Corporation suspends relations with leading film-maker accused of conflict of interests over 'palm oil' programmes
An
investigation by The Independent has established that entries in the
Malaysian government's Supplementary Budget 2010 show that FBC Media
(UK) was allocated 28.35m Malaysian Ringgit (MYR) – nearly £6m – for
work on a "Global Strategic Communications Campaign" ordered by the
Malaysian government in 2009. A similar sum (MYR29.34m) was designated
to the company the previous year. Concerns over the arrangements have
been raised in the Malaysian parliament.
By Ian Burrell and Martin Hickman, The Independent
The BBC has launched an investigation into how it broadcast to
millions of people around the world programmes made by a company that
had received millions of pounds in payments from the government of
Malaysia.
It has suspended all programming from
the London-based production company, FBC, which since 2009 has made at
least four BBC documentaries dealing with Malaysia and controversial
issues such as the country's contentious palm oil industry and its
treatment of rainforests and indigenous people.
In a statement,
the BBC said: "FBC has now admitted to the BBC that it has worked for
the Malaysian government. That information was not disclosed to the BBC
as we believe it should have been when the BBC contracted programming
from FBC. Given this, the BBC has decided to transmit no more
programming from FBC while it reviews its relationship with the
company."
An investigation by
The Independent has
established that entries in the Malaysian government's Supplementary
Budget 2010 show that FBC Media (UK) was allocated 28.35m Malaysian
Ringgit (MYR) – nearly £6m – for work on a "Global Strategic
Communications Campaign" ordered by the Malaysian government in 2009. A
similar sum (MYR29.34m) was designated to the company the previous
year. Concerns over the arrangements have been raised in the Malaysian
parliament.
Documents filed with the United States government's
House of Representatives in 2008 show that FBC Media (UK) contracted the
Washington-based American lobbying company APCO Worldwide, which it
paid more than US$80,000 (£50,000) in 2008 for the purpose of "raising
awareness of the importance of policies in Malaysia that are
pro-business and pro-investment as well as [showing] the significance of
reform and anti-terrorism efforts in that country".
The BBC's
guidelines on conflict of interest state: "Independent producers should
not have inappropriate outside interests which could undermine the
integrity and impartiality of the programmes and content they produce
for the BBC."
Having obtained this information on the Malaysian
payments, the BBC is conducting an investigation into whether any of the
FBC material it broadcast was in breach of BBC guidelines on
impartiality. At the same time, CNBC, a business channel owned by the
giant American NBC network, has withdrawn "indefinitely" its weekly show
World Business, which was made by FBC and featured Malaysia on many
occasions. In a statement issued to
The Independent, the
broadcaster said: "In light of serious questions raised two weeks ago,
CNBC withdrew the programme World Business indefinitely and immediately
initiated an examination of FBC and its business practices. CNBC has
made a formal inquiry to FBC for its explanation in relation to the
allegations that have been made."
FBC denies any impropriety in
its programmes for any broadcaster and said via its lawyers that "at no
time have the television programmes made for the BBC ever been
influenced or affected by our client's commercial activities". Its
lawyers said that FBC ran both production and commercial divisions,
which "are and always have been quite separate and distinct". They
added: "Our client, having reviewed its procedures, is now taking steps
to ensure that even the merest appearance of bias or overlap is fully
avoided."
Last night, media regulator Ofcom said: "Ofcom is
currently assessing this matter in accordance with our published
procedures. We will shortly decide whether to launch a full
investigation of the content in question under the broadcasting code."
The BBC and palm oil
With
its lush vegetation and smiling workforce dressed in polo shirts, the
footage from the Tuan Mee palm oil estate, to the north of Kuala
Lumpur, gave no obvious reason for BBC viewers to think they were being
shown anything more than an exotic travelogue and an intriguing
business story.
But the coverage of the workings of one of
Malaysia's most important industries, shown on BBC World News's Third
Eye series this summer under the title "The Power of Asia", formed part
of a much bigger picture.
The programme was made for the BBC by a
London-based company called FBC Media, which has been hired by
Malaysia to conduct a Global Strategic Communications Campaign, and has
paid American lobbyists to raise "awareness of the importance of
policies in Malaysia that are pro-business and pro-investment".
