Spanish Translation of this article done by Bea can be viewed (traducción en español aquí) HERE
DBSK’s Contract under SM from the Perspective of International Human Rights, Labour and Intellectual Property Law
By: Jimmie of TheJYJFiles
Introduction and Disclaimer
First of all, it’s only fair to my readers to reveal upfront from the start that I am not (yet) a lawyer, nor have I studied Korean law. I have nonetheless agreed to broach this subject because my work requires me to be intimately familiar with the norms and legal principles that I will be addressing here in relation to DBSK’s original contract—namely, norms and principles of international human rights, labour and intellectual property law.
Secondly, the Constitution of the Republic of Korea (aka South Korea), like that of most countries, requires that the first recourse in any legal proceeding be Korea’s national laws and statutes. That is toHowever, an analysis from the perspective of relevant international law is more than casually useful, because international law serves as a kind of “threshold guarantee” for national law. That is to say, countries that have signed and ratified treaties, though often encouraged to go above and beyond its protections in their national law, are obligated to NOT FALL BELOW THEM. And so, the fundamental provisions of international human rights treaties, for example, are found transcribed in most countries’ constitutions. In addition, State parties to a treaty are not only obligated to observe the letter of the treaty, but also, under Article 18 of the Vienna Convention on the Law of Treaties (1969), are obligated to “refrain from acts which would defeat the object and purpose of a treaty…” even if a country hasn’t yet ratified it or the instrument hasn’t yet entered into force.
Thirdly, in the interests of harmonising with the identity of the destined platform—which is, after all, an op-ed blog and not an academic journal—I will restrict myself to the norms and refrain from going into the case-law and/or commentary thereon issued by legal and intergovernmental bodies. If anyone would still like the extra commentary, you may contact me and I shall try my best to direct you to the right sources. Now, without further ado…
I. International Human Rights Law
Of the international human rights treaties that the Republic of Korea has ratified, the most relevant to this case also happen to be the most fundamental. They are the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR) of 1966, which are historically and content-wise derived from the Universal Declaration of Human Rights (UDHR) of 1948. Together, these three form what is referred to as, “The International Bill of Human Rights.” The UDHR is technically not a treaty and as such is not legally binding. However, through a combination of long practice by countries and collective consensus, the rights under the UDHR are recognised as custom and therefore binding on all member States of the UN. [i]
A. Right to just and favourable conditions of work
Article 23 of the UDHR grants, “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment”; “Everyone, without any discrimination, has the right to equal pay for equal work.”; and “Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.” This is solidified as an obligatory norm in Article 7 of the ICESCR, where the right to “the enjoyment of just and favourable conditions of work” as well as “Fair wages and equal remuneration for work of equal value”, “equal pay for equal work” and “safe and healthy working conditions” are equally recognised.
Does SM’s contract measure up? Articles 9 and 10 of DBSK’s contract draws out in detail the income distribution and pay for the members of the group. In the very first version of the contract, DBSK members had to sell at least 500,000 albums in order to receive 50,000,000 won (a little less than 50,000 USD) ON THE ALBUM AFTER; they had to sell at least 1,000,000 units in order to receive 100,000,000 won (a little less than 100,000 USD), once again, ON THE ALBUM AFTER the one that sold 1,000,000 units. According to an investigative journalist from the Joongang Daily, DBSK’s income from album sales under the latter arrangement represent a mere 0.44% of total sales made from their albums.[i] And while the amendment allows SM to increase the profit distribution from album sales 100% ($50,000 → $100,000 if at least 500,000 units sold; $100,000 → $200,000 if at least 1,000,000 units sold) FIVE YEARS AFTER the sale of the album in question, DBSK’s income would still amount to only about 2.2% of the total amount made from album sales. Furthermore, if an album of theirs is released in a repackage edition, with a couple of new songs, the members are only given the direct proportion representative of profits from those new songs. So, for example, let’s say a repackage album of DBSK has 10 songs of which 3 are new; SM would calculate the amount of money made solely from those 3 songs and give that to DBSK whilst keeping the rest. Remember, once again, that any gain is always divided among five members.
