South Waikato District Council and MediaWorks TV Ltd - 2018-022 (10 August 2018)
- Peter Radich (Chair)
- Paula Rose
- Wendy Palmer
- Te Raumawhitu Kupenga
- South Waikato District Council
BroadcasterMediaWorks TV Ltd
[This summary does not form part of the decision.]
An item on The Project discussed the building of a new gambling venue in Tokoroa set to contain 30 gambling machines (‘pokies’). The segment was critical of the South Waikato District Council’s (SWDC) role in the authorisation of this new venue, and also one of the Councillors’ roles as both a Councillor and manager of one of the clubs involved in the creation of the proposed new venue. The following evening one of the programme hosts issued an on-air apology to the Councillor, clarifying inaccurate statements made about their involvement in the decision-making process. The Authority upheld SWDC’s complaint that the action taken by MediaWorks did not sufficiently remedy the harm caused by the breaches. The Authority found that the statement the following night did not remedy the harm caused to SWDC by the broadcast, only the Councillor. The Authority also upheld the complaint that the host’s statement that the SWDC ‘get a cut of the profits’ from the gambling machines was inaccurate, as the SWDC do not directly receive any percentage of the profits.
Upheld: Balance (Action Taken), Fairness (Action Taken), Accuracy. Order: Section 13(1)(a) broadcast statement.
 An item on The Project discussed the building of a new gambling venue in Tokoroa set to contain 30 gambling machines (‘pokies’). The segment was critical of the South Waikato District Council’s (SWDC) role in the authorisation of this new venue, and also one of the Councillor’s roles as both a Councillor and manager of one of the clubs involved in the creation of the proposed new venue.
 The following evening on The Project, host Kanoa Lloyd issued an apology to the Councillor, clarifying that they were not a Councillor when the decision regarding the venue was made and apologising as the Councillor did not deserve the criticism they received in the earlier broadcast. MediaWorks also removed the online version of the original item.
 The SWDC complained that the segment was unbalanced, inaccurate and unfair because: the broadcast contained numerous inaccuracies about the SWDC and the Councillor that had a harmful effect on their reputations; and the broadcast failed to include or give consideration to SWDC’s point of view and was therefore unbalanced on an important issue.
 MediaWorks upheld SWDC’s complaint under the balance, accuracy and fairness standards, finding: the item was unbalanced as it implied that the Councillor was involved in the decision-making regarding the new venue; statements made about the Councillor were inaccurate; and more care should have been taken to inform the Councillor of the nature of the allegations against them. MediaWorks considered the apology broadcast the following evening adequately addressed these breaches.
 The SWDC referred the complaint to this Authority, on the basis that the broadcaster failed to remedy all of the inaccuracies arising from the segment, and although it apologised to the Councillor on air, it failed to apologise to SWDC for other inaccuracies. These included that the SWDC receives a portion of gambling machine profits and that SWDC decides the amount of gambling machines and where they are placed, and the harm these inaccuracies caused to the Council’s reputation. We understand from SDWC’s referral submissions that it was otherwise satisfied with the action taken in terms of the inaccurate statements relating to the named Councillor.
 Therefore the issues raised in SWDC’s complaint are:
- whether the broadcast breached the accuracy standard of the Free-to-Air Television Code in relation to the two points relating to SWDC (set out in paragraph  below), which were not addressed by MediaWorks in its decision; and
- whether the action taken by MediaWorks, having upheld the complaint under the balance and fairness standards of the Free-to-Air Television Code, was sufficient.
 The item was broadcast on Three on 14 December 2017 and the apology was broadcast on Three on 15 December 2017. The members of the Authority have viewed recordings of these broadcasts and have read the correspondence listed in the Appendix.
Freedom of expression
 When we determine a complaint alleging a breach of broadcasting standards, we first give consideration to the right to freedom of expression. We weigh the value of the broadcast item, as well as the broadcaster’s right to freedom of expression, against the level of actual or potential harm that might be caused by the broadcast. We may only interfere and limit the right to freedom of expression where doing so is reasonable and justified.
