Kenya Copyright Board and Collecting Societies: Myths and Facts

Kenya Copyright Newsletter 8th Edition 2013
The subject of this article is to critically analyse some of the questionable statements made by KECOBO in the latest edition of its newsletter, “Copyright News”. This particular edition is themed: Collective Management Organisations (CMOs). As many may know, there are currently four registered CMOs in Kenya namely (from oldest to youngest): the Music Copyright Society of Kenya (MCSK), the Reproduction Rights Society of Kenya (KOPIKEN), the Kenya Association of Music Producers (KAMP) and the Performers Rights Society of Kenya (PRiSK).
In a previous article here, this blogger commented on KECOBO’s poor performance in licensing and supervision of CMOs. Therefore this recent publication by KECOBO is useful in identifying certain areas of concern in the regulation of CMOs.
Take for instance, the statements on page 4 made by KECOBO’s second-in-command, Mr. Edward Sigei:

In the last few years, there has been some progress and a few of setbacks in this area [regulation of CMOs] as can be seen elsewhere in this publication.

One wonders why no mention is made of KECOBO’s deregistration of MCSK in 2011 and the ensuing court battle spanning over a year. One may also be curious to know why KECOBO fails to address the increasing reports of anti-competitive and/or unethical practices by the three CMOs operating within the music industry namely, KAMP, PRiSK and MCSK. How does KECOBO propose to deal with this emerging issue?
In this regard, this blogger submits that competition between CMOs may provide the solution to increase their productivity and efficiency. The one society per category of works rule entrenched in the Act ought to be amended so as to allow other entrants in the collective management business. This move would ensure that members and users alike benefit more from the collective administration of copyright.

Currently, there is a popular push for further reform in the sector to strengthen the oversight role of the Kenya Copyright Board in the absence of vibrant membership within the CMOs.

The absence of a vibrant membership within CMOs is due to ignorance. CMO members may not be fully aware or fully appreciative of their power as shareholders in the CMO. The creation of this awareness or appreciation among these members ought to be stated openly and clearly as an integral part of KECOBO’s outreach and sentisation agenda in collaboration with the CMOs.

Users generally complain of arbitrary license hikes to already high tariffs and they are subsequently demanding controls. Small kiosks and shops are being threatened thereby.

One of the novel features of the revised 2001 Copyright Act was the Competent Authority whose mandate includes reviewing CMO tariffs. However KECOBO has not pushed hard enough or fast enough for the Government to set up this Competent Authority. This Authority, once fully in place, would act as a Copyright Tribunal to hear and determine cases brought against CMOs by users of copyright works.

Drawing from this campaign to reform the law and recent developments globally, some of the legislative interventions under consideration include:
• Empowering the Kenya Copyright Board to order forensic or other audit on CMOs based on credible information

Who is to bear the costs of KECOBO’s decision to order forensic and other audits of CMOs where these audits are treated separately from the normal audits carried out by CMOs in every financial year? Will the members of the CMO still have a final say in the firm of auditors to be appointed?

• Introduction of the Attorney General’s power to approve and review tariff and to exempt small businesses from time to time.

Why not empower the AG to examine the entire licensing system including terms and conditions of license agreements as well as licensing procedures?

• Empower the Kenya Copyright Board to disband CMO Boards in cases of gross mismanagement and call for fresh elections and/or disqualify outgoing Board members.

Such a statutory power to disband CMO Boards by KECOBO ought to be carefully worded and exercised sparingly. For instance, in section 76 of Uganda’s Copyright Act, the Registrar of Copyright is empowered to order the cancellation of registration of a CMO after the findings of ad-hoc committee of inquiry or inspection or an application made by two-thirds of the members of a CMO.

(…)
• Reconsider utility of Section 38(2) of the Copyright Act in view of the rising cases (sic) alleged harassment arising out of its enforcement.