Two lengthy footnotes in the contract reveal that these terms were renegotiated so that after July 2008 DBSK members expected to receive 2% of the total sales of their Korean albums IF the sales range from 50,001 to 100,000 units, 3% if album sales reach 100,000-200,000 units and 5% if album sales exceed 500,000 units. They receive 10% of income made from any other format in which their music is sold (such as MP3 or digital downloads). As for proceeds from broadcast or media appearances in Korea, the group can receive as much as 65% of the profit IF THEY ARE CAST AS REGULARS IN A SHOW, but SM reserves the power to take as much as it deems necessary as “PR fees”. It is also important to note that all the group receives in net profit is divided into five.
The amendments made to the distribution of income from media broadcast appearances are not any less questionable in terms of added benefits to the DBSK members. Under these changes, also pursuant to July 28, 2008, SM takes 40% of proceeds from DBSK’s non-guest appearances and reserves the right to take as much as 50% in “management fees” from profits made from all other types of DBSK’s media activities. What remains is split among five, amounting to 12% of total gains for each member. SM always holds the right to deduct other miscellaneous amounts for the payment of external staff and DBSK’s living expenses at any time.
One could argue that the contractual arrangements detailed above for payment and income distribution represents “fair wages” and “equal remuneration for work of equal value”—and, no doubt, there are plenty who are doing just that—but this argument can’t be made using the standards and definitions of “fair” and “equal” of the 21st century. As it is, these arrangements don’t even pass the minimum threshold of international human rights law.
It is almost impossible to extrapolate a clear picture of DBSK’s working conditions from the contract alone. However, provisions such as Article 3, where the company unilaterally lifts all of DBSK’s copyright and artists’ rights, Article 4, which gives the company full control of when and where DBSK will appear, Article 6, which obligates DBSK to comply with every demand of the company’s managing staff with regards to musical and entertainment activities or take responsibility for non-compliance, and Article 11, which gives the company the ability to stop and start DBSK’s activities if it unilaterally deems the contract breached, hardly amounts to “favourable conditions of work” for DBSK or “safe and healthy working conditions.” The practical consequences of these provisions arguably amount to forced or compulsory labour. And to think that this was to be supported for 13 years…
Article 24 of the UDHR provides, “Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.” Article 7(d) of the ICESCR echoes the same right. Even the contracts of unpaid interns at the UN specify holiday and rest allowances. And yet, there is not a single provision in DBSK’s contract for holidays or rest periods.
B. Cultural rights
Article 27.2 of the UDHR states, “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.” Likewise, Article 15.1(c) of the ICESCR provides that “The States Parties to the present Convention recognise the right of everyone…To benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.” This is further developed under the instruments of international intellectual property law. Thus, I will cover the moral and economic rights of artists relevant to DBSK’s contract in section III.
C. The question of “slavery”
Ever since DBSK’s contract was revealed to the public, Korean fans and the media have labeled it a “slave contract”. The Korea Fair Trade Commission and representatives of the court, on the other hand, have refrained from using the term, preferring the much softer “unfair contract” or “long-term exclusive contract.” This is understandable. Even in the vague, airy, minimum-threshold world of international law, use of the word “slavery” or acknowledging a situation as constituting slavery carries considerable legal weight and triggers political responsibilities.
Article 8 of the ICCPR says of slavery:
1. No one shall be held in slavery; slavery and the slave-trade in all their forms shall be prohibited.
2. No one shall be held in servitude.
(a) No one shall be required to perform forced or compulsory labour;
(b) Paragraph 3 (a) shall not be held to preclude, in countries where imprisonment with hard labour may be imposed as a punishment for a crime, the performance of hard labour in pursuance of a sentence to such punishment by a competent court;
(c) For the purpose of this paragraph the term “forced or compulsory labour” shall not include:
(i) Any work or service, not referred to in subparagraph (b), normally required of a person who is under detention in consequence of a lawful order of a court, or of a person during conditional release from such detention;
(ii) Any service of a military character and, in countries where conscientious objection is recognized, any national service required by law of conscientious objectors;
(iii) Any service exacted in cases of emergency or calamity threatening the life or well-being of the community;
(iv) Any work or service which forms part of normal civil obligations.
