Contents

Chapter 7
Ethical journalism – a new approach to media standards
in the digital age

The News Media Standards Authority

7.23 We now describe how the NMSA would satisfy the principles discussed above, and the requirements of effective regulation. We note that our recommendations are broadly consistent with those of the Australian Convergence Review446  – although that review has adopted a different approach to the question of compulsory coverage, which we will address later in this chapter.

Independent governance and organisational structure

7.24 It is critically important that the NMSA be as independent as possible from both government and the industry.447  Independence from government, we believe, is of particular importance. This will involve a move away from the BSA model which has a significant degree of state control. The BSA’s members are appointed by the government; broadcasting standards are prescribed by statute, as are the sanctions which the authority can impose.

7.25The danger of state control is that the authority may serve, or just as seriously appear to serve, political ends, in the form either of the appointments made to it or the decisions made by those appointees. We do not suggest that the BSA has ever been open to those influences, but the possibility that it could be must inevitably reduce the confidence of the industry in it.

7.26No doubt some will believe that a degree of state “backbone” is desirable, and that complete independence from the state will weaken oversight: that there will be a tendency to pander to the lowest common denominator, and that commercial pressure might lead to a failure to take account of the wider public interest. The BSA itself put such a view to us:448

We think the State has an interest in balancing the media’s rights of freedom of expression along with the responsibilities that come with these.

7.27 That might indeed be a concern if what was proposed was pure self-regulation. Industry control of the authority would in its way be just as unsatisfactory as state control. It would not command public confidence. This point was strongly made by many people during the Leveson Inquiry.449  Announcing the Inquiry, the British Prime Minister, David Cameron, said:450

There is a strong case for saying it’s institutionally conflicted because competing newspapers judge each other. As a result it lacks public confidence … my starting presumption is that [the new system] should be truly independent, independent from the press, so the public will know that newspapers will never again be solely responsible for policing themselves.

7.28 No doubt the United Kingdom press has exhibited failings far in excess of anything that has happened in New Zealand. But the perception and confidence arguments are just as strong here. The importance of independence was emphasised in the Barker-Evans Review of the New Zealand Press Council in 2007.451
7.29So what we propose is a system which, in addition to being independent of government, is also substantially independent of industry. The Advertising Standards Authority (ASA) is a useful model.452  However, as we shall demonstrate, complete separation from industry will not be entirely easy to achieve. The following are the elements of independence.

7.30First, there should be a carefully devised method of making appointments to the NMSA. There should be no government involvement in these appointments. In the set-up stages the appointments should be made by an independent panel, the details of which we discuss later in this chapter. The chairperson of the NMSA should be a retired judge, or other respected, experienced and well known public figure.

7.31A majority of the members should be representatives of the public who are not from the media industry. A minority, however, should have industry experience. The NMSA needs to be informed about how the industry works and the very real pressures of time, resource and expertise it faces. The industry members should include representatives of both proprietors and journalists. However we believe it is preferable that current editors should not be appointed, for they would be sitting in judgement on their competitors. The Leveson Report makes that point strongly.453  We also believe that at least one member should have expertise in new media and digital communication technology.

7.32Second, once appointed, members should have fixed terms, and only be able to be removed for cause, and not at the instigation of the industry or anyone else. There should be power to reappoint a member for one further term.

7.33Third, the NMSA should have a separate legal existence independent of any industry bodies.454  It should preferably be an incorporated society. The management of such a body should be independent of the industry in the same way that the adjudication function is. The observations of Lara Fielden which we quoted in chapter 5 are strongly on point.455  We think that the present arrangement whereby the management of the Press Council is in the hands of an executive committee controlled by the industry is less than ideal. Any governance board or panel should not be controlled by media industry appointments.

7.34Fourth, the content of the code of practice should be formulated by the NMSA itself or a committee set up by it. The government should have no influence on the content of the code. We deal with the code below.

Jurisdiction: what is “news”?

7.35 The NMSA’s jurisdiction should be based on the nature of the content provided to the public rather than platform delivery. It should cover linear and non-linear broadcasters, web-based publishers, and print. The NMSA would only adjudicate complaints relating to news, current affairs and news commentary.

7.36 For present purposes it will be sufficient to conflate “news” and “current affairs”. Except for the fact that current affairs tends to relate to political and governmental matters and can involve more analysis than straight news, the two are very much the same. We put them both under the rubric of “news”. The question is what that means, and how it differs from “entertainment”.

7.37Besides news and current affairs, the media publish content which is pure entertainment. In the broadcast media, this includes a variety of forms of entertainment. Yet where is the line to be drawn between “news” and “entertainment”? Sometimes news items have no purpose other than to entertain and sometimes shows which are primarily of entertainment value do contain factual material about real people (reality TV for example).

7.38 A number of submitters told us that the line between “news” and “entertainment” will be difficult, if not impossible, to operate in practice. Yet it is a distinction which has been recognised elsewhere. The Australian Convergence Review has drawn a precisely similar distinction;456  likewise the Australian Law Reform Commission’s recommendations provide that news and current affairs programmes should be exempt from the classification scheme that it proposes.457  A similar distinction can be found in New Zealand in the Films, Videos, and Publications Classification Act 1993, where films about news are expressly exempt from labelling.458

7.39The distinction between news and other forms of content certainly poses difficulties, but they are not insuperable. The difficulty is most likely to arise in relation to “factual” programming: that is to say reality shows, documentaries and the like. We believe it is justifiable to take a wide definition of “news” as including any publication which purports to provide factual information and which involves real people. This is because such publications raise the issue of journalistic standards. Are the facts presented accurate? Is any part of the publication misleading? Have individuals portrayed been unfairly treated? Has anyone’s privacy been invaded? Has information been obtained by the use of deception? If so, the individuals involved should have the right to complain to the NMSA which will apply the appropriate ethical standards.

