Press Ombudsman's ruling on the Bosasa Operations (Pty) Ltd and Mail & Guardian matter

Wed, Feb 29, 2012

September 12, 2008

Joe Thloloe, Press Ombudsman;
Peter Mann, Press Appeals Panel (Press Representative); and
Ethel Manyaka, Press Appeals Panel (Public Representative)
John Campbell, SC, instructed by Brian Biebuyck of Routledge Modise, represented the complainants and Ferial Hafffajee, editor of the M&G, led the team from the newspaper.
Bosasa Operations (Pty) Ltd, SeaArk Africa (Pty) Ltd and Gavin Watson complained about an article headlined Big stink over R9bn prawn farm in the Mail & Guardian dated February 22, 2008 and alleged it was inaccurate and defamatory.
The complainants argued that:
·        The statement that ‘a R9-billion marine farming project in the Coega industrial development zone – announced with much fanfare in December – has a fraud convict as its international business associate’ was inaccurate in that it imputed, and was intended to impute that the complainants had associated themselves with a criminal;
·        The quotation ‘The political connections of the project were something to make you scared’ and ‘The pressure to authorise SeaArk (the pilot project) was outrageous’ was intended to convey to readers … that the complainants had wrongfully brought untoward political pressure to bear in seeking and obtaining the approval of the marine farming project, which it was suggested was only approved due to the political pressure.
·        The statement that ‘Bosasa has a chequered history’ carried the innuendo that Bosasa had on more than one occasion made itself guilty of wrong doing, particularly in the light of the further statement that ‘The company is also under investigation by the Special Investigating Unit in connection with the alleged rigging of correctional services tenders worth millions’.
·        The statement that Messrs Wills and Watson were further connected to one another as they were ‘governors of a shadowy non-profit organisation’ was intended to convey…that Watson’s membership of the International Foundation for the Conservation of National Resources was untoward in that such organisation was shadowy, with a known criminal as one of its governors.
·        In the context of the article as a whole, the intention was to convey to the reader…that the complainants were dishonest, associated with criminals, and were guilty of dishonest and questionable business practices. 
Fraud convict?
Before the Mail & Guardian published its report it gave Wills and Bosasa three chances to put forward their side of the story.
Wills could have clarified the position but chose instead to retort: “It’s not me. Knock yourself out; write whatever you want.”
When Bosasa CEO Gavin Watson was asked why he decided to partner with the company of a convicted fraudster, he replied: “It is not so, you’ve got it on the internet, didn’t you? …I’ve looked at it all. I’ve spoken to the judges. Sure, there was some stuff he was involved in, but that was a long time ago.”
Papa Leshabane, company director and spokesperson, responded: “We do not have knowledge of the details of the matter but we are aware that there was a range of spurious allegations against David Wills in the nineties. However, we fail to see how this affects his ability to provide the expertise required for the operation of SeaArk’s prawn project.”
The three knew there was material floating around on the Internet but spurned the chance to state their side. As an afterthought they now turn to the Ombudsman and say the newspaper’s story was defamatory and inaccurate.
To allow Wills to set the record straight, the International Foundation for the Conservation of Natural Resources (IFCNR) interviewed him three days after the M&G published its story. In its own introduction the IFCNR says he pleaded guilty to “one count of fraudulent use of funds in the amount of $17 500….”
Thus an Internet publication that is sympathetic to Wills does refer to fraud.
Bosasa says he “pleaded guilty to one account of misappropriation of funds” and in his evidence to the panel Wills used the word “embezzlement”.
The M&G told the panel that it used the word fraud because there was no crime in South Africa called embezzlement. It said any of the three words could have been used without changing the substance of the story. Two days after the hearing in the Ombudsman’s office, the M&G on its second page acknowledged it erroneously printed that SeaArk Africa’s international business associate David Wills was sentenced to six months in jail in 1999 after pleading guilty in a Maryland court to one count of embezzlement.
“Wills was never imprisoned, but sentenced to six months community service,” the M&G stated. “According to his lawyer the ‘fine’ of $67 800 he paid was not a penalty, but his contribution to the cost of the prosecution. We regret the error.”
The panel finds that the M&G gave the company the opportunity to put the record straight on the fraud allegations and when it was given information it quickly corrected its mistake.
An international business associate?

The normal meaning of the phrase “business associate” is someone who is connected with a business or a person in a professional capacity. The phrase has a wide meaning, wider than a business partner, for example.
The panel did not find it necessary to determine if Wills was running the project in order to find that he was an international business associate.

In his evidence Leshabane described Wills as “the brains behind the project”.

