McCully and Television New Zealand Ltd - 2015-053 (1 March 2016)
- Peter Radich (Chair)
- Leigh Pearson
- Paula Rose
- Hon Murray McCully
BroadcasterTelevision New Zealand Ltd
Te Raumawhitu Kupenga declared a conflict of interest and did not participate in the determination of this complaint.
[This summary does not form part of the decision.]
An item on ONE News covered ‘the Foreign Minister’s controversial payment of $11.5 million towards businessman Hmood Al-Ali Al-Khalaf’s Saudi farm’. It reported that Minister Murray McCully had ‘struck the deal to avoid a $30 million legal threat’, but then denied that there had been a legal threat. The Authority did not uphold a complaint that the item was inaccurate and unfair to the Minister by failing to distinguish between Mr Al-Khalaf merely assessing his legal position and actually threatening legal action, and consequently misrepresenting the Minister’s position. The issue arose through the use of ambiguous language, both by the broadcaster and by the Minister, and did not justify the Authority upholding a breach of standards.
Not Upheld: Accuracy, Fairness
 In mid-2015 a controversy developed in relation to an investment by the New Zealand government in the Saudi Arabian farm of a powerful Saudi businessman, Hmood Al-Ali Al-Khalaf. The investment was of some $11.5 million and questions were being asked about the reasons for this and the value of such an investment.
 On 3 June 2015 on ONE News, TV ONE reported that:
[Mr] McCully’s reasons for doing this deal are unravelling.
First Mr McCully said he struck the deal to avoid a $30 million legal threat. Then he admitted any legal threat had actually been withdrawn a year before the deal was struck.
Now we can reveal he told us there was never any legal threat. In an email three weeks ago, I asked if Mr McCully was made aware of a threat to take legal action over the ban of live sheep exports. His press secretary replied, ‘I’ve just been able to speak with the Minister; the answer is no’.
In a statement from off-shore late this afternoon, Mr McCully’s admitted, ‘Mr Al-Khalaf did not threaten me’.
 Hon Murray McCully, the Minister responsible for the payment and the person referred to in the report, complained to TVNZ that the report was inaccurate and unfair.
 The issue is whether the broadcast breached the accuracy and fairness standards, as set out in the Free-to-Air Television Code of Broadcasting Practice.
 The members of the Authority have viewed a recording of the broadcast complained about and have read the correspondence listed in the Appendix.
The function of this Authority
 It is not the function of this Authority to judge the merits or otherwise of the investment by New Zealand in a Saudi farm. Nor is it the responsibility of this Authority to determine whether all proper factors were considered and all proper procedures were followed. Our function is the narrow function of determining whether this particular broadcast was accurate and fair to the Minister. In cases such as this, we make that determination on the material which the Minister and the broadcaster have put before us. We do not go on an excursion searching for other evidence or material. The way in which these issues have been put before us leaves us to make our determinations on the basis of a small collection of material. This is because the broadcaster has justified its report on the basis of some identified statements of the Minister himself. Put in other words, the broadcaster has said, ‘Minister, what we have said about you was available to us to say on the basis of words out of your own mouth’.
 We think that the following was conveyed by the broadcast:
- that the Minister’s justification for the investment was to avoid a $30 million legal threat;
- that this reason did not bear scrutiny because the legal threat had been withdrawn a year before the deal was struck;
- that there never was a legal threat made and that therefore the reason given by the Minister was specious; and
- that the Minister now admitted that his having said he was threatened by Mr Al-Khalaf was not in fact true.
 In support of its conclusion that the broadcast was accurate and fair the broadcaster pointed first to a statement made by the Minister in Parliament on 27 May 2015 as follows:
[T]he Al-Khalaf group had taken legal advice and could mount a legal claim against the government for an amount estimated to be up to $30 million. It is a bit rich for members of the former government, who exposed New Zealand to the risk of a $30 million claim, to berate members of this government for resolving the issue for one third of that amount.
 Then the broadcaster pointed to an exchange between the broadcaster’s political reporter and the Minister on 28 May as follows:
Reporter: [The legal claim] was withdrawn before you wrote that Cabinet Paper [in February 2013], wasn’t it?
Mr McCully: Well it certainly would’ve been by the time the Cabinet Paper was filed.
 Finally, the broadcaster said in a response to the complaint:
What you argue is an attempt to portray you as ‘having resiled from an earlier position’ was, in our view, simply reporting what appeared to be a contradiction in what you had told Parliament on 27 May compared to what you told the Political Reporter the next day. The Committee finds that this reporting did not mislead viewers on this point.
