Government Regulation of the Republic of Indonesia Number 56 of 2021 concerning Management of Royalties for Songs and/or Music Copyright (“GR 56/2021”) is issued to provide protection and legal certainty for Creators, Copyright Holders, and Related Rights owners in relation to the economic rights of songs and/or music, as well as everyone who makes commercial use of songs and/or music.1
Scope of GR 56/2021
Based on Article 3 paragraph (1) GR 56/2021, every person may use songs and/or music commercially in the form of commercial public services by paying royalties. These Royalties are paid to Creators, Copyright Holders, and/or Related Rights owners by applying for a license to the Copyright Holders or Related Rights owners through a National Collective Management Agency (Lembaga Manajemen Kolektif Nasional – “LMKN”)2.
As part of the license regime, any person who makes commercial use of songs and/or music is obliged to provide reports on the use of songs and/or music to LMKN through the Songs and/or Music Information System (“SILM”).3
Commercial public services are defined where songs and music are played at:4
Management of Royalties for Songs and/or Music Copyright
In order for Creators, Copyright Holders, and/or Related Rights owners can obtain payment of royalties, the relevant party or its proxy must apply to the Minister of Law to keep records of songs and/or music.5 These records are important since LMKN will carry out the management of royalties based on the integrated data in the songs and/or music data center.6
Further, management of royalties is divided into 3 (three) categories, as follows:
1.Collection of Songs and/or Music Royalties
LMKN collects royalties from any person who makes commercial use of songs and/or music in the form of commercial public services for Creators, Copyright Holders, and Related Rights owners who have become members or who have not become members of a Collective Management Institution (Lembaga Manajemen Kolektif – “LMK”)7.8
2. Store of Songs and/or Music Royalties
LMKN collects royalties, coordinates, and determines the amount of royalties in accordance with each LMK’s right pursuant to the prevalence in practice based on justice.
3. Distribution of Songs and/or Music Royalties
Royalties that have been stored are used for:9
Royalties that have been collected by LMKN are distributed by LMKN based on the reports on the use of songs and/or music data in SILM, and distributed to Creators, Copyright Holders, and Related Rights owners through the LMK.10
For Creators, Copyright Holders, and Related Rights owners who are not known and/or have not been a member of the LMK, then the stored royalties are saved and LMKN shall notify the public for 2 (two) years so that Creators, Copyright Holders, and Related Rights owners may respond to enforce their commercial rights to their songs and music.11
If within 2 (two) years the Creators, Copyright Holders, and Related Rights owner are known, and/or become members of a LMK, then such royalties shall be distributed to them.12 However, if they are not known and/or have not become members of a LMK, the royalties can be used as a reserve fund.13
Provisions regarding royalty rates for every commercial public service are regulated in the Decree of the Minister of Law and Human Rights Number: HKI.2.OT.03.01-02 of 2016 concerning Ratification of Royalties Rates for Users Who Make Commercial Use of Works and/or Related Rights Products of Music and Songs.
Anyone who uses songs and/or music commercially, but does not pay royalties, can be deemed to have violated the economic rights of the Creators or Copyright Holders and/or Related Rights owner. A violation may subject a person to imprisonment and/or fine based on Law Number 28 of 2014 concerning Copyright.14
Letter a of Consideration of GR 56/2021.