Building independent media through public service broadcasting: a case of Ukraine (policy brief)

May 24, 2018

Ukraine is struggling for independent media which provide objective and reliable information. While public service broadcasting (PSB) is seen as the solution for countries lacking objective media, Ukraine was only able to start its creation through the transformation from state media in 2014. After the establishment of the “UA: Public Broadcasting Company” in 2017, several important things have been achieved, including renewal of management, editorial independence and the start of changes in the broadcaster’s structure. However, the financing is still not proper, while editorial independence is under the constant threat from former beneficiaries of state media. This brief presents the current state of the PSB reform in Ukraine, describes its main achievements and the problems it faces, and proposes solutions to the key obstacles on the way to a truly objective media in Ukraine.

The reform (or, to be clearer, the establishment) of the PSB is among the priorities on the agenda of media reforms in Ukraine: it was mentioned both in the Coalition Agreement in Ukrainian Parliament[1] and in the Roadmap of Reforms[2] by the Reanimation Package of Reforms – the largest coalition of Ukrainian pro-reform NGOs. As Ukrainian media environment is controlled by a couple of oligarch-owned media groups,[3] who often use their channels as tools for the propaganda of their own views on current events, the creation of the able PSB is crucial. The PSB is the only visible way to return fair and objective reporting on issues of public interest to Ukrainian media.

This brief is aimed at providing insights as to the current state of public service broadcasting reform in Ukraine. While the major first steps have already been made, including the merger of all former state entities (except for one) into the Joint Stock Company “UA: Public Broadcasting Company” (hereinafter – UA: PBC), certain crucial issues are still on the table. These issues include the need to ensure proper financing and editorial independence of the PSB, as well as the finalizing of the recruitment of new staff and merger of certain state-funded media with the UA: PBC. The proposed solutions will involve legislative amendments to the current PSB law in the sphere of financing and organizational structure of the Ukrainian UA: PBC, at the same time upholding the need to leave the “editorial” provisions of the law inviolable and working.

History of the PSB in Ukraine

It shall be mentioned that the obligation of Ukraine before Council of Europe to make state-funded media editorially neutral dates back at least to 1999.[4] It was clarified further on in PACE Resolution 1466 (2005) “Honouring of obligations and commitments by Ukraine” more specifically as the requirement to “transform the state broadcasters into public service broadcasting channels in line with relevant Council of Europe standards”.[5] However, the establishment of the PSB has been already planned prior to such commitments in the mid-90s and the necessary law was even adopted in 1997.[6] Unfortunately, this law has never become working in fact due to resistance among the Ukrainian authorities and its own declaratory character. Another try to pass the legislation enabling the reform was made in 2005 after the Orange Revolution but was failed by the representatives of the then pro-Maidan majority in the parliament. Discussions in 2010-2013 led to the creation of the compromised framework draft law. Hence, the reform had only commenced in 2014 with the adoption of the aforementioned draft, which currently became the Law On Public TV- and Radio-Broadcasting of Ukraine on 17 April 2014[7]. It was further amended in March 2015 and May 2016, notably, with the help of CEDEM lawyers, with the necessary changes leading to the effective start of the reforms inside the company.

UA: PBC as a legal entity

Formation

The first stage of the reform involved the structure of the PSB as the legal entity. Prior to that, Ukraine hosted the system of state-funded broadcasters. Such system existed in the form of regional broadcasters and included district (oblast’) state TV- and radio-broadcasting companies (so-called DSTRCs, located in every oblast’ of Ukraine except for the Kyiv oblast’), 5 more regional STRCs (STRC “Krym”, Kyiv Regional STRC, Sevastopol Regional STRC, Novhorod-Siverskyi Regional STRC “Siverska”, Kryvyi Rih Regional STRC “Kryvorizhzhya”), National Television Company of Ukraine, National Radio Company of Ukraine and STRC “Kultura”. Accordingly, this system comprised of 32 legal entities – which involved broadcasting of 56 different TV- and radio channels.

This entire system of broadcasters was merged to create a united UA: PBC. This process was completed and formalized in late 2016 with the adoption of the UA: PBC Charter by the Cabinet of Ministers of Ukraine, as well as the adoption of other internal statutes, co-drafted by CEDEM experts (including the UA: PBC Charter, Regulations on the Election of the Head and Members of the UA: PBC Board, the UA: PBC Board Regulation, etc. However, the merger of all the entities is not completed yet: “Ukrtelefilm”, which is under transformation from the State-Run Enterprise “Ukrainian Movie and Television Studio “Ukrtelefilm”, remains unattached. The latter was to join the newly formed PSB together with the other entities. However, due to the sabotage of the reform inside the company and large issues with debt proceedings in Ukrainian courts, the legislation was amended in May 2016 to enable the merger between the two joint stock companies after the resolution of problematic issues.