7.40So we would include in the term “news” documentaries and such “factual” and “reality” programmes as depict real people. We would also include sports programmes. “News commentary” which would also be within the jurisdiction of the NMSA would include programmes such as Campbell Live (TV3), Seven Sharp (TVOne), radio talk-back, letters to the editor and sporting analysis. We are not alone in taking this stance. The Privacy Commissioner takes a similarly broad view. She has held that the National Business Review’s “The Rich List” and TV3’s Target come within the rubric of “news activity” and are thus outside her jurisdiction.459

7.41Purely fictional programmes raise issues that are more likely to involve taste and decency, and suitability for children. In our view they are not suitable for adjudication by a body whose focus is news. We believe a separate body with stronger enforcement powers should deal with them. Currently the Censor’s Office does some of this work and the BSA has jurisdiction over broadcast entertainment. In the next chapter we argue that there needs to be a separate review of this sector to achieve a coherent solution for the new converged environment.

7.42Our proposed division into “news” and “entertainment” does, however, pose two difficulties. One is simply that in a few instances (and we think they will be very few) it may be extremely difficult to decide into which category a particular publication falls. To meet that case we think the NMSA and the appropriate entertainment authority could draw up a set of protocols for deciding which of them should deal with the complaint in question.

7.43 The second difficulty is that sometimes a “factual programme” may involve serious taste and decency issues – the portrayal of sex or violence, for instance. In these cases, while a complaint might properly be made to the NMSA, it should have the option to refer it to the entertainment body so that more appropriate enforcement action can be taken. Flexibility is the key to solving issues of this kind.

7.44 Currently the BSA hears complaints about broadcast entertainment content. We envisage that even after the NMSA comes in existence and the BSA’s jurisdiction over news is transferred to it, the BSA should remain in existence to deal with broadcast entertainment content, pending the recommended review of the entertainment sector. We also recommend that during that period the BSA retain its jurisdiction over news in relation to standards of good taste and decency and protecting the interests of children.

Functions and powers

7.45The NMSA should have the following functions:

Codes and Standards

7.46The NMSA, or an independent committee set up by it, should formulate a code of practice (or, if preferred, statements of principle) which clearly set out the standards against which the conduct of the news media is to be judged and which will form the basis of complaints from members of the public. The code should be available on the NMSA’s website.

7.47 Codes go to the heart of the system and serve two fundamental purposes. They serve as a kind of rule book to guide the conduct of journalists and editors, and they constitute the standards against which the authority will adjudicate complaints.460

7.48The code must be regarded as reasonable and credible by both the industry and the public. It should therefore be formulated after consultation with the industry and the public, and should capture to the fullest extent possible the traditional tenets of good journalism in a way which meets the demands of modern New Zealand society. The existing codes, including those of the Press Council, the BSA, OMSA and those used in the news media industry itself, should be consulted in the formulation of the new code.

7.49The passage of time can change expectations, and the emphasis of the standards may need to change from time to time. For example, modern codes emphasise intrusion into privacy to a greater extent than used to be the case. The code should be reviewed on a regular basis.

7.50As to the content of the code, we propose the following.

Freedom of expression

7.51First, a code should clearly recognise the right to freedom of expression, and strive to maintain an appropriate balance between this interest and other interests such as privacy. It should be clear that sometimes prima facie breaches of the code’s principles may be overridden by the public interest in publication.

7.52There is no doubt that freedom of expression must be a guiding principle. Agreeing with the view expressed in the Leveson Report, we believe that the NMSA should give guidance as to what “public interest” means.461  It is a concept which has caused uncertainty in many contexts.
7.53It is unlikely that the New Zealand Bill of Rights Act 1990 (BORA) would apply to the NMSA. As we are recommending that the NMSA not be set up by statute, it is difficult to argue that it will be a body which performs “any public function, power, or duty conferred or imposed on that … body by or pursuant to law”.462  But it is important that the NMSA acts on principles equivalent to those in BORA. We recommend that both the constitution of the NMSA and the code of practice it draws up expressly require the NMSA to recognise, and act in accordance with, the BORA guarantee of freedom of expression.463
Level of prescription

7.54 Second, there is a question of whether the code should be in terms of broad flexible principle or more detailed prescription. There are advantages and disadvantages of both styles. The Press Council prefers the broad statement of principle to enable more flexibility from case to case. The BSA codes contain similar fairly broad statements of principle accompanied by more detailed guidelines which have come to take on the appearance of rules. The new OMSA Code of Standards sets out each standard in general terms, with brief guidelines in relation to some standards. But, as far as possible, the code should be free from ambiguity, so as to leave little room for argument.

Level of specification

7.55Third, there is also the question of whether a code should be a complete and exhaustive code, or whether it should be left open for complainants to complain about other matters which are not specified. The Press Council prefers the latter approach, and is one reason it prefers to speak of “statements of principle” rather than a code.

