In a statement circulated on Monday evening the United Kingdom's Public Relations and Communications Agency (PRCA) announced that London public relations firm Bell Pottinger will be expelled from the PRCA. The expulsion will take immediate effect and constitutes "the most serious sanction" the PRCA can institute, according to the verdict.
The sanction comes after the PRCA launched its investigation into Bell Pottinger's work for Oakbay Capital in South Africa on 5 July, following a complaint from the Democratic Alliance. The Democratic Alliance alleged during that Bell Pottinger had "exploited racial divisions on behalf of the Gupta family".
The powerful industry regulator, with a membership of over 20,000 PR firms, found that its Professional Practices Committee was unanimous in its view that the Professional Charter and Codes of Conduct had been breached, and recommended to the PRCA Board of Management that Bell Pottinger's membership be terminated. The board approved that recommendation unanimously, the report states.
Francis Ingham MPRCA, Director General, PRCA, said: "Bell Pottinger has brought the PR and communications industry into disrepute with its actions, and it has received the harshest possible sanctions. The PRCA has never before passed down such a damning indictment of an agency's behaviour.
"This outcome reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications."
The PRCA has ruled that Bell Pottinger will not be eligible to reapply for corporate membership of the PRCA for a minimum period of five years.
Bell Pottinger has brought the PR and communications industry into disrepute with its actions
"The Committee understood the burden of Bell Pottinger's response to be that the offending element was just one component of a single workstream in a large and complex programme. Further, that the programme was essentially corporate and financial by nature. The Committee tried unsuccessfully to reconcile these assertions with what actually happened in terms of the reaction to the campaign and the level of criticism which it provoked," the statement said.
'The Committee acknowledged Bell Pottinger's eventual response to the problems but felt that a programme designed and managed in accordance with the highest standards of practice in PR and communications could not, and should not, have caused such problems in the first place.'
Importantly, the statement from the PRCA states emphatically that Bell Pottinger is directly responsible for inciting racial conflict in South Africa.
"The Committee found that the nature of the programme depicted in the documents submitted to Oakbay Capital by Bell Pottinger, and as conducted by Bell Pottinger on Oakbay Capital's behalf, was by any reasonable standard of judgement likely to inflame racial discord in South Africa and appears to have done exactly that. The Committee did not find the suggestion that this theme of the campaign and its consequences were unintentional to be plausible. The targeting of white corporate South Africa is a material consideration here."
The PRCA said that Bell Pottinger brought itself, South Africa and the public relations industry into disrepute. 'One outcome was a large volume of highly-critical media coverage of Bell Pottinger's work on behalf of Oakbay Capital, both in South Africa and internationally, which – in the Committee's view – has caused damage to the reputations of both Bell Pottinger and the profession of public affairs and lobbying.'
The targeting of white corporate South Africa is a material consideration here.
On Monday morning, Bell Pottinger chief executive James Henderson announced his resignation from the company. Later on Monday the findings from an independent review conducted by international law firm Herbert Smith Freehills (HSF) LLP into the work done by Bell Pottinger on its Oakbay account in South Africa were released.
It detailed the racially divisive nature of the campaign launched by Bell Pottinger, codenamed the "Economic Emancipation Campaign". The report also found that Bell Pottinger's work on the strategies behind the Economic Emancipation Campaign was created in breach of relevant ethical principles.