Appeal Decision: South African Shipyards vs Sunday Times

SUMMARY

The headline to the story in dispute read, Jacob Zuma pal’s R406m ship deal raises flag (published on 14 December 2014).

This ruling by the Chair of the Appeals Panel, Judge Bernard Ngoepe, was based on the Press Code that was in effect before 30 September 2022.

The story said the Department of Defence (DoD) had funnelled R406-million for ship maintenance and repairs to a private company because the Department said it could no longer look after its own fleet.

Charles Maher, General Manager: Marketing of SA Shipyards, complained that the story falsely stated that:

• the DoD had funnelled R406-million for ship maintenance;
• there was a R335-million deal to refit the arms deal frigate SAS Amatola;
• the Durban company’s lucrative relationship with the military had raised concerns and prompted a call for a probe by the Auditor-General;
• the R335-million Amatola refit tender had ballooned to about R360-million because of “unforeseen events”;
• several industry experts said the original contract amount was inflated by between R60-million and R100-million;
• despite insisting the Amatola contract was put out to public tender, the navy had steadfastly refused to clarify queries about apparent irregularities; and
• DA politician David Maynier had criticised the cost of the refit and other matters.

Maher added that the article misleadingly insinuated that Don Mkhwanazi’s friendship with Pres Jacob Zuma had yielded unfair benefits in his favour, and that the headline was false.

The Ombud dismissed the complaint, mainly because:

• the words “funnelled”, “deal” and “ballooned” did not necessarily carry any negative implications;
• the words “lucrative relationship” were published in context;
• if “industry experts” did not support their comments with “valid facts”, it was not the newspaper’s fault;
• the story did not state the “inflated” amount as fact, but ascribed it to sources;
• there was no reason for the newspaper to refrain from using quotes ascribed to Maynier;
• the story did not suggest that Zuma could have influenced the tender process; and
• the headline reasonably reflected the content of the report.

Maher then applied for leave to appeal.

Ater summarising Maher’s arguments and perusing all the relevant documentation, Judge Ngoepe said the Ombud had satisfactorily dealt with the complaint. He dismissed the application.

THE RULING ITSELF

Southern African Shipyards                                                             Applicant

and

Sunday Times                                                                                      Respondent

Matter: 07/01/2015

[1]      Southern African Shipyards (“applicant”) complained to the Press Ombudsman about an article which appeared in the 14 December edition of the Sunday Times (“respondent”).  The headline read: “Jacob Zuma pal’s R406m ship deal raises flag.”  The story went on to tell about naval contracts which had been awarded to the applicant by the Department of Defence.  The story reported that the Department said that it had outsourced the work because of its “capacity constraints”; in the past three years, it had given six naval contracts to the applicant, including a R1.4 billion contract for the refitting of the Amatola.  The complaint was dismissed by the Ombudsman in his Ruling given on 5 February 2015.

[2]      In his Ruling, the Ombudsman systematically sets out, and deals with, the complaint in detail.  I will therefore not go into the details again, but only highlight some to illustrate some points.

2.1     As regards the headline, the complaint was that it falsely and misleadingly insinuated that the award of the tender was on the basis of a friendly personal relationship between the chairperson of the applicant, Mr Don Mkhwanazi, and President Jacob Zuma, rather than on the basis of a public open tender; that respondent it focused more on this relationship that the tender itself.  The fact of the matter is that it is not denied that Mr Mkhwanazi is a friend of President Zuma’s; after all there is n any case nothing wrong with that.  The headline is, to me, more about describing Mr Mkhwanazi than postulating the friendship as the basis for the award of the tender.

2.2     The complaint against the statement “The Department of Defence has funnelled R406-million for ship maintenance …” The gist of the complaint is the word “funnelled”; it being argued that the word suggests that the tender was irregularly given.  As the Ombudsman says, the word does not, in its ordinary use, necessarily carry this connotation.  Please note the various synonyms given the Ombudsman.  I have noted the applicant’s contention in its grounds of appeal regarding the meaning of the word. But how often do we speak of a “funnel” through which for example paraffin is lead into the next container.  We would certainly not be insinuating anything untoward; compare for example the word “funnel” with “syphon”!  There are other complaints which revolve around the negative connotation of words used which can similarly be explained away, namely, that they do not necessarily have a negative meaning.

2.3     Moving now to the complaint of a different category, the applicant complaint about the sentence: “Several industry experts said the original contract amount was inflated by between R60-million and R100-million”.  Applicant says the experts on whom respondent relied have not supported their comments with valid facts.  Applicant also complained that the use of the word “inflated” implied that the price was allowed to increase for more profit without the Department getting commensurate value.  As the Ombudsman correctly says, that the experts did not support their comments cannot be blamed on the respondent especially as, importantly, the respondent did  not mention the inflation as a fact, but ascribed it to these sources.

[3]      The Ombudsman has adequately dealt with the issue of the headline in relation to article 10.1 of the Code.

[4]      In dealing with the application for leave to appeal, the parties substantially repeated the same points previously raised.  To sum up:

4.1     The fact that Mr Mkhwanazi is a close friend of President Jacob Zuma is acknowledged by the applicant; in itself, it is a perfectly innocuous state of affairs and thus nothing untoward.

4.2     The applicant has repeatedly stated that the contracts were awarded following open tenders.  Therefore no reasonable reader would think that the President played a role in the award of the tenders.

4.3     The negative connotations contended for by the applicant are not per se that negative, particularly in light of the fact that the tenders were, as applicant says, awarded as a result of open tender, a fact which cannot be disputed.

4.4     The issue of alleged irregularities was directed at the Department and it failed to respondent to some questions in that regard; the respondent did its best to get information, without success.  To the extent that such alleged irregularities could have reflected adversely on the applicant, the respondent did quote a Mr Maharaj of the applicant as saying that all the tenders were won through an open tender system and that their bid was the cheapest.  In light of this, there would be no adverse reflection on the applicant.

[5]      For the reasons given above, the applicant has no reasonable prospects of success before the Appeals Panel; the application for leave to appeal is therefore dismissed.

Dated this 28^th day of March 2015.

Judge B M Ngoepe, Chair, Appeal Panel.