1. Proposal of the Bill and Creation of a Working Group

On 19 December 2016, certain employees of the Public Broadcaster proposed a bill to the Parliament requesting an amendment to Article 30 of the Law of Georgia on Public Broadcaster. The amendment restricts the powers of the Board of Trustees of the Broadcaster.

The authors of the bill stated in the explanatory note of the bill that the powers of the Broadcaster’s management and the Board of Trustees were not clearly defined which was causing problems for the management when managing the Broadcaster. When the bill was proposed, Giorgi Baratashvili, the General Director of the Broadcaster, had already resigned and the Broadcaster was expecting an election of a new Director. The Parliament started hearing the bill in the beginning of January. The Legal Affairs Committee of the Parliament created a working group for the amendments to the Law on Public Broadcaster at the same time when Vasil Maghlaperidze, an affiliated person with Bidzina Ivanishvili, was elected as the Broadcaster’s Director.

The working group of the Parliament held its first working meeting on 21 January. Notably in the initial composition of the working group, representatives of civil society organizations or field specialists were not involved. Thereafter, on 30 January, Transparency International – Georgia requested the Committee to be involved in the working group. Lasha Tughushi, chief editor of newspaper “Rezonansi” and executive director of Liberal Academy Tbilisi, also joined the working group. It is notable that, for five months since 21 January, civil society members of the working group have never received any information about working group meetings. As a result, civil society representatives effectively have not participated in the legislative process on the proposed bill.

A meeting of the working group was scheduled six months after it was created in the Parliament, on 17 June, on Saturday. At the meeting, the bill was proposed to the working group. Members of the Parliament asked for comments of non-governmental organizations at the meeting. Since non-governmental organizations were not involved in drafting the bill, they did not have an opportunity to see the amendments ahead of time, and since the timeframe given for presenting comments was illogically short, non-governmental organizations requested the Parliament to suspend the bill initiation process. The non-governmental organizations also requested to create a more inclusive working group which would hear the bill. At the same time, despite the short timeframe, a group of non-governmental organizations sent their critical opinions on main areas of the proposed bill already on 21 June. Despite the initiation of the bill was not suspended and, on 22 June, a group of members of the Parliament initiated the bill.

This working process on important amendments without civil society representatives and the field experts lets us argue that the initiation of the bill was secretive and non-transparent. The public was not given the opportunity to be involved in the legislative process despite the strong public interest that existed in the legislative changes affecting the Public Broadcaster.

2. The Public Broadcaster – Background

We should consider the background to the Public Broadcaster when discussing the changes to the Law on Public Broadcaster. Specifically, after the parliamentary elections, before his term had expired, Giorgi Baratashvili, the General Director of the Broadcaster, resigned and Vasil Maghlaperidze, an affiliated person with Bidzina Ivanisvhili and his media projects, was elected. In the beginning of the year, the new management of the Broadcaster announced about shutting down 101 programs out of 102 programs in the name of the reorganization of the Broadcaster. After being met with a public outcry, the decision was changed. Instead a competition was announced for certain programs of the Broadcaster. Additionally, a group of employees has been transferred without any competition from GDS, a TV station owned by a son of Bidzina Ivanishvili. Starting the new television season, “Tsiteli Zona” and “Interview”, Radio Liberty projects, will be removed from the air. The same will happen to “Vektori”, a TV project focused on Euro-Atlantic integration of Georgia. It is still uncertain whether “Washington Today”, a project of Voice of America, will remain on the air. Introducing legislative amendments that will restrict openness and transparency of the Broadcaster with such a background raises more questions. The actual management of the Broadcaster agrees with the amendments citing a positive recommendation by the European Broadcasting Union (EBU). However, EBU issued positive recommendations only on three issues out of 13 issues in the amendments. It should also be considered how much information EBU has about the risks of the Georgian Government’s attempts to gain influence on the Georgian Public Broadcaster, as well as about the challenges and the context in which the Georgian Broadcaster exists in today’s Georgia.

3. What Changes Are being Made to the Law on the Public Broadcaster?

• “Air” or “Products”?

According to the proposed amendments to Article 16 of the Law on Public Broadcaster “At least 25% of the Public Broadcaster products shall be devoted to programming produced by private legal entities, whose procurement shall not be subject to Law of Georgia on State Procurement”.

