October 24, 2012

Reform and Support

Independent Media Inquiry

Professor Charles Sampford [Institute for Ethics, Governance and Law, Griffith University]:
[Effective regulation] can be seen as a form of risk management …
[A] kind of ‘institutional insurance’ against the misuse or abuse of power.
(p 283)

Twentieth Century Fund:
A free society cannot endure without a free press and the freedom of the press ultimately rests on … trust in its work.
(A Free and Responsive Press: The Twentieth Century Fund task force report for a national news council, Century Foundation Press, 1979)

The likely benefits of statutory regulation

  • The creation of an independent and transparent body for hearing complaints will right wrongs perpetrated by the media.
  • The improvement of journalistic standards.
  • Making the media, which exercises enormous power, accountable to their audiences and to those covered by the news.
  • Enabling the public to have confidence that journalistic standards will be upheld and that complaints will be resolved without fear or favour.
  • Enabling complaints that might otherwise have been resolved through lengthy and expensive litigation to be dealt in a timely and efficient manner.
  • Enhancing the public flow of information and the exchange of views.
(p 300)




  • Independent Media Inquiry, Department of Broadband, Communications and the Digital Economy, Commonwealth of Australia, 28 February 2012.
    Ray Finkelstein: former Federal Court judge; former President, Australian Competition Tribunal.
    Matthew Ricketson: Professor of Journalism, University of Canberra.


    [The] existing media standards regulation landscape in Australia:
    • The print media regulate themselves, principally through the self-application of codes, overseen by the Australian Press Council (APC).
    • The print media’s online publications are also self-regulated by the same methods.
    • At least two non-print media online publishers (crikey.com.au and ninemsn) … are only regulated by the self-application of a code of conduct.
    • Generally online publishers are not subject to any form of regulation, other than … the laws of the land.
    • [Foreign online publishers] are either not subject to Australian laws or, if they are, those laws cannot easily be enforced.
    • Broadcasters are regulated by statute and by codes of conduct acceptable to [the Australian Media and Communications Authority.]
      [This] regulation does not extend to online streaming of their programming or other online publications.
      ([However, the] major broadcasters voluntarily apply the same standards to their online activities.)
    (p 279)

    Is there a problem?

    [Market Failure]

    [The] production of news [is important] for the effective functioning of our democratic system. …
    [It] generates ‘external’ [unpriced] social benefits to society beyond the private benefits accruing to producers and consumers of news.
    [This] connotes the presence of market failure ….
    As an information product, news is also prone to … information asymmetry in that [citizens are] seldom in a position to know
    • whether the information provided in a story is accurate,
    • whether the sources quoted are reliable, and
    • whether all the relevant facts have been interpreted objectively.

    [The] concentration of ownership of the mainstream news services [in] some cities and towns [has] obvious dangers …
    • a lack of diversity in the views …
    • the [risk] that a handful of people … will unduly influence public opinion [ie mediatocracy]
    • a decline in standards because of the absence of effective competition.
    (p. 280, italics added)

    This adversely affects democracy.

    [Distrust of the media]

    [Ninemsn pointed] out, there is no significant research that conclusively links drops in readership to specific issues of quality. …

    Professor McKinnon, a former APC Chair, has pointed out several examples of transgressions of … fairness, accuracy and balance:
    • bias in the reporting of government affairs
    • obsessive attempts to influence government policy by day-after-day repetition of issues with little or no new information of news value
    • opposition to government policy which is commercially-driven
    • the unfair pursuit of individuals based on information that is inaccurate
    • the failure to separate news from comment
    • treating expert and lay opinion as being of equal value …
    • deliberately selecting opinions opposed to government policy while ignoring opposite views
    • overuse of pejorative adjectives in reports of issues with which the media outlet does not agree.
    (p 281)

    [The media] can cause wrongful harm … by unreliable or inaccurate reporting, breach of privacy, and the failure to properly take into account the defenceless in the community [eg]
    • A minister of the Crown has his homosexuality exposed.
      He is forced to resign.
    • A chief commissioner of police is the victim of false accusations about his job performance fed to the news media by a ministerial adviser.
      [He] is forced to resign.
    • A woman is wrongly implicated in the deaths of her two young children in a house fire.
      Her grief over her children's death is compounded …
    • Nude photographs said to be of a female politician contesting a seat in a state election are published [without] checking of their veracity.
      The photographs are fakes.
    • A teenage girl is victimised because of [her] sexual relations with a well-known sportsman.
    Self-regulation has not been successful in dealing with irresponsible reporting.
    (p 282)

    The internet is a medium … which is largely unmanaged and uncontrolled.
    If there is to be continued regulation of the print media it would be inappropriate to apply two different standards to material they publish both online and offline or to apply different treatment to their online competitors.