In
the Third Eye programme, one of several productions made on Malaysia
for the BBC in the last three years, viewers were told of the key role
of the Malaysian palm oil industry in meeting the growing demand for
food in countries such as China and India. "Once an efficient
production centre for rubber, Malaysia over the years has increasingly
turned to oil palm," said the voiceover. "The country is now one of the
world's biggest exporters, producing 40 per cent of global supply, and
is reaping the economic benefits of higher demand from Asia."
Azman
Abdul Majid, of the Tuan Mee estate, was happy to tell his positive
story. "The market now is so high that plantation in palm oil is a very
good business in terms of profit, in terms of our benefit," he said.
The BBC show also featured Kuala Lumpur Kepong, another Malaysian palm
oil business, and other Malaysian business figures.
The programme
dealt with the growing food crisis in Asia and the economic
instability and social unrest that may result. It highlighted failures
in harvesting rice in China and contrasted that with the successful
Malaysian palm oil industry. "There are now more than 200,000
smallholders depending on the sale of palm oil," the programme stated.
It
noted that "stocks in Asia's food companies from Mumbai to Kuala
Lumpur are now hotly traded", but stressed the need to expand to meet
the vast food demand. Indian companies were anxious to invest in
Malaysian palm oil plantations "but land prices are now too high".
Only
a brief reference was made to the reasons why the palm oil industry is
the subject of fierce debate. Environmental groups complain that its
spread has caused devastating levels of deforestation which harm
biodiversity, threaten the livelihoods of indigenous people and put at
risk the survival of the orang-utan.
The programme took the view
that production needed to be stepped up fast: "Asia is now experiencing
rising demand and rising prices for grains and oils but production is
lagging, as is investment and increases in yield." It concluded with a
sense of urgency: "Asia is going to have to grow its way out of trouble
– and the clock is ticking."
It was not the first time that BBC
viewers had shown programming on Malaysia produced by FBC. In February
2011, BBC World News broadcast on its One Square Mile programme a piece
from Sarawak in which presenter Rian Maelzer, who describes himself as
the "South East Asia Correspondent" for FBC's CNBC programme World
Business, explored the lifestyle of the tribal Iban people and took a
boat ride to visit a traditional longhouse.
"Tourism not only
brings in money, it also encourages youngsters to keep alive skills that
might otherwise have died out," he reported. "For the past 40 years,
the Malaysian government has practised an affirmative-action policy
aimed at raising the living standards of indigenous groups." The
attractive portrayal of Sarawak, and the fight to preserve traditional
culture, is at odds with the area's reputation among environmentalists,
who have highlighted the battle of indigenous people in Sarawak to
preserve the rainforest against logging and the development of palm oil
plantations.
Similar subjects were examined in FBC's Develop or
Die documentary for the BBC in March 2009. The programme opened with a
cartoon that drew comparisons between colonialists who asked "Are the
natives friendly?", and modern-day environmentalists who ask "Are the
natives eco-friendly?" It examined the benefits of the Malaysian palm
oil industry and its value to the economy, quoting smallholders whose
lives have been transformed for the better by palm oil production. While
it quoted environmentalists, it reported that "the major players in
the industry resent the sweeping nature of environmental campaigns".
The programme concluded by pointing out the pressure on nations such as
Malaysia to develop. "Now that their economies are more likely to fuel
global growth in the next few years, they are more than ever
questioning why they should be punished by Western-imposed standards."
As part of its Develop or Die series, BBC World News also screened an
FBC co-production, "World Debate: Islam and Democracy in 2009",
featuring Malaysian Prime Minister Najib Razak sitting alongside the
host on the panel.
FBC's 'blue-chip service'
FBC is a media company with offices in London, Mumbai and Rome. It told
The Independent
that the programmes it has made "have always been fair, balanced and
impartial". It also said that it was no longer working for Malaysia.
When
The Independent
first questioned the company about its business at the end of last
month, it denied that it had ever done work for Malaysia. Confronted
with evidence of contractual arrangements listed in Malaysian public
records, the company's lawyers said they had made an "error", having
"failed to spot an amendment made by our client to a draft letter that
we had prepared".
It stated: "It is no secret that FBC received
funds and performed consultancy work and media-buying for the Malaysian
government in the past." Of its hiring of American lobbyists to promote
Malaysia, it said: "The object of that work involved showing the
economy of Malaysia to be attractive to investors and committed to
battling terrorism."
