Is media ownership transparent?
In law YES FOR BROADCAST MEDIA ONLY
In practice NO

IN LAW

According to the law, it is possible to finds out who owns broadcast media only in Georgia through information reported to the media authority, Georgian National Communications Council (GNCC), and directly to the public. As a result of amendments to the Law on Broadcasting in 2011, broadcast media must disclose enough information for their real owners to be identified. This includes information on the size of shareholdings, beneficial owners and those with indirect interests and control. Ownership of broadcast media by offshore companies was a central amendment to the law.

Information on the ownership of print and online media ownership is only available through provisions of corporate law and as such it is not easy to identify the real owners.

For many years prior to 2011, the lack of transparency of media ownership had been of great concern in Georgia. The leading national broadcasters, including the public service broadcasters, were seen as mouthpieces of government and their real owners were hidden behind offshore companies. Despite the fact that the public was easily able to identify the biased, pro-governmental information disseminated by the broadcast media, there was a determination within civil society to get the law amended to ban offshore ownership and to oblige broadcast media to disclose beneficial owners.

Following a campaign by Georgian civil society, with support from local and international donor organisations and foreign diplomats, in 2011 the Law on Broadcasting was amended to introduce greater transparency provisions and ban offshore companies from owning broadcast licences. The ownership information, which is submitted to the media authority, the GNCC under the law, must also be made public via the websites of both the broadcaster and the GNCC.

 

IN PRACTICE

A 2014 Transparency International report on the ownership of more than 20 broadcast, print and online media outlets found that media ownership is now largely transparent in Georgia. This is in line with the GNCC view that media outlets generally report accurately.

Although some owners still have links to the ruling or opposition political parties, the situation has improved substantially since before 2011. There is now only one known case of media shareholders hiding their involvement behind an offshore shell company.

The biggest challenge facing the GNCC in supervising the law is the lack of available information about whether media owners hold positions in government bodies; there is no unified list of government officials and only senior officials have to complete an asset declaration which is publically available on the website of the Civil Service Bureau. In 2013 the GNCC identified one case where there was a conflict of interest.

Despite the fact that offshore ownership is banned, the law cannot prevent so-called “frontman” ownership. Although national broadcasters must submit some financial information to the GNCC, this information is mostly limited to summary conclusions which usually paint a very positive picture. Full financial transparency would help identify those financing the media; there were proposals from civil society lawyers at the drafting stage of the amendments to the Law on Broadcasting proposing that broadcasters should prepare their accounts in accordance with the International Accounting Standards (IAS). There is a rule that all companies must do this but it is not complied with or enforced, hence campaigners for ownership transparency wanted the GNCC to enforce this rule with respect to the broadcasters. The Parliament refused to enact this amendment, however.

As in many countries, the obligation to report ownership rests with the media outlet itself yet the media outlet cannot be certain that a person formally entered into its company shareholder register is the actual shareholder.

Greater ownership reporting requirements place further demands on both the media and the media authority. In order to find out how the requirement to report works in practice, interviews were carried out with one national broadcaster, one newspaper, one online paper, one regional broadcasting association as well as the media authority, the GNCC, to find out how they manage ownership information in practice.

As the body charged with collecting ownership information under the Law on Broadcasting, the GNCC only covers broadcast media which currently total 61 broadcast media outlets. The responsibility for gathering, storing and disclosing ownership information lies with three employees within the administrative and broadcasting regulation departments. The information is submitted in paper or electronic format. Uploading the information submitted by media, along with any relevant decisions adopted by the GNCC, onto the GNCC website takes approximately 10 minutes per document.

The GNCC regularly checks the information provided by the media outlets for compliance with the law and issues warnings and sanctions for breaches. The GNCC views the current law as quite progressive but identified some problems related to the proper implementation of the law in practice.

In larger media outlets, ownership information on shareholdings is collected, stored and disseminated to the GNCC and public by legal or business departments. It is stored within the media outlet in both paper and electronic format and takes very little time to process. Small regional broadcasters cannot afford to have dedicated departments dealing with ownership reporting requirements so these tasks are undertaken by directors or financial managers. Changes in ownership are not common at the regional level which means there is just the annual report to submit and this takes relatively little time meaning that reporting is not onerous.

The requirement to report ownership information was generally felt it be beneficial since it demonstrates the media outlet’s lack of bias and impartiality and increases the trust of the population in the media. One media outlet reported that it has helped the public identify “de facto owners” of media even when there is “front man” ownership. It is perceived as a normal part of running a business and none of the media reported any negative views on the requirement.

 

RELEVANT LEGISLATION

Law Media covered by law
Law on Broadcasting (23 December 2004, Law no. 780) Broadcast media (including cable and service providers)
Law on Entrepreneurs,28 October 1994, as amended, No. 557 Commercial print, broadcast and online media
Civil Code, 26 June 1997, as amended, Law No. 786 Non-commercial print, broadcast and online media

 

INFORMATION SOURCES

Georgian National Communications Commissions (GNCC) – information reported by media outlets can be found at: http://gncc.ge/index.php?lang_id=ENG&sec_id=50051

National Public Registry Agency – https://enreg.reestri.gov.ge/

The website of the NPRA, which is a public authority which is responsible for registering business and non-for-profit entities, contains information on companies (not just media) and sole traders.

Transparency International website which contains corporate information in English which is taken from the Business Registry run by the NPRA – www.companyinfo.ge

Access Info full country research: www.access-info.org/wp-content/uploads/tmo_georgia_5aug2013.doc

[1] Who owns Georgia’s media: Power networks and corporate relationships behind Georgian media outlets http://transparency.ge/en/node/4126

[2] Who owns Georgia’s media: Power networks and corporate relationships behind Georgian media outlets http://transparency.ge/en/node/4126

[3] https://declaration.gov.ge/eng/question