This section deals with the restricted act of public performance in copyright and related right in a musical work and sound recording, respectively. This section creates the offence of wilfully causing a public performance without the authorisation of the rights holders in the works. It is this blogger’s opinion that rights holders or their respective CMOs have the right to enforce this provision and pursue criminal action against all infringers under this section. Such infringers include all commercial premises, public service and commercial vehicles, telecomunications companies, broadcasters, content service providers and premium rate service providers, operating countrywide.
However CMOs lack trained prosecutors to deal with copyright infringement cases brought forward by CMOs as complainants. In 2012, the Director of Public Prosecutions appointed five (5) individuals employed at KECOBO to serve as public prosecutors for the purposes of cases arising under the Copyright Act. These prosecutors are required to handle all copyright infringement cases countrywide, including infringement cases brought by CMOs. To date, KECOBO has not provided any guidance or assistance to CMOs in prosecuting cases arising out of section 38(2) of the Act.
Let’s now consider some of the statements made by the KECOBO Chief Executive, Dr. Marisella Ouma on the subject of CMOs in Kenya.
On page 5 of the Newsletter, she states:

Their [CMOs’] licences are renewable annually subject to each CMO fulfilling their obligations under the Copyright Act, Companies Act as well as the implementing regulations.

From a practical point of view, the duration of the CMO license ought to be reviewed. One calendar year is too short a period to adequately assess the performance of a CMO. This reality is compounded by the statutory requirement to submit annual reports and audited accounts. How does KECOBO evaluate the performance of a CMO throughout an entire year on the basis of one single report submitted at the end of the licensing period?
A cursory look at the license conditions in other African countries is also instructive. In South Africa, a CMO license is granted for 5 years, whereas in Nigeria, the CMO license runs for 3 years and in Uganda, license duration is perpetual.
However, if KECOBO is adamant on retaining the one year license duration, the Act ought to be amended to require at the very least semi-annual if not quarterly reports from the CMOs.
The legality of KECOBO’s CMO Guidelines and Licensing Agreement for CMOs is worth mentioning. These two documents developed by KECOBO have no basis in the Copyright Act and yet they continue to be enforced against CMOs. Both CMOs and other key stakeholders ought to have a say on how KECOBO exercises its public powers in licensing and supervision of CMOs.

The collection of royalties has to be done within the provisions of the laws of Kenya. Thus the Collective Management Organisations have no right to confiscate any property such as radios, TVs and other equipment from users unless they have followed the due process for instance obtained a warrant or a court order to detain the property.

This blogger respectfully disagrees with this position. Section 39(2) states clearly that in addition to the copyright inspectors appointed under the Act, any police officer may perform the functions of an inspector under the Act. Section 41 vests powers of seizure on inspectors and section 42 deals with the powers of arrest. For the offence relating to public performance under section 38(2) of the Act, the prosecution must produce in court the device used to cause the public performance.
Looking generally at the Newsletter’s content, it may be of interest to note that the interviews with the CMO leaders do not disclose certain key information that would be of great use to the public. Apart from MCSK, none of the other CMO interviews deal with the issue of royalty distribution. The facts and figures on distributions vis-a-vis expenditures is an important area of collective management that ought to have been addressed across all CMOs interviewed.
Still on the question of partial interviewing, the responses by the star interviewee, Mr. John Katana are also questionnable. Firstly, this interview totally fails to address the responsibility of CMO members to hold their CMO accountable and the powers of members to take charge and make decisions on the governance and operation structures of their respective CMOs.
Secondly, the interview blatantly suggests that there is a standard worldwide cost-royalty ratio of 30:70 whereby 70% is paid to musicians and 30% is used for administrative costs. This blogger would be interested to know the source of this assertion.
Finally, the interview conveniently fails to disclose that the interviewee is a Board Director at KECOBO. Therefore any reasonable reader of the newsletter would read in between the lines of this interview and see clear statements made by KECOBO to advance its own agenda on regulation of CMOs.
In the final analysis, the total value addition of copyright-based industries to Kenya’s Gross Domestic Product (GDP) is estimated to be over Kshs. 85.21 Billion. It is submitted that this fact underscores the important role played by KECOBO as the state agency responsible for the administration of copyright and related rights in Kenya. Part of this weighty mandate is the licensing and supervision of Collective Management Organisations (CMOs) who represent the bulk of Kenya’s creators and copyright owners.

