BRIEFING NOTES
COPYRIGHT AND PERFORMERS PROTECTION ACTS: NEEDLE-TIME (PAY FOR PLAY)
1. Introduction Since 1995 stakeholders in the copyright and neighbouring rights (performing rights) regime, have been debating whether royalties which accrue from the recorded rights of performing artists (needle-time) should be paid to the performer. The debates were centered much on performers and recording companies’ interests. The debates promoted the issue of needle-time at the expense of other rights in this regime. Further the debates failed to address how this right would be exercised, i.e. giving emphasis on collective management of this right (like labour rights). Furthermore, the debates ignored to address the issues of the percentage to be distributed amongst the performers and recording companies. Furthermore, although the power relations amongst the performers and recording companies is skewed towards the latter the debates chose to leave the intervention of the government out of the equation. Really, market forces cannot be left to determine development of this regime. Furthermore, the Independent Communication Authority of South Africa (ICCASA) needs to address the issue of local content if performers are to be uplifted. Furthermore training and development of artists need to be brought into equation. It is true that the issue of needle-time on its own will not advance the course of copyright and neighbouring rights regime. The purpose of the amendments therefore need to be accompanied by other related amendments to other sections, but this does not necessarily mean it must happen simultaneously.
What DTI wants to achieve can be categorized into two; namely short term and long term gains, both accompanied by tangible economic benefits to right holders, in particular, creators of these rights (see under Economic rationale, paragraph 5 below).
2. Short Term In the short term, the Minister will issue regulations, which will address the following:
► needle-time royalty must be regulated by these regulations, whether the right is exercised collectively or individually (minimum rate imposed by regulations);
► a minimum of 50% royalty should be payable to the individual or his/her collecting society;
► 10% - 15% of the 50% may be deducted for administration by a collecting society;
► the constitution of collecting societies must provide precisely how collection of fees and their distribution are to be done;
► a Board should be appointed for the determination of tariffs;
► collecting societies must be given licenses to operate in this area, on terms and conditions and if these conditions and terms are breached, the license may be withdrawn (depending on the degree of the breach);
► collecting societies of different jurisdictions would enter into reciprocal agreements which govern repertoires;
► collecting societies should submit their constitutions, statements of accounts to the South African Patents and Trade Marks Office (SAPTO) for monitoring;
► broadcasters, performers and recording companies should form separate organizations if these rights are to be exercised appropriately; and
► the tariffs should be increased, progressively, and annually, negotiations (it may be a two year or three year negotiation circle).
· In view of the above, it is clear that the needle-time royalty, at least, would address in the short term, the plight of performers. The fact that collecting societies are allowed to operate within the confines of the law is a deterrent to exploitative tendencies by non-statutory societies. The applicable tariff, 50% distribution to performers, accountability to members and to SAPTO, and determination of local content by ICCASA, are mechanisms to assist in addressing the power imbalances amongst the parties.
For general functioning of collecting societies, see Annexures A, B, D and D and the purported regulations will be guided by such models;
4. Long term benefits On 6 December 1999, SAPTO convened a workshop of stakeholders, with a view of acceding to the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT), and 90 representatives from copyright stakeholders attended. At the end of the day, there was an agreement that the following should take place:
► that an overhaul of the copyright and neighbouring regime needs to be entertained before accession is entertained. The rationale for this is that the "beneficiaries" of the copyright and neighbouring rights regime are not rights holders or owners, but recording companies, SABC and other intermediaries;
► that the collective management of copyright and neighbouring rights regime should be addressed to cater for all rights (copyright and neighbouring rights); and
► that e-commerce should be addressed in its entirety.
