Copyright Review Commission Report - ICT Law and Regulation ...

we believe is fair. If the tariff was half of that it would be R100 million. So, if you want a ballpark figure of broadcasters,it is somewhere between R100 million and R200 million a year and we believe on legal advice that the claim isbackdated to 2002.(It must be pointed out that this is Mr Lister’s view and that the NAB does not agree.)3.2.10. Mr Lister also said that in their most recent application to court, NAB's senior counsel conceded that theaccumulated claims against the broadcasters are of the order of R1 billion. Mr Lister said that, in its most recentreport, the SABC contended that the amount in dispute with the national broadcaster is R132 million. Inevidence given before the CRC, the representatives of the SABC said the broadcaster had provided in its booksfor a liability under this head of R52 million, with an extra R35 million as a contingent liability. The amount ofR52 million was neither in a separate account, nor was it ring-fenced.3.2.11. In view of the fact that the Tribunal is seized of the matters and the sub judice rule applies, it is not appropriatefor the CRC to express an opinion on the royalties payable, the date from which they are applicable, or whetherany ‘escrow’ payments are to be made in the interim. What is clear, however, is that whatever the Tribunal maydecide, a substantial amount of money should become available to performers whose sound recordings havebeen broadcast as well as to the owners of the copyright in the sound recordings. It appears that those entitledto whatever is owing them have been kept out of their money for an inordinate period of time because of whatlooks like a prolonged filibuster designed to postpone the day when broadcasters will have to pay needletime. Ifthis is the case, it is unfortunate that the main beneficiary of this alleged filibuster is the national broadcaster. Ifthe Tribunal judgement goes against the broadcasters, it is likely that they will seek to appeal (as is their right)and this may further delay the payment of needletime royalties by another two years or more. Even if paymentinto an ‘escrow’ account is ordered, distribution will not be possible until the matter is resolved.3.2.12. A factor that has led to the delay in resolving the matters in the Copyright Tribunal is that it is presided over by ajudge of the North Gauteng High Court who, as far as the Tribunal is concerned, is a part-time judicial officer.According to Mr Lister, the Tribunal could not sit for a period of approximately six months because of the illnessof the judge dealing with the matter.3.2.13. Royalties payable in respect of ‘mechanical rights’ (i.e. rights falling under Section 9 (a) of the Copyright Act) arecurrently collected by SAMRO and NORM, an incorporated association collecting mechanical royalties on behalfof about 300 South African music publishers and composers. Originally, the sole licensing body in South Africawas SARRAL, which is now under liquidation. During the 1990s, NORM started licensing and collecting licencefees on behalf of its members. From 2002 onwards, the SABC paid NORM and SARRAL for mechanical rights.According to the evidence given to the CRC by representatives of the SABC and NORM, NORM and SARRALsubmitted monthly invoices to the SABC, which were paid. There was no written agreement between the SABC,NORM and SARRAL. Instead there was what one of the SABC representatives described as “a gentlemen'sagreement”. The SABC representatives were unable to explain how the SABC auditors were able to satisfythemselves each year that the amounts paid were correct. From 2002, the SABC paid NORM monthly amountsof R458 000; there was no increment of any kind. In September 2009, the payments stopped. According to theSABC representatives, this occurred when there was a due diligence on all contracts. Even though the SABChad stopped paying, it continued to use the mechanical rights. The operating income of NORM wassubstantially reduced, largely due to the fact that the SABC had halted its payments, and NORM was forced toincrease its collection commission rate, which normally stood at 10 to 12,5%.- 21 -