30 Comments
  1. Marisella Ouma
    Marisella Ouma
    Reply
    I have gone through the blog and quite surprised that there are several points of concern which are not only inaccurate but also fail to provide an objective view of collective management organisations. (1) Progress; there has been significant progress in the management within the CMOs which has seen an increase in the royalties collected and distributed and this is directly attributed to the licensing and supervision of the CMOs by KECOBO. (2) The three CMOs in the Music Industry, MCSK, KAMP and PRiSK represent different rights holders within the music industry. (3) duration of licence; the one year period was necessary to ensure that the CMOs comply with the terms of the licence. South Africa and Nigeria have there share of problems in the supervision of CMOs a fact which the blogger has conveniently left out. (4) The revocation of the MCSK licence was within the provisions of the law and It gave MCSK time to look into the issues that led into the revocation of the licence and undertook to address the issues. The licence offered subsequently was conditional and MCSK is working on fulfilling the conditions to ensure effective and efficient collection and distribution of royalties. (5) It is a fact that both the public (as illustrated clearly by this blog) and rights holders are ignorant when it comes to the role of collective management organisations. Most people react to the CMOs request for royalty payment negatively due to ignorance. It is established that the users have to pay for the public performance and broadcasting of copyright works and in the case of KOPIKEN for the reproduction of works. The question is how much. These tariffs are negotiable and where the user feels aggrieved, the Competent Authority under the office of the Attorney General should determine the same. It is the rights holders and users who should push for the establishment of the Competent Authority. For the blogger's information, it is noteworthy that KECOBo has been pushing for the establishment of the Competent Authority which has finally received the support of the Office of the Attorney General. This was also due to the constant lobbying by various users, and some CMOs. (6) This brings us to the point of the tariffs and mode of collection. On this issue, the blogger once again displays his ignorance of the law and more so of the Constitution. The law needs to be followed to avoid suits on grounds of infringement of fundamental rights and freedoms. The seizure cannot be arbitrary.There are judicial decisions to this effect. (7) The issue of distribution was hardly covered in the newsletter and there will be more features in later editions that will cover the actual distribution by the 4 CMOs (8) The blogger states that CMOs lack trained prosecutors to deal with copyright infringement cases! really, do they need prosecutors taking into account that their core mandate is to collect and distribute royalties. The prosecution of the cases is done by the DPP or officers appointed by the DPP such as the prosecutors in KECOBO. Secondly, the inspectors under Section 39 are those designated by KECOBO and Police Officers and not from the CMOs. It is imperative that they CMOs stick to their core mandate and avoid situations that will lead to court cases that would in turn cost the CMO time and money. To use the bloggers comparators, in South Africa and Nigeria, the CMOs do not use force or confiscate the users works as happens in Kenya. (9) Legal Basis of the Guidelines...really, guidelines are exactly that, guidelines. Once again the blogger has failed to take appreciate the law and implementing regulations as well as established practice. It is unfortunate that the blogger has chosen to make unsubstantiated comments based which have no legal basis and not factual. The purpose of the newsletter was to provide a basic overview of collective management in Kenya, including the general interviews with all the CEOs of the CMOs. The licensing and supervision of CMOs is just one of the many functions of KECOBO but the onus of ensuring the proper running of the CMOs squarely falls on the members who are the owners of the works that are used by third parties. The role of KECOBO and the government in General is to provide the infrastructure both legal and administrative to ensure that there is efficient collection and distribution of royalties. We have come a long way but we are sure that we are on the right track. I would thus invite people to read the Copyright News issue 8 and send their objective comments to KECOBO.
