Bell Pottinger: British PR firm stripped of trade body membership for ‘fuelling racial tensions’ in South African

Expulsion from the PRCA will not stop the firm from taking on new clients but the reputational damage is expected to be 'enormous'

Josie Cox
Business Editor
Tuesday 05 September 2017 08:00 BST
The DA blamed the PR company of working to 'divide and conquer the South African public by exploiting racial tensions'
The DA blamed the PR company of working to 'divide and conquer the South African public by exploiting racial tensions'

One of London’s best-known public relations firms has been stripped of its membership of the industry’s trade association after being accused of stirring up racial tensions in South Africa.

In a damning statement, the Public Relations and Communications Association (PRCA) said on Tuesday that Bell Pottinger — whose clients range from multinational businesses to governments, public sector organisations, entrepreneurs and some of the world’s richest individuals — had “brought the PR and communications industry into disrepute”.

Bell Pottinger’s chief executive, James Henderson, resigned over the weekend, and while the PRCA’s move will not prevent the company from conducting business, some have said that it could inflict considerable reputational damage on the firm. Several clients have reportedly already cut ties with the company.

The accusations relate to Bell Pottinger’s year-long relationship with Oakbay, a company controlled by the wealthy Gupta family of Indian-born businessmen, which has widely been accused of exerting undue influence over South African president Jacob Zuma.

The PRCA launched an investigation into Bell Pottinger following a complaint from South Africa’s main opposition party, the Democratic Alliance (DA). The DA blamed the PR company of working to “divide and conquer the South African public by exploiting racial tensions in a bid to keep Jacob Zuma and the ANC in power”.

The allegations reportedly stemmed from leaked emails that suggested Bell Pottinger had worked with Oakbay to create a “narrative that grabs the attention of the grassroots population”.

An email published in South African media earlier this year claimed to show that Bell Pottinger said the campaign needed to stress the continued “existence of economic apartheid”.

Bell Pottinger left the Oakbay account in April, and in July the group said that it had fired one partner and suspended another, as well as two other employees, as a result of the campaign. Mr Henderson at the time said he was “deeply sorry that this happened”.

On Monday, the PRCA said that it had “imposed its most serious sanctions on Bell Pottinger”.

The firm’s membership of the PRCA has been terminated with immediate effect and Bell Pottinger will not be eligible to reapply for corporate membership for a minimum period of five years. It cannot appeal the decision.

“Expulsion from the PRCA does not stop Bell Pottinger from taking on new clients,” Francis Ingham, director general of the PRCA told The Independent. He said that the PRCA’s decision “reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications”.

In response to the decision, Bell Pottinger said it “accepts that there are lessons to be learned but disputes the basis on which the ruling was made”.

“The overwhelming majority of our partners and employees played no part in the Oakbay Capital account and have not been accused of breaching the PRCA code. Many of them will now consider applying for individual membership,” said a spokesperson.

Bell Pottinger said it would now “refocus on delivering outstanding work for our clients and looking after our people”.

The PRCA initially launched its investigation on 5 July. Bell Pottinger and the Democratic Alliance were able to present written and oral evidence at a hearing of the PRCA’s Professional Practices Committee on 18 August.

The committee was unanimous in its view that the professional charter and codes of conduct had been breached, and recommended to the PRCA’s board of management that Bell Pottinger’s membership be terminated. The board approved that recommendation unanimously. Bell Pottinger was given five days to appeal the decision and submitted an appeal to the PRCA. On Monday, the PRCA’s board of management made its final decision.

Separately on Monday, international law firm Herbert Smith Freehills published the findings of an independent review into the case, in which it accused Bell Pottinger of failing to exercise “extreme care” over the campaign.

“[Bell Pottinger’s] senior management should have known that the campaign was at risk of causing offence including on grounds of race,” the report says.

“In such circumstances, [Bell Pottinger] ought to have exercised extreme care and should have closely scrutinised the creation of content for the campaign. This does not appear to have happened.”

South Africa, which is the continent’s most industrialised economy, abolished apartheid more than two decades ago, but many living there are still frustrated by lasting inequality.

Black people make up about 80 per cent of the 54 million-strong population, but a lot of the land and a large proportion of businesses remain in the hands of white people, who account for around 8 per cent of the population.

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