Cloud Ocean Water and MediaWorks TV Ltd - 2018-037 (23 July 2018)
- Peter Radich (Chair)
- Wendy Palmer
- Te Raumawhitu Kupenga
- Paula Rose QSO
- Cloud Ocean Water
BroadcasterMediaWorks TV Ltd
[This summary does not form part of the decision.]
An item on Newshub explored concerns of members of the public and the Christchurch City Council regarding potential water contamination from a bore drilled by Cloud Ocean Water and pending judicial review action taken against Environment Canterbury (ECan) over their resource consent processes. The Authority did not uphold a complaint that the broadcast was inaccurate and unfair to Cloud Ocean Water. The Authority found that Cloud Ocean Water’s responses to questions from Newshub prior to the broadcast were fairly reflected in the item, and that viewers were unlikely to be misled regarding the nature of Cloud Ocean Water’s involvement in the resource consent process or the judicial review.
Not Upheld: Accuracy, Fairness
 An item on Newshub explored concerns of members of the public and the Christchurch City Council regarding potential water contamination from a 170m bore drilled by Cloud Ocean Water and pending legal action taken against Environment Canterbury (ECan) over their resource consent processes.
 The reporter Patrick Gower explained in the item that the legal action referred to was a judicial review of the process that led to the granting of this consent to Cloud Ocean Water and similar consents:
This legal challenge is not just for that [Cloud Ocean Water’s] bore though – it’s much broader than that. This is part of a cluster of consents for water around here. It’s a judicial review opposing the process that they got them in so it’s much bigger than just this one consent.
 Mr Gower also said in relation to the consent granted to the consent for the bore granted to Cloud Ocean Water:
Its consent allows it to take 1.6 billion litres a year. In China the shelf price for 10 litres is 27 dollars. That means potential sales of 12 million dollars a day, or 4.3 billion dollars a year.
 This statement was accompanied by a graphic which read, ‘Potential earnings: $12m a day; $43b a year.’
 When asked by the newsreader if there had been any reaction from the owners of the overseas company linked to the bore, Mr Gower said:
No comment to a number of very direct questions. ...[a New Zealand-based public relations company responded on the company’s behalf] pretty much no comment, except they haven’t actually started taking the water from that new bore…
 The item was broadcast on 14 March 2018 on Three.
 Cloud Ocean Water complained that the item left out key facts and misled the audience by implying Cloud Ocean Water acted improperly in obtaining the consent from ECan to drill the bore. They submitted the item was inaccurate and misleading as the consent to drill the bore was received through the standard ECan resource consent process.
 Cloud Ocean Water submitted the following key facts should have been included in the broadcast:
- Cloud Ocean Water has a legal right to drill a 170m bore due to resource consent granted by ECan.
- The legal action referred to in the broadcast is being taken by Aotearoa Water Action against ECan over the granting of resource consents. By leaving this point out, the item implied legal action has been filed against Cloud Ocean Water and other companies with resource consents.
- Cloud Ocean Water has not yet obtained a consent to take groundwater from the new bore, and Christchurch City Council’s concerns regarding the water take – the key focus of the broadcast – will be considered as part of due process by ECan.
 Cloud Ocean Water also submitted a graphic used portraying ‘potential earnings’ from bottled water sales was inaccurate. The graphic said: ‘Potential Earnings: 12m a day; 4.3b a year.’ The estimate of these earnings numbers was based on revenue and did not account for Cloud Ocean Water’s costs, it said.
 Cloud Ocean Water also argued Mr Gower’s statement and the broadcast as a whole did not adequately refer to or reflect Cloud Ocean Water’s responses to Newshub’s questioning. In particular it did not explain that Cloud Ocean Water were not commenting due to the judicial review process currently underway. Cloud Ocean Water considered this was unfair.
 In our consideration of the complaint, the members of the Authority have viewed a recording of the broadcast complained about and have read the correspondence listed in the Appendix.
The broadcaster’s response
 The broadcaster MediaWorks’ response was that:
- The information Cloud Ocean Water wanted to be included was implicit in the broadcast, which focused on the consents issued by ECan, and the legal challenges to those consents.
- Mr Gower clearly explained that the legal action is a judicial review of the ECan decision to award consents.
- MediaWorks accepted the graphic referring to ‘potential earnings’ was inaccurate. However it noted Mr Gower correctly referred to potential ‘sales’ of $12 million a day. In any event this inaccuracy was not material to the main story.
- Cloud Ocean Water was given a fair and reasonable opportunity to comment for the programme, and Newshub made reasonable efforts to include Cloud Ocean Water’s points of view.
