Notes - Conflict of Interest
·
A conflict of interest happens when
personal interests clash with official duties or public responsibilities.
·
When doing your duty honestly becomes
difficult because your personal benefit, relationship, or belief gets in the
way.
Example:
·
A government officer who must give a
road contract finds that one of the bidders is his brother’s company.
·
Even if he doesn’t favor his brother,
the situation itself creates doubt — this is a conflict of interest.
Types of Conflict of Interest
Actual
Conflict of Interest
·
The conflict is real and present.
·
Personal interest directly influences
official decision.
Example:
·
An officer awards a contract to a
company in which she secretly owns shares.
Potential
Conflict of Interest
·
The conflict may arise in the future,
depending on the situation.
Example:
·
A civil servant is posted to a
department regulating telecom companies, and her spouse works in a telecom
firm.
Conflict of Interest in Public Services
·
Awarding contracts or tenders to
relatives or friends.
·
Recruitment and promotions influenced by
personal relationships.
·
Using confidential information for
private gain.
·
Accepting gifts, favours, or hospitality
from parties having interest in decisions.
·
Post-retirement jobs with companies that
benefited from one’s decisions while in office.
Why It Is a Problem?
·
Erodes
public trust - people lose faith in impartiality of
administration.
·
Damages
integrity - even appearance of bias harms credibility.
·
Distorts
decision-making - decisions may favor private interests
over public welfare.
Example:
·
In 2G spectrum allocation or coal block
allocations, officials’ personal or political connections led to major public
loss and public outrage — classic examples of conflict of interest.
How to Resolve or Manage Conflicts of Interest?
·
Disclosure
- Officers
must declare their assets, financial interests, and relationships that may
affect decisions. Example: Civil
servants in India file annual property returns.
·
Recusal
- Step
aside from decisions where personal interests are involved. Example: If your relative’s company is applying for a contract,
you recuse from the evaluation committee.
·
Clear
Codes of Conduct - Civil Services Conduct Rules and ethics
codes must clearly define acceptable and unacceptable behavior.
·
Transparency
- Open decision-making and documentation reduce the chance of bias.
·
Ethical
Awareness - Regular ethics training to help officers
recognize and handle such dilemmas.
Important Statements/Quotes/Examples
·
“It’s not only corruption when you take
money; it’s also corruption when you take decisions where your judgment is
compromised.”
·
“Integrity is not only about resisting
temptation, but also about avoiding situations where temptation arises.”
·
“Conflict of Interest is not about
dishonesty, but about divided loyalty.”
·
An honest officer must ensure not only
that he does no wrong, but also that he is seen to be doing right.
·
“It arises not because a person is
dishonest, but because circumstances create competing obligations.”
·
“Even the appearance of conflict is
enough to erode public trust.”
·
“Integrity demands not only doing right,
but also being seen to be right.”
·
The goal is not to punish every
conflict, but to identify, disclose, and manage them.
·
Recusal, disclosure, and accountability
convert an ethical dilemma into an ethical decision.
·
OECD (Organisation for Economic
Co-operation and Development): Defines conflict of interest as a situation
where a public official has private-capacity interests which could improperly
influence the performance of official duties.
·
“The Civil Services Conduct Rules, 1964,
implicitly discourage conflicts of interest through provisions on impartiality,
acceptance of gifts, and financial dealings.”
·
“The Second Administrative Reforms
Commission (ARC) emphasized disclosure and transparency as key to preventing
conflicts.”
·
“Recusal is not weakness; it is wisdom.”
·
“In public life, perception is as
important as action.”
·
“The real test of a public servant is
not only in how he acts when watched, but how he decides when torn between duty
and desire.”
·
“Ethical governance is not about absence
of conflict, but about its honest management.”
·
“When in doubt, the guiding question
should be: Does this serve public interest? — for that is the essence of public
service.”
PYQs - Conflict of Interest
Section A
·
Public
servants are likely to confront with the issues of “Conflict of Interest”. What
do you understand by the term “Conflict of Interest” and how does it manifest
in the decision making by public servants? If faced with the conflict of
interest situation how would you resolve it? Explain with the help of examples.
