MEMBERSHIP OF COLLECTIVE MANAGEMENT ORGANISATIONS
Part 3 of 13 Reasons Why Kenyan Music Creators Need a New CMO Legal Framework.
INFORMATION, ADHERENCE & WITHDRAWAL
In this third article of 13 reasons why Kenyan Music Creators need a new CMO legal framework, we discuss the importance of legislation and regulations governing the membership of collective management organisations. For several years, Kenyan CMOs have fallen out with their members who feel the CMOs are non responsive and have failed to protect their rights as creators of music. We discuss why a new legal framework needs to provide a framework that will govern membership applications before joining a CMO. We also discuss what structures should be in place after joining the CMO and because of freedom of association we put forward a case for regulations governing withdrawal of membership from a CMO. The recent dispute between Sol Generation’s Sauti Sol @Solgeneration and The Music Copyright Society @TheMCSK over Sauti Sol’s @sautisol synchronization rights is a classic example why we need to adopt clear legislative provisions in regards to which rights a CMO can manage and the relationship between & CMO and its members in regards to rights which the member opts to exercise individually.
Before Joining A CMO as A Member
In order to ensure transparency towards Rightsholders and Users, a CMO should provide a Rightsholder with the necessary information about its membership requirements, the nature of its Representation Agreement, Management Fees, other possible deductions, membership withdrawal conditions, the governance structure, and any opportunities to participate in the decision-making processes.
- A CMO should provide (where possible, electronically) a clear summary of applicable rights, obligations, and other essential information. In particular, a CMO should explain: who can join as a Member, and the procedures for doing so, the terms of membership and where all such information can be found.
- The CMO should also explain the nature of the grant or transfer of rights (whether rights have been granted on an exclusive or non-exclusive basis) and the implications of such information for the Member;
- The CMO should describe the scope of the authority granted under the agreement;
- The CMO should provide how a Member may determine the scope of the CMO’s mandate to act on their behalf;
- The CMO should provide how the CMO consults with its Members both electronically and physically;
- The CMO should provide the arrangements for terminating membership and a description of the implications of termination (and reversion of rights, if relevant);
- The CMO should provide for what happens if a Member dies or (if corporate) is dissolved while still a Member of such CMO;
- The CMO should provide how Members will be represented on the governing bodies;
- The CMO should provide how the governing bodies are composed, how they are appointed, and their terms of office;
- The CMO should provide details about any sub- committee or council structures, and how these are approved;
- The CMO should provide how a Member can present their candidature for elections to the governing body or apply to become Member of any sub-committees or council structures;
- The CMO should provide information about the frequency of General Meetings and how a Member will be notified of such meetings;
- The CMO should provide information about what rights a Member has to call an Extraordinary General Meeting and how to do it;
- The CMO should provide information about what voting rights a Member has;
- The CMO should provide information about how a Member can still exercise voting rights through proxy or digital means if he or she cannot attend;
- The CMO should provide information on whether collective administration by such CMO is mandatory, and the consequences of such information for the Rightsholder; and
- The CMO should provide information about its deduction policies and the Rightsholder’s ability to benefit from activities and services funded through those deductions;
- The CMO should provide a list of Representation Agreements or similar agreements with other CMOs.
Acceptance of Members
We believe that a CMO should ensure that its membership criteria and/or terms of service are fair, transparent and non-discriminatory. We also believe that terms should clearly be defined in published documents such as its Statute, membership terms, Distribution rules or User agreements. We also believe that the current disputes between CMOs and their members can largely be attributed to failure of the CMOs to have clearly spelt out terms of service that are non discriminatory to members. The current terms need review to instill creator protective measures.
- Membership criteria should be included in a CMO’s Statute or its membership terms.
- A CMO should accept a Rightsholder as a Member if they he/she fulfil the membership criteria.
- Rightsholders should be free to grant their rights to one or more CMOs on condition that they do not grant the same rights within the same territory and for the same period of time to more than one CMO. This is without prejudice to the Rightsholders’ freedom to grant to CMOs non-exclusive mandates or licenses and retain the right to license uses individually.
- Membership criteria should be objective, transparent and non-discriminatory.
- A CMO may only refuse a request for membership on the basis of objectively justifiable criteria, according to the provisions of its Statute or membership terms. Grounds for refusal should be provided to the applicant in writing within a reasonable period of time.