Thus, the ICCPR takes a broad definition of slavery that includes “slavery…in all its forms” and considers “forced or compulsory labour” one of those forms.
The offense of slavery is so grave that Article 4 of the ICCPR forbids signatory countries to engage in it or allow it on its territory even in times of “public emergency which threatens the life of the nation and the existence of which is officially proclaimed.” This essentially makes the ban on slavery a jus cogen norm, a norm that countries cannot go against or allow individuals on their territory to go against UNDER ANY CIRCUMSTANCES WHATSOEVER.[iii] Even if a contract (verbal or written) was legally formulated, if it contains any provision that violates or urges/causes another party to violate a jus cogens norm, that document is immediately rendered null and void. Other norms in this category include the interdiction against genocide, torture and arbitrary execution. Countries who find an individual on their territory who has violated a jus cogens norm are obligated to put that person on trial or, if unable to do so, extradite him to the nearest country that can, whether or not either of the countries have signed an extradition treaty. The failure of one country to stop or effectively deal with the violation of a jus cogens norm is accounted as the failure of every country.[iv] Hence the dilly-dallying around the word “genocide” in 1994 when Rwanda happened.
Luckily for SM, only paragraphs 1 and 2 of Article 8 are considered on the level of jus cogens (Article 4.2 of the ICCPR). Even so, given the 13-year contract length along with the cumulative penalty for breach of contract—the more successful Dong Bang Shin Ki is, the more they would owe SM to break away according to the calculation method under Article 11 of the contract—which media experts place at roughly 400,000,000 USD[v], this contract flirts dangerously with the category of slavery.
II. International Labour Law
By far, the most influential body in the area of international labour law is the International Labour Organisation (ILO), a UN agency of which South Korea is a member State[vi]. What the Universal Declaration of Human Rights is to international human rights law, the Declaration on the Fundamental Principles and Rights at Work is to international labour law. The Declaration enshrines four fundamental rights: freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation (Article 2). Each of these rights has a couple of conventions (aka, treaties) attached to it. Membership into the ILO is taken as tacit endorsement of the Declaration (Article 1(a)), and even if a member country has not ratified a convention (aka, treaty) attached to each of the rights recognised in the Declaration it is required to submit reports to the ILO on its progress “to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions” (Article 2).
The Republic of Korea has ratified the conventions attached to the effective abolition of child labour and the elimination of discrimination in respect of employment and occupation. It is periodically submitting reports on the progress made for the elimination of all forms of forced or compulsory labour.[vii] The conventions attached to the elimination of forced or compulsory labour are Convention 29 Forced Labour Convention (C29, 1930) and Convention 105 Abolition of Forced Labour Convention (C105, 1957).
C29 defines forced or compulsory labour as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily” (Article 2.1) and goes on further to state in Article 5.1, “No concession granted to private individuals, companies or association shall involve any form of forced or compulsory labour for the production or the collection of products which such private individuals, companies or associations utilise or in which they trade.” And yet, Article 3.2 of DBSK’s contract requires that “during the time the contract is in effect [DBSK] shall do with care and due diligence everything decided by the company and shall not carry out activities freely/independently, or else will be required to pay the penalty calculated under Article 11.1.2” (the penalty under Article 11 is the same penalty for breach of contract that is estimated at this point to be roughly 400 million USD and accumulates in amount the longer DBSK remains with SM and the more successful the group is). Furthermore, Article 6.3 of the contract requires DBSK to take on full responsibility (financial included) “if non-serious personal reasons prevent [DBSK] from making planned appearances in broadcasts or concerts.” Article 6.6 of the contract relates to DBSK’s recording obligations and adds in parenthesis, “the timing for album production will be decided by the company; [DBSK] is required to follow along.” Once again, this contract comes dangerously close to belonging to an undesirable category. Perhaps the only thing saving SM in this area is the fact that the definition of forced or compulsory labour includes, “[work or service]…for which the said person has not offered himself voluntarily.” But given that the majority of DBSK members were minors when they signed this contract, this is not a bulletproof defence either.
