From 1 July 2022 information on all contracts exceeding the value 500 PLN, which from the beginning of this year have been concluded by public authorities (including JST), will be public and will be entered in the register kept by the Minister of Finance. This will be a fairly detailed set of data on the content of the contract.
The obligation to register is included in the newly added Article 34a Act on 27 August 2009 public finances. Regulation introduced by the amendment of the Criminal Code and some other laws with 14 October 2021 raises many doubts.
Questions arise when information can be refused due to the secret of the entrepreneur (Article 35 Public Finance Act)? How can it be shown that any information was not included in the register because it is the secret of the entrepreneur? In other words, where is the limit of mystery?
Principle of transparency
one from the principles of public finances on the ground Act dated 27 August 2009 public finances is the principle of transparency, which assumes that the economy of public funds is transparent.
This principle has been implemented so far through a number of measures, including the transparency of budget debates or the public disclosure of grant amounts or collective data on public finances.
A completely new means of implementing the principle of transparency that will enter into force on the day 1 July 2022, entered Act dated 14 October 2021 on amending the Act – Criminal Code and some other laws, it is the making available of certain contracts in the contract register.
Amended Article 34a Public Finance Act provides for the operation of a register of contracts concluded by public finance sector entities, which will be run by the Minister of Finance in the electronic system.
The contract register shall contain information on contracts concluded in written, documentary, electronic or other specific form, the value of which exceeds 500 PLN. The information in the contract register will concern contracts that may be made available on the basis of Act dated 6 September 2001 access to public information.
However, the contract register shall not include information on all contracts, in particular contracts concluded as a result of the award of contracts and competitions awarded a clause in accordance with the rules on the protection of classified information, or where the essential interest of State security so requires.
Given the low (500 PLN) the value of the subject matter of the contract, which determines the obligation to enter the contract in the contract register, as well as a narrow list of contracts which are not subject to such an entry, in practice a significant number of contracts concluded by public finance sector entities will be entered in the register.
From the perspective of entrepreneurs entering into contracts with such entities, there may be a potential risk of disclosure of information that is a secret to their business. However, the amendment of the Act provides for appropriate regulations in this respect.
Namely, the relevant provisions will be applied to the contract register Article 5(1)(2)(2a) Public Information Access Act, which concerns the possibility to restrict the right to public information.
In addition to other possible cases of such a restriction, in the context of these concerns, the right to information is subject to restriction on account of the business secrets, and this restriction does not apply to information on persons exercising public functions relating to the performance of those functions, including the conditions for entrustment and performance of functions, and where the trader waives his right.
This limit is consistent with the standard expressed under Article 61(3) The Constitution of the Republic of Poland, according to which the limitation of the right to information may only take place because of the protection of the freedoms and rights of other persons and economic entities laid down in the laws, and the protection of public policy, security or important economic interest of the State.
Therefore, while information on a contract concluded by an entrepreneur with a local government unit is, in principle, subject to entry in the contract register, that obligation will be subject to limitation in relation to information which constitutes the business secret.
Where a contract is actually subject to a restriction on the right to information for that reason, the contract register should include information on the scope of the exemption and the legal basis for the exclusion of disclosure and should indicate the authority or person who has made the exemption, as well as the entity in the interest of which the exemption was made.
In theory, therefore, it might seem that the concerns of entrepreneurs about disclosure of their business secrets should not have any basis.
Definition of the secrecy of the undertaking authorising the limitation of the right to information
But this is not the case from a practical point of view. Both the Public Finance Act and the Access to Public Information Act do not contain a definition of the company's secrecy to restrict the right to information. This definition should therefore be sought In the Act dated 16 April 1993 about combating unfair competitors.
According to Article 11(2) that act, the secret of an undertaking shall mean technical, technological, organisational or other information having an economic value which, as a whole or in a particular compilation and collection of its elements, is not commonly known to persons normally involved in that type of information, or is not readily accessible to such persons, provided that the person entitled to use or dispose of the information has taken, with due care, action to keep them confidential.
The existing rules, including rules on combating unfair competition, do not therefore indicate exhaustively, what information is the secret of the company. This is generally defined information having economic value that is not commonly known and the entrepreneur has taken action to preserve its confidentiality.
The question whether the information in question is indeed a business secret should therefore be decided on a case-by-case basis. However, case law may help to assess. For example, information relating to names in the lists of persons, in particular in comparison with a description of the specialised experience of those persons (cf.
the judgment of the National Appeal Chamber) may be considered to constitute a secret of the company. dated 5 May 2021, KIO 696/21, information on counterparties, suppliers, rebates, models and methods of operation, all experience and information useful for running the company (cf.
judgment of the National Appeal Chamber) dated 19 April 2021, KIO 576/21, detailed cost calculation and adopted methodology for calculating the price, which in practice constitutes the competitiveness of the company in a given market (see judgment of the National Appeal Chamber) dated 22 April 2021, KIO 715/21, a description of the project including a full description of the technology, facilities and equipment and a comparison of the technological options under consideration in terms of investment outlays and their future operating costs, details of investment plans, information on know-how (see Supreme Administrative Court judgment) dated 24 April 2018, And OSK 931/16.
In turn, the preparation of unit prices for the conditions of the procedure (see the judgment of the Provincial Administrative Court in Wrocław) was considered non-confidential. dated 5 December 2019, IV SA/Wr 389/19, price, term of enforcement, period of guarantee, conditions of payment (cf.
judgment of the Provincial Administrative Court of Olsztyn seat dated 24 October 2019, II SA/Ol 697/19).
Contractual clauses for the exclusion of disclosure on grounds of business secrecy
In the context of limiting the principle of transparency due to the company's secrecy, it is worth recalling what is currently in place in the Public Finance Act that contractual clauses relating to the exclusion of disclosure on grounds of company secrecy in contracts concluded by public finance entities or other entities, provided that the contractual obligation is implemented or intended to be implemented by public funds, are considered to be unreserved, excluding technical, technological, organisational, business or other economic value information within the meaning of the rules on combating unfair competition on which the entrepreneur has taken the necessary measures to keep them secret or where the public finance entity demonstrates that the information constitutes a company's secret because it requires this significant public interest or an important State interest.
It is worth emphasizing the convergence of this regulation with the definition of legal secrecy of the undertaking referred to in the Act on Combating Unfair Competition, which is extended to include the possibility for the local government body to rely on the criterion of public interest or state interest.
The regulation explicitly addresses the ineffectiveness, to some extent, of the contractual exclusion of disclosure on account of the company's secret, but it also indicates when such a reservation will be effective, and it will be effective if the exclusion of disclosure is subject to information that satisfies the de facto definition of company secrecy within the meaning of the Act on Combating Unfair Competition extended to the criterion of public interest or State interest.
It may seem that, in the context of the introduction of an obligation to register contracts, the possibility of contractual exclusion of disclosure may take on new practical meaning.
The reservation in the contract of information to which the parties (and in particular the entrepreneur) wish to exclude disclosure, and which are indeed secret of the company within the meaning of the rules on combating unfair competition, may be for the head of the local government unit who introduces the data into the register, a clear condition for listing in the contract register – instead of information constituting the company's secret – information on the scope of exclusion and the legal basis for excluding disclosure.
In doing so, it should not be overlooked that sanctions were also regulated when the contract register was introduced for non-compliance with its obligations. Namely, who does not exercise or does not allow the obligation to maintain, update, make available or enter data in the contract register or give false data, will be subject to fines, imprisonment or imprisonment for up to years. 2.
Oliwia Wójcik, Legal advisor. Russell Bedford Dmowski and Associates Law Firm S.K.A.