7.56We are uncomfortable with the notion that remedies or sanctions can be brought to bear in relation to conduct which is not proscribed by the code. Yet in this fast-moving environment it may be difficult for the framers of the code to foresee and provide for everything in advance. We suggest, therefore, that complainants should be able to complain about conduct which is unethical even though the code does not make express provision for it; but that in such a case the NMSA’s power should extend no further than to make a declaration that the conduct is undesirable. The NMSA should then proceed to amend the code. We think that careful drafting of the code in the first place should ensure that this situation does not arise often.

Core principles of good journalism

7.57Fourth, a code would normally be expected to contain a number of core principles which are at the heart of good journalism from whatever platform it is delivered. Those principles are age-old, and appear in journalism codes of ethics the world over. They include such things as accuracy, correction of error, separation of fact and opinion, fairness to participants, good taste and decency, the protection of privacy and the interests of children.

Illegality

7.58Fifth, we believe that one of the standards in the code should require compliance with the law. The BSA’s “Law and Order” standard, or a variant of it, would be appropriate. This would allow complaints, for example, about the publication of suppressed names, or trespass by reporters on property. There is no reason why a standards body whose job is to maintain proper standards should not take cognisance of breaches of the law, and every reason why it should. Ethical standards often overlap with legal rules: for example the privacy standard presently includes cases of illegal interception and trespass.

7.59In some cases, criminal proceedings in the court might ensue as well, but their function is different: criminal proceedings result in punishment, whereas the standards body is often as much about remedy (for example a take-down order) as about sanction. Moreover in some cases of infringement of the law, prosecution does not result for whatever reason: in such a case, if the NMSA could not take action nothing would happen at all.

Variations for type of medium

7.60 Sixth, in addition to those overarching principles there will need to be variations depending on the type of medium. There are different expectations of public service broadcasters than of bloggers. Film has a different impact than print. On-demand material with its element of choice is different from linear presentation. Sub-codes could and should recognise these differences. Bloggers, for example, could not always be expected to be constrained by any requirement of balance to the extent that mainstream media might, although any court reporting they did would obviously need to be balanced. But bloggers would be bound by the core principles. Those who found those too constraining would not be obliged to join up to the system.

News gathering
7.61Seventh, the principles in a code should include not only principles about what content should or should not be published, but also principles about news gathering practices. For example, intimidation and harassment of subjects and secret filming should be dealt with, even if the information obtained is not published. The public interest should be carefully factored into such principles. Another possibility for consideration is whether there should be any requirement of prior notice to a person before a negative story about him or her is published: this has been the subject of some debate in the United Kingdom.464
Independent formulation

7.62Finally, as we have indicated earlier, the government should not influence the content of the codes through statute or regulation or in any other way. They should be formulated by the NMSA as a truly independent body.

Complaints adjudication

7.63A principal function of the NMSA will be to receive, investigate and determine complaints from members of the public about breaches of journalistic standards. We believe that anyone should be able to lodge a complaint even if they are not directly affected by the publication in question. The maintenance of proper media standards is an issue for everyone.

7.64Complaints should be directed to the media agency itself in the first instance, with recourse to the NMSA if the complainant is not satisfied with the outcome. However, we do favour an exception to this in a case when the complainant can show good reason for not approaching the agency first. This may be because he or she reasonably believes that he or she is being victimised, or because of previous unsatisfactory experiences. This is also the view taken by the Australian Press Council.465

7.65Complaints should be able to be made not just about material which has been published but also about unethical or illegal news gathering practice (including trespass, harassment and deception, for example).

7.66We have heard it suggested that complaints should be able to be made before the event with a view to preventing publication of damaging material but we firmly believe this would be to go too far. Such an injunctive power would be an unjustifiable intrusion on freedom of expression. It would be a form of censorship.466

7.67There would need to be an ability to filter complaints and reject, without the need for an investigation, those which are trivial, vexatious, improperly motivated or outside its jurisdiction.

Effective powers, remedies and sanctions

7.68As we discuss in chapter 5, there are considerable discrepancies between the powers of the BSA and those of the Press Council. The sole sanction administered by the Press Council is a requirement that an adverse decision be published in the newspaper concerned. The BSA has more sanctions in its armoury. They include a requirement to publish apologies and corrections, an ability to take a channel off the air for up to 24 hours,467  or require a similar period free from advertising.468  The BSA can also award compensation in the case of invasion of privacy and costs to the Crown and the complainant. At times, substantial amounts have been awarded under this last head.
7.69We are told by the newspapers and the Press Council that the requirement to publish an adverse decision is effective.469  Editors do not like such negative publicity. We are sure this is the case, but note that some Press Councils elsewhere in the world have had considerable difficulty in enforcing that requirement in an effective way.470  This has been an issue of concern for the New Zealand Press Council in recent times as noted in the 2010 Annual report.471
7.70Submissions from the Press Council and the media industry accepted the case for a wider range of powers.472  More teeth are needed. We recommend that a wider range of powers be spelled out in the contract between the NMSA and the media agencies who belong to it, and should include;473

7.71We also consider that, in exceptional cases, the NMSA should have the power to suspend or terminate the membership of a media agency. This would obviously be a very rare occurrence, and would be appropriate only if the agency was in serious and repeated non-compliance with the code or with decisions of the NMSA. Termination, or cancellation, is a standard remedy for serious breach of contract, and this should be no exception. We have noted that membership of the NMSA will be a mark of responsibility. Serious offending diminishes the brand, and termination may be necessary to protect the reputation of the NMSA and its other members.