South Korea has also ratified the ILO Equal Remuneration Convention (C100, 1951). The issue of equal remuneration was covered in the section above on international human rights law, so I will not be going into it again here. Suffice to say, the ILO Equal Remuneration Convention serves to reinforce the same norms in those human rights instruments and requires signatory countries to incorporate them into national law.
III. International Intellectual Property Law
The cornerstone of intellectual property law anywhere is the rights of the author (droits d’auteur) or copyright, sometimes referred to as the “economic rights” of the artist. The cornerstone of copyright in most civil law jurisdictions, of which South Korea is one, is artists’ rights, sometimes referred to as the “moral rights (droits moraux)” of the artist. Moral rights are rights attributed to the creators of copyrighted works—in other words, artists, in the broadest sense of the word. They include, among other rights, the right to be credited for the original work and the right to the integrity of the work, which prevents the work from being altered, distorted or mutilated without the artist’s consent or outside of his knowledge. These rights hinge on the status and person of the artist, not his or her art. Therefore, even if the artist relinquishes her art or the copyright to her art to a third party, she maintains the moral rights to her work[viii]. Copyright, on the other hand, revolves around the expression of the artist—his or her work.[ix]
Both moral rights and copyright are recognised on the international level. The main organisation involved in the formation and promulgation of intellectual property law here is the UN World Intellectual Property Organisation (WIPO)[x]. The Republic of Korea has ratified several WIPO treaties relevant to this case: WIPO Copyright Treaty (1996), WIPO Performances and Phonograms Treaty (1996) and WIPO Rome Convention (1961). Each of these instruments recognise moral rights and/or copyright[xi].
However, perhaps the most important treaty on the international level when it comes to moral rights and copyright is the Berne Convention for the Protection of Literary and Artistic Works of 1886 (revised in 1928). Article 6bis of the Berne Convention states, “Independent of the author’s economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to said work, which would be prejudicial to the author’s honor or reputation.” South Korea ratified the Berne Convention August 21, 1996. The Berne Convention also obligates its signatories to provide the same recognition and protection of the copyright of works of artists from other signatory States as it does for its own nationals (Article 5). For example, Japanese copyright law applies to all works published and all performances performed in the territory of Japan, regardless of the nationality of the author or where the work was originally created or performed. Japan ratified the Berne Convention July 15, 1889. Notice how, in DBSK’s contract, DBSK’s returns on works produced in Japan/abroad as well as copyrightable media appearances shot in Japan are much higher than on their Korean counterparts (Article 9 and 10). DBSK members are entitled to 70% of the net profit made from self-made compositions produced in Japan as well as on the net profit made on CFs shot in Japan. Through the stipulations of the Berne Convention, DBSK were able to benefit from Japan’s copyright protections.
This just makes the provisions of copyright and moral rights “protection” of DBSK’s contract under SM all the more shocking. Article 3 of the contract is a veritable crash course on how to disregard artists’ moral and economic rights. DBSK’s company unilaterally takes ownership rights to all of DBSK’s album and sound recordings (Article 3.4) and just as unilaterally lifts the copyright of all the members’ self-compositions, even giving itself the authority to distribute, broadcast and change DBSK’s works into any format or form it chooses without DBSK’s consent (Articles 3.5, 3.6). In fact, the contract requires the DBSK members to ask SM permission to give away any of their own compositions or works to a third party (Article 3.9). To SM’s credit, it gives DBSK the bare minimum right to object if it doesn’t want SM to sell or transfer their songs to a third party (Article 3.10).
