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ISSUE
35
By. Sharon Chahale
F
ollowing the assenting of the Copyright
Amendment Act (2019) by the
President, the country’s creative econ-
omy got a major boost even as Collective
Management Organisations (CMOs) were
kept on a short leash. It is the practice world-
wide that CMOs generally operate on four
major roles; Monitoring use of works for
their right holders; negotiating licenses for
their members; collection of royalties and
distribution of royalties.
These roles, however, must be done
within the parameters of the principles of
good governance of these organisations.
There must be transparency especially
with regards to royalty collection and
distribution. The goal is that rightsholders
must benet from these collections. And
this is what the new law sought to entrench.
A part of the Copyright Amendment
Act 2019 majorly focuses on CMOs
formerly known as collecting societies.
In that breath, the rst amendment was
to revert to using the word Collective
Management Organisation as opposed to
collecting societies. This is a word most
widely used internationally including in
most legislations. These Amendments are
featured in sections 46-48 of the Copyright
Amendment Act.
To begin with, KECOBO can now issue
a provisional license to a CMO which
has not submitted a complete application
or which has apparent administrative
shortfalls. The license will be issued for
a period of not more than six months and
will eventually be counted as part of the
complete license whenever it is issued.
It also provides that in case KECOBO
wants to deregister a CMO, KECOBO is
rst required to issue a notice to the CMO
and invite the CMO board or members to
make written presentations within 21 days,
as to why it should not be deregistered.
KECOBO will then consider the written
submissions and if it is satised that the
failure of the organisation materially
prejudices its members, KECOBO may
withdraw the registration or sanction
board of directors or the management of
that CMO.
In the past we have witnessed CMOs
without a KECOBO license collecting
royalties and not remitting to members.
The act now provides that any person
collecting royalties without a license shall
be liable under the act and shall pay a
ne of not more than Sh500,000 or face
imprisonment for a term not exceeding four
years if convicted.
The Amendments have also made
provision for qualications of directors and
chairpersons of CMOs unlike in the past
where it was open to anyone. A member of
a CMO is eligible for election as a director
if he holds a post-secondary qualication
recognised in Kenya. The director can
only serve for a term of three years and
is eligible for re-election for a further one
term only.
In the past we have witnessed an era
where directors of some CMOs seemed to
serve for eternity. This provision will cure
this mischief. This provision also applies
to a chairperson of a CMO. They shall be
eligible to serve for a maximum two three-
year terms. These amendments introduce
provisions also with regards to Chief
Executive Ofcers of CMOs.
A Chief Executive Ofcer of a CMO
shall hold ofce for a maximum two terms
of 4 years each.
The roles and types of CMOs have been
spelt out as Authors, Producers, performers,
visual artists and publishers. However, the
Act also provides that any CMO dealing
with rights not provided for under that
section may be approved by KECOBO as
may be necessary.
CMOs are now obligated by law to
submit to KECOBO information on
their total collections and distributions of
royalties annually. KECOBO shall then
publish such information in the gazette
notice. KECOBO has handled several
complaints in the past from rightsholders
touching on receipt of royalties and it is
envisioned that this provision will improve
transparency on this issue and reduce
complaints in this regard.
The Kenya Copyright Board has also
New Copyright Law
Keeps CMOs on a Short Leash
PHOTO SOURCE:KAMP/PRISK/MCSK
Ministry of Information Communications and Technology (ICT) Cabinet Secretary, Mr. Joe Mucheru and Kenya Copyright Board (KECOBO) Executive Director, Mr.
Edward Sigei meeting with Chairmen of Collective Management Organisations (CMOS), KAMP, PRiSK & MCSK
4
Copyright News
been enabled by law to authorise inspection
of books of accounts of any CMO when it
deems necessary. Any ofcer or employee
is required under the act to produce and
make available books, accounts records
and documents needed by the person
doing the inspection. Failure to produce
such books and documents amounts to
an offence under the Act and those found
guilty will be liable to a ne of not more
than Sh200,000 or a jail term of not more
than 3 months or both.
A person who KECOBO authorises
to inspect such books and records of
accounts shall report any breach or non-
observance of the Copyright Act; any
irregularity in conduct of business, any
apparent mismanagement or any other
matter warranting remedial action or a
forensic audit. After such a report is made,
KECOBO shall, by notice in writing, give
the CMO an opportunity to be heard within
a reasonable period of time.
These powers of inspection will,
however, be exercised in the following
circumstances; Where a petition of
inspection has been made by at least 40%
of the membership or more detailing the
breach of the law or instruments of the
organisation; If the CMO has failed to
account for monies to at least 20 % of its
members; Where a CMO has acted beyond
its powers to administer rights given to it;
where a CMO has altered its instruments
or rules to exclude some members from
participating in its affairs e.g. AGMs; where
a CMO has consistently failed to adhere to
its budget without a reasonable cause; or
where a CMO has failed to give information
to its board or members on request.
Under this amendment Act KECOBO
has been empowered to make certain
orders and give certain directions. In the
past, the act was silent on what action
KECOBO could take when CMOs were not
complying with the law. First KECOBO can
recommend the suspension or removal of
any ofcer or employee who in its opinion
has contributed to the contravention of
the law. This was not possible in the past.
The culture of impunity among ofcers
working for CMOs will now be a thing
of the past. KECOBO can now issue
directions regarding measures to be taken
to improve the management of a CMO or
to secure and improve compliance with the
law. This could be things like training of
ofcers to qualify to deliver better services.
KECOBO can also require the CMO
to reconstitute its board of directors. The
Board can now also by law demand for a
plan by the CMO management to resolve
all deciencies to its satisfaction. Such a
plan could include detailed business plans
with timelines and expected results. The
Board can appoint a chairperson suitable
in its opinion to help the CMO implement
a corrective action plan and the appointed
person shall regularly report to KECOBO
on the progress. It can also issue an
order placing the CMO under statutory
management; order for the revocation of
the collecting license meaning the CMO
will be barred from royalty collection;
and also order for the CMO to convene a
special general meeting.
The Kenya Copyright Board is now
by law able to take any action it deems
necessary to correct the deciencies
presented by the CMO.
The Board has battled with CMOs
in the past because mainly the law was
silent on what it could do. Now that the
amendments are in place it is envisioned
that there will be improved transparency
and governance of CMO and ultimately
improvement in the creative industry for
the betterment of the economy.
MCSK, KAMP & PRiSK held their AGMs at Lake
Basin Kisumu, Nairobi Baptist Church and All Saints
Cathedral Auditorium respectively.