In view of the above, DTI couched the proposed amendments to capture the issue of needle-time within the confines of collective management as practiced in other jurisdictions, e.g. Spain, Germany, Switzerland, Bulgaria. This means that DTI has to separate issues in a sense that for collective management of other rights, appropriate amendments to these two legislations are to be effected. These amendments will be tabled before Parliament. On 21 and 22 May 2001 a workshop on the collective management of copyright and neighbouring rights was held at Pretoria Hof Hotel. Two hundred and sixty (260) persons attended and the outcomes of the workshop are as follows:
► that collective management should apply to all rights under the copyright and neighbouring rights regime;
► the state needs to intervene by providing a legislative framework for collective management to thrive;
► a Board should be formed to regulate rates and tariffs;
► local content must be closely monitored by ICCASA;
► that all stakeholders should form different collecting societies in order to regulate different rights;
► that universities’, technikons’ principals must start to negotiate with authors collecting societies and enter into contractual arrangements like in Canada;
► that the state should monitor aggressively the conducts of collecting societies whether they are operating within the confines of the law;
► that collecting societies should train and develop their members;
► that South African collecting societies should enter into reciprocal agreements with foreign collecting societies on the regulation of repertories, otherwise no fees should leave the country and the money should be used for skills and development of right holders; and
► finally that DTI should institute a commission of enquiry to conduct an impact study of the intellectual property regime to the South African economy.
5. Economic rationale for legislating for collecting societies
The Copyright Act, 1978, is amongst the best in the world regarding the protection of rights and related rights. The Performers Protection Act, 1967, is also amongst the best in the world regarding protection of performers rights.
However, problems pertaining to this entertainment industry, are many, and some of them are:
► Copyright owners and neighbouring rights owners do not know the provisions of the law which regulate them. This leaves them vulnerable during negotiations with parties such as the broadcasters, recording companies, producers and managers of their rights;
► Copyright owners and neighbouring rights owners cannot negotiate good contracts with institutions or individuals mentioned above. This encourages them to enter into contracts which even assign or transfer all the rights to the above institutions or individuals. This makes them to be in servitude perpetually;
► The abovementioned institutions end up owning these rights and make a fortune out of them. The above institutions can market these rights and derive millions of rands, but are not bound to transmit any benefit to any person since they are assigned or transferred wholly to them. There is a public outcry against this practice, but without changing the law, nothing, will ever change;
► Copyright owners and neighbouring rights owners, are disillusioned because of these practices and are requesting to be treated as workers in terms of the Labour Relations Act, 1956. This is not a route to follow! In terms of the Copyright Act, where a copyright is developed by an employee during the existence of an employment relationship (contract), the copyright belongs to theemployer. This means that an employee does not have a claim over such rights. If copyright owners are trained to market themselves and to negotiate contracts, they wouldn’t be asking for this;
► The Copyright Act and Performers Protection Act are silent as to the collective management of the relevant rights. This scenario created situations where the abovementioned institutions may agree amongst themselves to form collecting societies to manage rights which might have been transferred to them by "owners" as reasoned above. Where collecting societies are independent from these bodies, they may enter into a relationship which has lost the texture of fiduciary relationship with members and therefore disclosure of information to members may dispute into thin air;
► In terms of the Copyright Regulations, for an example, the copyright owner is entitled to only 5% of any royalty, which might have been collected. This situation is unacceptable!; and
► There is a need for the State to intervene by way of legislating for the creation of collective management (bargaining) of these rights. By doing this, owners of these rights will be empowered in the following manner:
rights will be managed collectively like in trade unions;
negotiating skills of contracts will be enhanced;
disclosure of information and fiduciary relationship will be enhanced;
Minister will issue regulations for regulating the conduct of collecting societies;
50% of the royalty collected will belong to, e.g. performer;
accountability to members and the state (DTI) will be enhanced; and
DTI will issue licenses to collecting societies to operate and if certain terms and conditions are breached, a license will be withdrawn.
► In the Latin American region, they have formed a regional collecting society and the money which is collected annually is $90m. The Caribbean Islands are going to follow the same route since they are very rich in copyright and neighbouring rights, e.g. music.
► All developed countries have collecting societies, with a limited intervention by the State, but they are regulated by acts of parliament. This is so in certain developing countries.
In view of the above, it is proposed that the proposed amendments to section 9 of the Copyright Act, 1978, sections 5 and 8 of the Performers Protection Act, 1967, be amended. Section 1 of the Performers Protection Act deals with definitional issues and a performer also includes a singer who performs artistic works or expressions of folklore.