Complaints under s.8(1)(a) of the Broadcasting Act 1989
Grassroots Business – included report from Telecom representative which promoted a Telecom product or service – failed to distinguish between programme and advertising material – Standard 8 and Guideline 8a – TVNZ upheld complaint – TVNZ advised clarity required in any future series – complainant dissatisfied with action taken and referred action taken to Authority – a second complaint that other sponsors’ products and services also not clearly distinguished – not upheld by TVNZ – also referred to Authority
i) Standard 8 – broadcaster retained editorial responsibility – not upheld
ii) Action taken – sufficient in the circumstances – complaint is a reminder to all broadcasters of obligations under Standard 8 – not upheld
This headnote does not form part of the decision.
 Grassroots Business was shown on TV One on Saturday mornings at 7.30am and repeated at about midday. It reported on events concerning the rural sector. A report from a Telecom representative was a regular weekly feature and that report always referred to a Telecom product or service and provided an address from which more information could be obtained. Telecom was listed as one of the programme’s sponsors. References were also made to the products and services of certain other programme sponsors when employees of those sponsors were interviewed about matters being considered by the programme.
 Referring to the Grassroots Business series, Tom Frewen writing as an Editor of Mediawatch with Radio New Zealand, complained that the report from the Telecom representative “invariably proceeds to plug a Telecom product or service” and also included an address from which to obtain more information. Mr Frewen alleged that the Telecom report failed to distinguish clearly advertising material from programme material.
 Mr Frewen also complained about a number of references during the programme to the products and services provided by other sponsors.
 TVNZ assessed the complaint under the standard nominated by Mr Frewen. Standard 8 and the relevant guideline of the Free-to-Air Television Code of Broadcasting Practice provide:
Standard 8 Programme Information
Broadcasters are responsible for ensuring that programme information and structure does not deceive or disadvantage the viewer.
8a Broadcasters should ensure that programme material and advertising material are clearly distinguishable.
 TVNZ said that the Telecom segment was different from the other parts of Grassroots Business. It added that its enquiries disclosed that Telecom, unlike the other sponsors, provided the scripts for the segment and had a representative on site when the segment was being filmed. Upholding the aspect of the complaint about the Telecom segment, TVNZ wrote:
The [complaints] committee was concerned at the seamless way the programme moved from material over which the production company had editorial control, to the Telecom segment which was clearly advertising material.
 TVNZ advised the complainant that it had told the programme’s executive producer of its decision to uphold the aspect of the complaint about the Telecom segment. TVNZ further advised the complainant that it had told the programme’s producer that, if there was a future series, a way “must be found” to distinguish advertising material from programme material. One possible way, it noted, might be the use of captions containing the word “advertorial” or “advertisement”.
 TVNZ declined to uphold the complaint that the standard was contravened by the references in the programme to products and services provided by the other sponsors. It argued that an appropriate distinction was made, as the access of the other sponsors to the programme was largely confined to:
… the presence of their logos at certain strategic points such as the opening titles and the titles into and out of commercial breaks.
 In the referral regarding TVNZ’s proposed action, Mr Frewen maintained that the Telecom segment should be placed within a commercial break to ensure that it was clearly distinguishable. Failure to do so, he contended, raised questions about the broadcaster’s integrity. He described TVNZ’s explanation in regard to the exposure of the logos of the other sponsors as “disingenuous and suspiciously vague”.
 Only the Authority, Mr Frewen argued, could uncover the extent that advertising material was presented as editorial which he believed was “rife” on the free-to-air television channels.
 Dealing first with Mr Frewen’s dissatisfaction with its proposed action, TVNZ rejected the claim that its integrity was brought into question by not insisting that the material be screened during the commercial break. It was well-established that material which was “advertorial”, and which was identified as such, could be broadcast outside routine commercial breaks.
 As for broadcast of the sponsors’ logos, TVNZ wrote:
[I]f TVNZ has editorial responsibility for the material it screens, and if that material is not an infomercial, then the material is not advertising material even if the person being interviewed may be a sponsor of the programme. Interviewees may be employed by the sponsor but that does not mean they cannot at the same time be experts on the matter on which they are being interviewed.
 Explaining that his initial concern focused on the Telecom segment of Grassroots Business, Mr Frewen said he was also interested in discovering the degree to which other segments were influenced by the programme’s sponsors. He noted that TVNZ had upheld his complaint and he advised that he had referred the complaint to the Authority to enable the Authority to investigate whether new standards were necessary to ensure the on-screen separation of advertising and editorial.
 Mr Frewen also noted that Grassroots Business was partly funded by NZ On Air and he argued that commercial sponsorship and NZ On Air funding should not be allowed for the same programme. He had put some specific questions to NZ On Air and he attached its answers. NZ On Air advised that it was aware of the standards breach. However, NZ On Air advised, it intended to continue funding the programme provided that advertorial and editorial content was clearly distinguished.
 Neither NZ On Air nor TVNZ, Mr Frewen wrote, had stipulated the method by which the distinction was to be made clear and that was the basis for his dissatisfaction about the action taken by TVNZ. He also questioned the precise meaning of TVNZ’s distinction between “editorial” and “advertorial” and an “infomercial”. He suggested that it could have different meanings for TVNZ and NZ On Air, observing “what is the viewer (taxpayer) to make of it?”
 Mr Frewen again used the word “disingenuous” to describe TVNZ’s explanation that an interview with a sponsor’s representative might be acceptable when the representative was an expert. He concluded by suggesting from the material he had gathered that TVNZ and NZ On Air disagreed as to whether the material on Grassroots Business, other than the Telecom segment, was editorial. TVNZ’s reasoning, he said, was “extremely dubious”.