    • vnzomo
      vnzomo
      Reply
      Thank you for your comment. The rationale behind this piece stems from the latin phrase: “Quis custodiet ipsos custodes?" Since my #KECOBOat10 piece, I have opted for a direct and blunt approach in my analyses of KECOBO. It is hoped that this approach will give the public a different (but accurate) side of the story and facilitate lobbying/dialogue/engagement on issues. (1) Progress: From the contents of the newsletter, it’s hard to see how the increase in the royalties collected and distributed can be attributed to the licensing and supervision of the CMOs by KECOBO. (2) The three CMOs in the Music Industry, MCSK, KAMP and PRiSK represent different rights holders within the music industry. Agreed. However, my question remains, why not allow other companies to enter the market and compete alongside the existing CMOs within the various rights? Let the market forces work freely for the added benefit of users and owners. And in the event of market imperfections, KECOBO will still be there to regulate in the public interest, yes? (3) Duration of Licence: The problems in South Africa and Nigeria had/have to do with poor regulation. One can only hope that KECOBO won’t make the same mistakes! Be it as it may, the point remains that a one year license period is impractical when the Act only provides for annual reports. How does KECOBO evaluate a CMO’s performance on the basis of one report tabled at the end of a given license year? (4) The revocation of the MCSK licence in 2011 was unconstitutional and the whole idea of conditional licenses based on license agreements and CMO guidelines was/is also unconstitutional as well as ultra vires. (5) KECOBO continues to pass the buck on the issue of regulation of CMOs tariffs. Nothing new there. As we continue to wait for the one and only Competent Authority, CMOs are licensed to operate with impunity in setting tariffs and license conditions that are completely out of touch with reality. (6) Suits on grounds of infringement of fundamental rights and freedoms will continue as our nation grows more litigious. However KECOBO has for too long refused to accept that CMOs have rights and those rights must be enforced. This enforcement necessitates arrests and seizures with or without the assistance or guidance of KECOBO! (7) The issue of distribution ought to have been covered in the newsletter for the public benefit. Let all CMOs tell us how much they collect and how much they distribute! (8) CMOs need prosecutors and they must actively lobby the DPP, if need be. KECOBO knows the power of prosecutions especially in creating and spreading awareness as well as deterring offences of copyright infringement. KECOBO also appreciates that successful prosecution of infringement cases brought by CMOs would guarantee higher levels of compliance among users. Yes, CMOs’ core mandate is to collect and distribute royalties BUT in order to maximise collections, CMOs must be equipped to deal with infringers. Secondly, on the issue of enforcement, KECOBO continues to disregard the express provisions of section 39(2) which states that a police officer can perform the functions of the KECOBO inspectors. (9) Legal Basis of the Guidelines becomes an issue when KECOBO introduces, for instance a cost-royalty ratio of 30:70 and then purports to enforce such a ratio as if it had somehow acquired the force of law. The enforcement of such ultra vires conditionalities led to the deregistration of MCSK in the first place! This blogger is in no way claiming to be an expert or authority on matters of collective management. However KECOBO, as a public regulator, must be held accountable for its deeds and misdeeds especially when they impact on the lives and livelihoods of hardworking Kenyans countrywide. The role of this blogger is to get all parties involved to start constructively asking questions about how intellectual property is handled both in the public law and private law spheres. This is often a difficult task but more often than not, also rewarding. I would invite KECOBO to continue visiting this blog and making its comments and interventions throughout and not only when its interests and agendas are deemed to be threatened or “attacked”!
  2. SS
    SS
    Reply