    The regulation of broadcast news and current affairs has also not been satisfactory.
    [The] ACMA’s complaints-handling procedures and enforcement provisions have structural limitations that prevent speedy disposition of complaints and should be reformed.
    Senate Select Committee on Information Technologies:
    Self-regulation in the print media industry appears to be failing the community.
    In the television and radio industries, co-regulation has attracted widespread criticism.
    (In the Public Interest: Monitoring Australia’s Media, April 2000)
    There has been little improvement in the past 12 years.
    (p 283)

    What are the social costs of the problem and who bears them?

    [The] costs of the harm produced by an ineffectively self-regulated free press are borne not by the media and their consumers, but by other sections of the community.
    This includes those subjected to adverse reporting … and the community as a whole insofar as it depends upon the media for … democracy to function properly.
    [Media] outlets have little interest in reducing those costs. …

    [Given] the in-built limits on the effectiveness of the self-regulatory model … there is reason to consider that the costs associated with market imperfections and with the social harms caused by the media will be significantly reduced … by more effective regulation.

    [An] improved structure could to some extent transfer the costs associated with that harm from consumers and other affected individuals to the media.
    [This] shift in cost-bearing ought to provide an incentive for them to act to avoid causing unjustifiable harms …
    If media outlets continue to cause unjustifiable harm, it is proper that they bear the costs of doing so rather than simply shifting those costs to the victim.

    What are the options for regulation?
    • [Do] nothing …
      [Thi is the view of editors and publishers …
    • [Enhance the funding,] jurisdiction and powers of, the APC …
      [Several] submissions, including those made by the APC, support this option
    • [Establish] an independent statutory body to take over the functions of the APC …
      [This] option is supported by a number of academic commentators
    • [Establish] an independent statutory body to take over the functions of both the APC and the [ACMA.]
    • [License publishers on the basis of a] ‘fit and proper person’ [test.]
      [An] option with a surprising number of supporters, most but not all of whom are members of the advocacy group Avaaz.
    (p 284)

    What options should be rejected?

    [The] problems identified in this report have not occurred because the media have been unregulated …
    That the problems persist provides clear evidence that the current regulatory arrangements need strengthening to improve their effectiveness.

    Licensing the press should [be rejected, because] the government should not be involved in controlling who should publish news [or] in setting [or] evaluating press practices.
    (p 285)

    Factors that should influence the choice of a better model

    The mechanism needs to have the backing of law to be effective.
    Any group that wields … enormous power should be required to observe appropriate standards without provision to ‘opt out’. …

    [The] setting of obligatory minimum standards for a free functioning press will better serve society and will enhance democracy. …

    There is some evidence that simply having a regulatory requirement can, independently from enforcement, lead to improved standards …
    But experience also shows that with little or no enforcement, regulatory requirements are routinely ignored.
    (p 286)

    [A] move to full governmental regulation would be a step too far.
    A sufficient improvement would be an independent system of regulation that allows the regulated parties to participate in the setting and enforcement of standards (as is presently the case), but with participation being required, rather than voluntary. …
    [Such enforced] self-regulation has the following benefits:
    • It has no state involvement in appointing members of the regulatory body, in the setting of standards or in decisions regarding breach of standards, thus minimising the risk of potential attempts for state interference with, or control of, speech.
    • It retains almost all the benefits of self-regulation, but ensures a more robust and effective operation of the system.
    • Governmental funding … promotes independence from those it regulates.
    (p 287)

    Under the existing self regulation arrangements, membership of the APC is voluntary, as is compliance with the APC’s rulings …
    One competitive effect is the advantage to be gained from not having to comply with APC standards. …

    The cost of an adequately resourced single regulator should not be considerably higher [than the current system.]
    (p 288)

    A strengthened APC would not be sufficient

    [Many] publishers of news, especially publishers on the internet, will remain outside the system or, as in the past, will leave it when convenient.
    [Many] of the necessary changes [would] depend on the will of the APC members to implement them [and] it is unlikely that all [would be adopted. …]

    While conferring statutory powers on a private entity might give the ‘toothless tiger’ some teeth, it is fraught with legal difficulties in the Australian constitutional system …
    [A] strengthened APC would be an odd mixture of a private body with some statutory powers being partly funded by government.
    This hybrid is not the preferred option, although it would be preferable to the status quo.

