Ruling by the Press Ombudsman and a Panel of Adjudicators
31 March 2016
This ruling is based on the written submissions of some of the complainants as listed below, and those of Peter-Louis Myburgh, an investigative reporter at Rapport newspaper, as well as on a hearing that was held on 17 March 2016 in Johannesburg. Maliviwe Lumka, Khoza Sello, Sonja Pilusa, Robert Thibela, Khaye Nkwanyana and Zukile Mvalo represented the complaining parties and Marga Ley and Pieter-Louis Myburgh the publication. The two members of the Panel of Adjudicators who assisted me were Susan Smuts (press representative) and Philip van der Merwe (public representative).
The complainants are the Minister of Higher Education & Training (Dr Blade Nzimande), the Department itself, and two Sector Education and Training Authorities (Setas), Agriculture Seta (AgriSeta) and Construction Seta (Ceta).
The Code that is applicable in this finding is the one that was in operation at the time of publication.
Complaint
The parties complained about a lead on page 2 in Rapport of 8 November 2015, headlined Seta-miljoene is na Blade se trust – Verwaarloosde hoenders is ál teken van lewe (Seta millions went to Blade’s trust – Neglected chickens the only sign of life).
An article headlined Nzimande’s trust reaps R11m in funding from education organisation also appeared in News24.
They complain that the story was untruthful, inaccurate and unfair with regard to the:
· reference to “Nzimande’s Trust”, despite the fact that they provided answers to the newspaper’s questions, in writing, in reliance inter alia on “objective institutional information legally obtainable” (details below);
· suggestion that this trust had reaped R11-million in funding, creating the impression that this had been undeserved and “favoured” because it was a Minister’s trust;
· R6-million paid into the trust’s account; and
· two Setas (details below).
In general the complainants state, “An unfairness was perpetuated by a failure to publish these facts which, if published, would not have created an impression that the [complainants] are involved in manipulating processes in order to unduly benefit undeserving entities just because the Minister is invested in them.”
They insist that they gave Rapport full co-operation and that the newspaper had all the information at its disposal to publish a truthful, accurate and fair story. And yet, it neglected to publish material information – which led to incomplete, or content-starved, or misleading, or selective reporting that was either intended to, or at least had the effect of unduly embarrassing them.
The text
The story, written by Myburgh and Athandiwe Saba, said that 16 neglected chickens and approximately 100 poor youths, who were still jobless after a year-long course in construction, were the only signs of life they encountered when visiting a community trust of which Nzimande was the founder and the patron (the Dambuza Community Development Trust, Damcom) and which had received millions of rands since 2013 from the two Setas to train young people in the kwaDambuza township outside Pietermaritzburg (where Nzimande grew up).
The story said that Nzimande’s department had:
· authority over the country’s 23 Setas, “which in that financial year had received R11-billion from the state to develop critical skills shortages in important economic sectors”. (The Setas, in turn, financed non-governmental organisations and small businesses to offer short courses to poor, jobless young people); and
· awarded Damcom contracts to the value of R10.2-million (from the Construction Seta) and R617 000 from the Agriculture Seta (in 2012 and 2015).
The journalists wrote that critics said this amounted to a conflict of interest.
The article in News24, also written by Myburgh and Saba, said that a community trust founded by Nzimande received funding allocations of nearly R11-million from two Setas of which his department was the custodian.
However, a “group of youths” who had completed a construction learnership at the trust reportedly said their qualification was not worth the paper it was printed on.
The article stated that Damcom was founded by Nzimande, and that it had been given contracts by the Construction and Agriculture Setas.
It was also reported that:
· AgriSeta spokesman Sello Khoza had confirmed that it had provided support to 20 young people to the value of R617 600 during the 2015/2016 financial year. However, “When Rapport visited Damcom this week … there were no signs that any agriculture training has been initiated. The newspaper only encountered 16 chickens crammed into crates outside the trust’s training centre”;
· Damcom had signed a contract with the Construction Seta in 2012 to the value of R10-million to provide short skills courses, learnerships and apprenticeships. According to the Seta, “nearly R6m had already been paid into Damcom’s account”; and
· According to some of the youths who had completed the learnerships, only two of the group of 94 students had secured full-time employment since completing the course.
Khaya Nkwanyana, Nzimande’s spokesman, denied that the Setas’ funding of the trust had constituted a conflict of interest. “Damcom was established before Nzimande joined government and became Minister of Higher Education and Training,” he reportedly said. He also maintained that Nzimande had not been involved in the management and operations of the trust.