    Is that comment really from Dr. Marisella Ouma of KECOBO? Why is she being so evasive and patronising? Everyone is entitled to their opinion! Keep up the good work, wakili.
    • vnzomo
      vnzomo
      Reply
      Thank you SS.
  3. ubuntu
    ubuntu
    Reply
    @Marisella Kenya ought to have regulations by now on CMOs like other progressive jurisdictions! The Act's provisions on licensing and supervising of CMOs are ineffective and riddled with ambiguities. Amend the Act, enact Regulations then enforce! That's how to deal with CMOs.
    • vnzomo
      vnzomo
      Reply
      Thank you for your comment. I dont think it is a KECOBO vs CMO thing. Let us advocate for cooperation and joint support.
  4. Swali Nyeti
    Swali Nyeti
    Reply
    With reference to section 6(c) of the Copyright Act, tell us how one John Katana was appointed as a representative of musicians on your board! Which associations were these that nominated him?
  5. Disgruntled Kenyan
    Disgruntled Kenyan
    Reply
    KECOBO is crazy! How do you allow so many CMOs to operate in a country where we cant even respect traffic rules let alone copyright laws? Each industry should have one CMO maximum!
    • vnzomo
      vnzomo
      Reply
      Ha! Interesting view. Thanks for sharing.
    • julie
      julie
      Reply
      You are right. How can government appoint over 4 lincecing non govermental otganizations to collect so much money. How do they monitor if money collected is distributed to the musicians. For example they dont even do public awareness to let people know who they are. They wait until you have an event and storm in just like that. Creating commotions . Very very unproffesional behaviour. Its a so uncouth. The city council guys even behave better than the way these guys behave.. I think the gov shouldveither collect the funds or just let the mucisians sell their products at 1000 shillings or even 2000 at least we will know they are benefitting from their hard work other than let ngo take and spend their money on needless expenses and final cut is penuts. Government please listen to us. These are unproffesional not worth collecting any money on behave of anyone. Speaking from experience
  6. copywrong
    copywrong
    Reply
    My comments to Marisella: 1) The revocation of the MCSK license i.e. deregistration is provided in the Act BUT the Act does not provide a procedure for doing it. So, tell us what procedure did you use? Wasn't MCSK entitled to challenge the procedure used? 2) Where in the copyright act, is KECOBO empowered to issue conditional licenses? this conditional license thing is a creation of your office! conditions such as 70:30 have no basis in law and you know that but you still enforce them? 3) what is so hard in getting the DPP to gazette a few extra state counsels to deal with CMO cases? The fight against copyright infringement must not be the sole preserve of your office! I rest.
    • vnzomo
      vnzomo
      Reply
      You raise some pertinent points. Here are my thoughts on the same: 1) I think the deregistration was irregular both on procedure and on substance. From a substantive law point of view, I question the move to deregister a CMO when there is no transitional mechanism in place to deal with the vacuum left behind. All in all, I believe deregistering a CMO ought to be a measure of last resort and that the Act must include other disciplinary measures and sanctions to be taken against CMOs who dont' comply with the Act and Regulations. 2) I believe the 70:30 ratio is a weighted average of ratios from other countries around the world as decided by KECOBO. We have never been told which countries were used to come up with this ratio? All in all, CMOs and KECOBO must agree on a suitable ratio that will be progressively realised.
  7. Kamau
    Kamau
    Reply
    Marisela, So how do you explain the patnership between KECOBO and Microsoft, Multichoice and ZUKU in enforcing on behalf of the three corporates? Yet it is common knowledge that Multichoice Kenya and Zuku have refused to pay royalties to CMOs for commercial exploitation of Kenyan works. Whose side are you on? #Justwondering
    • vnzomo
      vnzomo
      Reply
      Interesting view. It is indeed curious that KECOBO and CMOs only have partnerships on raising awareness but never on issues to do with enforcement and prosecutions!
  8. The Last Word
    The Last Word
    Reply