The relevant standards
 The accuracy standard (Standard 9) states that broadcasters should make reasonable efforts to ensure that news, current affairs and factual programming is accurate in relation to all material points of fact, and does not mislead. The objective of this standard is to protect audiences from receiving misinformation and being misled.
 The fairness standard (Standard 11) requires broadcasters to deal fairly with any person or organisation taking part or referred to in a broadcast. This ensures that the dignity and reputation of those featured in broadcasts is not unduly damaged.
 This item focused on the judicial review of ECan’s resource consent processes amidst fears of potential water contamination from the bore. As obtaining a resource consent is a public process undertaken by democratically elected officials, it is important that reasonable scrutiny be allowed both at a legal level and an investigative journalism level. The key issue for us is whether MediaWorks misled viewers or presented a significantly inaccurate depiction of Cloud Ocean Water and its actions.
 Newshub did not mention that Cloud Ocean Water had not yet obtained a consent to take groundwater from the new bore or that any concerns members of ECan or the Christchurch City Council may have about extraction from that bore could be raised during that process. However this point was unlikely to affect viewers’ understanding of the story as a whole. The item primarily focused on the concerns of members of the public and the Christchurch City Council surrounding potential contamination as a result of potential extraction from the new bore, and the legal action taken against ECan.
 There was no suggestion in the broadcast that Cloud Ocean Water acted improperly in obtaining their consent to drill the new bore and we do not consider the audience would have been left with that impression.
 Turning to the graphic, which Cloud Ocean Water alleged was misleading, we note that while the graphic referred to ‘earnings’, Mr Gower said ‘sales’ in the broadcast. In any case potential profits for Cloud Ocean Water were not central to the item. The statistic was briefly used to highlight the significant sales of companies like Cloud Ocean Water to provide context around the potential value of resource consents of this type. The reference to ‘earnings’ in the graphic would not have affected viewers’ understanding of the item as a whole.
 We find no breach of the accuracy standard.
 It is a key principle of fairness that, if a person or organisation is likely to be adversely affected by a broadcast, they should usually be given a fair and reasonable opportunity to respond, and the response should be fairly presented in the broadcast.
 Newshub first approached Cloud Ocean Water for comment on Friday 9 March 2018 (five days before the broadcast). A public relations company responded to Newshub on Cloud Ocean Water’s behalf on 13 March (the day before the broadcast). Following a telephone discussion between the PR company and the production team, Newshub sent a long email explaining in detail who else would feature in the broadcast, and asking a comprehensive set of questions regarding the new bore and Cloud Ocean Water’s plans for water extraction and bottling. The PR company’s response was:
A spokeswoman for Cloud Ocean Water said the company will not be commenting on a High Court action between Aotearoa Water Action and another party. For details on the Cloud Ocean consents please refer to the resource consent reports and recommendations which are publicly available on the Environment Canterbury website.
 A further statement was emailed to Mr Gower on 14 March 2018 at 12.25pm, the day of the broadcast:
As per the public documents on the ECan website, Cloud Ocean Water received consent to drill a 170m bore on August 1 2017. As you’ll also see from the ECan website, an application to take water from the 170m bore has not been lodged. If and when the company decides to lodge such an application, this information would be made publicly available via ECan.
 Cloud Ocean Water was central to the concerns explored in the story due to fears surrounding the possible effect of the new bore. Based on the above exchange, and in particular the information and questions contained in Newshub’s email asking for comment, we consider Cloud Ocean Water was adequately informed of the nature of the programme and its proposed involvement, and that it was given a fair and reasonable opportunity to respond for the item.
 While Mr Gower’s summary of Cloud Ocean Water’s responses (outlined above) was short, it reflected the two key points, being that Cloud Ocean Water had no comment to make and that it had not yet started extraction from the bore. This was sufficient given the nature of the item, which, as we have said, focused on local concerns about water contamination and the pending judicial review process. While Mr Gower omitted the reasoning for the no comment response (the impending legal action), we do not consider this was unfair.
 We do not uphold the complaint as a breach of the fairness standard.
For the above reasons the Authority does not uphold the complaint.
Signed for and on behalf of the Authority
23 July 2018
The correspondence listed below was received and considered by the Authority when it determined this complaint:
1 Cloud Ocean Water’s formal complaint – 15 March 2018
2 MediaWorks’ response to the complaint – 5 April 2018
3 Cloud Ocean Water’s referral to the Authority – 20 April 2018
4 MediaWorks’ response to the referral – 11 May 2018
5 Cloud Ocean Water’s final comments –16 May 2018
6 MediaWorks’ confirmation of no final comment – 24 May 2018