Friday, 7 December 2012

Nigeria to impose copyright levies on "everything under the sun"


Afro-IP thanks Chukwuyere Izuogu, Streamsowers & Köhn for drawing our attention to this press release  that Nigeria's Attorney-General and Minister of Justice, Mr. Mohammed Bello Adoke SAN has granted the Nigerian Copyright Commission (NCC) an approval to issue the Copyright (Levy of Materials) Order 2012. Chronologically, this is what the press release tells us:


Products affected by the levy ("TAX" in Afro Leo's dictionary)
The Order allows the NCC to impose a levy on products such as "Audio Cassettes, Mini Discs, CDs, DVDs, Blu-ray, SD Memory Cards, Video Cassettes, USB Flash drives, I-Pods and Photocopying Paper. Others are equipment and devices like Photocopying Machines, MP3 Players, Digital Juke box, Mobile Phones, CD recorders, DVD Recorders, Blu Ray Recorders, Computer External Hard Drives, Analogue Audio Recorders, Analogue Video Recorders, Personal Computers, Printing Plates, Printers/Printing Machines, Radio/TV Sets enabling recording, Camcorders and Decoders/Signal Receivers" (Wow, this is what Afro Leo calls "everything under the sun". What about printing ink and cartridges? He can imagine manufacturers and/or dealers of these products now scratching their heads on how much they may have to pay over to the authorities and how to pass on the costs to consumers. Isn't it a bit strange that given the technological advancement in Africa in recent times, certain policies are springing up in Africa with intellectual property (IP), somehow, at the heart of it? Afro Leo can imagine an awkward but funny scenario where a mobile phone manufacturer lobby the Nigerian government to impose strict control on mobile phones in order to combat counterfeits, only to later find itself facing a levy - initiated by another IP owner e.g. a publisher - on its phones.)


Destination of the levy
The collected sums would be paid into a special fund to be created by the Commission and the beneficiaries would be approved collective management organisations (CMOs) and other agencies involved in the scheme. It is further noted that the Commission would retain 20% for anti-piracy initiatives and another 10% to promote creativity (Afro Leo can see why the NCC need more sources of income to discharge its mandate. He hopes that the NCC would not one day face a legal challenge by interested parties on the proportionality or legality of the levy as seen in other countries.)

Why the levy and who pays?
The principle behind the levy is based on the "pro-author" provisions in the Nigerian Copyright Act, and "aimed at controlling acts of piracy and copyright abuses such as excessive photocopying and unauthorised reproduction of copyright works being carried out in circumstances that could not be subjected to voluntary licensing by right owners but which activities undermined the legitimate interests of copyright owners." (Photocopying books for studies? Afro Leo once thought that poor countries had to tackle illiteracy. Well,  just like the "access to medicines" debate, he hopes that the levy does not, in any way, adversely affect the poor's access to educational materials.)
"The Director-General observed that the lot of Nigerian copyright owners has been adversely affected, particularly with the advent of more advanced reproduction technologies which facilitate illicit copying either for commercial exploitation or for unauthorised private use, thereby denying copyright industries and the nation the benefit of maximizing the revenue derivable from these sectors." (Afro Leo can see this similar argument brewing in continental Europe: Why penalise all because of the acts of the few? and, where you apply the levy and people pay, are you then saying it is ok to make copies - including illegal ones? Moreover, what about the fact that the copyright-based industries in Nigeria have long suffered from poor distribution infrastructureNo system is perfect, but Afro Leo prefers the UK's regime where copyright owners look after their "private" property.
“The new Copyright Levy Order is thus informed by the need to compensate right owners for the loss that they would obviously suffer from the illicit copying of their works, and to maintain an acceptable international standard of protection that would ensure the betterment of the lot of authors,” he stated." (Of course, compensation is the obvious reason and it is only fair that authors reap the fruits of their labour. But with money in the bank, more work should also be done to sensitise the public on why IPRs exist in the first place. Afro Leo understands that certain countries like the notion of matching controversial and uncertain international standards or emulating others - willingly or by pressure - little wonder he wrote the piece titled, 'The relevance of International IP developments'.)

There is always an exemption
“In order to address concerns of legitimate users of materials which are subject to the levy, and other activities which may not undermine the interest of authors, the new Levy Order provides for the Minister (in this case, the Honourable Attorney-General of the Federation) to exempt any class of materials from the payment of any levy. In addition to such exemption, the levy payable under the new Order does not apply to materials manufactured in Nigeria for purposes of export. Similarly, Institutions that represent persons with disability as may be approved by the Minister are also exempted from payment of the levy.” (Ok, hittting the right note here with "legitimate users"; but who are they? and how many manufacturers of most of the above products are currently in Nigeria? Anyway, we await details of the exemptions)

Stakeholder-led and beneficial to Nigeria
Finally, the NCC reassures that the levy - which had the input of the relevant stakeholders - "would strengthen the economic position of creators, encourage investment, generate revenue for government, discourage piracy and other abuses as well as provide incentive for more creativity." (Afro Leo is looking forward to see how this plays out in a few years time - if there is sufficient and available empirical data to rely on)

Conclusion
Piracy is obviously a global problem that needs to be tackled. However, some have argued that piracy has played a role in raising the profile of Nigeria's entertainment industry on the international stage. As Afro Leo noted, a country has a choice to follow or not to follow international IP developments, knowing fully well that to follow suit, in some instances, can yield benefits. It may well be that the NCC has looked at its counterpart in Ghana to see such a levy system in action and believes that it would also work in Nigeria. 