    KECOBO has no idea how CMOs work to begin with! Collective management is a very specialised area of copyright administration. KECOBO does not know what collection and distribution of royalties is all about. Someone should take Marisella on the ground and show her what CMOs are really about! How do you regulate a business you don't understand?
    • vnzomo
      vnzomo
      Reply
      Thanks for the comment. I like your idea of carrying out joint awareness and enforcement programmes!
  9. poetic
    poetic
    Reply
    TO: KECOBO LETS FACE FACTS. YOU ARE NOT DOING YOUR JOB! CMOS ARE RUNNING AMOK - YOU SHOULD BE THE ONES TO SET STANDARDS FOR THESE CMOS. PLEASE! HOW DO YOU CLAIM TO BE REGULATING THESE GUYS? PLEASE DO MORE! TO: CMOS ADOPT A CORPORATE CULTURE. TRAIN YOUR STAFF ON HOW TO DEAL WITH CLIENTS. THEY ARE A REFLECTION OF YOU! WE ARE TIRED OF BEING ASSOCIATED WITH CMOS THAT ARE NOT FRIENDLY TO CLIENTS
    • vnzomo
      vnzomo
      Reply
      Thank you for your comment.
    • julie
      julie
      Reply
      I agree. Today they stomed my event in nakuru in a so un proffesional manner. Worse than city council guys we used to know. Someone needs to teach them. Who even know who is prisk. Why dont they make public awareness. Why dont they work with county gov in a way that if one is organizing an event ofcourse the 1st stop is neema and councilm why dont they work with themso that when we pay neema then we are made aware.... they jst love embarrasing people by storming and making a show of their own. Shame and shame..
  10. mjomba
    mjomba
    Reply
    The newsletter does not mention that the PRISK chairman, Nonini is the highest royalty earner over at MCSK and that there are KAMP members who sit on the boards of PRISK and MCSK! This nonsense must stop.
    • vnzomo
      vnzomo
      Reply
      Good point! Thanks for visiting the blog.
  11. chief kariuki
    chief kariuki
    Reply
    To enforce the 70:30 rule I propose a centralised system for royalties where all CMOs to send their collections all to one account controlled by KEKOBO then KEKOBO to DIVIDE EQUALLY the monies among the MSCK KOPKEN PRSK AND KAM. PROBLEM SOLVED!
    • vnzomo
      vnzomo
      Reply
      hahaha! Interesting view. Thank you for sharing.
  12. baraka
    baraka
    Reply
    “Africa is not poor; it is poorly managed” - Ellen Sirleaf Johnson. "CMOs are not poor, they're just poorly managed!" - my quote. The biggest myth about this whole MCSK thing is that KECOBO has the power to step in and ensure that MCSK and other CMOs are properly managed. KECOBO is merely a public regulator! CMOs must manage themselves! However KECOBO should not sit back and watch CMOs going astray.
    • vnzomo
      vnzomo
      Reply
      Well said! I agree with you. Please visit the blog again for more updates!
  13. Paw Akuche
    Paw Akuche
    Reply
    Healthy discussion indeed.i will want to agree with the blogger here that as much as the CMOs must be friendly -the boundaries must be clearly demarcated - all the procedures followed enforcement must be conducted on all those who still don't comply otherwise some Kenyans will never comply with not only the IP laws but all laws!
    • vnzomo
      vnzomo
      Reply
      Thanks for your comment. I agree, enforcement is a challenge that KECOBO and CMOs must jointly deal with head on.
  14. jubilee
    jubilee
    Reply
    Chief Kariuki makes a good point. A centralised system would solve everyone's problems. Let KECOBO and all CMOs operate from one place eg. NHIF HOUSE. This way the office costs are less. Let KECOBO (who we know and trust) be the one to receive all the license fees and then distribute them to the CMOs who will in turn pay royalties to their guys. Ofcourse, the CMOs can give KECOBO a small percentage as a token for helping to make the administration of royalties smoother. It's a win-win situation!
  15. Sankara
    Sankara
    Reply
    Victor, What is the role of the Registrar of Companies in all of this? Surely if these collecting companies are acting contrary to the law, can't KECOBO or the shareholders simply demand that the Registrar deregisters them?
  16. Marisella Ouma
    Marisella Ouma
    Reply
    Thanks all for the interesting contributions. There are several issues that have been raised, and KECOBO will soon organise a forum on CMOs with all the CMOs represented as well as the users and any other interested stakeholders so that we can have an open and participatory discussion on the issues. We shall keep you posted on the dates and venue via the social medai.
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