 In our view this broadcast carried a high level of public interest. It is an important role of journalists and the media in general to scrutinise and hold governing bodies and public organisations to account for their actions. The criticism and challenging of these institutions promotes free and frank public discourse and discussion, which is an important feature of freedom of expression and democratic society. However, while the value of this type of political expression is high, so too is the potential for harm, due to the potential for unfair, unbalanced or inaccurate criticism to mislead the public and unduly damage the reputation of, and public trust in, those criticised. Our task is to strike an appropriate balance between these interests.
 The questions for us to consider are whether the actions taken by the broadcaster remedied the harm caused by the item, and whether the additional harm that is alleged to have been caused through the broadcast of misinformation is such that it warrants limiting the right to freedom of expression in this case.
Was the broadcast inaccurate or misleading?
 The accuracy standard (Standard 9) states that broadcasters should make reasonable efforts to ensure that news, current affairs and factual programming is accurate in relation to all material points of fact, and does not mislead. The objective of the standard is to protect audiences from being significantly misinformed.
The parties’ submissions
 SWDC submitted:
- It has incurred reputational damage as a result of the following two inaccurate statements, which need to be corrected through an on-air apology:
- ‘The Council gets to decide how many machines they have and where they go.’ (SWDC says local authorities can put a condition on the site location regarding numbers of machines. However, the final decision regarding numbers of machines is made by the Department of Internal Affairs.)
- ‘…Plus they [SWDC] get a cut of the profits.’ (SWDC says it does not receive any monetary gain from this facility other than a rate-take as a rateable property in the district.)
 MediaWorks submitted:
- The first statement was not inaccurate or misleading. As SWDC acknowledged in the referral it can ‘put a condition on the site location regarding numbers’.
- It accepted the second statement was inaccurate, however it was minor in the broader context and would not have significantly affected the audience's understanding of the item as a whole.
‘The Council gets to decide how many machines they have and where they go.’
 Regarding the first statement, we note that, under the Gambling Act 2003, corporate societies applying for a venue licence, like the one required for this venue, need to obtain a Territorial Authority consent in certain circumstances.1 In the issuing of a Territorial Authority consent, the relevant Authority (in this case the SWDC) has the ability to grant the consent ‘with or without a condition specifying the maximum number of gaming machines that may be operated at the venue’.2
 While the final decision with respect to granting these venue licences ultimately lies with the Department of Internal Affairs, the SWDC does have the ability to limit the number of machines that may be operated at the venue, giving it a certain level of authority and control as part of the licencing process.
 We therefore find that, while the statement summarised and simplified the relevant process, we do not consider that this resulted in the statement being materially inaccurate such that it would have significantly affected viewers’ understanding of the programme as a whole, or the involvement of Territorial Authorities like the SWDC in the venue licencing process. Accordingly we do not uphold this aspect of the accuracy complaint.
The SWDC get a ‘cut of the profits’
 With respect to the second statement, while a portion of the proceeds received from gambling machines is paid to the Crown in the forms of gambling levies and gaming duty payments, District Councils such as the SWDC do not directly receive any of the profits made from gambling machines.3 The broadcaster has accepted that the statement in the item was inaccurate in this respect, but argued that it was not material to the item as a whole and therefore did not breach the accuracy standard.
 In our view, the notion that SWDC would profit from the new gambling machines had the potential to misinform viewers about the motivations of Council Members in their decision to authorise the new venue. It was likely to materially affect viewers’ understanding of the broadcast in this sense.
 The question then is whether the potential or actual harm caused to SWDC as a result of this inaccurate statement outweighed the right to freedom of expression on this occasion.
 In our view it was likely to cause undue harm to SWDC’s reputation, and to affect the public’s trust and confidence in the Council’s ability to operate as a representative body. As discussed above, while criticism of governing bodies is an important part of the right to freedom of expression in a free and democratic society, broadcasters must take reasonable steps to ensure there is a sufficient basis for any criticism, to avoid causing undue reputational damage. Therefore, on this occasion we find the potential harm arising from the broadcast outweighed the right to freedom of expression.
 Accordingly we uphold this aspect of the complaint under the accuracy standard.
Was the action taken by MediaWorks having upheld the complaint under the balance and fairness standards, sufficient?