New governance system

The second stage of the reform included the creation of the new governance system. The Supervisory Council of UA: PBC was already appointed in late 2015 and held informal meetings even prior to the formal establishment of the company as a legal entity. The Supervisory Council comprises 17 members: one representative of each parliamentary faction and group of the current Verkhovna Rada of Ukraine (8 in total) and nine members nominated by non-governmental organisations and associations acting in different spheres, pertaining to the PSB activities – from sports to disabled persons’ rights groups. It held its first formal meeting on 19 January 2017 and, inter alia, started the process of election of the new management.

The Board of the UA: PBC was elected on the basis of the open competition, where 7 candidates took part. The Regulation on the Election of the Head and Members of the UA: PBC Board was prepared by CEDEM lawyers. On 10 April 2017, Zurab Alasania was elected by the Supervisory Council on the secret ballot as the Chair of the Board. The members of the Board were nominated by the newly elected Chair of the Board and later elected on 15 May 2017. It is important to note that Mr Alasaniia competed with the Head of the State Committee on TV- and Radio-Broadcasting Oleh Nalyvaiko, who was considered to be representing the authorities. Therefore, the election of the independent management shall be seen as the huge success of the reform.

After these elections, the Board started to optimize the inner corporate structure: the Directorates were established, as well as the system of regional hubs was introduced. The aim of an introduction of these hubs is to cut down the unnecessary costs which were irrationally spent previously. It will also allow establishing strong regional broadcasters with major editorial independence and high professional qualities of journalists to change the system, which largely remains a system of DSTRCs in its core values.

However, the major obstacle on this stage is threefold: the resistance from the DSTRCs management, former beneficiaries of DSTRCs “services” on the local level and the DSTRCs staff. The management of some former DSTRCs sees the reform as a threat for them rather than the opportunity: being used to certain corrupted practices, they cannot implement new PSB values into their daily activities and even distinguish between state and public service broadcasting.[8] The beneficiaries of DSTRCs services are mostly local politicians, who used the broadcasting time of these channels as a podium for their political advertisement and the so-called “jeans” (a term, used in Ukraine to illustrate the situation where politicians, political parties or oligarchs are unofficially paying the broadcasters for aired time on screen, this time being used for the propaganda of the benefactor of such transaction). As a measure of last resort, they are currently using their powers to stop the optimization of the PSB structure via appeals to the President and the government to, for example, “protect the channel in the interests of Ukrainian nation in times of war”.[9] This also provokes appeals to different authorities, calling for action to “prevent the destruction of the system”.[10]

So, the resistance of the management and staff is largely based on the premise that they will lose their occupation. It is notable that the competition for managerial positions of UA: PBC local branches was held and led to the solid renovation thereof.[11] At the same time, the opportunities of hiring new staff by the PSB are limited by financial and administrative obstacles. While the cuts have already begun and from the start of the reform the amount of staff has lessened from 10223 to 6575 by the end of 2017,[12] it is still not enough. The amount of staff needed for a sustainable functioning of the PSB is approximately 3680. However, Ukrainian labour legislation provides solid safeguards to workers, which means that it is impossible to dismiss everyone at once: due to Article 40 of the Labour Code,[13] when the entity is being reorganized, it is only possible to dismiss the worker after he/she denies the option to move to another position inside the company. The approximate cost of dismissal of 100 persons including all the social payments is around UAH 34,000,000, which equals EUR 1,100,000. It is also worth mentioning that under the collective agreement, current management of UA: PBC cannot dismiss more than 3% of staff during the year. This demands the adoption of the amendments to the collective agreement between the parties, on the condition that these amendments will not lead to any blatant dismissals in future. It also brings up the question of adequate financing of the PSB for the latter to comply with the labour legislation.

Funding of the UA: PBC

Current provisions of the Law on Public TV- and Radio-Broadcasting provide guarantees for the financing of the PSB. Under Article 14.3 of the latter, the State shall ensure proper financing of the UA: PBC that will have a separate line in the State Budget of Ukraine and shall make no less than 0,2% of the expenditures of the State Budget of Ukraine for the previous year.[14] This can also be supplemented by the profits obtained from selling PSB’s programming, sums from local budgets, prospective fees for PSB services and other sources, not prohibited by law, including advertising. For instance, as follows from the inside information from UA: PBC, 80,000,000 UAH was received from advertising during 2017.

The financing issue lies within the sphere of sustaining the necessary sum from the State budget. While the guarantee itself looks strong, the Parliament for the second year straight fails to fulfil the provision of the law. In the budget for 2017, which is the first official year of UA: PBC, the sum for its functioning was established at the rate of UAH 970,000,000; however, the 0,2% part is approximately UAH 1,280,000,000.[15] While the obligation to review the budget after the first semester of 2017 was prescribed in the Law on 2017 State Budget,[16] the calls of the civil society to ensure proper financing were ignored.[17] The argument can be put against UA: PBC that it also administered UAH 455,700,000 for the Eurovision Song Contest; however, in line with Article 14.3 of the Law on Public TV- and Radio-Broadcasting, the 0,2%-sum shall be prescribed for the specific line for the financing of the PSB in the budget, which was not done.

