The Serious Fraud Office Act 1990 and Journalistic Freedom: a Source-y Problem

Abstract

In October 2010 there was a standoff between the Serious Fraud Office (SFO) and the National Business Review (NBR). The SFO demanded documents and audiotapes relating to NBR reporter Matt Nippert’s investigation into the collapse of South Canterbury Finance. The SFO threatened NBR with a prison sentence and fines for non-cooperation. This was the first time in NBR’s 40-year history that police or other state investigators had demanded journalists’ files. The Serious Fraud Office Act 1990 gives the SFO broad powers to require anyone, including a journalist, to produce documentation, answer questions or hand over information. Potentially, a journalist could be required to disclose the identity of his or her sources for the purposes of detecting and investigating serious fraud. This is what the SFO demanded of Matt Nippert and NBR. The NBR was concerned that handing over information could compromise their confidential sources. The news media play an important role in ensuring that the public is informed on matters of public interest. To continue to provide accurate and compelling stories, journalists need to be assured that they will not be required to disclose the identity of their sources. Confidentiality is a fundamental ethical obligation that journalists must observe; but it is also a vital component for journalistic freedom. NBR sought legal advice and extended an invitation to the SFO to attend a meeting, seeking an assurance from the SFO that they would not invoke their “draconian” powers of document seizure in return for NBR’s cooperation in the investigation. The SFO refused to attend any such meeting and threatened NBR with legal action, eventually forcing NBR to hand over all material relating to the investigation on South Canterbury Finance. NBR did not go down without a fight. Their coverage of the story and their outspoken editorial criticisms of the state of affairs placed considerable pressure on the SFO to justify their special powers, and lead to a vigorous public debate about journalist rights to protect their sources. The Serious Fraud Office Act 1990 contains no protection for confidential media sources. This essay argues that this lack of protection constitutes a serious infringement of free speech (as was claimed by NBR). From a practical viewpoint, this essay considers the negative impact of the SFO powers, in particular the “chill effect.” The essay concludes there is no definitive evidence that suggests that every incidence of compellability will result in a “chill effect” on confidential media sources. The true extent of the “chill effect” varies from case to case. From a legal viewpoint, this essay considers the Bill of Rights, and concludes the SFO powers are unwarranted and are not demonstrably justified in a free and democratic society. The essay argues that although there are strong reasons for requiring such broad powers, this does not excuse the state from ignoring freedom of expression. This right is one of our fundamental civil and political rights essential in a democratic society. What then can the solution be? Section 68 of the Evidence Act 2006, a relatively new provision, provides a statutory exemption to compellability for journalists. The statutory exemption is not an absolute rule of privilege, but it does allow journalists to insist that a judge makes the decision after weighing up various statutory factors. There is no good reason for the Serious Fraud Office Act 1990 to not recognize this provision. This essay proposes an amendment to the Serious Fraud Office Act 1990 to make it subject to s 68 of the Evidence Act 2006. This will allow the courts to recognize journalistic privileges while ensuring that the SFO can continue to exercise its powers efficiently.