Appeal Decision: Business Day vs Department of Small Business Development

SUMMARY

The headline to the story in dispute read, SA ‘completely out of step’ with global SME growth trends (published on 25 July 2018); and that of the editorial, Lip service paid to SME sector (26 July).

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 first article cited the initial findings of a recent study by the Small Business Institute (SBI) and the Small Business Project (SBP), in which it had been found that South Africa had only 250,000 formal small and media-sized enterprises (SMEs) – which were much less than previous estimates of between 2-million and 6-million. This reportedly raised questions about possible policy and regulatory failures. The editorial highlighted some of the “disconcerting facts” which emanated from the SBI’s study.

Dr Thami Mazwai, special advisor to the Minister of Small Business Development, complained that Business Day had:

• published the (defamatory) content of a media statement without asking the department to respond (first article);
• found the department guilty of gross under-performance (editorial); and
• repeated damaging allegations (in a follow-up article).

Mazwai said he submitted an article to be used as an op-ed piece to correct allegations made in the article, but BD had indicated that it would only publish that response as a 400-word letter or an online article – an offer that he rejected. He asked the Press Council to direct the newspaper to publish his text as an op-ed piece.

The Ombud ruled that it should be an op-ed piece, upon which BD applied for leave to appeal.

Judge Ngoepe noted that BD In its application for leave to appeal, persisted with the argument that the article did not specifically refer to the SBI, but to the government – “an argument which … the Ombud correctly rejected,” he remarked. He added that the department had been charged with the obligation to spend taxpayers’ money correctly. “In doing so, they should at least be given the opportunity to respond.”

The judge said he was not going to interfere with regards to the sanction that the Ombud had imposed. The application for leave to appeal was dismissed.

THE RULING ITSELF

In the matter between

BUSINESS DAY                                                                       APPLICANT

AND

1. This is an application by Business Day (“applicant”) against the Ruling of the Press Ombud issued 31 August 2018, upholding a complaint by Dr T Mawai on behalf of the Department of Small Business Development (“respondent”).  The complaint was about a story published by the applicant on 25 July 2018, with the headline “SA ‘completely out of step’ with global SME growth trends”. In brief, the story, relying on initial findings by the Small Business Institute (“SBI”) and the Small Business Project (“SBJ”), reported that compared with other countries in the world,  small businesses in the country employed far less people. The story was repeated in the editorial of the respondent’s edition of 26 July 2018: “Lip service paid to SME sector.”   The respondent complained that the report was inaccurate; the responded was not afforded the opportunity to respond and that the applicant refused to publish its response in print, unless it be in the form of a letter reduced to 400 words, or only online. The respondent declined this offer and insisted on the publication of its “op-ed” piece.
2. In his Ruling, the Ombud summed up the compaint as follows:

“The complaint is that BD has:

• published the defamatory content of a media statement without asking the department to respond (first article);
• found the department guilty of gross under-performance (editorial); and
• repeated damaging allegations (in a follow-up article).”

3. After considering the case, the Ombud rejected the argument that the article did not specifically mention the respondent.  He ruled that the applicant breached article 1.8 of the Press Code in that it did not give the respondent the right to respond. The complaint relating to the editorial was, however, dismissed. The Ombud imposed a sanction, ordering the applicant to publish respondent’s text as an op-ed article. I agree with him that it is sufficiently known that the department responsible for the policy as well as the administration of that category of industry (Small and Medium Enterprises) is the respondent. As the Ombud says, the article constitutes critical reportage.
4. In its application for leave to appeal, the applicant persists with the argument that the article does not specifically refer to the respondent, but to the government; an argument which, for the reason stated above, the Ombud correctly rejected. It is not, as the applicant says, about the government having or not having a thick skin; it is about conveying balanced information to the public; that is the idea behind article 1.8. Notably, it is not the applicant’s case that it approached any government department for comment. The department must be open to scrutiny; but it is charged with the obligation to spend taxpayers money correctly. If there is an allegation that they are not doing so, they should at least be given the opportunity to respond. Much as the story was said to be preliminary, I think strongly critical words were used; for example: “Preliminary findings show a lack of consistency in the government’s definitions of SME’s in  70 laws, regualtions and key strategies reviewed;” again, this country is described as a “complete outlier”  internationally. The Ombud, in his consideration of the facts, found that the reportage was critical. There are no prospects that the Appeals Panel will interfere with this finding. This also applies to the sanction imposed by him. Sanction is a matter of discretion by the Ombud; the Appeals Panel would only interfere in the event of a misdirection or if the sanction is shockingly inappropriate. The present is not such a case.
5. For the reasons given by the Ombud and those added above, the application is dismissed.

Dated this 6^th day of December  2018

Judge B M Ngoepe, Chair, Appeals Panel