Kouga Local Municipality vs. Die Burger


Wed, Feb 29, 2012

Ruling by the Deputy Press Ombudsman

 
June 25, 2010
 
This ruling is based on the written submissions of Ms Laura-Leigh Randall, for Kouga Local Municipality (KLM), and Die Burger newspaper.
 
 
Complaint
 
KLM complains about a front page story by Mariska Spoormaker in Die Burger (Oos-Kaap), dated June 5, 2009 and headlined Kouga-vrese lóóp.
 
The main complaint is about the following:
  • The municipality was not given enough time to respond to Spoormaker’s questions;
  • The statement that many municipal regulations were transgressed is false;
  • Mr Fred Dennis is unfairly singled out as a culprit;
  • The statement that Dennis indirectly awarded a contract to himself is false;
  • The story falsely states that the AG’s report says that legal opinion regarding Dennis should be obtained;
  • Spoormaker probably never saw the Auditor General’s (AG) report (the main source cited for the information in the article); and
  • The story oversimplifies the bid committee.
 
The complaint is also about many inaccuracies in the story:
  • Dennis was not the acting Municipal Manager (MM) at the time the tender was advertised, as alleged in the story;
  • The tender advertisement was not placed in December, as stated in the story, but rather in October 2006;
  • Mr Japie Jansen was not part of Kouga Consortium of Valuers (KCV) and he did not resign when the tender was awarded, as alleged in the story;
  • The golf estate was not sold in June 2006, as the story states, but in December of that year.
  • The correct trading name of the only company that tendered for valuation of the property is Kouga Consortium of Valuers, not Kouga Consortium of Valuators, as stated in the story; and
  • Dennis was not part of KCV when the tender was awarded and he was not appointed to do the municipal valuations, as the story suggests.
Analysis
 
The story centers around the person of Mr Fred Dennis, the then acting Municipal Manager (MM) of Kouga Local Municipality (KLM) at the time when a tender-process relating to the sale of the golf course in Jeffreys Bay was underway. The story raises several questions with regards to the validity and transparency of the awarding of the tender and valuation processes.
 
The main source of the article is a report by the AG. The objectives of this report were to identify possible deviation from prescripts, policies and procedures in the intended sale of the golf course, as well as to determine whether any conflict of interest existed between members of the KLM and the purchaser of the golf course. The process followed by the KLM in awarding the tender for municipal valuation services to KCV was also investigated.
 
We shall now look at the merits of the complaint.
 
 
Time to respond
 
KLM says the newspaper only gave it three hours to respond to the story in dispute – this was not enough, given the number and nature of the mistakes in the story as well as the amount of research that was needed to give the newspaper the correct information. Notwithstanding its warning that more time was needed, Die Burger published the story on its front page the next day, KLM says.
 
The newspaper does not respond to this part of the complaint.
 
Given the importance of the issue and the public interest at stake, the newspaper cannot reasonably expect the KLM to give it all the correct information in three hour’s time. At the very least the story should have stated that KLM did not have enough time to respond.
 
Many municipal regulations transgressed
 
The KLM says the statement that many municipal regulations were transgressed is false.
 
The following is a shortened list from the AG’s report concerning alleged misdoings by the KLM. It is worth spending some time on:
  • An evaluation of the land 15 months prior to the advertisement was used, resulting in selling for an out-dated market value of the property;
  • The tender was inadequately advertised – it was placed in a small, free community newspaper with a distribution of 20 000 copies per week and with a circulation limited to certain areas in the KLM district;
  • There was no evidence that the proposal from the prospective buyer, Molweni Developments (MD), had been presented to council;
  • The advertisement did not disclose full information (there was no address, no extent, no reserve price and no zoning);
  • Bidders were to furnish audited annual financial reports, and quite a few more documents – MD had none of these required documents attached and should therefore have been disqualified by the bid evaluation committee;
  • The closure date on the advertisement was 24 days, not the stipulated minimum of 30 days; this shorter period was evidently not justified by Dennis;
  • A neutral or independent observer had to be appointed to oversee a committee – but, according to the minutes of both the bid evaluation committee (BEC) and the bid adjudication committee (BAC) no such observer had been appointed;
  • No check was done to see if the bidder was able to execute the contract and that the bidder’s municipal taxes and service charges were not in arrears;
  • The BEC should have comprised at least one person from the department – there was none;
  • A member of the BEC may not have been a member of the BAC as well. However, the minutes reflect that Dennis, Mr M. Booyens and Mr J Jansen attended meetings of both committees; and
  • It was prohibited to award the bid to a person in the service of the state. Mr J.M. Tshume was such a person – the agreement of sale with MD should for this reason alone not have been entered into.
This list is followed by another list of “weaknesses and limitations”.
 