    The recommended model

    [An] independent statutory body [called the 'News Media Council' is proposed, that] would take over the functions of both the APC and the news and current affairs standards functions of ACMA. …

    There should be an independent [committee] to appoint the members of the [NMC — unlike the APC where appointments] are made by the council itself.
    (p 290)

    [This committee could] consist of three senior academics from tertiary institutions appointed by the Australian Vice-Chancellors Committee (now called Universities Australia) the Commonwealth Ombudsman and the Solicitor-General for the Commonwealth.

    [The NMC] should consist of a full-time independent chair and 20 part-time members.
    • One half of the members … being persons who have not had previous connection with the media.
      Public advertisements should call for candidates.
    • The other half should be … should be nominated by the media and MEAA.
      [Managers,] directors and shareholders of media organisations [would be excluded.]
    • One half of the members should be men and one half should be women.
    • The chair should be a retired judge or other eminent lawyer. …

    Standards of conduct … could be based on already existing codes which have been developed either by the media or in consultation with the media. …
    Some aspects will need to be platform specific.
    (p 291)

    Funding should be by the government out of the consolidated revenue and not be recovered through a levy on the media. …
    There [should be] some means by which the executive can be held to account if the parliament, for party political reasons, does not provide the News Media Council with sufficient funds. …

    General structure

    The principal function of the News Media Council should be to promote the highest ethical and professional standards of journalism by:
    • preparing and reviewing standards of conduct
    • investigating and resolving alleged contraventions of the standards whether on complaint or by own motion
    • [regularly] preparing or commissioning a report on the state of the news media in Australia;
    • educating the news media about the content of the standards
    • educating the public about the standards and about the existence and role of the … Council.
    (p 192)
    New Zealand Law Commission:
    For the purposes of the law the “news media” includes any publisher, in any medium, who meets the following criteria:
    • a significant proportion of their publishing activities must involve the generation and/or aggregation of news, information and opinion of current value;
    • they disseminate this information to a public audience;
    • publication must be regular;
    • the publisher must be accountable to a code of ethics and a complaints process. …
    (The news media meets ‘new media’: rights, responsibilities and regulation in the digital age, Issues Paper No 27, 2011)
    If a publisher distributes more than 3000 copies of print per issue or a news internet site has a minimum of 15,000 hits per annum it should be subject to the [NMC.]
    (p 295)

    Complaints-handling procedures
    • A complainant should be required to waive any possible future action they might have arising out of the grievance.
      • It is desirable that the [NMC] not deal with complaints in which litigation is pending or which may ultimately be presented to a court. …
    • There should be a filtering process carried out by a senior officer … to determine whether or not a complaint is frivolous or vexatious. …
      It may be appropriate to allow for an appeal to the chair by a complainant whose complaint is not to be pursued.
    • [The NMC should] attempt to resolve a complaint through discussions with the media outlet … immediately upon receipt of the complaint.
      • It is not proposed that the complainant should first present [her] complaint to the media outlet [unless] the organisation has an effective internal complaints handling procedure …
    • If not resolved informally, complaints should be dealt with by a complaints panel consisting of one, three or, only in exceptional cases, five members of the [NMC.]
    • Complaints should, as a general rule, be dealt with on the papers and not by a hearing.
    • [There] could be a requirement that the media outlet concerned has two days to respond to a complaint and the panel then has a further two days to resolve the complaint and make a decision.
      These timeframes could be extended by the chair where appropriate.
    • The panel should have power to require the production of documents and call for the attendance of persons to provide information. …
    • There should be no requirement for the panel to provide reasons for a decision although it would likely ordinarily do so.
    (p 296)

    [The NMC] would require a rule-making power to further develop its own rules [to expedite] the speedy and efficient resolution of a complaint.
    The rules should exclude lawyers from hearings (although a complainant might be permitted to have lay assistance), impose strict timetables on procedural steps, [and] forbid cross examination without leave …

    If the [NMC] uncovered information suggesting a breach of the criminal law, it should have the power to refer that information to the appropriate law enforcement agency.

