Journalism ethics and feeding business bubbles

I AM sure many were surprised, as I was, when a leading Saudi newspaper published on its first page last week a “report” on accomplishments of a local company. The report was little more than an advertisement in the guise of an impartial report. There was no critical or evaluative input of any kind.
This business report was placed on the top of page one, high above the fold, next to news about King Abullah’s health, but higher on the page than Gaza news and a report on the trial of terrorism suspects in Riyadh. Coincidently, the report was placed on the same space that this company’s proper advertisements had occupied in previous weeks.
This incident was only the most glaring recent example of blurring the lines between advertising and impartial reporting. It used to be most noticeable in business pages, but now it is creeping to the front page. It is also part of a larger problem of uncritical business reporting, which takes several manifestations and with possibly disastrous consequences for the profession, the economy and consumers of news.
There is of course the common practice of rewriting press releases issued by companies, with no independent commentary.
More insidious, however, is publishing stories that take the guise of an independent investigative report, but in fact contains only partial analysis representing a particular business’ point of view. Earlier this month, I wrote about how food importers and retailers have tried to justify raising their prices in Saudi Arabia by creating an impression that international food prices had risen. They were aided by some reports in the local press supporting that point of view. It worked, as I pointed out in that essay (“Food prices drop globally but rise in local markets!” Arab News, Nov. 11, 2012): While food prices declined by 8 percent this year, food prices have risen in Saudi Arabia by over 5 percent, despite the fact that most food items sold in Saudi Arabia are imported.
In another example last year, a leading newspaper published a detailed report supporting higher prices for clothes in Saudi Arabia, because cotton prices had risen internationally, it asserted. The report cited supporting statements, predictably, from clothing wholesalers and retailers. No officials were interviewed, nor consumer representatives, as an impartial report would have done. The truth was, as we know, international cotton prices declined dramatically last year, just the opposite of what the report claimed.
The real estate sector was hit hard by the global crisis, both in our region and across the world. However, while real estate developers in the United States and Europe were on the defensive, some local developers took the opposite approach, aggressively marketing their new big projects. Regrettably, they were aided by uncritical reporting. One TV network put together a multipart program, relying heavily on experts from one real estate developer who was also its main sponsor. The whole series served as a disguised advertisement.
Of course, there has always been tension between journalism ethics and business reporting, probably more than any other kind of reporting. There are many temptations, of course, that could sway reporters, even when they do not mean to. There is also the matter of expertise. New business practices, whether in real estate, banking or financial instruments are not easy to decipher and dissect, causing journalists to rely heavily on their developers for evaluation.
However, the global financial crisis revealed many unethical press practices around the world, when it came to business matters. Those revelations led to closer scrutiny of business reporting, but also to moves in many quarters to implement more rigorous ethics standards. Unfortunately, this soul searching has yet to reach our local press.
After the collapse of the real estate markets in the United States and Europe, many discovered that business journalism had in fact fed the real estate bubble. True, there were doubting voices that warned about inflated prices and shady lending practices, but most reports were of the cheerleading type.
Uncritical reporting about the financial industry overlooked the financial bubble as well. Readers got accustomed to good news that they forgot about the great risks implicit in the new financial instruments.
All of this has led to consistent calls for stronger ethical standards for business reporting, to be used for self-policing by reporters, analysts and news organizations.
Several useful codes have been developed over the years, including: Dow Jones Code of Ethics, Thomson Reuters Code of Ethics, American Business Media Code of Ethics, American Society of Business Publication Editors Code of Preferred Editorial Practices, Associated Press Statement of News Values and Principles, Society of American Business Editors and Writers Code of Ethics and the BusinessWeek Code of Ethics.
However, a code of ethics is of no use if it is not followed. News organizations should rigorously require their reporters and their columnists to abide by the code of ethics it chooses. However, if news organizations are unwilling or incapable of performing this task, peer scrutiny by professional organization should do that.
So far, in our region at least, peer organizations have largely stood silently by. News organizations are rarely if ever taken to task for shoddy business reporting.
Until there is a change, it is up to consumers of business news to try to implement codes of ethics.