News

Transparency

February 11, 2016
Joep Meddens - IP, IT and Media specialist, Höcker Advocaten, Netherlands

Hocker-logoTransparency is increasingly becoming a core value of our daily lives. This value is in keeping with an era in which all information is available (online or otherwise) to everyone and sharing seems to be the norm. The government is subject to the Government Information (Public Access) Act, yet businesses, too, are expected to be more and more open. At the same time, the issue of data protection has grown in importance.

My colleague (Marijn Kingma) and I filed an action on behalf of foodwatch (a foundation which strives for proper, honest information about food) against the state secretary responsible for the Netherlands Food and Consumer Product Safety Authority (NVWA). The purpose of the lawsuit was to obtain transparency about the horsemeat scandal at the mega-meat processer Willy Selten. What happened to the 50 million kilos of meat which the NVWA had recalled, and what did the NVWA do after this recall action to protect consumers?

For the NWVA, it seems, being transparent is difficult. The requested documents were not disclosed until after a decision by the Amsterdam District Court, and then only in part. What this demonstrates above all else is that transparency has not been incorporated yet into NVWA’s standard procedures. The information there, for example, is not compiled in a manner which facilitates openness. It is not possible, say, to create with one click of the hand a version of a document where the names of individual civil servants and other parties concerned have been blacked out. This is something which the agency will have to work on. We live in the age of WikiLeaks and whistleblower regulations, and the call for transparency will not grow softer any time soon.

Not only are government and semi-public institutions being called on to be more open; businesses are likewise expected to be more forthcoming. The European transparency directive (yes, there is indeed one) requires ‘public-interest entities’ to furnish information about their social and environmental policies. Even apart from these rules, however, society expects companies to be open. One example of the impact of greater transparency is the pressure put on banks and pension funds to no longer invest in the arms or tobacco industry.
The Government Information (Public Access) Act is not only the way to compel transparency. Illustrative of these times is that the Dutch Supreme Court recently recognised that a claim under Article 843a of the Dutch Code of Civil Procedure for the production of documents may be a basis for the seizure of evidence. Anyone who suspects that a party has information which may be helpful in proving a legal relationship can seek to have those documents (often entire sets of records) seized and then demand to inspect them in a separate action. Experience shows that this type of coerced transparency can be a game changer in disputes.

Lawyers are also often engaged at those times when confidentiality is particularly important. In the case of an acquisition, for instance, the data room needs to be fully transparent in informing the buyer, but the information still must be kept secret from everybody else. That interest in an acquisition is sometimes used as a pretext for gathering information about a competitor is a problem in and of itself.

With other types of negotiations as well, transparency often threatens to undermine achievement of the end result. A confidentiality clause in a settlement agreement does not raise any eyebrows, for example.

The obligation to report data leaks, which took effect on 1 January, nicely illustrates both sides of the transparency coin. Businesses are expected to treat data confidentially and to properly secure data. If something goes wrong, transparency about the data breach is required and the breach must be reported.

Many government bodies and companies are still getting used to the idea of increased transparency. To be sure, this is not easy, either. Some forms of sensitive information, such as personal data, must specifically be protected. Listed companies must treat with great care market-sensitive information which they share. Other information may in principle be shared, but is actually so important as a trade secret that sharing is out of the question. And that’s to say nothing about such information as receipts detailing agreements between public prosecutors and pot dealers.

It is a challenge which they will have to take up: compiling and organising information in such a way that the proper level of transparency can easily be achieved. In other words, it’s time for a transparent strategy!