The arguments
In general, Myburgh says Damcom was associated with or linked to Nzimande, and that the trust has received funding and/or contracts from certain Setas (which fall under the control of his Department). “Clearly this constitutes an alarming possible conflict of interest which the public has an undeniable right to be informed about.”
He adds that an investigation into the operations of the trust showed there were legitimate concerns about its ability to fulfil its obligations with the public money it received from the Setas. For instance, many, if not most, of the learners who had completed their training in construction, remained unemployed – despite the trust’s undertaking that it would assist learners to get jobs after completing their training at the trust.
The journalist argues that the complainant chose to neglect taking issue with the above, while instead trying to convince this office that Rapport did not provide the public with the full picture. This, he maintains, is a disingenuous attempt to create the impression that the reporter did not consider the full set of responses and information provided to him by the Setas.
He says that the first 32 pages of documents from AgriSeta, as included in the file that accompanied the complaint, were not made available to him at the time – in fact, he had to go to great lengths to secure “a terse, two-paragraph response from the AgriSeta”, after it ignored his repeated attempts to garner information.
“[AgriSeta] furnished the Ombudsman with a variety of documentation that is pertinent to the issue, but earlier failed to supply such documents to [me] even after the latter had repeatedly implored the AgriSeta to provide [me] with any information that might facilitate an accurate and fair understanding of the issue. The complainants are now crying foul over the supposed omission of information they withheld from [me], but were quite happy to include in their complaint…”
In conclusion, Myburgh says because he has received such scant responses from the Setas, it is dishonest to maintain that the complainants gave him “full co-operation”.
The panel now focuses on the specifics of the arguments:
‘Nzimande’s Trust’
The complainants say that earlier, City Press (a sister publication of Rapport) asked questions relating to the same subject matter, and answers and supporting documents were provided. City Press then did not pursue the matter any further. Rapport followed this up with questions in writing.
They complain that the story radically departed from the facts. At the very least, a neutral, honest and diligent publisher would have reported that Nzimande:
· founded Damcom in 2007, together with some professionals and community activists from Dambuza,;
· was not a Minister at that time; and
· discontinued active involvement in the affairs of the trust since his appointment as a Minister in 2009 – and the applications for funding, which is standard procedure and the first point of contact between Setas and any applicant, were completed long after his involvement both in respect of AgriSeta (pages 10 – 14) and Construction Seta (51 – 82) had been terminated.
The story did not report the above, which led to the false impression that the reader was dealing with “Nzimande’s Trust” and that he had been actively involved.
They add the story also omitted that, apart from Nzimande, there was a list of patrons to various trusts receiving allocations from the Seta environment. The complainants add there is nothing untoward with such a list – and, if anything, “there is everything right and good and true with community leaders helping out communities through sacrificing their time and efforts towards development”.
If this was reported, they argue, it would have been clear that the relationship between Nzimande and the trust was not an isolated incident or “even a minimum basis for suspicion”.
Myburgh replies that the article sought to challenge “this feigned distance” between Nzimande and Damcom because:
· a Damcom brochure on three occasions listed Nzimande as the trust’s sole founder;
· Nzimande described himself in Parliament’s register of members’ interests of 2010 and 2014 as Damcom’s “patron”;
· pictures on the trust’s Facebook page showed Nzimande present and participating in activities organised by the trust as late as December 2013; and
· Nzimande himself opened Damcom’s centre in 2011 – in his capacity as Minister.
From this, the reporter argues that Nzimande seemed to be the trust’s sole founder, that the Minister was its patron, and that he actively participated in the trust’s activities on at least two occasions while serving as the responsible Minister.
He concludes, “In light of the above, I do not see … referring to the Damcom Trust as ‘Nzimande’s Trust’ is in any way unfair or inaccurate.”
Myburgh also notes that the article did include a comment from Nzimande’s spokesman (see above).
He says it is not true that Nzimande discontinued his involvement with the trust in respect of AgriSeta and Ceta. He says Damcom applied for its funding from Ceta in November 2011, a month after Nzimande himself officially opened the Damcom community centre. In October 2012, when Nzimande still described himself as the trust’s patron (in Parliament’s register), Damcom received its first grant from Ceta.
Myburgh calls the inclusion of a supposed “list of patrons to various trusts” apparently maintained by the Setas “highly suspicious and cynical”. He says that at no point in his “extensive” attempts to gain insight into the issue was such a list mentioned to him by either of the Setas (while such a list has been included in the complainants’ submission to this office).
Be that as it may, Myburgh questions the validity or authenticity of this list – he claims that it seemed to be nothing more than a hastily typed effort with two names on it. “I highly doubt that this is an official SETA document and challenge the complainants to provide proof that this is indeed an official document and not merely a piece of paper drafted for the purposes of their complaint.”