The term “air” under the earlier version of the Law is now replaced by “products”. Considering that “air” means tele/radio air, and the “products” also includes web platform, there is a legitimate suspicion that the Public Broadcaster, based on this wording, will procure outside programming to place it on the web. Placing content on the web then can be used to meet the statutory requirement and the Broadcaster may not air the outside programming at all or air only little amount of such programming. This suspicion is further supported by the fact that, according to statements by the Public Broadcaster, it is planned to switch to multi-media broadcasting, which means that the web platform will be developed as a separate information source. At the end, the viewer will be disadvantaged because a large number of viewers (especially in the regions)[1]do not have access to the internet. According to surveys, TV viewers still outnumber the persons who receive information from the internet.[2]

 It is notable that the Public Broadcaster has never complied with this clause and, up until today, it had purchased minimal amount of outside programming instead of statutory 25%. This has always been a major problem in the quality of management of the Public Broadcaster, because, by refusing to fulfill this requirement, the Broadcaster effectively refuses to play its role to encourage media pluralism and independent media production in the country.

• Exemption from the State Procurement Rules

One of the central changes made to the Law are Article 16 and 20¹ which exempt the Public Broadcaster from the Law on State Procurement.

• According to the amendment to Article 16, 25% programming that will be procured from outside studios will not be subject to the Law on State Procurement.
• According to Article 20¹, the Law on State Procurement will also not apply to procurement of production of programs, TV series, fiction and/or documentary films broadcasted on the Public Broadcaster.

According to these changes, the Public Broadcaster will not use tender offers to procure products from outside studios – an obligation it has under the current version of the Law.[3]

The purpose of the electronic procurement is to spend budgetary resources in a rational way, to establish fair and non-discriminatory approach towards the participants of procurement, and to ensure transparency of the procurement process. Therefore, by leaving the regulation of the Law on State Procurement, the Broadcaster will impair its own transparency and increase corruption risks.

Representatives of the Public Broadcaster were noting that this rule prevents procuring high-quality products because they have to purchase least expensive, but not high-quality, products when tenders are used. However, they have not cited any example when and which program could not be purchased due to this rule. In addition, they have not considered an alternative whereby the tender documentation and qualification requirements might have been improperly drafted when trying to purchase a desired product.

The explanatory note to the bill contains even more vague language on this Article: “The problem with this rule is that, in most cases, due to unforeseeable circumstances, it is impossible to plan a state procurement ahead of time, and the rule prevents state procurement in short periods of time”. In unforeseeable situations, the Law anyway permits direct procurement. This rule applies not only to programming but to any type of procurement by a budget-funded organization. It is also unknown how the State Audit Office will monitor the procurements by the Public Broadcaster if the latter will not be subject to the existing standards.

According to the statements by the management of the Broadcaster, instead of tenders, it will hold competitions for selecting programs. However, no law will regulate these competitions, the composition of the selection committee etc. This causes even more concerns about transparency and fairness of the process, as well as how rationally the budgetary funds will be spent and how fairly the competitors will be selected.

• Expanding the Powers of the Management

According to the proposed amendments, the authority of the Board of Trustees will be restricted and the powers of the management will be expanded. Members of the Board of Trustees are elected by the Georgian Parliament and therefore they are accountable to the Parliament – presenting annual performance reports to the Parliament. This means that the Board of Trustees has a representative function and is responsible for the developments in the Public Broadcaster before the public. Consequently, restricting the authority of the Board means to weaken a public control mechanism over the Broadcaster.

• The Board of Trustees will not determine the main terms of the employment contracts with the Broadcaster’s staff, including the grounds to employment termination.

The proposed bill does not provide who will have the power to determine the terms of employment. However, probably, the management will assume this power. This amendment weakens the guarantees of protection of the employees in the Public Broadcaster especially considering the inconsistent employment policy under the new management. The new management, which is affiliated with the ex-prime minister Ivanishvili, had been suggesting reorganization and hiring new staff based on a competition. Later however, persons affiliated with Channel Nine and GDS, television projects of Bidzina Ivanishvili, have been massively appointed at various positions in the Public Broadcaster. It was reported that certain programs of the Public Broadcaster will be shut down from 17 July. The Broadcaster has not presented any plan how the Broadcaster will be staffed, who will be granted an extension of the contract, who will be laid off or how the new staff will be hired.