The report ads to this: Municipalities must disclose in their annual financial statements any awards made to any person who had left the employ of the KLM. Dennis resigned from the KLM on 31 January 2007 (and on the next day he became equal member of a CC affiliated with providing land valuations to the KLM) – but this affiliation was not disclosed, as was required.
 
There is only one reasonable conclusion here: Die Burger did not suck the statement that many municipal regulations were transgressed out of its thumb – based on the report, it had solid ground to stand on.
 
 
Unfairly singled out
 
The KLM says that Dennis was unfairly singled out as a culprit.
 
However, after the list of weaknesses quoted above the AG’s report concludes: “Due to the above weaknesses the agreement of sale entered into by the then acting MM, Mr F P Dennis, and MD (Molweni Developments) had not safeguarded the financial and legal interest of the KLM.” Note that this is the conclusion of the AG’s report, and not that of the newspaper.
 
Die Burger does single out Dennis – but, based on the AG’s report, it had more than enough reason to do so.
 
 
Awarded contract indirectly
 
According to the complaint, the AG’s report does not indicate that Dennis awarded the contract indirectly to himself.
 
Indeed, but neither does the newspaper say that. It does not say “the report states” – it merely says “because it appears from the report”. (In Afrikaans: “omdat dit uit die verslag blyk”.)
 
What else was the newspaper (or the public) to think when a person who was intimately involved in awarding this contract resigns from KLM on a certain day, only to become involved in the same contract the very next day – this time from the other side? Surely the newspaper’s reporting on this issue was reasonable.
 
 
Dennis: Legal opinion required
 
The KLM asks: Where does the AG’s report state that legal opinion regarding Dennis should be obtained because of the way in which the tender was advertised?
 
It is there in the report, for anybody to read: “The KLM should seek legal opinion …against…Mr. F P Dennis.”
 
Besides, Die Burger does not say that legal opinion should be obtained only because of the way the tender was advertised – it says “for example”, implying that there are other reasons for this.
 
 
The AG’s report
 
The KLM says the journalist probably never saw the AG’s report.
 
That is not reasonably true. A careful comparison between the story and the report leaves little doubt that Spoormaker must have read the AG’s report before having written the disputed story.
 
 
Oversimplification of the bid committee process
 
The KLM says the story oversimplifies the bid committee process. This may or may not be true – but Spoormaker is merely quoting from the AG’s report. In other words, if it indeed is an oversimplification, it is not due to Die Burger’s lack of insight.
 
 
Inaccuracies
 
To the many inaccuracies (as listed above in the complaint) Spoormaker admits that the report was probably not 100% factually correct.
 
It should have been.
 
After having admitted that she had made a mistake about the date of the advertisement, Spoormaker adds that the newspaper is not worried about dates (but rather about the whole process). She also calls it “petty” after having been informed that she miss-spelt the name of the KCV.
  
This is worrisome.
 
 
Finding
 
The little time the KLM was afforded to respond to the article was unfair, resulting in a breach of Art. 1.1 of the Code that says: “The press shall be obliged to report news…fairly.”
 
All the other objections with regards to the main complaint are dismissed.
 
The inaccuracies in the article are in breach of  Art. 1.1 of the Press Code: “The press shall be obliged to report news…accurately.”
 
Sanction
 
Die Burger is reprimanded for:
  • not affording the KLM enough time to respond to questions; and
  • inaccurate reporting.
 
The newspaper is directed to publish a summary of this finding. Our office should be furnished with the text prior to publication.
 
 
Appeal
 
Please note that our Complaints Procedures lays 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 Appeals Panel, Judge Ralph Zulman, fully setting out the grounds of appeal. He can be reached at Khanyi@ombudsman.org.za.
 
 
Johan Retief
Deputy Press Ombudsman