7.72However, the step should not be taken lightly, and we would expect that usually a number of warnings should precede the application of the sanction. Of course suspension or termination would not mean that the news agency concerned would be driven from the market or be required to cease publishing. It would continue as before, but without the benefit of the privileges accruing to membership of the standards body. The suspension or termination would also need to be proportionate to the breach and, in most cases, we would expect the media agency concerned to be able to seek reinstatement of their membership after a suitable period. We also expect that a decision to terminate or suspend membership (or to decline reinstatement) would be subject to judicial review.

7.73We have considered whether there should be monetary sanctions such as fines, or remedies such as compensation. That question received a mixed response in the United Kingdom in the course of the Leveson Inquiry,476  but attracted some support even from people with strong media connections who advocated heavy fines for very serious misdemeanours. The Leveson Report does recommend such fines, and at a very high level.477  However, we do not presently support monetary sanctions, either damages or penalties.

7.74Monetary sanctions would need to be very significant in the case of larger organisations. A fine of say $5,000 is not likely to act as a meaningful deterrent to that sector of the media industry. More significant monetary sanctions, however, would be likely to lead to increased legalism in the handling of complaints, including the deployment of counsel and an adversarial process. It would be undesirable, in our view, to create incentives for litigious behaviour. The complaints system needs to be fast and flexible to be effective and therefore could be unduly weighed down by the spectre of financial sanctions. Our preference is for the power to impose monetary sanctions to be reserved for the courts in cases where the law has been broken.

7.75We considered whether monetary penalties might be appropriate in the case of flagrant or repeated offending. But we believe that a strong mark of disapproval, such as a censure, or a direction that an apology be published in a prominent manner as determined by the NMSA, or (as a last resort) suspension or termination, serves equally well as a deterrent. As noted above,478  so far in New Zealand there is no evidence of the sort of behaviour that has characterised some elements of the British press (giving rise to the Leveson Inquiry), which might have provided stronger justification for the introduction of monetary penalties.
7.76We have carefully considered whether the BSA’s existing power to award up to $5,000 compensation for invasion of privacy should be replicated in the new authority. We have concluded not. It has never been clear why privacy alone carried that sanction. An individual can be equally hurt by inaccurate statements or unfair treatment. (Indeed unfairness is often an alternative ground of complaint to invasion of privacy.) We therefore prefer to treat invasion of privacy no differently from breach of any other standards. A person seriously aggrieved would still have the right to bring tort proceedings in court,479  and the mediation service we recommend may sometimes result in an agreed sum being offered to settle the matter, in privacy as well as other kinds of case.

7.77An enhanced range of sanctions such as we have recommended above should have the beneficial effect that complainants who might have a potential cause of action in the courts, say for defamation, might be encouraged to take the route of an NMSA complaint rather than expend resources and time pursuing a court action. That happens now with the Press Council and BSA. It is to everyone’s advantage.

Appeal

7.78We believe that justice is better accorded to all those involved if there is a right of appeal from decisions of the NMSA. Because it will not be a state agency, that appeal could not be to a court. However, we support the concept of a media appeals body which would sit above the first instance authority. It would be similarly independent and appointments to it made by the same process. Currently decisions of the BSA can be appealed to the High Court; there is no right of appeal from the Press Council. The Advertising Standards Complaints Board is subject to appeal to an appeals authority comprising two representatives of the public and one representative of the media industry: it is this model that we advocate for the NMSA. In addition we think it likely that the decisions of the NMSA would be subject to judicial review in the High Court.

Mediation

7.79 We recommend that the NMSA should provide a mediation service to enable complainants and media agencies to settle cases which might otherwise proceed to court. The United Kingdom Press Complaints Commission currently operates such a system, and it has attracted favourable comment.480  Such a service could be a particular benefit in defamation cases, and perhaps privacy also. Defamation cases are well known for their procedural complexity and the time and expense required to proceed to a court hearing. The Defamation Act 1992 contains certain incentives to plaintiffs not to continue with large damages claims (for example the provisions for declarations, correction recommendations, and retraction or reply) but these have not been notably successful.481
7.80We note that in the United Kingdom, one proposal put forward to the Leveson Inquiry proposed a Media Standards Agency (MSA) which could among other things engage in alternative dispute resolution of defamation cases.482  It would extend to an arbitration process which would make determinations binding on the parties. A news medium which participated in such a process and complied with the requirements of the MSA would have a complete defence to a defamation action unless the matter was published maliciously.483
7.81In similar vein, the Defamation Act 2009 (Ireland) gives an advantage to a news medium belonging to the Press Council if it pleads a public interest defence to a defamation action (although even non-members gain an advantage if they have adhered to standards equivalent to those required by the Press Council).484  Such a concept has real attractions. It would provide an apparatus for complainants to settle genuine claims under the guidance of an experienced mediator and it would provide a real incentive for media to join and remain under the jurisdiction of the new authority.

7.82However, some issues would arise in seeking to introduce a mechanism such as the Irish one. The full potential of such a system could not be realised without legislation. A plaintiff could bypass the system in the absence of statutory compulsion, and the “public interest” media defence which applies in Ireland could not be introduced here without an amendment to our Defamation Act.

7.83We consider that something could be achieved along these lines even without a statute. A non-statutory system which simply made available an expert machinery for parties to settle disputes which might otherwise escalate to court proceedings could be attractive to potential litigants. It could be an incentive for media to support the standards body that we recommend.