 SWDC submitted:
- The broadcast damaged its reputation and caused the Council to ‘suffer under misconception’ in the community due to the misinformation broadcast.
- While the broadcaster apologised to the named Councillor and removed the online item, it has not apologised to SWDC therefore the harm caused to SWDC has not been rectified.
 MediaWorks submitted:
- The correction broadcast the following evening was sufficient to address the breaches so no further action was required.
- The broadcast is not available online and was only broadcast on this one occasion.
- The broadcast did reflect SWDC’s statement that the Council’s approach to this issue was in line with its policy to reduce the number of gaming venues, and that profits were returned to the community. Following the broadcast, SWDC provided additional comments however for obvious reasons it was not possible to include those in the broadcast.
 Our consideration of whether the action taken by MediaWorks was sufficient depends on the nature of the breach of standards – that is, the severity of the conduct and the level of harm caused – and the specific circumstances of each individual complaint. The more serious the breach, generally the more the broadcaster will need to do to remedy it.
 In this case, MediaWorks has acknowledged that the broadcast contained critical comments about the Councillor involved, resulting in an unfair and unbalanced broadcast that misinformed the audience about the nature of that individual’s involvement in the venue decision-making process.
 To respond to these breaches, one of the programme hosts, Ms Lloyd, delivered an on-air apology to the Councillor the following evening. Ms Lloyd also clarified inaccurate statements that had been made about the Councillor in the item.
 We accept that the on-air apology addressed the harm caused to the Councillor, and SWDC is satisfied with the action taken in this respect. However we agree with the complainant that no remedy has yet been achieved for SWDC.
 The potential impacts of this broadcast, particularly arising from the broadcast of misinformation (as we have found above), as well as the absence of direct comment from SWDC on some aspects of the item, were not limited to the named Councillor, but were also likely to flow on to the reputation of the Council. The treatment of the SWDC in this story and the implications arising from the misinformation contained in the story had the potential to cause significant damage to the reputation of the SWDC as a transparent and representative local governing body, by making the public question the SWDC’s motives and interests.
 In these circumstances we find that the action taken by MediaWorks was insufficient and we uphold this part of SWDC’s complaint.
For the above reasons the Authority upholds the complaint that the action taken by MediaWorks Television Ltd regarding the broadcast of The Project on 14 December 2017, having upheld the complaint under Standards 8, 9 and 11 of the Free-to-Air Television Code of Broadcasting Practice, was insufficient.
The Authority also upholds the complaint that the broadcast breached Standard 9 of the Free-to-Air Television Code of Broadcasting Practice.
 Having upheld the complaint, the Authority may make orders under sections 13 and 16 of the Broadcasting Act 1989. We invited submissions on orders from the parties.
Submissions on orders
 SWDC submitted that the broadcaster’s responses during the complaints process show it has failed to accept responsibility for the damage caused to the Council’s reputation. It requested a broadcast statement summarising the decision and the reasons why it was upheld (including a correction and an apology), to be broadcast either at the beginning or end of an episode of The Project so that correcting the misconception that the SWDC ‘gets a cut of the profits [from pokie machines]’ did not get lost in other content. It also requested an order of costs to the Crown in the maximum amount of $5,000.
 MediaWorks submitted that, given the significant amount of time that has elapsed since the broadcast (in December 2017), and the complexity of the issues addressed in the decision, the publication of the Authority’s decision, which clearly explains the issues and the background to the complaint, is the most appropriate remedy. MediaWorks submitted that in these circumstances no orders are warranted.
Authority’s decision on orders
 When the Authority upholds a complaint, whether in whole or in part, we may make orders, including directing the broadcaster to broadcast and/or publish a statement, and/or pay legal costs to the complainant.
 In determining whether orders are warranted we consider the following factors:4
- the seriousness of the breach, and the number of upheld aspects of the complaint
- the degree of harm caused to any individual, or to the audience generally
- the objectives of the upheld standard(s)
- the attitude and actions of the broadcaster in relation to the complaint (eg, whether the broadcaster upheld the complaint and/or took mitigating steps; or whether the broadcaster disputed the standards breach and/or aggravated any harm caused)
- whether the decision will sufficiently remedy the breach and give guidance to broadcasters, or whether something more is needed to achieve a meaningful remedy or to send a signal to broadcasters
- past decisions and/or orders in similar cases.
