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6.1.3. The CRC’s assessment of the appropriateness of the accreditation for these societies, based on therequirements of the regulations, revealed the following cases of non-compliance:6.1.3.1. In terms of Regulation 3 (3) (d) of the Collecting Society Regulations, “The Registrar is satisfied that theapplicant is able to comply with the obligations set out in these regulations.” SARRAL’s audited annualfinancial statements for the year ended 31 December 2003 and for the year ended 31 December 2005were issued in June 2005 and October 2006 respectively. This was a contravention of Section 304 of theCompanies Act of 1973 (as amended). Based on this, it would have been incorrect to assume thatSARRAL was going to be able to comply with Regulations 4 (3) (e), if it was already not complying with theCompanies Act. Regulation 4 (3) (e) requires the accredited collecting societies to issue the auditedfinancial statements within six months after the end of the financial year. Therefore, it was inappropriate toaccredit a collecting society with a track record of non-compliance.6.1.3.2. According to Regulation 3 (3) (g), “The Registrar is satisfied that the accreditation of the applicant does notconflict with, undermine or diminish the adequate, efficient and effective administration of the right toreceive payment of a royalty in terms of Section 9A of the Copyright Act, 1978, or Section 5 (1) (b) of thePerformers’ Protection Act, 1967, as undertaken by a collecting society already accredited and establishedunder the Copyright At, 1978.” SAMRO was accredited as the performers’ collecting society. The copyrightowners for the sound recordings are the sound producers and, accordingly, the performers cannot assignthe rights they do not own. Therefore, SAMRO would not be able to license the sound recordings rights tothe users and, accordingly, could not function independently (as a performers’ collecting society for soundrecording) without relying on another collecting society mandated by the sound producers. AlthoughRegulation 3 (1) (b) allows for the performers’ collecting societies to exist, such societies cannot operateindependently. Regulation 6 (2) (a collecting society may not retain more than 20% of the total collections)does not deal with the situation where more than one collecting society is involved in one collectingtransaction. Due to the above-mentioned complication, this requirement could not be fulfilled.6.1.3.3. SAMPRA, as a collecting society for the sound producers, is entitled to issue licences, collect royalties anddistribute them to its members, but has no responsibility towards the performers. With regard to theperformers, SAMPRA can either transfer the performers’ portion to a performers’ collecting society ordistribute the share via the sound producers. Transferring funds from one collecting society to another isinefficient because the collection costs could potentially double. Distributing the performers’ share via thesound producers is risky and inappropriate because the conduct of the sound producers is not regulated.6.1.4. Based on the above assessment, it is clear that in accrediting the sound recording collecting societies, the levelof compliance was less than satisfactory. The most concerning case is in respect of SARRAL, which wasaccredited despite the fact that it had received a qualified audit report for three consecutive years, had failed tocomply with the Companies Act with regard to the issuance of the audited financial statements, and had apending case about its financial status. The lesson arising from this saga is that a comprehensive investigationis required before any accreditation process can be concluded.6.1.5. The accreditation of SAMPRA and SAMRO resulted in a court case involving the Registrar, SAMPRA andSAMRO regarding the distribution of the performers’ share of royalties. As a result, no distributions have beenmade for needletime royalties.- 44 -
6.2 COMPLIANCE BY COLLECTING SOCIETIES WITH REGULATIONS6.2.1. Due to the legal dispute involving SAMPRA, SAMRO and the Registrar, SAMRO has not yet performed anyactivities associated with the collection and distribution of sound recording royalties and as a result compliancematters are not relevant to the society.6.2.2. The cases of non-compliance to the Regulations by SAMPRA are set out in Table 1.Table 1: Cases of Non-Compliance to the Regulations by SAMPRARefers to theRegulationsRegulations RequirementsSAMPRA’S Response to theRequirementsRemarksa. 4(2)“… the Registrar shall beinvited to attend the annual orspecial general meetings of anaccredited collecting society...”The Registrar was not invitedto the last AGM of SAMPRA /RiSA held on 23 February2011.The relevant documentspertaining to the AGM weresubsequently forwarded tothe Registrar (noncompliance).b. 4(2)“... the Registrar shall receivean annual activity report fromeach collecting society, settingout information on its activities,financial records and otherrecords within 30 days afterthe end of the financial year ...”The activity reports forSAMPRA were submitted tothe Registrar after 30 days.Nonec. 4(3) (e)“An accredited collectingsociety shall furnish theRegistrar annually with annualaudited financial statements”.The audited financialstatements for the last twocompleted financial periodshave not yet been submitted tothe Registrar.According to SAMPRA, thedelays were due to thedispute with the Registrar.d. 6 (2)A collecting society shalldistribute at least 80% amongits members, and not morethan 20% shall be retained bythe collecting society afterdistribution to defray its costsor apply otherwise.No distribution has been madedue to the dispute with theRegistrar.The matter has been referredto the court.6.3 RECOMMENDATIONS AND CONCLUSION6.3.1. The Registrar needs to be appropriately resourced so that his or her office is equipped to investigate and makeappropriate decisions. Funding sources for the Office of the Registrar have to be identified. The CRC’srecommendation is that state funding should be provided for the first three years, during which time theRegistrar should develop an appropriate funding model that can be supported by the industry from year four.6.3.2. The Copyright Act should be amended to allow the Registrar to take over the administration (as opposed to thewithdrawal of accreditation) of any relevant collecting society (SAMPRA, NORM or SAMRO) if the Registrar hasreason to believe that there has been a material breach of the Copyright Act or Regulations.- 45 -
Page 2 and 3: TABLE OF CONTENTSLIST OF ABBREVIATI
Page 4 and 5: 11.8 RECOMMENDATIONS ..............