    [The NMCs] powers for own motion investigations would be similar, except there would be no need for strict timeframes.
    (p 297)

    Remedial powers
    • To require publication of a correction.
    • To require withdrawal of a particular article from continued publication …
    • To require [publication of] a reply by a complainant or other relevant person.
    • To require publication of the [NMCs] decision or determination;
    • To direct when and where publications should appear. …
    (p 297)

    There should be no power to impose fines or award compensation.

    Enforcement of determinations

    [The NMC requires] a means of enforcing its decisions.
    [The NMC] or the complainant should have the right to apply to a court of competent jurisdiction for an order compelling compliance.
    Any failure to comply with the court order should be a contempt of court and punishable in the usual way.
    This will be both a deterrent to breaching standards and … as an incentive for media outlets to resolve the complaint through discussion.
    (p 298)

    Appeals, merits review and judicial supervision

    In the course of enforcement proceedings a collateral challenge to a determination may be available and this would provide a sufficient mechanism for judicial supervision.

    Other attributes of the proposed model

    It is not appropriate to give the [NMC] responsibilities in addition to the promotion of the ethical and professional standards of journalism.
    With additional responsibilities [such as the promotion of free speech,] it would not be the efficient and streamlined body that is envisaged.
    (p 299)

    {There are ample bodies and persons in the community who do that more than adequately.
    (p 292)}

    The cost of implementing statutory regulation

    The current cost of operating the APC is approximately $1 million per annum.
    Professor Disney says he needs an additional $1 million per annum.
    Even if the actual costs are greater (as is likely) they will not be significant.
    At the same time, the work of ACMA will be reduced, so savings will be made.
    (p 300)


    The internet’s benefits for journalism and democracy

    Among the most important such websites that have grown up in Australia over the last decade are Inside Story, Australian Policy Online, Online Opinion, The Drum, The Conversation, and New Matilda.
    (p 304)

    Is market intervention needed?

    [Although Australian] newspapers have been weakened by the economic downturn and the loss of market share to internet advertising, their revenue base does not appear to have been gravely eroded.
    (p 314)

    Decline of newspapers as a problem for democracy

    The resources needed for effective performance of the public scrutiny role of newspapers is often difficult to justify by the direct returns accruing to a newspaper or other media from the publication of the stories that are produced. …
    When earnings from other investments of resources are plentiful, accepting a low return from resources committed to investigative and other public interest journalism might be seen as a civic duty.
    (p 323)

    But when times are tough the low returns are more likely to be seen as an unaffordable luxury. …

    [At] least 700 full time jobs have been lost since 2008 …
    (p 324)

    Both newspapers and television (ABC and commercial) and to a lesser extent ABC Radio National [have] devoted substantial resources to investigative journalism.
    [This has] led to the establishment of Royal Commissions and other formal Inquiries such as
    • Costigan’s Painters and Dockers Royal Commission,
    • the Fitzgerald Inquiry and subsequent establishment of the Criminal Justice Commission in Queensland …

    [Other recent examples of investigative journalism include:]
    • the 2005 Australian Wheat Board oil-for-wheat scandal,
    • the Australian Federal Police’s wrongful arrest of Dr Haneef in 2007,
    • the 2010 Reserve Bank-Securency bribery scandal, and
    • the 2011 Four Corners’ report on inhumane slaughter of live cattle exported to Indonesia. …

    On the negative side, are the 2008 closures of the Nine Network’s current affairs program Sunday and of the Bulletin magazine.
    (p 325)

    Whether the level of resources committed to investigative and public interest journalism is declining and reducing the quality of what is supplied, is difficult to determine without a detailed study. …

    [Exclusive] analysis and similar stories are more likely to be amenable to charging for access than generic news. …
    (p 326)

    New technologies and digital applications facilitating access to news via tablets, e-readers and other mobile devices [could also be] potential revenue-generating streams for newspapers.
    (p 327)

    Historically, newspapers have devoted much more time and resources to news reporting [than broadcasters].
    There is little doubt this will continue into the future.
    (p 328)

    Recommendations for future action

    Local and Regional Needs. …
    (p 331)

    Strengthen the news capacity of the ABC ….

    The ABC … has a long and successful history in investigative and public service journalism. Should a gap emerge from reduced efforts of newspapers and other media, the ABC, with additional government funding, would be well-placed to fill it.

    Incentives for private/philanthropic investment in news. …

    Subsidies to investigative and public interest journalism. …
    (p 332)

    Subsidising the professional development of journalists.
    (p 333)

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