 We have taken these factors into account in making our decision on orders and outline our views on these below.
 We have upheld three aspects of this complaint under accuracy, fairness (action taken) and balance (action taken), with the remaining issue in our view being the inaccurate statement that the SWDC gets a ‘cut of the profits’ from gambling machines and potential harm caused to the Council’s reputation as a result. We consider this to be a relatively serious breach as it has the potential to seriously undermine the community’s understanding of the Council’s interest in gambling and to impugn the trust and confidence that the community may have in the Council. While the broadcaster acknowledged the potential impact on the named Councillor and upheld the complaint and took action in this respect, it also should have recognised the potential impact on the Council.
 Given the importance of transparency of local governing bodies like the SWDC, and the misleading impression that was created for viewers, we consider a broadcast statement is appropriate and necessary in this case to publicly acknowledge the breach and correct the inaccuracy for viewers. It ought to also mitigate in some way any reputational damage caused to the Council. We do not have the power to order an apology, and we leave this for MediaWorks to consider for itself.
 We direct that the statement be broadcast at 7pm at the beginning of The Project on a Friday, to reflect the original timeslot, within one month from the date of this decision.
Costs to the Crown
 The Authority may also make an award of costs to the Crown having regard to various factors, including the conduct of the broadcaster, the seriousness of the breach of standards and previous decisions. Under section 16(4) of the Act, the maximum amount of costs to the Crown we are able to award is $5,000.
 In determining whether costs to the Crown are warranted, we have considered the following factors:
- The breach of standards is relatively serious with three aspects of the complaint upheld.
- There was a clear risk of undue harm to the reputation of both the SWDC and its councillors arising from this broadcast, which could impact the SWDC’s standing in its community which is important to the role it has.
 We have also considered the following mitigating factors:
- The broadcaster upheld various aspects of the original complaint and acknowledged those breaches of standards.
- An on-air apology to the Councillor named in the broadcast was issued the following evening. Although this did not correct all of the deficiencies of the earlier broadcast, it demonstrates a willingness by the broadcaster to address the breaches it identified.
- The broadcaster has accepted the Authority’s findings in this decision.
 Taking into account the considerations above, on balance we do not think an order of costs to the Crown is warranted. While the breach is fairly serious, the broadcaster recognised some of the deficiencies, and took some steps to remedy the harm caused. We consider that the broadcast statement and publication of this decision will serve to publicly censure the broadcaster for its conduct in the breach of standards in this case.
Under section 13(1)(a) of the Act, the Authority orders MediaWorks TV Ltd to broadcast a statement. The statement shall:
- be broadcast within one month of the date of this decision
- be broadcast at 7pm, on a date to be approved by the Authority
- contain a comprehensive summary of the upheld aspects of the Authority’s decision
- be approved by the Authority prior to being broadcast.
The Authority draws the broadcaster’s attention to the requirement in section 13(3)(b) of the Act for the broadcaster to give notice to the Authority of the manner in which the above orders have been complied with.
Signed for and on behalf of the Authority
10 August 2018
The correspondence listed below was received and considered by the Authority when it determined this complaint:
1 South Waikato District Council’s formal complaint – 19 December 2017
2 MediaWorks’ response to the complaint – 7 February 2018
3 SWDC’s referral to the Authority – 20 February 2018
4 MediaWorks’ confirmation of no further comment on the referral – 8 March 2018
5 MediaWorks’ response to Authority’s request for submissions on accuracy – 8 May 2018
6 SWDC’s submissions on orders – 25 June 2018
7 MediaWorks’ submissions on orders – 29 June 2018
1 Section 98, Gambling Act 2003
2 Section 100(1)(b)(i), Gambling Act 2003
3 The distribution of non-casino gaming machine profits in New Zealand (Department of Internal Affairs, 2012).
4 Guide to the BSA Complaints Process for Television and Radio Programmes, Broadcasting Standards in New Zealand Codebook, page 58