He also regards it as curious that the complainants suddenly claim “there is everything right and good and true with community leaders helping out communities through sacrificing their time and efforts towards development” (which includes Nzimande) – while they also claimed that Nzimande has discontinued his active involvement in the affairs of the trust.
R11-million
The complainants argue the story suggested that this trust had reaped R11-million in funding, creating the impression that this had been undeserved and “favoured” because it was a Minister’s trust – and again leading to an unfair, inaccurate and unbalanced report.
They submit what the story omitted to state (while the information had been provided to Rapport) was that the:
· total discretionary fund approved by AgriSeta was in the order of R150-million, from which the trust was allocated an amount slightly less than R700 000;
· total discretionary fund approved for Construction Seta was in the order of R1.5-billion, from which the trust was allocated slightly more than R10-million; and
· largest single successful applicant was allocated in the order of R50-million – and this was not an entity that had a relationship with Nzimande.
Myburgh reiterates his argument as cited above.
He adds that this part of the complaint seems to stem from the rationale that, even though the complainants did not deem Nzimande’s involvement in the trust (that got funding from the two Setas) as problematic, such funding was in any case only a drop in the ocean in terms of the total amount of funding these entities made available each year.
“Such alarming reasoning should be rejected with concern and contempt. The complainants seem to want to justify the allocation of money to a trust connected to the minister on the dubious grounds that the amounts involved are relatively small! ... The fact of the matter is that a trust most closely associated with minister Nzimande received funding from entities that fall under the watch of his own government department. I vehemently reject the notion that the relatively or comparatively small monetary amounts involved should be ‘contextualised’ when reporting on such a conflict of interest.”
R6-million
The story said that nearly R6-million had already been paid into the trust’s account.
The complaintants say the journalists omitted to publish material information pertaining to this issue. They say this was done to suggest fruitless or wasteful expenditure or, alternatively, no value for money.
These payments to the trust were made up of:
· 50% for a stipend for learners, in accordance with standard procedures;
· 40% for a disbursement to cover the costs of service providers; and
· 10% for administration fees, in accordance with “ruling standards”.
Had these facts been published, the impression would not have been created that the trust had “reaped” R10-million, that the figure of R6-million had been for the benefit of the trust, and that the payments had not been in accordance with due processes.
Myburgh denies that his reporting was “deliberately misleading”, adding that the story did not claim the Setas’ payments to the trust were not in accordance with “due process”. He says it seems as if the complainants relied on the condensed version as it appeared on News24, while the story in Rapport and Netwerk24 included Ceta’s comment that R5.8-million already paid to Damcom had been utilised to fund the first group of 100 students as well as the current group of 74 learners undergoing training programmes in construction.
The reporter adds his article did not claim that the funding of the trust by the Setas amounted to fruitless or wasteful expenditure. “However, it does … rightly point out that very little of the funding from the SETAS actually leads to Damcom students obtaining full time employment”.
Regarding the other 50% (spending unrelated to the stipends mentioned by the complainants), Myburgh says he did everything in his power to persuade the trust itself to be transparent with its finances so that he could verify his information and accurately report on the manner in which these funds were spent. However, the trust did not assist in this regard.
He also points out that the article did not contain any assertions that the contrary (as opposed to the claims of the complainants) was true.
“However, given the trust’s unwillingness to discuss its finances with [me], it was not possible to report with absolute certainty that the money was allocated by the trust in the manner the complainants now lay claim to.”
R617 000 paid out to AgriSeta
The story said, “Agriseta provided support for 20 young people … [to the value of] R617 000. When Rapport visited DAMCOM this week there were no signs that any agriculture training has been initiated. The newspaper only encountered 16 chickens cramped in crates outside the training centre.”
The complainants submit the story omitted to state that:
· no money had been paid out by AgriSeta to the trust at all – not even a cent;
· the funds were committed on the basis that the trust incurred expenses and produced proof of delivery against budgeted expenses – and only then got paid or reimbursed;
· the trust formally applied for an extension of time, like many other entities had done, for rolling out the project;
· by applying the standards relevant to applications for extension of time, AgriSeta had determined that a case had been made for the granting of extension; and
· the extension was granted – which was why no amount had been paid to the trust and why the trust had not commenced with the rollout of the project.
They complain that it was unfair to omit these facts which, if published, would have made it clear that public funds were secured, to be paid in controlled circumstances where value for money had been determined, and that there had been a clear and reasonable explanation for the trust not having rolled out the project.