7.84 Rule 7.79(5) of the High Court Rules provides:

A Judge may, with the consent of the parties, make an order at any time directing the parties to attempt to settle their dispute by the form of mediation or other alternative dispute resolution (to be specified in the order) agreed to by the parties.

The ready availability of a mediation service expert in media matters could be an attractive forum for parties for the purpose of this rule. We recommend that the NMSA should provide a mediation service and clear information about using it. However, mediation is not always a cheap process. Thought will need to be given as to how costs can be kept down. The availability of some NMSA members to act as mediators might be a possibility.

Oversight and Monitoring

7.85Oversight is an important factor in the maintenance of standards. There are of course funding implications if this is to be another function of the NMSA, another reason for guaranteeing that funding levels remain adequate.485
7.86 Nevertheless, an effective standards body needs to be more than just an adjudicator. We think the NMSA should keep an overview of trends, and undertake research and conduct public surveys to monitor and draw attention to any developments or practices which could detrimentally affect standards.486  It should from time to time issue reports or advisory opinions. The Press Council has done this in the past,487  and the BSA often does so.488

7.87We also recommend that each media agency that belongs to the NMSA should be required to report each year on the complaints it has handled itself. However this obligation to report would have to be confined to formal written complaints. If it were to include every phone-call received by an editor the task would become unmanageable.

Transparency and accessibility

7.88 The news media sometimes adopt their own set of professional ethics and standards, such as those developed by the journalists’ union, and major newspaper companies. However, these professional codes and standards which guide journalistic practice can be difficult for the public to find. We also note that news websites do not provide obvious mechanisms by which the public can complain about content.

7.89It is also critically important that the existence of the NMSA should be well known and that its functions and the means of making complaints be well advertised. The Broadcasting Act 1989 requires that broadcasters advertise the right to make complaints.489  The Press Council has for some time requested its members to advertise the complaints body but reports compliance has been “patchy”. A recent survey conducted for the Law Commission showed that only 26 per cent of respondents had heard of the Press Council.490
7.90There should be a requirement, imposed by contract on all members of the NMSA, to regularly publish a statement that they are bound by the NMSA’s code and that complaints can be made about breaches of it. There should be clear directions as to where the code can be found. Members should also publicise their own complaints handling processes. Those statements should be prominent and contain clear contact details.491

7.91Access to the NMSA should be as easy and straightforward as possible. There should be clear and well publicised information on how to make a complaint. It should be easy and inexpensive to do so. The complaint processes should be as informal as possible. Most cases should be dealt with on the papers without a hearing, with hearings being reserved for matters of high public importance. There should be provision for dealing quickly with urgent complaints.

7.92 The NMSA should be transparent in its operations and decisions and should take all reasonable steps to keep the public informed:

(a) First, the code of practice should be publicly available on the NMSA’s website.
(b) Second, the decisions of the NMSA and the appeals body should be published online and be readily available. In this way precedent grows, and both editors and members of the public can have a clearer idea of how the standards work in practice.
(c) Third, the NMSA should publish an Annual Report including financial statements and complaints statistics.
(d) Fourth, the NMSA should publish and keep updated information about its organisational arrangements including:

Funding

7.93In order to be effective in carrying out its functions, the NMSA will need to be adequately resourced. It will need to be funded principally by the industry. There is no other viable source. The Press Council is presently totally funded in this way. Yet this does create certain difficulties.

7.94First, if a major industry body, perhaps one of the large newspaper companies or a major broadcaster, were to withdraw from the NMSA, the reduction in funding may put the very existence of the NMSA in jeopardy. This has happened on occasion overseas and has led to the demise or serious weakening of the Press Councils concerned.494
7.95This can to some extent be remedied by tying all the media agencies to the NMSA by contract for a set term of say five years (although the NMSA should have the discretion to negotiate shorter term contracts with members who are individuals).495  The contract would not only deal with funding, but would bind the signatory agencies into the system of accountability and the sanctions that could be imposed. To promote funding stability, the member’s right to terminate the membership contract before its term has expired should be limited to events such as insolvency or corporate merger. We would expect that if the system works as it should the contracts would be renewed on their expiry.
7.96Second, if the industry is the sole funder there may be an incentive not to fund at an optimal level. In Australia, the Finkelstein Report noted the submission of a former chair of the Australian Press Council: “[t]he problem … is that the press have an incentive not to give the APC too much money, because it would only be able to criticise them better.”496  We acknowledge that this is speculative, and that if media organisations are persuaded of the possible adverse consequences of the NMSA otherwise being seen to be ineffective, they may in fact be incentivised to fund it appropriately. However, we do note that levels of funding were the subject of comment in the 2007 review of the Press Council.497

7.97Third, a difficulty with the funding being supplied solely by industry is that smaller organisations such as bloggers, if they are admitted to membership, are unlikely to be able to afford as much by way of subscription as their larger corporate colleagues. So those larger organisations may have bear the larger share of the funding burden, something they may be reluctant to do.

7.98Finally, if the body is totally funded by industry the public perception might be unfavourable. The NMSA might be seen as too closely tied to the industry, just as total state funding may create a perception of state control.

7.99So what is the solution? We proposed in our Issues Paper that while the majority of the funding should come from industry, the state should also make a contribution.498  The government’s contribution to the BSA might be transferred to the new body. The state has an interest in a responsible media just as much as the public, and should be prepared to support it.

