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Thursday, 15 March 2018

Infighting at Nigeria’s main collecting society – Powers of the sector regulator

Katfriend and AfroIP blogger Chijioke Ifeoma Okorie returns on a topic that has been increasingly at the centre of attention recently: collective rights management and collecting societies in Nigeria.

Here’s what Chijioke Ifeoma writes:

“At a meeting of the Board of Directors of the Copyright Society of Nigeria (COSON) held on 7th December 2017, COSON’s founding Chairman (Mr. Tony Okoroji) was removed and one of the founding Directors, Mr. Efe Omoregbe, appointed in his stead. A General Meeting involving COSON’s members (General Assembly) was held on 19th December 2017 and the members who attended the meeting reinstated Mr. Tony Okoroji as Chairman and appointed other Board members. Earlier this month, COSON instituted Suit No ID/4827/GCMW18 seeking inter alia an injunction restraining Mr. Omoregbe from parading himself as Chairman of the Society.

This post reviews the line of events from the perspective of the role of the Nigerian Copyright Commission (NCC), the sector regulator for COSON and other collecting societies in Nigeria.

Issues

The issue here is a dispute between members of the COSON Board and one that concerns the internal workings of COSON. There are no specific provisions in COSON’s Memorandum and Articles of Association regarding disputes arising in relation to the position of COSON Chairman. However, general provisions pertaining to the position of COSON Chairman and the powers of the General Assembly may be found in Articles 17, 36, 44 and 61 of COSON’s Memorandum and Articles of Association. COSON’s Memorandum and Articles may be obtained from the Corporate Affairs Commission (CAC) or from COSON itself.

Article 17 is to the effect that the chairman of the management board is to preside as chairman at every general meeting of COSON. Article 36 stipulates that the business of COSON is to be managed by the Management Board and no regulation made by the COSON General Assembly is to invalidate the actions of the Board. Article 44 gives the Management Board to elect the COSON Chairman from amongst its director members and to determine the period for which such chairman is to hold office

Where there is a dispute regarding which director shall be Chairman of the society, such dispute is one that exists between members of COSON and is within the purview of the NCC’s powers as sector regulator. This is because, by virtue of Regulation 2(3)(iii) of the Copyright (Collective Management Organisations) Regulations 2007 (CMO Regulations) and Article 61 of COSON’s memorandum and articles of association, every member of the Management Board excluding the General Manager, is or must be a member of COSON itself.

Powers of NCC in relation to the issues at stake

In relation to disputes between members and/or disputes regarding the Management Board, the NCC may by virtue of the CMO Regulations:

(a)  Order an audit of the accounts of the collecting society [Regulation 10].
(b)  revoke the licence of a collecting society [Regulations 3 and 20(2)].
(c)  serve a written caution to a collecting society [Regulation 20(1)].
(d)  suspend the licence of a collecting society for 3 months [Regulation 20(2)].
(e)   set up a dispute resolution panel [Regulation 15].

Given the nature of the issues as described in the preceding paragraphs, appropriate provisions exist within the CMO Regulations that indicate that the NCC is aware of the resolutions reached at the various meetings. In terms of Regulation 2(3)(vi) of the CMO Regulations, Article 35 of COSON’s memorandum and articles of association provide for the NCC to have its representative as a non-voting member of the Management Board. Further, COSON is required to furnish the NCC with a report of all its meetings by virtue of Regulation 9 of the CMO Regulations. In the circumstances, a dispute regarding powers exercised at the meetings of COSON’s management board and general assembly respectively is within the regulatory competence of the NCC and falls squarely within the purview” of the CMO Regulations.

Yes ... there might be
more fun things to collect than royalties
Comment

The NCC is clearly in a position to act and issue a written directive capable of quelling the storm at COSON. The NCC has clear powers to appoint an auditor to audit the account of COSON especially in view of the allegations of financial impropriety levied against the Chairman of the Board. It was present at these contentious meetings and even if it was absent, it has access to report of these meetings. The NCC’s adjudicatory powers in this instance can only be activated by a member of the management board presenting the Chairmanship dispute before the NCC. However, the constitution of a panel to resolve such dispute is at the discretion of the Director-General of the NCC by virtue of Rule 6 of the Copyright (Dispute Resolution Panel) Rules 2007.

Accordingly, the NCC has the powers to issue appropriate directives regarding the conduct of COSON’s management board and the general assembly. Indeed, there is no point sitting in at meetings and receiving report of meetings if the NCC cannot take steps to address issues that threaten the existence and purpose of COSON.

Presently, COSON’s funds that should serve the financial interests of its members are being depleted in terms of lawyers’ fees and its image as a fair and transparent collecting society is gradually being eroded.

Up till April 2017 when Nigeria’s Attorney-General exercised his powers to approve the Memorandum and Articles of Association of Musical Copyright Society of Nigeria (MCSN) and direct the issuance of a CMO licence to MCSN, COSON has operated as a sole collecting society approved for musical works and sound recordings in Nigeria. Indeed, despite several suits instituted regarding the status and powers of MCSN, the courts have consistently ruled that without due appointment and registration by the sector regulator, the NCC, COSON remained the only collecting society available to music copyright owners (for membership) and music copyright users (for music licences) in Nigeria. It is therefore without doubt that COSON wields considerable powers in ensuring adequate remuneration to music copyright owners regarding the use of their protected works.

In the circumstances, it is important that the internal administration of COSON continue to operate smoothly like a well-oiled engine. The NCC can exercise its powers to ensure the achievement of this objective and save COSON from imploding.”

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