Examination of Witnesses (Questions 220-239)
11 NOVEMBER 2004
MR RICHARD
HOLMAN AND
MR GARY
SMART
Q220 Mr Challen: How many one-off events
are there? I do not quite understand the business, you appreciate.
Mr Smart: There could be one a
week, 52 a year. There are more on some weeks, two or three a
week sometimes.
Q221 Mr Challen: But if you found that
somebody had broken that licence you would not accept them again
as a promoter? Would that be the case?
Mr Smart: We are quite happy to
pass on their details if we receive a letter saying the posters
have been seen for the event and it is not our event. We would
be quite happy to pass on the details of the person putting them
up and they obviously have to react the same way we would when
we received that notice. No, we would not stop them from hiring
the club.
Q222 Chairman: Is fly-posting a reaction
to the cost of legitimate advertising? It costs a lot of money,
I imagine.
Mr Smart: It is not really. We
do a lot of legitimate advertising. We are one of the most prolific
clubs in the world but we advertise everywhere we want to advertise.
Fly-posting is just a very important added extra.
Q223 Chairman: Do you know how important?
Have you done any market research on who comes and for what reason;
how they learned about the event?
Mr Smart: No, we have not.
Q224 Chairman: You just know?
Mr Smart: You talk within the
industry and people say, "I saw your poster", "I
saw your flyer", "I picked up on your flyers",
whatever. If there is a big event on and you have got some activity
going on outside it to promote another event that you have got
going on, it has got to be as direct marketing as possible.
Mr Holman: Fly-posting is only
part of the marketing we use. We use e-mails, we use text messages,
we use entries in What's On-type magazines. It is part
of an armoury. It is not the way we spend all the money and therefore
we are not running on a virtually zero marketing budget by using
fly-posting.
Q225 Chairman: What do you say to the
people who feel that fly-posting contributes to environmental
degradation in an area? It looks tatty and creates an atmosphere
that is tending towards being a bit squalid and therefore tending
to encourage rather more serious forms of crime: do you buy that
at all?
Mr Holman: Yes, we do. Generally
we try to meet our obligations. For instance, we have bought our
own street cleaning machines and after club nights we go round
and make sure that the streets are probably cleaner after the
nights when we have had 2,000 people coming out of the club than
they were before, with no disrespect to Southwark Council. They
do keep the streets very clean. That is an illustration of the
way we take our responsibilities. Certainly if we felt that anybody
who was fly-posting for us had been behaving in an irresponsible
manner, in a way that caused councils to react, we have always
responded as rapidly as possible and taken the posters down when
we have been told to. We have talked to the fly-posting people
if they are clearly going into areas they should not have done.
We have cut back on our activity in fly-posting because it has
become a sensitive issue with the local authorities.
Q226 Chairman: Have you ever used the
services of a company called Diabolical Liberties?
Mr Smart: No, we have not used
them. As far as I am aware it is individual promoters who allocate
these posters for companies. London is pretty much split into
quarters. If we did a poster run for an event the posters would
be split four ways, but one is not Diabolical Liberties, no.
Q227 Sue Doughty: I am quite interested
in the impact on the business if you are fined. We had Thames
and Anglian Water both in here, very different sorts of business,
of course. They on the face of it claimed to have a good record
on environmental crime but when they get fined it very much hits
them in the long run because if somebody does a trawl of their
businesses there is something on the record and that is a very
big no, so in terms of viability of the business it has had a
disproportionate impact because the fines themselves are fairly
insignificant compared to their turnover. What do you think is
the pressure on you to comply with regulations? Is there any pressure
apart from the fact that somebody is going to do you for it? Are
there any commercial pressures?
Mr Holman: They are not very great.
We are not a public company. It is not that Ministry of Sound
is not high profile but we do not have quite the sensitivity of
large companies with shareholders and there are not any City pressure
groups. Clearly, we do not like paying fines and we always try
to avoid paying fines if we can. If we are given 48 hours to get
the posters down we get them down. Clearly, if we were being hit
on the bottom line and our profit was being seriously affected
by draconian financial penalties we might react more rapidly,
apart from banning the whole thing, which is presumably where
we may end up.
Q228 Sue Doughty: Is this something to
do also with the image of your organisation which has been very
sparky and has the appearance of being slightly anarchic? That
is your market place?
Mr Holman: Yes.
Q229 Sue Doughty: So that that market
place would almost work directly against something which was very
law-abiding, very respectable. That is not where you are in the
business world, is it, being respectable?
Mr Holman: Precisely.
Mr Smart: In a way, although more
recently pressure has been stepped up to stop this, we have discussed
it with the people we use and have tried to be conscientious as
to where the posters go up and we have been informed that the
sites they are using now are okay to use. Having said that, we
have not received any fines for quite some time. Beforehand it
was very random. As you said, there were posters up. Coming under
Waterloo Bridge, for example, both sides would be solid posters.