To any normal reader Wills is an international business associate.
Besides that, the company’s version that after it acquired 100 percent of SeaArk Africa it “retained the services of a company of which David Wills is a member/employee” was reflected in the M&G reports.
Political pressure
Did the company exert political pressure in seeking and obtaining approval of its marine farming project?
On this alleged pressure the M&G quoted an official in the Eastern Cape environmental affairs department and also said the department in turn declined to comment. There was no comment from the South African National Parks (SANParks), whose objections were allegedly dismissed as a result of the political pressure. An anonymous Bosasa official at the plant is also quoted in the article saying the environmental impact assessment was fast-tracked “without breaking any laws”.
There is no indication that Bosasa was asked about the alleged political pressure.
The panel feels this allegation should have been put to the company, particularly because it relied on one source. In a story with multiple allegations, the subject must be given the opportunity to answer all of them.

Bosasa’s “chequered’ history
The normal meaning of this phrase is a history that is “uneven or inconsistent, and characterised by periods of trouble or controversy as well as periods of success”.

The article substantiates the chequered history phrase by going back to Bosasa’s contract with Home Affairs that was renewed in 2005 and also alleging that the company is currently under investigation by the special investigating unit (SIU).
M&G reporter Adriaan Basson gave evidence that he had been following the affairs of Bosasa since he had been a reporter at Beeld newspaper. He submitted a story he had written about Bosasa, Bosasa Operations and Sondolo IT in 2006, which had never been denied or objected to by the company. The report said that while the company had not been named both Bosasa Operations and Sondolo IT were under investigation by the SIU.

He further submitted that he and a colleague at Beeld had won an investigative journalism award for their exposure of Bosasa company Sondolo IT, “Tronkskandaal”, where it was shown that Sondolo IT had written the tender document that led to its being awarded the business.

A simple Google search for the words Bosasa South Africa reveals reports about a Scopa investigation into the Bosasa contract at the Marabastad refugee reception centre and a report by Basson headed Scandal rocks prison services over the award of a massive contract to “unknown” company Sondolo IT.

Certainly it appears that within the normal meaning of the phrase Bosasa has had a chequered history.

Is Bosasa under investigation by the SIU?

Bosasa says no and to back its case it tabled a letter addressed by its attorneys to the SIU and the reply they received.

The SIU response was that it was currently conducting a forensic audit relating to a number of matters in the Department of Correctional Services’ procurement division and that “at this stage the SIU” was “not targeting any specific company”. It added: “At no point had we indicated to the media that we are investigating any particular service provider to the DCS.”

The M&G said that a number of confidential sources within the SIU had told it that they were investigating Bosasa. It said the letter from the SIU was a standard one and it was very unlikely that the SIU would tell Bosasa that it was under investigation. The M&G argued that the SIU letter did not constitute a denial that the company was under investigation. It further said that the SIU, for example, had for two years denied that it was investigating Jackie Selebi, while it was.

Finally, the M&G submitted copies of SIU/DCS slides to a parliamentary portfolio committee meeting in May, 2008 which showed that they were conducting a forensic audit of the top 200 cases by value in the areas of Ramp, IT contracts, nutrition, clothing, agriculture and workshops, and building and security at correctional centres.

The slides showed “success” in that 23 cases had been identified for investigation; and that the DCS had referred 10 cases (for prosecution?) and various types of irregularities had been identified which had led to R6,9m recovered, R5,6m of assets under restraint and savings of another R4,8m.
The slides also said that various other investigations were pending and further asset seizures were planned for later this year. (Our italics)

The M&G said that because Bosasa, by its own admission – Leshabane’s evidence - had done business worth nearly R1bn with DCS in the areas of IT, nutrition and security and fencing, it must be under investigation.

The panel is persuaded that it is likely that Bosasa is under investigation.
Watson and Wills as governors of a “shadowy” IFCNR
On the evidence before us, Watson was given a chance to explain the IFCNR and his relationship with it. He reacted angrily and ended with the comment: “Do me a favour and do what you usually do. Go and write negative articles again…You are part of the white racists. I’ve done my own investigations on you.”
Watson knew that there were hostile stories about the IFCNR on the Internet but missed the opportunity to tell his side of the story. When he refused to answer questions he probably raised the possibility for the M&G that those stories could be true.
The M&G breached only one section of the Code, 1.5, in that it did not seek the views of Bosasa on the allegation that it exerted “outrageous” pressure to authorise SeaArk’s pilot project.
The rest of the story was in accordance with the Press Code. When the subjects of a report get defensive and don’t tell the truth, as Wills did, it strengthens suspicions that there might be something untoward that is being hidden.
It was particularly important for Bosasa to tell the full story as its project has raised environmental concerns. The credentials of the people assuring the world that the concerns are unfounded have to be impeccable.
The M&G to publish an appropriate apology, approved by the Ombudsman, on its breach of Section 1.5 of the Press Code.
In terms of our Complaints Procedures, within seven days of receipt of this ruling, any one of the parties may apply for leave to appeal to the chairperson of the Press Appeals Panel, Judge Ralph Zulman, and the grounds of appeal shall be fully set out.