Therefore, with this uncertain employment policy, the Board of Trustees would have been an additional guarantor for the protection of labor rights of the Public Broadcaster employees.

• The Board of Trustees will not have an opportunity to initiate changes to the structure or the budget of the Broadcaster:

Specifically, under the new version of the Law:

“After being nominated by the General Director, it adopts the Charter of the Public Broadcaster based on 2/3 of all votes, as well as amendments to the Charter, which must ensure editorial independence of the relevant structural unit. It is authorized to initiate amendments to the Charter except for amendments to the clauses with respect to the structure of the Public Broadcaster”.

“After being nominated by the General Director, it adopts the budget of the Public Broadcaster, as well as amendments to the budget and adopts its performance reports”.

The restriction of the authority of the Board of Trustees and expanding the powers of the management under the new law is particularly dangerous because it makes it easier to exert political influence on the management of the Public Broadcaster and thereby influence the content and editorial policies of the Broadcaster.

• Financing of startups

According to the proposed bill, the following language will be added to the current version of the Law: “The Public Broadcaster shall be authorized to use incomes permitted under the Georgian legislation, including the disbursements from the state budget, to encourage startup companies, innovative development of tele-, radio- and online products, and to develop the field of broadcasting.” (Article 6¹).

The version of the bill prior to its initiation also included the person who would be authorized to make decisions regarding startup financing: “The decision for the purposes of this Article shall be made by the General Director upon a recommendation of the Board of Trustees as defined under Article 31 of this Law”. This gave the General Director the sole discretion to finance startups and innovative projects. This clause is removed from the bill that is initiated in the Parliament. This made the purposes of the Article even vaguer because “startup” or “innovative project” are not defined, and it is unknown who determines their level of innovation or whether to finance them. In case the Law does not provide these procedures, the Article will create risks of non-transparent spending of the budget as well as corruption risks. It is also important that the General Director did not have the sole discretion to make decisions on financing startups and innovative projects. Instead, it must provide a procedure of decision-making within the Public Broadcaster which would ensure that the management of the Broadcaster would be supervised by a collegial body.

Advertising and Sponsorships

The proposed amendments on advertising and sponsorships at the Public Broadcaster significantly contradict the idea of a Public Broadcaster being fully free from not only political but also commercial interests. This is guaranteed even under the proposed Constitutional amendments which have been adopted by the Parliament with two readings. The Constitutional bill provides: “The law shall guarantee the independence of the Public Broadcaster from state institutions, as well as its freedom from political and substantial commercial influence”.

A significant increase of income into the budget of the Public Broadcaster may restrict the Broadcaster’s freedom to produce critical and investigatory content about these commercial groups. The current restrictions under the Law were introduced exactly for providing the guarantees against such risks.

• The Public Broadcaster Commercial Advertising Time has been Doubled

According to the proposed bill, “Advertising shall be prohibited on holidays and weekends on the air of the Public Broadcaster, Adjara TV of the Public Broadcaster and its radio channels. The prohibition shall also applies to the prime time – in other days, except for sport programming, international festivals and competitions, and in the beginning, during natural intervals and at the end of competition programming. Time of advertising during sports programs, international festivals and competitions, and in the beginning, during natural intervals and at the end of competition programming shall not exceed 60 minutes in 24 hour-period, and 12 minutes – in one hour (20%), and in other cases – commercial advertising time shall not exceed 3 minutes in one hour (5%)”.

Under the current version of the Law, time of commercial ads may not exceed 30 minutes in 24 hour-period, and in one hour – 6 minutes (10%). Notably, this amendment does not contradict the EU Directive and the authors of the bill cite a letter from the European Broadcasting Union which confirms that this is an established practice at European broadcasters. However, the Audiovisual Media Services Directive sets only the maximum limit of 20% in 24 hour-period. Therefore, leaving the 10% in 24 hour-period rule would not contradict the Directive either. In addition, the Directive provides standards for general broadcasters but not only for public broadcasters.

• Expanding the Scope of Sponsorship at the Public Broadcaster

According to the proposed bill, “Sponsorship shall be permitted on the air of the Public Broadcaster, Adjara TV of the Public Broadcaster and its radio channels only for sports programming, international festivals/competitions and entertainment programming, and TV series.”

