Taxpayer money should be used to improve access to justice in Australia’s music industry [op ed]

Photo by Nick Fewings on Unsplash

With ongoing silence from Sony HQ in New York and a local music industry unsure how to undo decades of wrongdoing, former music agent and manager turned political adviser Chris Jervis has taken the unusual step of suggesting taxpayer funds could be used to clean up the sector and hold it accountable. But is government intervention and involvement really the answer? Here, he explains his thinking. 

The response to allegations of unconscionable behaviour by management at Sony Music – in particular by its former CEO Denis Handlin – has been swift since being first reported in the media.

Leading industry groups, including APRA AMCOS and ARIA, have issued responses pledging various reviews and changes. All are well intentioned, but unfortunately, none will do anything to address a structural issue at the heart of the Australian music industry: that there exists a fundamental lack of any meaningful method by which an employee can assert their industrial rights or seek redress when they experience harm.

Most of the Australian music industry doesn’t look like Sony Music, a company with high-profile executives who attract media interest; independent shareholders who hold management accountable to their fiduciary duties; or foreign parent corporations who can intervene when there are issues.

PwC’s Australian Entertainment and Media Outlook Report shows that while the size of the Australian music industry is worth more than $1.8 billion, Music Australia estimates up to 99% of this figure is comprised of Australian music and performing arts businesses which turn over less than $2 million (and some 88% are micro businesses, turning less than $200,000 per annum).

In general, it is common for SMEs to suffer from relatively poor management and governance practices; this is a diabolical situation, in which industrial and personal misconduct can flourish.

It often takes a major failing or exposé involving a large multinational company, a pre-eminent Australian business figure, and an association with market-leading artists to shine a light on the industry as a whole, especially one as diverse and difficult to unify as Australia’s music sector.

This discussion has begun because the media were willing to listen, ultimately, because the matter involved such a prestigious and recognisable public brand, as well as a larger-than-life music player who’s been a leader in the field for five decades.

To be clear – to take meaningful action in response to these serious issues at Sony is important and appropriate. Chief among, Sony Music has a clear moral, ethical and legal duty to get its own business in order, and to make amends with those people who they owed a duty of care but failed so grievously.

But it would be remiss to say that this is an isolated incident within one company; it is but a number in a series of unreported and underreported issues playing the sector, which I believe would stand to benefit strongly from Government-led initiatives that will promote better business practices in Australia’s music industry.

Over the past 18 months, we have witnessed COVID-19 ravage the sector further, with a large proportion of the Australian music industry having now received some type of State or Federal Government support related to the pandemic. To be fair, this support pales in comparison to other industries, and the sector continues to call on all governments to extend financial support.

That said, with so much of the industry now reliant on taxpayer-funded subsidy, there is a strong public good case to be made that taxpayer funding could – whether through a governmental audit of the industry and/or the establishment of one body which oversees all industry complaints – be used to clean up the industry once and for all.

The social contract which underpins most public expenditure clearly confers duties upon those who benefit from it; the least the public should expect in exchange for their money is that it be used for lawful and productive purposes.

It is also generally recognised that institutional investment into Australian companies has a positive influence on corporate governance. Why should taxpayer funds not seek to influence in the same way?

The issue then becomes which levers are available to achieve the desired effect. With the outlook from the pandemic still unclear, any future broad-based industry support could be conditional on businesses meeting best practice guidelines for their governance structures.

Larger financial subsidies could require more stringent guidelines, with a view to creating ‘model actors’ in the industry in the same way that Governments promote good conduct in the courts by requiring its agencies to adhere to model litigant provisions.

The industry’s union, the Media, Entertainment and Arts Alliance, should resolve an awkward conflict that much of the sector experiences, where portions of the industry (employee agents, promoters and managers) are unsure of which union is most appropriate for them, as their job requires many in the industry to employ people (artists and crew) who might also be MEAA members.

Those who balk at the idea of this type of oversight might consider whether the industry more broadly could establish an independent ombudsman-type body capable of receiving confidential complaints about misconduct in the industry, and bringing litigation if there is a viable cause of action. Where this would differ from the Fair Work Ombudsman is that it could be capable of strategically pursuing certain issues that specifically pertain to the music industry.

Thanks to Sony Music, we are faced with once-in-a-lifetime opportunity to truly assess how to improve an industry where most musicians are forced to simultaneously play often conflicting roles of freelancers, sole traders, employees, employers, and everything in between just to make ends meet.

What is at issue is a structural problem that undermines the law by leaving its protections out of reach of the people it is there to serve. Whether it is theft of wages and entitlements, harassment and discrimination or serious assault – these things have been against the law for a very long time – having nowhere clear to turn only serves to disincentivise reporting and hinders necessary reform.

Whether the response is led by government or industry, we must resolve this issue of dealing with misconduct in companies that don’t have access to a dedicated body with explicit and fair processes.

The Australian music industry has suffered enough: it’s time to turn things around.

Chris Jervis is a professional political adviser, and former music agent and manager