Is media ownership transparent?
In law YES
In practice NO

IN LAW

According to amendments to the Media Law (2011) and the Electronic Media Law (2012), it is possible to finds out who owns print, broadcast and online media in Croatia through information reported to: the relevant media authorities; directly to the public; or to corporate /trade registers. Through the various laws media must disclose enough information for their real owners to be identified right back to the individual, not just to a company. This includes information on the all shareholdings over 1%, disclosure of beneficial owners and those with indirect interests and control and a bans on “secret” ownership.

In June 2011, concerns about suspicious financing of the media led to calls for changes to the law to allow identification of media owners back to an individual. The process of privatising the print media in Croatia, which had begun in 2000, had been rife with corruption scandals, with rumours of money laundering and disguised ownership of certain groups involved in criminal activities surrounding the sales of the biggest Croatian print media – Jutarnji list, Večernji list and Slobodna Dalmacija. The real ownership structure of the media was often hidden behind secret contracts and far-reaching informal agreements involving high-profile individuals, such as politicians, police and public prosecutors.

As a result, amendments to the Media Act and the Electronic Media Act were drafted very quickly and passed with minimal consultation by the Parliament in July 2011 (Media Act), with the same provisions being introduced to the Electronic Media Act in June 2012.

 

IN PRACTICE

Despite some well-defined provisions, the speed with which the amendments to the Media Act and Electronic Media Act were passed and the lack of consultation has resulted in serious omissions in the monitoring and enforcement side to the law. For example:

  • Media companies do not always publish information on indirect ownership yet there is no institution authorised by the Media Act to monitor compliance and to apply sanctions.
  • 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.
  • The supervisory body, the Croatian Chamber of Economy (CCE), is not provided with sufficient resources adequately to monitor compliance or check information.

The amendments have had little impact on the ownership structure of Croatian media thus far since most of the privatisation processes, many of which were reported to be suspicious or controversial, were completed before 2011. In the absence of an effective enforcement mechanism, there have been no legal proceedings and the questionable ownership structures remain.

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 regional broadcast media outlet, two large national newspapers and the Croatian Chamber of Economy (CCE) which manages the ownership reporting under the Media Act, to find out how they manage ownership information in practice.

Within the CCE, the responsibility for gathering, storing and disclosing ownership information lies with two employees who are estimated to each spend around 20% of their time on this work, with busier periods twice a year around reporting deadlines. Thus the total for a whole year is around 50% of one employee. Their tasks include advising media on how to complete the relevant forms, processing and storing the submitted forms. If compliance with the law also fell within the CCE’s remit, then this time might double but still would not be more than about one full time person.

Ownership information must still be reported in hard copy, as well as electronically. The CCE reports that the process could be significantly streamlined if it all became digitised with online submission of information, to be stored in an electronic database.

The obligation to report ownership information to the CCE (Media Act) or the Electronic Media Council (EMC) (Electronic Media Act) lies with media outlets themselves. They are, therefore, required to collect and report information from their shareholders on an annual basis and when changes take place.

Prior to the 2011/2012 changes to the ownership reporting requirements, all media were already covered by (less detailed) ownership reporting obligations in the Media Act, so the concept of all media outlets having to report their ownership information was already accepted in Croatia. All our interviewees – from broadcast or print media – supported the idea of reporting ownership, calling it “normal thing” and stating that that “the continuous obligation to report media ownership information prevents fraud” if the law is executed effectively. The two large national newspapers that were interviewed both expressed the view that the public need to know who owns the media in the interests of transparency.

The 2011/2012 changes to the law are simply an extension of an existing obligation. Although the new provisions are more time-consuming to implement, our respondents all reported that the time commitment for reporting ownership is negligible. Individual changes in ownership can take as little as 5 minutes each to submit (there are relatively few changes), whilst the annual report takes around half a day. The same information is provided directly to the public via website and the Official Gazette and takes a further 1 hour or so per year.

 

RELEVANT LEGISLATION

Law Media covered by law
Media Act, May 2004, as amended July 2011 Print, broadcast & online media
Electronic Media Act, December 2009, as amended June 2012 Broadcast & online media
Companies Act, November 1993; Court Register Act, January 1995Capital Market Act, July 2008 Print, broadcast & online media

INFORMATION SOURCES

Official web page of the Electronic Media Agency http://www.e-mediji.hr/

Access Info – Croatia media ownership law and practice research questionnaire: www.access-info.org/wp-content/uploads/tmo_croatia_17july2013.doc