Royalty collection society Screenrights has sought to clarify its new royalty policy following criticism from the Australian Writers Guild and the Australian Directors Guild.
Screenrights has issued a public statement in the wake of a blistering attack from the AWG and the ADG over a new Express Dispute Resoution Process (EDRP) introduced by Screerights on September 1.
The Guilds claim the new process undermines writers and directors entitlements to royalties.
The Screenrights "Fact Sheet" said the collection society was concerned that public statements from AWGACS and ASDACS in recent days did not accurately represent the EDRP.
"It (the EDRP) was introduced following extensive screen industry consultations," a Screenrights statement said.
"In its role as a collection society, Screenrights takes no position on who should ultimately receive any royalty.
"We pay the rightsholder, whoever that may be under Australian copyright law.
"Sometimes the rightsholder is changed by contract between two parties. As an impartial collecting society, Screenrights is not in a position to alter the terms of a contract.
"Where there is no contest, we pay the rightsholder and where there is a contest we offer dispute resolution process procedurs like the EDR Process to assist in the resolution.
"As part of the EDR Process, if ther eare industry agree contracts we will recognise them."
According to the statement, there are two presumptions that favour writers – specifically for series and serials produced after January 1, 2008 and telemovies and mini-series produced after January, 1, 2010.
"Screenrights recongises that directors are entitled to a share of retransimission royalties subject to exceptions under the Australian Copyright Act.
"However, Screenrights makes no presumptions under the EDR Process about what that share is because there is currently industry agreed contract to determine that share.
There are no presumptions in the EDR Process specifically affecting foreign directors, according to the statement.
"If a member disagrees with an internal decision made by Screenrights, they can request that the dispute go before an expert adjudicator, appointed by an independent organisation in accordance with Screenrights Alternative Dispute Resolution Procedure for disputes between Screenrights and its members.
Screenrights has paid and will continue to pay all rightsholders, including writers and directors, according to the statement.
"Screenrights is a not for profit organisation that does not retain undistributed royalties.
"Undistributed royalties are rolled over into the distribution pool for the benefit of rightsholders.
However the AWG beleives the new procedure represents an extraordinary change to Screenrights practices and means that Australian screenwriters risk losing hundreds of thousands of dollars in the royalty payments that Screenrights is entrusted by the federal government to fairly distribute.
The Guild has been in protracted negotiations with Screenrights for years over the approach Screenrights takes to their dealings with writers.
AWG executive director, Jacqueline Elaine, told IF Screenrights was entrusted with millions of dollars on behalf of audio visual creators.
“Unfortunately this new procedure is a stark example of an inconsistent, inequitable and non-transparent approach.”
The EDR Process will operate alongside Screenrights’ existing Alternative Dispute Resolution Procedure for Multiple Claims between Screenrights’ Members.
Two drafts of the EDR Process were released for comment in October 2014 and May 2015. Screenrights also hosted roundtables in Sydney and Melbourne in June 2015.
ADG and ASDACS chief executive, Kingston Anderson, said he was "horrified" that Screenrights would ignore the clear royalty entitlements of screen directors, "particularly those in Australia who struggle to earn an average income.”
“Screenrights say they have consulted when in fact this policy sits in direct contradiction to many of the key issues Australian directors raised,” he says. “Screenrights have not taken on board any of our objections or suggestions to make the policy fairer for directors around the world.”
According to the ADG, Screenrights makes two critical assumptions that clearly undermine directors’ entitlements to royalties.
The first is against Australian directors.
"Screenrights refuses to presume that Australian directors are entitled to retransmission royalties unless their share of entitlement is specifically set out in the contract. Meaning that many Australian directors may miss out on their fair share of royalty payments, according to an ADG statement.
The second assumption is against foreign directors.
"Screenrights refuses to recognise laws in other countries such as Europe and South America where directors have wellâ€established and clear legal entitlements to royalty payments.
"For example, if a Spanish film is aired in Australia on FOXTEL, the Spanish director’s royalties may now be paid incorrectly to the producer rather than the director.
"Kingston Anderson has criticised the way Screenrights is trying to change its rules to deny directors an avenue of fair appeal over money they are owed."
Screenrights chief executive, Simon Lake, told IF Screenrights initially proposed changes to its royalties distribution process in October 2014.
"At the time, we sought feedback from stakeholders and members to the proposal, which we believe is a common sense approach that will ensure royalties are distributed efficiently and fairly, particularly in the event of multiple claims," he said.
"Screenrights took into consideration industry feedback, including from AWGACS, before implementing the express dispute resolution on 1 September."
He said Screenrights paid the appropriate rights holders in accordance to Australian law.
"Screenrights continues to collect and pay royalties on behalf of its members," he said.
"More than $38.4 million dollars has been paid in the 2014/15 financial year”
The EDR Process will be reviewed by an independent reviewer after 12 months of operation.
The EDR process is a dispute resolution procedure that contains nine presumptions. It is used in cases where, based on one or more of the presumptions, a particular member is likely to be the relevant rightsholder of the royalties in conflict.
Screenrights determines whether a presumption applies to a conflict and will notify the members involved.
If a presumption favours a particular member, that member can rely on it to receive payment of royalties, unless the opposing member is able to overturn the Presumption or put the Presumption into question.