The practical effect of Article 3 of DBSK’s contract is to make it impossible for any of the DBSK members to claim their moral rights or copyright to their work. This not only represents an infringement of Article 6bis of the Berne Convention, but also arguably infringes upon the entire 2nd chapter of the WIPO Performances and Phonograms Treaty (Articles 5 – 10), which covers the moral and economic rights of performers—note, of performers, not their proxies—including the right of reproduction of works, right of distribution, right of rental and right of making available recorded performances. The right of distribution and of rental is also recognised in Articles 6 and 7 of the WIPO Copyright Treaty as the domain of authors of literary and artistic works. Article 15.1 of the WIPO Performances and Phonograms Treaty further states, “Performers and producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any other communication to the public.” In Japan, DBSK enjoyed up to 70% of this kind of remuneration. In Korea, SM took up to 90% of the same (Articles 9 and 10 of the DBSK contract).
The doctrine of moral rights ensures that the artist will always have a say in the economic destiny of his work. One could say that the entire point of moral rights is to safeguard the right of the artist to give or withhold consent. And yet, what is striking about DBSK’s contract is how little it recognises this right, if at all. If the arrangements under Article 3 weren’t enough, Article 4 rubs insult into injury by deciding, “even after expiry of the present contract, the intellectual property rights and ownership of all songs produced during the time this contract was in force shall belong solely to the company” with no mention of consulting the DBSK members in cases where the songs are the members’ own compositions. The lack of reference to consent from the DBSK members contravenes, among other international obligations, Article 7.1 of the WIPO Rome Convention, which protects the right of performing artists to give or withhold consent on the broadcasting, reproduction and/or fixation (ie, video recording) of their performances:
1. The protection provided for performers by this Convention shall include the
possibility of preventing:
(a) the broadcasting and the communication to the public, without their consent, of
their performance, except where the performance used in the broadcasting or
the public communication is itself already a broadcast performance or is made
from a fixation;
(b) the fixation, without their consent, of their unfixed performance;
(c) the reproduction, without their consent, of a fixation of their performance:
(i) if the original fixation itself was made without their consent;
(ii) if the reproduction is made for purposes different from those for which the
performers gave their consent;
(iii) if the original fixation was made in accordance with the provisions of Article 15, and the reproduction is made for purposes different from those referred to in those provisions. (emphasis added)
It is a sad irony that an international treaty, drafted by delegates indifferent to Koreans per se, takes the consent of creative individuals more seriously than a document drafted on Korean territory by Korean citizens representing a leader of the creative industry in Korea.
At this point in time, in my opinion, there is really only one respectable decision to this lawsuit from the standpoint of the international community. However, regardless of the final ruling, the fact that a document like DBSK’s contract under SM materialised from within South Korean territory, in spite of the international treaties, obligations and norms the Republic of Korea has committed itself to, is nothing short of a national embarrassment. As such, the Korean government stands to lose face and credibility on the international stage for failing to meet key treaty obligations. And all because of the ethically questionable business practices of a single corporation…
More than anything, what the lawsuit and its consequences, this entire affair with DBSK, SM and JYJ, have shown is that the status quo in the Korean pop music industry is not sustainable. Even if the Korean government cares nothing for international obligations or the principles of international human rights, labour or intellectual property law, if it is serious about developing South Korea’s cultural content as a viable export and vehicle for the country’s soft power it will commit itself now to overhauling the Kpop system so that entities operating within South Korean territory never issue such contracts again. This means, even in the face of strong lobbies from SM and their like, involving every relevant branch and department—from the Ministry of Culture to the various departments dealing with labour and media relations—and not simply leaving it all to the Fair Trade Commission. Otherwise, we might as well consign the Korean Wave to the history books as a big joke we would all rather forget.
[i] Fact Sheet No.2 (Rev. 1), The International Bill of Human Rights, Office of the High Commissioner of Human Rights, Geneva, June 1996
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