After FBC was contacted by
The Independent,
most of its website was replaced with a single page, giving only the
most basic of information. In its online promotional material for
potential clients – now removed from the internet – FBC boasted: "We
control blue-chip television editorial time-slots" and can "guarantee
controlled messaging from A to Z on the world's leading news channels".
Telling would-be customers that "FBC is not a traditional PR firm", it
stated that it "can guarantee that your message is endorsed by prestige
third-party ambassadors".
FBC also talked of its "broadcast news
feeds" and informed clients that "by facilitating independent
editorial coverage, broadcast news feeds can raise awareness amongst a
highly targeted audience". In another statement on its former website,
it said: "FBC specialises in the planning and execution of strategic
communications and branding campaigns, helping raise awareness across
the international media landscape". It then promised "an elite audience
via" and listed a series of prestigious media brands including BBC
World (now BBC World News), CNN, CNBC Europe and a number of print
publications including The Economist, the Financial Times, Business
Week, the Wall Street Journal and the International Herald Tribune.
FBC
says that its company is split into two distinct divisions, one for
television production and the other for branding. It says its references
to "time-slots" were "to paid advertising commercial spots and paid
advertorial programming that is clearly labelled as such".
The
founder and chairman of the FBC Group, which is the 100 per cent owner
of both FBC Branded Content and FBC Media (UK), is Alan Friedman, an
award-winning journalist and former banking correspondent at the
Financial Times. Friedman was credited as the "executive producer" of
three of the FBC programmes featuring Malaysia made for the BBC.
Before
the BBC broadcasts, it is understood that FBC, which has made 20
programmes for the BBC, signed the BBC's standard producer guidelines
which guarantee to "not accept money or other services or benefits from
any individual, company or organisation with a view to endorsing or
promoting such services and/or products in the series or series
publicity or which could lead to doubts about the subjectivity or
impartiality of the series".
In a statement to
The Independent,
the BBC said: "All independent TV companies who produce programmes for
BBC World News have to sign strict agreements to ensure programmes
meet the BBC's editorial guidelines, including avoiding any conflict of
interest."
BBC World News attracts 78 million viewers a week, is
available in more than 200 countries and reaches around 300 million
households and more than 1.8 million hotel rooms. The channel's content,
which includes advertising, is also available on 57 cruise ships, 42
airlines, 35 mobile phone networks and a number of major online
platforms including bbc.com/news.
The American-owned business
channel CNBC has also begun an examination of "FBC and its business
practices" and "withdrawn indefinitely" the programme the company
produces, World Business. In the past two years, FBC has made at least
10 programmes for CNBC's World Business featuring Mr Razak. In other
editions, the previous prime minister, Abdullah Badawi, appeared as well
as senior figures from Iskandar Malaysia, Malaysia Airlines and palm
oil company Sime Darby. In March this year, the channel showed
Deforestation in Sarawak, which was syndicated to other broadcasters,
including US state broadcaster PBS. The programme featured Sarawak
leader Taib Mahmud talking positively about the condition of the state's
rainforests and highlighted the area's attraction to tourists.
Eckart
Sager, the president of FBC, is a former producer with CNN who, since
joining FBC, has personally conducted interviews with Mr Razak, and
separately his wife Rosmah Mansor, for CNBC's World Business. Friedman,
who is an American and lives in Rome, has also personally interviewed
Razak. FBC is also linked to another award-winning journalist, John
Defterios, the host of CNN show Marketplace Middle East, since 2007.
Defterios,
the former group president of FBC Media, last month conducted an
exclusive interview for CNN with Mr Razak during his official visit to
London. During the interview, Defterios questioned the Prime Minister on
recent mass street protests by democracy campaigners in Malaysia.
"Some would say you had 1,600 arrests of some 20,000 protesters. Are
you satisfied with the security response to that particular round of
protests, yourself?" he asked. Razak responded: "It was quite mild, you
know, because although they were taken in, they were released after
eight hours and they were treated very well. There was no undue use of
force."
CNN issued a statement to say it had "never had an
editorial relationship with FBC" and that FBC Media had not been
involved in setting up interviews. "FBC has released a public statement
that John Defterios resigned from the company," it said.