7.100This suggestion of a state contribution was met with suspicion and disapproval by those media who made submissions on our Issues Paper. They feared that state funding would have strings attached, and that this would open the way to a degree of state control. That need not be so, and it is certainly not our intention.

7.101It would need to be made very clear that any state contribution to the NMSA must not be accompanied by state influence. That is perfectly feasible. Judges are entirely paid by the state, and indeed are executive appointments, but there is not the slightest doubt that they are completely independent in exercising their judicial functions. In the media context, well regarded and independent news agencies such as the BBC and the ABC are entirely state funded. So we continue to support a state contribution to the funding of the new authority.

7.102 The Australian Convergence Review also supports the idea of partial state funding, but believes it should be limited to specific purposes, for example to fund projects.499  We support that idea. If there is to be partial state funding it should be “ring-fenced” for research and surveys commissioned by the NMSA in the exercise of its oversight and monitoring function. This would leave the industry funding the complaints arm of the NMSA which performs the adjudicative functions, with the state making a financial contribution to essential ancillary functions that verify the continuing effectiveness of the authority on behalf of the public.

7.103It is important that these ancillary functions receive adequate funding. As noted above, we also think there is a benefit in spreading the funding burden to limit any undue increase in the contributions required from media industry participants. Requiring the media industry to fully fund the NMSA may result in the cost of membership deterring potential applicants, especially from the new media sector.

7.104 We recommend that the state funding for the specific purposes of oversight and monitoring outlined above500  should be secured by a contract between the NMSA and the relevant government department. The terms of the funding contract should negate any perception of state influence over the operation of the NMSA.
7.105As far as the media organisations’ own contributions are concerned, funding mechanisms will need to be worked out in detail. Levies should be based on revenue bands for commercial entities, with lower rates for individual communicators, and more nominal fees for low-profit or non-profit entities. The establishment of a detailed mechanism would be a function of the set-up body we discuss below.501

The benefits of membership

7.106The complaints regime outlined above has the potential to provide a significant level of accountability. Its success will depend in a large measure on the news media’s willingness to enter into contractual agreements to join the NMSA, comply with its rulings and to provide it with adequate resources. The quid pro quo is that those who are willing to do so will have access to a number of important benefits.

Legal privileges and exemptions

7.107 Under our recommended regime, only those entities willing to join the NMSA would be eligible to access the news media’s legal privileges and exemptions which we describe in chapter 2. This would be reflected in amendments to each of the statutes containing these media provisions. The privileges and exemptions are not insignificant. They include being able to attend a closed court, and to challenge suppression orders; and being exempt from the Privacy Act 1993, and some provisions of the Fair Trading Act 1986, the Electoral Act 1993 and the Human Rights Act 1993.

7.108Some of these privileges and exemptions were included in the relevant Acts as a result of submissions by the media, itself an illustration of how much they mean to the media and how necessary they are to the effective dissemination of news. There are similar privileges and exemptions in the United Kingdom, but they are fewer and not as absolute or clearly defined. As one example, the Data Protection Act 1998 (the United Kingdom equivalent of New Zealand’s Privacy Act 1993) exempts journalistic material, but only where publication of it is in the public interest, and where compliance with the Act would be incompatible with the journalistic purpose.502  There are doubts about its exact scope.503  This is in contrast to the simple unqualified exemption in the New Zealand Privacy Act.504  Nor are the privileges of attendance in closed court as clear-cut. Entitlement to the New Zealand privileges and exemptions, as a whole, constitute a stronger incentive to the media.
7.109A small number of submitters to our Issues Paper thought that it is wrong in principle, and perhaps even unconstitutional, to grant special legal privileges to some but not all the media. The creation of a privileged class was said by one submitter to be the equivalent of a kind of licensing.505  We are not persuaded by this argument. If it is wrong to favour one class of the media there are only two alternatives. One is to abolish the privileges altogether so that no one has them. That would limit access to important information and make it more difficult to disseminate the news, to the detriment of citizens.

7.110 The second alternative is to give the privileges to anyone who intends to publish the information thus derived. But a line has to be drawn somewhere. It would be unworkable if any member of the public who wishes to write something about a court case should have full access privileges even when the court is closed to the public, or that anyone could opt to be exempt from Acts such as the Privacy Act that otherwise apply to the general public. Provided those news content providers who fall within a set of defined criteria have the free right to opt into the system if they wish, and thus have access to the privileges, with corresponding accountability for their responsible exercise, we cannot see that there is any constitutional difficulty.

“Brand” advantage

7.111 We believe, and this has been confirmed by some of the media personnel with whom we spoke, that the fact of belonging to the NMSA would be a mark of responsibility which distinguishes a member news medium from others, and gives it a reputational advantage. There are benefits in being demonstrably part of a group of media which have bound themselves to act responsibly and are prepared to be held to account. We see this as possibly a greater incentive than the legal privileges. It may be that some, like the BBC in Britain, the ABC in Australia and Radio New Zealand in this country, might say that they do not need such a brand because they have built such a reputation themselves independently of it. That may be so, but for most media we think the brand will be significant. The media are often undervalued in New Zealand. It should improve their reputation and standing in the community if they are visibly part of a system which places a high value on responsibility.