The current version of the Law on Public Broadcaster permits sponsorship only for sports programming, and international festivals/competitions. Given the current situation in the advertising market of Georgia, we believe it would be more adequate to retain the current version of the Article. Under these amendments, the Public Broadcaster will enter into a competition with privately-owned broadcasters putting them in a disadvantageous position. This is due to the fact that the Public Broadcaster has guaranteed income from the state budget. Therefore, theoretically, it is possible it may take significant portion of income from small and medium-sized private broadcasters by offering damping prices for low viewership program sponsorships. Broadcasters have already petitioned the Parliament with a detailed explanation on these risks asking the Parliament not to adopt these amendments.

Social Advertising

• Slashing Amount of Social ads in half on the Air of the Public Broadcaster:

“The Public Broadcaster, Adjara TV and radio of the Public Broadcaster, as well as a community broadcasters shall grant a total of 90 minutes within 3 hour-period for social ads for free and without discrimination. Within this timeframe, the Public Broadcaster shall grant 10 seconds for social ad on NATO and EU integration of Georgia in case such an ad is submitted to the Broadcaster. The Public Broadcaster, Adjara TV and radio of the Public Broadcaster, as well as community broadcasters shall, during an election campaign that is ongoing in their coverage area, provide information to the viewers about the election subjects and important election procedures”.

Under the current version of the Law, the timeframe of social ads was set to at least 60 seconds within 1 hour-period. Under the amendments, this time will be halved.

Social ad is defined as “an ad for supporting public goods, achieving charity purposes, raising awareness on important public issues and/or changing the public behavior into a positive direction”. Therefore, the Public Broadcaster, which receives millions of GEL from the state budget, must have more obligations compared to private television channels.

• Restriction on Production of Public Information and Removing the Broadcaster from the Requirements under the General Administrative Code

According to the initiated bill, the information on any novelty/innovation that is planned or made to new programs of tele-radio production, whose publication may damage the activities of the Public Broadcaster in the specific instance, is not public information until it is aired and Chapter 3 of the General Administrative Code does not apply to it. Decision on making information public is made by the General Director of the Broadcaster.

The legal form of the Public Broadcaster is Legal Entity under Public Law. It is financed by the state budget. This determines that the information publication standards for public institutions under the law also apply to the Broadcaster.

Chapter 3 of the General Administrative Code defines the importance of public information and those exceptional cases when information is not public (state, trade, commercial or personal information) and does not require additional regulation.

The Public Broadcaster’s main argument in support of the proposed bill is to protect the Broadcaster’s content from competitors. However, adopting such amendment directly contradicts the idea of openness and transparency of the Public Broadcaster. Allowing such precedence may encourage other independent budget-funded organizations to also request different types of exemptions. Further, Vasil Maghlaperidze, the manager, will have the sole discretion which information needs to be published. This is unacceptable. We believe this amendment contravenes the established principle of freedom of information under the Georgian legislation.

• Public Broadcaster Beyond the Scope of Budget Code

The initiated bill proposes amendments to the Budget Code of Georgia. According to the amendments, the unspent amount left over from the previous year will be added, in the beginning of the following year, to the new budgetary disbursement for the next year.

The authors of the bill provide an argument in the explanatory note of the bill that the Public Broadcaster is not a state entity and/or organization spending budgetary funds in its normal meaning, despite the fact that it is financed by the budget. Under the proposed bill, the Budget Code of Georgia will not apply to the Public Broadcaster together with such exceptional organizations such as, for example, the National Bank and a National Regulatory Commission. Unlike the National Broadcaster, these organizations are not financed from the budget.

It is possible that in the future the Public Broadcaster may become such an organization which is not financed from the budget.[4] Thereby it may then legitimately request to leave the scope of application of the Budget Code. However, making such a request as of today is incompressible and legally unsubstantiated.

As of now, the noted bill is initiated in the Parliament. However, committee hearings have not been launched yet. Representatives of non-governmental organizations have already sent its critical comments on the bill to the Lead Committee of the Parliament. Transparency International – Georgia finds it necessary that hearings on the bill include representatives of non-governmental organizations, media experts and representatives of broadcasters. This has failed to happen within the working group but it is necessary until the bill is enacted by the Parliament. Adopting the current version of the bill will harm the Public Broadcaster and regulatory framework for its transparency and accountability. Therefore it is necessary that comments from a variety of interested parties be discussed and a public discussion be held which will improve the bill.