"While
we appreciate that John Defterios's relationship with FBC during his
tenure with CNN could present the appearance of an editorial conflict,
we have been reviewing the situation and have found no indication that
CNN's editorial standards were – or are in any way – compromised by that
prior relationship."
The movers and shakers at the TV company
Alan Friedman, chairman and founder of FBC Group
The
award-winning journalist, who studied at Johns Hopkins University, New
York University and the London School of Economics, describes himself
as a "media entrepreneur". He has worked for the Financial Times, the
International Herald Tribune and the Wall Street Journal. In FBC
material he is described as "one of Europe's most respected economic and
political commentators". He is the author of books on the Italian
industrialist Gianni Agnelli, and on America's arming of Iraq. Friedman
was the executive producer of many of FBC's programmes for the BBC and
has conducted some of FBC's interviews, including with Malaysia's Prime
Minister Najib Razak.
Eckart Sager, president and head of production for FBC
German-born
and educated in the US, Sager is a former senior producer for CNN,
based in London. He previously worked for CNN in New York, travelling
the world profiling leading business figures. He is the executive
producer of many of FBC's documentaries and also "provides key strategic
communications advice and support on behalf of FBC clients". Sager has
also personally interviewed Mr Razak for FBC.
John Defterios, former group president of FBC Media from 2000-2011
Since
2007, he has been the presenter of CNN International's Marketplace
Middle East programme and is a journalist with 25 years' experience. He
is a CNN news anchor and former Reuters bureau chief. In July this year
he conducted an exclusive interview with Mr Razak for CNN during the
Malaysian Prime Minister's visit to London, CNN said the interview did
not involve FBC. Defterios resigned from FBC in March, the company has
told CNN.
The money trail
* Malaysian
budget records show that MYR28.35m (nearly £6m) was allocated to FBC
Media (UK) for a "Global Strategic Communications Campaign" in 2009. A
similar allocation was made in 2008. FBC Media (UK) is a subsidiary of
FBC Group Ltd
* Documents filed with the United States House of
Representatives show that FBC Media (UK) hired the Washington lobbyists
APCO Worldwide in 2008 for the purpose of "raising awareness of the
importance of policies in Malaysia that are pro-business and
pro-investment as well as the significance of reform and anti-terrorism
efforts in that country"
The palm oil industry's history of misleading claims
The Malaysian palm oil industry has a history of offending the authorities by making false claims on BBC World.
Three
years ago, the Advertising Standards Authority (ASA) criticised a
campaign from the Malaysian Palm Oil Council (MPOC) for carrying
"misleading" claims about its impact on the environment. The advertising
from the MPOC, which was not made by FBC, appeared on BBC World in
2007 and showed a palm oil plantation interspersed with shots of a
rainforest and wildlife. In a voiceover, it asserted that "its trees
give life and help our planet to breathe, and give home to hundreds of
species of flora and fauna. Malaysia palm oil: a gift from nature, a
gift for life." The MPOC also claimed that palm oil had been
"sustainably produced" since 1917.
A second advert showed a man
running through a forest, cut with shots of a palm oil plantation and
wildlife. The voiceover said of the palm oil industry: "Its trees give
life and help our planet breathe. Its fruit provides vitamins for our
bodies and energy for our daily lives." But the ASA upheld a complaint
from Friends of the Earth International and Friends of the Earth Europe
that the advert was misleading on the grounds that much palm oil was
produced in a way that was not socially or environmentally sustainable.
The advert was made before the Roundtable for Sustainable Palm Oil
completed a verification system for sustainable palm oil.
The ASA
ruled that the advert "was likely to mislead viewers as to the
environmental benefits of palm oil plantations compared with native
rainforest". It also said viewers were misled "because there was not a
consensus that there was a net benefit to the environment from
Malaysia's palm oil plantations".
In July this year, another
campaign from the MPOC was banned by the advertising watchdog in Belgium
for once again claiming that the production of palm oil is
"sustainable". The Jury d'Ethique Publicitaire ruled that production had
impacts on the environment and the campaign was in breach of its
environmental advertising code.
The
four - Major (Rtd) Risman Mastor, Kamarulzaman Ibrahim, Mohamed Nasir
Ahmad and Mohd Kamil Omar - said they had marked thousands of postal
votes in three separate general elections between 1978 and 1999.