Page 6 and 7: LIST OF TABLESTable 1: Cases of Non
Page 8 and 9: NORMOSPsPOSAPPLPPL (India)ProLitter
Page 10 and 11: These problems are addressed in the
Page 12 and 13: xxi.The report considers developmen
Page 14 and 15: 1.3.8. Determine whether all money
Page 16 and 17: 1.4.9. The CRC derived considerable
Page 18 and 19: 2.3 SUBMISSION BY THE DEPARTMENT OF
Page 20 and 21: Aspects of Intellectual Property Ri
Page 22 and 23: (1) Subject to the provisions of th
Page 24 and 25: Copyright Tribunal or an arbitrator
Page 26 and 27: society, the South African Recordin
Page 28 and 29: 3.2.14. With the liquidation of SAR
Page 30 and 31: the final rate or rates to be appli
Page 32 and 33: (a)that payment is to be made to th
Page 34 and 35: information as to their use to enab
Page 36 and 37: The WCT and WPPT oblige members to
Page 38 and 39: Once the handset technology changed
Page 40 and 41: 4.3.16. In 2009, in what was coined
Page 42 and 43: 4.4.6. In exchange for the above li
Page 44 and 45: operators are licensed by NORM to p
Page 46 and 47: 5.2 FUNCTIONING OF COLLECTING SOCIE
Page 48 and 49: the grant of licences. Article 17 o
Page 52 and 53: 6.3.3. SAMPRA should be given one y
Page 54 and 55: Corporate Governance GapsKing II Re
Page 56 and 57: King IIIPrincipleKing IIIRequiremen
Page 58 and 59: King IIIPrincipleKing IIIRequiremen
Page 60 and 61: 8 COLLECTION OF MUSIC ROYALTIES8.1
Page 62 and 63: 8.1.4.2. Needletime royalties are n
Page 64 and 65: 8.1.7.4. For the past five years, V
Page 66 and 67: PRS (UK)SPRE (FRANCE)SUISA(SWITZERL
Page 68 and 69: DetailsPerformance RightsSound Reco
Page 70 and 71: 8.2.7 Comparative Study Performed b
Page 72 and 73: y a collecting society. A rights ho
Page 74 and 75: agency, its rights being derived fr
Page 76 and 77: Mr Robinson said DALRO assumed the
Page 78 and 79: 10.1.6. The distribution to publish
Page 80 and 81: 10.4.4. Most of the other collectin
Page 82 and 83: 10.6.3.4. South African English-lis
Page 84 and 85: 10.10 CONTRACTUAL RELATIONSHIPS BET
Page 86 and 87: 10.12.2. The Regulations should rec
Page 88 and 89: licence that the licensee comply wi
Page 90 and 91: 11.4.6. The details of ICASA’s ta
Page 92 and 93: RecommendationsTimelines for Recomm
Page 94 and 95: enterprises. There was a suggestion
Page 96 and 97: Copyright as it relates to copyrigh
Page 98 and 99: 13.4 DEPARTMENT OF ARTS AND CULTURE
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Table 28: Comparative Study’s Key
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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about 30%, which is the highest amo
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15.1.3. The Copyright Tribunal’s
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15.1.20. Local music content requir
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for the selected artists. The outco
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King III Report by Institute of Dir
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Paranagua Pedro, “Strategies to I
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Copyright Amendment Act of 1984Copy
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APPENDIX 1(B): SUMMARY OF ORAL REPR
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Due to the fact that the existing c
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Mr BrottelProtection of copyright m
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1.1.3. LIST OF ENTITIES VISITED AND
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In the 2009 Annual Report of ABRAMU
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The implementation of this law led
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ecordings. In respect of audio-visu
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In 1995, ECAD distributed 72% of it
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niches in the market to ensure fair
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Proprietary rights allow authors to
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International royalty distribution
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3.2. Relevant LegislationsThe prese
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IPRS uses the standard tariffs in r
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Ad-hoc workshops on copyright are c
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meaningful living out of their crea
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4.1.3. LICENSING AND LEGAL REGIMESI
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Ballet teachers; Teachers in the fi
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It was founded in 1928 by the Norwe
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6.2. STRUCTURE OF COLLECTING SOCIET
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6.5. COLLECTION OF MUSIC ROYALTIEST
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1957, when the Managing Director of
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16.4.14 SWISSPERFORM: CHF4 millionI
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Cross-border licensing of digital r
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algorithm could be used to determin
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Collecting societies in the UK all
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APPENDIX 3: RECOMMENDATIONS BY MITT
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1.PREAMBLEThe Music Industry Task T
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The environment in which the music
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3.1.3 IMPLEMENTATION AND ACCESSION
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In this regard, the Minister should
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3.5.6 OMBUDSMANThe music industry s
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RECOMMENDATION 23:The MITT recommen
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The MITT further recommends that DA
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APPENDIX 4A: EXTRACTS FROM COPYRIGH
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(f)(g)doing, in relation to an adap
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(i)requiring notice of any intended
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(b)any organization claiming to be
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PERFORMERS’ PROTECTION ACTNO. 11
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the parties may agree to refer the
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ANNEXURE 5: COPY OF SARRAL’S CONT
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Page 210 and 211:
ANNEXURE 6: SARRAL’S AUDIT REPORT
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TERMS OF REFERENCESNO’SREQUIREMEN
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Page 218 and 219:
Page 220 and 221:
Page 222 and 223:
Page 224:
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