NON DISCRIMINATION OF MEMBERS
The Kenyan Constitution prohibits discrimination on the basis of gender, ethnicity, religion, economic status, and various other grounds including age. The principle of fair and non-discriminatory treatment, which is enshrined in the Berne Convention and other international copyright treaties, should be integral to a CMO’s operations. This principle therefore deserves the particular attention of those setting up and/or regulating a CMO. CMOs are important players in the cultural and creative industries, which emphasizes the need of for all CMOs to abide by internationally and nationally adopted principles of non-discrimination.
- A CMO should not discriminate between Rightsholders it represents – either directly or indirectly – on the basis of: nationality or place of residence or establishment; or gender, origin, religion, disability, age or sexual orientation.
- A CMO should treat the Rightsholders it represents by virtue of direct mandates, Representation Agreements, or legislation, fairly and equally. This principle must be codified in law because of the prevalence of discriminatory practices in Kenyan CMOs.
SCOPE OF CMO RIGHTS MANDATE
A CMO’s authority to act may be based on mandates received from a Rightsholder or other legislative provisions. The specific role of contractual arrangements between a rightsholders and a CMO varies according to the different systems of collective management. Such arrangements determine the nature and scope of a CMO’s authority to license the Right holder’s rights and otherwise to represent the interests of the Rightsholder (e.g., to take legal action in order to enforce the rights in their own name). These arrangements also set the limits of a CMO’s authority to represent the Rightsholder and their his/her rights. A CMO’s mandates should strike a fair balance between a Rightsholder’s freedom to determine how his/her rights are managed and the legitimate need to have a meaningful Repertoire of rights to license to Users.
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- A CMO should always act on the basis of a mandate from a Rightsholder or, in defined cases, by statutory or governmental mandate.
- A CMO may, in its Statute, restrict a Right holder’s right to freely determine the scope of his/her rights management mandate provided that such a restriction is objectively justified and supported by statute. The restriction imposed by a CMO should be proportionate to the objective it seeks to achieve.
TERMINATION OF MANDATE
CMOs administer rights on a collective basis when individual rights management is impractical or impossible. For instance, an author, performer, or producer, cannot contact every single radio station to negotiate licenses and remuneration for the use of their songs. On the flip side, it is not practical for a radio station to seek specific permission from every author, performer, and producer for the use of each song. Against this background, it is important to ensure that rightsholders have the ability to terminate their mandate of a CMO, and/or to entrust their rights to another organization, or to manage their rights themselves, when not subject to mandatory collective management.
- A CMO should permit each Rightsholder to terminate or change the scope of his/her mandate, upon a reasonably determined notice period.
- In circumstances described in its Statute, a CMO may require that a Rightsholder’s rights continue to be included, for a reasonable period of time, in licenses granted to Licensee prior to termination.
- Notwithstanding the termination of a mandate, a Rightsholder should be entitled to his/her full share in the Rights Revenue collected.
MEMBERS RIGHTS TO FAIR TREATMENT IN THEIR CMO
Rightsholders’ trust and confidence in their CMO helps it achieve a strong position in the marketplace and contributes to the effective management of rights. The best way of reinforcing the Members’ confidence in their CMO is through transparent governance as well as through proportionate rights and obligations.
- A CMO should treat each Member or Rightsholder fairly, and in accordance with its Statute and membership terms. It should not impose any obligations on Rightsholders that are not objectively necessary for the effective management of such Rightsholder’s rights.
MEMBERS RIGHTS IN REPRESENTATIVE BODIES
In order to ensure a fair and balanced participation by Members in a CMO’s decision-making process, the CMO should establish a genuine and balanced role for Members within its governance structures, with particular attention to fair voting rights.
- The rules determining the basis for Member’s representation and powers within a CMO’s decision-making process should be open, fair and balanced. In particular, a CMO should maintain a fair balance between the rightsholder Member categories that it represents.
- A Member of a CMO should be eligible for positions in any of its decision-making, supervisory or advisory bodies, provided that he/she meets the qualifications set out in the Statute or legislation.
- All Members should have the right to participate at a CMO’s General Meeting (subject to any restrictions below).
- Any restriction on the right of a Member to exercise voting rights at the General Meeting of a CMO should be included in the Statute or provided by law and should be fair and proportionate.
- Each Member of a CMO should have the right to appoint another Member as a proxy to attend and vote at a General Meeting. A CMO’s Statute may reasonably limit the number of proxies any individual Member may hold, unless otherwise provided by law.