Looking at the disquiet in Europe (see here and here) on this sort of state-driven measures on behalf of copyright owners and considering that the management of public funds (or even collection of taxes) are not easy tasks, it would be interesting to see the level of impact of this levy on piracy, the commercial success of copyright-based industries, and the cost burden on the ordinary consumers in Nigeria. 
This Leo is already aware of the great work done by the NCC on IP matters, so he hopes that this current policy is one based on sound evidence.
Questions for readers' digest:
(1) Is a private copying levy on all a fair means to compensate copyright owners for the unfortunate but inevitable piracy and for private use permitted under Nigeria's copyright law? 
(2) Are there topical lessons to be learned from developed countries, such as Canada and some countries in continental Europe, already running the copyright levy regime? 
(3) Has the NCC gone too far with the range of liable products?

(4) Should a developing country, such as Nigeria, be going down this route?
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For an argument in favour of a private copying levy, see here
The welfare effects of private copying levies, see here
Is there a case for Copyright levies? An economic impact analysis, see here
For HP's view on copyright levies, see here
Spain looks to a fairer copyright compensation system, see here
European Commission contemplates private copying levy for cloud computing, see here (pages 18 to 22)

European Commission revisits copyright law in a digital age, see here

Canadian consumers won't face copyright levy on memory cards, see here

Tech tools are boosting Africa’s movie industry to global leader status, see here
Why practitioners  can't access the 200 billion naira entertainment fund in Nigeria, see here

UK government's response to Hargreaves Review, see here

Microsoft asks for Nigerian government's support in tackling piracy, see here

3 comments:

Joly MacFie said...

In the quid pro quo nature of things, in the regulation is there any corresponding privacy copying right provision for those paying the levy?

Jeremy de Beer said...

Thanks to Afro Leo for the great reporting on this important development.

About the system in Ghana, and the potential impact on access to educational resources, Afro-IP readers might be interested in Access to Knowledge in Africa: The Role of Copyright. http://www.idrc.ca/EN/Resources/Publications/Pages/IDRCBookDetails.aspx?PublicationID=72. During fieldwork research to produce this book, the authors conducted interviews with key stakeholders about the origins and impacts of Ghana's levy system.

It is interesting that Nigeria is moving in the opposite direction of countries that are phasing out experimentation with levies over the past 10-15 years, such as Canada. See http://canadagazette.gc.ca/rp-pr/p2/2012/2012-11-07/html/sor-dors226-eng.html

For more on the practical and conceptual incompatibilities between levies and digital rights management systems, readers might be interested in De Beer, J., 2006. Locks & Levies. Denver University Law Review, 84(1), pp.143–180. http://ssrn.com/abstract=952128

And on the impact of levies on the market for digital content, albeit in a much different socio-economic and cultural context, readers might be interested in De Beer, J., 2005. The Role of Levies in Canada’s Digital Music Marketplace. Canadian Journal of Law and Technology, 4(3), pp.153–168. http://ssrn.com/abstract=877191

Chinedu Okpaleke said...

It's fair & in line with moral rights for copyright holders to benefit from the fruits of their creative works. The levy system while apparently justified to some extent, the seemingly general or omnibus nature of its application raises some questions. For instance one wonders about issues of implementation as well as distribution of these levies after collection by the Collection Management agencies and again what would determine the ratio(s) of distribution? Are there reliable data to rely on in implementing this policy? These and other questions are important and relevant as regards the peculiarities of the country. In respect of Canada & other countries including some in the EU, it's important to note that they have their own issues and peculiarities as well. It's interesting to note that towards year-end 2012 Canada came up with legislation to clamp down on online (digital) piracy (illegal down-loading of online copyrighted material), which (legislation) require ISPs to release physical addresses of owners of IP addresses which have been found to violate these laws thereby raising privacy and data-protection issues. In the EU the "Three strikes" rule obtains and the US recently (just a few days ago) came up with its own "Six-Strikes" rule modeled after the EU laws. The Google levy comes to mind as well. The point is, what works for one may not work for another and it remains to be seen whether all these measures will reduce or eliminate the types of piracy towards which they're targeted and also whether the exemptions itemised by the Nigerian Copyright Commission are adequate. This can only be discovered through trial, I guess.