“Many other applicants” – Myburgh says the article did not lay claim to the contrary, and in any event this part of the argument is irrelevant as far as the main issue of a possible conflict of interest goes.
Myburgh replies that the complainants again referred to information that was supposedly readily ascertainable – while he received only two paragraphs of response from AgriSeta (even though he explicitly asked the Seta for details regarding the funding agreement with the Damcom trust, and how much money it had received up to then).
He adds that Khoza’s response to him (“AgriSeta provided support to 20 young people… The value of the support is R617 6000”) seemingly indicated that AgriSeta had already paid money over to Damcom trust.
The reporter also notes that Khoza made no mention of the project having been delayed.
The Setas
The complainants say that:
· standard window periods were published for applicants to submit applications in terms of discretionary funding instruments;
· the applications by the trust were subjected to the usual evaluation and adjudication processes, as with many other entities;
· quality assurance mechanisms were rigorously put in place, including processes relating to due diligence, implementation and business plans, monitoring and evaluation, and contract management;
· external, professional, expert advice was sought, given, taken and applied in the course of evaluating and adjudicating the applications of the trust and many other entities;
· audits were undertaken in respect of all successful applicants, including the trust; and
· the trust’s application succeeded on merit and nothing else.
Regarding the argument about “standard window periods”, Myburgh says he does not see the relevance of this assertion to the complaint at hand.
Regarding the rest of the issues raised above, Myburgh says the article did not lay claim to the contrary.
At the hearing
The panel first had to clarify that the complaint was about Rapport’s story and not about a similar one that appeared on News24 (as the original complaint did not include the latter, and consequently that publication was not represented at the hearing).
‘Nzimande’s Trust’
The newspaper’s reference to Damcom as “Nzimande’s trust” was central to the complaint. The issues were a possible false impression that the Minister was still actively involved in the trust, that he was involved in a conflict of interest, and the suspicion that Damcom had improperly benefitted due to its relationship to Nzimande. The two Setas were also implicated in this process.
The panel accepts that the story did not say that Nzimande had personally benefitted from the grant to Damcom, as correctly pointed out by Rapport. Instead, the question was if the newspaper was justified in describing the trust as “Nzimandi’s”, given the fact that he had resigned as a trustee before he was sworn in as a Minister – but also taking into account that he had been (and remained) the founder of the trust, that he had been its patron, that he had participated in Damcom activities as late as December 2013, and that he himself had opened Damcom’s centre in 2011 in his capacity as Minister.
Was the distance between Nzimande and Damcom, real, as the complainants would have it, or was it a “feigned”, as argued by Rapport?
We note that the story itself did not refer to the trust as “Nzimande’s trust” – this was only mentioned in the headline. The article did mention that he was intimately involved in the trust though (in Afrikaans: “ten nouste aan hom verbind”) – but the story did not go as far as the headline did.
When one considers the headline and the story in its totality, the impression remains that money was given by Nzimande’s Department to a trust in which he had a hand in the pie – a conflict of interest, in other words. This suggestion remains inevitable, no matter how much Rapport tried to rationalise it.
This impression was enhanced by the reference to “critics” who reportedly said the allocation of funds to the trust in question via Setas (that was financed by Nzimande’s Department) suggested a conflict of interest. Later in the story the reporters quoted only one of these “critics”.
The question is if this was fair to everybody concerned. The panel is not at all convinced that it was – even if Nzimande had been active in some of Damcom’s activities, even if he remained its founder, and even if he was its patron, the fact still remains that he had resigned as trustee – a fact that Rapport was not aware of and, in the end, made a vital difference.
The panel believes that Rapport should have been more careful not to create the impression that Nzimande was involved in a conflict of interest and that it may have included relevant information such as that he has resigned as a trustee (to minimise the impression of a conflict of interest). It may be true that it was not the newspaper’s intention to create such an impression – but that is exactly what it succeeded in doing.
The problem we have with the headline is not the statement that the trust was Nzimande’s (because he founded it and still was its patron), but rather that it enhanced the impression of a conflict of interest.
We have little doubt that this has unnecessarily and unfairly done damage to Nzimande’s reputation.
Section 4.7 of the Press Code is relevant in this regard. It reads:
The press shall exercise care and consideration in matters involving…reputation. The dignity or reputation of an individual should be overridden only by a legitimate public interest and in the following circumstances:
4.7.1 The facts reported are true or substantially true; or
4.7.2 The article amounts to fair comment based on facts that are adequately referred to and that are true or substantially true; or
4.7.3 The report amounts to a fair and accurate report of court proceedings, Parliamentary proceedings or the proceedings of any quasi-judicial tribunal or forum; or
4.7.4 It was reasonable for the article to be published because it was prepared in accordance with acceptable principles of journalistic conduct and in the public interest.