2015
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Conflict of interest in the public sector arises
when
·
Official duties,
·
Public interest, and
·
Personal interest
are taking priority one above the other
How can this conflict in administration be resolved?
Describe with an example. 2017
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·
What is mean by conflict of interest?
Illustrate with examples, the difference between the actual and potential
conflicts of interest. 2018
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Section B
2024 – Brother Applied for a Tender
Sneha is a Senior Manager working for a big reputed
hospital chain in a mid-sized city. She has been made in-charge of the new
super speciality center that the hospitals building with state-of-the art
equipment and world class medical facilities. The building has been
reconstructed and she is starting the process of procurement for various
equipment and machines. As the head of the committee responsible for
procurement, she has invited bids from all the interested reputed vendors
dealing in medical equipment.
She notices that her brother, who is a well-known
supplier in this domain, has also sent his expression of interest. Since the
hospital is privately owned, it is not mandatory for her to select only the
lower bidder. Also, she is aware that her brother’s company has been facing
some financial difficulties and a big supply order will help him recover. At
the same time, allocating the contract to her brother might bring charges of
favouritism against her and tarnish her image The hospital management trusts her
fully and would support any decision of hers
a) What
should be Sneha’s course of action?
b) How
would she justify what she chooses to do?
c) In
this case, how is medical ethics compromised with vested personal interest?
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2025 – Road Construction Project – Son is in Real Estate Business
Subash is Secretary, PWD in the State Government. He
is a senior officer, known for his competence, integrity and dedication to
work. He enjoys the trust and confidence of Minister Incharge of PWD and
Programme Implementation. As a part of his job profile, he is responsible for
policy formulation, execution of projects relating to infrastructure
initiatives in the State. Besides, he oversees the technical and administrative
aspects, relating to planning, designing and construction etc.
Subash's Minister is an important Minister in the
state and significant growth in urban infrastructure development and road
network has been registered during his tenure. He is very keen for launching of
ambitious road construction project in the near future. Subash is in regular touch
with the Minister and is working various modalities of road construction
project. Regular meetings, interactions and presentations are made by him to
the Minister before a formal public announcement of the project is made by the
Minister. Subash's only son Vikas is in real estate business.
His son from his own sources is aware that a mega
road project is on the anvil and announcement in this regard is expected
anytime. He is very keen to know from his father the exact location of the
upcoming project. He knows that there would be quantum jump in the prices of
land in the vicinity. Buying land at this stage at cheaper prices would pay him
rich dividends. He is pleading with him (his father) day in and day out to
share him location of the proposed project.
He assured him that he would handle the matter
discretely as it would not attract any adverse notice as he in the normal
course, keeps on buying land as a part of his business. He feels pressurised
because of constant pleadings by his son. Another significant aspect of the
matter pertained to the extra/undue interest in the above project by the
Minister PWD. His nephew was also having big infrastructure project company.
In fact, the Minister has also introduced his nephew
to him and indicated to him to take care of his nephew's business interest in
the forthcoming project. The Minister encouraged him to act fast in the matter
as early announcement and execution of mega road project would enhance his
status in the party and public life. In the above backdrop, Subash is in a fix
as to the future course of action.
(a) Discuss
the ethical issues involved in the case.
(b) Critically
examine the options available to Subash in the above situation.
(c) Which
of the above would be most appropriate and why? (250 words)
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KAS 2025
You are a KAS officer posted in your home district.
Your father, a respected political leader, is under investigation for alleged
misuse of public funds. As the head of the administration, you are expected to
ensure a fair and unbiased inquiry. Your family expects loyalty, while the
media and opposition parties accuse you of favouritism. Meanwhile, your junior
officers are hesitant to take action due to your familial ties. The public is
watching your response closely, as this case will impact the credibility of
governance and public trust.
(a) How
will you maintain objectivity and fairness while dealing with an inquiry
involving your family?
(b) What
steps will you take to ensure public trust and institutional integrity in your
decision?
(c) How
will you handle personal emotions and professional responsibilities in this
situation?
(300 words | 20 marks)
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