More importantly, the Law on 2018 State Budget, adopted in late 2017, prescribes the expenditures on the PSB on the level of UAH 776,563,100 which is less than in 2017 and almost 50% less than 0,2% rate established by the law (approximately UAH 1,500,000,000).[18]

This situation calls for the change of the system of state financing of the PSB. While advocacy action shall be made in order to ensure the proper amount of money for the broadcaster for 2018 and further on, a new scheme must be established for the future. To ensure its independence from an external action on behalf of authorities, it must stem from the source, payable from private entities such as broadcasters and telecommunication service providers. In the foreseeable future, the best solution is to allocate the portion or all the revenue gained by the authorities from the licence fees paid for the use of frequencies.

Ensuring editorial independence of the UA: PBC

Editorial independence of the PSB is the key factor which distinguishes it from the classic state-run broadcasting channel. The ability to provide objective news reports and be a truthful source of information is a must for the PSB in Ukraine to stand on its feet. The editorial independence is currently ensured both by the legal provision and by the practice of the UA: PBC. On the legislative level, Article 3.2 of the Law on Public TV- and Radio-Broadcasting declares that public authorities and local self-governments, their officials or officers, as well as NGOs shall be prohibited from intruding into the UA: PBC operations to impose censorship, prior control, or illegally manipulate the content of the information distributed by it. Additionally, Article 18.2 of the law protects UA: PBC from being obliged to cover the activity of executive authorities, other state authorities, local self-government bodies, or their officials.[19] The process of election of the new editorial board was completed.[20] The UA: PBC Editorial Charter was further adopted on 27 February 2018.[21] On the level of programming, the broadcaster hosts some of the most critical projects on Ukrainian screens: “Slidstvo.Info” and “Schemes: Corruption in Details” – two investigative journalism programmes, run on a weekly basis. However, the ratings still remain at a low point, as the trust to the PSB is only beginning to be established among the wider Ukrainian audience.

Whereas the editorial independence of the UA: PBC can be seen as a huge success and the promotion of local politicians through the use of state budget was eliminated, such independence is prone to external attacks. The state authorities are still reluctant towards an independent editorial policy of the local branches of the broadcaster – and this can be evidenced both by the improper financing of UA: PBC and by the tries to impose on UA: PBC certain obligations related to broadcasting of MPs.

The latter can be confirmed by the recent Draft Law #6681, proposed by the leader of the second-biggest faction of Verkhovna Rada. Therein, the MP proposes to amend Article 18.2 of the Law on Public TV- and Radio-Broadcasting in order to impose upon the PSB the obligation to cover the activities of state and local authorities.[22] This proposal poses high danger for the editorial independence of the broadcaster and may seriously hamper the reform.

Another similar proposal was transferred into the parliament in the text of the Draft Law #7395, which gives MPs the right to have their actions highlighted by the PSB (25 minutes of screen time for reporting on his activities for each MP, elected in the local district or attached to a certain region).[23]After the pressure by the civil society, this proposal was dropped in February 2018 and recalled from the Parliament by the authors.

Conclusion

The formation of the PSB in Ukraine is a windy process. While certain positives had already been achieved and the overall process of changes commenced after the years of waiting, certain changes are still needed to be implemented. Without such changes, the risk of PSB becoming a slump and a media, which serves the interests of the holders of power rather than the society, is growing. In our view, to ensure proper functioning of the UA: PBC in the nearest future, the following crucial steps shall be undertaken:

“Ukrtelefilm” shall either be merged with UA: PBC and become its production centre or be excluded from the text of the law and the reform;
amendments to the collective agreement within UA: PBC shall be made to allow new management to hire new staff, acquainted with the principles of PSB and ready to implement its values into the new programming and governance;
Ukraine`s government must fulfil the provisions of its own Law on Public TV- and Radio-Broadcasting and provide the necessary funding to UA: PBC in full for 2018 and further on;
it shall be ensured that UA: PBC does not rely upon external decisions on its funding through amending current legislation, allowing the broadcaster to be funded through re-allocation of the frequency licence fees;
harmful legislative initiatives which undermine the editorial independence of UA: PBC must be prevented from adoption.

[1] http://zakon3.rada.gov.ua/laws/show/n0001001-15

[2] http://rpr.org.ua/wp-content/uploads/2016/09/RPR-Roadmap-of-Reforms-for-Ukraine.pdf

[3] http://ukraine.mom-rsf.org/

[4] http://assembly.coe.int/nw/xml/XRef/Xref-XML2HTML-en.asp?fileid=16671&lang=en

[5] http://assembly.coe.int/nw/xml/XRef/Xref-XML2HTML-en.asp?fileid=17377

[6] http://zakon2.rada.gov.ua/laws/show/485/97-вр

[7] http://zakon4.rada.gov.ua/laws/show/1227-18/

[8] http://stv.detector.media/reformuvannya/movlennya/valentin_scherbachov_zaklikav

[9] http://www.cg.gov.ua/index.php?id=261408&tp=0

[10]http://www.lviv.tv/vazhliva-novina/zvernennya-trudovogo-kolektivu

[11] http://1tv.com.ua/news/channel/97432

[12] https://suspilne.media/documents/80