None of these provisions was applicable in this case.
The reference to Setas that were “financed” by Nzimande’s Department also evoked some discussion. The complainants explained that the money was merely channelled through the Department, and that the latter had no say in how that money was spent.
The panel feels that nothing much turns on this issue.
R11-million
The issue was if the suggestion that Damcom had reaped R11-million in funding created the impression that this had been undeserved and “favoured” because it was a Minister’s trust.
The complainants argued that AfriSeta approved a total of approximately R150-million, from which the trust was allocated an amount slightly less than R700 000; and that the total fund approved for Ceta was about R1.5-billion, from which the trust was allocated approximately R11-million.
The panel notes the story did not state that the R11-million was paid over to Ceta – only that that amount had been allocated to that Seta.
However, the suspicion that Damcom had been favoured because of Nzimande’s links with it continued to linger – the story stated that his Department had the say over all the Setas, and mentioned the Minister’s links with Damcom.
Again, the (unfair) insinuation of a conflict of interest, directly involving Damcom and indirectly the Setas, is too discernible to ignore.
R6-million
The story said that nearly R6-million had already been paid into the trust’s account.
The issue is if the story suggested that this expenditure was fruitless or wasteful, and if the reportage could have been described as no value for money. The complainants reiterated that a mere 10% of that amount went to administration fees – the rest was used as stipends for learners and to cover the costs of service providers.
Myburgh pointed out that his article included Ceta’s comment that R5.8-million already paid to Damcom had been utilised to fund the first group of 100 students, as well as the current group of 74 learners undergoing training programmes in construction.
The panel accepts the journalist’s argument on this issue.
However, we were not so satisfied with Myburgh’s contention that his article did not claim that the funding of the trust by the Setas amounted to fruitless or wasteful expenditure (at that it merely pointed out that little of the Setas’ funding had actually led to Damcom students obtaining full time employment).
Given Myburgh’s observations as regards the Damcom site, ‘though, we are not convinced that the complaint is strong enough as to warrant a finding against Rapport on this issue.
R617 000 paid out to AgriSeta
The complaint that the story falsely stated that Agriseta had paid out R617 000 to young people cannot hold water – the article did not state that, only that that amount had been allocated.
The other part of the complaint was that the text failed to make it clear that public funds were secured, to be paid in controlled circumstances where value for money had been determined, and that there had been a clear and reasonable explanation for the trust not having rolled out the project.
The panel takes the following into account:
· After having stated that the amount had been allocated (and not spent), it was not essential for Rapport to have included the issues that the complainants referred to; and
· These aspects were not germane to the essence of the article.
The Setas
The issues the Setas as complainants wanted Rapport to include were not essential to the story.
We also accept Myburgh’s argument that the story did not lay claim to any of the issues raised by the complainants in this regard.
Finding
The headline, together with some elements of the article as discussed above, created the unfair impression that Nzimande was in some way conflicted, adversely affecting his reputation, as well as those of Damcom and the two Setas.
This is in breach of the following sections of the Press Code:
· 1.1: “The press shall take care to report news…fairly”; and
· 4.7: “The press shall exercise care and consideration in matters involving…reputation.”
Seriousness of breaches
Under the headline Hierarchy of sanctions, Section 8 of our Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).
The breach of the Press Code, as described above, is a Tier 2 offence.
Sanction
Rapport is directed to apologise to all the complainants for:
· creating the unfair impression that Nzimande was in some way conflicted in the funding of Damcom through the Setas; and
· adversely affecting his reputation, as well as those of Damcom and the two Setas.
The text, which should be approved in advance by the panel and be published on top of page 2, should:
The headline should reflect the content of the text. A heading such as Matter of Fact, or something similar, is not acceptable.
If the offending article appeared on Rapport’s website, the apology should appear there as well.
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Section 5.5 of the Complaints Procedures reads: “At the conclusion of a hearing, and after a Panel has reached a decision, both parties shall be entitled to address the Panel, personally or in writing, on sanctions and where appropriate mitigation.” Either party may do so within three working days of receipt of this decision. Please note that this is not an application for leave to appeal – that is a separate process, as explained below. |
Appeal
Our Complaints Procedures lay down that within seven days of receipt of this decision, anyone of the parties may apply for leave to appeal to the Chairperson of the SA Press Adjudication Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be reached at khanyim@ombudsman.org.za.
Philip van der Merwe (public representative)
Susan Smuts (press representative)
Johan Retief (ombudsman)