QSAR's collapse contains valuable lesson for media

QSAR's collapse contains valuable lesson for media

The Jakarta Post, Jakarta

While some blame senior government officials for lending PT
Qurnia Subur Alam Raya (QSAR) credibility through their high
profile visits to the company before its downfall, experts said
the media had not been exemplary either.

Slack self-control and poor reporting by the media were partly
to blame for QSAR's boom-to-bust story. When it collapsed last
month, the company owed around 6,800 investors some Rp 500
billion (US$$58 million).

"The media could be called to account for deceiving the
public," said media expert Veven SP Wardhana from the Institute
for Studies on the Free Flow of Information (ISAI) on Tuesday. "A
class action may be unlikely, but it is possible."

Sociologists said QSAR's fall had brought to light the
collective foolhardiness of Indonesians. From ordinary housewives
up to Vice President Hamzah Haz, QSAR deceived them all into
believing it was an indefatigable money machine, generating a
return of more than three times the current average 13 percent
per annum interest rate offered by the banks.

QSAR gained much from the generous media attention it
received, even without high profile visits from Hamzah and
People's Consultative Assembly Speaker (MPR) Amien Rais.

"We tend to assume that if officials have visited the place,
if the media has checked them (QSAR) out, than it must be okay,"
Veven explained.

But the media had not done its job in investigating the story
behind QSAR's growth, he said, and for that the media should be
held morally responsible.

Indeed, QSAR is not the only company that promised, or is
still promising, profit-sharing schemes with astronomical profits
from the trade in agricultural products. Reports have surfaced
that some 40 others could still be collecting money from
unsuspecting investors.

"It's not enough to get balancing statements from other
sources, reporters should also investigate the facts," Veven
said. "Otherwise the media becomes nothing more than a mouthpiece
for other people."

Since the downfall of Soeharto's authoritarian regime in 1998,
the press has often come under fire for favoring sensational
journalism at the expense of well-researched and prudent reports.

"We do our job as well as we can. These things, however, can
happen," said Nurhadi Purwosoputro, the secretary-general of the
Association of Indonesian Private Television Stations (ATVSI) and
news director of Indosiar television.

According to Nurhadi, the media had adopted its own code of
ethics and that in order to prevent further QSARs from cropping
up, this had to be strengthened.

Association of Indonesian Advertising Agencies (PPPI) chairman
R.T.S. Masli said the media was responsible as it had been paid
to spread information that later turned out to be false and even
harmful to the public.

He added that they should also be more careful when accepting
advertisements or reporting on companies raising funds from the
public.

There have been complaints that many of these companies'
advertisements fail to highlight the risks involved when
investing in agribusinesses.

"Actually, it's illegal for a company to raise funds from the
public without mentioning the risks," Masli said, adding that
this also applied to prospectuses.

Some advertisements, however, come in the form of advertorials
that at first glance appeared to be a part of a newspapers' news
content. These, Masli said, represented a gray area. "Nonetheless
the media should vet all types of advertisements."

A number of laws are on the statute books to protect the
public, be they consumer or investors, from false or misleading
advertisements.

However, government supervision is slack and some officials
are already toying with the idea of tightening control over the
freewheeling press.

"We don't want a third party like the government to step
in... the media should be capable of regulating itself," said
Masli.