 The members have read the correspondence listed in the Appendix. As the complaints did not refer to a specific programme, TVNZ selected one episode of Grassroots Business at random (11 October 2003) and, in addition, prepared a tape of all the Telecom segments in the series broadcast in 2003. The Authority has viewed both the episode broadcast on 11 October and the tape of all the Telecom segments. The Authority determines the complaints without a formal hearing.
 In view of the definition of a “programme” and a “series” in the Broadcasting Act 1989, the Authority interprets the reference to a “programme” in the section dealing with formal complaints (s6) as focusing on a specific programme. It does not consider that a formal complaint may be made about a “series”. Mr Frewen complained about Grassroots Business broadcast on TV One at 7.30am on Saturday mornings. The letter to TVNZ was headed “Formal Complaint” and TVNZ dealt with it on that basis. After the complaint was referred to the Authority, TVNZ provided it with a “sample programme in the Grassroots Business series”. The Authority has dealt with the matter as if it was a complaint about the episode supplied by TVNZ.
 Mr Frewen referred both aspects of TVNZ’s decision to the Authority:
 In his final comment to the Authority, Mr Frewen expanded on the scope of his referral and contended that an investigation was warranted to decide whether new standards were required “to maintain the on-screen separation of editorial and advertising”. Such an inquiry was necessary, he argued, as commercial involvement in television productions created the potential for corruption. He referred to the concern expressed by NZ On Air which was involved in funding Grassroots Business.
 The Authority deals with Mr Frewen’s referral, first, as an alleged breach of Standard 8 in regard to the broadcast of Grassroots Business on 11 October 2003, and secondly, as an expression of dissatisfaction with the action taken by TVNZ on the aspect upheld on this occasion. It considers that the issues raised do not justify the full enquiry suggested. Nevertheless, the focus on the specifics in this instance, should ensure that the requirements in Standard 8 are noted by broadcasters.
 Mr Frewen complained that the action taken by TVNZ was insufficient following its decision to uphold his complaint about the Telecom segment of Grassroots Business. Mr Frewen argued that in future programmes the Telecom segment should be placed within a commercial break to ensure that viewers knew it was advertising material. He regarded TVNZ’s proposals as “disingenuous and suspiciously vague”.
 TVNZ advised Mr Frewen (and later the Authority) that the executive producer of Grassroots Business had been told that in future programmes she must make the distinction clear between programme material and advertising material. The Authority is also aware that continued funding from NZ On Air depends on a clear distinction being made.
 The Authority does not agree with the complainant that the Telecom segment must be placed in a commercial break to ensure that viewers understand it is advertising material. Guideline 8a of Standard 8 requires only that broadcasters ensure that programme material and advertising material are clearly distinguishable. While the Authority notes that TVNZ has not advised the precise means by which that will be accomplished, the Authority is confident that TVNZ will ensure that the distinction is clear in future. The Authority notes that it is not its role to tell TVNZ how to make the distinction. In any event, if a future series does not clearly distinguish programme material and advertising material, a further formal complaint could be made.
 Accordingly, the Authority declines to uphold the complaint that the action taken by TVNZ was insufficient.
 Upon its initial examination of the complaint, the Authority had some concern about the extent to which each of the sponsors, other than Telecom, had exercised control in regard to the contents of the items presented. Much of the episode it viewed could be taken as a series of advertorials for the sponsors’ products. It decided that more information from the broadcaster was necessary before it determined the complaint that the item deceived or disadvantaged viewers by failing to distinguish programme and advertising material.
 TVNZ had earlier advised the Authority that it had retained editorial responsibility. The Authority wrote to TVNZ as follows:
The Authority seeks reassurance that the retention of “editorial responsibility” amounts to “editorial control”, and that Grassroots Business could and would, for example
- report, if it occurred, the fact that a sponsor’s product had been recalled
- deal with an issue of fencing, drenching or one of a sponsor’s products by interviewing an “expert” from a company which was not the sponsor
- include critical comment where justified of a sponsor’s products from a person/business who/which was not a sponsor.
 TVNZ assured the Authority that final editorial control remained with TVNZ and Screentime Communicado Ltd (the production company). It described the questions as hypothetical to which only hypothetical responses could be given. It wrote:
 In his comments on TVNZ’s response, the complainant did not accept that Screentime Communicado Ltd should have any final editorial responsibility. He added:
 The retention of editorial control is the central criterion for the Authority in determining the complaint. By relinquishing such control for the Telecom segment, the broadcaster acknowledged that it had failed to comply with Standard 8. By exercising such control for the balance of the programme material, the Authority accepts that TVNZ has complied with the requirement in Standard 8 not to deceive or disadvantage viewers by failing to distinguish programme material from advertising material. Accordingly, the Authority declines to uphold this aspect of the complaint.
 In its letter to TVNZ seeking information, the Authority asked whether it was possible to view a typical contract between a sponsor and the programme maker. TVNZ advised the Authority that, to ensure the protection of commercial interests, it was reluctant to provide a contract. The Authority has not pursued the request. In this case, the Authority is prepared to accept TVNZ’s assurances relating to editorial control.
 The Authority’s task in this situation, as with all concerns about broadcasting standards, is to respond to complaints. It has done so on this occasion and is of the view that the complaints, which have had some media profile in view of the complainant’s involvement with Mediawatch, and the broadcaster’s full and considered response, are a timely reminder to all broadcasters of the need to comply with the clear instruction in Standard 8.
For the above reasons, the Authority does not uphold the complaints.
Signed for and on behalf of the Authority
6 May 2004
The following correspondence was received and considered by the Authority when it determined this complaint: