Figuring it out: Popular KwaZulu-Natal gospel singer Hlengiwe Mhlaba had her royalties at Samro audited and investigated. Picture: SOWETAN
Figuring it out: Popular KwaZulu-Natal gospel singer Hlengiwe Mhlaba had her royalties at Samro audited and investigated. Picture: SOWETAN

The Southern African Music Rights Organisation (Samro) could have withheld royalty payments to musicians of up to R1.5bn over the past 50 years.

The collective management organisation that licenses the rights of members’ songs reported that R449.3m was collected in 2016 and R298.9m distributed to members.

But it has a tiered system of payments and historically black musicians have not received the full benefit of their work.

As a member of the International Confederation of Societies of Authors and Composers, Samro has the monopoly right in SA to issue the International Standard Musical Work Code, a global reference standard for identifying musical works, and the Interested Party Name number used to identify every interested party in a song.

The members’ global database is accessed using CIS-Net, which allows users to view authorship and ownership claims, the splits and other metadata for almost every registered work in the world.

"Access to CIS-Net is restricted and tightly controlled, inaccessible to the Department of Trade and Industry, the South African Revenue Service and the Reserve Bank," says copyright lawyer Graeme Gilfillan.

Samro was started in 1961 by Gideon Roos, former head of the SABC, with the assistance and support of Eric Gallo, the founder of Gallo Africa and the UK’s Performing Rights Society.

From 1963 onwards membership at Samro was structured on three tiers.

"A member is classified initially as a ‘candidate’ member, who can later graduate to an associate member, and then a fortunate few are classified as full members," Gilfillan explains.

"During apartheid, though candidates’ works were broadcast no differently than full members’, they were not allowed to vote or attend meetings. Nonroyalty revenues were divided discriminatively. Some, not all, candidate members were accorded a fixed few hundred rand, and associate and full members were accorded a percentage share."

Samro has not disclosed the names of their full, associate and candidate members.

"Samro is reviewing its membership criteria and is due to complete the final leg of the review process by June 2018. The information you are requesting is bound to change," says the organisation’s CEO, Nothando Migogo.

The audit report on Brenda Fassie’s Samro royalty payments indicates this unequal system continues to this day.

Gilfillan was appointed by popular KwaZulu-Natal gospel singer Hlengiwe Mhlaba to audit and investigate her royalties at Samro. The investigations exposed another irregularity that has become known as the "DP scam".

Of Mhlaba’s performance royalties on 24 songs due to her over the past 10 years, she has received only 16.7% in payments. The rest was paid to a composer author named as "DP" — "Domaine Publique" on the Samro books. Gilfillan claims that Mhlaba was defrauded of about R100,000.

Migogo wrote to members defending this split in payments, saying "this 16.7% rule deals with musical arrangements of an existing musical work".

The cost to black South African musicians could be R1bn-R1.5bn over the past 55 years. The cost to songwriters and arrangers of public domain, traditional and indigenous songs is put at R30m-R40m a year

According to Samro rules, there are six categories of payments. Money is split between lyricist, composer and arranger, and divided into original and unoriginal. Mhlaba was paid for unoriginal arrangements only.

Samro has 14,000 members. All black writers who arranged works labelled as traditional, indigenous or in the public domain could have been affec-ted by the DP scam, which allowed for five-sixths of the royalties to be paid to the DP.

The cost to black South African musicians could be R1bn-R1.5bn over the past 55 years. The cost to songwriters and arrangers of public domain, traditional and indigenous songs is put at R30m-R40m a year.

"The rule was put in place during the apartheid era to financially subdue black people," says Gilfillan.

"When the Collection Society Regulations 2006 was implemented, it only addressed Section 9 rights. Samro, which operates Section 6 rights, was excluded from oversight or regulation and continues to operate unregulated and unaccredited.

"Full membership at Samro is reserved for those who earn a percentage of Samro’s turnover, which has the immediate effect of favouring publishers and discriminating against composers, authors and arrangers."

DP composer author accrued income is paid into "distribution", which benefits companies based on market share. A graph provided by Gilfillan indicates that four major publishers and 10 large independent publishers receive the bulk of payments.

Arts and Culture Minister Nathi Mthethwa has mandated a special commission of inquiry into the arts.

"Without the involvement of the Department of Trade and Industry, the effectiveness of any commission of inquiry in this matter is in question and likely destined at the outset to fail," Gilfillan cautions.

Samro’s board is chaired by Jerry Mnisi with Sibongile Khumalo as deputy. It includes an equal spread of songwriters and publishers — Gabi le Roux, Arthur Mafokate, Loyiso Bala, Sipho Mabuse, Joe Niemand, Rowlin Naicker, John Edmunds, Jeanne Zaidel–Rudolph and Relebogile Mabotja.

There is an international crackdown on collective management organisations.

The former CEO of Spain’s Sociedad General de Autores y Editores, Teddy Bautista, was convicted and jailed for embezzlement and fraud.

In the Netherlands, financial irregularities at its collections agency BUMA Setmra were exposed and the Greek collection society is accused of financial wrongdoing with illegal loans to board members and €42m of undistributed royalties.