Aspire Art Auctions pioneers Artist’s Resale Rights (ARR)

Committed to the growth and development of the African art market, Aspire Art Auctions is the first and, to date, the only auction house in South African history to pay living South African artists royalties on the resale of their works of art on auction.

The implementation of the Artist Resale Rights (ARR) initiative is an investment back into the industry, acknowledging the value of authorship and ensuring support for artists. The inequality of artists only profiting from the initial sale is compounded when one considers the rise in value of an artwork over time, in relation to the growing success of the artist. The resale royalties endeavour to return some of that value to the artist.

Aspire’s vision places art, sustainability, and the development of the industry at its core. The sustainability of the practitioners and the professionals that have made this market what it is today forms the heart of this pioneering auction house. Whilst upholding the significance of established artists, Aspire is building a market for the future.

Across the world, artists, associations and collecting societies have been actively fighting, for decades, to achieve and implement resale rights. With the globalisation of the art market, this is a timeous and significant international trend.

The droit de suite (French for “right to follow”) was first proposed in Europe around 1893 to alleviate the plight of the ‘struggling artist’. Although not yet universal, ARR has been implemented in different forms in over 70 countries including France, Australia, and Russia. The European Union standardised its legislation in 2001, with the payment mandated to official collecting agencies, or paid directly to the artist. The EU directive was met with loud protestations from established UK auction houses and galleries, however in 2011 and in 2012 the European Commission and UK Parliament reported that the resale right does not impact the art market negatively. This report was followed up by the World Intellectual Property Organisation research in 2017, which corroborated that the payment of royalties on works at auction has no discernible impact on prices.

South Africa is one of a group of countries which have no existing legislation to govern the implementation of an ARR scheme. This group currently includes the USA, Canada, China, Japan, and Switzerland. The legislation in South Africa has been tabled, but the law is still in draft discussion form. Aspire was the only representative from the secondary market to submit representations to government on the public hearings for the draft legislation, and to appear before the parliamentary committee in 2017 to put forward the case for a national ARR.

With little opportunity for funding in the arts, the profound social inequalities of South Africa seem particularly magnified in the sector. In the absence of legislation or a government mandated collecting agency, Aspire voluntarily covers the cost of the ARR percentage fee.

Aspire is perfectly placed to usher in a new era, as the newest South African art auction house, with the longest combined secondary art market experience in the country and a particular focus on top quality fine art. To date, Aspire has earned royalties for over 90 living South African artists through their sales, across the market spectrum, and has paid out around R400 000. Exiled South African artist Louis Maqhubela, one of the artists who has benefitted from the Aspire ARR, had this to say: “your email was like a whisper from the ‘Old Ones’ – a grand affirmation of ethical market practice, goodwill and generosity that really made my day” (email correspondence, 2017). The project received the Best Strategic Project Award from Business Arts South Africa in 2018.

How are Artist’s Resale Rights calculated?
The artist’s royalty depends on the resale price. The higher the sale price of the artwork, the lower the overall royalty rate. The royalty is worked out according to a sliding scale from 4% to 0.25%.

Portion of the sale price Royalties
From 0 to R50 000 4%
From R50 000.01 to R200 000 3%
From R200 000.01 to R350 000 1%
From R350 000.01 to R500 000 0.5%
Exceeding R500 000 0.25%

Royalties are calculated on the sale price minus VAT for galleries and the hammer price, (sale price minus VAT and Buyers Premium) for auction houses. The maximum an artist or their beneficiary can receive is capped at R12 500 for one sale of one work, which is reached by works sold for R2 million or more.

Please note: this scale is cumulative, which means that where the sale price is higher than the first threshold, the royalty on each portion of the price must be calculated accordingly and added together to arrive at the final sum.

For example, an artwork that sells for R210 000. The first R50 000 would achieve 4% (R2 000), the next 150 000 would achieve 3% (R4 500), and the final R10 000 would achieve 1% (R100). The total royalties due would be R6 600.

When does ARR not apply?
The royalty does not apply to any lot with a value less than R1 000. In addition, where the seller has acquired the work directly from the artist less than 3 years before the resale and where the resale price does not exceed R10 000, ARR does not apply. Also, if the author is the seller, ARR does not apply.

Can an artist waive their right?
An artist cannot waive their resale right. Nor can they agree to share or repay resale royalties, for example, to their dealer or a client of their dealer’s.