7.112Moreover, the membership of the NMSA is likely to lead to a range of privileges beyond the strictly legal. On a day-to-day basis, news media and their journalists are given preferential access in a wide range of circumstances. This includes invitations to attend media conferences of public and private agencies, early embargoed access to media releases, invitations to meetings (such as shareholder meetings), police and emergency service media briefings, and so on. Membership might also be made a condition of membership of the Press Gallery in Parliament. Politicians and other powerful figures in society are often buffered from the media by advisers who determine which media outlets will have access to them. Most people and organisations prefer to deal with accountable media with whom there is a higher degree of trust. Membership of a regulatory system is a way of demonstrating that accountability.

7.113 It may be that members of the authority could “kite-mark” their publications to indicate to the public that they belong. This would differentiate the accountable from the rest so that the public, including organisations and members of government, can make an informed choice. One Danish industry commentator has argued that transparency is the key to ensuring that citizens:506

… know when they are on websites, mobile apps or newspapers produced and edited by professional journalists and editors, respectful of media law and ethical standards … The professional media must separate themselves from the crowd by displaying a special obligation to credibility, fairness and independence.

We think this will be a significant inducement to join.

Exclusion from jurisdiction of proposed Communications Tribunal

7.114 In our Ministerial Briefing paper on harmful digital communication,507  we have recommended the establishment of a Communications Tribunal to provide the public with quick and efficient access to remedies when they have experienced significant harm as a result of digital publications. It was our recommendation that the news media would not be subject to the jurisdiction of that Tribunal, since such complaints would be dealt with by the new standards authority (NMSA).508  Publishers not subject to the NMSA would however be subject to the Communications Tribunal.

Access to public funding

7.115 The Broadcasting Commission (New Zealand on Air) funds broadcasting and the production of programmes to be broadcast; it can also make funds available for on-demand transmission. The Commission must require from recipients an undertaking that the programme will be consistent with the standards specified in section 4(1) of the Broadcasting Act. The majority of the recipients of funding are production companies, but the Commission requires that they have a contract with a broadcaster.

7.116Many of the programmes funded are documentaries or factual programmes which would come within the definition of “news” for the purpose of the recommendations in this report.509  If our recommendations are accepted, the standards with which the recipients must undertake to comply in relation to “news” programmes would have to be those in the NMSA code. To ensure ultimate accountability for standards, the broadcaster with whom the recipient contracts should therefore be subject to the NMSA’s jurisdiction.

7.117 We recommend that the Broadcasting Commission should make it a condition of funding “news” programmes that the broadcaster with whom the recipient contracts be a member of the NMSA. This would serve to assure standards. It would also act as another incentive for broadcasters to join the NMSA.

Mediation

7.118As discussed above we recommend that the NMSA should provide a mediation service to enable complainants and media agencies to settle cases which might otherwise proceed to court. This would be a clear advantage to member agencies.

