The Press Council has considered a complaint about a series of articles in The Sydney Morning Herald. The articles were headed “Costa, Obeid and the water firm” (15.12.12); “Revealed: Obeids’ $3m water stake” (24.01.13); and “Obeids’ billion dollar bonanza” (02.02.13). They reported on the involvement of Eddie Obeid and his son Eddie Jnr in Australian Water Holdings (AWH) and also mentioned some actions by Michael Costa when NSW Treasurer and subsequently Chairman of AWH.
Mr Costa complained that the publication’s description of his actions when Treasurer, in relation to a proposed public call for tenders by Sydney Water, implied inaccurately and unfairly that he sought legal advice from the Solicitor-General in order to help justify declining to follow legal advice provided to him by Sydney Water. This advice was adverse to AWH’s interests.
Mr Costa said the publication should have explained that he had been given two sets of conflicting legal advice – by Sydney Water and AWH respectively – and his referral to the Solicitor-General had been to help him to choose an appropriate course of action. The Solicitor-General had advised that, while it was impossible to predict with confidence, a court was more likely to agree with the advice provided by AWH. Rather than intervening then in favour of AWH, Mr Costa had ordered that the parties attend independent mediation (in which he took no part).
Mr Costa also complained that the publication’s description of benefits he accrued from being appointed Chair of AWH was unfair because it failed to mention that they were the same as those received by the previous Chair, Arthur Sinodinos. It also should have mentioned that the date of his AWH appointment was consistent with the separation period specified for former NSW government ministers. He said he had mentioned both these points to the journalist prior to publication.
The publication replied that Mr Costa became involved in the tender dispute when there was no need for him to do so. It said the fact that Mr Costa had conflicting legal advice did not detract from his decision to consult the Solicitor-General, an action that was favourable to AWH’s interests. It had reported the Solicitor-General’s advice that “a court was ‘more likely’ to find for AWH” and had explained that Mr Costa’s actions in ordering mediation had been based on that advice.
It said there was no need to mention Mr Sinodinos’ benefits, or to report compliance with the separation period (which it claimed Mr Costa had not raised with the journalist before publication). It had reported that “[Mr Costa] said: ‘This notion that there is some nexus between activity that occurred in 2008 and then subsequently [when I was approached] in 2011 is absurd,’ and the Herald does not suggest otherwise”.
The Council’s Standards of Practice state that publications should take reasonable steps to ensure reports are accurate and fair. Whether or not Mr Costa should have consulted the Solicitor-General, the Council considers that accuracy and fairness to Mr Costa required the publication to report that when he consulted the Solicitor-General he had two conflicting sets of advice, rather than mentioning only the advice obtained by Sydney Water that was adverse to AWH’s interests. He had informed the journalist to this effect prior to publication and the publication did not deny the fact. Accordingly, this aspect of the complaint is upheld.
The Council considers it was entirely appropriate for the publication to mention the benefits provided to Mr Costa on his appointment as Chair of AWH. In fairness to Mr Costa, however, it should have mentioned Mr Sinodinos’ similar benefits (even if the formal legal status of the arrangements was different), particularly as its report had named Mr Sinodinos. Accordingly, this aspect of the complaint is also upheld.
The Council is unable to determine whether Mr Costa told the journalist prior to publication that his appointment as Chair complied with the required separation period. In any event, it considers that failure to mention the compliance did not constitute inaccuracy or unfairness. Accordingly this aspect of the complaint is not upheld.
The Council emphasises that in reaching these conclusions it has not needed to make any findings about the appropriateness or otherwise of Mr Costa’s motivations, the outcomes of his actions or the reasons for his appointment as Chairman of AWH. Accordingly, it has not done so.
(not required for publication):
The publication referred the Council to advice by the head of the Premier’s Department that government intervention in the commercial dispute between Sydney Water and AWH was “inappropriate and unnecessary”. However, this advice was provided three years later when the circumstances were arguably very different.
The Council notes that the report of Mr Costa’s denial of any link between his handling of the tender proposal and his subsequent appointment to AWH was followed by the publication’s statement that it “does not suggest otherwise”. While not commenting specifically on its use in this instance, the Council considers that such a disclaimer may not always be sufficient in itself to dispel a clear implication to the contrary elsewhere in the article.
Mr Costa also complained about some other matters concerning his involvement with AWH but the Council did not make findings about them and they were subsequently withdrawn.
Relevant Council Standards
(not required for publication by the newspaper):
This adjudication applies the Council’s General Principle 1: “Publications should take reasonable steps to ensure reports are accurate, fair and balanced”.