 An important touchstone in all of this is the Cabinet Paper dated 13 February 2013 presented by the Minister (which members of the Authority have read) in which the reasons and justification for the payment are set out.
 Part of the confusion surrounding this news report is to do with the use of the word ‘threat’. This word has two distinct meanings. It can mean:
- the declaration of the intention to inflict harm; or
- the presence of potential harm.
 In the first sense there is usually a person who is making or delivering the threat. In the second sense there is recognition by a person that harm may be on its way but this is not necessarily a recognition that comes from this harm having been threatened by a person.
 When Mr McCully made the following statement in the House of Representatives, he was referring to a threat in the second sense although the word was not used:
Also in the minds of officials would have been the fact that the Al-Khalaf Group had taken legal advice and could mount a legal claim against the Government for an amount estimated to be up to $30 million.
 The broadcaster appears to have used this statement as a basis for asserting that Mr McCully had said that he was threatened (in the first sense) with a claim. Having interpreted Mr McCully’s meaning in this way, the broadcaster then proceeded to endeavour to establish that what it thought he had said was wrong.
 The simple position taken largely from the Cabinet Paper of 13 February 2013 seems to us to be this:
- Certain entities from the Arabian Gulf were encouraged by the then Government to make investments in New Zealand for the purpose of supplying live lambs to the Saudi Arabian market for slaughter there.
- A subsequent close down of live sheep exports led to the investors suffering losses and the Government being given a message that there was an expectation on the part of the Saudi Government that something would be done.
- In order to maintain cordial relations with the Saudi Government and others, a programme for New Zealand involvement in Saudi farming was developed.
- Substantial New Zealand monies were invested (without any acceptable level of monetary return from the investment, it later became apparent).
- Diplomatic and trade relations were restored and any threat (in the second sense) of a claim against the New Zealand Government went away.
 It can be seen that the message that the broadcaster conveyed (set out above at paragraph ) was not consistent with the position set out in the Cabinet Paper.
How this has come about
 We think that the problem here has come about through the use of ambiguous language and from the making of assumptions that perhaps were not open to be made. We think that this is an outcome to which both the Minister and the broadcaster have made contributions. The Minister’s statement of 27 May 2015 in Parliament was one which gave some emphasis to possible legal proceedings. It led the broadcaster to then solidify the payment/investment as being in settlement of a legal claim.
 It is understandable that remarks made in a Parliamentary debate can have elements of overstatement. It is also understandable that news media would grasp on these and add gloss and interpretations. We are required to intervene only where a broadcaster has met threshold tests of inaccuracy or unfairness.
 The conclusion we have reached is that what has happened does not justify our upholding a breach of the broadcasting standards of accuracyand fairness. The broadcaster’s report was expressed in ambiguous language and attempted to summarise a complex situation which was not amenable to summary in a few words. On the other hand, the Minister’s statements were ambiguous and were open to interpretation. In this respect we have had regard to further material provided to us by TVNZ from other political commentators and broadcasters which ‘understood Mr McCully to have discussed a legal threat’.1
 In these circumstances our finding overall is that this is a complaint which ought not to be upheld and that the publication of this decision ought to be sufficient to explain what happened here and how it happened.
For the above reasons the Authority does not uphold the complaint.
Signed for and on behalf of the Authority
1 March 2016
The correspondence listed below was received and considered by the Authority when it determined this complaint:
1 Hon Murray McCully’s formal complaint – 4 June 2015
2 TVNZ’s response to the complaint – 2 July 2015
3 Hon McCully’s referral to the Authority – 30 July 2015
4 TVNZ’s response to the Authority – 1 October 2015
5 Hon McCully’s final comment – 15 October 2015
6 TVNZ’s final comment – 30 October 2015
7 TVNZ’s submissions on the Authority’s provisional decision – 26 January 2016
8 Hon McCully’s submissions on the Authority’s provisional decision – 26 January 2016
1 For example, ‘Legal threat gone before Saudi payout’, Newstalk ZB, 28 May 2015 http://www.newstalkzb.co.nz/news/politics/corruption-claims-fly-over-saudi-sheep-scandal/, ‘More questions over Saudi sheep deal’, Newshub, 28 May 2015 http://www.newshub.co.nz/nznews/more-questions-over-saudi-sheep-deal-2015052820#axzz40IZvCqXl, ‘Saudi sheep deal: Putting Murray McCully in the dock’, New Zealand Herald, 6 June 2015 http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11460571