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.