446Australian Government Convergence Review (Final Report to the Minister for Broadband, Communications and the Digital Economy, Sydney, 2012) at ch 4 [Convergence Review].
447The same conclusion about the need for structural independence has been reached in other inquiries, see for example House of Lords and House of Commons Joint Committee on Privacy and Injunctions First Report (2012) at ch 5, [170]; The Rt Hon Lord Justice Leveson Report of An Inquiry into the Culture, Practice and Ethics of the Press (The Stationery Office, 2012) Part K at 1,590 [Leveson Report].
448Submission of the Broadcasting Standards Authority (12 March 2012) at [30].
449Philip Ward “Press Regulation – the Debate” (House of Commons Library Note SN/HA/6357, 20 June 2012).
450Joe Sinclair “PM Signals End of Press Complaints Commission” (The Independent, 8 July 2011).
451Ian Barker and Lewis Evans Review of the Press Council (2007), recommendations 2 – 7 [Barker-Evans Review].
452Advertising Standards Authority <www.asa.co.nz>.
453Leveson Report, above n 447, Executive Summary at recommendations 4, 5 and 13.
454This was one of the recommendations of the Barker-Evans Review, above n 451, recommendation 3. The Press Council implemented that recommendation by registering as an incorporated society at the end of 2011.
455Ch 5 at [5.73].
456Convergence Review, above n 446, at chapter 4.
457Australian Law Reform Commission Classification – Content Regulation and Convergent Media (ALRC R118, 2012), recommendation 6-3 [Classification Review].
458Films, Videos, and Publications Classification Act 1993, s 8(1)(g).
459Talley Family v National Business Review (1997) 4 HRNZ 72; Case Note 38197 [2003] NZPrivCmr 24. See also John Burrows and Ursula Cheer Media Law in New Zealand (6th ed, LexisNexis, Wellington, 2010) at 377–380.
460Lara Fielden Regulating the Press: a Comparative Study of International Press Councils (Reuters Institute for the Study of Journalism, University of Oxford, 2012) at [5.2] [Regulating the Press]. See also Leveson Report, above n 447, at Part B, chapter 4, [4.14], and Executive Summary at recommendation 36.
461Leveson Report, above n 447, Executive Summary at recommendation 42: “A regulatory body should provide guidance on the interpretation of the public interest that justifies what would otherwise constitute breach of the Code. This must be framed in the context of the different provisions of the Code relating to the public interest, so as to make it easier to justify what might otherwise be considered as contrary to standards of propriety.”
462New Zealand Bill of Rights Act 1990, s 3(b).
463Section 14.
464Ward, above n 449, at [3.5].
465Australian Press Council submission to the Convergence Review, above n 446, (October 2011) <www.dbcde.gov.au> at [D3].
466The potential for injunctive relief would remain available through the courts.
467This type or order has only been used once: see Broadcasting Standards Authority Barnes and ALT TV Ltd-2007-029 (order for suspension of broadcasting for a five hour period).
468This type of order has only been used once: see Broadcasting Standards Authority Diocese of Dunedin and 12 Others and TV3 Network Services Ltd-1999-125-137 (order for suspension of advertising for 2.5 hour period).
469See Press Council Annual Report (2011) at 6.
470Fielden Regulating the Press, above n 460, at [5.4].
471Press Council Annual Report (2010) at 8.
472Submission of the Press Council (March 2012) at 5; submission of APN (March 2012) at 3.
473Compare recommendations of the Leveson Report, above n 447, Executive Summary at recommendations 15-20. See also The Hon R Finkelstein QC Report of the Independent Inquiry into the Media and Media Regulation (2012) at [11.74] – [11.76] [Finkelstein Report].
474Rather than removing material from a website, it may be more effective to attach a permanent corrective statement to the material.
475Some might argue that such a requirement might exert a “chilling” effect on the media, see Ward, above n 449, at [3.6]. But this is not a strong point in our view. Providing a right of reply can also be regarded as expanding speech rights. The new media thrive on to-and-fro. And New Zealand defamation law has long required a right of reply as a condition of retaining certain of the Defamation Act’s reporting privileges: Defamation Act 1992, s 18.
476Ward, above n 449, at [3.1].
477Leveson Report, above n 447, Executive Summary at recommendation 19 (financial sanctions up to 1% of turnover with a maximum of £1million).
478At [7.28].
479In a number of New Zealand cases, ordinary “non-celebrity” plaintiffs have brought privacy actions in the Courts. See, for example, Andrews v TVNZ [2009] 1 NZLR 220; C v Holland [2012] NZHC 2155.
480Ward, above n 449, at [2.6].
481Defamation Act 1993, ss 24 – 27.
482Media Regulation Roundtable “Final Proposal for Future Regulation of the Media: A Media Standards Authority” (Submission to the Leveson Inquiry, 7 June 2012); Leveson Report, above n 447, Part K at 1,697. See also the Joint Parliamentary Committee on Privacy and Injunctions, above n 447 at ch 5 at [209]; Ward, above n 449, at 26 – 29.
483The Leveson Report, above n 447, did not include any specific recommendations about mediation but concluded that the proposed new press standards body should provide an arbitration process in relation to privacy, defamation and other media cases that would be a quick, fair and inexpensive system for resolving these disputes: Executive Summary at recommendation 22. While it would not be a mandatory process, it would be incentivised by way of costs advantages, with the courts having the power to impose costs penalties on non-members of the self-regulatory body: Executive Summary at recommendation 26.
484Defamation Act 2009 (Ireland), s 26(2)(f) and (g).
485See further at [7.102] below for discussion of a funding stream to support this function.
486See Finkelstein Report, above n 473, at [11.56] – [11.57].
487See Barker-Evans Review, above n 451, at 80, suggesting that ideally the Press Council’s funding would be sufficient to service the Press Council’s broader functions such as commissioning research.
488Broadcasting Act 1989, s 21(d), (h). This is also a function carried out by agencies such as the Privacy Commissioner: Privacy Act 1993, s 13(1)(p).
489Broadcasting Act 1989, s 6(1).
490Big Picture Marketing and Strategy Research Ltd Public Perception of News Media Standards and Accountability in New Zealand (summary of the online survey conducted for the Law Commission, April 2012) <www.lawcom.govt.nz/project/review-regulatory-gaps-and-new-media> [Big Picture Research].
491The BBC <www.bbc.co.uk/aboutthebbc/insidethebbc/howwework/>, the Guardian <www.guardian.co.uk/info/our-values> and the New York Times <www.nytco.com/press/> are models of transparency in this regard.
492See [7.104] below.
493See [7.43] – [7.44] above.
494Lara Fielden Regulating for Trust in Journalism: Standards Regulation in the Age of Blended Media (Reuters Institute for the Study of Journalism, University of Oxford and City University London, 2011) at 44–47.
495This exercise is being undertaken by the Australian Press Council, and we understand that the New Zealand Press Council is likewise considering it. Lord Hunt, current chairman of the Press Complaints Commission (UK), also strongly supports this solution: see “Submission to the Leveson Inquiry from the Rt Hon the Lord Hunt of Wirral MBE” (8 June 2012).
496Finkelstein Report, above n 473, at 236.
497Barker-Evans Review, above n 451, at 67.
498Issues Paper, above n 438, at [6.76].
499Convergence Review, above n 446, at 52.
500At [7.86].
501At [7.177] – [7.183].
502Data Protection Act 1998 (UK), s 32(1).
503Leveson Report, above n 447, appendix 4, at 1,910 – 1,912.
504Privacy Act 1993, s 2(1), definition of “agency” (xiii).
505Submission of Jim Tucker (4 March 2012). See also submission of Ross Johnston (12 March 2012); submission of David Harvey at 5; submission of Tech Liberty (12 March 2012).
506Lisbeth Knudsen, cited by Fielden in Regulating the Press, above n 460, at 81.
507Law Commission Harmful Digital Communications: the Adequacy of the Current Sanctions and Remedies (Ministerial Briefing Paper, 2012) at ch 5 [Briefing Paper]. The Briefing Paper and accompanying draft bill is attached in Appendix A.
508At [61], [5.95]; Communications (New Media) Bill (attached in the Appendix to the Briefing Paper), cl 14(4)(b).
509At [7.35] – [7.44]; R3.