Now it is clean, so it is obviously a site that they do not use
any more, and we have not received any notices recently.
Q230 Sue Doughty: If we were to move
towards dedicated advertising areas, and we touched on that earlier,
which clubs could use for their posters, would this be an acceptable
way forward? Do you think it could work? Would it take the posters
off the places we do not want them and put them in other places?
If you had your notice boards and young people could go to that
place to find out what you were doing, could it work?
Mr Smart: In an ideal world it
would. You sometimes see these formal sites, not the huge ones
that the massive companies buy, but the formal sites in nice framed
areas. They do not really work. For example, if the building companies
would allow the hoardings to be used to create a framework then
you could pay to go on those sites because they are good, visible
sites, but if it was too formal it would just be an avenue of
information that you would have to cease because it would not
have the effect.
Mr Holman: I noticed in your report
a reference to Leeds where they had drums and we would be interested
to know whether that has worked or not. That sort of focused business
area where those sorts of posters can be placed would seem to
me to need to be very effective. People who come to our events
want to know what is going on and we need to find the best channel
for reaching them.
Q231 Chairman: Certainly Leeds City Council
believe it has been very effective because the quid pro quo
for putting up the drums allows people to stick their posters
all over that but they are very hard on fly-posting elsewhere.
Mr Holman: It seems very logical.
Q232 Mr Challen: Do you have an environmental
policy or a corporate social responsibility policy? These are
now getting more and more evident in the world of commerce.
Mr Holman: We do not have a written
policy, no. There are a number of policies that we are in the
process of writing but not specifically those. We are trying to
move more towards a full corporate governance regime but at this
moment, no, we do not.
Q233 Mr Challen: Given that some of your
activities, perhaps on a diminishing scale, do involve activities
which are illegal, if you like, or at least degrading to the environment,
do you not think you ought to have such a policy clearly set out
that people can look at and hold you to account on?
Mr Holman: That is probably correct.
Writing policies is something that does not seem to add much to
the business but this sort of issue and also the human resource
issue means that we are having to write more policies. I still
sometimes question whether a written policy achieves all that
much without the full policing behind it.
Q234 Mr Challen: In that case do you
have somebody with a specific duty within the company to monitor
these areas?
Mr Holman: No, we do not at the
moment. I cannot see us having somebody whose job it is to monitor
adherence to any environmental policy. It would not be a full
time job unless they had a motor scooter and rode round London
looking for illegal fly-posting.
Q235 Mr Challen: It would be very hard
for your company to assess the impact of fly-posting. Perhaps
the only way that you would learn more about it would be when
people complained, which is a very negative way of assessing its
impact, is it not, or if you have to go to court?
Mr Smart: The attention and pressure
that has come on is quite recent. I have been in the club for
22 years and fly-posting in every shape and form has always been
part of what we do and no doubt what is done everywhere in the
world for clubs. The pressure is only coming on now and obviously
we are reacting to it. Our first thing was to try and ensure that
the companies that do our fly-posting think about what they are
doing and wherever we get a warning we make sure we do not do
those areas, and the sites they use are in their opinion legal
or they own the sites. If that is not the case then obviously
that site goes. It is going to get to a stage, obviously, where
we just cannot do it and alternatives, if there are any, need
to be looked at. The pressure is very recent, is it not?
Q236 Mr Challen: It is, I guess. Would
there be any value to the company to say, "We are the first
in this field to go down this environmental route"? We have
been told that a lot of young people are rather fond of environmental
causes and whilst we have heard that promoting an anarchic image
may have its benefits in one area perhaps this is something you
ought to consider.
Mr Holman: We will take that up.
I think life is moving in that direction and I will suggest that
we look at that.
Q237 Mr Challen: The Environment Agency
said they believed that some companies had set up funds specifically
to pay the fines incurred brought about by companies' environmental
offences. Do you have such a fund?
Mr Holman: We do not. It would
be tiny if we did because we have very few fines. As we have said,
where we get notices that a poster is offensive we take it down.
If the council is clearly concerned and is launching a broader
attack then we will reduce or stop fly-posting in that area. They
penalties we have paid might have been £500 in a year, if
that.
Q238 Mr Challen: Do they act as a deterrent,
these fines?
Mr Holman: In the sense that £500
matters, yes, but it is not material, but they do matter in the
sense that we then try to avoid offending again. If we do get
warnings from the councils we will stop fly-posting or find out
what sites they have been on.
Q239 Mr Challen: Is it the approach in
your experience of local authorities to come to you first to ask
for posters to be removed rather than saying, "We are going
to take you to court"? Is there in that sense a co-operative
approach from councils to try and remedy the problem, or do they
prefer simply to issue a summons?
Mr Smart: They try and remedy
the problem, definitely, and we are supporting that. They are
not taking a particularly aggressive approach. It is just a fine.
Mr Holman: Normally it is a stern
letter—48 hours or there will be a bigger penalty or court
action.
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