3, 7.8 and 7.11 of the Code as the relevant paragraphs.

11. The issue for consideration was whether the respondents should have declared a non-financial interest, arising from their appointment as Directors of WIDT, when considering planning applications from wind farm developers as the Comhairle stands to gain financially from community benefit from developers if their applications are, ultimately, approved by the Scottish Executive and the projects proceed.

12. Paragraph 5.10 of the Code is the most relevant to this situation and states that councillors who are nominated or appointed by their Council to serve on the boards and management committees of limited liability companies, public bodies, societies and other organisations must decide, in the particular circumstances surrounding any matter, whether to declare a non-financial interest. The Code advises that the public interest points towards transparency and that, only if councillors believe that the nature of the interest is irrelevant or without significance should it not be declared.

13. The Monitoring Officer confirmed that, with one exception, none of the respondents declared an interest at meetings where planning applications in respect of renewable energy developments were being considered. The exception was Councillor John Mackay who declared an interest at the meeting of the Council on 29 June 2005 when an application from Lewis Wind Power Limited was under consideration. The Monitoring Officer indicated that the interest related to his wife having a share in one of the common grazings concerned.

14. For similar reasons to those set out in paragraph 9 above, I did not consider that - in all the circumstances - it could reasonably be concluded that there was an obligation on Councillors Archibald K Campbell, Peter Carlin, John Mackay, Angus Campbell and Alexander A Macdonald who were Directors of WIDT to have declared a non-financial interest when they were present at meetings of the Comhairle or its Committees when planning applications from wind farm developers were before the meetings for consideration, and I found accordingly. I did, however, repeat my observation that councillors appointed to these positions will require to keep their position under close review in light of changing circumstances.

15. Paragraph 5.17 of the Code states that a declaration of a non-financial interest requires a further exercise of judgement on the part of a councillor and paragraph 5.18 states that, in the final analysis, the conclusive test is whether, in the particular circumstances of the item of business and knowing all the relevant facts, a member of the public acting reasonably would consider that the councillor might be influenced by the interest in his or her role as a councillor and that it would therefore be wrong to take part in any discussion or decision-making. The Code advises that if a councillor is not confident about the application of this objective yardstick he or she should play no part in discussion and should leave the meeting room until discussion of the particular item is concluded but states that if, in conscience, a councillor believes that his or her continued presence would not fall foul of this objective test, then declaring an interest will not preclude their involvement in discussion or voting.

16. As the respondents did not declare a non-financial interest they did not have to consider the provisions of paragraph 5.18 but it is relevant to point out that, even if they had declared a non-financial interest, this would not necessarily have precluded them from taking part in the discussion and voting on wind farm applications because of the judgement afforded to them by paragraph 5.18 of the Code.

17. The third complaint was made against the respondents (Councillors Norman A Macdonald, Annie MacDonald, Donald Manford and Angus Nicolson) under paragraphs 7.2, 7.3, 7.10 and 7.11 of the Code. In addition, the complainant invited the Chief Investigating Officer to examine whether the respondents had maintained the key principles of the Code relating to duty, integrity, objectivity, accountability and stewardship, openness and leadership. The thrust of the complaint was that through their involvement in community benefit negotiations, as a result of their membership of the M/O WG and the Focus Group, the respondents failed to uphold the necessary requirement for the separation of community benefit considerations from the planning process.

18. The M/O WG was set up to consider matters relating to obtaining benefit from the location of alternative and renewable energy developments in the Western Isles. The remit of the Group was later extended to cover wider planning policy and inter-connector issues. The Group consisted of several Chief Officers and included Councillors Norman A Macdonald and Annie MacDonald. The Focus Group was set up to take forward negotiations with individual developers on community benefit, in order to relieve WIDT of that responsibility. The Focus Group included Councillors Donald Manford and Angus Nicolson. Two other councillors who are not respondents for the purpose of this part of the complaint were designated as "Negotiators." The Monitoring Officer indicated that discussions with developers principally took place through Comhairle officers although the two councillors designated as negotiators attended meetings with developers in relation to the rationale behind the offered community benefit package.

19. I regarded the M/O WG as a normal and appropriate mechanism to enable the Council to undertake the necessary exploratory work and to consider the implications and potential effect of alternative and renewable energy developments in the Western Isles. Similarly, I regarded the Focus Group as an appropriate vehicle to facilitate negotiations with developers on behalf of the Council. I considered both Groups to be part of the Council's internal processes rather than external bodies to which Councillors are appointed or nominated. I considered that councillors' membership of these Groups did not give rise to any conflict of interest or impropriety in relation to their role when considering applications from wind farm developers. Accordingly, I found that Councillors Norman A Macdonald, Annie MacDonald, Donald Manford and former Councillor Angus Nicolson had not contravened paragraphs 7.2, 7.3, 7.10 or 7.11, or any of the key principles, of the Code.

20. The key considerations in the public interest were that the Comhairle deals with - and is seen to be dealing with - its responsibilities in regard to statutory applications in a fair and proper manner, that it has sound and effective procedures in place for implementing its renewable energy strategy, and that all decisions, including those relating to the receipt and allocation of community benefit, are taken in an open and transparent manner. In assessing the conduct of those councillors referred to in the complaint I took account of these general considerations and of the following specific factors:

- information relating to the objectives and membership of the M/O WG, the Focus Group and the WIDT, and to decisions of the Council and its Committees relating to renewable energy developments, is in the public domain or is readily available on application;

- the M/O WG and the Focus Group are normal and appropriate internal mechanisms for the Council to utilise to consider matters relating to renewable energy developments;

- councillors who were members of WIDT received no financial benefit from their membership and will receive no personal benefit from any community benefit received beyond that which will be enjoyed by other members of the community;

- the declaration of a non-financial interest by a councillor would not necessarily have resulted in that councillor withdrawing and taking no part in the discussion and voting on a planning application as individual councillors could have exercised the judgement available to them in paragraph 5.18 of the Code which allows them to participate in the discussion and voting if they, in conscience, believe that to do so would not cause a member of the public, acting reasonably, to consider that they might be influenced by the interest in their role as a councillor.

21. I noted that the Comhairle have - in order to put any question of conflict of interest beyond doubt - applied to the Standards Commission for a dispensation for councillors who have been appointed by the Comhairle as Directors of WIDT and I commended that approach as considered and constructive.

22. Having considered the information that arose from my investigation, I concluded that Councillors Angus Campbell, Archibald K Campbell, Peter Carlin, Alexander A Macdonald, Annie MacDonald, Norman A Macdonald, John Mackay, Donald Manford and former Councillor Angus Nicolson had not contravened the Councillors' Code of Conduct.

D Stuart Allan,
Chief Investigating Officer.
Forsyth House
Innova Campus
Rosyth Europarc
Rosyth
Fife
KY11 2UU
7 June 2007